<PAGE> 1
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
<TABLE>
<C> <S>
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-10351
</TABLE>
POTASH CORPORATION OF SASKATCHEWAN INC.
(Exact name of the registrant as specified in its charter)
SASKATCHEWAN, CANADA
(State or other jurisdiction of incorporation or organization)
N/A
(I.R.S. employer identification no.)
122 - 1ST AVENUE SOUTH
SASKATOON, SASKATCHEWAN, CANADA S7K 7G3
(Address of principal executive offices)
306-933-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. As at July 31, 1997
53,705,118 Common Shares.
================================================================================
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These interim consolidated financial statements do not include all
disclosure normally provided in annual financial statements. In management's
opinion, the unaudited financial information includes all adjustments
(consisting solely of normal recurring adjustments) necessary to present fairly
such information. Interim results are not necessarily indicative of the results
expected for the fiscal year.
POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------- ----------------------
1997 1996 1997 1996
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Net sales.......................................... $676,648 $352,369 $1,141,482 $719,240
Cost of goods sold................................. 492,496 262,056 842,303 521,523
-------- -------- ---------- --------
GROSS MARGIN....................................... 184,152 90,313 299,179 197,717
-------- -------- ---------- --------
Selling and administrative......................... 27,900 14,341 47,189 29,222
Provincial mining and other taxes.................. 14,466 8,981 24,969 20,901
Other income....................................... (12,928) (7,375) (18,206) (13,894)
-------- -------- ---------- --------
29,438 15,947 53,952 36,229
-------- -------- ---------- --------
OPERATING INCOME................................... 154,714 74,366 245,227 161,488
INTEREST EXPENSE................................... 23,560 11,904 37,378 25,746
-------- -------- ---------- --------
INCOME BEFORE INCOME TAXES......................... 131,154 62,462 207,849 135,742
INCOME TAXES....................................... 34,174 10,064 54,504 19,666
-------- -------- ---------- --------
NET INCOME......................................... $ 96,980 $ 52,398 153,345 116,076
======== ========
RETAINED EARNINGS, BEGINNING OF PERIOD............. 438,526 277,689
DIVIDENDS.......................................... (27,843) (23,853)
---------- --------
RETAINED EARNINGS, END OF PERIOD................... $ 564,028 $369,912
========= ========
NET INCOME PER SHARE (NOTE 4)...................... $ 1.81 $ 1.15 $ 3.02 $ 2.55
======== ======== ========= ========
DIVIDENDS PER SHARE (NOTE 5)....................... $ 0.25 $ 0.26 $ 0.52 $ 0.52
======== ======== ========= ========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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<PAGE> 3
POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents.......................................... $ 99,087 $ --
Accounts receivable................................................ 346,970 230,778
Inventories (Note 3)............................................... 345,395 219,433
Prepaid expenses................................................... 34,457 16,748
----------- ----------
825,909 466,959
Property, plant and equipment........................................ 2,974,728 1,978,692
Goodwill............................................................. 516,790 1,686
Other assets......................................................... 118,275 47,050
----------- ----------
$ 4,435,702 $2,494,387
=========== ==========
LIABILITIES
Current Liabilities
Bank indebtedness.................................................. $ -- $ 6,330
Short-term debt.................................................... 149,989 --
Accounts payable and accrued charges............................... 326,857 180,008
Current portion of long-term debt.................................. -- 1,520
Current obligations under capital leases........................... 300 300
----------- ----------
477,146 188,158
Long-term debt....................................................... 1,269,700 618,800
Obligations under capital leases..................................... 1,018 1,163
Deferred income tax liability........................................ 301,001 28,480
Accrued post-retirement/post-employment benefits..................... 121,097 95,460
Accrued reclamation costs............................................ 126,113 146,512
Other non-current liabilities and deferred credits................... 32,988 10,318
----------- ----------
2,329,063 1,088,891
----------- ----------
SHAREHOLDERS' EQUITY
Share Capital........................................................ 1,206,125 630,484
Contributed Surplus.................................................. 336,486 336,486
Retained Earnings.................................................... 564,028 438,526
----------- ----------
2,106,639 1,405,496
----------- ----------
$ 4,435,702 $2,494,387
=========== ==========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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POTASH CORPORATION OF SASKATCHEWAN INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
------------------------
1997 1996
----------- ---------
<S> <C> <C>
Operating Activities
Net Income........................................................ $ 153,345 $ 116,076
Items not affecting cash
Depreciation and amortization.................................. 77,941 46,106
(Gain) loss on disposal of property, plant and equipment....... (1,288) 150
Provision for deferred income taxes............................ 37,412 10,521
Provision for post-retirement/post-employment benefits......... 3,396 3,055
----------- ---------
270,806 175,908
Changes in non-cash operating working capital
Accounts receivable............................................ 29,127 13,219
Inventories.................................................... 32,125 311
Prepaid expenses............................................... (10,141) (10,102)
Accounts payable and accrued charges........................... (75,110) (31,569)
Accrued reclamation costs......................................... (20,399) (750)
Other non-current liabilities and deferred credits................ 9,575 (8,059)
----------- ---------
Cash provided by operating activities..................... 235,983 138,958
----------- ---------
Investing Activities
Acquisition of Arcadian Corporation (Note 2)...................... (1,039,858) --
Additions to property, plant and equipment........................ (56,118) (22,042)
Proceeds on disposal of property, plant and equipment............. 7,503 22,497
(Additions to) disposals of other assets.......................... (13,689) 881
----------- ---------
Cash (used in) provided by investing activities........... (1,102,162) 1,336
----------- ---------
Cash (deficiency) before financing activities............. (866,179) 140,294
----------- ---------
Financing Activities
Proceeds from (repayment of) long-term obligations................ 648,335 (151,519)
Proceeds from short-term debt..................................... 149,989 --
Repayment of note payable......................................... (374,526) --
Dividends......................................................... (27,843) (23,853)
Issuance of shares................................................ 575,641 1,871
----------- ---------
Cash provided by (used in) financing activities........... 971,596 (173,501)
----------- ---------
Increase (Decrease) in Cash......................................... 105,417 (33,207)
(Bank Indebtedness) Cash and Cash Equivalents, Beginning of
Period............................................................ (6,330) 40,497
----------- ---------
Cash and Cash Equivalents, End of Period............................ $ 99,087 $ 7,290
========== =========
Supplemental cash flow disclosure
Interest paid..................................................... $ 31,831 $ 26,583
Income taxes paid................................................. $ 32,896 $ 22,860
========== =========
</TABLE>
(See Notes to the Consolidated Financial Statements)
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POTASH CORPORATION OF SASKATCHEWAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Company's accounting policies are in accordance with accounting
principles generally accepted in Canada. These policies are consistent with
accounting principles generally accepted in the United States except as outlined
in Note 7.
Basis of Presentation
The consolidated financial statements include the accounts of Potash
Corporation of Saskatchewan Inc. (PCS) and its operating subsidiaries (the
"Company" except to the extent the context otherwise requires):
-- PCS Sales (Canada) Inc.
-- PCS Sales (Iowa), Inc.
-- PCS Sales (Indiana), Inc.
-- Potash Corporation of Saskatchewan (Florida) Inc.
-- Potash Corporation of Saskatchewan Transport Limited
-- PCS Sales (USA), Inc.
-- PCS Phosphate Company, Inc. (PCS Phosphate)
-- Albright & Wilson Company (proportionately consolidated)
-- White Springs Agricultural Chemicals, Inc.
-- PCS Nitrogen, Inc. (PCS Nitrogen)
2. ACQUISITION OF ARCADIAN CORPORATION
On March 6, 1997, the Company acquired all of the outstanding shares of
Arcadian Corporation for cash of $555,145 and the issuance of 8,030,236 common
shares valued at $573,278. The cash consideration was financed by debt. Arcadian
Corporation is based in Memphis, Tennessee and is a producer of nitrogen and
nitrogen products. The acquisition was completed through the merger of Arcadian
Corporation into a wholly-owned subsidiary of PCS, PCS Nitrogen.
The acquisition has been accounted for by the purchase method of accounting
and, accordingly, the results of operations of PCS Nitrogen have been included
in the consolidated financial statements from March 7, 1997. The excess of the
purchase price over the fair value of the net identifiable assets acquired of
$519,460 has been recorded as goodwill and is being amortized on a straight-line
basis over 40 years.
Net assets acquired were:
<TABLE>
<S> <C>
Working capital................................................. $ 177,394
Fixed assets and other assets................................... 1,075,850
Goodwill........................................................ 519,460
----------
1,772,704
Long-term debt and other long-term liabilities.................. 644,281
----------
Net assets acquired............................................. 1,128,423
Less: Cash acquired............................................. 88,565
----------
Net acquisition cost............................................ $1,039,858
==========
</TABLE>
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<PAGE> 6
POTASH CORPORATION OF SASKATCHEWAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
2. ACQUISITION OF ARCADIAN CORPORATION -- (CONTINUED)
The following unaudited pro forma financial information presents the
combined results of operations of the Company and PCS Nitrogen as if the
acquisition had occurred at the beginning of the periods presented, after giving
effect to certain adjustments including amortization of goodwill, additional
depreciation expense, increased interest expense on debt related to the
acquisition, decreased interest expense and interest income due to debt retired
in connection with the acquisition, and related income tax effects.
The consolidated financial statements and the pro forma amounts are based
on a preliminary allocation of the purchase price. However, changes to the
consolidated financial statements and pro forma amounts are expected as
evaluations of assets and liabilities are completed and additional information
becomes available. Accordingly, the final allocated values may differ from the
amounts set forth in the consolidated financial statements and below.
The unaudited pro forma financial information is for informational purposes
only and is not necessarily indicative of the future results of operations of
the combined company or the results of operations that would have actually
occurred had the acquisition been in effect for the periods presented.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
-----------------------------
1997 1996
---------- ----------
(UNAUDITED PRO FORMA)
<S> <C> <C>
Net sales....................................... $1,303,538 $1,309,247
Operating income................................ 275,573 322,092
Net income...................................... 168,856 199,623
Net income per share............................ $ 3.33 $ 3.73
</TABLE>
3. INVENTORIES
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
<S> <C> <C>
Finished product...................................... $159,367 $ 93,717
Materials and supplies................................ 117,542 73,912
Raw materials......................................... 48,981 29,917
Work in process....................................... 19,505 21,887
-------- --------
$345,395 $219,433
======== ========
</TABLE>
4. EARNINGS PER SHARE
Earnings per share for the year-to-date are calculated on the weighted
average shares issued and outstanding during the six months ended June 30, 1997
of 50,770,000 (1996 -- 45,513,000). The weighted average shares issued and
outstanding during the second quarter of 1997 were 53,685,000 (1996 --
45,543,000).
5. DIVIDENDS
The Company declares its dividends in Canadian dollars.
I-5
<PAGE> 7
POTASH CORPORATION OF SASKATCHEWAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
6. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
As a result of the acquisition of Arcadian Corporation, the Company now
employs certain derivative instruments for the purpose of establishing the cost
of a portion of its natural gas requirements (primarily futures, swaps and
options) thereby managing the exposure to commodity price risk in the purchase
of natural gas, the primary raw material used in the manufacture of ammonia.
These activities have been designated as hedging activities by the Company and
are accounted for as such. The Company hedges for both committed and anticipated
purchases of natural gas. The Company does not hold these instruments for
trading purposes.
Gains or losses resulting from changes in the fair value of hedging
transactions which have not yet been settled are not recognized as they
generally relate to changes in the spot price of anticipated natural gas
purchases. Gains or losses arising from settled hedging transactions are
deferred as a component of inventory until the product containing the hedged
item is sold, at which time both the natural gas purchase cost and the related
hedging deferral are recorded as cost of sales. The Company regularly evaluates
its unrecognized or deferred gains and losses on these derivatives from a net
realizable value of inventory perspective and establishes appropriate reserves,
if necessary.
7. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
A description of the accounting principles which differ significantly in
certain respects from generally accepted accounting principles in the United
States (US GAAP) follows:
Earnings per share: In computing primary earnings per share, under US GAAP,
the stock options are included in the calculation to the extent that they are
exercisable.
Deferred income taxes: Deferred tax assets have been recognized only to the
extent of reducing deferred tax liabilities. US GAAP would require that deferred
tax assets be recorded when their realization is more likely than not.
Net sales: Sales are recorded net of freight costs (less related revenues)
and transportation and distribution expenses. US GAAP would require that net
freight costs be included in cost of sales and transportation and distribution
expenses be included in operating expenses.
I-6
<PAGE> 8
POTASH CORPORATION OF SASKATCHEWAN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
7. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -- (CONTINUED)
The application of US GAAP, as described above, would have had the
following approximate effects on net income, net income per share, total assets
and shareholders' equity:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income as reported in the
consolidated statements of income
and retained earnings............. $96,980 $52,398 $153,345 $116,076
Item decreasing reported net income
Deferred income taxes............. (1,118) (1,091) (4,292) (4,318)
------- ------- -------- --------
Approximate net income -- US GAAP... $95,862 $51,307 $149,053 $111,758
======= ======= ======== ========
Weighted average shares
outstanding -- US GAAP............ 54,218,000 45,975,000 51,315,000 45,975,000
========== ========== ========== ==========
Net income per share -- US GAAP..... $1.77 $1.12 $2.90 $2.43
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
Total assets as reported in the consolidated statements of
financial position......................................... $4,435,702 $2,494,387
Item increasing reported total assets
Deferred income tax asset.................................. 11,435 15,727
---------- ------------
Approximate total assets -- US GAAP.......................... $4,447,137 $2,510,114
========= ==========
Shareholders' equity as reported in the consolidated
statements of financial position........................... $2,106,639 $1,405,496
Item increasing reported shareholders' equity
Deferred income taxes...................................... 7,090 11,382
---------- ------------
Approximate shareholders' equity -- US GAAP.................. $2,113,729 $1,416,878
========== ===========
</TABLE>
8. COMPARATIVE FIGURES
Certain of the prior period's comparative figures have been reclassified to
conform with the current period's presentation. Results for the first six months
of 1996 do not include the operations of PCS Nitrogen (formerly Arcadian
Corporation) acquired March 6, 1997.
I-7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
With the exception of purchased product, nitrogen data for 1997 is only for
the period subsequent to the acquisition of PCS Nitrogen, Inc. (formerly
Arcadian Corporation).
Net sales revenue and net income for the three months ended June 30, 1997,
improved 92 percent and 85 percent, respectively, over the same period in 1996.
Net income for the three months ended June 30, 1997, was $97.0 million
(1996 -- $52.4 million) on net sales of $676.6 million (1996 -- $352.4 million),
or $1.81 per share (1996 -- $1.15 per share). For the second quarter of 1997,
gross margin and operating income were $184.2 million and $154.7 million,
respectively, compared to a gross margin of $90.3 million and an operating
income of $74.4 million for the same period in 1996 (increases of 104 percent
and 108 percent, respectively).
For the three months ended June 30, 1997, North American and offshore net
sales revenue were $501.8 million (1996 -- $204.4 million) and $174.8 million
(1996 -- $148.0 million), respectively. North American net sales revenue
represented 74 percent (1996 -- 58 percent) of total net sales revenue, whereas
offshore sales represented 26 percent of net sales revenue (1996 -- 42 percent).
Net sales revenue for the second quarter of 1997 was $676.6 million, an
increase of $324.3 million or 92 percent over the same period in 1996. Potash,
phosphate and nitrogen net sales revenue for the quarter ended June 30, 1997
were $137.4 million (1996 -- $103.9 million), $246.9 million (1996 -- $222.1
million), and $292.3 million (1996 -- $26.4 million), respectively.
Gross margins for the second quarter of 1997 increased $93.8 million or 104
percent over the same quarter in 1996. Gross margin for potash was $63.0
million, an increase of $16.7 million when compared to the same quarter of 1996.
Gross margin for phosphate and feed was $54.5 million, an increase of $11.3
million when compared to the second quarter of 1996. Of this $54.5 million gross
margin, 36 percent is attributable to liquid phosphate fertilizer products, 23
percent to solid phosphate fertilizer products, 27 percent to feed products and
14 percent to industrial products. Gross margin for manufactured nitrogen
products was $66.6 million of which 27 percent is attributable to urea, 34
percent to ammonia, 20 percent to nitrogen solutions and 19 percent to other
nitrogen products.
The increase in net income of $44.6 million when comparing the second
quarters of 1997 and 1996 is attributable to: potash sales volumes were up 32
percent and the gross margin was up 36 percent; phosphate volumes were up 7
percent and increases in prices for liquid, feed and industrial products more
than compensated for the price decrease in DAP to result in a 26 percent
increase in phosphate gross margin; and a $66.6 million gross margin
contribution by nitrogen. These increases in gross margin were offset by:
additional nitrogen selling and administrative expenses of $9.3 million; $5.5
million of additional potash mining taxes resulting from the increased
profitability in those operations; $11.7 million additional interest expense
relating to the acquisition of the nitrogen operations and a $24.1 million
increase in the provision for income taxes as a result of increased income
before tax.
Net sales and net income for the six months ended June 30, 1997 improved 59
percent and 32 percent, respectively, over the same period in 1996. Net income
for the six months ended June 30, 1997 was $153.3 million (1996 -- $116.1
million) on net sales of $1,141.5 million (1996 -- $719.2 million), or $3.02 per
share (1996 -- $2.55 per share). For the first six months of 1997, gross margin
and operating income were $299.2 million and $245.2 million, respectively,
compared to a gross margin of $197.7 million and operating income of $161.5
million for the same period in 1996 (increases of 51 percent and 52 percent,
respectively).
For the six months ended June 30, 1997, North American and offshore net
sales revenue were $829.0 million (1996 -- $435.3 million) and $312.5 million
(1996 -- $283.9 million), respectively. North American net sales revenue
represented 73 percent (1996 -- 61 percent) of total net sales revenue, whereas
offshore sales represented 27 percent of net sales revenue (1996 -- 39 percent).
I-8
<PAGE> 10
Potash, phosphate and nitrogen net sales revenue for the first half of 1997
was $244.4 million (1996 -- $207.8 million), $470.6 million (1996 -- $446.2
million), and $426.5 million (1996 -- $65.2 million), respectively.
Gross margins for the first six months of 1997 increased $101.5 million or
51 percent over the same period in 1996. Gross margin for potash products was
$110.3 million, an increase of $12.2 million when compared to the first half of
1996. Gross margin for phosphate products was $94.0 million, a decrease of $4.0
million when compared to the first half of 1996. Of this $94.0 million gross
margin, 54 percent is attributable to liquid and solid phosphate fertilizer
products, 32 percent to feed products and 14 percent to industrial products.
Gross margin for manufactured nitrogen products was $94.5 million of which 31
percent is attributable to urea, 29 percent to ammonia, 19 percent to nitrogen
solutions and 21 percent to other nitrogen products.
The increase in net income of $37.3 million when comparing the first half
of 1997 with the first half of 1996 is attributable to: a 19 percent increase in
potash sales volumes and a 12 percent increase in the gross margin; a decrease
of 4 percent in the phosphate gross margin (although there was a 2 percent
increase in sales volumes and a 4 percent increase in prices these were offset
by increased mining costs) and a $93.2 million increase in the gross margin
contributed by nitrogen. This increase in gross margin was offset by: $13.3
million of nitrogen selling and administrative expense; a $4.1 million increase
in potash mining taxes; an $11.6 million increase in interest expense relating
to the acquisition of the nitrogen operations and a $34.8 million increase in
income taxes.
POTASH REVENUE
Potash net sales revenue for the quarter ended June 30, 1997 increased by
$33.5 million or 32 percent as compared to the same period in 1996
(1997 -- $137.4 million; 1996 -- $103.9 million). Potash net sales revenue
represented 20 percent of consolidated net sales revenue. The Company sold 1.887
million tonnes of potash in the second quarter of 1997, compared to 1.430
million tonnes sold in the same period last year, an increase of .457 million
tonnes or 32 percent. Potash prices overall were flat for the second quarter of
1997 when compared to the second quarter of 1996. The gross margin for potash
products was $63.0 million (1996 -- $46.3 million) or 34 percent of the
consolidated gross margin.
In the second quarter of 1997, North American and offshore potash sales
volumes increased 16 percent and 49 percent, respectively, over the same period
in 1996. Overall, potash pricing was flat when compared to the same period last
year. However, prices in the North American market were up 9 percent.
North American net sales revenue from potash operations represented 41
percent of the potash net sales revenue of the Company during the second quarter
of 1997 (1996 -- 43 percent). In the second quarter of 1997, the increase in
North American potash sales volumes and the increase in North American prices
resulted in a $11.7 million increase in North American potash net sales revenue
over the same period in 1996. North American potash sales volumes for the second
quarter of 1997 increased .117 million tonnes (1997 -- .849 million tonnes;
1996 -- .732 million tonnes) compared to the second quarter of 1996.
In the second quarter of 1997, offshore net sales revenue from potash
operations represented 59 percent of net potash sales revenue of the Company
(1996 -- 57 percent). In the second quarter of 1997, the increase in offshore
sales volumes and the decrease in overall offshore selling price resulted in a
$21.8 million increase in offshore potash net sales revenue over the same period
in 1996. In the offshore market, the Company sold 1.038 million potash tonnes
during the second quarter of 1997 (1996 -- .698 million tonnes), an increase of
49 percent. Of the 1.038 million tonnes, .759 million tonnes were sold through
Canpotex and the remaining .279 million tonnes were produced by PCS New
Brunswick and sold and delivered to offshore markets by PCS Sales.
Potash net sales revenue for the first six months of 1997 increased by
$36.6 million or 18 percent as compared to the first six months of 1996
(1997 -- $244.4 million; 1997 -- $207.8 million). The Company sold 3.433 million
tonnes of potash in the first half of 1997, compared to 2.887 million tonnes
sold in the same period last year, an increase of .546 million tonnes or 19
percent. Potash prices overall were flat in the first half of 1997 as compared
to the first half of 1996.
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<PAGE> 11
In the first six months of 1997, North American and offshore potash sales
volumes increased 16 percent and 21 percent, respectively, over the same period
in 1996. Potash prices decreased 6 percent in the offshore market; however,
price increases of 6 percent were realized in the domestic market.
North American net sales revenue from potash operations represented 41
percent of the potash net sales revenue of the Company during this year's first
half. In the first half of 1997, the increase in North American potash sales
volumes and an increase in North American prices resulted in a $18.9 million
increase in North American potash net sales revenue over the same period in
1996. North American potash sales volumes for the first half of 1997 increased
.217 million tonnes (1997 -- 1.538 million tonnes; 1996 -- 1.321 million tonnes)
compared to the first half of 1996.
In the first half of 1997, offshore net sales revenue from potash
operations represented 59 percent of potash net sales revenue of the Company. In
the first half of 1997, the increase in offshore sales volumes and the decrease
in overall offshore selling price resulted in a $17.6 million increase in
offshore potash net sales revenue over the same period in 1996. In the offshore
market, the Company sold 1.895 million potash tonnes during the first half of
1997 (1996 -- 1.566 million tonnes), an increase of 21 percent. Of the 1.895
million tonnes, 1.493 million tonnes were sold through Canpotex (China purchased
over one million tonnes in the first half which is almost as much as it
purchased in all of last year) and the remaining .402 million tonnes were
produced by PCS New Brunswick and sold and delivered to offshore markets by PCS
Sales.
PHOSPHATE REVENUE
Phosphate net sales revenue for the three months ended June 30, 1997 was
$246.9 million representing 36 percent of the consolidated net sales revenue.
The distribution of this revenue was as follows: liquid phosphate fertilizer
$83.3 million (34 percent); solid phosphate fertilizers $96.6 million (39
percent); animal feed $44.0 million (18 percent); industrial products $22.8
million (9 percent) and phosphate rock $.2 million. For the same quarter of 1996
net sales revenue was $222.0 million; liquid phosphate fertilizer $59.7 million
(27 percent); solid phosphate fertilizer $100.8 million (46 percent); animal
feed $41.4 million (19 percent) and industrial products $20.1 million (9
percent). Gross margin for phosphate products was $54.5 million or 30 percent of
consolidated gross margin.
Second quarter net sales revenue from liquid and solid fertilizers was
$179.9 million (1996 -- $160.5 million) with sales volumes of .919 million
tonnes (1996 -- .814 million tonnes). Solid phosphate fertilizer (substantially
all DAP) accounted for 39 percent (1996 -- 45 percent) or $96.6 million (1996 --
$100.9 million) of the total phosphate net sales revenue. Compared to the second
quarter of 1996 the Company received higher prices for most of its phosphate
products (with the exception of DAP). Liquid fertilizer prices increased by 12
percent and volumes increased by 24 percent, resulting in additional net sales
revenue of $23.6 million over the second quarter of 1996 (mostly from the
addition of PCS Nitrogen's Geismar operations). Solid phosphate fertilizer
prices declined 9 percent as compared to the second quarter of 1996. However,
this was partially offset by a volume increase of 5 percent resulting in a
reduction of net sales revenue of $4.2 million compared to the second quarter of
1996.
Net sales revenue from animal feed and industrial products during the
second quarter was $66.8 million (1996 -- $61.5 million) with sales volumes of
.235 million tonnes (1996 -- .242 million tonnes). Although the Company gave up
market share in the animal feed area where volumes decreased 4 percent as
compared to the second quarter of 1996, recent price increases (11 percent as
compared to the second quarter of 1996) more than offset the volume lost. This
resulted in additional net sales revenue of $2.6 million. Industrial product
prices improved by 13 percent while maintaining sales volumes. The result was
additional net sales revenue of $2.7 million. Gross margin for feed and
industrial products improved over the same period a year ago.
Phosphate net sales revenue for the six months ended June 30, 1997 was
$470.6 million representing 41 percent of the consolidated net sales revenue.
The distribution of this revenue was as follows: liquid phosphate fertilizer
$149.5 million (32 percent); solid phosphate fertilizer $180.9 million (38
percent); animal feed $94.6 million (20 percent); industrial products $44.3
million (10 percent) and phosphate rock $1.3 million. For the same six months of
1996 net sales revenue was $446.2 million; liquid phosphate fertilizer
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<PAGE> 12
$118.7 million (27 percent); solid phosphate fertilizer $192.1 million (43
percent); animal feed $90.9 million (20 percent); industrial products $41.3
million (10 percent) and phosphate rock $3.2 million. Gross margin for phosphate
was $94.0 million or 31 percent of consolidated gross margin.
For the six months ended June 30, 1997 net sales revenue from liquid and
solid fertilizers was $330.4 million (1996 -- $310.8 million) with sales volumes
of 1.677 million tonnes (1996 -- 1.530 million tonnes). Solid phosphate
fertilizer (substantially all DAP) accounted for 38 percent (1996 -- 43 percent)
or $180.9 million (1996 -- $192.1 million) of the total phosphate net sales
revenue. Compared to the first six months of 1996 the Company received higher
prices for most of its phosphate products (with the exception of DAP). Liquid
fertilizer prices increased by 10 percent and sales volumes increased by 15
percent, resulting in additional net sales revenue of $30.9 million over the
first six months of 1996. Solid phosphate fertilizer prices declined 11 percent
as compared to the first six months of 1996. However, this was partially offset
by a volume increase of 6 percent resulting in a reduction of net sales revenue
of $11.2 million compared to the first six months of 1996.
Net sales revenue from animal feed and industrial products during the first
six months was $138.9 million (1996 -- $132.2 million) with sales volumes of
.490 million tonnes (1996 -- .518 million tonnes). Animal feed prices increased
9 percent and volumes decreased 5 percent as compared to the first six months of
1996. This resulted in additional net sales revenue of $3.6 million. Industrial
product prices improved by 17 percent while sales volumes decreased by 8
percent. The result was additional net sales revenue of $3.1 million. Gross
margin for feed products improved over the same period a year ago while the
margin for industrial products was substantially unchanged.
NITROGEN REVENUE
During the second quarter of 1997 nitrogen net sales revenue was $292.3
million. Net sales revenue includes $40.6 million of purchased Russian ammonia
product and $5.5 million of other nitrogen products for resale. Manufactured
nitrogen net sales revenue for the three months ended June 30, 1997 was $246.2
million. The distribution of this revenue was as follows: ammonia $73.8 million
(30 percent); urea $65.9 million (27 percent); nitrogen solutions $67.2 million
(27 percent) and other nitrogen products $39.3 million (16 percent). Gross
margin for manufactured nitrogen products was $66.6 million (27 percent of
manufactured nitrogen net sales revenue).
For the three months ended June 30, 1997 sales tonnes for manufactured
nitrogen products were as follows: ammonia .402 million tonnes; urea .360
million tonnes; nitrogen solutions .636 million tonnes and other nitrogen
products .294 million tonnes. Purchased nitrogen products sales tonnes for the
three months ended June 30, 1997 were .274 million tonnes.
From the date of acquisition, nitrogen net sales revenue was $426.5
million. Net sales revenue includes $90.2 million of purchased Russian ammonia
product and $7.4 million of other nitrogen products for resale. The overall
gross margin was impacted negatively by sales of this low margin purchased
ammonia and by lower selling prices for ammonia, urea and nitrogen solutions.
Manufactured nitrogen net sales revenue for the four months ended June 30, 1997
was $328.9 million. The distribution of this revenue was as follows: ammonia
$88.7 million (27 percent); urea $100.1 million (31 percent); nitrogen solutions
$86.6 million (26 percent) and other nitrogen products $53.5 million (16
percent). Gross margin for manufactured nitrogen products was $94.5 million (29
percent of manufactured nitrogen net sales revenue).
For the four months ended June 30, 1997 sales tonnes for manufactured
nitrogen products were as follows: ammonia .471 million tonnes; urea .541
million tonnes; nitrogen solutions .813 million tonnes and other nitrogen
products .395 million tonnes. Purchased nitrogen products sales tonnes for the
four months ended June 30, 1997 were .519 million tonnes.
While China's import embargo on urea has resulted in pricing pressures in
the rest of the world, the Company continues to sell the majority of its North
American urea production to the more stable industrial market. In addition, U.S.
mid-west urea prices have not declined as much as U.S. gulf urea prices. Ammonia
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prices were down when compared to the same quarter a year ago, but results were
supported by the Company's strategic plant locations in North America and its
favourable gas contracts with protected margins in Trinidad.
COST OF GOODS SOLD
During the second quarter of 1997 the Company produced 1.687 million
potassium chloride (KCl) tonnes, a 12 percent increase from the 1.512 million
tonnes produced in the second quarter of 1996. During the second quarter of 1997
the Company produced .599 million phosphoric acid (P2O5) tonnes (1996 -- .507
million tonnes), an increase of 18 percent. Nitrogen production during the
second quarter of 1997 was .724 million nitrogen (N) tonnes.
Potash unit cost of sales were favourably affected by higher production
volumes in the second quarter of 1997 compared to the same period in 1996.
Phosphate unit cost of sales during the second quarter of 1997 decreased by
7 percent for solid fertilizer and 11 percent for feed products compared to the
same period in 1996. This was offset by increases of 16 percent and 12 percent
in the unit cost of sales of liquid fertilizer and industrial products,
respectively during the same period.
Depreciation expense for the second quarter of 1997 was $48.0 million
compared to $22.8 million in 1996, an increase of $25.2 million or 111 percent.
The increase is largely attributable to additional depreciation of $20.5 million
from the acquired nitrogen operations.
For the six months ended June 30, 1997, the Company produced 3.340 million
potassium chloride (KCl) tonnes, compared to 3.211 million tonnes in the first
half of 1996, an increase of .129 million tonnes (4 percent) compared to 1996.
For the six months ended June 30, 1997, the Company produced 1.121 million
phosphoric acid (P205) tonnes from its phosphate operations, compared to 1.020
million tonnes in 1996, an increase of .101 million tonnes. From the date of
acquisition, nitrogen production was .964 million (N) tonnes.
Potash unit cost of sales increased by 4 percent in the first six months of
1997 compared to the same period in 1996 due in part to three additional
shutdown weeks.
Phosphate unit cost of sales in the first six months of 1997 decreased by 5
percent for feed products as compared to the same period in the prior year.
However, this was offset by increases of 11 percent and 22 percent in the unit
cost of sales of liquid fertilizer and industrial products, respectively. These
increased costs, which were primarily caused by excessive moisture in the
overburden at Aurora, were reduced in the second quarter when compared to the
first quarter of 1997. The unit cost of sales of solid fertilizer remained
unchanged during the first six months of 1997 as compared to the same period in
1996.
In nitrogen, U.S. natural gas market prices have increased each month since
the date of acquisition; however, PCS Nitrogen, through its natural gas hedging
program, has managed to keep its U.S. per unit natural gas cost relatively flat.
In addition, Trinidad's per unit natural gas cost has decreased 12% since the
date of acquisition. Trinidad's natural gas is purchased using a pricing formula
indexed to the market price of ammonia. The per unit natural gas cost included
in PCS Nitrogen's cost of sales increased approximately 7 percent from the same
period in 1996.
Depreciation expense for the first half of 1997 was $78.0 million compared
to $46.1 million in 1996, an increase of $31.9 million or 69 percent. The
increase is largely attributable to $27.1 million additional depreciation from
the acquired nitrogen operations.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses during the second quarter of 1997 were
$27.9 million as compared to $14.3 million in 1996, an increase of $13.6
million. During the first half of 1997, selling and administrative expenses were
$47.2 million as compared to $29.2 million in 1996, an increase of $18.0
million. The increases are attributable to the acquisition of PCS Nitrogen and
to general increases in supplies, compensation and benefits.
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PROVINCIAL MINING AND OTHER TAXES
Saskatchewan's potash production tax is comprised of a base tax per tonne
of product sold and an additional tax based on mine-by-mine profits. The New
Brunswick division and the Saskatchewan divisions pay a provincial crown
royalty, which is accounted for under cost of goods sold.
For the second quarter of 1997, Saskatchewan provincial mining and other
taxes were $14.5 million as compared to $9.0 million in the second quarter of
1996, an increase of 61 percent. Potash production tax for the second quarter of
1997 was $10.1 million compared to $5.8 million in the same period in 1996, an
increase of 74 percent. Corporate capital tax was $4.2 million in the second
quarter ended June 30, 1997 compared to $3.2 million in the same period in 1996,
an increase of 31 percent. For the first half of 1997, Saskatchewan provincial
mining and other taxes were $25.0 million as compared to $20.9 million in the
first half of 1996, an increase of 20 percent. Potash production tax for the
first half of 1997 was $16.9 million compared to $14.2 million in the same
period in 1996, an increase of 19 percent. Corporate capital tax was $8.0
million in the six months ended June 30, 1997 compared to $6.7 million in the
same period in 1996, an increase of 19 percent.
INTEREST EXPENSE
For the second quarter of 1997, interest expense was $23.6 million as
compared to $11.9 million in the same period in 1996. For the first half of
1997, interest expense was $37.4 million as compared to $25.7 million in the
same period in 1996. The 1997 amount includes interest on the debt incurred with
the acquisition of PCS Nitrogen in March.
INCOME TAXES
Income taxes in the second quarter of 1997 were $34.2 million, compared to
$10.1 million in the same period of 1996, an increase of $24.1 million. Income
taxes in the first half of 1997 were $54.5 million, compared to $19.7 million in
the same period of 1996, an increase of $34.8 million. The increase is largely
attributable to U.S. withholding taxes and deferred income tax relating to the
Company's acquired nitrogen operations. The tax rate applicable to the U.S.
operations for the first half of 1997 is approximately 25 percent of income
before taxes. This rate for 1996 was approximately 20 percent of income before
taxes.
ANALYSIS OF FINANCIAL CONDITION AND CASH FLOW
Working capital for the first half of 1997 increased by $70.0 million. Cash
flow from operations was $236.0 million. Quick and current ratios were .93 and
1.73 at June 30, 1997, respectively. The Company paid down its debt by $161.5
million (of which $160.0 million was voluntary) and paid dividends of $27.8
million. At the end of the first half of 1997, the debt to capital ratio was at
40.3 percent and the interest coverage ratio was 6.6 to 1. The net debt to
market capitalization at June 30, 1997 was 29.1 percent.
OUTLOOK
The statements in this "Management Discussion and Analysis" in this
"Outlook" section, relating to the period after June 30, 1997, are
forward-looking statements subject to uncertainties. The Company's financial
performance continues to be affected by fertilizer prices tied to the worldwide
state of supply and demand for potash, phosphate and nitrogen products,
agricultural commodity prices, government assistance programs, weather
conditions, exchange rates and trade policies of producing and consuming nations
which, among other things, are influenced by domestic political conditions. The
Company sells to a diverse group of customers both by geography and by end
product. Market conditions by country will vary on a year-over-year basis and
sales shift from one period to another.
The rising world population and the demand for better diets in developing
nations will continue to drive consumption for fertilizer products over the
long-term. Over the short-term, there should be increased fertilizer usage over
the next few years as world grain stocks are critically low, and governments
around the world focus on food production. The Company expects to be an
important supplier to these markets. While the
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consumption trend line is expected to continue to climb over the long-term,
there will be, at times, fluctuations in demand.
North American potash, phosphate and nitrogen demand in fertilizer is
generally considered mature but is expected to fluctuate from year to year, as a
function of acres planted and application rates per acre which are influenced by
crop prices and weather. The North American agricultural market is expected to
have strong fall fertilizer demand which is expected to firm markets and support
prices in the second half of 1997. As approximately 40 percent of the Company's
phosphate and nitrogen gross margins comes from non-fertilizer markets, demand
for these products will be affected by domestic economic growth. The optimistic
outlook for continued strong domestic economic growth, if correct, supports the
industrial markets and should translate into increased demand for the Company's
upgraded products.
Potash is expected to continue to perform well in both the domestic and
offshore markets. The Company has introduced an increase of $6 per ton in the
domestic market for mid-September following a strong spring season and previous
price increases. China, India and Brazil are expected to continue buying potash.
Lower offshore sales volumes in 1996 resulted in lower spot prices in Asian
markets. The strong volumes so far in 1997 should result in higher prices going
forward. Supply is tight on Canada's east coast where a competitor is currently
shut down for an unknown duration due to mine flooding.
The near-term outlook for phosphate pricing is expected to remain
favourable as supply and demand are in reasonably good balance. Worldwide
phosphoric acid capacity utilization remains historically high. India is
importing MGA under a one-year record contract with major suppliers through
early 1998. Subsidies in India have brought it back into the market for DAP and
MGA. The government support for agriculture in China should continue to support
good demand for DAP. This, combined with the demand in India, is expected to
result in upward pricing pressure for DAP. The recent decline in ammonia input
costs should translate into improved DAP margins. In North America, projected
increased corn and wheat acreage is expected to support liquid and solid
phosphate fertilizer sales. Prices should benefit.
Market prices for nitrogen fertilizer are expected to come under some
pressure as new capacity comes on stream. The urea market is influenced by
China. Earlier in 1997, China stopped importing urea which had a negative effect
on prices. It is unknown if China will reenter the urea market by year end. The
low urea price realizations in the agricultural markets are expected to be
offset to some degree by higher priced industrial markets for urea. The Company
expects that its strategic plant locations and sales to industrial customers
(both of which result in higher margins) and its favourable gas contracts in
Trinidad will continue to provide positive urea margins. In ammonia, the
strategic plant locations and favourable gas contracts will support margins. The
strong domestic economic outlook should support industrial sales. Nitrogen
solution prices are expected to remain below their record levels of one year
ago. The Company is reducing solution production at Wilmington to maximize
margins.
U.S. farmers are expected to plant more wheat and corn in 1998 beginning
with winter wheat this fall. This should support strong demand for all three
nutrients. With record or near record yields in 1997, it is expected that there
will be an increase in the need for fertilizer as farmers look to replenish
depleted nutrient levels in the soil.
PCS continues to operate its potash mines by matching production to sales
demand. Shutdowns at potash mines for inventory correction will influence potash
production costs on a quarter over quarter comparative basis. Sulphur and
ammonia prices have moderated and are expected to impact favourably upon
phosphate processing input costs for 1997. The Company manages its natural gas
costs through a combination of fixed price contracts, hedges and the Trinidad
gas contracts. As the most flexible producer, the Company will continue to
allocate its nitrogen and phosphate feed stock to production of the products
with the best margins.
Capital expenditures in 1997 will exceed those in 1996 primarily due to the
acquired nitrogen operations. Plans for such expenditures are limited to
sustaining capital.
The narrative, included under this Management Discussion and Analysis, has
been prepared with reference to the financial statements reported under Canadian
Generally Accepted Accounting Principles (GAAP).
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
PCS NITROGEN LEGAL MATTERS
LAKE CHARLES PLANT
In connection with a 1992 incident at PCS Nitrogen's Lake Charles plant,
the United States Occupational Safety and Health Administration ("OSHA")
proposed penalties totaling $4.35 million, based on multiplying the base penalty
for the alleged violation by the number of employees allegedly exposed in the
incident. On February 19, 1997, an administrative law judge of the Occupational
Safety and Health Review Commission issued a decision finding that PCS Nitrogen
had committed a willful violation of the federal Occupational Safety and Health
Act and assessing a penalty of $50,000. PCS Nitrogen has appealed the judge's
decision. In another phase of the OSHA litigation, on April 28, 1997, the United
States Court of Appeals for the Fifth Circuit held that OSHA may not multiply
the penalty for the violation by the number of employees allegedly exposed in
the incident. OSHA has not appealed that decision and it has become final.
Therefore any civil penalty ultimately paid will be no more than $70,000, the
maximum allowed under the Occupational Safety and Health Act for the alleged
violation.
In September 1996, PCS Nitrogen's liability insurers negotiated preliminary
settlements of substantially all of the civil litigation arising from the Lake
Charles incident. The settlements, which in the aggregate are within the policy
limits of PCS Nitrogen's liability insurance, have been finalized and approved
by the court as to fairness. There remain three lawsuits pending in the United
States District Court for the Western District of Louisiana against PCS Nitrogen
arising from the incident, which were brought in July 1993 by former employees
at the Lake Charles plant who allege that they were wrongfully terminated
following the incident. Management and legal counsel believe that these lawsuits
are without merit, and that there will be no material adverse effect on the
Company upon their resolution.
SHAREHOLDER LITIGATION
Following announcement of Arcadian Corporation's proposed business
combination with Freeport McMoRan Inc., five lawsuits were filed in the Court of
Chancery of the State of Delaware in New Castle County on behalf of a purported
class of all stockholders of Arcadian Corporation other than the defendants and
their affiliates against Arcadian Corporation and some or all of its directors.
PCS was named as an additional defendant in an amended complaint, but PCS was
not served process. The amended complaint alleged generally that the defendants
acted improperly in causing Arcadian Corporation to enter into the merger
agreement with PCS and PCS Nitrogen, and seeks an injunction preventing the
merger, unspecified monetary damages, and other relief.
The defendants believe the lawsuit is without merit. Nevertheless, Arcadian
Corporation and the other defendants entered into a Stipulation and Agreement of
Compromise, Settlement and Release (the "Stipulation") with the plaintiffs
providing for the conditional settlement of the litigation. In so doing, the
defendants denied that they violated the law and agreed to settle the suit
solely to eliminate the burden and expense of any further litigation relating to
the merger. The Stipulation provides among other things that PCS will pay the
fees and expenses, if any, awarded by the court to the plaintiffs' counsel, up
to $450,000. The Stipulation also provides for, among other things, (a) the
dismissal of all claims asserted in the lawsuit with prejudice; and (b) the
release by the plaintiffs of any and all claims relating to the merger that they
may have against the defendants and related persons. The consummation of the
settlement is subject to certain conditions, including the approval of the
Stipulation by the Delaware court. The court has scheduled a hearing for
September 10, 1997 to determine whether the settlement should be approved.
FORMER ARCADIAN EXECUTIVE PROCEEDINGS
On May 7, 1997, J. Douglas Campbell, Alfred L. Williams, Peter H. Kesser,
and David Alyea, former officers of Arcadian Corporation, filed lawsuits against
PCS in the United States District Court for the Western District of Tennessee.
The complaints allege that PCS breached employment agreements between
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Arcadian and the officers and breached the related assumption agreement among
PCS, PCS Nitrogen, and Arcadian. In addition, Mr. Alyea's complaint names
Charles Childers, John Gugulyn, and John Hampton as additional defendants and
alleges that the defendants interfered with and conspired to interfere with his
employment agreement, and did not accurately state their intentions in entering
into the assumption agreement. The complaints of Mr. Campbell, Mr. Williams, Mr.
Kesser, and Mr. Alyea seek damages approximately in the amounts of $22.2
million, $6.2 million, $3.7 million, and $4.2 million, respectively. Each
complaint also seeks certain additional unspecified damages. The defendants have
responded to the lawsuits. Management of the Company, having consulted with
legal counsel, believes that the lawsuits will not have a material adverse
effect on the Company.
PORT AUTHORITY PROCEEDINGS
On March 13, 1996, PCS Nitrogen, two other nitrogen producers, and up to 30
unidentified parties were named as defendants in a lawsuit filed in the name of
the Port Authority of New York and New Jersey (the "Port Authority") in New
Jersey state court. The lawsuit was actually filed by attorneys hired by the
Port Authority's subrogated insurance carriers. The Port Authority's insurers
are seeking to recover damages allegedly incurred as a result of the explosion
at the World Trade Center in New York City on February 26, 1993. The Port
Authority's insurers allege in their complaint that the two other named
defendants and one or more unidentified parties (as manufacturers of ammonium
nitrate), PCS Nitrogen and one or more unidentified parties (as producers of
urea), and one or more unidentified makers of nitric acid are liable under
various tort theories for unspecified property damages, business interruption
losses, lost rent and other damages allegedly incurred by the Port Authority as
a result of the World Trade Center explosion. The lawsuit was removed to federal
court in New Jersey. On February 7, 1997, the defendants filed a motion to
dismiss the suit for failure to state a claim upon which relief could be
granted. On July 29, 1997, the court requested the parties to brief the issue of
the court's subject matter jurisdiction over the case. PCS Nitrogen expects that
a ruling on the motion to dismiss will issue only after the court reviews the
jurisdictional issue. Although neither the Port Authority nor its subrogated
insurers have alleged or otherwise revealed the amount of damages sought from
PCS Nitrogen in the lawsuit, the Port Authority stated in an affidavit submitted
to the court in support of its motion to disqualify its insurers' counsel that
as of April 9, 1996, the Port Authority had submitted to its insurers claims
relating to the explosion totaling approximately $340 million, of which the
insurers had paid approximately $160 million. PCS Nitrogen is unaware of any
basis for liability and intends to vigorously defend the lawsuit.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
<TABLE>
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
3(i) Restated Articles of Incorporation of the registrant dated October 31, 1989, as
amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
report on Form 10-K for the year ended December 31, 1995 (the "1995 Form 10-K").
3(ii) Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
3(ii) to the 1995 Form 10-K.
4(a) Term Credit Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated October 4, 1996, incorporated by reference to
Exhibit 4(b) to the registrant's Form S-4 (File No. 333-17841).
4(b) Indenture dated as of June 16, 1997 between the registrant and The Bank of Nova
Scotia Trust Company of New York, incorporated by reference to Exhibit 4(a) the
registrant's report on Form 8-K dated June 18, 1997.
The registrant hereby undertakes to file with the Securities and Exchange Commission,
upon request, copies of any constituent instruments defining the rights of holders of
long-term debt of the registrant or its subsidiaries that have not been filed herewith because
the amounts represented thereby are less than 10% of the total assets of the registrant and
its subsidiaries on a consolidated basis.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
10(a) Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited,
Agent for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated
by reference to Exhibit 10 (a) to the registrant's Form F-1 (File No. 33-31303)
(the "F-1 Registration Statement").
10(b) Sixth Voting Agreement dated April 22, 1978, between Central Canada Potash,
Division of Noranda, Inc., Cominco Ltd., International Minerals and Chemical
Corporation (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
reference to Exhibit 10(f) to the F-1 Registration Statement.
10(c) Canpotex Limited Shareholders Seventh Memorandum of Agreement effective April 21,
1978, between Central Canada Potash, Division of Noranda Inc., Cominco Ltd.,
International Minerals and Chemical Corporation (Canada) Limited, PCS Sales,
Texasgulf Inc. and Canpotex Limited as amended by Canpotex S & P amending agreement
dated November 4, 1987, incorporated by reference to Exhibit 10(g) to the F-1
Registration Statement.
10(d) Producer Agreement dated April 21, 1978, between Canpotex Limited and PCS Sales,
incorporated by reference to Exhibit 10(h) to the F-1 Registration Statement.
10(e) Agreement of Limited Partnership of Arcadian Fertilizer, L.P. (now PCS Nitrogen
Fertilizer, L.P.) dated as of March 3, 1992 (form), and the related Certificate of
Limited Partnership of Arcadian Fertilizer L.P., filed with the Secretary of State
of the State of Delaware on March 3, 1992 (incorporated by reference to Exhibits
3.1 and 3.2 to Arcadian Partners L.P.'s Registration Statement on Form S-1 (File
No. 33-45828)).
10(f) Geismar Complex Services Agreement dated June 4, 1984, between Allied Corporation
and Arcadian Corporation (incorporated by reference to Exhibit 10.4 to Registration
Statement on Form S-1 (Registration No. 33-34357)).
10(g) PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
33-36283).
10(h) Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
reference to Exhibit 10(f) to the 1995 Form 10-K.
10(i) Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated with effect
October 7, 1993, incorporated by reference to Exhibit 10(g) to the 1995 Form 10-K.
10(j) Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
International Minerals and Chemical Corporation (Canada) Limited and the
registrant's predecessor, incorporated by reference to Exhibit 10(e) to the F-1
Registration Statement.
10(k) Agreement dated December 21, 1990, between International Minerals & Chemical
Corporation (Canada) Limited and the registrant, amending the Esterhazy Restated
Mining and Processing Agreement dated January 31, 1978, incorporated by reference
to Exhibit 10(p) to the registrant's report on Form 10-K for the year ended
December 31, 1990.
10(l) Operating Agreement dated May 11, 1993, between BP Chemicals Inc. and Arcadian
Ohio, L. P., as amended by the First Amendment to the Operating Agreement dated as
of November 20, 1995, between BP Chemicals Inc. and Arcadian Ohio, L. P. ("First
Amendment") (incorporated by reference to Exhibit 10.2 to Arcadian Partners L. P.'s
current report on Form 8-K for the report event dated May 11, 1993 ("Partners
5/11/93 Report"), except for the First Amendment which is incorporated by reference
to Arcadian Corporation's report on Form 10-K for the year ended December 31, 1995
("Arcadian 10-K")).
10(m) Manufacturing Support Agreement dated May 11, 1993, between BP Chemicals Inc. and
Arcadian Ohio, L. P. (incorporated by reference to Exhibit 10.3 to the Partners
05/11/93 Report).
10(n) Amended and Restated Agreement for Lease dated as of May 16, 1997, between Trinidad
Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
10(o) Amended and Restated Lease Agreement dated as of May 16, 1997, between Trinidad
Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(p) Amended and Restated Agreement for Lease dated as of May 16, 1997, between Nitrogen
Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(q) Amended and Restated Lease Agreement dated as of May 16, 1997, between Nitrogen
Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(r) Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
Nitrogen Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer
Operations, Inc
10(s) Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
Trinidad Ammonia Company, Limited Partnership and PCS Nitrogen Fertilizer
Operations, Inc.
10(t) Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
incorporated by reference to Exhibit 10(j) to the 1995 Form 10-K.
10(u) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated
Directors, incorporated by reference Exhibit 4(a) to the registrant's Form S-8
(File No. 333-19215) (the "Form S-8").
10(v) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
Employees, incorporated by reference to Exhibit 4(b) to the Form S-8.
10(w) Short Term Incentive Plan of the registrant, as amended May 7, 1997.
10(x) Long-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(y) Resolution and Forms of Agreement for Supplemental Retirement Income Plan, for
officers and key employees of the registrant, incorporated by reference to Exhibit
10(o) to the 1995 Form 10-K.
10(z) Supplemental Executive Retirement Plan of Arcadian Corporation (incorporated by
reference to Exhibit 10.16 to the Arcadian S-4).
10(aa) Forms of Agreement dated December 30, 1994, between the registrant and certain
officers of the registrant, concerning a change in control of the registrant,
incorporated by reference to Exhibit 10(p) to the 1995 Form 10-K.
10(bb) Form of Agreement of Indemnification dated August 8, 1995, between the registrant
and certain officers and directors of the registrant, incorporated by reference to
Exhibit 10(q) to the 1995 Form 10-K.
10(cc) Employment Agreement between Arcadian Corporation and Gary E. Carlson, dated as of
September 5, 1996, incorporated by reference to Exhibit 10(cc) to the registrant's
report on Form 10-Q for the period ended March 31, 1997.
10(dd) Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
incorporated by reference to Exhibit 10(r) to the 1995 Form 10-K.
10(ee) Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
Company, Inc., incorporated by reference to Exhibit 10(s) to the 1995 Form 10-K.
10(ff) Second Amended and Restated Membership Agreement dated January 1, 1995, among
Phosphate Chemicals Export Association, Inc. and members of such association,
including Texasgulf Inc. (now PCS Phosphate Company, Inc.), incorporated by
reference to Exhibit 10(t) to the 1995 Form 10-K.
10(gg) International Agency Agreement dated January 1, 1995, between Phosphate Chemicals
Export Association, Inc. and Texasgulf Inc. (now PCS Phosphate Company, Inc.)
establishing Texasgulf Inc. as exclusive marketing agent for such association's wet
phosphatic materials, incorporated by reference to Exhibit 10(u) to the 1995 Form
10-K.
10(hh) General Partnership Agreement forming Albright & Wilson Company, dated July 29,
1988 and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate
Company, Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to
Exhibit 10(v) to the 1995 Form 10-K.
</TABLE>
II-4
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
10(ii) Royalty Agreement dated October 7, 1993, by and between the registrant and Rio
Algom Limited, incorporated by reference to Exhibit 10(x) to the 1995 Form 10-K.
10(jj) Amending Resolution and revised forms of agreement regarding Supplemental
Retirement Income Plan of the registrant, incorporated by reference to Exhibit
10(x) to the registrant's report on Form 10-Q for the quarterly period ended June
30, 1996 (the "Second Quarter 1996 Form 10-Q").
10(kk) Employment Agreement dated May 16, 1996, by and between PCS Phosphate Company, Inc.
and Thomas J. Wright, incorporated by reference to Exhibit 10(y) to the Second
Quarter 1996 Form 10-Q.
10(ll) Shareholders Rights Agreement dated November 10, 1994, as amended on March 28,
1995, and May 4, 1995, and approved the shareholders on May 11, 1995, incorporated
by reference to Exhibit 4(a) to the 1995 Form 10-K.
11 Statement re Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
- ---------------
(b) Reports on Form 8-K
On May 16, 1997, the registrant amended its report on Form 8-K filed on
March 20, 1997 regarding the merger of Arcadian Corporation with and into PCS
Nitrogen, Inc., a wholly-owned subsidiary of the registrant.
On June 11, 1997, the registrant filed a report on Form 8-K regarding the
status of its proposed acquisition of 51 percent of the outstanding shares of
Kali und Salz Beteiligungs AG.
On June 18, 1997, the registrant filed a report on Form 8-K regarding its
entry into a terms agreement relating to the sale by the registrant of its
$400,000,000 aggregate principal amount 7.125% Notes due June 15, 2007.
II-5
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Potash Corporation of Saskatchewan
Inc.
<TABLE>
<S> <C>
July 31, 1997 By: /s/ JOHN L.M. HAMPTON
----------------------------------------------
John L.M. Hampton
Senior Vice President, General Counsel and
Secretary
July 31, 1997 By: /s/ BARRY E. HUMPHREYS
----------------------------------------------
Barry E. Humphreys
Sr. Vice President, Finance and Treasurer
(Principal Financial and Accounting Officer)
</TABLE>
II-6
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
3(i) Restated Articles of Incorporation of the registrant dated October 31, 1989, as
amended May 11, 1995, incorporated by reference to Exhibit 3(i) to the registrant's
report on Form 10-K for the year ended December 31, 1995 (the "1995 Form 10-K").
3(ii) Bylaws of the registrant dated March 2, 1995, incorporated by reference to Exhibit
3(ii) to the 1995 Form 10-K.
4(a) Term Credit Agreement between The Bank of Nova Scotia and other financial
institutions and the registrant dated October 4, 1996, incorporated by reference to
Exhibit 4(b) to the registrant's Form S-4 (File No. 333-17841).
4(b) Indenture dated as of June 16, 1997 between the registrant and The Bank of Nova
Scotia Trust Company of New York, incorporated by reference to Exhibit 4(a) the
registrant's report on Form 8-K dated June 18, 1997.
10(a) Suspension Agreement concerning Potassium Chloride from Canada dated January 7,
1988, among U.S. Department of Commerce, Potash Corporation of Saskatchewan,
International Minerals and Chemical (Canada) Limited, Noranda, Inc. (Central Canada
Potash Co.), Potash Company of America, a Division of Rio Algom Limited, S & P
Canada, II (Kalium Chemicals), Cominco Ltd., Potash Company of Canada Limited,
Agent for Denison-Potacan Potash Co. and Saskterra Fertilizers Ltd., incorporated
by reference to Exhibit 10 (a) to the registrant's Form F-1 (File No. 33-31303)
(the "F-1 Registration Statement").
10(b) Sixth Voting Agreement dated April 22, 1978, between Central Canada Potash,
Division of Noranda, Inc., Cominco Ltd., International Minerals and Chemical
Corporation (Canada) Limited, PCS Sales and Texasgulf Inc., incorporated by
reference to Exhibit 10(f) to the F-1 Registration Statement.
10(c) Canpotex Limited Shareholders Seventh Memorandum of Agreement effective April 21,
1978, between Central Canada Potash, Division of Noranda Inc., Cominco Ltd.,
International Minerals and Chemical Corporation (Canada) Limited, PCS Sales,
Texasgulf Inc. and Canpotex Limited as amended by Canpotex S & P amending agreement
dated November 4, 1987, incorporated by reference to Exhibit 10(g) to the F-1
Registration Statement.
10(d) Producer Agreement dated April 21, 1978, between Canpotex Limited and PCS Sales,
incorporated by reference to Exhibit 10(h) to the F-1 Registration Statement.
10(e) Agreement of Limited Partnership of Arcadian Fertilizer, L.P. (now PCS Nitrogen
Fertilizer, L.P.) dated as of March 3, 1992 (form), and the related Certificate of
Limited Partnership of Arcadian Fertilizer L.P., filed with the Secretary of State
of the State of Delaware on March 3, 1992 (incorporated by reference to Exhibits
3.1 and 3.2 to Arcadian Partners L.P.'s Registration Statement on Form S-1 (File
No. 33-45828)).
10(f) Geismar Complex Services Agreement dated June 4, 1984, between Allied Corporation
and Arcadian Corporation (incorporated by reference to Exhibit 10.4 to Registration
Statement on Form S-1 (Registration No. 33-34357)).
10(g) PCS Sales -- Saskterra Special Canpotex Entitlement effective June 13, 1990,
incorporated by reference to Exhibit 10(n) to the registrant's Form S-1 (File No.
33-36283).
10(h) Canpotex/PCS Amending Agreement, dated with effect October 1, 1992, incorporated by
reference to Exhibit 10(f) to the 1995 Form 10-K.
10(i) Canpotex PCA Collateral Withdrawing/PCS Amending Agreement, dated with effect
October 7, 1993, incorporated by reference to Exhibit 10(g) to the 1995 Form 10-K.
10(j) Esterhazy Restated Mining and Processing Agreement dated January 31, 1978, between
International Minerals and Chemical Corporation (Canada) Limited and the
registrant's predecessor, incorporated by reference to Exhibit 10(e) to the F-1
Registration Statement.
10(k) Agreement dated December 21, 1990, between International Minerals & Chemical
Corporation (Canada) Limited and the registrant, amending the Esterhazy Restated
Mining and Processing Agreement dated January 31, 1978, incorporated by reference
to Exhibit 10(p) to the registrant's report on Form 10-K for the year ended
December 31, 1990.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
10(l) Operating Agreement dated May 11, 1993, between BP Chemicals Inc. and Arcadian
Ohio, L. P., as amended by the First Amendment to the Operating Agreement dated as
of November 20, 1995, between BP Chemicals Inc. and Arcadian Ohio, L. P. ("First
Amendment") (incorporated by reference to Exhibit 10.2 to Arcadian Partners L. P.'s
current report on Form 8-K for the report event dated May 11, 1993 ("Partners
5/11/93 Report"), except for the First Amendment which is incorporated by reference
to Arcadian Corporation's report on Form 10-K for the year ended December 31, 1995
("Arcadian 10-K")).
10(m) Manufacturing Support Agreement dated May 11, 1993, between BP Chemicals Inc. and
Arcadian Ohio, L. P. (incorporated by reference to Exhibit 10.3 to the Partners
05/11/93 Report).
10(n) Amended and Restated Agreement for Lease dated as of May 16, 1997, between Trinidad
Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(o) Amended and Restated Lease Agreement dated as of May 16, 1997, between Trinidad
Ammonia Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(p) Amended and Restated Agreement for Lease dated as of May 16, 1997, between Nitrogen
Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(q) Amended and Restated Lease Agreement dated as of May 16, 1997, between Nitrogen
Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer, L.P.
10(r) Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
Nitrogen Leasing Company, Limited Partnership, and PCS Nitrogen Fertilizer
Operations, Inc
10(s) Amended and Restated Purchase Option Agreement dated as of May 16, 1997, between
Trinidad Ammonia Company, Limited Partnership and PCS Nitrogen Fertilizer
Operations, Inc.
10(t) Agreement dated October 13, 1995 between the registrant and Charles E. Childers,
incorporated by reference to Exhibit 10(j) to the 1995 Form 10-K.
10(u) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Unaffiliated
Directors, incorporated by reference Exhibit 4(a) to the registrant's Form S-8
(File No. 333-19215) (the "Form S-8").
10(v) Potash Corporation of Saskatchewan Inc. Stock Option Plan -- Officers and Key
Employees, incorporated by reference to Exhibit 4(b) to the Form S-8.
10(w) Short-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(x) Long-Term Incentive Plan of the registrant, as amended May 7, 1997.
10(y) Resolution and Forms of Agreement for Supplemental Retirement Income Plan, for
officers and key employees of the registrant, incorporated by reference to Exhibit
10(o) to the 1995 Form 10-K.
10(z) Supplemental Executive Retirement Plan of Arcadian Corporation (incorporated by
reference to Exhibit 10.16 to the Arcadian S-4).
10(aa) Forms of Agreement dated December 30, 1994, between the registrant and certain
officers of the registrant, concerning a change in control of the registrant,
incorporated by reference to Exhibit 10(p) to the 1995 Form 10-K.
10(bb) Form of Agreement of Indemnification dated August 8, 1995, between the registrant
and certain officers and directors of the registrant, incorporated by reference to
Exhibit 10(q) to the 1995 Form 10-K.
10(cc) Employment Agreement between Arcadian Corporation and Gary E. Carlson, dated as of
September 5, 1996, incorporated by reference to Exhibit 10(cc) to the registrant's
report on Form 10-Q for the period ended March 31, 1997.
10(dd) Deferred Compensation Plan, for certain officers of PCS Phosphate Company, Inc,
incorporated by reference to Exhibit 10(r) to the 1995 Form 10-K.
10(ee) Supplemental Retirement Benefits Plan, for eligible employees of PCS Phosphate
Company, Inc., incorporated by reference to Exhibit 10(s) to the 1995 Form 10-K.
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
10(ff) Second Amended and Restated Membership Agreement dated January 1, 1995, among
Phosphate Chemicals Export Association, Inc. and members of such association,
including Texasgulf Inc. (now PCS Phosphate Company, Inc.), incorporated by
reference to Exhibit 10(t) to the 1995 Form 10-K.
10(gg) International Agency Agreement dated January 1, 1995, between Phosphate Chemicals
Export Association, Inc. and Texasgulf Inc. (now PCS Phosphate Company, Inc.)
establishing Texasgulf Inc. as exclusive marketing agent for such association's wet
phosphatic materials, incorporated by reference to Exhibit 10(u) to the 1995 Form
10-K.
10(hh) General Partnership Agreement forming Albright & Wilson Company, dated July 29,
1988 and amended January 31, 1995, between Texasgulf Inc. (now PCS Phosphate
Company, Inc.) and Albright & Wilson Americas, Inc., incorporated by reference to
Exhibit 10(v) to the 1995 Form 10-K.
10(ii) Royalty Agreement dated October 7, 1993, by and between the registrant and Rio
Algom Limited, incorporated by reference to Exhibit 10(x) to the 1995 Form 10-K.
10(jj) Amending Resolution and revised forms of agreement regarding Supplemental
Retirement Income Plan of the registrant, incorporated by reference to Exhibit
10(x) to the registrant's report on Form 10-Q for the quarterly period ended June
30, 1996 (the "Second Quarter 1996 Form 10-Q").
10(kk) Employment Agreement dated May 16, 1996, by and between PCS Phosphate Company, Inc.
and Thomas J. Wright, incorporated by reference to Exhibit 10(y) to the Second
Quarter 1996 Form 10-Q.
10(ll) Shareholders Rights Agreement dated November 10, 1994, as amended on March 28,
1995, and May 4, 1995, and approved the shareholders on May 11, 1995, incorporated
by reference to Exhibit 4(a) to the 1995 Form 10-K.
11 Statement re Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
<PAGE> 1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(n)
================================================================================
AMENDED AND RESTATED AGREEMENT FOR LEASE
between
Trinidad Ammonia Company, Limited Partnership
and
PCS Nitrogen Fertilizer, L.P.
Dated as of May 16, 1997
================================================================================
THIS AMENDED AND RESTATED AGREEMENT HAS BEEN ASSIGNED AS
SECURITY FOR INDEBTEDNESS OF THE OWNER. SEE SECTION 17.
This Amended and Restated Agreement 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 Agreement
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any jurisdiction), no security interest in this Amended and
Restated Agreement may be created or perfected through the transfer or
possession of any counterpart other than the original counterpart which shall be
the counterpart identified as counterpart No. 1.
<PAGE> 2
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
AMENDED AND RESTATED AGREEMENT FOR LEASE
Amended and Restated Agreement for Lease, 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 "Agreement"), between Trinidad Ammonia Company, Limited
Partnership, a Delaware limited partnership ("Owner") and PCS Nitrogen
Fertilizer, L.P. (formerly Arcadian Fertilizer, L.P.), a Delaware limited
partnership, individually and, to the extent provided for herein, as agent of
Owner (in either such capacity, the "Agent").
Owner and Agent entered into an Agreement for Lease, dated as
of June 29, 1995, as amended, and said parties now desire to further amend and
restate said Agreement for Lease. Accordingly, said Agreement for Lease and all
Exhibits thereto are hereby amended and restated in their entirety as herein
provided:
WHEREAS, Owner may from time to time acquire either (i) a fee
interest or (ii) a leasehold interest pursuant to a Ground Lease (hereinafter
defined) in certain Unit Premises (hereinafter defined); and
WHEREAS, on or about the date of this Agreement, Owner and
Agent propose to enter into the Lease (hereinafter defined), providing for the
lease or sublease by Agent of certain Unit Improvements (hereinafter defined)
which will be constructed and furnished on such Unit Premises pursuant to the
terms of this Agreement; and
WHEREAS, Owner desires to appoint Agent to act as agent for
Owner in connection with the selection of Owner's fee and/or leasehold interests
in Unit Premises from time to time, and with the construction of Unit
Improvements and the installation of Unit FF&E thereon, if any, and in
connection with all matters related to such construction, and Agent wishes to
accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Owner and Agent hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement each of
the following terms shall have the meaning specified with respect thereto:
Accrued Default Obligations: Defined pursuant to paragraph (e)
of subsection 11.2 hereof.
<PAGE> 3
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Acquisition Certificate: The written certification of Agent to
be delivered to Owner in connection with the making of the Initial Advance
hereunder, which contains the information and representations of Agent as
required by Section 4 of this Agreement, and which is substantially in the form
of Exhibit C hereto.
Affiliate: Defined pursuant to subsection 1.2 hereof.
AFL Unit Leasing Record: An instrument, substantially in the
form of Exhibit B hereto, evidencing the lease of a Unit under the Lease.
Agent: PCS Nitrogen Fertilizer, L.P. (formerly Arcadian
Fertilizer, L.P.), a Delaware limited partnership.
Agreement: This Amended and Restated Agreement for Lease, as
the same may be further amended, restated, modified or supplemented from time to
time pursuant to and in compliance with the Operative Documents.
Ammonia Project: The Unit Premises located in the Republic of
Trinidad and Tobago and described on Exhibit J hereto in which Owner will,
subject to the provisions hereof, acquire a leasehold interest and the related
Unit Improvements and Unit FF&E constituting the ammonia production plant which
are to be located on or about such Unit Premises, as described in Exhibit J
hereto.
Ancillary Facility Agreement: Any of the contracts entered
into by Agent or an Affiliate of Agent and assigned to Owner 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 as listed on Exhibits M-1
through M-3 hereto and the License Agreement relating to pipelines and similar
facilities necessary for the operation and maintenance of the Ammonia Project.
Ancillary Facility Agreement Consents: Each Estoppel
Certificate, Consent and Agreement (including all acknowledgments with respect
thereto) relating to an Ancillary Facility Agreement entered into by the
National Energy Corporation of Trinidad and Tobago Limited, the Trinidad and
Tobago Electricity Commission and the Water and Sewage Authority of Trinidad and
Tobago and the consent of Point Lisas relating to the Sublease Agreement.
Assignee: Defined pursuant to subsection 1.2 hereof.
Assignment Agreements: Each agreement entered into between an
Affiliate of Agent and Owner, pursuant to which such Affiliate's rights under
the Gas Contract, each Ancillary Facility Agreement and each License Agreement
are assigned to Owner.
2
<PAGE> 4
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Business Day: Defined pursuant to subsection 1.2 hereof.
Casualty Event: Any of the events specified in subsection 11.5
hereof.
Certificate of Increased Cost: The certificate delivered by
Agent to Owner pursuant to Section 7 hereof in connection with a request for a
Completion Advance, and which is substantially in the form of Exhibit F hereto.
Certificate of Substantial Completion: The certificate
delivered by Agent to Owner pursuant to Section 6 hereof in connection with a
request for a Final Advance, and which is substantially in the form of Exhibit E
hereto.
Completion Advance: Any advance made by Owner upon
satisfaction or waiver of the conditions set forth in Section 7 hereof.
Consent: Defined pursuant to subsection 1.2 hereof.
Construction Agreement: Each agreement between Owner and a
General Contractor, providing for the construction of Unit Improvements, as the
same may be amended, restated, modified or supplemented from time to time
pursuant to and in compliance with the Operative Documents. A copy of the
Construction Agreement related to the Ammonia Project is attached as Exhibit L
hereto.
Construction Agreement Surety: Each of (i) a retainage letter
of credit which will periodically increase to reflect amounts entitled to be
retained from progress payments up to a maximum of $2,500,000 issued by a bank
or other financial institution reasonably acceptable to Owner and General
Contractor, for the account of the General Contractor of the Ammonia Project for
the benefit of Owner and its transferees and assigns and (ii) the guaranty of
Mannesmann Capital Corporation, or other Affiliate of the General Contractor
reasonably acceptable to Owner, in the amount of $7,500,000, furnished by the
General Contractor of the Ammonia Project for the benefit of Owner.
Construction Documents: The collective reference to the
Construction Agreement(s), the Unit Plans, the Permits and all other agreements
entered into by Agent or its Affiliate with respect to constructing, equipping,
furnishing and decorating the Unit.
Credit Agreement: Defined pursuant to subsection 1.2 hereof.
Debt: Defined pursuant to subsection 1.2 hereof.
3
<PAGE> 5
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Designated Effective Date: Twenty-four (24) months from the
date on which the Initial Advance is made by Owner to Agent pursuant to Section
4 hereof.
Effective Date: Defined pursuant to subsection 1.2 hereof.
Environmental Consultant: Pilko & Associates, Inc.
ERISA: Defined pursuant to subsection 1.2 hereof.
ERISA Event: Defined pursuant to subsection 1.2 hereof.
Event of Default: Any of the events constituting an Event of
Default, as specified in subsection 11.1 hereof.
Event of Unit Termination: Any of the events constituting an
Event of Unit Termination, as specified in subsection 11.3 hereof.
Final Advance: Any advance made by Owner upon satisfaction or
waiver of the conditions of Section 6 hereof.
Financing Costs: All interest costs (including, without
limitation, interest at a default rate), other costs, fees and expenses incurred
by or accrued to any date for the determination thereof for the account of Owner
under a Credit Agreement, and all costs, fees and expenses incurred by or
accrued for the account of Owner to such date in connection with obtaining
equity financing, including return on equity capital and interest on overdue
payments thereof.
Fiscal Quarter: Any of the three-month periods ending on the
last day of March, June, September and December in each year.
Force Majeure Delay: Any delay caused by conditions beyond the
control of Agent or any of its Affiliates (assuming that Agent and its
Affiliates are in compliance with their obligations under the Operative
Documents), including, without limitation, acts of God or the elements, fire,
strikes, labor disputes, delays in delivery of material and disruption of
shipping, which does not have the effect of extending the Unit Completion Date
for the relevant Unit beyond two hundred and seventy (270) days in the
aggregate.
Gas Contract: The Gas Supply Contract dated November 25, 1994
between the National Gas Company of Trinidad and Tobago Limited and Arcadian
Trinidad Ammonia Limited (which by novation assigned its obligations, rights and
benefits thereunder to Arcadian Trinidad Limited, currently PCS Nitrogen
Trinidad Limited) by agreement dated January 27, 1997.
4
<PAGE> 6
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
General Contractor: Any contractor or contractors as may be
engaged by Agent or its Affiliate from time to time for construction of Unit
Improvements. The General Contractor for the Ammonia Project is KTI Fish, Inc.
Governmental Action: Any action as defined in subsection 8.5
hereof.
Governmental Authority: Any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, or agencies, courts or arbitral panels having jurisdiction over
or application to any Unit Premises, Unit Improvements, Unit FF&E, Unit, Agent,
any Affiliate of Agent or Owner.
Ground Lease: Each ground lease, including, without
limitation, the Site Lease and the Sublease (each of which Site Lease and
Sublease must be a Mortgageable Ground Lease) and each additional lease under
which a leasehold interest in a Unit Premises is leased to Owner or is subleased
to Agent or a Permitted Sublessee (as defined in the Lease).
Guarantor: Potash Corporation of Saskatchewan Inc., a
corporation organized under the laws of the Province of Saskatchewan, and an
Affiliate of Agent, and its successors.
Indemnified Person: Any Person as defined in Section 12
hereof.
Initial Advance: Any advance made by Owner upon satisfaction
or waiver of the conditions set forth in Section 4 hereof.
Insurance Requirements: Defined pursuant to subsection 1.2
hereof.
Interim Advance: Any advance made by Owner to Agent upon
satisfaction or waiver of the conditions set forth in Section 5 hereof.
Interim Advance Certificate: A certificate delivered by Agent
to Owner pursuant to Section 5 hereof in connection with a request for an
Interim Advance, and which is substantially in the form of Exhibit D hereto.
Lease: The Lease Agreement, dated as of June 29, 1995, by and
between Owner, as lessor, and Agent, as lessee, as amended (the "Original
Lease"), as further amended and restated as of the date hereof and as it may be
further amended, restated, modified or supplemented from time to time pursuant
to, and in compliance with, the provisions of the Operative Documents. A copy of
the Lease is attached as Exhibit A hereto.
5
<PAGE> 7
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Legal Requirements: 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 Authorities, 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 term of this Agreement,
whether or not such compliance shall require structural, unforeseen or
extraordinary changes to any Unit or the operation, occupancy or use thereof,
except any thereof promulgated by a Governmental Authority of the jurisdiction
of organization of Owner with application exclusively to Owner.
License Agreements: Defined pursuant to subsection 1.2 hereof.
Lien: Defined pursuant to subsection 1.2 hereof.
Material Subsidiaries: Potash Corporation of Saskatchewan
Sales Limited, LLC, PCS Nitrogen, Inc., PCS Phosphate Company, Inc. and any
other subsidiary of the Guarantor whose book value of assets is greater than 20%
of the book value of the assets of the Guarantor on a consolidated basis or
whose gross sales are greater than 20% of the gross sales of the Guarantor on a
consolidated basis.
Merrill Leasing: ML Leasing Equipment Corp., a Delaware
corporation.
Merrill Lynch: Merrill Lynch & Co., Inc., a Delaware
corporation.
Mortgageable Ground Lease: Defined pursuant to subsection 1.2
hereof.
Multiemployer Plan: Defined pursuant to subsection 1.2 hereof.
Multiple Employer Plan: Defined pursuant to subsection 1.2
hereof.
Operating Agreement: Defined pursuant to subsection 1.2
hereof.
Operative Documents: This Agreement, the Lease, the
Construction Documents, the Project Documents, each Ground Lease, each
Assignment Agreement, the Ancillary Facility Agreement Consents, the PCS/NT Ltd.
Agreement, the Trinidad Government Agreement and the Point Lisas Agreement.
Operator: Defined pursuant to subsection 1.2 hereof.
Owner: Trinidad Ammonia Company, Limited Partnership or any
successor or successors to all of its rights and obligations as Owner hereunder.
6
<PAGE> 8
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
PCS Guaranty: The guaranty agreement, dated as of the date
hereof, between the Guarantor and Owner, as the same may be amended, restated,
modified or supplemented from time to time.
PCS/NF Ltd.: PCS Nitrogen Fertilizer Limited (formerly
Arcadian Fertilizer Limited), a Trinidad and Tobago private limited company.
PCS/NT Ltd.: PCS Nitrogen Trinidad Limited (formerly Arcadian
Trinidad Urea Limited, Arcadian Trinidad Ammonia Limited and Arcadian Trinidad
Limited), a Trinidad and Tobago private limited liability company.
PCS/NT Ltd. Agreement: The Estoppel Certificate Consent and
Agreement dated June 29, 1995, as supplemented by the Letter Agreement dated
April 30, 1997 relating thereto in respect of the Sublease.
PCS Term Credit Agreement: 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.
Permits: All consents, licenses, building, and operating
permits required for construction, completion, and operation of any Unit in
accordance with all Legal Requirements affecting such Unit.
Permitted Contest: Defined pursuant to paragraph (a) of
Section 16 hereof.
Permitted Liens: Defined pursuant to subsection 1.2 hereof.
Person: Defined pursuant to subsection 1.2 hereof.
Plan: Defined pursuant to subsection 1.2 hereof.
Point Lisas: The Point Lisas Industrial Port Development
Corporation.
Point Lisas Agreement: The Deed of Direct Covenant dated
June 25, 1995 and all amendments, modifications and supplements related thereto
relating to the Site Lease entered into by Point Lisas.
Potential Default: Any event which, but for the lapse of time,
or giving of notice, or both, would constitute an Event of Default.
Potential Event of Unit Termination: Any event which, but for
the lapse of time, or giving of notice, or both, would constitute an Event of
Unit Termination.
7
<PAGE> 9
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Project Documents: The Gas Contract, the Operating Agreement
and each Ancillary Facility Agreement.
Project Parcel: The land, together with all required
appurtenant easements thereto, which is necessary for the siting, construction
and proper operation of the Ammonia Project as described on Exhibit K hereto.
Responsible Officer: The President, any Vice President or
Treasurer or Assistant Treasurer of the general partner of Agent, or any other
officer or similar official of the general partner of Agent responsible for the
administration of the obligations of Agent with respect to this Agreement.
Site Lease: The Deed of Lease dated as of August 24, 1983
between Point Lisas and the National Energy Corporation of Trinidad and Tobago
Limited ("NEC"), which was assigned to the Operator by Deed of Assignment dated
as of September 7, 1990 between NEC and the Operator (previously Trinidad and
Tobago Urea Company Limited), as the same may be amended, restated, modified or
supplemented from time to time as permitted by and in accordance with the
Operative Documents.
Sublease: The Deed of Sub-Lease dated as of June 29, 1995
between Arcadian Trinidad Urea Limited (subsequently Arcadian Trinidad Limited
and currently PCS Nitrogen Trinidad Limited) and Owner as the same may be
amended, restated, modified or supplemented from time to time as permitted by
and in accordance with the Operative Documents.
Substantial Completion: With respect to any Unit, the
satisfaction or waiver of all requirements of Section 6 hereof.
Surrender Date: Defined pursuant to paragraph (a) of
subsection 11.4 hereof.
Taking: Any event which is described in paragraph (b) of
subsection 11.5 hereof.
Trinidad Government Agreement: The Estoppel Certificate,
Consent and Agreement and all amendments, modifications and supplements thereto
relating to the Gas Contract entered into by the National Gas Company of
Trinidad and Tobago Limited.
Unit: Any Unit Premises and any Unit Improvements thereon and
related Unit FF&E, including without limitation the Ammonia Project.
8
<PAGE> 10
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Unit Acquisition Cost: With respect to any Unit the sum of (a)
the aggregate amount of advances made pursuant to this Agreement with respect to
the Unit and (b) all other costs of Owner (including costs incurred by Agent but
reimbursed by Owner) with respect to the Unit (except costs which are not
properly capitalized and costs for which Owner has been reimbursed or chooses,
in lieu of capitalization hereunder, to be reimbursed by Agent, pursuant to the
provisions of subsection 9.5 or Section 12 hereof) arising from the acquisition,
construction, equipping, and financing (including, without limitation, Financing
Costs and Owner's out-of-pocket expenses and fee obligations in connection
therewith) prior to the lease of the Unit under the Lease, including all rent
under any Ground Lease which is paid or prepaid by Owner. Unit Acquisition Cost
shall be reflected in the applicable AFL Unit Leasing Record, as modified by any
revised AFL Unit Leasing Record.
Unit Budget: The budget prepared or to be prepared by Agent
and delivered to, and approved by, Owner prior to the Initial Advance with
respect to any Unit, as amended from time to time, which budget shall set forth
in general detail costs relating to such of the following as Agent deems to be
appropriate: (a) the installation of Unit FF&E, if any, thereon; (b) all costs,
including, without limitation, the purchase price, survey and survey inspection
charges, appraisal, architectural, engineering, environmental analysis, soil
analysis and market analysis fees, title insurance premiums, brokerage
commissions, transfer fees and taxes that are customarily the responsibility of
the purchaser, closing adjustments for taxes, utilities and the like, escrow and
closing fees, recording and filing fees, the legal fees of Owner and Agent, and
all related costs and expenses incurred in acquiring and maintaining marketable
fee or leasehold title to such Unit and in leasing or subleasing such Unit to
Agent; (c) the costs of completion of the Unit Improvements in conformity with
the Unit Plans, the Construction Agreement or any contracts in replacement
thereof, including without limitation, costs of site preparation, acquiring or
granting easements and acquiring or installing equipment and all related
appliances, appurtenances, accessions, furnishings, materials and parts
(including all replacements and subsequent replacements thereto) in connection
with the completion of the Unit Improvements, making utility connections,
demolition, streets, parking areas, landscaping, development, off-site
improvements, design and related construction of the Unit Improvements and
related facilities and the cost of necessary studies, surveys, plans and
permits, insurance and examination and incidental costs and expenses related
thereto incurred in acquiring and maintaining marketable fee or leasehold title
to such Unit and in leasing or subleasing such Unit and Unit FF&E to Agent; (d)
the costs of architects', attorneys', engineers' and other professionals' fees
and disbursements, in connection with the development, planning, renovation,
construction, start-up, testing and construction financing of the Unit
Improvements, including, without limitation, the fees and disbursements of
Owner's counsel in connection with this Agreement and the duties of Owner
hereunder, the Construction Agreement, and in all other matters involving or
reasonably related to this transaction; (e) costs of all charges and assessments
for the construction, improvement, maintenance, repair and restoration of
streets, roads, walks, sewer, gas, electrical,
9
<PAGE> 11
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
telephone and water lines and other improvements levied upon the Unit until the
Effective Date; (f) the costs of all insurance, real estate, property and excise
tax assessments, sales and use taxes on materials used in construction, and
other operating and carrying costs paid, accrued, or levied upon the Unit or
Owner in connection with the Unit during the period from acquisition of the Unit
Premises until the Effective Date for such Unit; (g) costs of Agent's project
representatives (inspectors, consultants, etc.) incurred in its capacity as
agent for Owner; (h) a contingency amount of up to an additional twenty percent
(20%) of the aggregate of all such projected expenditures, which shall include
Financing Costs and otherwise shall be allocated to unexpected increases in the
costs associated with such Unit; and (i) any and all other costs arising from or
in connection with the construction period for such Unit Improvements during the
term of this Agreement. The Unit Budget with respect to the Ammonia Project
shall not exceed $83,000,000. A copy of the revised Unit Budget with respect to
the Ammonia Project is attached as Exhibit O hereto.
Unit Completion Date: With respect to the Ammonia Project,
thirty (30) months from the date on which the Initial Advance is made by Owner
to Agent pursuant to Section 4 hereof plus any Force Majeure Delay, and with
respect to any other Unit, as agreed to in writing among Agent, Owner and any
Assignee.
Unit FF&E: The specific items of furniture, fixtures and
equipment, if any, from the Unit FF&E Specifications which are installed or (if
such items have been acquired by Owner for installation) to be installed in a
particular Unit Improvement and any replacement parts thereof and for which
advances are made by Owner hereunder.
Unit FF&E Specifications: The list of furniture, fixtures and
equipment to be installed with the proceeds of advances hereunder in a
particular Unit Improvement, a copy of which with respect to the Ammonia Project
is attached as Exhibit G hereto.
Unit Improvements: The improvements to be constructed on an
individual Unit Premises in accordance with the Unit Plans for the Unit
Improvements to be built on such Unit Premises.
Unit Plans: The plans and specifications for the construction
and operating characteristics of any Unit Improvements, including, without
limitation, installation of curbs, sidewalks, gutters, landscaping, utility
connections (whether on or off the Unit Premises) and all fixtures necessary for
construction, operation and occupancy of the Unit and certain equipment to be
used in connection therewith, prepared or to be prepared by an architect and
Agent and approved by Owner, including such amendments, modifications and
supplements thereto as may from time to time be made by Agent; provided that any
subsequent material deviation from the Unit Plans selected for the Unit shall be
made only with Owner's prior consent, which consent shall not be unreasonably
withheld or delayed.
10
<PAGE> 12
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Unit Premises: Each individual parcel of land, in which either
a fee interest or a leasehold interest has been acquired by Owner for the
construction of Unit Improvements thereon, including without limitation the
Project Parcel.
Withdrawal Liability: Defined pursuant to subsection 1.2
hereof.
1.2 Other Definitional Provisions.
(a) For purposes of this Agreement, the terms "Affiliate",
"Assignee", "Business Day", "Consent", "Credit Agreement", "Debt", "Effective
Date", "ERISA", "ERISA Event", "Insurance Requirements", "License Agreement",
"Lien", "Mortgageable Ground Lease", "Multiemployer Plan", "Multiple Employer
Plan", "Operating Agreement", "Operator", "Permitted Liens", "Person", "Plan",
and "Withdrawal Liability" shall have the meanings set forth opposite those
terms in the Lease, except that, for purposes of this Agreement, the terms "the
Lessor", "the Lessee" and "this Lease" if used in those definitions in the Lease
shall be deemed to be the terms "Owner", "Agent" and "this Agreement",
respectively, and if used in those definitions in the Lease, each of the terms
"Parcel", "Parcel of Property" and "Property" shall be deemed to be the phrase
"Unit Premises and related Unit Improvements" and each of the terms "Unit of
Equipment" and "Unit", shall be deemed to be an item of "Unit FF&E".
(b) All terms defined in this Agreement shall have their
defined meanings when used in any certificate or other document made or
delivered pursuant hereto.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, paragraph, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 2. APPOINTMENT OF AGENT
2.1 Appointment and Duties of Agent. Subject to the terms
hereof, including, without limitation, the requirements of Section 4 hereof,
Owner hereby appoints Agent as its agent for the design, construction,
equipping, and installation of the Ammonia Project on the Project Parcel in
accordance with the Unit Plans and Unit Budget and, to the extent identified in
Exhibit G hereto, Unit FF&E with respect thereto and Agent hereby accepts such
appointment. By written agreement, Owner may appoint Agent as its agent in
respect of additional Unit Premises and Unit Improvements. Unit Improvements
must be of a type permitted to be leased under the Lease, as set forth in
Exhibit A to the Lease. Agent agrees to contract for, supervise and achieve the
good, workmanlike and timely completion of the Unit Improvements
11
<PAGE> 13
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
and installation of Unit FF&E on each Unit Premises in accordance with the Unit
Budget and in all material respects in accordance with the Unit Plans, suitable
for its intended use. Owner and Agent agree that any obligation of Agent
herewith may be performed by an Affiliate of Agent; provided that Agent shall in
no event be relieved of any of its obligations under this Agreement by virtue of
any such performance. Upon request of Agent, Owner agrees to deliver to Agent a
separate executed power of attorney confirmatory of the power granted herein in
form suitable for recording. Owner and Agent agree that Agent shall be
responsible for the supervision of all matters relating to any Construction
Agreement; provided that, with respect to any Construction Agreement relating to
the Ammonia Project, all obligations of Owner under such Construction Agreement
shall be performed on Owner's behalf by PCS/NF Ltd., an Affiliate of Agent;
provided, however, that Agent shall not be relieved of any of its obligations
hereunder.
2.2 Cost and Completion of a Unit. Owner and Agent agree that
(a) Unit Acquisition Cost shall be no more than $83,000,000 with respect to the
Ammonia Project and such amount as Agent, Owner and any Assignee agree in
writing with respect to any other Unit. Agent agrees to effect Substantial
Completion of any Unit Improvements on or before the applicable Unit Completion
Date. After receiving the Initial Advance with respect to a Unit, Agent may from
time to time amend, restate, modify or supplement the Unit Plans, Unit Budget or
Unit FF&E Specifications relating thereto; provided that no such amendment,
modification or supplement shall increase the Unit Budget to an amount in excess
of the maximum cost for acquisition set forth in the first sentence of this
subsection 2.2 or result in the Unit not being completed on or prior to its Unit
Completion Date in all material respects in accordance with the Unit Plans.
Agent shall promptly deliver to Owner and any Assignee any such amended,
modified or supplemented Unit Plans, Unit Budget or Unit FF&E Specifications.
2.3 Lease of a Unit.
(a) Upon Substantial Completion of any Unit, Agent will
deliver to Owner the Certificate of Substantial Completion in the form of
Exhibit E hereto with respect to such Unit (including, without limitation, the
AFL Unit Leasing Record), and Agent shall request the Final Advance with respect
to such Unit. If the conditions set forth in Section 6 hereof have been
satisfied in the reasonable judgment of Owner, Owner, within five (5) Business
Days of receipt of the Certificate of Substantial Completion, a fully completed
AFL Unit Leasing Record executed by Agent and the other documents required in
Section 6 hereof, shall execute and deliver to Agent such AFL Unit Leasing
Record. Except as provided below, the Final Advance shall be made by Owner on
the date of execution by Owner of the AFL Unit Leasing Record. If Substantial
Completion of the Unit will not be effected on or before the Designated
Effective Date with respect to the Unit, Agent shall prepare and execute an AFL
Unit Leasing Record with respect to the Unit and deliver it to Owner, at least
five (5) days prior to the Designated Effective Date. Owner shall execute and
deliver to Agent the
12
<PAGE> 14
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
AFL Unit Leasing Record by the Designated Effective Date, and Owner's obligation
to make further advances, other than Completion Advances, with respect to the
Unit under this Agreement shall terminate on the Designated Effective Date.
Agent may request and receive on the Designated Effective Date an advance
pursuant to Section 5, provided all conditions to such advance under Section 5
are met. Such AFL Unit Leasing Record shall have an Effective Date as of the
date of the Designated Effective Date. Execution and delivery by Agent of the
AFL Unit Leasing Record shall constitute (i) acknowledgment and representation
by Agent that each Unit included therein (taking into account its then current
state of construction) is in good condition, conforms in all material respects
to the Unit Plans and has been accepted for lease under the Lease by Agent as of
the Effective Date of the AFL Unit Leasing Record, (ii) acknowledgment by Agent
that each such Unit is subject to all of the covenants, terms and conditions of
the Lease, and (iii) certification by Agent that the representations and
warranties contained in Section 2 of the Lease are true and correct in all
material respects on and as of the Effective Date of the AFL Unit Leasing Record
as though made on and as of such date and that there exists on such date no (1)
Event of Default or, with respect to such Unit, Event of Unit Termination or
Casualty Event under this Agreement or Event of Default (as defined in the
Lease) or (2) Potential Default or, with respect to such Unit, Potential Event
of Unit Termination under this Agreement or Potential Default (as defined in the
Lease). Upon execution and delivery of an AFL Unit Leasing Record by Owner, such
Unit shall become a Parcel of Property (as defined in the Lease).
(b) Notwithstanding the foregoing, but subject to the terms of
subsection 3.1 hereof, Agent may, by delivering to Owner a Certificate of
Increased Cost (in the form of Exhibit F hereto), at any time up to May 15,
1998, request Completion Advances in order to pay construction costs that were
not the subject of any previous advance. Owner, within five (5) Business Days of
receipt and upon Owner's approval of a request for a Completion Advance and the
Certificate of Increased Cost, shall execute and deliver to Agent a revised AFL
Unit Leasing Record for such Unit reflecting such increased cost, and Agent,
within five (5) Business Days of receipt of such revised AFL Unit Leasing
Record, shall sign the revised AFL Unit Leasing Record and return it to Owner. A
Completion Advance shall be made by Owner upon receipt of the revised AFL Unit
Leasing Record signed by Agent. Execution and delivery by Agent of the revised
AFL Unit Leasing Record shall constitute (i) acknowledgment and representation
by Agent that each Unit included therein is in good condition, conforms in all
material respects to the Unit Plans and has been accepted for lease under the
Lease by Agent as of the Effective Date of the AFL Unit Leasing Record, (ii)
acknowledgment by Agent that each such Unit is subject to all of the covenants,
terms and conditions of the Lease, and (iii) certification by Agent that the
representations and warranties contained in Section 2 of the Lease are true and
correct in all material respects on and as of the Effective Date of the revised
AFL Unit Leasing Record as though made on and as of such date and that there
exists on such date no (1) Event of Default or, with respect to such Unit, Event
of Unit Termination
13
<PAGE> 15
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
or Casualty Event under this Agreement or Event of Default (as defined in the
Lease) or (2) Potential Default or, with respect to such Unit, Potential Event
of Unit Termination under this Agreement or Potential Default (as defined in the
Lease).
2.4 Powers of Agent. Agent shall have the right to act for and
on behalf of Owner with full and complete authority to appear before each
applicable Governmental Authority to resolve issues related to the platting,
zoning and use of the Unit Premises, to obtain all Permits, to grant and obtain
easements for the benefit of any Unit Premises or which are reasonably deemed
necessary by Agent for the installation or operation of the Ammonia Project
(provided that no such action shall contravene any provision of any Ground
Lease) in all material respects in accordance with the Unit Plans, appoint,
employ and deal with the architects, engineers, consultants and contractors,
purchase and arrange for delivery of all materials, supplies, furniture,
fixtures, and equipment, and to approve all related vouchers, invoices and
statements. Notwithstanding the foregoing, Owner agrees to execute directly any
and all such documents which Governmental Authorities do not permit to be
exercised pursuant to a power of attorney or as Agent may reasonably deem to be
necessary to effect the purposes of this Agreement. No payment shall be made for
any property or services of such architects, engineers, consultants, or
contractors relating to the acquisition, construction and equipping of any Unit
without the prior approval of Agent, and each amount so approved and paid shall
be in accordance with the Unit Budget, and shall be part of the Unit Acquisition
Cost of such Unit. If Agent has unreasonably delayed or withheld giving the
approvals required to make such payments, Owner may make payments to any
architects, engineers, consultants, contractors, vendors or suppliers which are
properly due and payable in accordance with the contracts with said parties, and
any such payment so made shall be and become a part of the Unit Acquisition Cost
of the Unit; provided, however, that Owner shall not make any such payment if it
is subject to a Permitted Contest.
SECTION 3. ADVANCES
3.1 Agreement to Make Advances. Subject to the conditions and
upon the terms herein provided, including, without limitation, that the Unit
Budget not be exceeded, Owner agrees to make available to Agent advances from
time to time for each Unit up to an aggregate principal amount for such Unit
determined in accordance with the Unit Budget for such Unit and not in excess of
the maximum amount per Unit set forth in subsection 2.2 hereof. Subject to the
terms of this Agreement, Owner agrees to make (a) an Initial Advance with
respect to a Unit in accordance with Section 4 of this Agreement, (b) Interim
Advances from time to time in accordance with Section 5 of this Agreement, (c) a
Final Advance in accordance with Section 6 of this Agreement and (d) Completion
Advances in accordance with Section 7 of this Agreement.
14
<PAGE> 16
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
3.2 Procedure for Advances. Agent shall give Owner notice in
accordance with Sections 4, 5, 6 and 7 hereof of its irrevocable request for an
advance pursuant to this Agreement, specifying a Business Day on which such
advance is to be made and the amount of the advance. Not later than 2:00 P.M.
New York time on the date for the advance specified in such notice, provided
that all conditions to that advance have been satisfied, Owner shall provide to
Agent, or to such other party as may be designated by Agent, in immediately
available funds, the amount of the advance then requested.
3.3 Determination of Amounts of Advances.
(a) Initial Advance. The amount of the Initial Advance with
respect to a Unit shall be made within the limits of the Unit Budget and in
accordance with the Acquisition Certificate, and shall be sufficient to pay in
full all components of Unit Acquisition Cost paid or incurred to the date
thereof including acquisition and closing costs of the respective Unit
including, without limitation, the purchase price, survey and survey inspection
charges, recording and filing fees, brokerage commissions, appraisal,
architectural, engineering, environmental analysis, soil analysis and market
analysis fees, transfer fees and taxes that are customarily the responsibility
of the purchaser, title insurance premiums, closing adjustments for taxes,
utilities, and the like, escrow fees, if any, construction materials and
existing structures, and the legal fees of Owner and Agent. All such costs for
which the Initial Advance is requested shall be set forth in the Unit Budget
attached to the Acquisition Certificate, and in the request for the Initial
Advance.
(b) Interim Advances. Disbursements for the payment of or the
reimbursement of Agent for components of Unit Acquisition Cost for a Unit shall
be made upon the request of Agent from time to time, based upon the
certifications of Agent contained in an Interim Advance Certificate. Owner shall
have no obligation to make Interim Advances more often than once every seven (7)
days.
(c) Final Advance. The amount of the Final Advance shall be
made within the limits of the Unit Budget and in accordance with the Certificate
of Substantial Completion, and shall be sufficient, subject to the provisions of
paragraph (d) of this subsection 3.3, the payment of or the reimbursement of
Agent for components of Unit Acquisition Cost in connection with Substantial
Completion of the Unit, free of all Liens other than Permitted Liens. Owner
shall have no obligation to make the Final Advance unless Owner is satisfied
that all such costs as set forth in the Unit Budget, the Certificate of
Substantial Completion, and the request for the Final Advance have been actually
incurred, or in the case of punch list items will be incurred, in construction
and equipping of the Unit, free of all Liens, except for Permitted Liens and
shall not cause the Unit Acquisition Cost of the Unit to exceed the Unit Budget.
15
<PAGE> 17
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(d) Completion Advances. The amount of each Completion Advance
shall be made in accordance with and shall not exceed the amount set forth in
the Certificate of Increased Cost, shall not cause the Unit Acquisition Cost of
the Unit to exceed the Unit Budget, and shall be sufficient for payment in full
of all costs that are properly capitalizable and that were not the subject of
any previous advance with respect to such Unit. Owner shall have no obligation
to make a Completion Advance unless Owner is satisfied that all such costs were
reasonably estimated in the Unit Budget and are adequately set forth in the
Certificate of Increased Cost and will be sufficient for payment in full of all
costs with respect to such Unit.
3.4 Partial Advances. If any or all conditions precedent to
any advance have not been satisfied on the applicable date for a requested
advance, Owner, in its sole discretion, and with the consent of Assignee may,
but shall have no obligation to, disburse a part of the requested advance.
SECTION 4. CONDITIONS PRECEDENT TO THE INITIAL
ADVANCE WITH RESPECT TO A UNIT
Owner's obligation to make the Initial Advance with respect to
a Unit shall be subject both to the satisfaction of the conditions set forth in
this Section 4 and to the receipt by Owner and any Assignee of the documents set
forth in this Section 4, in each case in form and substance reasonably
satisfactory to Owner and any Assignee. Owner and any Assignee shall have at
least five (5) Business Days to review the Acquisition Certificate and its
attachments prior to making any Initial Advance.
The following are the documents to be received by Owner and
the conditions to be satisfied:
(a) Lease. With respect to the first advance only under this
Agreement, a fully executed copy of the Original Lease.
(b) Acquisition Certificate. A duly executed copy of the
Acquisition Certificate the statements in which shall be true.
(c) Warranty Deed. Where fee title is being acquired by Owner,
a photocopy of the executed purchase and sale agreement and the
warranty deed to be executed and delivered at the closing of the
acquisition of Owner's fee interest in such Unit Premises, conveying
marketable title to Owner, free of all Liens other than Permitted
Liens. For purposes of the Initial Advance, Permitted Liens shall not
include any mechanics' liens or materialmen's liens, or any taxes,
assessments, governmental charges or levies, except to the extent that
such taxes, assessments, governmental charges or levies are due and
payable but not yet delinquent, and have been properly apportioned with
the seller at closing.
16
<PAGE> 18
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(d) Memorandum of Lease Agreement. Except with respect to the
Ammonia Project, two original counterparts of a memorandum of lease
agreement in the appropriate form for recording in the jurisdiction in
which the Unit Premises is located, executed by Agent, as lessee, and
otherwise reasonably acceptable to Owner and Assignee.
(e) Ground Lease. Where a leasehold interest is being acquired
by Owner, a true and complete copy of the Site Lease, the Sublease and
each other Ground Lease, including a true and complete copy of the
legal description of the Unit Premises, executed or intended to be
executed and delivered at the closing of the acquisition of Owner's
leasehold interest, in a form approved by Owner, and complying in all
respects with this Agreement and with Section 28 of the Lease, and not
subject to any Liens other than Permitted Liens, along with a
memorandum of ground lease in statutory recordable form and any
necessary estoppel certificates, recognition and attornment agreements,
confirmations, and subordinations required by Owner's and any
Assignee's counsel regarding the Ground Lease. For purposes of the
Initial Advance, Permitted Liens shall not include any taxes,
assessments, governmental charges or levies, except to the extent that
such taxes, assessments, governmental charges or levies are due and
payable but not yet delinquent.
(f) Taxes. Certification by Agent that all past and current
taxes and assessments (excluding those which are due and payable but
not yet delinquent) applicable in respect of the acquisition of the
Unit or any component thereof by Owner, its leasing to Agent, or
otherwise in connection with the transactions contemplated hereby, and
in respect of the Unit Premises have been paid in full.
(g) Title Information. A copy of the underlying documents of
record affecting fee title to the Unit Premises from the appropriate
Governmental Authority, or such other evidence in respect of title as
Owner may reasonably request.
(h) Survey. A current survey or an update of an existing
survey of the Unit Premises prepared by a licensed public land
surveyor, and dated a date within one hundred eighty (180) days prior
to the date of the Initial Advance.
(i) Availability of Access Rights and Utilities. Certification
by Agent that all easements, licenses, rights of way, access rights and
utility services and facilities (including, without limitation, gas,
electrical, water and sewage services and facilities) (i) which are
necessary and required during the construction period have been
completed or will be available in such a manner as to assure Owner that
construction will not be impeded by a lack thereof and (ii) which are
necessary for the occupancy of the Unit and the installation of the
Unit Improvements thereon and for the completion and operation of the
Unit in
17
<PAGE> 19
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
accordance with the Unit Plans are or will be completed in such a
manner and at such a time as will assure the completion and operation
of the Unit on or before the Unit Completion Date.
(j) Permits. Certification by Agent that all Permits and
governmental approvals required for the construction of the Unit
Improvements (other than the governmental approval of the Town and
Country Planning Authority of the Republic of Trinidad and Tobago,
which approval will be obtained in the normal course) have been or will
be issued or obtained in such a manner as to assure Owner that
construction will not be impeded by a lack thereof and all such Permits
and governmental approvals required therefor which have been issued or
obtained are in full force and effect.
(k) Opinions of Counsel for Agent. An opinion of counsel for
Agent, in form and substance reasonably satisfactory to Owner and
Assignee, and an opinion of counsel for Agent licensed in the Republic
of Trinidad and Tobago, in form and substance reasonably satisfactory
to Owner and Assignee.
(l) Construction Agreement. A fully executed and complete copy
of the Construction Agreement.
(m) Consent and Acknowledgement Documentation. Fully executed
originals of the Point Lisas Agreement, the PCS/NT Ltd. Agreement, the
Ancillary Facility Agreement Consents and the Trinidad Government
Agreement.
(n) Unit Plans. A copy of the Unit Plans satisfactory to Owner
and Assignee.
(o) Unit Budget. A copy of the Unit Budget and certification
by Agent that such Unit Budget is (i) true, complete and correct, (ii)
accurately representative at the time of delivery of all expected costs
to Owner of the Unit and (iii) within the dollar limits set forth in
the first sentence of subsection 2.2 hereof.
(p) Certificates of Insurance. Certificates of insurance or
other evidence reasonably acceptable to Owner certifying that the
insurance then carried or maintained on the Unit required by subsection
9.3 hereof complies with the terms of such subsection.
(q) Request for Advance. A duly executed AIA Document G722 (or
substantially similar document), stating the total amount of the
Initial Advance requested, the date on which the advance is to be made,
the name, address and, if applicable, the escrow reference number of
the escrow or closing agent or
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
party to whom the Initial Advance is to be tendered, wiring
instructions and an itemization of the various costs constituting the
amount of the Initial Advance in such detail as will be necessary to
provide disbursement instructions to the escrow or closing agent,
including, specifically, an accounting of all expenditures for costs
shown on the Unit Budget for which payment or reimbursement is being
requested with respect to the Unit. A form of AIA Document G722 is
attached hereto as Exhibit N.
(r) Environmental Certificate and Report. An environmental
certificate in substantially the form of Exhibit H hereto, duly
executed by the general partner of Agent, and an environmental report
satisfactory to Owner and any Assignee in all respects, prepared by the
Environmental Consultant. If Owner or Assignee shall reasonably require
additional assurance as to any matter or matters contained or not
adequately addressed in such environmental report, Owner or Assignee
may require that further investigation be conducted and a supplemental
or additional environmental report with respect to such matter or
matters, satisfactory to Owner and Assignee in all respects, be
delivered.
(s) Use of Proceeds, No Liens and Representations of Agent.
(i) All costs and expenses which are the subject of the Initial Advance
requested have been paid in full or will be paid in full out of the
proceeds of the Initial Advance, (ii) there are no Liens on the Unit of
which Agent has knowledge that are not Permitted Liens, (iii) all
representations and warranties made in this Agreement, in the Lease and
in connection with the Initial Advance, are and remain true and correct
in all material respects on and as of the date of the Initial Advance
(except to the extent such representations and warranties expressly
relate specifically to an earlier date) and (iv) no Event of Default,
Potential Default or, with respect to the Unit for which the Initial
Advance is requested, Casualty Event, Event of Unit Termination or
Potential Event of Unit Termination, under this Agreement has occurred
and is continuing on the date such Initial Advance is to be made or by
reason of giving effect to such Initial Advance.
(t) Project Documents. With respect to the Ammonia Project,
copies of each Project Document.
(u) Appraisal. With respect to the Ammonia Project, an
appraisal prepared by Arthur Andersen & Co., which appraisal shall
include (i) a "value in use" fair market valuation of at least
$75,000,000 as at July 1, 1996 and (ii) a "value in use" fair market
valuation of the Ammonia Project of at least $68,800,000 as at July 1,
2000.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(v) Assignment Agreement. With respect to the Ammonia Project,
an executed Assignment Agreement with respect to each Ancillary
Facility Agreement and the Gas Contract.
(w) Unit FF&E Specifications. A true and complete copy of the
Unit FF&E Specifications with respect to the Unit.
SECTION 5. CONDITIONS PRECEDENT TO OWNER'S
OBLIGATION TO MAKE INTERIM ADVANCES
AFTER THE INITIAL ADVANCE WITH RESPECT TO
A UNIT
Owner's obligation to make any Interim Advance with respect to
a Unit after the Initial Advance with respect to such Unit shall be subject to
the satisfaction of the conditions set forth in this Section 5 and to the
receipt by Owner and any Assignee of the documents set forth in this Section 5,
in each case in form and substance reasonably satisfactory to Owner and any
Assignee. Owner and any Assignee shall have at least five (5) Business Days to
review the Interim Advance Certificate and its attachments prior to making any
Interim Advance.
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Interim Advance Certificate. A duly executed Interim
Advance Certificate the statements in which shall be true.
(b) Continuing Representations of Agent. All representations
and warranties made in this Agreement, in the Lease, and in connection
with the Interim Advance, are and remain true and correct in all
material respects on and as of the date of the Interim Advance as if
made on and as of the date of the Interim Advance (except to the extent
such representations and warranties expressly relate specifically to an
earlier date) and no Event of Default, Potential Default or, with
respect to the Unit for which such Interim Advance is requested,
Casualty Event, Event of Unit Termination or Potential Event of Unit
Termination, under this Agreement has occurred and is continuing on the
date such Interim Advance is to be made or by reason of giving effect
to such Interim Advance.
(c) Construction Progress. If reasonably requested in writing
by Owner or any Assignee at least three (3) Business Days prior to the
making of an Interim Advance, Owner shall have received and approved
(i) an inspection report from an independent party satisfactory to
Owner or any Assignee, if any, covering conformity of the work to the
Unit Plans, quality of work completed, percentage of work completed and
(ii) true copies of unpaid invoices, receipted
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
bills and Lien waivers, and such other reasonably available supporting
information as Owner or any Assignee may reasonably request.
(d) Evidence of Compliance. Agent shall furnish Owner and any
Assignee with such additional or updated documents, reports,
certificates, affidavits and other information, in form and substance
reasonably satisfactory to Owner and any Assignee in its reasonable
judgment, as Owner and any Assignee may reasonably require to evidence
compliance by Agent with all of the provisions of this Agreement.
(e) Request for Advance. A duly executed AIA Document G722 (or
a substantially similar document), stating the total amount of the
Interim Advance requested, the date on which such Interim Advance is to
be made, and a specific breakdown of items and costs for which the
Interim Advance is being made.
(f) No Other Security Interests. All materials and fixtures
incorporated in the construction of the Unit Improvements have been
purchased so that title thereto or a leasehold interest therein, as the
case may be, shall have vested in Owner immediately upon delivery
thereof to the Unit Premises, except for Permitted Liens, and Agent
shall have produced and furnished, if requested in writing by Owner at
least three (3) Business Days prior to the making of an Interim
Advance, the contracts, bills of sale, statements, receipted vouchers,
or other documents under which title thereto or a leasehold interest
therein is claimed; provided that, if Agent does not have any documents
under which title thereto or a leasehold interest thereon is claimed,
upon Owner's request, Agent shall use commercially reasonable efforts
to obtain such documents.
(g) Statement of Expenditures. If requested in writing by
Owner, Agent or any General Contractor shall supply Owner with a
statement setting forth the names, addresses and amounts due or to
become due as well as the amounts previously paid to every contractor,
subcontractor or Person furnishing materials, performing labor or
entering into the construction of any part of the Unit Improvements.
(h) Political Risk Insurance. Evidence reasonably acceptable
to Owner that the political risk insurance required by paragraph (d) of
Section (10) of the Lease has been obtained.
SECTION 6. CONDITIONS PRECEDENT TO THE FINAL
ADVANCE WITH RESPECT TO A UNIT
Owner's obligation to make the Final Advance with respect to a
Unit shall be subject to the satisfaction of the conditions set forth in this
Section 6 and to the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
receipt by Owner and any Assignee of the documents set forth in this Section 6,
in each case in form and substance reasonably satisfactory to Owner and any
Assignee. When all of the conditions set forth in this Section 6 shall have been
satisfied to the reasonable satisfaction of Owner and any Assignee, Substantial
Completion of a Unit shall be deemed to occur. Owner and any Assignee shall have
at least five (5) Business Days to review the Certificate of Substantial
Completion and its attachments prior to making a Final Advance.
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Certificate of Substantial Completion. A duly executed
Certificate of Substantial Completion the statements in which shall be
true.
(b) Construction and Equipping of the Unit. The Unit
Improvements (including all interior finish work, but exclusive of
punch list items) have been completed within the Unit Budget and in all
material respects in accordance with the Unit Plans and are accepted by
Agent.
(c) Permits. All Permits and governmental approvals (other
than the governmental approval of the Town and Country Planning
Authority of the Republic of Trinidad and Tobago, which approval will
be obtained in the normal course) with respect to the Unit shall have
been issued or obtained and shall be in full force and effect.
(d) Liens. The Unit, including interior finish work, has been
completed as contemplated in paragraph (b) above, free of all Liens,
except for Permitted Liens (all of which are to be itemized as to the
nature, amount, claimant and status), and there are no current
Permitted Contests with respect to the Unit (or, if any, the nature,
amount, claimant and status thereof).
(e) Final Survey. A final survey showing the completed Unit
Improvements, all easements on the Unit Premises, and indicating the
location of access to the Unit Premises and all utility and water
easements directly affecting the Unit Premises.
(f) Utilities. Connection has been made to all appropriate
utility facilities and the Unit Improvements are ready for occupancy
and operation.
(g) Continuing Representations of Agent. All representations
and warranties made in this Agreement, in the Lease, and in connection
with the Final Advance are to remain true and correct in all material
respects on and as of the date of the Final Advance (except to the
extent such representations and warranties expressly relate
specifically to an earlier date) as if made on and as of
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
the date of the Final Advance and no Event of Default, Potential
Default or, with respect to the Unit for which the Final Advance is
requested, Casualty Event, Event of Unit Termination or Potential Event
of Unit Termination, under this Agreement has occurred and is
continuing on the date such Final Advance is to be made or by reason of
giving effect to such Final Advance.
(h) AFL Unit Leasing Record. An AFL Unit Leasing Record
prepared and duly executed by Agent. All Unit Premises and Unit
Improvements included in the Ammonia Project shall be included on one
(1) AFL Unit Leasing Record.
(i) Request for Advance. A duly executed AIA Document G722 (or
a substantially similar document), stating the total amount of the
Final Advance requested, the date on which such advance is to be made,
wiring instructions and a specific breakdown of items and costs for
which the Final Advance is to be made.
SECTION 7. CONDITIONS PRECEDENT TO COMPLETION
ADVANCES WITH RESPECT TO A UNIT
Owner's obligation to make Completion Advances with respect to
a Unit shall be subject to the satisfaction of the conditions set forth in this
Section 7 and to the receipt by Owner and any Assignee of the documents set
forth in this Section 7, in each case in form and substance reasonably
satisfactory to Owner and Assignee. The amount of a Completion Advance shall not
cause the Unit Acquisition Cost of a Unit to exceed the Unit Budget. The
proceeds of a Completion Advance shall be used to pay in full all costs relating
to completion of such Unit for which Agent has received invoices subsequent to
such Effective Date. Owner and any Assignee shall have at least five (5)
Business Days to review the Certificate of Increased Cost and its attachments
prior to making such Completion Advance.
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Certificate of Increased Cost. A duly executed Certificate
of Increased Cost the statements in which shall be true.
(b) Continuing Representations of Agent. All representations
and warranties made in this Agreement, in the Lease, and in connection
with the Completion Advance are and remain true and correct in all
material respects on and as of the date of such Completion Advance
(except to the extent such representations and warranties expressly
relate specifically to an earlier date) as if made on and as of the
date of such Completion Advance and no Event of Default, Potential
Default or, with respect to the Unit for which such
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<PAGE> 25
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Completion Advance is requested, Casualty Event, Event of Unit
Termination or Potential Event of Unit Termination under this Agreement
has occurred and is continuing on the date such Completion Advance is
to be made or by reason of giving effect to such Completion Advance.
(c) Request for Advance. A duly executed AIA Document G722 (or
a substantially similar document), stating the total amount of the
Completion Advance requested, the date on which such advance is to be
made, wiring instructions and a specific breakdown of items and costs
for which such Completion Advance is to be made.
(d) Revised AFL Unit Leasing Record. A revised AFL Unit
Leasing Record prepared by Agent pursuant to subsection 2.3(b) hereof.
(e) Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are and remain true and
correct in all material respects on and as of the date of such
Completion Advance as if made on and as of the date of such Completion
Advance (except to the extent such representations and warranties
expressly relate specifically to an earlier date) and no default under
the PCS Guaranty has occurred and is continuing on the date such
Completion Advance is to be made or by reason of giving effect to such
Completion Advance.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF
AGENT
Agent represents and warrants to Owner on the date hereof and
on the date of each advance occurring after the date hereof that:
8.1 Partnership Matters. Agent (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 Agreement 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)
to the best of its knowledge after due inquiry, is duly qualified to do business
as a foreign limited partnership 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 where the failure to so qualify
would not materially impair the ability of Agent to perform its obligations
hereunder or under the other Operative Documents. The sole general partner of
Agent on the date hereof is PCS Nitrogen Fertilizer Operations, Inc.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
8.2 Power and Authority. The consummation by Agent of the
transactions contemplated by the Operative Documents and the execution, delivery
of and performance and observance by Agent of its obligations under this
Agreement and the other Operative Documents to which it is or is to be a party
have been duly authorized by all necessary action on the part of the partners of
Agent. None of the execution, delivery and performance by Agent of this
Agreement or any other Operative Document to which Agent is or is to be a party
will result in any violation of any term of the certificate of limited
partnership or the partnership agreement of Agent, or require the approval or
consent of any limited partner or general partner of Agent 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 Agent under, any indenture,
mortgage or other agreement or instrument to which Agent 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 Governmental Authority or
court having jurisdiction over Agent or any of its activities or properties.
8.3 Binding Agreement. Each of this Agreement and each other
Operative Document to which Agent is or is to be a party has been duly
authorized and has been or will be duly executed and delivered by Agent and,
assuming the due authorization, execution and delivery of this Agreement and any
other such Operative Document by the parties thereto other than Agent, this
Agreement is, and each such other Operative Document when executed and delivered
will be, the legal, valid and binding obligation of Agent, enforceable against
Agent according to their 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).
8.4 No 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 Agent,
threatened against or affecting Agent or any property or rights of Agent which
questions the enforceability of this Agreement or any other Operative Document
or which affects any or relates to any Unit Premises, Unit Improvements, Unit
FF&E or Unit or which, if adversely determined, would have a reasonable
possibility of causing a material adverse impact on the business of Agent in the
aggregate or would materially impair the ability of Agent to perform its
obligations hereunder or under any other Operative Document.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
8.5 Consents, Approvals, Authorizations, Etc. 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 Authority 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 Agreement or
any other Operative Document or any Governmental Action (i) which is or will be
required in connection with any participation by Owner in the transactions
contemplated by, or the exercise of remedies or the enforcement of rights by
Owner under, this Agreement or any other Operative Document, any bill of sale,
deed, assignment, assumption, ownership agreement, or operating agreement
relating to any Unit Premises, Unit Improvements, Unit FF&E or Unit or (ii)
which is or will be required to be obtained by Owner, Agent, any Assignee or an
Affiliate of the foregoing, during the term of this Agreement, with respect to
any Unit Premises, Unit Improvements, Unit FF&E or Unit except the Governmental
Action of the Town and Country Planning Authority of the Republic of Trinidad
and Tobago, which Governmental Action Agent 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 Owner,
(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 Owner or any Assignee in any danger of any monetary civil liability
for which Owner or any Assignee is not adequately indemnified (Agent's
obligations under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner 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 Unit Premises, Unit Improvements, Unit FF&E or
Unit 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 Agent 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
Owner, any Assignee or any Affiliate of the foregoing and which are not solely
dependent on the nature of the Unit Premises, Unit Improvements, Unit FF&E or
Units or the business of Agent.
8.6 Compliance with Legal Requirements and Insurance
Requirements. The construction, operation, use, and physical condition of each
Unit Premises, the Unit Improvements, Unit and item of Unit FF&E comply 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 Owner or any Assignee in any danger of any monetary civil liability
which Owner or any Assignee is not adequately indemnified for (Agent's
obligations under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner or any Assignee to any criminal liability
as a result of a failure to comply therewith and (ii) will not
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
result in a material diminution in the value of any Unit Premises, Unit
Improvements, Unit FF&E or Unit or in any material risk of the loss, sale or
forfeiture or loss of use of any thereof.
8.7 No Default. Neither Agent nor the Guarantor is in
violation of or in default under or with respect to any Legal Requirement in any
respect which could have a materially adverse effect on the business,
operations, properties or financial or other condition of Agent or the
Guarantor, or which could materially adversely affect the ability of Agent to
perform its obligations under this Agreement or any other Operative Document to
which Agent is a party or the ability of the Guarantor to perform its
obligations under the PCS Guaranty.
8.8 Ownership; Liens. No Unit Premises, Unit Improvements,
Unit FF&E or Unit is subject to any Lien, except for Permitted Liens.
8.9 Financial Statements. Agent has furnished to Owner 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.
8.10 Changes. Since March 31, 1997, there has been no material
adverse change in the financial condition or business of the Guarantor and its
consolidated subsidiaries taken as a whole nor any change which would materially
impair the ability of Agent to perform its obligations under this Agreement or
any other Operative Document to which Agent is a party or the ability of the
Guarantor to perform its obligations under the PCS Guaranty.
8.11 Suitability of Each Unit Premises. Each Unit Premises is
suitable in all material respects (including, without limitation, ground
conditions, utilities, and condition of title) for the construction and
operation of the related Unit Improvements in all material respects in
accordance with the related Unit Plans.
8.12 ERISA.
(a) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA, of each
Plan exceeds 90 percent, other than with respect to Plans whose unfunded current
liability does not exceed $1,000,000 in the aggregate, and there has been no
material adverse change in the funding status of any such Plan since such date.
(c) Agent has not incurred or is reasonably expected to incur
any Withdrawal Liability to any Multiemployer Plan.
(d) Agent 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 subsection 8.9 hereof, Agent 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 Agreement will not
involve any non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code.
8.13 Ground Lease. Each Ground Lease is a Mortgageable Ground
Lease, except to the extent agreed to in writing by Owner and Assignee, and is
in full force and effect and has not been modified, amended or changed in any
manner that has not been approved in writing by Owner, nor is there any material
default under any Ground Lease nor event which, with the giving of notice or the
passage of time or both, would constitute a default under such Ground Lease, nor
to the best knowledge of Agent has any party under any Ground Lease commenced
any action or given or received any notice for the purpose of terminating any
Ground Lease.
8.14 Operating Agreement. The Operating Agreement has been
duly authorized, executed and delivered by the Operator and, assuming the due
authorization, execution and delivery of the Operating Agreement by Owner, is a
legal, valid and binding obligation of the Operator, enforceable according to
its terms.
8.15 Gas Contract. The Gas Contract has been duly authorized,
executed and delivered by an Affiliate of the Agent 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 such Affiliate of Agent, enforceable according to its terms.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
8.16 Ancillary Facility Agreements. Each Ancillary Facility
Agreement has been duly authorized, executed and delivered by Agent or an
Affiliate of Agent and, assuming the due authorization, execution and delivery
of each Ancillary Facility Agreement by the parties thereto other than Agent or
an Affiliate of Agent, is a legal, valid and binding obligation of Agent or such
Affiliate, enforceable according to its terms.
8.17 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 9. AFFIRMATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains in
effect, Agent shall keep and perform fully each and all of the following
covenants:
9.1 Performance under Other Agreements. Agent shall duly
perform and observe in all material respects all of the covenants, agreements
and conditions on its part to be performed and observed hereunder and under each
other Operative Document to which it is a party, except to the extent that
Agent's obligation in respect of such covenant, agreement or condition may be
subject to a Permitted Contest.
9.2 No Encroachments. The Unit Improvements shall be
constructed entirely on the related Unit Premises and shall not encroach upon or
overhang (unless consented to by the affected property owner or permitted by the
terms of any easement, license or right-of-way agreement) any easement or
right-of-way or the land of others, and when erected shall be wholly within any
building restriction lines, however established. If Owner shall have a
reasonable basis to believe any Unit Improvements are not in compliance with
this subsection 9.2, Owner may request, and Agent shall furnish from time to
time satisfactory evidence of compliance with the foregoing covenants,
including, without limitation, a survey prepared by a surveyor or engineer. If
any discrepancies exist between the legal description set forth on the survey
described in Section 4(h) hereof and the final as-built survey described in
Section 6(f) hereof, Owner and Agent shall cooperate, at Agent's expense, in
amending the legal descriptions in all recorded documents creating or
encumbering or otherwise affecting the Unit Premises, including, without
limitation, any easements, to reflect the correct as-built description.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
9.3 Insurance.
(a) Insurance with respect to each Unit Premises, the Unit
Improvements, Unit FF&E and Unit. Agent will maintain or cause to be maintained
on each Unit Premises, the Unit Improvements, Unit FF&E and Unit insurance of
the same types, in the same amounts and on the same terms and conditions as the
insurance required by paragraph (c) through (l) of Section 10 of the Lease,
except that the terms "Owner", "Agent" and "this Agreement" shall substitute for
the terms "the Lessor", "the Lessee" and "this Lease", respectively, the phrase
"Unit Premises, Unit Improvements, Unit FF&E and Unit" shall substitute for the
phrase "Parcel of Property" or "Property", references to "Equipment" or "Unit of
Equipment" shall be deemed deleted, and the phrase "Unit Acquisition Cost" shall
substitute for the phrase "Acquisition Cost"; provided that in lieu of the
insurance required by paragraph (c)(i) of Section 10 of the Lease, Agent shall,
as Owner's agent, maintain or cause to be maintained for Owner All Risk
Builders' Risk Completed Value Non-Reporting Form Insurance, including collapse
coverage and fire insurance with extended coverage, in an amount not less than
one hundred percent (100%) of the completed insurable value of the respective
Unit Improvements and Unit FF&E. The term "completed insurable value" as used
herein means the actual replacement cost, including the cost of debris removal,
but excluding the cost of constructing foundation and footings. Such insurance
may provide for such deductibles and Agent may self-insure with respect to the
required coverage to the extent consistent with Agent's customary practice with
respect to similar property owned by Agent.
(b) Use or Operation of Unit Premises, Unit Improvements, Unit
FF&E or Unit. Agent covenants that it will not use, carry on construction with
respect to, or occupy any Unit or permit the use, construction, or occupancy of
any Unit Premises, Unit Improvements, Unit FF&E or Unit at a time when the
insurance required by paragraph (a) of this subsection is not in force with
respect to such Unit Premises, Unit Improvements, Unit FF&E or Unit.
(c) Construction Bonding. In order to secure the performance
by the General Contractor for the Ammonia Project of its obligations under its
Construction Agreement, Agent shall furnish to Owner and maintain the
Construction Agreement Surety in such amounts and for such durations as may be
required pursuant to such Construction Agreement.
9.4 Inspection. 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), Owner or Assignee or any authorized
representatives of either of them, shall have during reasonable business hours
the right of entry and free access to each Unit Premises, the Unit Improvements,
Unit FF&E and each Unit and the right to inspect all work done, labor performed
and materials furnished in and about each Unit Premises, the Unit Improvements,
Unit FF&E and each Unit and at
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
reasonable times the right to inspect all contracts of Agent relating to each
Unit Premises, the Unit Improvements, Unit FF&E and each Unit, but neither Owner
nor any Assignee shall have any duty to make any such inspection; provided that
Agent shall be permitted to withhold from Owner or any Assignee any information
with respect to its business or work products not related to any Unit Premises,
Unit Improvements, Unit FF&E or Unit. Owner may recover from Agent (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 (as defined in the Lease) with respect thereto, in an amount
not to exceed, when aggregated with the expenses referred to in clause (i) of
paragraph (d) of Section 8 of the Lease, $100,000 in the aggregate, and (ii) the
reasonable costs and expenses associated with any such inspection which are
incurred following the occurrence and during the continuation of any Event of
Default throughout the term of this Agreement.
9.5 Expenses. Agent shall pay, whether or not Owner is
obligated to make any Advance under Sections 3 through 7 hereof, upon demand all
obligations, costs and expenses incurred in good faith by Owner with respect to
any and all transactions contemplated herein and the preparation of any document
reasonably required hereunder and the prosecution or defense of any action or
proceeding or other litigation affecting Agent or any Unit Premises, Unit
Improvements, Unit FF&E or Unit, including (without limiting the generality of
the foregoing) all Financing Costs not capitalized by Owner in Unit Acquisition
Cost and amounts required to reimburse Owner for its obligations, costs and
expenses arising in connection with the termination of any Credit Agreement
(whether as a result of a default thereunder or otherwise), costs incurred in
connection with obligations of Owner under or in respect of any interest rate
swap, cap, collar or other financial hedging arrangement, including without
limitation costs incurred by Owner 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, title and conveyancing charges, recording and filing fees
and taxes, title search fees, rent under the Ground Leases, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax stamp expenses,
insurance premiums (including title insurance premiums), brokerage commissions,
finders' fees, placement fees, court costs, surveyors', photographers',
appraisers', architects', engineers', accountants' and reasonable attorneys'
fees and disbursements, and will reimburse to Owner all expenses paid by Owner
of the nature described in this subsection 9.5 which have been or may be
incurred by Owner with respect to any and all of the transactions contemplated
herein. In the event Agent shall fail to reimburse Owner within ten (10)
Business Days after presentation of a bill and demand for payment therefor,
Owner may pay or deduct from the advances to be made any of such expenses and
any proceeds so applied shall be deemed advances under this Agreement, and
deducted from the total funds available to Agent under this Agreement.
Notwithstanding anything to the contrary contained in the foregoing, Agent shall
not be required to reimburse Owner for any of the foregoing obligations, costs
and expenses which constitute properly capitalizable costs under
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
generally accepted accounting principles. Expenses incurred by Owner (including,
without limitation, Financing Costs) in financing obligations, costs and
expenses pending allocation as a capitalized cost to a Unit shall be payable by
Agent hereunder, if not capitalized by Owner. Agent shall not be required to pay
any start-up costs associated with the commencement of operations at the Ammonia
Project or any related operating costs associated with the Ammonia Project,
which costs and expenses shall be borne by the Operator under the Operating
Agreement.
9.6 Certificates; Other Information. Agent shall furnish to
Owner:
(a) concurrently with the delivery of the financial statements
referred to in subsection 9.6(b) hereof, a certificate of a Responsible
Officer stating that, to the best of such Responsible Officer's
knowledge, Agent during such period has observed or performed in all
material respects all of its covenants and other agreements, and
satisfied in all material respects every condition contained in this
Agreement and in the Construction Documents to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Event of Default or Potential Default except as
specified in such certificate;
(b) 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 Agent's or the
Guarantor's operations, business, property, assets, financial condition
or litigation as Owner shall reasonably request, (iii) promptly after a
Responsible Officer of Agent obtains knowledge of any Event of Default
or Potential Default or Event of Unit Termination or Potential Event of
Unit Termination or Casualty Event, a certificate of a Responsible
Officer of Agent specifying to the extent known the nature and period
of existence of such Event of Default or Potential Default or Event of
Unit Termination or Potential Event of Unit Termination or Casualty
Event, and what action, if any, Agent has taken, is taking, or proposes
to take with respect thereto and (iv) promptly after a Responsible
Officer of Agent obtains knowledge of any material adverse change in
the financial condition or business of Agent or the Guarantor or of any
litigation of the type described in subsection 8.4 hereof, a
certificate of a Responsible Officer of Agent describing such change or
litigation as the case may be.
9.7 Conduct of Business and Maintenance of Existence. Agent
shall preserve, renew and keep in full force and effect its existence as a
limited partnership
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(except as otherwise permitted herein), and take all reasonable action to
maintain all rights, privileges and franchises material to the conduct of its
business, and comply with all Legal Requirements; except any Legal Requirements,
the non-compliance with which, individually or in the aggregate, (i) will not
place either Owner or any Assignee in any danger of any monetary civil liability
which Owner or any Assignee is not adequately indemnified for (Agent's
obligations under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner 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 Unit Premises, Unit Improvements, Unit
FF&E or Unit or in any material risk of the loss, sale or forfeiture or loss of
use of any thereof; provided, however, that nothing contained in this subsection
9.7 shall prevent Agent from ceasing or omitting to exercise any rights,
privileges or franchises which in the reasonable judgment of Agent can no longer
be profitably exercised or prevent Agent from selling, abandoning or otherwise
disposing of any property, the retention of which in the reasonable judgment of
Agent is inadvisable in relation to the business of Agent, or prevent any
liquidation of any subsidiary of Agent, or any merger, consolidation or sale,
permitted by the provisions of subsection 10.2 hereof.
9.8 Notices. Agent shall give notice to Owner promptly upon
the occurrence of:
(a) any notice given by or to Agent pursuant to any of the
Construction Documents that a default has occurred thereunder;
(b) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of the Unit Improvements
that is reasonably likely to extend the Unit Completion Date (without
taking into account any Force Majeure Delay);
(c) any "Event of Default" or "Potential Default" under the
Lease; and
(d) notices received from the lessor under any Ground Lease.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action, if any, Agent proposes to take with respect thereto.
9.9 Legal Requirements and Insurance Requirements. Agent shall
comply with every Insurance Requirement and Legal Requirement affecting (i) the
execution, delivery and performance of this Agreement and the Construction
Documents to which Agent is a party and (ii) any Unit Premises, Unit
Improvements, item of Unit FF&E or Unit, and Agent will not do or permit any act
or thing which is
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
contrary to any Insurance Requirement or which is contrary to any Legal
Requirement; except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (i) will not place either Owner or any
Assignee in any danger of any monetary civil liability which Owner or any
Assignee is not adequately indemnified for (Agent's obligations under Section 12
of this Agreement shall be deemed to be adequate indemnification if no Event of
Default exists) or any other material civil liability or penalty or subject
Owner 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 Unit Premises, Unit Improvements, Unit FF&E or Unit or in any material
risk of the loss, sale or forfeiture or loss of use of any thereof.
9.10 Payment of Taxes. With respect to any Unit Premises, Unit
Improvements, Unit FF&E or Unit, Agent shall make all required reports to the
appropriate taxing authorities and Owner shall capitalize and include as an
element of Unit Acquisition Cost of a Unit during the term of this Agreement the
taxes that Agent would be required to pay if such Unit Premises, Unit
Improvements or Unit was a Parcel of Property under paragraph (c) of Section 9
of the Lease.
9.11 Filings, Etc. Agent shall promptly and duly execute,
deliver, file, and record, all such documents, statements, filings, and
registrations, and take such further action as Owner 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 Owner's or any Assignee's title to and interest in any Unit
Premises, Unit Improvements, Unit FF&E and any Unit and any Assignee's interest
in this Agreement, any Unit Premises, Unit Improvements, Unit FF&E or any Unit
as against Agent or any third party in any applicable jurisdiction. All costs
and expenses arising out of Agent's obligations under this subsection 9.11 shall
be capitalized by Owner and included as an element of Unit Acquisition Cost of a
Unit.
9.12 Use of Proceeds. The proceeds of each advance shall be
used by Agent for payment of costs specified in the applicable request for the
advance and in accordance with the respective Unit Budget or to reimburse Agent
for any such costs paid by Agent.
9.13 Compliance with Other Requirements. Agent shall use every
commercially reasonable precaution to prevent loss or damage to any Unit
Premises, Unit Improvements, Unit FF&E, or any Unit and to prevent injury to
third Persons or property of third Persons. Agent shall cooperate fully with
Owner and any additional insured or loss payee and all insurance companies
providing insurance pursuant to subsection 9.3 hereof in the investigation and
defense of any claims or suits arising from the ownership or operation of
equipment or ownership, use, or occupancy of any Unit Premises, Unit
Improvements, Unit FF&E or any Unit and Owner and any Indemnified Person shall
comply, at the expense of Agent, with all reasonable requests
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
for assistance of Agent and any insurance companies in connection therewith;
provided that nothing contained in this subsection shall be construed as
imposing on Owner any duty to investigate or defend any such claims or suits.
Agent shall comply and shall use reasonable efforts to cause all Persons
operating equipment on, using or occupying any Unit Premises, Unit Improvements,
Unit FF&E, or any Unit to comply with every Insurance Requirement and Legal
Requirement regarding acquiring, titling, registering, leasing, subleasing,
insuring, using, occupying, operating and disposing of any Unit Premises, Unit
Improvements, Unit FF&E, or any Unit, and, if applicable, the licensing of
operators thereof; except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (i) will not place either Owner or any
Assignee in any danger of any monetary civil liability which Owner or any
Assignee is not adequately indemnified for (Agent's obligations under Section 12
of this Agreement shall be deemed to be adequate indemnification if no Event of
Default exists) or any other material civil liability or penalty or subject
Owner 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 Unit Premises, Unit Improvements, Unit FF&E or Unit or in any material
risk of the loss, sale or forfeiture or loss of use of any thereof.
9.14 Site Lease. Agent agrees to pay or cause to be paid, on
or before the first Business Day of each calendar year, all rent to be due under
the Site Lease for such calendar year.
9.15 Consent Agreements. Agent agrees to deliver to Owner and
Assignee, on or before the date that is one hundred twenty (120) days from the
date of this Agreement, an executed copy of each consent with respect to each of
the Assignment Agreements listed on Schedule I.
SECTION 10. NEGATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains in
effect, Agent shall not directly or indirectly:
10.1 Changes in Unit Plans or Unit Budget.
(a) Modify or supplement in any material respect any Unit
Plans or any Unit Budget without the prior written consent of Owner (which
consent will not be unreasonably withheld or delayed) and all Governmental
Authorities which previously have approved the matters to be changed, if the
effect of the failure to obtain such consent will, (i) place either Owner or any
Assignee in any danger of any monetary civil liability for which Owner or any
Assignee is not adequately indemnified for (Agent's obligations under Section 12
of this Agreement shall be deemed to be adequate indemnification if no Event of
Default exists) or any other material civil liability or penalty or subject
Owner or any Assignee to any criminal liability as a result of a
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
failure to comply therewith, (ii) result in a material diminution in the value
of any Unit Premises, Unit Improvements, Unit FF&E or Unit or in any material
risk of the loss, sale or forfeiture or loss of use of any thereof, or (iii)
materially impair the ability of Agent to perform its obligations hereunder or
(b) receive advances with respect to a Unit which exceed the Unit Budget for
such Unit.
10.2 Prohibition of Fundamental Changes. Consolidate with or
merge into any other Person as such prohibition is set forth in Section 26 of
the Lease, except that the term "Owner" shall substitute for the term "the
Lessor" and the term "Agent" shall substitute for the term "the Lessee".
10.3 Acquire Fee or Leasehold Interest. Acquire a fee or
leasehold interest on behalf of Owner in any Unit Premises other than the
Project Parcel until Agent has delivered all documents required by Section 4
hereof and in the reasonable judgment of Owner satisfied the conditions set
forth in such Section 4.
10.4 Assignment of Obligations. Except as provided in
subsection 2.1 hereof, assign its obligations hereunder to any other party.
SECTION 11. EVENTS OF DEFAULT, EVENTS OF UNIT
TERMINATION AND CASUALTY EVENTS
11.1 Events of Default. The occurrence of any of the following
shall constitute an Event of Default:
(a) Failure to Make Payments. Failure of Agent to make any
payment required by Section 11.2(e), 11.4(a), 11.6 or 19 hereof when
due or failure by Agent to pay any other amount due hereunder for more
than fifteen (15) days after written demand for such other payment.
(b) Unauthorized Assignments, Etc. Except as provided in
subsection 2.1 hereof, assignment by Agent of any interest in this
Agreement or any advance to be made hereunder or any interest in
either.
(c) Misrepresentations. Any representation or warranty made or
deemed made or certified to by Agent in this Agreement or any Operative
Document or which is contained in any certificate, document or
financial or other statement furnished under or in connection with this
Agreement shall prove to have been false or inaccurate in any material
respect on or as of the date made or deemed made.
(d) Involuntary Bankruptcy, Etc. The entry of a decree or
order for relief in respect of Agent or the Guarantor by a court having
jurisdiction in the premises, or the appointment of a receiver,
liquidator, assignee, custodian,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
trustee, sequestrator (or other similar official) of Agent or the
Guarantor or of any substantial part of Agent's or the Guarantor's
property, or ordering the winding up or liquidation of Agent's or the
Guarantor's affairs, in an involuntary case under the U.S. Federal
Bankruptcy Code, as now or hereafter constituted, 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 Agent or the Guarantor of an involuntary
case under the U.S. Federal Bankruptcy Code, as now or hereafter
constituted, 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.
(e) Voluntary Bankruptcy, Etc. 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 Agent or the
Guarantor or the suspension or discontinuance of Agent's or the
Guarantor's business operations, Agent's or the Guarantor's insolvency
(however evidenced) or Agent's or the Guarantor's admission of
insolvency or bankruptcy, or the commencement by Agent or the Guarantor
of a voluntary case under the U.S. Federal Bankruptcy Code, as now or
hereafter constituted, the Bankruptcy and Insolvency Act (Canada), or
any other applicable federal, state or provincial bankruptcy,
insolvency, reorganization, composition or other similar law of any
jurisdiction, or the consent by Agent or the Guarantor to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official)
of Agent or the Guarantor or of any substantial part of Agent's or the
Guarantor's property, or the making by Agent or the Guarantor of an
assignment for the benefit of creditors, or the failure of Agent or the
Guarantor generally to pay its debts as such debts become due, or the
taking of partnership or other action by or on behalf of Agent or the
Guarantor in furtherance of any such action.
(f) Negative Covenants. Agent shall default in the performance
or observance of any agreement, covenant or condition contained in
Section 10 hereof.
(g) Other Defaults. Agent shall default in the performance or
observance of any other term, covenant, condition or obligation
contained in this Agreement or any other Operative Document (except a
Ground Lease), and if such default is capable of cure, such default
shall continue for thirty (30) days after written notice shall have
been given to Agent by Owner specifying such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
default and requiring such default to be remedied; provided that, if
such default is of a nature that it is capable of being cured, but not
within such thirty (30) day period, and Agent shall have diligently
commenced curing such default within such thirty (30) day period and
Agent shall have proceeded diligently and in good faith thereafter to
complete curing such default, such thirty (30) day period shall be
extended to one hundred eighty (180) days; provided further that an
Event of Unit Termination and a Casualty Event shall not constitute an
Event of Default hereunder.
(h) Default under Lease. An Event of Default (as defined in
the Lease) shall occur under the Lease or the Lease shall be terminated
or otherwise cease to be in full force and effect.
(i) Payment of Obligations. An Event of Default (as defined in
the PCS Term Credit Agreement) shall occur under the PCS Term Credit
Agreement. 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.
(j) Defaults under any Ground Lease. Agent 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 Unit Premises, 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 Owner without opportunity to cure, as tenant thereunder, or
if any of the terms, covenants or conditions of the Site Lease, the
Sublease or any Ground Lease shall in any manner be modified, changed,
terminated, supplemented, altered or amended in any material respect
without the consent of Owner and any Assignee.
(k) Gas Contract; Ancillary Facility Agreements; PCS Guaranty.
The Gas Contract, any Ancillary Facility Agreement, the PCS Guaranty or
any other Operative Document shall be modified, changed, terminated,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
supplemented, altered or amended in any material respect without the
consent of Owner and Assignee.
(l) PCS Guaranty. (i) The PCS Guaranty ceases to be in full
force and effect prior to the termination thereof in accordance with
its terms, or (ii) 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.
(m) Guarantor Representations. 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.
(n) The Guarantor ceases to directly or indirectly own all of
the outstanding partnership interests of Agent and issued and
outstanding shares of the capital stock of PCS Nitrogen Fertilizer
Operations, Inc.
11.2 Owner's Rights upon an Event of Default.
(a) Upon the occurrence and continuation of any Event of
Default Owner 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 Agent of an Event of Default
Notice (as defined in Section 19 hereof), Agent has not made a request to
purchase all Unit Premises, Unit Improvements, Unit FF&E or Units under Section
19 or, if Agent 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 19):
(i) Terminate this Agreement and/or Owner's obligations to
make any further advances hereunder by written notice to Agent, subject
to the maximum amount Owner shall be entitled to recover from Agent, as
described in paragraph (f) of this subsection 11.2;
(ii) Take immediate possession of any Unit Premises, Unit
Improvements, Unit FF&E and Unit and remove any equipment or property
of Owner in the possession of Agent, wherever situated, and for such
purpose, enter upon any Unit Premises, Unit Improvements or Unit
without liability to Agent for so doing; provided that the taking of
possession of any Unit Premises, Unit Improvements, Unit FF&E or Unit
shall take place in a commercially reasonable manner;
(iii) Whether or not any action has been taken under (a)
above, sell any Unit Premises, Unit Improvements, Unit FF&E or Unit
(free of or subject
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
to the rights of Agent or any other Person under this Agreement and
with or without the concurrence or request of Agent);
(iv) Hold, use, occupy, operate, remove, lease, sublease or
keep idle any Unit Premises, Unit Improvements, Unit FF&E or Unit as
Owner in its sole discretion may determine, without any duty to account
to Agent with respect to any such action or inaction, except that Owner
agrees that any profit it derives from the occupation or use of any
Unit Premises, Unit Improvements, Unit FF&E or Unit while exercising
its rights under this subsection 11.2 will be applied to reduce the
Accrued Default Obligations; and
(v) 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.
(b) Suit or suits for the recovery of any default in the
payment of any sum due hereunder or for damages may be brought by Owner from
time to time at Owner's election, and nothing herein contained shall be deemed
to require Owner to await the date whereon this Agreement or the term hereof
would have expired by limitation had there been no such default by Agent or no
such termination or cancellation.
(c) The receipt of any payments under this Agreement by Owner
with knowledge of any breach of this Agreement by Agent or of any default by
Agent in the performance of any of the terms, covenants or conditions of this
Agreement, shall not be deemed to be a waiver of any provision of this
Agreement.
(d) No receipt of moneys by Owner from Agent after the
termination or cancellation hereof in any lawful manner shall reinstate or
continue this Agreement, or operate as a waiver of the right of Owner to recover
possession of any Unit Premises, Unit Improvements, Unit FF&E or Unit by proper
suit, action, proceedings or remedy or operate as a waiver of the right to
receive any and all amounts owing by Agent to or on behalf of Owner hereunder;
it being agreed that, after the service of notice to terminate or cancel this
Agreement, and the expiration of the time therein specified, if the default has
not been cured in the meantime, or after the commencement of suit, action or
summary proceedings or of any other remedy, or after a final order, warrant or
judgment for the possession of any Unit Premises, Unit Improvements, Unit FF&E
or Unit, Owner 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, operation and occupation of the Unit
Premises, Unit Improvements, Unit FF&E or Unit, or at the election of Owner, on
account of
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Agent's liability hereunder and will be applied to reduce the Accrued Default
Obligations.
(e) Agent hereby expressly confirms that, in any event,
including after any Event of Default, and notwithstanding any termination of
this Agreement or reentry or repossession by Owner, Agent shall be liable for,
and Owner may recover from Agent, (i) all of Owner's obligations, costs and
expenses incurred in good faith in connection with its obligations under this
Agreement and for which Owner may demand reimbursement pursuant to subsection
9.5 hereof, (ii) all amounts payable hereunder or under any other Operative
Document and (iii) all losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses, commissions, filing fees
and sales or transfer taxes) sustained by Owner by reason of such Event of
Default and the exercise of Owner's remedies with respect thereto, including, in
the event of a sale by Owner of any Unit Premises, Unit Improvements, Unit FF&E
or Unit pursuant to this subsection 11.2, all costs and expenses associated with
such sale. The amounts payable in clauses (i) through (iii) 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 Agent of
any Unit Premises, Unit Improvements, Unit FF&E or Unit or the anticipated
receipt of income therefrom subsequent to Agent's possession of such Unit
Premises, Unit Improvements, Unit FF&E or Unit.
(f) After an Event of Default, Owner may sell its interest in
any Unit Premises, Unit Improvements, Unit FF&E and Unit in any commercially
reasonable manner upon any terms that Owner deems satisfactory, free of any
rights of Agent or any Person claiming through or under Agent. In the event of
any such sale, or in the event Owner elects not to sell any Unit Premises, Unit
Improvements, Unit FF&E or Unit, in addition to the Accrued Default Obligations,
Owner shall be entitled to recover from Agent, as liquidated damages, and not as
a penalty, an amount equal to eighty-five percent (85%) of the Unit Acquisition
Cost of any Unit Premises, Unit Improvements, Unit FF&E and Units under this
Agreement. Proceeds of any such sale received by Owner, or, in the event Owner
elects not to sell, proceeds at any time thereafter received by Owner from any
sale, occupation, operation, use or lease of any Unit Premises, Unit
Improvements, Unit FF&E or Unit (net of all reasonable costs and expenses
incurred by Owner in connection with any sale, occupation, operation, use or
lease of any Unit Premises, Unit Improvements, Unit FF&E or Unit) in excess of
fifteen percent (15%) of the Unit Acquisition Cost of such Unit Premises, Unit
Improvements, Unit FF&E or Unit, shall be credited against the Accrued Default
Obligations Agent is required to pay under this subsection 11.2. If such excess
proceeds exceed the Accrued Default Obligations, or, if Agent has paid all
amounts required to be paid under this subsection 11.2, such excess shall be
paid by Owner to Agent. If Agent converts any such Unit Premises, Unit
Improvements, Unit FF&E or Unit after an Event of Default, or if such Unit
Premises, Unit Improvements, Unit FF&E or Unit is lost or destroyed, in addition
to the Accrued Default Obligations,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Owner may cause such Agent to pay to Owner, and Agent shall pay to Owner, as
liquidated damages and not as a penalty, an amount equal to eighty-five percent
(85%) of the Unit Acquisition Cost of such Unit Premises, Unit Improvements,
Unit FF&E or Unit.
(g) In the event of a sale pursuant to this subsection 11.2,
upon receipt by Owner of the amounts payable hereunder, Owner shall transfer all
of Owner's right, title and interest in and to the Unit Premises, Unit
Improvements, Unit FF&E and Unit to the purchaser thereof.
(h) In addition to its other rights in this subsection 11.2,
Owner may exercise its various rights under the Operating Agreement, the Gas
Contract, the Ancillary Facility Agreements or any Construction Agreement or
transfer such rights to the purchaser in a sale.
(i) No remedy referred to in this subsection 11.2 is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to above or otherwise available to Owner at law or in equity,
and the exercise in whole or in part by Owner of any one or more of such
remedies shall not preclude the simultaneous or later exercise by Owner of any
or all such other remedies. No waiver by Owner 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.
11.3 Events of Unit Termination. The occurrence of any of the
following shall constitute an Event of Unit Termination with respect to a Unit:
(a) Nonconforming Work. If the construction of the Unit
Improvements, or any part thereof, deviates from the Unit Plans and
results in a material diminution in the value of any Unit Premises,
Unit Improvements, Unit FF&E or Unit or there shall be any structural
defect in any Unit Improvement and Agent fails to correct such
nonconforming work or structural defect in a reasonably prompt and
satisfactory fashion after notice and demand by Owner.
(b) Failure to Complete. If as of the close of business on a
Unit Completion Date the related Unit Improvements have not for
whatever reason (including an event of force majeure deferring
completion beyond the Force Majeure Delay) been completed as herein
provided, or if the Certificate of Substantial Completion and AFL Unit
Leasing Record have not been executed and delivered by the respective
Unit Completion Date, or if Owner shall reasonably determine during the
course of construction that the Unit Improvements cannot for whatever
reason (including an event of force majeure deferring completion beyond
the Force Majeure Delay) be completed by the Unit Completion Date.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(c) Unsatisfactory Title. If at any time title to the Ammonia
Project or any other Unit is not reasonably satisfactory to Owner by
reason of any Lien, encumbrance, or other environmental defect
affecting title, except for Permitted Liens, and such Lien, encumbrance
or other defect is not corrected by and at the expense of Agent within
ninety (90) days after notice to Agent.
(d) Other Security Agreements. If (i) Agent executes any
chattel mortgage or other security agreement on any materials, fixtures
or articles of personal property used in the construction or operation
of the Unit Improvements or if any such materials, fixtures or articles
are purchased pursuant to any conditional sales contract or other
security agreement or otherwise so that the title thereto will not vest
in Owner free from encumbrance or (ii) Agent does not furnish to Owner
upon request the contracts, bills of sale, statements, receipted
vouchers and other agreements and documents, or any of them, under
which Owner claims title to such materials, fixtures or articles.
(e) Permits. If Agent shall fail in respect of the Ammonia
Project to obtain or be unable to obtain any material Permit, or if any
Permit shall be revoked or otherwise cease to be in full force and
effect unless, if such revocation or cessation shall not be due to
Agent's negligence or willful misconduct, Agent shall have obtained
reinstatement or reissuance of such Permit within thirty (30) days
after the revocation or expiration thereof, or if such reinstatement or
reissuance is of a nature that it cannot be completely effected within
thirty (30) days, Agent shall have diligently commenced application for
such reinstatement or reissuance and shall thereafter be diligently
proceeding to complete said reinstatement or reissuance.
11.4 Owner's Rights upon Event of Unit Termination.
(a) If any Event of Unit Termination with respect to a Unit
shall occur, Owner shall have no further obligation to make advances to Agent
with respect to such Unit, and Agent shall, upon written notice by Owner of such
Event of Unit Termination, either (i) purchase such Unit within ninety (90) days
after written notice by Owner of such Event of Unit Termination at a price equal
to the Unit Acquisition Cost for such Unit, or (ii) pay to Owner, within five
(5) Business Days of Owner's written notice of such Event of Unit Termination
(the "Surrender Date"), an amount equal to 89.9% of the Unit Acquisition Cost of
such Unit and to be subject to the requirements of paragraph (b) of this
subsection 11.4. In the event Agent elects to purchase such Unit from Owner, at
the time of such sale, Agent shall be required, in addition to its obligation to
pay all amounts contemplated by subsection 9.5 hereof, to pay to Owner Owner's
obligations, costs, losses, damages, and expenses (including, without
limitation, taxes and reasonable attorneys' fees and expenses) sustained by
Owner in good faith by reason of such Event of Unit Termination and exercise of
Owner's rights under this subsection 11.4.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) In the event Agent elects to proceed under clause (ii) of
subsection 11.4(a) and makes the payment contemplated thereby, Owner may sell
such Unit to a third party and Agent shall have no further right, claim or
interest in such Unit. If Owner shall fail to sell such Unit within seven (7)
days of the Surrender Date, the Assignee shall have the right, but not the
obligation, to sell such Unit to a third party. The proceeds of sale received by
Owner or such Assignee, as the case may be, from any sale of such Unit shall be
retained by Owner or such Assignee, as the case may be, provided that if the
proceeds of sale exceed 10.1% of the Unit Acquisition Cost of such Unit, such
excess shall be paid by Owner or such Assignee, as the case may be, to Agent net
of all amounts to be paid by Agent to Owner pursuant to the last sentence of
subsection 11.4(a) hereof.
11.5 Casualty Events. The occurrence of any of the following
shall constitute a Casualty Event with respect to a Unit:
(a) Damage or Destruction. If any Unit Improvements are
partially or totally damaged or destroyed by fire or any other cause and the
restoration thereof cannot reasonably be expected to be completed so that the
Unit Improvements will be completed on or before the applicable Unit Completion
Date, subject to any Force Majeure Delay.
(b) Takings. If the use, occupancy or title to any Unit 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") and
such Taking affects a substantial portion of a Unit. Upon receipt of proceeds
from any award or sale made in connection with such Taking, so long as no Event
of Default or Potential Default has occurred and is continuing, and so long as
Agent has made all payments to Owner required under subsection 11.6 hereof,
Owner shall remit to Agent the net amount of such proceeds remaining after
reimbursement for all costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by Owner in connection with the negotiation
and settlement of any proceedings related to such Taking. If such proceeds are
received prior to Agent making the payments required under subsection 11.6
hereof, the net proceeds shall be applied to the amount payable thereunder. A
Taking shall be deemed "to affect a substantial portion" of a Unit if after such
Taking such Unit is, or will be, in Agent's reasonable judgment, unusable for
Agent's ordinary business purposes.
11.6 Owner's Rights upon the occurrence of a Casualty Event.
If any Casualty Event shall occur, (i) Agent shall promptly notify Owner in
writing of such event, (ii) on a date designated by Agent, which shall be a date
within ninety (90) days following such event, Agent shall pay to Owner an amount
equal to eighty-five percent (85%) of the Unit Acquisition Cost of such Unit and
(iii) Agent shall be required, in addition to its obligation to pay all amounts
contemplated by subsection 9.5 hereof, to
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
pay to Owner Owner's obligations, costs, losses, damages, and expenses
(including, without limitation, taxes and reasonable attorneys' fees and
expenses) sustained by Owner by reason of such Casualty Event and exercise of
Owner's rights under this subsection 11.6. Insurance and condemnation proceeds,
if any, received by Owner that, together with the amounts paid by Agent to Owner
pursuant to clause (ii) of the preceding sentence, exceed the Unit Acquisition
Cost of such Unit, shall be paid by Owner to Agent upon payment by Agent of all
amounts referred to in clause (iii) of the preceding sentence.
SECTION 12. INDEMNITIES
(a) Agent shall, and hereby does, indemnify and hold harmless
Owner, Merrill Lynch, Merrill Leasing, any Assignee, any successor or successors
and any Affiliate of each of them, and their respective officers, directors,
incorporators, shareholders, partners (general and limited, including, without
limitation, the general and limited partners of Owner), employees, agents and
servants (each of the foregoing an "Indemnified Person") from and against all
liabilities (including, without limitation, strict liability in tort and
environmental law), taxes, losses, obligations, claims (including, without
limitation, strict liability in tort), damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, reasonable attorneys'
and accountants' fees and expenses) or judgments of any nature relating to or in
any way arising out of:
(i) The Operative Documents and the transactions
contemplated thereby and the ordering, delivery, assembly,
installation, acquisition, construction (including, without
limitation, all obligations of Owner under any Construction
Agreement), title on acquisition, rejection, installation,
possession, titling, retitling, registration, reregistration,
custody by Agent of title and registration documents,
ownership, use, non-use, misuse, financing (including, without
limitation, all obligations of Owner under or in respect of
any interest rate swap, cap, collar or other financial hedging
arrangement and any amounts payable by Owner 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), lease, sublease, refinancing, operation,
transportation, repair, return, redelivery or control of any
Unit Premises, Unit Improvements, Unit FF&E or Unit, or the
release of hazardous substances on, under, to or from, or the
generation or transportation of hazardous substances to or
from, any Unit Premises except (x) to the extent that such
costs are included in the Unit Acquisition Cost of such Unit
Premises, Unit Improvements, Unit FF&E or Unit, (y) for any
general administrative expenses of Owner, and (z) for the
income taxes
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
with respect to which indemnification is excluded under
paragraph (c) of Section 11 of the Lease; and
(ii) Any of the claims, demands, fees, taxes,
violations of contract, or any other matter or situation
described in or contemplated by the indemnification provisions
of subparagraphs (b), (c) and (d) of Section 11 of the Lease,
except that this Agreement shall substitute the terms "Owner"
for "the Lessor", "Agent" for "the Lessee", "this Agreement"
for "this Lease", and shall substitute the phrase "Unit
Premises, Unit Improvements, Unit FF&E or Unit" for the phrase
"Property or Equipment."
(b) The indemnification required under this Section 12 shall
be upon the terms provided in the paragraphs of Section 11 of the Lease
following paragraph (d) thereof, except that this Agreement shall substitute the
terms in the same manner as described in subparagraph (a)(ii) above.
SECTION 13. LEASEHOLD INTERESTS
The provisions of Section 28 of the Lease shall govern each
Ground Lease hereunder, including without limitation the Site Lease, the
Sublease and each additional lease under which a leasehold interest in a Unit
Premises is subleased to Agent or an Affiliate of Agent hereunder, except this
Agreement shall substitute the terms "Owner" for "the Lessor", "Agent" for "the
Lessee", "Unit Premises, Unit Improvements, Unit FF&E and Unit" for "Parcel of
Property" and "Section 13" for "Section 28".
SECTION 14. PURCHASES
In connection with, and as a condition to, the purchase of any
Unit Premises, Unit Improvements, Unit FF&E or Unit pursuant hereto, (i) Agent
shall pay at the time of purchase, in addition to the Unit Acquisition Cost and
all other amounts payable by Agent under this Agreement, and without limitation
of any of its obligations hereunder or under any other Operative Document, 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
Unit Premises, Unit Improvements, Unit FF&E or Unit to Agent and all other
amounts owing hereunder, and (ii) when Owner transfers title, such transfer
shall be on an as-is, non-installment sale basis, without warranty by, or
recourse to, Owner, except that such title shall be free of any Liens resulting
from Owner's willful or knowing act or omission not contemplated by this
Agreement, the Lease or the transactions contemplated thereby.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 15. CHARACTER OF AMMONIA PROJECT
It is the intention of Owner and Agent that the components of
the Ammonia Project identified as personal property components in Exhibit J
hereto maintain their character as personal property for commercial law
purposes. Agent shall take all 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 16. PERMITTED CONTESTS
(a) Agent shall not be required, nor shall Owner have the
right, to pay, discharge or remove any tax, assessment, levy, fee, rent, charge,
Lien or encumbrance, or to comply or cause any Unit Premises, Unit Improvements
item of Unit FF&E or Unit to comply with any Legal Requirement applicable to any
Unit Premises, Unit Improvements item of Unit FF&E or Unit or the occupancy, use
or operation thereof, so long as no Event of Default exists under this
Agreement, and, in the judgment of Agent's counsel, Agent shall have reasonable
grounds to contest the existence, amount, applicability or validity thereof by
appropriate proceedings, which proceedings in the reasonable judgment of Owner,
(i) shall not involve any material danger that any Unit Premises, Unit
Improvements, item of Unit FF&E or Unit would be subject to sale, forfeiture,
loss or loss of use as a result of failure to comply therewith, (ii) shall not
affect the payment of any sums due and payable hereunder or result in any such
sums being payable to any Person other than Owner or any Assignee, (iii) will
not place Owner in any danger of any monetary civil liability which is not
adequately indemnified (Agent's obligations under Section 12 of this Agreement
shall be deemed to be adequate indemnification if no Event of Default exists) or
any other material civil liability or penalty or to any criminal liability, (iv)
if involving taxes, shall suspend the collection of the taxes, and (v) shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Agent or any Unit Premises, Unit Improvements, item of Unit
FF&E, or Unit is subject and shall not constitute a default thereunder (the
"Permitted Contest"). Agent 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. Owner shall at Agent's expense
cooperate in good faith with Agent with respect to all Permitted Contests
conducted by Agent pursuant to this Section 16, including without limitation in
assisting in the preparation of, and participating in, filings related to such
Permitted Contests.
(b) At least ten (10) days prior to the commencement of any
Permitted Contest, Agent shall notify Owner 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
levy of any tax for which Agent is obligated to reimburse Owner under this
Agreement, or in the event that Owner is notified of the commencement of an
audit or similar proceeding which could result in such an additional assessment,
then Owner shall in a timely manner notify Agent in writing of such proposed
levy or proceeding.
(c) Owner and Agent agree that no Event of Default, Potential
Default, Event of Unit Termination or Potential Event of Unit Termination shall
be deemed to have occurred if the existence of the event causing such Event of
Default, Potential Default, Event of Unit Termination or Potential Event of Unit
Termination, as the case may be, is being contested by Agent as a Permitted
Contest in accordance with the terms of this Section 16.
SECTION 17. SALE OR ASSIGNMENT BY OWNER
(a) Owner shall have the right to obtain equity and debt
financing for the acquisition and ownership of any Unit Premises, Unit
Improvements, Unit FF&E and Unit by selling or assigning its right, title and
interest in any or all amounts due from Agent or any third Person under this
Agreement; provided that any such sale or assignment shall be subject to the
rights and interests of Agent under this Agreement.
(b) Any Assignee shall, except as otherwise agreed by Owner
and Assignee, have (to the exclusion of Owner) all the rights, powers,
privileges and remedies of Owner hereunder, and Agent's obligations as between
itself and such Assignee hereunder shall not be subject to any claims or defense
that Agent may have against Owner, 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 Agent may have against Owner. Upon written notice
to Agent of any such assignment, Agent shall thereafter make payments of any and
all sums due hereunder to Assignee, to the extent specified in such written
notice, and only such payments to the applicable Assignee shall discharge the
obligation of Agent 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 Owner
hereunder, and any such duty, covenant or condition shall be and remain the sole
obligation of Owner.
SECTION 18. GENERAL CONDITIONS
The following conditions shall be applicable throughout the
term of this Agreement:
18.1 Survival. All indemnities, representations and warranties
and the obligation to pay Additional Rent (as defined in the Lease) shall
survive the expiration or other termination hereof.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
18.2 No Waivers. No advance hereunder shall constitute a
waiver of any of the conditions of Owner's obligation to make further advances
nor, in the event Agent is unable to satisfy any such condition, shall any
waiver of such condition have the effect of precluding Owner from thereafter
declaring such inability to be an Event of Default as herein provided. Any
advance made by Owner and any sums expended by Owner pursuant to this Agreement
shall be deemed to have been made pursuant to this Agreement, notwithstanding
the existence of an uncured Event of Default. No advance at a time when an Event
of Default exists shall constitute a waiver of any right or remedy of Owner
existing by reason of such Event of Default, including, without limitation, the
right to refuse to make further advances.
18.3 Owner and Assignee Sole Beneficiaries. All conditions of
the obligation of Owner to make advances hereunder are imposed solely and
exclusively for the benefit of Owner and Assignee and their assigns and no other
Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Owner will refuse to
make advances in the absence of strict compliance with any or all thereof and no
other Person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Owner, with the consent of Assignee, at any time if in its sole discretion, it
deems it advisable to do so. Inspections and approvals of any Unit Plans, Unit
Premises, Unit Improvements, Unit FF&E, and Unit and the workmanship and
materials used therein impose no responsibility or liability of any nature
whatsoever on Owner, and no Person shall, under any circumstances, be entitled
to rely upon such inspections and approvals by Owner for any reason.
18.4 No Offsets, Etc. The obligations of Agent to pay all
amounts payable pursuant to this Agreement shall be absolute and unconditional
under any and all circumstances of any character (including, without limitation,
the circumstances set forth in clauses (A) through (K) below), and such amounts
shall be paid without notice, demand, defense (except the defense of prior
payment), setoff, 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 Agent to lease and pay Basic Rent (as defined in the Lease) for a
Unit upon Substantial Completion is without any warranty or representation,
express or implied, as to any matter whatsoever on the part of Owner or any
Assignee or any Affiliate of either, or anyone acting on behalf of any of them.
AGENT HAS SELECTED AND SHALL SELECT ALL UNIT PREMISES, UNIT
IMPROVEMENTS, UNITS AND ITEMS OF UNIT FF&E CONSTRUCTED, ACQUIRED OR ORDERED ON
THE BASIS OF ITS OWN JUDGMENT. NEITHER OWNER 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
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY,
CONFORMITY TO SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF ANY UNIT PREMISES,
UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E, OR AS TO WHETHER ANY UNIT
PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E OR THE OWNERSHIP, USE,
OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES, REGULATIONS OR
REQUIREMENTS OF ANY KIND.
AS BETWEEN OWNER AND AGENT, ANY ASSIGNEE OR ANY INDEMNIFIED
PERSON, AGENT 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, TO ITS
OBLIGATION TO PAY ALL AMOUNTS PAYABLE HEREUNDER, INCLUDING, WITHOUT LIMITATION,
ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS
FOR USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT
FF&E, 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 AGENT MAY HAVE AGAINST OWNER,
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 ANY UNIT PREMISES,
UNIT IMPROVEMENTS, OR UNIT OR ANY TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING
WITH RESPECT TO THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM
OF UNIT FF&E IN WHOLE OR IN PART, OR CESSATION OF THE USE OR POSSESSION OF ANY
UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E BY AGENT FOR ANY
REASON WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION, CONFISCATION,
REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY UNIT PREMISES, UNIT
IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E IN WHOLE OR IN PART;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT
OR ITEMS OF UNIT FF&E BY AGENT;
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST AGENT OR OWNER 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 AGREEMENT;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS AGREEMENT OR
ANY OTHER INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF OWNER OR AGENT
TO ENTER INTO THIS AGREEMENT;
(I) 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;
(J) AGENT 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
(K) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER RELATING
TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, WHETHER OR NOT SIMILAR TO
ANY OF THE FOREGOING.
AGENT 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 AGREEMENT EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS
HEREOF. The making of payments under this agreement by Agent (including without
limitation payments pursuant to Section 12 hereof) shall not be deemed to be a
waiver of any claim or claims that Agent may in a separate action assert against
Owner or any other Person. Owner agrees to repay Agent amounts paid to Owner to
the extent such payments were in error and are not required by any of the terms
and provisions of this Agreement.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
18.5 No Recourse.
(a) Owner'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 Agreement or any other Operative Document, or for any claim based thereon
or otherwise in respect thereof, shall be had against any limited partner of
Owner 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 Owner, or against any direct or
indirect parent corporation of such corporate general partner or of any limited
partner of Owner or any other subsidiary or Affiliate or 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 Owner is a limited partnership
formed for the purpose of the transactions involved in and relating to this
Agreement, the Lease and the Operative Documents on the express understanding
aforesaid. Nothing contained in this subsection 18.5(a) shall be construed to
limit the exercise or enforcement, in accordance with the terms of this
Agreement, the 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 Owner or the assets of the limited partnership
or the corporate general partner of Owner.
(b) Agent'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 Agent hereunder, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any limited partner of Agent 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 Agent, or against
any direct or indirect parent corporation of such corporate general partner or
of any limited partner of Agent 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 subsection 18.5(b) shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Agreement, the Lease, the PCS Guaranty and the Operative Documents and any
other documents referred to herein, of rights and remedies against (i) Agent or
the corporate general partner of Agent or the assets of Agent or the corporate
general partner of Agent or (ii) the Guarantor for obligations under the PCS
Guaranty.
52
<PAGE> 54
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
18.6 Notices.
(a) 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 (i) if delivered in
person, (ii) if sent by express courier service (including, without limitation,
Federal Express, Emery, DHL, Airborne Express, and other similar express
delivery services), (iii) 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 (iv) 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 (i), (ii) or (iii) of paragraph (a) of this subsection
18.6. All notices shall be effective upon receipt by the addressee; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
For the purposes of notice, the addresses of the parties shall be as set forth
below; provided, however, that any party shall have the right to change its
address for notice hereunder to any other location by giving written notice to
the other party in the manner set forth herein. The initial addresses of the
parties hereto are as follows:
If to Owner:
Trinidad Ammonia Company, Limited Partnership
c/o Trinidad Ammonia Capital, Inc.
North Tower
World Financial Center
250 Vesey Street
New York, NY 10281
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to Agent:
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Senior Counsel
Telephone: (901) 758-5375
Telecopy: (901) 758-5201
and
53
<PAGE> 55
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Assistant Treasurer
Telephone: (901) 758-5266
Telecopy: (901) 758-5202
With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: Chief Financial Officer
Telecopy: (306) 933-8844
and
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: General Counsel
Telecopy: (306) 933-8877
With a copy of all notices under this subsection 18.6 to any Assignee at such
address as such Assignee may specify by written notice to Owner and Agent.
(b) Owner shall use reasonable efforts to give to Agent,
within five days of receipt, a copy of all notices received by Owner pursuant to
any Credit Agreement and any other notices received with respect to any Unit
Premises, Unit Improvements, item of Unit FF&E, or Unit.
18.7 Modifications. Neither this Agreement nor any provision
hereof may be changed, waived or terminated, orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver or
termination is sought.
18.8 Rights Cumulative. All rights, powers and remedies herein
given to Owner are cumulative and not alternative, and are in addition to all
statutes or rules of law; any forbearance or delay by Owner in exercising the
same shall not be deemed to be a waiver thereof, and the exercise of any right
or partial exercise thereof shall not preclude the further exercise thereof, and
the same shall continue in full force and effect until specifically waived by an
instrument in writing executed by Owner. All representations and covenants by
Agent shall survive the making of the advances, and
54
<PAGE> 56
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
the provisions hereof shall be binding upon and inure to the benefit of the
respective successors and permitted assigns, if any, of the parties hereto.
Except to the extent provided in subsection 2.1 hereof, Agent may not, however,
assign its rights or obligations as agent hereunder.
18.9 GOVERNING LAW. THIS AGREEMENT HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK. AGENT AND OWNER AGREE THAT, TO THE MAXIMUM
EXTENT PERMITTED BY THE LAWS OF THE STATE OF NEW YORK, THIS AGREEMENT, AND THE
RIGHTS AND DUTIES OF AGENT AND OWNER 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. AGENT HEREBY IRREVOCABLY
SUBMITS, FOR ITSELF AND ITS PROPERTIES, 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
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, AGENT 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 AGREEMENT 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, AGENT AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE
JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. AGENT AGREES
THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO
THE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY
THE LAWS OF NEW YORK. OWNER AND AGENT EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN TORT OR CONTRACT OR
OTHERWISE) RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
55
<PAGE> 57
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
OWNER AND AGENT ACKNOWLEDGE THAT THE PROVISIONS OF THIS SUBSECTION 18.9 HAVE
BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION
THEREWITH.
18.10 Confidentiality. Agent and Owner agree to treat
information concerning the structure and documentation of this Agreement and the
Lease confidentially, except to the extent that disclosure is required by law
(in which circumstance such party will use reasonable efforts to notify the
other party prior to such disclosure of any information). The foregoing
constraint shall not include information: (i) that is now in the public domain
or subsequently enters the public domain without fault on the part of the party
proposing to disclose the same; (ii) currently known to Agent or Owner from its
own sources as evidenced by its prior written records; (iii) that Agent or Owner
receives from a third party not under any obligation to keep such information
confidential; and (iv) that is provided by Owner or Agent to counsel,
consultants, other advisors and regulatory authorities, and Assignees or
proposed Assignees, provided that such parties agree (including in writing if so
requested by the non-providing party) to treat any information so provided as
similarly confidential.
18.11 Captions. The captions in this Agreement are for
convenience of reference only, and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
18.12 Unit Designation. Owner recognizes Agent's right to call
any Unit by such name or designation as Agent may deem appropriate or reliable
in the ordinary course of Agent's business and to place such signs, labels,
plates or other markings on any Unit Premises, Unit Improvements or Unit as
Agent may desire in exercising such right, subject to the provisions of
subsection 9.11 hereof.
18.13 Owner Capitalization. Owner shall provide to Agent on
the date hereof and hereafter upon the reasonable request of Agent, a balance
sheet of Owner certified by Owner and showing that Owner's capitalization is
such that at least four percent (4%) of its capitalization shall consist of
contributions from Owner's general partner and limited partners.
18.14 Conveyance of Easements, Etc. In connection with any
sale of any Unit Premises, Unit Improvements, Unit FF&E or Unit pursuant to this
Agreement, Owner shall convey, and the purchaser shall accept a conveyance of,
Owner'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 Unit Premises, Unit Improvements, Unit FF&E or Unit, or
adjacent property, such conveyance to be without warranty by, or recourse to,
Owner, except that such interest shall be free of any Liens resulting from
Owner's willful or knowing act or
56
<PAGE> 58
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
omission unrelated to an occurrence of an Event of Default or an Event of Unit
Termination.
SECTION 19. AGENT'S RIGHT TO PURCHASE
Upon the occurrence of an Event of Default and upon the
written request of Agent, which shall be received by Owner and any Assignee not
later than fifteen (15) Business Days subsequent to receipt by Agent of notice
(an "Event of Default Notice") from Owner or any Assignee pursuant to this
Agreement that an Event of Default has occurred, Agent shall have the right, but
not the obligation, not later than thirty (30) Business Days after Agent
receives the notice of the Event of Default from Owner or any Assignee, to
purchase all Units at a price equal to the Unit Acquisition Cost for such Units;
provided that the purchase option contained in this paragraph shall only be
available to Agent if the purchase price and all other amounts paid by Agent
would not in the circumstances in which such payment is made constitute a
preferential payment or a voidable transfer pursuant to the provisions of the
Federal Bankruptcy Code in a bankruptcy proceeding by or against Agent and will
not otherwise result in the payment being subject to recapture from Owner. In
connection with, and as a condition to, the purchase of all Units pursuant
hereto, (i) Agent shall pay at the time of purchase, in addition to the Unit
Acquisition Cost, all other amounts payable by Agent under this Agreement,
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
Unit to Agent and all other amounts owing hereunder, and (ii) when Owner
transfers title, such transfer shall be on an as-is, non-installment sale basis,
without warranty by, or recourse to, Owner, except that such title shall be free
of any Liens resulting from Owner's willful or knowing act or omission.
57
<PAGE> 59
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the parties have executed this Agreement
the day and year first above written.
Trinidad Ammonia Company, Limited
Partnership, by Trinidad Ammonia Capital,
Inc., its General Partner
By ___________________________________
Name:
Title:
PCS Nitrogen Fertilizer, L.P.,
by PCS Nitrogen Fertilizer Operations,
Inc.,
its General Partner
By ___________________________________
Name:
Title:
<PAGE> 60
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SCHEDULE I
List of Assignment Agreement Consents
1) Consent with respect to assignment of Water Supply Agreement
2) Consent with respect to assignment of Electricity Supply Agreement
3) Consent with respect to assignment of Point Lisas Agreement
4) Consent with respect to assignment of Savonetta Pier User Agreement
5) Consent with respect to assignment of Gas Contract
<PAGE> 61
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT A
Copy of Amended and Restated Lease Agreement
<PAGE> 62
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT B
AFL UNIT LEASING RECORD to Lessor: Trinidad Ammonia Company,
the Amended and Restated Lease Limited Partnership
Agreement, dated as of May 16, Lessee: PCS Nitrogen Fertilizer, L.P.
1997, between Trinidad Ammonia
Company, Limited Partnership, as
lessor, and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. Unit Premises 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__.
UNIT PREMISES 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
Unit Premises _________________________________________________________
State County City
Country
F. Unit Acquisition Cost under the Amended and Restated 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 Unit Premises 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
<PAGE> 63
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
of this AFL ULR until the end of the month on the next succeeding Basic
Rent Payment Date.
H. The Initial Term and Renewal Term for the Unit Premises 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 or Equipment 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 and otherwise as
required by the Lease of the Unit Premises described on this AFL ULR.
The Lessee agrees to pay the Basic Rent, Additional Rent and additional
payments set forth in the Lease Agreement. The covenants, terms and
conditions of this lease are those appearing in the Lease Agreement, as
it may from time to time be amended, which covenants, terms and
conditions are hereby incorporated by reference. The terms used herein
have the meaning assigned to them in the Lease Agreement.
PCS Nitrogen Fertilizer, L.P., Trinidad Ammonia Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Trinidad Ammonia Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By ________________________________
By ________________________________ Name:
Name: Title:
Title:
2
<PAGE> 64
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT C
FORM OF ACQUISITION CERTIFICATE
WITH RESPECT TO UNIT PREMISES LOCATED AT _____________*
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement for Lease"), dated as
of May 16, 1997, entered into between Trinidad Ammonia Company, Limited
Partnership ("Owner") and Agent, hereby certifies to Owner and Assignee as
follows:
1. Legal Description. Attached hereto at Tab 1 is a
complete and correct copy of the legal description of
the Unit Premises located at _____________. The Unit
Premises are being (acquired in fee; leased pursuant
to a Ground Lease).
2. Unit Plans. Attached hereto at Tab 2 is a complete
and correct copy of the Unit Plans for the Unit
Improvement to be constructed on the Unit Premises,
and initialed to show Agent's and Owner's approval.
3. Unit Budget. Attached hereto at Tab 3 is a complete
and correct copy of the Unit Budget for the Unit,
including an itemization of all Unit Acquisition
Costs to Owner incurred to date or to be incurred in
connection with the acquisition of Owner's interest
in the Unit Premises and with the construction and
equipping of the Unit.
4. Unit FF&E Specifications. Attached hereto at Tab 4 is
a complete and correct copy of the Unit FF&E
Specifications initialed to show Agent's approval.
[IF NO UNIT FF&E ARE CONTEMPLATED, PLEASE INDICATE
THIS.]
5. Title Information. Attached hereto at Tab 5 is a copy
of the underlying documents of record affecting fee
title to the Unit Premises from the appropriate
Governmental Authority or such other evidence of
title reasonably required by Owner in paragraph (g)
of Section 4 of the Agreement for Lease.
- --------
* All capitalized terms used in this Certificate shall have the meanings
given to such terms in the Agreement for Lease.
<PAGE> 65
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
6. Utilities. All easements, licenses, rights of way,
rights of access and utility services and facilities
(including, without limitation, gas, electrical,
water and sewage services and facilities) (a) which
are necessary and required during the construction
period [HAVE BEEN COMPLETED; OR WILL BE AVAILABLE IN
SUCH A MANNER THAT CONSTRUCTION WILL NOT BE IMPEDED
BY A LACK THEREOF] and (b) which are necessary for
the occupancy of the Unit and the installment of the
Unit Improvements thereon and for the completion and
operation of the Unit in accordance with the Unit
Plans are or will be completed in such a manner and
at such a time as will assure the completion and
operation of the Unit on or before the Unit
Completion Date.
7. Permits. All Permits required for the construction of
the Unit Improvements (other than the governmental
approval of the Town and Country Planning Authority
of the Republic of Trinidad and Tobago, which
approval will be obtained in the normal course) have
been or will be issued in such a manner that
construction will not be impeded by a lack thereof.
No work for which a Permit or governmental approval
is required will be commenced or continued unless and
until such permit or governmental approval required
therefor has been issued or obtained, and once issued
or obtained will remain in full force and effect.
8. Construction Agreement. Attached hereto at Tab 6 is a
complete and correct copy of the most recent draft of
the Construction Agreement, substantially in the form
to be entered into between Agent and the General
Contractor.
9. Request for Advance. Attached hereto at Tab 7 is a
duly executed AIA Document G722 or a substantially
similar document.
10. Representations of Agent. (i) All costs and expenses
which are the subject of the Initial Advance
requested have been paid in full or will be paid in
full out of the proceeds of the Initial Advance, (ii)
there are no Liens on the Unit Premises of which
Agent has knowledge that are not Permitted Liens,
(iii) all representations and warranties made in the
Agreement for Lease, in the Lease, and in connection
with the Initial Advance, are and remain true and
correct in all material respects on and as of the
date of the Initial Advance (except to the extent
such representations and warranties expressly relate
specifically to an earlier date) and
2
<PAGE> 66
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(iv) no Event of Default, Potential Default or, with
respect to the Unit for which the Initial Advance is
requested, Event of Unit Termination or Casualty
Event or Potential Event of Unit Termination, under
the Agreement for Lease has occurred and is
continuing on the date such Initial Advance is to be
made or by reason of giving effect to such Initial
Advance.
11. Appraisal. If this advance relates to the Ammonia
Project, attached hereto at Tab 8 is an appraisal
prepared by Arthur Andersen & Co., which appraisal
shall include (i) a "value in use" fair market
valuation of the Ammonia Project as at July 1, 1996,
which fair market valuation shall equal or exceed
$75,000,000, and (ii) a "value in use" fair market
valuation of the Ammonia Project of at least
$68,800,000 as at July 1, 2000.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer
Operations Inc., its General
Partner
By: _______________________________
Name:
Title:
Unit Completion Date:
3
<PAGE> 67
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
FORM OF INTERIM ADVANCE CERTIFICATE
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR AN INTERIM ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Trinidad Ammonia Company, Limited Partnership ("Owner"),
delivers this Interim Advance Certificate pursuant to Section 5 of the Agreement
with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with the Interim
Advance are and remain true and correct in all
material respects on and as of the date of the
Interim Advance (except to the extent such
representations and warranties expressly relate
specifically to an earlier date) and no Event of
Default, Potential Default or, with respect to the
Unit for which the Interim Advance is requested,
Event of Unit Termination or Casualty Event or
Potential Event of Unit Termination under this
Agreement has occurred and is continuing on the date
such Interim Advance is to be made or by reason of
giving effect to such Interim Advance.
2. Construction Progress. If reasonably requested in
writing by Owner at least three (3) Business Days
prior to the making of an Interim Advance, attached
hereto at Tab 1 is (a) an inspection report from an
independent party and (b) true copies of unpaid
invoices, receipted bills and Lien waivers and such
other supporting information as may be requested by
Owner.
3. No Other Security Interests. All materials and
fixtures incorporated in the construction of the Unit
Improvements have been purchased so that title
thereto shall have vested in Owner immediately upon
delivery thereof to the Unit Premises, except for
Permitted Liens and if requested by Owner at least
three (3) Business Days prior to the making of an
Interim Advance, attached hereto at Tab 2 are copies
of the contracts, bills of sale, statements,
receipted vouchers, or other documents under which
title thereto is claimed.
<PAGE> 68
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
4. Statements of Expenditures. If requested in writing
by Owner, attached hereto at Tab 3 is a statement
setting forth the names, addresses and amounts due or
to become due as well as the amounts previously paid
to every contractor or subcontractor furnishing
materials, performing labor or entering into the
construction of any part of the Unit Improvements.
5. Request for Advance. Attached hereto at Tab 4 is a
duly executed AIA Document G722 or a substantially
similar document.
6. Evidence of Compliance. If requested, attached hereto
at Tab 5 are such documents, reports, certificates,
affidavits and other information as reasonably
required by Owner and any Assignee to evidence
compliance by Agent with all of the provisions of the
Agreement.
7. Political Risk Insurance. Attached hereto at Tab 6 is
evidence that the political risk insurance required
by paragraph (d) of Section 10 of the Lease has been
obtained.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer
Operations, Inc., its General
Partner
By: _______________________________
Name:
Title:
2
<PAGE> 69
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT E
FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR A FINAL ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Trinidad Ammonia Company, Limited Partnership ("Owner"),
delivers this Certificate of Substantial Completion pursuant to Section 6 of the
Agreement with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Construction and Equipping of the Unit. The Unit
Improvements (including all interior finish work, but
exclusive of punch list items) has been completed
within the Unit Budget and in all material respects
in accordance with the Construction Agreement and the
Unit Plans and are accepted by Agent.
2. Permits. All Permits and governmental approvals
(other than the governmental approval of the Town and
Country Planning Authority of the Republic of
Trinidad and Tobago, which approval will be obtained
in the normal course) with respect to the Unit have
been issued or obtained and are in full force and
effect.
3. Liens. The Unit, including interior finish work, has
been completed as contemplated in paragraph (b) of
Section 6 of the Agreement free of all Liens, except
for Permitted Liens (all of which are to be itemized
as to the nature, amount, claimant and status) and
there are no current Permitted Contests with respect
to the Unit (or, if any, the nature, amount, claimant
and status thereof).
4. Final Survey. Attached hereto at Tab 3 is a final
survey showing the completed Unit Improvements, all
easements on the Unit Premises and indicating the
location of access to the Unit Premises and all
utility and water easements directly affecting the
Unit Premises.
<PAGE> 70
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
5. Utilities. Connection has been made to all
appropriate utility facilities and the Unit
Improvements are ready for occupancy and operation.
6. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with this Final
Advance are and remain true and correct in all
material respects on and as of the date of the Final
Advance (except to the extent such representations
and warranties expressly relate specifically to an
earlier date) and no Event of Default, Potential
Default or, with respect to the Unit for which the
Final Advance is requested, Event of Unit Termination
or Casualty Event or Potential Event of Unit
Termination under this Agreement has occurred and is
continuing on the date such Final Advance is to be
made or by reason of giving effect to such Final
Advance.
7. AFL Unit Leasing Record. Attached hereto at Tab 4 is
a duly executed AFL Unit Leasing Record.
8. Request for Advance. Attached hereto at Tab 5 is a
duly executed AIA Document G722 or a substantially
similar document.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer
Operations, Inc., its General
Partner
By: _______________________________
Name:
Title:
2
<PAGE> 71
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
FORM OF CERTIFICATE OF INCREASED COST
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR A COMPLETION ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Trinidad Ammonia Company, Limited Partnership ("Owner"),
delivers this Certificate of Increased Cost pursuant to Section 7 of the
Agreement with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with this Completion
Advance are and remain true and correct in all
material respects on and as of the date of such
Completion Advance (except to the extent such
representations and warranties expressly relate
specifically to an earlier date) and no Event of
Default, Potential Default or, with respect to the
Unit for which such Completion Advance is requested,
Event of Unit Termination or Casualty Event or
Potential Event of Unit Termination under this
Agreement has occurred and is continuing on the date
such Completion Advance is to be made or by reason of
giving effect to such Completion Advance.
2. Revised AFL Unit Leasing Record. Attached hereto at
Tab 1 is a revised AFL Unit Leasing Record prepared
by Agent.
3. Request for Advance. Attached hereto at Tab 2 is a
duly executed AIA Document G722 or a substantially
similar document.
4. Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are
and remain true and correct in all material respects
on and as of the date of this Completion Advance as
if made on and as of the date of such Completion
Advance (except to the extent such representations
and warranties expressly relate specifically to an
earlier date) and no event of default under the PCS
Guaranty has occurred and is
<PAGE> 72
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
continuing on the date such Completion Advance is to
be made or by reason of giving effect to such
Completion Advance.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P.,
by PCS Nitrogen Fertilizer
Operations, Inc.,
its General Partner
By: _______________________________
Name:
Title:
2
<PAGE> 73
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
UNIT FF&E SPECIFICATIONS
<PAGE> 74
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT H
ENVIRONMENTAL CERTIFICATE
1. PCS Nitrogen Fertilizer, L.P. ("Agent"), is a party to a
certain Amended and Restated Agreement for Lease, dated as of May 16, 1997 (the
"Agreement for Lease"), entered into with Trinidad Ammonia Company, Limited
Partnership ("Owner"). Agent is herewith delivering to Owner and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland", New York Branch
(the "Assignee") an Acquisition Certificate with respect to a leasehold interest
in certain premises located at the Ward of Couva, County of Caroni in the
Republic of Trinidad and Tobago. Capitalized terms used herein and not otherwise
defined shall have the meaning given such terms in the Agreement for Lease.
2. Except as described in the Environmental Report
(hereinafter defined), Agent has no actual knowledge and has not given or
received any notice indicating, that (a) any prior or present owner, operator,
tenant or occupant of any portion of the Unit has spilled, released, disposed
of, or discharged (collectively "managed") any Hazardous Substances (hereinafter
defined) on, from, beneath or affecting the Unit or any portion thereof in
amounts or concentrations requiring remediation under applicable Environmental
Regulations; (b) any prior or present owner, operator, tenant or occupant of any
portion of the Unit Premises has received any notice, directive, citation,
subpoena, summons, order to show cause, complaint or other communication from
any Governmental Authority or entity or Person with respect to the management of
any Hazardous Substances on, from, beneath or affecting the Unit Premises or any
portion thereof; (c) Agent has not given notice to any insurance broker or
insurance carrier under any insurance policy that there has been an occurrence
relating to the release of Hazardous Substances on, from, beneath, or affecting
the Unit or any portion thereof; or (d) there are currently any agreements,
consent orders, decrees or other directives of any applicable court or
governmental or quasi-governmental agency requiring any tests, studies,
inspections, work, monitoring or other removal or remedial activities with
respect to the management of any Hazardous Substances on, from, beneath or
affecting the Unit Premises or any portion thereof, or any threatened proceeding
concerning the Unit Premises or any portion thereof which is related to
Environmental Regulations (hereinafter defined).
3. For purposes of this document, the following terms shall
have the following meanings: (i) "Environmental Regulations" shall mean each and
every applicable federal, state or local law, statute, ordinance, code, rule,
order, regulation, or other published requirement (including but not limited to,
consent decrees and administrative orders) of any jurisdiction regulating,
relating or imposing obligations, liabilities or standards of conduct with
respect to human health or safety, to the environment, or to Hazardous
Substances, including, without limitation, the
<PAGE> 75
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Comprehensive Environmental Response, Compensation, and Liability Act, as
amended ("CERCLA") (42 U.S.C. Section 9601, et seq.), as amended by the
Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Sections
9601-9675), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et seq.), the Emergency Planning and Community Right-To-Know Act,
as amended (42 U.S.C. Section 11001, et seq.) the Water Pollution Control Act,
as amended (33 U.S.C. Section 1251, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), and any so
called "Superfund" or "Superlien" law, (ii) "Environmental Report" shall mean
the environmental report delivered pursuant to paragraph (v) of Section 4 of the
Agreement for Lease to and accepted by Owner and the Assignee in connection with
the acquisition of the Unit Premises, and (iii) "Hazardous Substances" shall
mean, without limitation, any solid, liquid or gaseous wastes, substances or
materials containing or constituting urea formaldehyde, polychlorinated
biphenyls, petroleum products, methane, radioactive materials, hazardous wastes,
hazardous or toxic substances, or related materials, asbestos or any material
containing asbestos, pollutants, or any other substance, material, chemical
compound, waste or item defined as or determined by a governmental authority
having jurisdiction to be hazardous or toxic pursuant to any Environmental
Regulations applicable to the Unit Premises or the business operations conducted
thereon.
PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations, Inc.,
its General Partner
By: ________________________________
Title: _____________________________
2
<PAGE> 76
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT I
OPERATING AGREEMENT
<PAGE> 77
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT J
DESCRIPTION OF THE AMMONIA PROJECT
<PAGE> 78
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT K
PROJECT PARCEL
<PAGE> 79
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT L
CONSTRUCTION AGREEMENT FOR AMMONIA PROJECT
<PAGE> 80
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-1
ELECTRICITY SUPPLY AGREEMENT
<PAGE> 81
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-2
WATER SUPPLY AGREEMENT
<PAGE> 82
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-3
SAVONETTA PIER USER AGREEMENT
<PAGE> 83
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT N
FORM OF AIA DOCUMENT G722
<PAGE> 84
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT O
REVISED UNIT BUDGET
<PAGE> 85
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
SECTION 1. DEFINITIONS......................................................................... 1
SECTION 2. APPOINTMENT OF AGENT................................................................ 11
SECTION 3. ADVANCES............................................................................ 14
SECTION 4. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE
WITH RESPECT TO A UNIT.............................................................. 15
SECTION 5. CONDITIONS PRECEDENT TO OWNER'S OBLIGATION
TO MAKE INTERIM ADVANCES AFTER THE INITIAL
ADVANCE WITH RESPECT TO A UNIT...................................................... 19
SECTION 6. CONDITIONS PRECEDENT TO THE FINAL ADVANCE
WITH RESPECT TO A UNIT.............................................................. 21
SECTION 7. CONDITIONS PRECEDENT TO COMPLETION
ADVANCES WITH RESPECT TO A UNIT..................................................... 22
SECTION 8. REPRESENTATIONS AND WARRANTIES OF AGENT............................................. 23
SECTION 9. AFFIRMATIVE COVENANTS............................................................... 28
SECTION 10. NEGATIVE COVENANTS.................................................................. 34
SECTION 11. EVENTS OF DEFAULT, EVENTS OF UNIT
TERMINATION AND CASUALTY EVENTS..................................................... 35
SECTION 12. INDEMNITIES......................................................................... 44
SECTION 13. LEASEHOLD INTERESTS................................................................. 45
SECTION 14. PURCHASES........................................................................... 45
SECTION 15. CHARACTER OF AMMONIA PROJECT........................................................ 45
SECTION 16. PERMITTED CONTESTS.................................................................. 45
SECTION 17. SALE OR ASSIGNMENT BY OWNER......................................................... 47
SECTION 18. GENERAL CONDITIONS.................................................................. 47
</TABLE>
i
<PAGE> 86
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 19. AGENT'S RIGHT TO PURCHASE................................. 55
Schedule I List of Assignment Agreement Consents
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C>
Exhibit A The Amended and Restated Lease Agreement
Exhibit B Form of AFL Unit Leasing Record
Exhibit C Form of Acquisition Certificate
Exhibit D Form of Interim Advance Certificate
Exhibit E Form of Certificate of Substantial Completion
Exhibit F Form of Certificate of Increased Cost
Exhibit G Unit FF&E Specifications
Exhibit H Environmental Certificate
Exhibit I Operating Agreement
Exhibit J Description of the Ammonia Project
Exhibit K Project Parcel
Exhibit L Construction Agreement for Ammonia Project
Exhibit M-1 Electricity Supply Agreement
Exhibit M-2 Water Supply Agreement
Exhibit M-3 Savonetta Pier User Agreement
Exhibit N Form of AIA Document G722
Exhibit O Revised Unit Budget
</TABLE>
ii
<PAGE> 1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(o)
CONFIDENTIAL AND PROPRIETARY
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of May 16, 1997
BETWEEN
Trinidad Ammonia Company, Limited Partnership
as Lessor
AND
PCS Nitrogen Fertilizer, L.P.
as Lessee
THIS AMENDED AND RESTATED LEASE HAS BEEN ASSIGNED AS
SECURITY FOR INDEBTEDNESS OF THE LESSOR. SEE SECTION 21.
This Amended and Restated Lease has been manually executed in 8 counterparts,
numbered consecutively from 1 through 8, of which this is No. __. To the extent,
if any, that this Amended and Restated Lease constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction) no security interest in this Amended and Restated Lease may be
created or perfected through the transfer or possession of any counterpart other
than the original executed counterpart which shall be the counterpart identified
as counterpart No. 1.
<PAGE> 2
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
CONFIDENTIAL
AMENDED AND RESTATED LEASE AGREEMENT
Amended and Restated Lease Agreement, dated as of May 16, 1997
(as the same may be further amended, restated, modified or supplemented from
time to time as permitted by and in accordance with the Operative Documents,
this "Lease"), between Trinidad Ammonia Company, Limited Partnership, a Delaware
limited partnership, as lessor (the "Lessor"), and PCS Nitrogen Fertilizer, L.P.
(formerly Arcadian Fertilizer, L.P.), a Delaware limited partnership, as lessee
(the "Lessee").
The Lessor and the Lessee entered into a Lease Agreement, dated
as of June 29, 1995, as amended, and said parties now desire to further amend
and restate said Lease Agreement. Accordingly, said Lease Agreement and all
Exhibits thereto are hereby amended and restated in their entirety as herein
provided:
SECTION 13. DEFINED TERMS.
Unless the context otherwise requires, each term defined in this
Section 1 shall, when used in this Lease, have the meaning indicated:
"Accrued Default Obligations" has the meaning set forth in
paragraph (e) of Section 19 hereof.
"Acquisition Cost" means, (i) in the case of a Parcel of Property
or Unit of Equipment acquired and built pursuant to the Agreement for Lease, the
Unit Acquisition Cost (as defined in the Agreement for Lease) therefor; (ii)
with respect to any other Unit of Equipment, an amount equal to the sum of (a)
the vendor's invoice price to the Lessor therefor, including any progress
payments, costs of labor, delivery or installation, sales, use, excise or
similar taxes and any other charges included in such invoice, after deduction
for any refundable fleet or other discounts or credits actually used by the
Lessee or the Lessor, (b) any construction or assembly costs, expenses or
charges paid by the Lessor in connection therewith, (c) similar amounts paid or
payable with respect to such Unit to parties other than the vendor of such Unit,
including by way of reimbursement, (d) similar costs incurred with respect to
such Unit by the Lessee, and (e) legal, printing, reproduction, closing and
other normally capitalizable administrative fees and expenses paid by the Lessee
and approved by the Lessor; and (iii) with respect to any Parcel of Property not
acquired and built pursuant to the Agreement for Lease, an amount equal to the
amounts included in (ii)(e) above which are applicable to such Parcel plus (a)
the vendor's contract price therefor or the appraised value thereof, (b)
vendee's closing costs, including, without limitation, title
<PAGE> 3
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
insurance premiums, survey and survey inspection charges, recording and filing
fees, title closer fees, vendee's attorneys' fees and brokerage commissions, (c)
other costs related to the acquisition, including, without limitation,
appraisal, architectural, engineering, soil analysis, environmental analysis and
market analysis fees, and (d) any amounts paid by vendee on behalf of vendor in
addition to, and not as a credit against the contract price, including, without
limitation, payments made in satisfaction of prior liens, and payment of any
transfer, transfer gains or similar taxes imposed in respect of the conveyance
of such Property.
"Additional Insureds" has the meaning set forth in paragraph (e)
of Section 10 hereof.
"Additional Rent" has the meaning set forth in paragraph (c) of
Section 7 hereof.
"Affiliate" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; provided that, in any event, any Person
which owns directly or indirectly more than 10% of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or more than 10% of the partnership or other ownership interest of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AFL Unit Leasing Record" means an instrument, substantially in
the form of Exhibit B hereto, evidencing the lease under this Lease of Equipment
or Property and related personal property acquired and built pursuant to the
Agreement for Lease. The terms "lease" or "leased" when used in this Lease shall
be deemed to mean "sublease" or "subleased" when referenced to the Equipment or
Property subleased pursuant to the AFL Unit Leasing Record.
"Agreement for Lease" means the Agreement for Lease, dated as of
June 29, 1995, as amended, between the Lessor, as owner, and the Lessee, as
agent, as amended and restated as of the date hereof and as the same may be
further amended, restated, modified or supplemented from time to time as
permitted by and in accordance with the Operative Documents.
"Ammonia Project" means the Equipment and improvements
constituting the Ammonia Project described in Exhibit D hereto to be located on
and including the Parcel of Property described in Exhibit F hereto located in
the Republic of Trinidad and Tobago in which the Lessor has acquired or will
acquire a leasehold interest. To the extent that
2
<PAGE> 4
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
portions of the Ammonia Project are personal or real property, respectively, the
provisions of this Lease in respect to Equipment or Property, respectively,
shall be applicable thereto.
"Ancillary Facility Agreement" means any of the contracts entered
into by the Lessee or an Affiliate of the Lessee and assigned to the Lessor
which provide for the use of and access to storage tanks, loading and unloading
facilities, pipelines and similar facilities and equipment necessary for the
operation and maintenance of and access to the Ammonia Project and the License
Agreement relating to pipelines and similar facilities necessary for the
operation and maintenance of the Ammonia Project.
"Appraisal Procedure" means the following procedure whereby an
independent appraiser shall be appointed by the Lessor and the Lessee, with the
consent of the Assignee, to determine the amount, if any, by which the sales
price of the Ammonia Project has been reduced as the direct result of wear and
tear in excess of the wear and tear that would have occurred if the Lessee's
obligations contained in the second sentence of paragraph (b) of Section 9 of
this Lease had been satisfied, if such determination is required under Section
19 of this Lease. If no such appraiser is appointed by the Lessor and the Lessee
within thirty (30) days after the written request of either the Lessor or the
Lessee that an appraiser be appointed, the Lessor and the Lessee shall each
appoint an independent appraiser within thirty (30) days thereafter, and the two
appraisers so appointed shall appoint a third independent appraiser. Each
appraiser appointed pursuant to the foregoing procedure shall, within thirty
(30) days after appointment of the last appraiser, independently determine the
amount, if any, by which the sales price of the Ammonia Project has been reduced
as the direct result of wear and tear in excess of the wear and tear that would
have occurred if the Lessee's obligations contained in the second sentence of
paragraph (b) of Section 9 of this Lease had been satisfied. If the Lessor or
the Lessee shall fail to appoint an independent appraiser within the
above-mentioned thirty (30) day period, the appraiser appointed by the other
party shall determine such amount. If a single appraiser is appointed, such
appraiser's determination shall be final. If three appraisers are appointed, the
amounts determined by the three appraisers shall be averaged, the amount which
differs the most from such average shall be excluded, the remaining two amounts
shall then be averaged and such average shall be final. The expenses of all
appraisers shall be paid by the Lessee. Each appraiser appointed pursuant to
this "Appraisal Procedure" shall be an independent engineering firm of
recognized standing and shall have experience in the construction, maintenance
and operation of ammonia production plants.
"Assignee" means each Person to which any part of the Lessor's
interest under this Lease or in any Parcel of Property or Unit of Equipment
shall at the time have been collaterally assigned, conditionally or otherwise,
by the Lessor in accordance with Section 21 of this Lease.
"Assignment" means each assignment agreement referred to in
Section 21 hereof, between the Lessor and a third party, pursuant to which the
Lessor assigns certain of its rights under this Lease to such third party, as
the same may be amended, restated, modified or supplemented from time to time.
3
<PAGE> 5
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Average Ammonia Market Price" means, for any calendar month, the
average of the Weekly Average Ammonia Price, FOB Trinidad, for each calendar
week. "Weekly Average Ammonia Price, FOB Trinidad" means, for any calendar week
that begins during such calendar month, the average of the "Green Markets
Caribbean Price", the "Fertecon Caribbean Price", and the "FMB Trinidad Price",
except that (x) if, for any reason, any such price cannot be determined with
respect to such calendar week, the Weekly Average Ammonia Price, FOB Trinidad
shall be the average of such prices as can be so determined (or, if only one
such price can be so determined, such price), and (y) if no such price can be so
determined, the Weekly Average Ammonia Price, FOB Trinidad shall be determined
in a manner as shall be mutually agreed to between the Lessee and the Lessor.
(a) The "Green Markets Caribbean Price" for any calendar week
shall be the average of:
(i) the low International Caribbean Market Price for
Anhydrous Ammonia on the spot market as reported
for such week in the Table "International Market
Prices" by the publication Green Markets
Fertilizers Market Intelligence Weekly (a Pike &
Fischer publication); and
(ii) the high International Caribbean Market Price for
Anhydrous Ammonia on the spot market as reported
for such week in the manner aforesaid by the said
publication.
(b) The "Fertecon Caribbean Price" for any calendar week shall
be the average of:
(i) the low FOB Caribbean Ammonia Spot Price as
reported for such week in the Table "AMMONIA SPOT
PRICE INDICATIONS" by the publication Fertecon
Weekly Ammonia Fax (a Fertecon Limited
publication); and
(ii) the high FOB Caribbean Ammonia Spot Price as
reported for such week in the manner aforesaid by
the said publication.
(c) The "FMB Trinidad Price" for any calendar week shall be
the average of:
(i) the low Ammonia - FOB Trinidad Spot Price as
reported for such week in the table "FMB
International Price Guide" under the heading "RAW
MATERIALS/INTERMEDIATES" by the publication FMB
Fertilizer Market Bulletin (a FMB Consultants Ltd.
publication); and
4
<PAGE> 6
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(ii) the high ammonia - FOB Trinidad Spot Price as
reported for such week in the manner aforesaid by
the said publication.
If the Green Markets Caribbean Price, the Fertecon Caribbean
Price or the FMB Trinidad Price is quoted for other than short ton of anhydrous
ammonia (for example tonne), the quotation shall be converted to a short ton
basis using generally accepted conversion methods.
"Basic Rent" means, with respect to any Parcel of Property or
Unit of Equipment commencing on the Effective Date with respect to such Parcel
of Property or Unit of Equipment:
13.1 for each calendar month during the Lease Term of such Parcel
or Unit, an amount computed by multiplying the following:
(i) the Acquisition Cost of such Parcel or Unit, by
(ii) a fraction having a numerator equal to the number of days
in such month and a denominator of 365, or in a leap year,
366, by
(iii) the decimal equivalent of 0.06% plus the Lessor's weighted
average percentage cost per annum (including, without
duplication, any interest accruing at a default rate and
any facility, commitment or other fees under a Credit
Agreement) of borrowings outstanding at any time during
the period from and including the 20th day of the
preceding calendar month to and including the 19th day of
the calendar month for which Basic Rent is being computed
(the "Computation Period") to finance or refinance the
acquisition and ownership of Property or Equipment; and
13.2 for any partial first calendar month during the Lease Term
of such Parcel or Unit, an amount computed by multiplying the following:
(a) the Acquisition Cost of such Parcel or Unit, by
(b) a fraction having a numerator equal to the number of days
such Parcel or Unit is under lease during such partial
first month and a denominator of 365, or in a leap year,
366, by
(c) the decimal referred to in paragraph (a)(iii) above,
provided that, if the Effective Date for such Parcel or
Unit falls on or after the Lease Rate Date during such
partial first calendar month, such decimal shall be the
decimal determined as of the next succeeding Lease Rate
Date.
5
<PAGE> 7
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Basic Rent Payment Date" means the 20th day of each calendar
month during the Lease Term of any Property or Equipment and the Lease
Termination Date therefor or, if such day is not a Business Day, the next
succeeding Business Day.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in the City of New York or the City of London
are authorized by law to close.
"Capital" means, at any particular time, the aggregate of:
(a) Debt at such time; and
(b) Equity at such time.
"Cash Reserve Account" shall have the meaning set forth in
paragraph (q) of Section 2 hereof.
"Cash Reserve Requirement Amount" means an amount equal to the
quotient of 50% of the Acquisition Cost of the Ammonia Project divided by the
number of Scheduled Reserve Payment Dates.
"Cash Reserve Trigger Event" means each of (i) the date that the
Guarantor's senior unsecured long-term credit is first rated below BBB- by
Standard & Poor's Ratings Group (or any successor entity thereto) and below Baa3
by Moody's Investors Services, Inc. (or any successor entity thereto) and (ii)
the date following any CRA Release Event that the Guarantor's senior unsecured
long-term credit is again rated below BBB- by Standard & Poor's Ratings Group
(or any successor entity thereto) and below Baa3 by Moody's Investors Services,
Inc. (or any successor entity thereto).
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies Act" means Companies Act, Chapter 31, No. 1, of May 1,
1939, as amended.
"Computation Period" has the meaning set forth in subclause
(a)(iii) of the definition of Basic Rent in Section 1 hereof.
"Consent" means each consent or acknowledgement or similar
instrument of the Lessee with respect to an Assignment, as the same may be
amended, restated, modified or supplemented from time to time.
"CRA Agreement" means the Cash Reserve Account Agreement to be
entered into among the Lessee, the Lessor and the CRA Bank within five (5)
Business Days following the initial occurrence of a Cash Reserve Trigger Event,
which agreement shall be substantially in the form of Exhibit G hereto.
6
<PAGE> 8
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"CRA Bank" means the bank party to the CRA Agreement.
"CRA Release Event" means the date, following any Cash Reserve
Trigger Event, that the Guarantor's senior unsecured long-term credit is rated
BBB- or higher by Standard & Poor's Ratings Group (or any successor entity
thereto) and Baa3 or higher by Moody's Investors Services, Inc. (or any
successor entity thereto).
"Credit Agreement" means each credit or loan agreement, including
any amendment, restatement, modification or supplement with respect thereto,
which has been entered into between the Lessor and a lender or lenders related
to the financing of Property or Equipment, as the same may be amended, restated,
modified or supplemented from time to time.
"Debt" means, at any particular time, the aggregate of (without
duplication):
(a) the aggregate of the amounts which would, in
accordance with generally accepted accounting
principles, be classified on the consolidated
balance sheet of the Guarantor at such time as
indebtedness for borrowed money of the Guarantor
and as capital leases of the Guarantor (but
specifically excluding Subordinated Debt); and
(b) the aggregate indebtedness for borrowed money of
entities other than the Guarantor and its
consolidated subsidiaries to the extent guaranteed
by any of the Guarantor and its consolidated
subsidiaries at such time;
provided that, for the Fiscal Quarter ending March 31, 1997 or
the Fiscal Quarter ending June 30, 1997 (each, a "Transition
Fiscal Quarter"), there shall be deducted from the foregoing
aggregate amount, when measured as at the last day of each
Transition Fiscal Quarter, the least of (i) net cash on hand of
PCS Nitrogen, Inc. at such time which is not subject to any
restrictions on its use and is not dedicated to any purpose other
than the repayment of Debt, (ii) Debt of PCS Nitrogen, Inc. at
such time and (iii) $300,000,000.
"EBITDA" means, for any particular period, Net Income of the
Guarantor for such period plus, to the extent deducted in the determination of
Net Income of the Guarantor for such period, the aggregate of:
(a) Interest Expense of the Guarantor for such period;
7
<PAGE> 9
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) consolidated income tax expenses (both current and
deferred) of the Guarantor (including, without
limitation, those reported on the consolidated
income statement of the Guarantor as "provincial
mining and other taxes") for such period; and
(c) consolidated depreciation, amortization and other
non-cash expenses of the Guarantor for such period;
provided, however, that, with respect to any calculation of the
ratio referred to in clause (ii) of paragraph (p) of Section 2
hereof which involves a calculation of EBITDA for the first
Fiscal Quarter of 1997 or for any of the three immediately
preceding Fiscal Quarters, "EBITDA" for such Fiscal Quarter shall
mean the pro forma combined Net Income of the Guarantor and PCS
Nitrogen, Inc. for such Fiscal Quarter plus, to the extent not
included in the pro forma combined Net Income of the Guarantor
and PCS Nitrogen, Inc., the aggregate of:
(d) the pro forma combined Interest Expense of the
Guarantor and PCS Nitrogen, Inc. for such Fiscal
Quarter;
(e) the pro forma combined income tax expenses (both
current and deferred) of the Guarantor and PCS
Nitrogen, Inc. (including, without limitation,
those reported on the consolidated income statement
of the Guarantor as "provincial mining and other
taxes") for such Fiscal Quarter;
(f) the pro forma combined depreciation, amortization
and other non-cash expenses of the Guarantor and
PCS Nitrogen, Inc. for such Fiscal Quarter.
"Effective Date" means, with respect to any Parcel of Property or
Unit of Equipment, the date on which such Parcel or Unit becomes subject to this
Lease, as evidenced by execution by the Lessor of an AFL Unit Leasing Record or
a Unit Leasing Record.
"Equipment" means personal property of any type leased or to be
leased hereunder and, when leased, evidenced by Unit Leasing Records or AFL Unit
Leasing Records, and all related appliances, appurtenances, accessions,
furnishings, materials and parts leased or to be leased by the Lessor to the
Lessee as provided herein and including all replacements and subsequent
replacements of such related appliances, appurtenances, accessions, furnishings,
materials and parts. "Unit", when referring to the personal property leased
under this Lease, means a particular item of Equipment, as the context may
require.
8
<PAGE> 10
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Equity" means, at any particular time, the aggregate of (i) the
amount which would, in accordance with generally accepted accounting principles,
be classified upon the consolidated balance sheet of the Guarantor at such time
as shareholders' equity and (ii) the amount of Subordinated Debt at such time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated thereunder.
"ERISA Affiliate" means any Person that, for purposes of Title IV
of ERISA, is a member of the controlled group of the Lessee, or under common
control with the Lessee, within the meaning of Section 414 of the Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA; (d) the cessation of operations at a facility of the
Lessee or any ERISA Affiliate in the circumstances described in Section 4062(e)
of ERISA; (e) the withdrawal by the Lessee or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Event of Default" has the meaning set forth in Section 18
hereof.
"Expiration Covenants" has the meaning set forth in paragraph (b)
of Section 13 hereof.
"Final Advance" has the meaning set forth for such term in the
Agreement for Lease.
9
<PAGE> 11
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Fiscal Quarter" means any of the three-month periods ending on
the last day of March, June, September and December in each year.
"Gas Contract" means the Gas Supply Contract dated November 25,
1994 between the National Gas Company of Trinidad and Tobago Limited and
Arcadian Trinidad Ammonia Limited (which by novation assigned its obligations,
rights and benefits thereunder to Arcadian Trinidad Limited, currently PCS
Nitrogen Trinidad Limited, by agreement dated January 27, 1997).
"Governmental Action" has the meaning set forth in paragraph (d)
of Section 2 hereof.
"Ground Lease" has the meaning set forth in Section 28 hereof.
"Guarantor" means Potash Corporation of Saskatchewan Inc., a
corporation organized under the laws of the Province of Saskatchewan and an
Affiliate of the Lessee, and its successors.
"Indemnified Person" has the meaning set forth in Section 11
hereof.
"Initial Advance" means any advance made by the Lessor to the
Lessee upon satisfaction or waiver of the conditions set forth in Section 4 of
the Agreement for Lease.
"Initial Term" has the meaning set forth in paragraph (a) of
Section 6 hereof.
"Insurance Requirements" means all terms of any insurance policy
covering or applicable to any Property or Equipment, all requirements of the
issuer of any such policy, all statutory requirements and all orders, rules,
regulations and other requirements of any governmental body related to insurance
applicable to any Property or Equipment.
"Interest Expense" of any particular Person means, for any
particular period, the amount which would, in accordance with generally accepted
accounting principles, be classified on the consolidated income statement of
such Person for such period as gross interest expense.
"Lease Rate Date" has the meaning set forth in paragraph (b) of
Section 7 hereof.
"Lease Term" means, with respect to any Parcel of Property or
Unit of Equipment, the Initial Term plus the Renewal Term thereof, if any.
"Lease Termination Amount" shall mean, as to any Parcel of
Property or Unit of Equipment, an amount equal to (i) at any time during or at
the end of the Initial
10
<PAGE> 12
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Term, 85% of the Acquisition Cost of such Parcel or Unit or (ii) at any time
during or at the end of the Renewal Term, a percentage of the Acquisition Cost
of such Parcel or Unit to be agreed to between the Lessee and the Lessor prior
to the commencement of such Renewal Term.
"Lease Termination Date" means for any Parcel of Property or Unit
of Equipment, the earlier of (i) the last day of the Initial Term of such Parcel
or Unit (unless the lease hereunder of such Parcel or Unit has been renewed
pursuant to Section 12 hereof), (ii) if the lease of such Parcel or Unit has
been renewed pursuant to Section 12 hereof, the last day of the Renewal Term of
such Parcel or Unit or (iii) the day on which PCS Nitrogen Fertilizer
Operations, Inc. purchases such Parcel or Unit pursuant to the terms of the
Purchase Option.
"Legal Requirements" means all laws, judgments, decrees,
ordinances and regulations and any other governmental rules, orders and
determinations and all requirements having the force of law of governmental
entities or agencies, courts or arbitral panels which have jurisdiction over or
application to any Property or Equipment leased hereunder, the Lessee or the
Lessor, now or hereinafter enacted, made or issued, whether or not presently
contemplated, including, without limitation, compliance with all requirements of
labor laws and environmental statutes (including, without limitation, all
environmental laws and statutes of the Republic of Trinidad and Tobago),
compliance with which is required at any time from the date hereof through the
Lease Term, whether or not such compliance shall require structural, unforeseen
or extraordinary changes to any Property or Equipment or the operation,
occupancy or use thereof, except any thereof promulgated by a governmental
authority of the jurisdiction of organization of the Lessor with application
exclusively to the Lessor.
"Lessee" has the meaning set forth in the first paragraph of this
Lease.
"Lessor" means Trinidad Ammonia Company, Limited Partnership or
any successor or successors to all of its rights and obligations as the Lessor
hereunder.
"License Agreement" means the License Agreement dated June 26,
1995 and made by Arcadian Trinidad Ammonia Limited, which by novation assigned
its obligations, rights and benefits thereunder to Arcadian Trinidad Limited
(currently PCS Nitrogen Trinidad Limited) by agreement dated January 27, 1997,
the said Arcadian Trinidad Limited (currently PCS Nitrogen Trinidad Limited) and
the Lessor.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), or other
security agreement or charge or preferential arrangement having the same
economic effect as any of the foregoing of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
11
<PAGE> 13
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
any of the foregoing, or the filing of any financing statement or the
recordation or registration of any security interest or charge under the Uniform
Commercial Code or Companies Act or comparable law of any jurisdiction in
respect of any of the foregoing).
"Long Term Debt" means, at any particular time, that portion of
Debt at such time which would not, in accordance with generally accepted
accounting principles, be considered to be current liabilities at such time.
"Material Subsidiaries" means Potash Corporation of Saskatchewan
Sales Limited, LLC, PCS Nitrogen, Inc., PCS Phosphate Company, Inc. and any
other subsidiary of the Guarantor whose book value of assets is greater than 20%
of the book value of the assets of the Guarantor on a consolidated basis or
whose gross sales are greater than 20% of the gross sales of the Guarantor on a
consolidated basis.
"Merrill Leasing" means ML Leasing Equipment Corp., a Delaware
corporation.
"Merrill Lynch" means Merrill Lynch & Co., Inc., a Delaware
corporation.
"Mortgageable Ground Lease" means a Ground Lease for a Parcel of
Property to be subleased to the Lessee which is delivered to the Lessor for
execution by the Lessor, or assigned to the Lessor by an assignment in form and
substance satisfactory to the Lessor, and having such terms and characteristics
as may be required by the Lessor and any Assignee, which terms and
characteristics shall include, without limitation, the following: (a) free
assignability to any lender as security for a borrowed money obligation of the
Lessor and, upon foreclosure of such security, by such lender to any third
party; (b) a term of at least five years in excess of the Initial Term of the
Parcel of Property to which such Ground Lease relates; (c) no provisions for
percentage or variable rent; and (d) no provision for a security deposit. A
Mortgageable Ground Lease shall be delivered with such estoppel certificates,
recognition and attornment agreements, or confirmation of customary mortgagee
protection as are reasonably acceptable to the Lessor and any Assignee.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Lessee or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees the Lessee
or any ERISA Affiliate and at least one Person other than the Lessee and the
ERISA Affiliates or (b) was so maintained and in respect of which the Lessee or
any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
12
<PAGE> 14
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Net Income" of a particular Person means, for any particular
period, the amount which would, in accordance with generally accepted accounting
principles, be classified on the consolidated income statement of such Person
for such period as the net income after all unusual and extraordinary items
other than any gains or losses on the disposition of property, plant and
equipment and any non-cash writedowns of assets.
"Operating Agreement" means the certain Operating Agreement dated
as of June 26, 1995 and made between the Lessor and Arcadian Trinidad Ammonia
Limited (which by novation assigned its obligations rights and benefits
thereunder to Arcadian Trinidad Limited, currently PCS Nitrogen Trinidad
Limited, by agreement dated January 27, 1997).
"Operative Documents" has the meaning set forth in the Agreement
for Lease.
"Operator" means PCS Nitrogen Trinidad Limited (formerly Arcadian
Trinidad Urea Limited, Arcadian Trinidad Ammonia Limited and Arcadian Trinidad
Limited), a private limited liability company incorporated under the laws of the
Republic of Trinidad and Tobago.
"PCS Guaranty" means the guaranty agreement, dated as of the date
hereof, made by the Guarantor in favor of the Lessor, as the same may be
amended, restated, modified or supplemented from time to time.
"PCS Lease Group" means the Lessee, PCS Nitrogen Trinidad
Fertilizer Corporation, a Delaware corporation (formerly Arcadian Fertilizer
Corporation), and the Seller.
"PCS/NT Ltd. Agreement" means the Estoppel Certificate Consent
and Agreement dated June 26, 1995 in respect of the Sublease, as supplemented by
the Letter of Agreement dated April 30, 1997 relating thereto.
"PCS Term Credit Agreement" means the Term Credit Agreement, made
as of October 4, 1996, among The Bank of Nova Scotia, as Agent, the Co-Agents
and the Lenders named therein and the Guarantor.
"Permitted Contest" has the meaning set forth in paragraph (a) of
Section 27 hereof.
"Permitted Liens" means the following Liens and other matters
affecting the title of any Parcel of Property or Unit of Equipment: (a) Liens
securing the payment of taxes, assessments and other governmental charges or
levies which are either not delinquent or, if delinquent, are being contested by
the Lessee in good faith as a Permitted Contest;
13
<PAGE> 15
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) zoning and planning restrictions, subdivision and platting restrictions,
easements, rights-of-way, licenses, reservations, covenants, conditions,
waivers, restrictions on the use of any Parcel of Property, minor encroachments
or minor irregularities of title, none of which materially impairs the intended
use or value of such Parcel of Property by the Lessee; (c) reservations of
mineral interests; (d) any Lien created by an Operative Document; (e) leases and
licenses in effect with respect to any Parcel of Property which are permitted by
this Lease or which are delivered to and accepted by the Lessor prior to such
Parcel's Effective Date; (f) materialmen's, mechanics', worker's, repairmen's,
employees', or similar Liens incurred in good faith and in the ordinary course
of business which are not yet delinquent or which are the subject of a Permitted
Contest; (g) Liens arising out of any judgment or award against the Lessee,
unless there exists a material risk of the sale, forfeiture or loss of such
Parcel of Property or Unit of Equipment or any interest therein or any use
thereof or unless such judgment or award shall not in any event, within 45 days
after the entry thereof, have been discharged, vacated, reversed or execution
thereof stayed pending appeal or shall not have been discharged, vacated or
reversed within 45 days after the expiration of such stay; (h) any Lien with
respect to which the Lessee shall have provided a bond or other security in an
amount and under terms reasonably satisfactory to the Lessor; and (i) such other
or additional matters as may be approved in writing by the Lessor, such approval
not to be unreasonably withheld or delayed.
"Permitted Sublessee" means any entity within the PCS Lease Group
which becomes a sublessee in accordance with the terms hereof.
"Person" means any individual, corporation, partnership, limited
liability company, private limited company, joint venture, association,
joint-stock company, trust, unincorporated organization of government or any
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3
of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Lessee or any Related Person or to
which the Lessee or any Related Person is or has been obligated to contribute,
or an employee benefit plan as to which the Lessee or any Related Person would
be treated as a contributory sponsor under Section 4069 or Section 4212 of ERISA
if such plan were terminated.
"Potential Default" means any event which, but for the lapse of
time, or giving of notice, or both, would constitute an Event of Default.
"Property" means any and all parcels of land together with all
buildings and other improvements (including, without limitation, the
attachments, appliances, equipment, machinery and other affixed property which,
in each case, would constitute "fixtures" under Section 9-313(1)(a) of the
Uniform Commercial Code) now or hereafter located on such parcels of land,
leased or to be leased hereunder and when leased, evidenced by Unit Leasing
Records or AFL Unit Leasing Records, and the respective easements, rights and
14
<PAGE> 16
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
appurtenances relating to such parcels of land, buildings and improvements.
"Parcel" or "Parcel of Property" means a specific parcel or parcels of Property.
"Purchase Agreement" means that certain Amended and Restated
Purchase Option Agreement, dated as of the date hereof, between PCS Nitrogen
Fertilizer Operations, Inc. (the general partner of the Lessee) and the Lessor,
as the same may be further amended, restated, modified or supplemented from time
to time.
"Purchase Option" means the right of PCS Nitrogen Fertilizer
Operations, Inc. to purchase the Ammonia Project on the terms and subject to the
conditions set forth in the Purchase Agreement.
"Reconciliation Amount" has the meaning set forth in paragraph
(e) of Section 7 hereof.
"Related Person" means any trade or business, whether or not
incorporated, which, as of any date of determination, would be treated as a
single employer together with the Lessee, under Section 414 of the Code.
"Renewal Term" means the additional sixty (60) month term during
which, if the conditions set forth in Section 12 hereof are met, a Parcel of
Property or Unit of Equipment may be leased pursuant to the provisions of this
Lease, which term would commence on the day following the end of the Initial
Term with respect to such Parcel of Property or Unit of Equipment.
"Responsible Officer" shall mean the President, any Vice
President or any Treasurer or Assistant Treasurer of the general partner of the
Lessee, or any other officer or similar official of the general partner of the
Lessee responsible for the administration of the obligations of the Lessee with
respect to this Lease.
"Scheduled Reserve Payment Date" has the meaning set forth in
paragraph (q) of Section 2 hereof.
"Seller" means PCS Nitrogen Fertilizer Limited (formerly Arcadian
Fertilizer Limited), a Trinidad and Tobago private limited liability company.
"Site Lease" means the Deed of Lease, dated as of August 24,
1983, between Point Lisas Industrial Port Development Corporation Limited and
the National Energy Corporation of Trinidad and Tobago ("NEC"), which was
assigned to the Operator by Deed of Assignment dated as of September 7, 1990
between NEC and the Operator (previously Trinidad and Tobago Urea Company
Limited), as the same may be amended, restated, modified or supplemented from
time to time as permitted by and in accordance with the Operative Documents.
15
<PAGE> 17
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Sublease" means the Deed of Sub-Lease dated as of June 29, 1995
between Arcadian Trinidad Urea Limited (subsequently Arcadian Trinidad Limited
and currently PCS Nitrogen Trinidad Limited) and the Lessor, as the same may be
amended, restated, modified or supplemented from time to time as permitted by
and in accordance with the Operative Documents.
"Subordinated Debt" means, at any particular time, unsecured
indebtedness of the Guarantor (for greater certainty, excluding its consolidated
subsidiaries) which would otherwise be Debt but which is subordinated, in
writing, on terms satisfactory to the Lessor acting reasonably (including,
without limitation, subordination and postponement of principal repayments and
restrictions on rights to accelerate and commence proceedings), to the
indebtedness of the Guarantor to the Lessor under the PCS Guaranty.
"Surplus Earnings" means, for each Surplus Earnings Period, the
lesser of:
(a)(i) the after-tax income of the Seller from ammonia sales from
the Ammonia Plant, as determined in accordance with U.S.
generally accepted accounting principles as in effect on
the date hereof, plus
(ii) income taxes, depreciation expenses, depletion expenses
and amortization expenses,
in each case determined in accordance with U.S. generally accepted accounting
principles as in effect on the date hereof, minus
(iii) cash spending during the Surplus Earnings Period for
capital expenditures, turnaround expenditures, income
taxes, and deposits into the Cash Reserve Account pursuant
to paragraph (q) of Section 2 hereof,
or
(b)(i) (A) the sum of the Average Ammonia Market Prices during
such Surplus Earnings Period, divided by six, minus
(B) $160.00, multiplied by
(ii) the number of short tons of ammonia sold by the Seller
from the Ammonia Plant during such Surplus Earnings
Period.
"Surplus Earnings Period" means each whole six-month period
following the date of a Cash Reserve Trigger Event (but not including any period
of less than six months following the date of such Cash Reserve Trigger Event)
ending on June 30 or December 31
16
<PAGE> 18
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
during the Initial Term, beginning with the first whole six-month period
following the date of such Cash Reserve Trigger Event the first day of which
occurs during the Initial Term and ending with the last whole six-month period
following the date of such Cash Reserve Trigger Event to occur in the Initial
Term; provided that, if a CRA Release Event shall occur between the date of the
Cash Reserve Trigger Event and the end of such whole six-month period, no
"Surplus Earnings Period" shall be deemed to occur.
"Surplus Earnings Reduction Amount" means, with respect to any
payment pursuant to paragraph (t) of Section 2 hereof, an amount equal to (a)
the amount of such payment, divided by (b) the number of Scheduled Reserve
Payment Dates occurring after the date of such payment.
"Taking" has the meaning set forth in paragraph (a) of Section 16
hereof.
"Tangible Net Worth" means, at any particular time, Equity at
such time less the aggregate of the amounts which would, in accordance with
generally accepted accounting principles, be classified on the consolidated
balance sheet of the Guarantor at such time as intangible assets, including,
without limitation, goodwill and deferred expenses.
"Unit Leasing Record" means an instrument, substantially in the
form of Exhibit C hereto, evidencing, except in the case of any Parcel or
Parcels of Property acquired and built pursuant to the Agreement for Lease, the
lease of any Parcel or Parcels of Property or Unit or Units of Equipment under
this Lease.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 14. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE.
The Lessee represents, warrants and covenants to the Lessor:
14.1 Partnership Matters. The Lessee (i) has been duly organized
and is validly existing as a limited partnership in good standing under the laws
of the State of Delaware, (ii) has full power, authority and legal right to own
and operate its properties and to conduct its business as presently conducted
and to execute, deliver and perform its obligations under this Lease and any
other Operative Document to which it is or is to be a party and to consummate
the transactions contemplated hereby and by the other Operative Documents, and
(iii) is duly qualified to do business in good standing in each jurisdiction in
which its ownership or leasing of properties or the conduct of its business or
the consummation of the transactions contemplated hereby and by the other
Operative Documents requires such qualification, except whether the failure to
so qualify would not
17
<PAGE> 19
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
materially impair the ability of the Lessee to perform its obligations hereunder
or under the other Operative Documents. The sole general partner of the Lessee
on the date hereof is PCS Nitrogen Fertilizer Operations, Inc.
14.2 Binding Agreement. This Lease has been duly authorized,
executed and delivered by the Lessee and, assuming the due authorization,
execution and delivery of this Lease by the Lessor, this Lease is a legal, valid
and binding obligation of the Lessee, enforceable according to its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
14.3 Compliance with Other Instruments. None of the execution,
delivery and performance by the Lessee of this Lease and any Consent will result
in any violation of any term of the certificate of limited partnership or the
partnership agreement of the Lessee or require the approval or consent of any
limited partner or general partner of the Lessee except such as have been
obtained prior to the date hereof and will not conflict with or result in a
breach in any material respect of any terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any property or assets of the Lessee under, any indenture,
mortgage or other agreement or instrument to which the Lessee is a party or by
which it or any of its property is bound, or any existing applicable law, rule,
regulation, license, judgment, order or decree of any government, governmental
body or court having jurisdiction over the Lessee or any of its activities or
properties.
14.4 Governmental Consents. There are no consents, licenses,
orders, authorizations, approvals, waivers, extensions or variances of, or
notices to or registrations or filings with (each a "Governmental Action"), any
governmental or public body or authority in any jurisdiction which are or will
be required in connection with or are necessary to the valid execution, delivery
and performance of this Lease and the Operating Agreement, or any Governmental
Action (i) which is or will be required in connection with any participation by
the Lessor in the transaction contemplated by, or the exercise of remedies or
the enforcement of rights by Lessor under, this Lease, the Site Lease, the
Sublease, any bill of sale, deed, assignment, assumption, ownership agreement,
operating agreement, or other agreement relating to any Property or Equipment or
(ii) which is or will be required to be obtained by the Lessor, the Lessee, any
Assignee or any Affiliate of the foregoing, during the term of this Lease, with
respect to any Property or Equipment except the Governmental Action of the Town
and Country Planning Authority in the Republic of Trinidad and Tobago, which
Governmental Action the Lessee reasonably believes will be obtained in the
normal course, and such other Governmental Actions, (A) as have been duly
obtained, given or accomplished, with true copies thereof delivered to the
Lessor, (B) as may be required by applicable law not now in effect, (C) which,
individually or in the aggregate, if not obtained or effected, (x) will not
place either the Lessor or any Assignee in any danger of any monetary civil
liability for which the Lessor or any Assignee is not
18
<PAGE> 20
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
adequately indemnified (the Lessee's obligations under Section 11 of this Lease
shall be deemed to be adequate indemnification if no Event of Default exists) or
any other material civil liability or penalty or subject the Lessor or any
Assignee to any criminal liability as a result of a failure to comply therewith,
(y) will not result in a material diminution in the value of any Property or
Equipment or in any material risk of the loss, sale or forfeiture or loss of use
of any thereof, and (z) will not materially impair the ability of the Lessee to
perform its obligations hereunder, (D) as may be required for the construction
or operation of the Ammonia Project and have been or will be timely obtained, or
(E) which may be required as a result of the business, properties or activities
of the Lessor, any Assignee or any Affiliate of the foregoing and which are not
solely dependent on the nature of the Property or Equipment leased hereunder or
the business of the Lessee.
14.5 Financial Statements. The Lessee has furnished to the Lessor
copies of the annual audited financial statements of the Guarantor and its
consolidated subsidiaries for the fiscal year ended December 31, 1996, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 of the
Guarantor and its consolidated subsidiaries and the Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 1997 of the Guarantor and its
consolidated subsidiaries. The financial statements contained in such documents
fairly present in all material respects the financial position, results of
operations and statements of cash flows of the Guarantor and its consolidated
subsidiaries taken as a whole as of the dates and for the periods indicated
therein and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as stated therein or in the
notes thereto.
14.6 Changes. Since March 31, 1997, there has been no material
adverse change in the financial condition or business of the Guarantor and its
consolidated subsidiaries taken as a whole, nor any change which would
materially impair the ability of the Lessee to perform its obligations under
this Lease or the Guarantor to perform its obligations under the PCS Guaranty.
14.7 Litigation. Except as disclosed in the most recent audited
financial statements of the Guarantor and its consolidated subsidiaries, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 of the
Guarantor and its consolidated subsidiaries and the Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 1997 of the Guarantor and its
consolidated subsidiaries, there is no action, suit, proceeding or investigation
at law or in equity by or before any court, governmental body, agency,
commission or other tribunal now pending or, to the knowledge of the Lessee,
threatened against or affecting the Lessee or any property or rights of the
Lessee which questions the enforceability of this Lease or which affects or
relates to any Parcel of Property or Unit of Equipment which, if adversely
determined, would have a reasonable possibility of causing a material adverse
impact on the business of the Lessee in the aggregate or would materially impair
the ability of the Lessee to perform its obligations hereunder.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
14.8 Delivery of Information. The Lessee shall deliver to the
Lessor from time to time, (i) promptly upon their becoming available (but in any
event, within 120 days after the end of each fiscal year with respect to annual
statements and within 90 days after the end of each fiscal quarter with respect
to quarterly statements), copies of the annual audited financial statements of
the Guarantor and its consolidated subsidiaries and the quarterly unaudited
financial statements (balance sheet, income statement and cash flow statement)
of the Guarantor and its consolidated subsidiaries, (ii) promptly upon request,
such other information with respect to the Lessee's or the Guarantor's
operations, business, properties, assets, financial condition or litigation as
the Lessor shall reasonably request, (iii) promptly after a Responsible Officer
of the Lessee obtains knowledge of any Event of Default or any Potential Default
hereunder or under the PCS Guaranty, a certificate of a Responsible Officer of
the Lessee specifying to the extent known the nature and period of existence of
such Event of Default or Potential Default, and what action, if any, the Lessee
or the Guarantor has taken, is taking, or proposes to take with respect thereto
and (iv) promptly after a Responsible Officer of the Lessee obtains knowledge of
any material adverse change in the financial condition or business of the Lessee
or the Guarantor or of any litigation of the type described in paragraph (g) of
this Section 2, a certificate of a Responsible Officer of the Lessee describing
such change or litigation as the case may be.
14.9 Compliance with Legal Requirements and Insurance
Requirements. The operation, use and physical condition of the Property and
Equipment are in full compliance with all Legal Requirements and Insurance
Requirements, except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (i) will not place either the Lessor or any
Assignee in any danger of any monetary civil liability for which the Lessor or
any Assignee is not adequately indemnified (the Lessee's obligations under
Section 11 of this Lease shall be deemed to be adequate indemnification if no
Event of Default exists) or any other material civil liability or penalty or
subject the Lessor or any Assignee to any criminal liability as a result of a
failure to comply therewith and (ii) will not result in a material diminution in
the value of any Property or Equipment or in any material risk of the loss, sale
or forfeiture or loss of use of any thereof.
14.10 Liens. No Property or Equipment is subject to any Lien,
except Permitted Liens.
14.11 Agreement for Lease. The Property and Equipment acquired
and built pursuant to the Agreement for Lease was acquired and built in
accordance with the terms of the Agreement for Lease. The representations and
warranties of the Lessee in the Agreement for Lease are true and correct in all
material respects.
14.12 ERISA. (a) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan.
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<PAGE> 22
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90 percent, other than with respect to Plans whose
unfunded current liability does not exceed $1,000,000 in the aggregate,
and there has been no material adverse change in the funding status of
any such Plan since such date.
(c) The Lessee has not incurred or is reasonably expected to
incur any Withdrawal Liability to any Multiemployer Plan.
(d) The Lessee has not been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no
such Multiemployer Plan is reasonably expected to be in reorganization
or to be terminated, within the meaning of Title IV of ERISA.
(e) Except as set forth in the financial statements referred to
in paragraph (e) of Section 2 hereof, the Lessee and its Subsidiaries
have no material liability with respect to "expected post retirement
benefit obligations" within the meaning of Statement of Financial
Accounting Standards No. 106.
(f) The execution and delivery of this Lease will not involve any
non-exempt "prohibited transaction" within the meaning of Section 406 of
ERISA or Section 4975 of the Code.
14.13 Operating Agreement. The Operating Agreement has been duly
authorized, executed and delivered by the Operator and, assuming the due
authorization, execution and delivery of the Operating Agreement by the Lessor,
is a legal, valid and binding obligation of the Operator, enforceable according
to its terms.
14.14 Gas Contract. The Gas Contract has been duly authorized,
executed and delivered by the Operator and, assuming the due authorization,
execution and delivery of the Gas Contract by The National Gas Company of
Trinidad and Tobago Limited, is a legal, valid and binding obligation of the
Operator, enforceable according to its terms.
14.15 Ancillary Facility Agreements. Each Ancillary Facility
Agreement has been duly authorized, executed and delivered by the Lessee or an
Affiliate of the Lessee and, assuming the due authorization, execution and
delivery of each Ancillary Facility Agreement by the parties thereto other than
the Lessee or an Affiliate of the Lessee, is a legal, valid and binding
obligation of the Lessee or such Affiliate, enforceable according to its terms.
14.16 Financial Covenants. The Guarantor shall (i) at all times
maintain or cause to be maintained Tangible Net Worth in an amount greater than
or equal to
21
<PAGE> 23
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
$1,250,000,000; (ii) maintain or cause to be maintained the ratio of Long Term
Debt as at the last day of each Fiscal Quarter to EBITDA for the four
consecutive Fiscal Quarters ending on such day in a ratio of less than or equal
to 3.5 to 1; and (iii) at all times maintain or cause to be maintained the ratio
of Debt to Capital in a ratio of less than or equal to 0.55 to 1.
14.17 Cash Reserve Account. Upon the first occurrence of a Cash
Reserve Trigger Event, the Lessee shall, within five (5) Business Days of such
Cash Reserve Trigger Event, enter into a CRA Agreement, providing for the
establishment and administration of an interest-bearing account for the benefit
of the Lessor (the "Cash Reserve Account"). The Lessee agrees that following
each Cash Reserve Trigger Event, it shall deposit or cause to be deposited with
the CRA Bank, commencing on the first day of the fourth month commencing after
the month in which such Cash Reserve Trigger Event occurs and on the first day
of each six-month period thereafter which is prior to March 27, 2003 (each such
date being a "Scheduled Reserve Payment Date"), an amount in immediately
available funds equal to (i) the Cash Reserve Requirement Amount, minus (ii) the
aggregate amount of all Surplus Earnings Reduction Amounts with respect to
payments pursuant to paragraph (t) of Section 2 hereof theretofore made, to be
held and administered by the CRA Bank pursuant to the CRA Agreement; provided,
however, that (A) the Lessee's obligation to make any deposit pursuant to the
CRA Agreement shall immediately cease upon the occurrence of a CRA Release Event
(subject to such obligation being reinstated upon any subsequent occurrence of a
Cash Reserve Trigger Event) and (B) upon such occurrence of a CRA Release Event,
any funds previously deposited with the CRA Bank by the Lessee shall, within one
(1) Business Day thereof, be released to the Lessee by the CRA Bank.
14.18 Site Lease. The Lessee agrees to pay or cause to be paid,
on or before the first Business Day of each calendar year throughout the Lease
Term, all rent to be due under the Site Lease for such calendar year.
14.19 PCS Guaranty. The PCS Guaranty has been duly authorized,
executed and delivered by the Guarantor and constitutes a legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor according
to its terms, subject to bankruptcy, insolvency, moratorium, and similar laws
affecting creditors' rights generally and equitable principles.
14.20 Earnings Recapture. The Lessee agrees that in the event the
Average Ammonia Market Price for any Surplus Earnings Period exceeds $160.00,
then all Surplus Earnings for such Surplus Earnings Period shall be paid into
the Cash Reserve Account as follows: (i) if such Surplus Earnings Period ends on
June 30 of any year, on July 31 of such year, and (ii) if such Surplus Earnings
Period ends on December 31 of any year, on January 31 of the following year. The
Lessee will, by the date on which any payment of Surplus Earnings in respect of
any Surplus Earnings Period is due hereunder (or would be
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<PAGE> 24
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
due, if any Surplus Earnings had existed in respect of such Surplus Earnings
Period), deliver to the Lessor reasonable detail as to the manner in which such
Surplus Earnings were calculated or in which it was determined that no Surplus
Earnings existed.
SECTION 15. LEASE OF PROPERTY OR EQUIPMENT.
15.1 Subject to the terms and conditions hereof, the Lessor shall
lease to the Lessee, and the Lessee may lease from the Lessor pursuant to this
Lease, any Property or Equipment of the type listed on Exhibit A hereto, when
and as the Lessee has need of such Property or Equipment; provided, that:
(a) such Property or Equipment is available for purchase;
(b) except with respect to any Parcel of Property acquired and built
pursuant to the Agreement for Lease, the Lessor has approved the
purchase order or acquisition with respect to such Equipment or
the acquisition with respect to such Property (which approval
shall be in the reasonable discretion of the Lessor, such
approval not to be unreasonably withheld);
(c) at the time any such Property or Equipment is to be ordered or
leased hereunder there exists no Event of Default or Potential
Default;
(d) with respect to any Parcel of Property or Unit of Equipment
acquired and built pursuant to the Agreement for Lease, the
conditions for the Lessee to execute an AFL Unit Leasing Record
shall have been satisfied and the Lessor shall have executed an
AFL Unit Leasing Record with respect to such Parcel of Property
or Unit of Equipment; and
(e) the sum of (A) the Acquisition Cost of such Property or Equipment
and (B) the aggregate Acquisition Cost of all other Property or
Equipment leased hereunder would not, at the time any such
Property or Equipment is to be leased hereunder, exceed such
amount as the Lessor and the Lessee may from time to time agree.
15.2 The lease hereunder of Property and Equipment acquired and
built pursuant to the Agreement for Lease shall be evidenced by an AFL Unit
Leasing Record, including a revised AFL Unit Leasing Record, if any, delivered
pursuant to subsection 2.3(b) of the Agreement for Lease. Subject to the terms
of paragraph (a) of Section 3 hereof, upon Substantial Completion (as defined in
the Agreement for Lease) of a Parcel or Parcels of Property or a Unit or Units
of Equipment acquired and built pursuant to the Agreement for Lease, or, if
Substantial Completion will not occur prior to the Designated Effective Date (as
defined in the Agreement for Lease), at least five (5) days prior to the
Designated Effective Date, the Lessee shall prepare an AFL Unit Leasing Record.
The
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<PAGE> 25
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
AFL Unit Leasing Record shall give a full description of the Property and
Equipment, its Acquisition Cost, its Initial Term and Renewal Term, the Basic
Rent with respect to such Property, and such other details as the Lessor and the
Lessee may from time to time agree. The AFL Unit Leasing Record shall have an
Effective Date as of the earlier of the date of execution by the Lessor of the
AFL Unit Leasing Record or the Designated Effective Date, as the case may be.
Execution and delivery by the Lessee of an AFL Unit Leasing Record shall
constitute (i) acknowledgment by the Lessee that the Equipment and Property, if
any, specified in such AFL Unit Leasing Record has been delivered to the Lessee
in condition in all respects satisfactory to the Lessee and has been accepted
for lease hereunder by the Lessee as of the Effective Date of such AFL Unit
Leasing Record, (ii) acknowledgment by the Lessee that the Property and
Equipment, if any, specified in such AFL Unit Leasing Record is subject to all
of the covenants, terms and conditions of this Lease, and (iii) certification by
the Lessee that the representations and warranties contained in Section 2 of
this Lease are true and correct in all material respects on and as of the
Effective Date of such AFL Unit Leasing Record as though made on and as of such
date and that there exists on such date no Event of Default or Potential
Default.
15.3 The lease of each Parcel of Property, other than a Parcel of
Property acquired and built pursuant to the Agreement for Lease, or Unit of
Equipment, other than a Unit of Equipment appropriately included in an AFL Unit
Leasing Record, to the Lessee under this Lease shall be evidenced by a Unit
Leasing Record. The Lessee shall prepare and execute a Unit Leasing Record with
respect to each such Parcel of Property or Unit of Equipment (which Unit Leasing
Record may relate to more than one Unit of Equipment) and deliver it promptly to
the Lessor. Contemporaneously with the payment required by paragraph (b) of
Section 5 hereof, the Lessor shall execute the acceptance of such Unit Leasing
Record and promptly return one copy of such Unit Leasing Record to the Lessee.
15.4 The Lessee shall prepare each Unit Leasing Record pursuant
to the procedures provided by the Lessor. Each Unit Leasing Record and AFL Unit
Leasing Record shall give a full description of the Parcel or Parcels of
Property or Unit or Units of Equipment covered thereby, the Acquisition Cost of
each such Parcel or Unit, the Initial Term and Renewal Term for each such Parcel
or Unit, its location and such other details as the Lessor and the Lessee may
from time to time agree.
15.5 Execution by the Lessee of a Unit Leasing Record or AFL Unit
Leasing Record shall constitute (i) acknowledgment by the Lessee that the
Property or Equipment specified in such Unit Leasing Record or AFL Unit Leasing
Record has been delivered to the Lessee in good condition and has been accepted
for lease hereunder by the Lessee as of the Effective Date thereof, (ii)
acknowledgment by the Lessee that the Property or Equipment specified in such
Unit Leasing Record or AFL Unit Leasing Record is subject to all of the
covenants, terms and conditions of this Lease, and (iii) certification by the
Lessee that the representations and warranties contained in Section 2 of this
Lease and in Section 8 of the Agreement for Lease are true and correct in all
material respects on and as
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<PAGE> 26
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
of such Effective Date as though made on and as of such Effective Date and that
there exists on such Effective Date no Event of Default or Potential Default.
15.6 In connection with any Parcel of Property or Unit of
Equipment acquired and built pursuant to the Agreement for Lease, until May 15,
1998, the Lessee may deliver to the Lessor a Certificate of Increased Cost (as
defined in the Agreement for Lease) pursuant to the Agreement for Lease setting
forth the actual amount expended by the Lessee for items included in the Unit
Budget (as defined in the Agreement for Lease) with respect to such Parcel or
Unit. If, based upon such Certificate of Increased Cost, a Completion Advance
(as defined in the Agreement for Lease) is to be made, the Lessor shall execute
within five (5) days of receipt of such Certificate of Increased Cost from the
Lessee a revised AFL Unit Leasing Record to amend the Acquisition Cost for such
Parcel or Unit to reflect the increase in the Acquisition Cost. In the event the
Lessee shall receive a Completion Advance with respect to the Ammonia Project on
a date following the date of a Cash Reserve Trigger Event (unless a CRA Release
Event has occurred since the date of such Cash Reserve Trigger Event), the
Lessee shall, on the Business Day immediately succeeding such Completion
Advance, deposit or cause to be deposited into the Cash Reserve Account an
amount equal to 50% of such Completion Advance, to be held by the CRA Bank
pursuant to the CRA Agreement.
SECTION 16. OPERATING LEASE.
The Lessor and the Lessee hereby declare that it is their mutual
intent that for accounting and regulatory purposes this Lease be treated as an
operating lease and not an instrument or evidence of indebtedness, and that the
relationship between the Lessor and the Lessee under this Lease shall be that of
lessor and lessee only. Title to and ownership of any Property or Equipment
shall at all times remain in the Lessor and at no time become vested in the
Lessee except in accordance with an express provision of this Lease. The Lessee
does not hereby acquire any right, equity, title or interest in or to any
Property or Equipment except pursuant to the terms hereof.
SECTION 17. DELIVERY.
17.1 The Lessee shall acquire or order and accept Property or
Equipment, other than Property and Equipment acquired and built pursuant to the
Agreement for Lease, pursuant to the procedures, if any, provided by the Lessor.
17.2 Upon acceptance for lease of a Parcel of Property, other
than Property acquired and built pursuant to the Agreement for Lease, or a Unit
of Equipment, other than a Unit of Equipment acquired and built pursuant to the
Agreement for Lease, by the Lessee and the Lessor and receipt by the Lessor of
(i) the vendor's invoice or invoices for such Unit of Equipment and a contract
of sale and deed with respect to each Parcel of Property, (ii) invoices or other
evidence satisfactory to the Lessor for any amounts included
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<PAGE> 27
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
in the Acquisition Cost of such Parcel or Unit payable to parties other than the
vendor, (iii) invoices or other evidence satisfactory to the Lessor (including
an appraisal with respect to a Parcel of Property or Unit of Equipment) for any
amounts included in the Acquisition Cost of such Parcel or Unit that have been
paid to the vendor or other parties by the Lessee and for any costs included in
the Acquisition Cost of such Parcel or Unit incurred by the Lessee, (iv) a Unit
Leasing Record with respect to such Parcel or Unit duly prepared and executed by
the Lessee and (v) such other documentation as the Lessor may reasonably
require, the Lessor shall (A) pay to such vendor the amount of the vendor's
invoice or invoices and/or contract of sale for such Parcel or Unit except to
the extent previously paid by the Lessee, (B) pay to such other parties such
amounts payable, except to the extent previously paid by the Lessee and (C)
reimburse or pay to the Lessee for such amounts paid to the vendor or other
parties by the Lessee, for such costs incurred by the Lessee and, if agreed
between the Lessor and the Lessee, for the appraised value of the Property or
Equipment; provided, however, that in no event shall the sum of all payments
made pursuant to clauses (A), (B) and (C) above exceed the Acquisition Cost of
such Property or Equipment.
17.3 The requirements for acceptance for lease hereunder of the
Property and Equipment acquired and built pursuant to the Agreement for Lease
shall be the requirements set forth in the Agreement for Lease.
17.4 The obligations of the Lessee to pay all amounts payable
pursuant to this Lease (including specifically and without limitation amounts
payable under Sections 7 and 11 hereof) shall be absolute and unconditional
under any and all circumstances of any character (including, without limitation,
the circumstances set forth in clauses A through L below), and such amounts
shall be paid without notice, demand, defense (except the defense of prior
payment), set-off, deduction or counterclaim and without abatement, suspension,
deferment, diminution or reduction of any kind whatsoever, except as herein
expressly otherwise provided. Without limitation of the foregoing, the
obligation of the Lessee to lease and pay Basic Rent for any and all Property or
Equipment accepted for use pursuant to this Lease is without any warranty or
representation, express or implied, as to any matter whatsoever on the part of
the Lessor or any Assignee or any Affiliate of either, or anyone acting on
behalf of any of them.
THE LESSEE HAS SELECTED AND SHALL SELECT ALL PROPERTY OR
EQUIPMENT ACQUIRED OR ORDERED ON THE BASIS OF ITS OWN JUDGMENT. NEITHER THE
LESSOR NOR ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR ANYONE ACTING ON BEHALF
OF ANY OF THEM MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE SAFETY, TITLE,
CONDITION, QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF ANY PROPERTY OR EQUIPMENT, OR AS
TO WHETHER ANY PROPERTY OR
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<PAGE> 28
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EQUIPMENT OR THE OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH
ANY LAWS, RULES, REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN THE LESSEE AND THE LESSOR, ANY ASSIGNEE OR ANY
INDEMNIFIED PERSON, THE LESSEE WAIVES ANY AND ALL DEFENSES (EXCEPT THE DEFENSE
OF FINAL AND INDEFEASIBLE PRIOR PAYMENT), SET-OFFS, DEDUCTIONS, COUNTERCLAIMS
(OTHER THAN COMPULSORY COUNTERCLAIMS) (OR OTHER RIGHTS), EXISTING OR FUTURE, AS
TO THE LESSEE'S OBLIGATION TO PAY BASIC RENT AND ALL OTHER AMOUNTS PAYABLE
HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR
USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY PROPERTY OR EQUIPMENT, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM (OTHER THAN COMPULSORY
COUNTERCLAIMS), RECOUPMENT, ABATEMENT, DEFENSE (EXCEPT THE DEFENSE OF FINAL AND
INDEFEASIBLE PRIOR PAYMENT) OR OTHER RIGHT WHICH THE LESSEE MAY HAVE AGAINST THE
LESSOR, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON FOR ANY REASON WHATSOEVER ARISING
OUT OF THIS OR ANY OTHER TRANSACTION OR MATTER;
(C) ANY DEFECT IN TITLE OR OWNERSHIP OF PROPERTY OR EQUIPMENT OR
ANY TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY OR
EQUIPMENT;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, ANY PROPERTY OR EQUIPMENT, IN WHOLE OR IN PART, OR
CESSATION OF THE USE OR POSSESSION OF ANY PROPERTY OR EQUIPMENT BY THE LESSEE
FOR ANY REASON WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION,
CONFISCATION, REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY
PROPERTY OR EQUIPMENT, IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE PROPERTY OR EQUIPMENT BY THE LESSEE;
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<PAGE> 29
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST THE LESSEE OR THE LESSOR OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS LEASE;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS LEASE OR ANY OTHER
INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF THE LESSOR OR THE LESSEE
TO ENTER INTO THIS CONTRACT;
(I) THE INVALIDITY OR UNENFORCEABILITY OF ANY BILL OF SALE OF ANY
PROPERTY OR EQUIPMENT EXECUTED IN CONNECTION WITH THIS LEASE OR ANY OTHER
INFIRMITY THEREIN OR LACK OF POWER OR AUTHORITY OF ANY PARTY THERETO TO ENTER
INTO SUCH BILL OF SALE;
(J) ANY RESTRICTION ON THE EXCHANGE OF THE CURRENCY OF THE
REPUBLIC OF TRINIDAD AND TOBAGO INTO U.S. DOLLARS OR THE TRANSFER OF FUNDS TO
THE UNITED STATES;
(K) THE LESSEE OR ANY OTHER PERSON AT ANY TIME HAVING IMMUNITY
FROM SUIT, PREJUDGMENT, ATTACHMENT, ATTACHMENT IN AID OF EXECUTION OR EXECUTION
ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE; OR
(L) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER RELATING TO
THE TRANSACTIONS CONTEMPLATED BY THIS LEASE, WHETHER OR NOT SIMILAR TO ANY OF
THE FOREGOING.
THE LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY
BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT,
RESCIND OR SURRENDER THIS LEASE EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS
HEREOF. Each payment of Basic Rent, Additional Rent and any other amount
due hereunder made by the Lessee shall be final, and the Lessee, without waiving
any other remedies it may have, will not seek or have any right to recover all
or any part of such payment from the Lessor or any Assignee for any reason
whatsoever. The making of payments under this Lease by the Lessee (including
without limitation payments pursuant to Section 11 hereof) shall not be deemed
to be a waiver of any claim or claims that the Lessee
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<PAGE> 30
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
may assert in a separate action against the Lessor or any other Person. The
Lessor agrees to repay the Lessee amounts paid to the Lessor to the extent such
payments were in error and are not required by any of the terms and provisions
of this Lease.
17.5 Notwithstanding any other provision contained in this Lease,
it is specifically understood and agreed that neither the Lessor nor any
Assignee nor any Affiliate of either, nor anyone acting on behalf of any of them
makes any warranties or representations, nor, except as set forth in Section 22
of this Lease, has the Lessor or any Assignee or any Affiliate of either, or
anyone acting on behalf of any of them made any covenants or undertakings, as to
the accounting treatment to be accorded the Lessee or as to the Canadian, U.S.
Federal or any state income or any other tax consequences, if any, to the Lessee
as a result of or by virtue of the transactions contemplated by this Lease.
SECTION 18. INITIAL TERM; RENEWAL TERM.
18.1 The "Initial Term" with respect to any Parcel of Property or
Unit of Equipment leased hereunder shall commence on the Effective Date set
forth in the Unit Leasing Record or the AFL Unit Leasing Record for such Parcel
of Property or Unit of Equipment and shall continue for the period agreed in
writing between the Lessee and the Lessor, unless terminated earlier pursuant to
the provisions of this Lease. The Initial Term applicable to the Ammonia Project
shall be the period from the Effective Date therefor until March 27, 2003.
18.2 In the event this Lease is renewed pursuant to the terms of
Section 12 hereof, the Renewal Term with respect to any Parcel of Property or
Unit of Equipment shall commence on the first day of the calendar month
following the last day of the Initial Term of such Parcel or Unit and shall
continue for sixty (60) calendar months, unless terminated earlier pursuant to
the provisions of this Lease.
18.3 With respect to each Unit of Equipment or Parcel of
Property, it is understood and agreed that the Initial Term of each Parcel of
Property or Unit of Equipment shall in no event exceed 75% of its economic
useful life remaining after the Effective Date for such Parcel or Unit.
18.4 Notwithstanding anything contained in this Section 6, the
provisions of Sections 10 and 11 hereof and paragraph (a) of Section 15 hereof
shall apply with respect to any Property or Equipment from the time such
Property or Equipment is acquired by the Lessor, and from the date hereof as to
all property and equipment acquired, constructed, assembled or improved in
connection with the Ammonia Project.
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<PAGE> 31
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 19. RENT AND OTHER PAYMENTS.
19.1 The Lessee hereby agrees to pay the Lessor on each Basic
Rent Payment Date, the amount of Basic Rent due and payable on such Basic Rent
Payment Date.
19.2 The Lessor shall provide notice to the Lessee on the fourth
(4th) day prior to each Basic Rent Payment Date of the amount of Basic Rent due
and payable from the Lessee to the Lessor on such Basic Rent Payment Date (the
"Lease Rate Date"). Subject to paragraph (e) of Section 7 hereof, the Lessor's
determination of Basic Rent shall be conclusive and binding absent manifest
error. At least two (2) Business Days prior to each Basic Rent Payment Date the
Lessor shall furnish the Lessee with a summary of the calculations of Basic Rent
payable on such Basic Rent Payment Date, which calculations shall be consistent
with the Minimum Lease Payment Calculations attached as Exhibit E hereto.
19.3 Without prejudice to the full exercise by the Lessor of its
rights under Sections 18 and 19 hereof, the Lessee shall pay to the Lessor from
time to time, on the Lessor's written demand, as additional rent ("Additional
Rent") (i) amounts required to reimburse the Lessor for its obligations, costs
and expenses (not previously included in Basic Rent) incurred in leasing the
Property or Equipment (including, without limitation, all obligations of the
Lessor under or in respect of any interest rate swap, cap, collar or other
financial hedging arrangement and any amounts payable by the Lessor under any
such arrangement to reduce the notional amount thereof by the amount of any
prepayment of any borrowing to which such interest rate swap, cap, collar or
other financial hedging arrangement relates), and (ii) to the extent legally
enforceable, an amount computed by multiplying (A) all sums not paid by the
Lessee to the Lessor as provided in this Lease on or before the date such
payments are due, by (B) the decimal equivalent of the percentage referred to in
paragraph (a)(iii) of the definition of "Basic Rent" used in the calculation of
the most recent Basic Rent amount, and by (C) a fraction having a numerator
equal to the number of days in the period from but excluding such due date to
and including the date of payment thereof and a denominator of 365, or in a leap
year, 366. The Lessee shall also pay to the Lessor on the Lessor's written
demand an amount equal to any expenses (including the reasonable fees and
disbursements of counsel) incurred by the Lessor in collecting such unpaid sums.
Prior to the payment of any Additional Rent, the Lessor shall supply to the
Lessee a statement which describes the obligations, costs and expenses incurred,
and, if appropriate, a calculation of the amount of such Additional Rent. Such
statement shall be conclusive and binding absent manifest error.
19.4 Basic Rent and Additional Rent and any other amount payable
by the Lessee to the Lessor shall be paid such that immediately available funds
in the full amount due are available on the date due, to the account of the
Lessor at such bank, or to such account of such other Person at such bank, or
otherwise as the Lessor may from time to time designate.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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19.5 During the Lease Term of any Parcel of Property or Unit of
Equipment, the Lessor shall calculate, on or before each Lease Rate Date (except
the first Lease Rate Date hereunder), the difference, if any, between (i) the
Basic Rent paid by the Lessee for the previous calendar month and (ii) an amount
equal to what the Basic Rent would have been for such calendar month had the
Basic Rent been calculated using the weighted average percentage cost per annum
of the borrowings outstanding at any time (as specified in subparagraph (a)(iii)
of the definition of Basic Rent) during the entirety of the previous calendar
month, provided that, with respect to the Basic Rent for the last month of the
Lease Term, such calculation shall occur on the last day of the Lease Term. On
each Lease Rate Date (except the first Lease Rate Date hereunder) and on the
last day of the Lease Term, the Lessor shall furnish to the Lessee a calculation
of the difference between the amounts determined under clause (i) above and the
correlating amounts determined under clause (ii) above (the "Reconciliation
Amount") for the previous calendar month. The Lessor and the Lessee agree that
if the Reconciliation Amount is a positive number, then such amount shall be
credited against the amount of Basic Rent that the Lessee is required to pay on
the next Basic Rent Payment Date (or Basic Rent Payment Dates, if such amount
shall exceed the amount of Basic Rent payable in the next succeeding month), and
if the Reconciliation Amount is a negative number, then such amount shall be
payable by the Lessee on the next Basic Rent Payment Date in addition to the
amount of Basic Rent due and payable on such Basic Rent Payment Date, except
that with respect to the Reconciliation Amount computed on the last day of the
Lease Term, such amount shall be paid by the Lessor to the Lessee (in the case
of a positive number) or by the Lessee to the Lessor (in the case of a negative
number) on the last day of the Lease Term. Any notices required by this
paragraph (e) which are furnished to the Lessee by the Lessor shall be
conclusive, absent manifest error, as to the contents thereof.
SECTION 20. RESTRICTED USE; COMPLIANCE WITH LAWS.
20.1 So long as no Event of Default shall have occurred and be
continuing, the Lessee may use the Property or Equipment in the course of its
business for any lawful purpose. Without limitation of any of its other
obligations hereunder or under any other Operative Document, the Lessee agrees
that the Lessee will not do or permit any act or thing which could reasonably be
expected to materially impair the value or utility of any Property or Equipment.
20.2 The Lessee shall promptly and duly execute, deliver, file
and record, at the Lessee's expense, all such documents, statements, filings and
registrations, and take such further action as the Lessor or any Assignee shall
from time to time reasonably request and shall install such signs or other
markings as shall be required by any applicable Legal Requirement in order to
establish, perfect and maintain the Lessor's or any Assignee's title to and
interest in the Property or Equipment and any Assignee's interest in this Lease
or any Property or Equipment as against the Lessee or any third party in any
applicable jurisdiction. The Lessor agrees that it will not change the location
of the Ammonia Project.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
At the reasonable request of the Lessor, but, so long as no Event of Default has
occurred and is continuing no more than once each year, the Lessee shall advise
the Lessor in writing where all Equipment leased hereunder as of such date is
principally located.
20.3 The Lessee shall use every commercially reasonable
precaution to prevent loss or damage to Property or Equipment and to prevent
injury to third persons or property of third persons. The Lessee shall cooperate
fully with the Lessor and any additional insured or loss payee and all insurance
companies providing insurance pursuant to Section 10 hereof in the investigation
and defense of any claims or suits arising from the ownership, operation or use
of any Equipment or ownership, use, or occupancy of the Property and the Lessor
and any Indemnified Person shall comply, at the expense of the Lessee, with all
reasonable requests for assistance of the Lessee and any insurance companies in
connection therewith, provided that nothing contained in this paragraph (c)
shall be construed as imposing on the Lessor any duty to investigate or defend
any such claims or suits. The Lessee shall comply and shall use reasonable
efforts to cause all Persons using or operating Equipment or using or occupying
Property to comply with all Insurance Requirements and Legal Requirements
applicable to such Property or Equipment and to the acquiring, titling,
registering, leasing, insuring, using, occupying, operating and disposing of
Property or Equipment, and the licensing of operators thereof; except any Legal
Requirements, the non-compliance with which, individually or in the aggregate,
(i) will not place either the Lessor or any Assignee in any danger of monetary
civil liability for which the Lessor or any Assignee is not adequately
indemnified (the Lessee's obligations under Section 11 of this Lease shall be
deemed to be adequate indemnification if no Event of Default exists) or any
other material civil liability or penalty or subject the Lessor or any Assignee
to any criminal liability as a result of a failure to comply therewith and (ii)
will not result in a material diminution in the value of any Property or
Equipment or in any material risk of the loss, sale or forfeiture or loss of use
of any thereof.
20.4 Upon at least five (5) Business Days written notice (or upon
two (2) Business Days written notice if an Event of Default shall have occurred
and be continuing), the Lessor or any Assignee or any authorized representative
of either may during reasonable business hours from time to time inspect
Property or Equipment and deeds, registration certificates, certificates of
title and related documents covering Property or Equipment wherever the same may
be located, but neither the Lessor nor any Assignee shall have any duty to make
any such inspection, provided that the Lessee shall be permitted to withhold
from the Lessor or any Assignee any information with respect to its business or
work products not related to any Property or Equipment. The Lessor may recover
from Lessee as Additional Rent (i) the reasonable costs and expenses associated
with any inspection of the Ammonia Project during the first six months after the
Lease Termination Date (as defined in the Lease) with respect thereto, in an
amount not to exceed, when aggregated with the expenses referred to in clause
(i) of subsection 9.4 of the Agreement for Lease, $100,000 in the aggregate, and
(ii) the reasonable costs and expenses associated with any such inspection
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
which are incurred following the occurrence and during the continuation of any
Event of Default throughout the Lease Term of the Ammonia Project.
20.5 The Lessee shall not, without the prior written consent of
the Lessor, permit, or suffer to exist, any Lien on, other than Permitted Liens
or those Liens placed thereon by, or arising from, the Lessor's own actions or
which are subject to a Permitted Contest, nor may it assign any right or
interest herein or in, any Property or Equipment. The Lessee shall not, without
the prior written consent of the Lessor, sublease or otherwise relinquish
possession of any Property or Equipment, except that (i) the Lessee may
relinquish possession of Property or Equipment to any contractor for use in
performing work for the Lessee on such Property or Equipment, provided that such
relinquishment of possession shall in no way affect the obligations of the
Lessee or the rights of the Lessor hereunder and with respect to the Property or
Equipment and (ii) the Lessee may sublease any Parcel of Property or Unit of
Equipment to a Person within the PCS Lease Group; provided that (A) the terms of
the instrument of sublease shall be subject to the prior written approval of the
Lessor which approval shall not be unreasonably withheld or delayed, (B) each
such sublease shall expressly be made subject and subordinate to the provisions
hereof, shall not permit any act or omission not permitted hereby and shall, at
the sole option of the Lessor, by its terms be subject to termination upon the
termination for any reason of this Lease, (C) no such sublease shall modify or
limit any right or power of the Lessor hereunder or affect or reduce any
obligation of the Lessee hereunder, and all such obligations shall continue in
full force and effect as obligations of a principal and not of a guarantor or
surety, as though no such subletting had been made, and (D) any such sublease
made otherwise than as expressly permitted by this paragraph (e) shall be void
ab initio and of no force and effect. As additional security to the Lessor for
the performance of the Lessee's obligations under this Lease, the Lessee hereby
assigns to the Lessor all of its right, title and interest in and to all
subleases permitted hereby and agrees to cause any sublessee to enter into
attornment agreements with the Lessor as the Lessor shall request. The Lessor
shall have the present and continuing right to collect and enjoy all rents and
other sums of money payable under any such sublease, and the Lessee hereby
irrevocably assigns such rents and other sums to the Lessor for the benefit and
protection of the Lessor, provided that, unless an Event of Default shall have
occurred and be continuing hereunder, the Lessee shall be entitled to collect
and enjoy such rents and other sums. The Lessee shall, within thirty (30) days
after the execution of any such sublease, deliver a conformed copy thereof to
the Lessor. Nothing contained in this Lease shall be construed as constituting
the consent or request of the Lessor, express or implied, to or for the
performance by any contractor, laborer, materialman or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to any Property or Equipment or
any part thereof. Notice is hereby given that the Lessor will not be liable for
any labor, services or materials furnished or to be furnished to the Lessee, or
to anyone holding any Property or Equipment or any part thereof through or under
the Lessee, and that no mechanics' or other liens for any such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
labor, services or materials shall attach to or affect the interest of the
Lessor in and to the Property or Equipment.
20.6 The Lessee shall register and title all automotive Equipment
in the name of the Lessor except that, where required or permitted by law or
regulation, Equipment may, with the written approval of the Lessor be registered
(but not titled) in the name of the Lessee. If requested by the Lessor, the
Lessee shall cause one of the officers of its general partner to hold in his
custody and control all registration certificates and certificates of title
covering automotive Equipment, as custodian for the Lessor. The Lessee agrees to
cause such officer to furnish to the Lessor, upon reasonable request, a
certificate to the effect that all registration certificates and certificates of
title pursuant to any Legal Requirement have been obtained and are being held on
behalf of the Lessor.
20.7 The Lessee shall comply with all Legal Requirements pursuant
to which it is necessary that a Unit of Equipment or any component thereof be
labeled to provide notice of the Lessor's or any Assignee's interest in such
Unit of Equipment.
20.8 If any Lien or charge of any kind or any judgment, decree or
order of any court or other governmental authority (including, without
limitation, any state or local tax lien affecting the Property or Equipment),
whether or not valid, shall be asserted or entered which might interfere with
the due and timely payment of any sum payable or the exercise of any of the
rights or the performance of any of the duties or responsibilities under this
Lease, the Lessee shall (and without limiting any other obligation of the Lessee
hereunder), upon a Responsible Officer's obtaining knowledge thereof or upon
receipt of notice to that effect from the Lessor, promptly take such action as
may be necessary to prevent or terminate such interference.
SECTION 21. MAINTENANCE, IMPROVEMENT AND REPAIR OF PROPERTY OR
EQUIPMENT.
21.1 The Lessor, so long as no Event of Default shall have
occurred and be continuing, hereby assigns and agrees to make available to the
Lessee any and all rights the Lessor may have under any vendor's or
manufacturer's warranties or undertakings with respect to any Property or
Equipment. If any Event of Default shall have occurred and be continuing, the
assignment of such rights from the Lessor to the Lessee shall be deemed to be
suspended.
21.2 The Lessee shall pay all costs, expenses, fees and charges
incurred in connection with the Lessor's ownership, and the Lessee's use or
occupancy of any Parcel of Property or the Lessor's ownership, and the Lessee's
use and operation of any Unit of Equipment. Except as otherwise provided in
Section 15 hereof, the Lessee shall at all times, at its own expense, and
subject to reasonable wear and tear, keep Property or Equipment in good
operating order, repair, condition and appearance. The foregoing
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
undertaking to maintain Property or Equipment in good repair shall apply
regardless of the cause necessitating repair and regardless of whether the
Lessee has possession of the Property or Equipment, and as between the Lessor
and the Lessee all risks of damage to Property or Equipment are assumed by the
Lessee.
21.3 With respect to any Parcel of Property, the Lessee shall
pay: (i) all taxes, assessments, levies, fees, water and sewer rents and
charges, and all other governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are, at any time, imposed or
levied upon or assessed against (A) the Parcel, (B) any Basic Rent, any
Additional Rent or other sum payable hereunder or (C) this Lease, the leasehold
estate hereby created, or which arises in respect of the ownership, operation,
occupancy, possession or use of the Parcel; (ii) all gross receipts or similar
taxes (i.e., taxes based upon gross income which fail to take into account all
customary deductions (e.g., ordinary operating expenses, depreciation and
interest) relating to the Parcel) imposed or levied upon, assessed against or
measured by any Basic Rent, or any Additional Rent or other sum payable
hereunder; (iii) all sales, value added, use and similar taxes at any time
levied, assessed or payable on account of the acquisition, leasing or use of the
Parcel; and (iv) all charges of utilities and communications services serving
the Parcel. The Lessee shall not be required to pay any franchise, estate,
inheritance, transfer, income or similar tax of the Lessor (other than any tax
referred to in clause (ii) above) unless such tax is imposed, levied or assessed
in substitution for any other tax, assessment, charge or levy which the Lessee
is required to pay pursuant to this paragraph (c); provided, however, that if at
any time during the term of this Lease, the method of taxation shall be such
that there shall be levied, assessed or imposed on the Lessor a capital levy or
other tax directly on the rents received therefrom, or upon the value of any
Parcel or any present or any future improvement or improvements on any Parcel,
then all such taxes, assessments, levies or charges or the part thereof so
measured or based, shall be payable by the Lessee, but only to the extent that
such taxes would be payable if the Property affected were the only property of
the Lessor, and the Lessee shall pay and discharge the same as herein provided.
The Lessee will furnish to the Lessor, promptly after demand therefor, proof of
payment of all items referred to above which are payable by the Lessee. If any
such assessments may legally be paid in installments, the Lessee may pay such
assessment in installments; in such event, the Lessee shall be liable only for
installments which become due and payable during the Lease Term and any Renewal
Term.
21.4 The Lessee may make alterations to any Equipment, provided
such alterations do not materially impair the value or utility of such Equipment
and shall make, at its expense, all modifications and improvements which are
necessary pursuant to any Legal Requirement or Insurance Requirement. Any
improvements or additions to any Equipment shall become and remain the property
of the Lessor, except that any addition to Equipment made by the Lessee, if it
can be removed from such Equipment without impairing the value or utility
thereof or without violating Legal Requirements or Insurance Requirements, may
be removed by the Lessee, and if removed title thereto shall pass to the Lessee.
In the event
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
the Lessee shall receive a Completion Advance from the Lessor with respect to
any such improvements or additions, the Lessee agrees to furnish promptly to the
Lessor a revised Unit Leasing Record or AFL Unit Leasing Record to amend the
Acquisition Cost for such Parcel or Unit to reflect the increase in the
Acquisition Cost.
21.5 So long as no Event of Default shall have occurred and be
continuing, the Lessee may, at its expense, make additions to and alterations to
any Parcel of Property; provided that upon completion of such additions or
alterations (i) neither the fair market value or utility of the Parcel of
Property shall be materially impaired, (ii) such additions or alterations shall
not result in a change of use of such Parcel of Property and (iii) no exterior
walls of any building or other improvement constituting a part of a Parcel of
Property shall be demolished unless the Lessee has made adequate provision
according to sound and prudent engineering and architectural standards to
preserve and maintain the structural integrity of the Parcel of Property and for
the restoration of such Parcel of Property to a structurally sound architectural
whole. Any and all such additions and alterations shall be and remain part of
the Parcel of Property and shall be subject to this Lease. Notwithstanding
anything contained herein, the Lessee shall not perform any addition or
alteration to any Parcel of Property which would have an estimated cost in
excess of $5,000,000, without the Lessor's prior written consent, which consent
shall not be unreasonably withheld.
21.6 The Equipment constituting or included in the Ammonia
Project and leased by the Lessee shall be maintained, repaired, refurbished or
replaced by the Lessee when necessary in order to ensure that all Equipment
located at the Ammonia Project will include the Equipment listed on the AFL Unit
Leasing Record with respect to the Ammonia Project or replacements for such
Equipment of the kind, quality and in the quantities included in the AFL Unit
Leasing Record with respect to the Ammonia Project (provided that the Lessee
may, subject to compliance with other requirements of this Section 9, replace
Equipment at the Ammonia Project with equipment of different kind, quality and
in different quantities if such replacement equipment is of equal or greater
value and serviceability) and will be in such condition and sufficient to allow
the Ammonia Project to be operated in accordance with industry standards as an
ammonia production plant. As equipment is substituted at the Ammonia Project for
Equipment at the Ammonia Project and subject to this Lease, title to such
substitute equipment shall automatically vest in the Lessor and such equipment
shall be subject to this Lease and title to the existing Equipment at the
Ammonia Project for which such equipment is being substituted shall be
transferred by the Lessor at the direction of the Lessee.
21.7 The Lessee shall (i) maintain the Ammonia Project in a
condition (ordinary wear and tear excepted) such that Ammonia Project will have
the capacity and functional ability to perform, in normal commercial operation,
the functions for which it was designed at the operational levels contemplated
therefor, which operational levels shall be achieved no later than January 31,
1998 and (ii) operate, service, maintain and repair the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Ammonia Project and replace all necessary components thereof (A) so that the
condition and operating efficiency will be maintained and preserved (ordinary
wear and tear excepted) in accordance with industry standards for an ammonia
production plant, (B) in accordance with such operating standards as shall be
required to take economic advantage of and enforce all available warranties to
the extent such warranties are material to the value or operation of the Ammonia
Project, (C) in accordance with all Insurance Requirements applicable to the
Ammonia Project and (D) in accordance with all Governmental Actions relating
thereto.
21.8 The Lessee has obtained or will obtain prior to the time
required and shall maintain in full force and effect all operating licenses, if
any, relating to the Ammonia Project which are required for the operation of the
Ammonia Project.
SECTION 22. INSURANCE.
22.1 General Liability Insurance with Respect to Equipment. The
Lessee will carry at its own expense general liability insurance and property
damage insurance with respect to all Equipment (i) in amounts which are not less
than the general liability and property damage insurance applicable to similar
equipment owned, leased or held by the Lessee, provided that in no event shall
such amounts in respect of the Ammonia Project be less than $5,000,000 per
occurrence, (ii) of the types usually carried by Persons engaged in the same or
a similar business, similarly situated with the Lessee, and owning or operating
similar equipment and which cover risk of the kind customarily insured against
by such Persons, and (iii) which are maintained in effect with insurers of
recognized responsibility and reputation satisfactory to the Lessor and any
Assignee. The insurance required by this paragraph (a) may be subject to such
deductibles and the Lessee may self-insure with respect to the required coverage
to the extent consistent with the Lessee's customary practice with respect to
similar property owned by the Lessee.
22.2 Insurance Against Loss or Damage to Equipment. The Lessee
will maintain in effect with insurers of recognized responsibility and
reputation satisfactory to the Lessor and any Assignee, at its own expense,
all-risk physical damage insurance with respect to all Equipment, which is of
the type usually carried by Persons engaged in the same or similar business,
similarly situated with the Lessee, and owning or operating similar equipment
and which cover risk of the kind customarily insured against by such Persons,
and in substantially the amount applicable to similar equipment owned, leased or
held by the Lessee, provided that such insurance shall at all times be in an
amount not less than the aggregate Acquisition Cost of such Unit of Equipment.
The insurance required by this paragraph (b) may be subject to reasonable
deductibles and the Lessee may self-insure with respect to the required coverage
to the extent consistent with the Lessee's customary practice with respect to
similar property owned by the Lessee.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
22.3 Insurance with respect to Property. The Lessee will maintain
or cause to be maintained insurance of the following character, on each Parcel
of Property:
(a) All risk insurance coverage against losses by fire and
lightning and other risks for the full insurable
replacement value of each Parcel of Property or portion or
component thereof, with agreed amount endorsement or
endorsements providing equivalent protection, including
loss by windstorm, flood, hail, explosion, riot (including
riot attending a strike), civil commotion, aircraft,
vehicles, smoke damage, and vandalism and malicious
mischief, in amounts not less than the full insurable
replacement value of all buildings and other improvements
on each Parcel of Property, but in no event less than the
Acquisition Cost of each Parcel of Property. The term
"full insurable replacement value" as used herein means
the actual replacement cost, including the costs of debris
removal, but excluding the cost of constructing foundation
and footings.
(b) Comprehensive general public liability insurance covering
the legal liability of the Lessor and the Lessee against
claims for bodily injury, death or property damage,
occurring on, in or about each Parcel of Property or
occurring as a result of ownership of facilities located
on each Parcel of Property or as a result of the use of
products or materials manufactured, stored, processed,
constructed or sold, or services rendered, on each Parcel
of Property, in the minimum amount of $5,000,000 with
respect to any one occurrence, accident or disaster or
incidence of negligence.
(c) The Lessee shall comply with applicable workers'
compensation laws of the jurisdiction where each Parcel of
Property is located, and shall maintain such insurance if
and to the extent necessary for such compliance.
(d) Such other insurance, in such amounts and against such
risks, as is customarily maintained by operators of
similar properties.
The insurance required under this paragraph (c) shall be maintained in effect
with insurers of recognized responsibility and reputation satisfactory to the
Lessor and any Assignee. Such insurance may provide for such deductibles and the
Lessee may self-insure with respect to the required coverage to the extent
consistent with the Lessee's customary practice with respect to similar property
owned by the Lessee.
Insurance claims by reason of damage or destruction to any Parcel
of Property shall be adjusted by the Lessee, subject to the approval of the
Lessor, which
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
approval the Lessor agrees not to unreasonably withhold or delay, provided that,
if the amount claimed exceeds $5,000,000, the Lessor may participate in such
adjustment, at the Lessee's expense.
22.4 Political Risk Insurance. The Lessee shall, as agent for the
Lessor, procure or cause to be procured and maintain or cause to be maintained
in respect of Property or Equipment not located in the United States, for the
Lessor, with the Multilateral Investment Guaranty Agency, the American
International Group, or such other insurance company as shall be reasonably
acceptable to the Lessor and any Assignee, a policy of political risk insurance
covering (i) transfer restrictions, (ii) expropriation and (iii) to the extent
reasonably available from public or private market insurers or any combination
thereof, war and civil disturbance, provided that in no event shall the amount
of such political risk insurance in respect of the Ammonia Project be less than
20% of the Acquisition Cost of the Ammonia Project.
22.5 Additional Insureds; Notice. Any policies of insurance
carried in accordance with this Section 10 and any policies taken out in
substitution or replacement for any such policies (i) shall name the Lessor, the
general partner of the Lessor and its shareholders, officers and directors, the
limited partners of the Lessor, and each Assignee as additional insureds (the
"Additional Insureds"), as their respective interests may appear in relation to
the Property and Equipment (but without imposing upon any such Person any
obligation imposed on the insured, including, without limitation, the liability
to pay the premium for any such policy), (ii) with respect to insurance carried
in accordance with the preceding paragraphs (b), (c)(i) and (c)(iv) shall name
the Assignee, if any, or the Lessor, if no Assignment has been made, as loss
payee, (iii) with respect to insurance carried in accordance with the preceding
paragraphs (b) and (c), shall provide that as against the Lessor the insurers
shall waive any rights of subrogation, provided that the exercise by insurers of
rights of subrogation derived from rights retained by the Lessee shall not in
any way delay payment of a claim that would otherwise be paid by such insurers,
(iv) shall provide that if the insurers cancel such insurance for any reason
whatsoever, or any substantial change is made in the coverage or the same is
allowed to lapse for nonpayment of premium or such insurance coverage is
reduced, such cancellation, change, lapse or reduction shall not be effective as
to the Additional Insureds or any loss payee for ten (10) days after receipt by
the Lessor and any Assignee of written notice by such insurers of such
cancellation, change, lapse or reduction, and (v) shall provide that in respect
of the interest of the Additional Insureds or any loss payee in such policies
the insurance shall not be invalidated by any action or inaction of the Lessee
or any other Person (other than an Additional Insured in respect of its own
interest) and shall insure the interests of the Additional Insureds or any loss
payee as they appear, regardless of any breach or violation of any warranties,
declarations or conditions contained in such policies by the Lessee or any other
Person, provided that, subject to the specific requirements of this Section 10,
the coverage afforded the Additional Insureds shall not be broader than the
coverage afforded the named insured. Each liability policy (A) shall be primary
without right of contribution
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
from any other insurance which is carried by the Lessor with respect to its
interest as such in the Property or Equipment and (B) shall expressly provide
that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering each
insured.
22.6 Application of Insurance Proceeds for Loss or Taking. As
between the Lessor and the Lessee it is agreed that any insurance payments
received as the result of the occurrence of (i) any event of loss described in
paragraph (c) of Section 15 hereof with respect to any Parcel of Property or
Unit of Equipment, or (ii) any event of Taking described in Section 16 hereof
shall be paid to an account of the Lessor and disposed of, as set forth in
paragraph (c) of Section 15 hereof.
22.7 Application of Insurance Proceeds for Other than Loss or
Taking. As between the Lessor and the Lessee, the insurance proceeds of any
property damage loss to any Property or Equipment will be held in an account of
the Lessor and applied in payment (or to reimburse the Lessee) for repairs or
replacement in accordance with the terms of paragraph (b) of Section 15 hereof,
provided that, in the event that any insurance payments received pursuant to
this paragraph (g) are less than $2,000,000, such payments shall be paid to, or
retained by, the Lessee. The Lessee shall be entitled (i) to receive the amounts
so deposited against certificates, invoices or bills satisfactory to the Lessor,
delivered to the Lessor from time to time as such work or repair progresses, and
(ii) to direct the investment of the amounts so deposited as provided in
paragraph (h) of this Section 10. To the extent that the cost of such work or
repair shall exceed the amount of proceeds, the Lessee shall make payment
thereof. Any moneys remaining in the aforesaid account after final payment for
repairs has been made shall be paid to the Lessee.
22.8 Investment. The Lessor, at the Lessee's instruction and
risk, may invest the amounts deposited with the Lessor pursuant to paragraph (g)
of this Section 10 in any investments permitted under a Credit Agreement. Such
investments shall mature in such amounts and on such dates so as to provide that
amounts shall be available on the draw dates sufficient to pay the amounts
requested by and due to the Lessee. Any interest earned on investments of such
funds shall be paid to the Lessee. The Lessor shall not be liable for any loss
resulting from the liquidation of any such investment and the Lessee shall bear
the risk of such loss, if any.
22.9 Application in Default. Any amount referred to in paragraphs
(e), (f), (g) or (h) of this Section 10 which is payable to the Lessee shall not
be paid to the Lessee or, if it has been previously paid to the Lessee, shall
not be retained by the Lessee, if at the time of such payment an Event of
Default shall have occurred and be continuing. In such event, all such amounts
shall be paid to and held by the Lessor as security for the obligations of the
Lessee hereunder or, at the Lessor's option, applied by the Lessor toward
payment of any of such obligations of the Lessee at the time due hereunder as
the Lessor may elect. At such time as there shall not be continuing any Event of
Default, all such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
amounts at the time held by the Lessor in excess of the amount, if any, which
the Lessor shall have elected to apply as above provided shall be paid to the
Lessee.
22.10 Certificates, Etc. On or before the execution of this
Lease, on the Effective Date with respect to any Parcel of Property or Unit of
Equipment, and annually on or before the anniversary of the date of this Lease,
the Lessee will furnish to the Lessor certificates of an independent insurance
broker reasonably satisfactory to the Lessor or other evidence reasonably
acceptable to the Lessor certifying that the insurance then carried and
maintained on each Parcel of Property or Unit of Equipment complies with the
terms hereof.
22.11 Use or Operation of Property and Equipment. The Lessee
covenants that it will not use or operate any Equipment or use or occupy any
Property or permit the use or occupancy of any Property or the use or operation
of any Equipment at a time when the insurance required by this Section 10 is not
in force with respect to such Property or Equipment.
22.12 Prosecution of Claims. The Lessee may, so long as no Event
of Default shall have occurred and be continuing, at its cost and expense,
prosecute any claim against any insurer or contest any settlement proposed by
any insurer, and the Lessee may, so long as no Event of Default shall have
occurred and be continuing, bring any such prosecution or contest in the name of
the Lessor, the Lessee, or both, and the Lessor will join therein at the
Lessee's request, provided that the Lessee shall indemnify the Lessor against
any losses, costs or expenses (including reasonable attorneys' fees) which the
Lessor may incur in connection with such prosecution or contest whether or not
it is at the request of the Lessee.
SECTION 23. INDEMNITIES.
The Lessee shall, and hereby does, indemnify and hold harmless
the Lessor, Merrill Lynch, Merrill Leasing, any Assignee, any successor or
successors, and any Affiliate of each of them, and their respective officers,
directors, incorporators, shareholders, partners (general and limited,
including, without limitation, the general and limited partners of the Lessor),
employees, agents and servants (each of the foregoing an "Indemnified Person")
from and against all liabilities (including, without limitation, strict
liability in tort), taxes, losses, obligations, claims (including, without
limitation, strict liability in tort), damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' and
accountants' fees and expenses) or judgments of any nature relating to or in any
way arising out of:
23.1 The Operative Documents and the transactions contemplated
thereby and the ordering, delivery, acquisition, construction, assembly,
installation, title on acquisition, rejection, installation, possession,
titling, retitling, registration, reregistration,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
custody by the Lessee of title and registration documents, ownership, use,
non-use, misuse, financing (including, without limitation, all obligations of
the Lessor under or in respect of any interest rate swap, cap, collar or other
financial hedging arrangement and any amounts payable by the Lessor under any
such arrangement to reduce the notional amount thereof by the amount of any
prepayment of any borrowing to which such interest rate swap, cap, collar or
other financial hedging arrangement relates), refinancing, operation,
transportation, repair, return, delivery or control of any Property or Equipment
or the past, present or future presence or the release of hazardous substances
on, under, to or from, or the generation or transportation of hazardous
substances to or from, or the failure to report, disclose or remediate the
foregoing with respect to any Property or Equipment, leased or to be leased
hereunder or any Operative Document or any transaction contemplated by any
thereof, including any failure by the Lessee to comply with any provision of any
thereof, (i) except to the extent that such costs are included in the
Acquisition Cost of such Property or Equipment within the limitations provided
in paragraph (a)(v) of Section 3 hereof (or within any change of such
limitations agreed to in writing by the Lessor and the Lessee), (ii) except for
any general administrative expenses of the Lessor, (iii) except the income taxes
with respect to which indemnification is excluded under paragraph (c) of this
Section 11 and (iv) except that this indemnity shall not increase any payment
required to be made by the Lessee pursuant to Section 13 of this Lease or
paragraph (j) of Section 19 of this Lease;
23.2 The assertion of any claim or demand based upon any
infringement or alleged infringement of any patent or other right, by or in
respect of any Property or Equipment; provided, however, the Lessor will make
available to the Lessee the Lessor's rights under any similar indemnification
arising from any manufacturer's or vendor's warranties or undertakings with
respect to any Property or Equipment;
23.3 All U.S. Federal, state, county, municipal, foreign
(including, without limitation, the Republic of Trinidad and Tobago) or other
fees and taxes of whatsoever nature, including but not limited to license,
qualification, franchise, sales, use, withholding, gross income, gross receipts,
ad valorem, business, personal property, real estate, value added, excise, motor
vehicle, occupation fees and stamp or other taxes or tolls of any nature
whatsoever, and penalties and interest thereon, whether assessed, levied against
or payable by the Lessor or otherwise, with respect to any Property or Equipment
or the acquisition, purchase, sale, rental, use, operation, control, ownership
or disposition of any Property or Equipment (including, without limitation, any
claim by any Governmental Authority for transfer tax, transfer gains tax,
mortgage recording tax, filing or other similar taxes or fees in connection with
the acquisition of any Property by the Lessor or otherwise in connection with
this Lease) or measured in any way by the value thereof or by the business of,
investment in, or ownership by the Lessor with respect thereto, provided that
this indemnity shall not apply to Federal net income taxes, or to state and
local net income taxes, except that such indemnity shall apply to state and
local net income taxes (A) to the extent imposed by reason in whole or in part
of (1) a relation or asserted relation of any
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
such taxing jurisdiction to the Property or Equipment or to the transactions
contemplated herein or (2) the actual or deemed use by any Person of the
Property or Equipment in such taxing jurisdiction, other than in the case of
both clauses (1) and (2), taxes to the extent such taxes would have been imposed
by a taxing jurisdiction because of a relationship between the Lessor and such
taxing jurisdiction without regard to the circumstances described in clauses (1)
and (2), and (B) to the extent imposed as a result of the inability to claim,
disallowance or other loss by Trinidad Ammonia Company, Limited Partnership of
deductions customarily allowed in computing net income (e.g., interest expense,
financing, administrative, ordinary operating expenses and other fees and
expenses, but not including depreciation in respect of Property or Equipment);
or
23.4 Any violation, or alleged violation by the Lessee, of this
Lease or any other Operative Document or of any contracts or agreements to which
the Lessee is a party or by which it is bound or of any laws, rules,
regulations, orders, writs, injunctions, decrees, consents, approvals,
exemptions, authorizations, licenses and withholdings of objection, of any
governmental or public body or authority and all other Legal Requirements.
The Lessee shall forthwith upon demand reimburse any Indemnified
Person for any sum or sums expended with respect to any of the foregoing or,
upon request from any Indemnified Person, shall pay such amounts directly. Any
amount payable to any Indemnified Person pursuant to this Section 11 shall be
paid promptly upon receipt of a written demand therefor from such Indemnified
Person accompanied by a written statement describing in reasonable detail the
claims which are the subject of and basis for such indemnity and the computation
of the amount so payable. Any payment made to or on behalf of any Indemnified
Person pursuant to this Section 11 shall be increased to such amount as will,
after taking into account all taxes imposed with respect to the accrual or
receipt of such payment (as the same may be increased pursuant to this
sentence), equal the amount of the payment, reduced by the amount of any savings
in such taxes actually realized by the Indemnified Person as a result of the
payment or accrual of the amounts in respect of which the payment to or on
behalf of the Indemnified Person hereunder is made. To the extent that the
Lessee in fact indemnifies any Indemnified Person under the indemnity provisions
of this Lease, the Lessee shall be subrogated to such Indemnified Person's
rights in the affected transaction and shall have a right to determine the
settlement of claims therein.
The indemnities contained in this Section 11 shall survive and
shall not be affected by any termination of this Lease as a whole or in respect
of any Parcel of Property or Unit of Equipment leased hereunder or any failure
or refusal of the Lessee to accept any Property or Equipment acquired or ordered
pursuant to the terms hereof.
Notwithstanding any provisions of this Section 11 to the
contrary, the Lessee shall not indemnify and hold harmless any Indemnified
Person against any claims and
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
liabilities arising solely from the gross negligence or willful misconduct of
such Indemnified Person. Each Indemnified Person shall give prompt notice to the
Lessee by telephone confirmed in writing of any event or circumstance which will
give rise to a claim for indemnification but delay or failure in giving such
notice shall not affect the Lessee's obligations hereunder except to the extent
that any increase in liability is a direct result of such failure or delay.
In the event any Indemnified Person shall be a party defendant to
any litigation in respect of which indemnification is applicable under this
Section 11, such Indemnified Party shall give prompt notice thereof to the
Lessee by telephone and in writing. No failure or delay of such Indemnified
Person to give the notice required by this Section 11 shall excuse the
obligation of the Lessee to indemnify each Person with respect to such
litigation except to the extent that any increase in liability is a direct
result of such failure or delay. In the event any claim, action, proceeding or
suit is brought against an Indemnified Person with respect to which the Lessee
has acknowledged its obligation to indemnify such Indemnified Person (provided
that such acknowledgement shall not be binding upon the Lessee in the event of a
final determination in a judicial proceeding that the Lessee was not liable in
such claim, action, proceeding or suit), the Lessee shall have the right to
assume the defense thereof, including the employment at its expense of counsel,
provided that the Lessee shall not have such right, to the extent that such
Indemnified Person shall deliver to the Lessee a written notice waiving the
benefits of the indemnification of such Indemnified Person provided by this
Section 11 in connection with such claim, action, proceeding or suit.
Notwithstanding the foregoing, if (i) any criminal proceeding is brought against
an Indemnified Person, (ii) the claim, action, proceeding or suit seeks damages
of more than $10,000,000 or material non-monetary civil liability or penalty, or
(iii) independent counsel to an Indemnified Person shall advise such Indemnified
Person in writing that there may be a conflict of interest or defenses available
to the Indemnified Person which are different from, or additional to, and may
conflict with those available to the Lessee, the Lessee shall not have the right
to assume the defense of any such action on behalf of the Indemnified Person if
such Indemnified Person chooses to defend such action, and all reasonable costs,
expenses and attorneys' fees incurred by the Indemnified Person in defending
such action, including any damages or any settlement amount, shall be borne by
the Lessee. Notwithstanding the assumption of its defense by the Lessee pursuant
to this paragraph, any Indemnified Person shall have the right to employ
separate counsel and to participate in its defense, but the fees and expenses of
such counsel shall be borne by the Indemnified Person. In addition, the Lessee
will not be liable for any settlement of any claim, action, proceeding or suit
unless the Lessee has consented thereto in writing (which consent shall not be
unreasonably withheld or delayed). Any decision by an Indemnified Person to
employ its own counsel rather than counsel selected by the Lessee (whether or
not at the Lessee's expense) shall in no way affect any rights of such
Indemnified Person otherwise arising under this Section 11.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 24. LEASE RENEWAL.
(a) Provided that no Event of Default has occurred and is
continuing as at the date of such request, if the Lessee shall, not earlier than
450 days and not later than one year prior to the last day of the Initial Term,
request in writing that the Lessor obtain bank borrowings on terms acceptable to
it and the Lessee in order to finance the Lessor's ownership of the Property and
Equipment during the Renewal Term, the Lessor shall make reasonable efforts to
arrange for bank commitments to provide such financing.
(b) The Lessor will advise the Lessee and PCS Nitrogen Fertilizer
Operations, Inc. in writing not later than 300 days prior to the last day of the
Initial Term as to whether it has been able to obtain bank commitments on terms
and conditions acceptable to it to finance the Property and Equipment for the
period of Renewal Term. In such notice, the Lessor shall identify such terms and
conditions. In order to renew the lease of the Property and Equipment for the
Renewal Term, the Lessee must notify the Lessor in writing within thirty (30)
days of its receipt of the foregoing notice of the Lessor, indicating (i)
whether the terms and conditions of such financing are acceptable to it and (ii)
whether, if PCS Nitrogen Fertilizer Operations, Inc. does not exercise its
Purchase Option or, having exercised such option, PCS Nitrogen Fertilizer
Operations, Inc. fails to effect the purchase contemplated thereby, the Lessee
agrees to lease the Property and Equipment for the Renewal Term. The notice of
the Lessee contemplated by the preceding sentence shall be irrevocable.
(c) The lease of the Property and Equipment shall not be renewed
for the Renewal Term if (i) the Lessor shall not obtain bank commitments to
finance the Property and Equipment on terms and conditions acceptable to it and
the Lessee, (ii) the Lessee shall not give the notice of renewal set forth in
paragraph (b) above, (iii) PCS Nitrogen Fertilizer Operations, Inc. shall
purchase the Property and Equipment pursuant to the exercise of the Purchase
Option or (iv) the Lessor and the Lessee shall not have agreed on the Lease
Termination Amount for the Renewal Term.
(d) The Lessor shall schedule the closing of the financing
contemplated by the bank commitments on or before the date which is six (6)
months prior to the end of the Initial Term. The Lessor shall notify the Lessee
in writing promptly of the closing of such financing or that such financing
shall have failed to close on such scheduled date. Upon the date of such closing
the Property and Equipment shall, subject to the terms and conditions of this
Lease, be leased hereunder for the Renewal Term. If the closing shall not occur
on or before the date which is six (6) months prior to the last day of the
Initial Term, then the lease of the Property and Equipment shall terminate on
the last day of the Initial Term and the Lessee shall comply with its
obligations with respect to such termination as set forth in paragraph (b) of
Section 13 hereof.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 25. LEASE EXPIRATION.
25.1 In the event PCS Nitrogen Fertilizer Operations, Inc. has
not purchased all Property and Equipment under this Lease pursuant to the
Purchase Option and the Lessee desires to terminate this Lease with respect to
such Property and Equipment, the Lessee shall provide notice to Lessor of such
intention at least five (5) months prior to the expiration of the Lease Term.
25.2 In the event (x) the Lessee provides the termination notice
contemplated in paragraph (a) above or (y) the circumstances referred to in the
last sentence of paragraph (d) of Section 12 shall be applicable, the Lessee
hereby covenants to the Lessor (the "Expiration Covenants") as follows: (A) on
the Lease Termination Date, (i) no Event of Default or Potential Default shall
have occurred and be continuing, (ii) no Parcel of Property shall be undergoing
any repairs, additions or alterations that would have a material adverse effect
on the fair market value of such Parcel of Property, (iii) each Parcel of
Property and Unit of Equipment shall be in compliance with all Legal
Requirements, except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (1) will not place either the Lessor or any
Assignee in any danger of any monetary civil liability for which the Lessor or
any Assignee is not adequately indemnified (the Lessee's obligations under
Section 11 of this Lease shall be deemed to be adequate indemnification if no
Event of Default exists) or any other material civil liability or penalty or
subject the Lessor or any Assignee to any criminal liability as a result of a
failure to comply therewith and (2) will not result in a material diminution in
the value of any Property or Equipment or in any material risk of the loss, sale
or forfeiture or loss of use of any thereof, (B) five (5) months prior to the
Lease Termination Date, the Lessee shall at its expense deliver to the Lessor an
environmental audit satisfactory in form and substance to the Lessor in its
reasonable discretion, the conclusion of which shall be satisfactory to the
Lessor in its reasonable discretion, and prepared by an independent
environmental consultant or engineer satisfactory to the Lessor in its
reasonable discretion, addressing the environmental hazards or liabilities
associated with any Parcel of Property or Unit of Equipment under this Lease and
(C) on or prior to the Lease Termination Date, the Lessee shall deliver to the
Lessor a report of an independent engineer (selected by the Lessor and at the
expense of the Lessee), to the effect that the Property and Equipment under this
Lease (i) have been maintained in accordance with the terms and conditions of
Section 9 of this Lease and (ii) are currently operating in accordance with the
design specifications listed in the appraisal provided to the Lessor pursuant to
Section 4 of the Agreement for Lease.
25.3 In the event the Lessee has complied with each of the
Expiration Covenants, the Lessee shall on the Lease Termination Date applicable
to a Parcel of Property or Unit of Equipment, terminate this Lease with respect
to such Property and Equipment, surrender such Property and Equipment to the
Lessor and pay to the Lessor the Lease Termination Amount with respect to such
Property and Equipment and all other amounts owing by the Lessee hereunder and
under the other Operative Documents. Upon
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
such surrender, the Lessor shall have the right to sell such Property and
Equipment to a third party and the Lessee shall have no further right, claim or
interest in such Property and Equipment (it being understood that the Lessor
shall be entitled to commence the marketing of such Property and Equipment at
any time subsequent to the first day of the fifth month prior to the Lease
Termination Date, and the Lessee agrees that it shall cooperate in connection
therewith). If the Lessor shall fail to sell the Ammonia Project within seven
(7) days of the surrender thereof by the Lessee, the Assignee shall have the
right, but not the obligation, acting on behalf of the Lessor to sell the
Ammonia Project to a third party. The proceeds of sale received by the Lessor or
such Assignee, as the case may be, from any sale of such Property and Equipment
shall be retained by the Lessor or any Assignee, as the case may be, provided
that, if the proceeds of sale, together with the Lease Termination Amount paid
by the Lessee, exceed the Acquisition Cost of such Property and Equipment and
all other amounts payable by the Lessee hereunder and under the other Operative
Documents, such excess shall be paid by the Lessor or such Assignee, as the case
may be, to the Lessee. The Lessee shall use reasonable efforts during the last
five (5) months of the Initial Term with respect to such Property and Equipment
(unless this Lease has been renewed pursuant to Section 12 hereof), and during
the last five (5) months of the Renewal Term, if any, to seek on behalf of the
Lessor bona fide arms-length bids for not less than all such Property and
Equipment from prospective purchasers who are financially capable of purchasing
such Property and Equipment for cash, on an as-is, non-installment sale basis,
without warranty by, or recourse to, the Lessor. The Lessee shall assign to any
purchaser, at such purchaser's request and for no additional consideration, any
and all assignable agreements in the Lessee's name for the acquisition,
construction, storage or transportation of the Property and the Equipment. The
Lessee shall notify the Lessor of the amount of each such bid, and the name and
address of the Person submitting such bid.
25.4 In the event the Lessee shall surrender such Property and
Equipment to the Lessor or to a purchaser of such Property and Equipment from
the Lessor pursuant to the provisions of this Section 13, on the Lease
Termination Date applicable to such Property and Equipment, the Lessee shall pay
to the Lessor all Basic Rent payable with respect to such Property and Equipment
and any Additional Rent and other amounts owing hereunder and under the other
Operative Documents. Upon payment by the Lessee to the Lessor of all amounts
owing under this Section 13 and delivery of all Property and Equipment under
this Lease to the Lessor or such purchaser, this Lease shall terminate with
respect to such Property and Equipment, except to the extent provided in Section
11 hereof.
SECTION 26. CHARACTER OF AMMONIA PROJECT.
It is the intention of the Lessor and the Lessee that the
components of the Ammonia Project identified as personal property components in
Exhibit D hereto maintain their character as personal property for commercial
law purposes. The Lessee shall take all such reasonable action to maintain such
character and shall obtain and record such instruments and take such steps as
may be necessary to prevent any Person from acquiring
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
any rights in such components by reason of such components being deemed to be
real property.
SECTION 27. LOSS OF OR DAMAGE TO PROPERTY OR EQUIPMENT.
27.1 The Lessee hereby assumes all risk of loss of or damage to
Property or Equipment, however caused. No loss of or damage to any Property or
Equipment shall impair any obligation of the Lessee under this Lease, which
shall continue in full force and effect with respect to any lost or damaged
Property or Equipment.
27.2 In the event of damage of any kind whatsoever to any
Property or Equipment (unless the same is determined by the Lessee in its
reasonable judgment to be damaged beyond repair) the Lessee, at its own cost and
expense, shall place the same in good operating order, repair, condition and
appearance. The Lessee's right to any proceeds paid under any insurance policy
or policies required under Section 10 of this Lease with respect to any such
damage to any Property or Equipment which has been so placed by the Lessee in
good operating order, repair, condition and appearance is governed by paragraph
(f) of Section 10 hereof.
27.3 If (A) all, or a substantial portion of the Ammonia Project
or any other Property or Equipment is lost, stolen, destroyed, seized,
confiscated, rendered unfit for use or damaged beyond repair (in the reasonable
judgment of the Lessee), (B) the use thereof by the Lessee in the ordinary
course of business is prevented by the act of any third Person or Persons or
governmental instrumentality for a period exceeding one hundred eighty (180)
days or, if shorter, the period ending on the last day of the Initial Term or
the Renewal Term of the Ammonia Project or of such other Property or Equipment,
as applicable, (C) the Ammonia Project or any other Property or Equipment is
attached (other than on a claim against the Lessor as to which the Lessee is not
obligated to indemnify the Lessor) and the attachment is not removed within a
period of one hundred eighty (180) days or, if shorter, the period ending on the
last day of the Initial Term or the Renewal Term of the Ammonia Project or of
such other Property or Equipment, as applicable, (D) a Taking as described in
Section 16 shall occur, or (E) the Ammonia Project or any other Property or
Equipment is damaged and the Lessee elects not to rebuild or repair the Ammonia
Project or such Property or Equipment or such rebuilding or repairs would exceed
twenty-five (25%) of the replacement cost of the Ammonia Project or such
Property or Equipment where such rebuilding or repairs could not, in the
reasonable judgment of the Lessee, restore the Ammonia Project or such Property
or Equipment to its previous working order prior to the expiration of the
Initial Term, or if the Lessee has renewed this Lease pursuant to Section 12
hereof, prior to the expiration of the Renewal Term, then in any such event, (a)
the Lessee shall replace such Property or Equipment with real property or
equipment of a similar like and kind, and of a value not less than the Property
or Equipment being replaced (assuming that the replaced Equipment or Property
was maintained in accordance
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
with the provisions hereof), and the Lessee and the Lessor shall execute a
revised Unit Leasing Record or AFL Unit Leasing Record, as the case may be, to
amend, among other things, the description of such Property or Equipment,
provided that the replacement of any Property with other real property shall be
subject to the prior written consent of the Lessor, which consent shall not be
unreasonably withheld, and to receipt by the Lessor and the Assignee of all
documentation required with respect to the acquisition of Property and Equipment
by the Lessor under the terms of any Credit Agreement or (b)(i) the Lessee shall
promptly notify the Lessor in writing of such event, (ii) on the Basic Rent
Payment Date designated by the Lessee, which shall be a date within ninety (90)
days following such event but not later than the last day of the Lease Term, the
Lessee shall pay to the Lessor an amount equal to eighty-five percent (85%) of
the Acquisition Cost of the Ammonia Project or such Property or Equipment, (iii)
the Initial Term or Renewal Term of the Ammonia Project or such Property or
Equipment shall continue until the Basic Rent Payment Date on which the Lessor
receives payment from the Lessee of the amount payable pursuant to this
paragraph (c) and of Basic Rent payable with respect to the Ammonia Project or
such Property or Equipment and any Additional Rent and other amounts owing
hereunder and under the other Operative Documents, and shall thereupon
terminate. Insurance and condemnation proceeds, if any, received by the Lessor
that, together with the amounts paid by the Lessee to the Lessor pursuant to
clause (ii) of the preceding sentence, exceed the aggregate of the Acquisition
Cost of the Ammonia Project or the affected Property or Equipment and all other
amounts payable hereunder and under the other Operative Documents, shall be paid
by the Lessor to the Lessee. For purposes of this paragraph (c), loss of or
damage to a "substantial portion of the Ammonia Project or any other Property or
Equipment" shall be deemed to occur if the Ammonia Project or such Property or
Equipment is unusable for the Lessee's ordinary business purposes in the
reasonable judgment of the Lessee.
SECTION 28. CONDEMNATION AND DEDICATION OF PROPERTY; EASEMENTS.
28.1 If the use, occupancy or title to all or a substantial
portion of the Ammonia Project or any other Parcel of Property is taken,
requisitioned or sold in, by or on account of actual or threatened eminent
domain or confiscation or similar proceedings or other action by any
governmental authority (such events collectively referred to as a "Taking"),
then the Initial Term or Renewal Term shall terminate as provided in paragraph
(c) of Section 15 hereof. Upon receipt of proceeds from any award or sale made
in connection with such Taking, if the Lessee has paid all amounts owing under
paragraph (c) of Section 15 hereof, so long as no Event of Default has occurred
and is continuing, the Lessor shall remit to the Lessee the net amount of such
proceeds remaining after reimbursement for all costs and expenses (including,
without limitation, reasonable attorneys' fees) incurred by the Lessor in
connection with the negotiation and settlement of any proceedings related to
such Taking. A Taking shall be deemed to affect a "substantial portion" of the
Ammonia Project or a Parcel of Property if, after such Taking, the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Ammonia Project or such Parcel of Property is unusable for the Lessee's ordinary
business purposes in the reasonable judgment of the Lessee.
28.2 If less than a substantial portion of the Ammonia Project or
any other Parcel of Property is subject to a Taking, then this Lease shall
continue in effect as to the portion of the Ammonia Project or such Parcel not
taken and any net proceeds, so long as no Event of Default has occurred and is
continuing, shall be paid to the Lessee, provided that if, as a result of a
Taking or Takings of less than substantially all of a Parcel of Property, the
aggregate proceeds with respect to any Parcel of Property received is equal to
or greater than $2,000,000, at the Lessee's option, (A) the Lessee shall replace
such Property as provided in clause (a) in the first sentence of paragraph (c)
of Section 15 hereof, or (B) such proceeds shall be paid to the Lessor and the
Acquisition Cost of the affected Parcel shall be reduced by the amount of such
proceeds (such reduction to be evidenced by a revised Unit Leasing Record or AFL
Unit Leasing Record, as the case may be). If, at any time after a Cash Reserve
Trigger Event has occurred (unless a CRA Release Event has occurred since the
date of such Cash Reserve Trigger Event), the Acquisition Cost of the Ammonia
Project is reduced pursuant to this paragraph (b) of Section 16, the Lessor
shall cause the CRA Bank to remit to the Lessee an amount computed by
multiplying the total amount of proceeds paid to the Lessor pursuant to clause
(B) above by a percentage derived by multiplying the results of (1) a fraction,
the numerator of which shall be the amount of the reduction in the Acquisition
Cost and the denominator of which shall be the Acquisition Cost of the Ammonia
Project, by (2) a fraction, the numerator of which shall be the dollar amount in
the Cash Reserve Account at such date and the denominator of which shall be
fifty percent of the Acquisition Cost of the Ammonia Project.
28.3 So long as no Event of Default hereunder has occurred and is
continuing, the Lessee shall have the right (i) to grant, obtain or enter into
easements for the benefit of any Parcel of Property, (ii) to voluntarily
dedicate or convey, as required, portions of any Parcel of Property for road,
highway and other public purposes and (iii) to voluntarily execute petitions to
have any Parcel of Property or a portion thereof annexed to any municipality or
included within any utility, highway or other improvement or service district,
provided such annexation has no material adverse effect on the value of such
Parcel of Property. In connection with the Lessee's development of the Property
in accordance with the terms of this Lease, the Lessee shall at all times be
free to enter into and/or execute such agreements, dedications, easements,
conditions, covenants and restrictions in favor of other property owners,
lessees or local agencies as are necessary for the conduct of the Lessee's
operations on the Property. If any monetary consideration is paid for such
easement or dedication, the Lessee shall be entitled to receive or retain such
consideration.
Subject to the foregoing provisions of this Section 16(c), the
Lessor will cooperate, without unreasonable delay and at the Lessee's expense,
as necessary and join in the execution of any appropriate instrument or shall
execute any separate instrument as necessary. As a condition precedent to the
Lessee's exercise of any of the Lessee's powers
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
under this Section 16, (i) the Lessee shall give the Lessor five (5) Business
Days' prior written notice of the proposed action and (ii) the Lessee shall
provide to the Lessor a certificate of the Lessee stating that such action will
not in any material respect adversely affect either the fair market value of
such Property or the use of such Property for its intended purpose, will not
affect the Lessor's ability to exercise its rights and remedies under this Lease
and that the Lessee undertakes to remain obligated under this Lease to the same
extent as if the Lessee had not exercised its powers under this Section 16 and
the Lessee will perform all obligations under such instrument and shall prepare
all required documents and provide all other instruments and certificates as the
Lessor may reasonably request. If requested by the Lessee, the Lessor shall
appoint the Lessee as the Lessor's attorney-in-fact pursuant to a power of
attorney for the foregoing purposes.
SECTION 29. SURRENDER OF PROPERTY OR EQUIPMENT.
29.1 Upon termination of the lease of any Property or Equipment
under circumstances in which such Property or Equipment is to be returned to the
Lessor, the Lessee shall surrender and deliver such Property or Equipment to the
Lessor or a designee of the Lessor at the location where such Property or
Equipment is required to be located pursuant to the provisions hereof.
29.2 Upon the surrender of the Property and Equipment, the Lessee
shall deliver to the Lessor or its designee, all logs, manuals, inspection data,
books and records in the English language, if available, or with translations in
the English language or copies thereof which are applicable to the Property and
Equipment that are in accordance with sound industry practice customarily
retained (or that the Lessee actually did retain) or are required by law to be
retained with respect to similar property and equipment, including, without
limitation, all software and manuals necessary for the operation of the Ammonia
Project in accordance with the design specifications set forth in the appraisal
provided to the Lessor pursuant to Section 4 of the Agreement for Lease.
29.3 The Lessee shall be obligated to obtain all Governmental
Actions necessary for the surrender of Property and Equipment hereunder and
permitting the Lessor (without the Lessor being required to change its business
structure or otherwise to suffer any real or potential adverse effect on its
business or that of its Affiliates as a result of such surrender and receipt of
possession) to possess the Ammonia Project with or without the continued
involvement of the Lessee, which Governmental Actions shall be in full force and
effect. In connection with the Lessee's surrender of possession of the Ammonia
Project to the Lessor, the Lessee shall furnish to the Lessor copies certified
by a Responsible Officer of the Lessee of all Governmental Actions necessary to
effect such surrender and receipt of possession.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 30. EVENTS OF DEFAULT.
Any of the following events of default shall constitute an "Event
of Default" and shall give rise to the rights on the part of the Lessor
described in Section 19 hereof:
30.1 Failure of the Lessee (x) to make any payment required by
paragraph (e) of Section 19, paragraph (c) of Section 15, paragraph (q) or (t)
of Section 2 or paragraph (l) of Section 29 hereof when due or to pay amounts
due to the Lessor on the Lease Termination Date, (y) to pay Basic Rent on or
prior to the earlier of (i) ten (10) days after such payment is due and (ii) the
Lease Termination Date, or (z) to pay any other amount payable by the Lessee
hereunder on or prior to the earlier of (i) fifteen (15) days after written
demand for such other payment and (ii) the Lease Termination Date; or
30.2 Failure to maintain the insurance required by Section 10
hereof, or default in the performance of the covenant contained in paragraph (k)
of Section 10 hereof; or
30.3 Failure to comply with any of the Expiration Covenants
described in paragraph (b) to Section 13 hereof or with Section 26 hereof; or
30.4 Default in the performance of any other obligation or
covenant of the Lessee pursuant to this Lease or any other Operative Document
(except a Ground Lease) and, if such default is capable of cure, the continuance
of such default for 30 days after written notice to the Lessee by the Lessor or
any Assignee, provided that, if such default is of a nature that it is capable
of being cured but not within such 30 day period and the Lessee shall have
diligently commenced curing such default within such 30 day period and the
Lessee shall have proceeded diligently and in good faith thereafter to complete
curing such default, such 30-day period shall be extended to one hundred eighty
(180) days but not to a date later than the Lease Termination Date; or
30.5 The entry of a decree or order for relief in respect of the
Lessee or the Guarantor by a court having jurisdiction in the premises, or the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Lessee or the Guarantor or of
any substantial part of its property, or ordering the winding up or liquidation
of the Lessee's or the Guarantor's affairs, in an involuntary case under the
U.S. Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy
and Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency reorganization,
composition or other similar law of any jurisdiction; or the commencement
against the Lessee or the Guarantor of an involuntary case under the U.S.
Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy and
Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
reorganization, composition or other similar law of any jurisdiction, and the
continuance of any such case unstayed and in effect for a period of 60
consecutive days; or
30.6 The entry or deemed entry of an order for relief in any case
under the U.S. Federal Bankruptcy Code, as now or hereafter constituted, or the
Bankruptcy and Insolvency Act (Canada), involving the Lessee or the Guarantor or
the suspension or discontinuance of the Lessee's or the Guarantor's business
operations, the Lessee's or the Guarantor's insolvency (however evidenced) or
the Lessee's or the Guarantor's admission of insolvency or bankruptcy, or the
commencement by the Lessee or the Guarantor of a voluntary case under the U.S.
Federal Bankruptcy Code, as now or hereafter constituted, or the Bankruptcy and
Insolvency Act (Canada), as now or hereafter constituted, or any other
applicable federal, state or provincial bankruptcy, insolvency reorganization,
composition or other similar law of any jurisdiction, or the consent by the
Lessee or the Guarantor to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Lessee or the Guarantor or of any substantial part of
the Lessee's or the Guarantor's property, or the making by the Lessee or the
Guarantor of an assignment for the benefit of creditors, or the failure of the
Lessee or the Guarantor generally to pay its debts as such debts become due, or
the taking of partnership or corporate or other action by or on behalf of the
Lessee or the Guarantor in furtherance of any such action; or
30.7 There shall be an "Event of Default" under the PCS Term
Credit Agreement; or, other than as disclosed in Schedule H to the PCS Term
Credit Agreement, an event of default (after the expiry of all applicable grace
periods) under any one or more agreements, indentures or instruments under which
the Guarantor or any of its Material Subsidiaries has outstanding Debt in excess
of Cdn. $40,000,000 or the U.S. Dollar Equivalent thereof shall happen and be
continuing without being cured or discharged by repayment, or any Debt of the
Guarantor or any of its Material Subsidiaries in excess of Cdn. $40,000,000 or
the U.S. Dollar Equivalent thereof which is payable on demand is not paid on
demand; or
30.8 Any representation or warranty made or deemed made or
certified to by the Lessee in this Lease or any Operative Document, any Consent
or any document contemplated hereby or thereby proves to be false or inaccurate
in any material respect on or as of the date made or deemed made; or
30.9 The Lessee shall fail to observe or perform, after the
expiration of any applicable grace period, any material term, covenant or
condition of any Ground Lease relating to a Parcel of Property, to be observed
or performed, unless any such observance or performance shall have been waived
or not required by the landlord under such Ground Lease, or if any one or more
of the events referred to in the Site Lease, the Sublease or any Ground Lease
shall occur which would cause the Site Lease, the Sublease or such Ground Lease
to terminate without notice or action by the landlord thereunder or which would
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
entitle the landlord under the Site Lease, the Sublease or such Ground Lease to
terminate the Site Lease, the Sublease or such Ground Lease and the term thereof
by the giving of notice to the Lessor without opportunity to cure, as tenant
thereunder, or if any of the terms, covenants or conditions of the Site Lease,
the Sublease or any Ground Lease shall in any manner be modified, changed,
terminated, supplemented, altered or amended in any material respect without the
consent of the Lessor and Assignee; or
30.10 An Event of Default (as defined in the Agreement for Lease)
shall exist under the Agreement for Lease; or
30.11 The Gas Contract or any Ancillary Facility Agreement or any
other Operative Document shall be modified, changed, terminated, supplemented,
altered or amended in any material respect without the consent of the Lessor and
the Assignee; or
30.12 The PCS Guaranty ceases to be in full force and effect
prior to the termination thereof in accordance with its terms, or the Guarantor
defaults in the performance of any obligation or covenant contained in the PCS
Guaranty, after required notice of such default shall have been given, and any
applicable grace period shall have expired; or
30.13 Any representation or warranty made by the Guarantor in the
PCS Guaranty or in any document contemplated hereby or thereby proves to be
false, misleading or inaccurate in any material respect on or as of the date
made or deemed made; or
30.14 The Guarantor ceases to directly or indirectly own all of
the outstanding partnership interests of the Lessee and issued and outstanding
shares of the capital stock of PCS Nitrogen Fertilizer Operations, Inc.
SECTION 31. RIGHTS UPON DEFAULT.
31.1 Upon the occurrence and continuation of any Event of Default
the Lessor may, in addition to exercising any other rights and remedies
available to it under applicable law, do any one or more of the following (if,
within fifteen (15) Business Days of receipt by the Lessee of an Event of
Default Notice (as defined in Section 29(l)), the Lessee has not made a request
to purchase all Parcels of Property and Units of Equipment under Section 29(l)
or, if the Lessee has so made such a request but has not consummated within
thirty (30) Business Days of receipt of the Event of Default Notice such
purchase in full compliance with Section 29(l)):
(a) Terminate the lease of any or all Property or Equipment
leased hereunder by written notice to the Lessee, subject
to the maximum amount the Lessor shall be entitled to
recover from the Lessee, as described in paragraph (f) of
this Section 19;
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(b) Whether or not the lease of any Property or Equipment is
terminated, take immediate possession of and remove any or
all Equipment and other equipment or property of the
Lessor in the possession of the Lessee, wherever situated,
and for such purpose, enter upon any premises without
liability to the Lessee for so doing, provided that the
taking of possession of any Property or Equipment shall
take place in a commercially reasonable manner;
(c) Whether or not any action has been taken under paragraph
(i) or (ii) above, sell any Property or Equipment (free of
or subject to the rights of the Lessee or any other person
under this Lease and with or without the concurrence or
request of the Lessee);
(d) Hold, use, occupy, operate, remove, lease or keep idle any
or all Property or Equipment as the Lessor in its sole
discretion may determine, without any duty to account to
the Lessee with respect to any such action or inaction,
except that the Lessor agrees that any profit it derives
from the occupation or use of any Property or Equipment
while exercising its rights under this Section 19 will be
applied to reduce the Accrued Default Obligations; and
(e) Exercise any other right or remedy which may be available
under applicable law and in general proceed by appropriate
judicial proceedings, either at law or in equity, to
enforce the terms hereof or to recover damages for the
breach hereof.
31.2 Suit or suits for the recovery of any default in the payment
of any sum due hereunder or for damages may be brought by the Lessor from time
to time at the Lessor's election, and nothing herein contained shall be deemed
to require the Lessor to await the date whereon this Lease or the term hereof
would have expired by limitation had there been no such default by the Lessee or
no such termination or cancellation.
31.3 The receipt of any payments under this Lease by the Lessor
with knowledge of any breach of this Lease by the Lessee or of any default by
the Lessee in the performance of any of the terms, covenants or conditions of
this Lease, shall not be deemed to be a waiver of any provision of this Lease.
31.4 No receipt of moneys by the Lessor from the Lessee after the
termination or cancellation hereof in any lawful manner shall reinstate,
continue or extend the Initial Term or the Renewal Term, or affect any notice
theretofore given to the Lessee, or operate as a waiver of the right of the
Lessor to enforce the payment of Basic Rent or Additional Rent or other charges
payable hereunder, or operate as a waiver of the right of the Lessor to recover
possession of any Unit of Equipment or Parcel of Property by proper
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
suit, action, proceedings or remedy; it being agreed that, after the service of
notice to terminate or cancel this Lease, and the expiration of the time therein
specified, if the default has not been cured in the meantime, or after the
commencement of any suit, action or summary proceedings or of any other remedy,
or after a final order, warrant or judgment for the possession of any Unit of
Equipment or Parcel of Property, the Lessor may demand, receive and collect any
moneys payable hereunder, without in any manner affecting such notice,
proceedings, suit, action, order, warrant or judgment; and any and all such
moneys so collected shall be deemed to be payments on account for the use and
operation of any Unit of Equipment or the use, operation and occupation of any
Parcel of Property, or at the election of the Lessor, on account of the Lessee's
liability hereunder and will be applied to reduce the Accrued Default
Obligations. Acceptance of the keys to any Parcel of Property, or any similar
act, by the Lessor, or any agent or employee of the Lessor, during the term
hereof, shall not be deemed to be an acceptance of a surrender of any Parcel of
Property unless the Lessor shall consent thereto in writing.
31.5 The Lessee hereby expressly confirms that, in any event,
including after any Event of Default, and notwithstanding any termination of
this Lease or reentry or repossession by the Lessor, the Lessee shall continue
to be liable for, and the Lessor may recover from the Lessee, (i) all Basic Rent
accrued to the date of payment, (ii) any Additional Rent owing with respect to
all Property or Equipment leased by the Lessee, (iii) all amounts payable
hereunder or under any other Operative Document and (iv) all losses, damages,
costs and expenses incurred (including, without limitation, reasonable
attorneys' fees and expenses, commissions, filing fees and sales or transfer
taxes) sustained by the Lessor by reason of such Event of Default and the
exercise of the Lessor's remedies with respect thereto, including, in the event
of a sale by the Lessor of any Property or Equipment pursuant to this Section
19, all costs and expenses associated with such sale. The amounts payable in
clauses (i) through (iv) above are hereinafter sometimes referred to as the
"Accrued Default Obligations". Accrued Default Obligations shall not include any
damages for loss of profits arising from the prospective use, operation and
occupancy by parties other than the Lessee of any Property or Equipment or the
anticipated receipt of income therefrom subsequent to the Lessee's possession of
such Property and Equipment.
31.6 After an Event of Default, the Lessor may sell its interest
in any Property and Equipment in any commercially reasonable manner upon any
terms that the Lessor deems satisfactory, free of any rights of the Lessee or
any Person claiming through or under the Lessee. In the event of any such sale
or in the event the Lessor elects not to sell any Property or Equipment, in
addition to the Accrued Default Obligations, the Lessor shall be entitled to
recover from the Lessee, as liquidated damages, and not as a penalty, an amount
equal to eighty-five percent (85%) of the Acquisition Cost of any Property or
Equipment under this Lease. Proceeds of any such sale received by the Lessor,
or, in the event the Lessor elects not to sell, proceeds at any time thereafter
received by the Lessor from any sale, occupation, operation, use or lease of any
Property or Equipment (net of all reasonable costs and expenses incurred by the
Lessor in connection with any sale,
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
occupation, operation, use or lease of any Property or Equipment) in excess of
fifteen percent (15%) of the Acquisition Cost of such Property or Equipment,
shall be credited against the Accrued Default Obligations the Lessee is required
to pay under this Section 19. If such excess proceeds exceed the Accrued Default
Obligations, or, if the Lessee has paid all amounts required to be paid under
this Section 19, such excess shall be paid by the Lessor to the Lessee. If the
Lessee converts any such Property or Equipment after an Event of Default, or if
such Property or Equipment is lost or destroyed, in addition to the Accrued
Default Obligations, the Lessor may cause the Lessee to pay to the Lessor, and
the Lessee shall pay to the Lessor, as liquidated damages and not as a penalty,
an amount equal to eighty-five percent (85%) of the Acquisition Cost of such
Property or Equipment.
31.7 In the event of a sale pursuant to this Section 19, upon
receipt by the Lessor of the amounts payable hereunder, the Lessor shall
transfer all of the Lessor's right, title and interest in and to the Property
and Equipment to the purchaser thereof.
31.8 In addition to its other rights in this Section 19, the
Lessor may exercise its various rights under the Operating Agreement, the
Ancillary Facility Agreements and the Gas Contract or transfer such rights to
the purchaser in a sale.
31.9 No remedy referred to in this Section 19 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor at law or in equity, and
the exercise in whole or in part by the Lessor of any one or more of such
remedies shall not preclude the simultaneous or later exercise by the Lessor of
any or all such other remedies. No waiver by the Lessor of any Event of Default
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default.
31.10 If (i) an Event of Default arising solely as a result of
the Lessee's failure to comply with its obligations contained in the second
sentence of paragraph (b) of Section 9 of this Lease shall have occurred and be
continuing, (ii) the Lessor shall terminate this Lease or the Lessee's right to
the use and possession of the Ammonia Project, and (iii) the Lessor shall sell
the Ammonia Project, then if the proceeds of such sale are less than 15% of the
Acquisition Cost of the Ammonia Project, the Lessee shall pay to the Lessor the
amount by which the sales price of the Ammonia Project has been reduced as the
direct result of wear and tear in excess of the wear and tear that would have
occurred if the Lessee's obligations contained in the second sentence of
paragraph (b) of Section 9 of this Lease had been satisfied (the amount by which
the sales price of the Ammonia Project has been reduced as the direct result of
wear and tear in excess of the wear and tear that would have occurred if the
Lessee's obligations contained in the second sentence of paragraph (b) of
Section 9 of this Lease had been satisfied, to be such amount, if any, as the
Lessor and the Lessee agree, or if no agreement is reached, the amount, if any,
determined pursuant to the Appraisal Procedure), provided that, in no event
shall the Lessee be required to pay an
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
amount that, when combined with the proceeds received by the Lessor from the
purchaser of the Ammonia Project, exceeds 15% of the Acquisition Cost of the
Ammonia Project.
SECTION 32. EQUIPMENT TO BE PERSONAL PROPERTY.
It is the intention and understanding of the Lessor and the
Lessee that all Equipment shall be and at all times remain personal property.
The Lessee shall obtain and record such instruments and take such steps as may
be necessary to prevent any Person from acquiring any rights in Equipment
paramount to the rights of the Lessor by reason of such Equipment being deemed
to be real property.
SECTION 33. SALE OR ASSIGNMENT BY LESSOR.
33.1 The Lessor shall have the right to obtain equity and debt
financing for the acquisition and ownership of the Property or Equipment by
selling or assigning its right, title and interest in any or all amounts due
from the Lessee or any third party under this Lease; provided that any such sale
or assignment shall be subject to the rights and interests of the Lessee under
this Lease.
33.2 Any Assignee shall, except as otherwise agreed by the Lessor
and such Assignee, have (to the exclusion of the Lessor) all the rights, powers,
privileges and remedies of the Lessor hereunder, and the Lessee's obligations as
between itself and such Assignee hereunder shall not be subject to any claims or
defense that the Lessee may have against the Lessor, other than the defense of
payment or satisfaction of the obligation, provided that the foregoing shall not
be deemed to be a waiver of any claims the Lessee may have against the Lessor.
Upon written notice to the Lessee of any such assignment, the Lessee shall
thereafter make payments of Basic Rent, Additional Rent and other sums due
hereunder to the Assignee, to the extent specified in such written notice, and
only such payments to the applicable Assignee shall discharge the obligation of
the Lessee to the Lessor hereunder and only to the extent of such payments.
Anything contained herein to the contrary notwithstanding, no Assignee shall be
obligated to perform any duty, covenant or condition required to be performed by
the Lessor hereunder, and any such duty, covenant or condition shall be and
remain the sole obligation of the Lessor.
SECTION 34. INCOME TAXES.
34.1 The Lessor agrees that it will not file any Federal, state
or local income tax returns during the Lease Term with respect to any Property
or Equipment that are inconsistent with the treatment of the Lessee as tax owner
of such Property or Equipment for Federal, state and local income tax purposes.
34.2 Paragraph (a) of Section 22 above notwithstanding, the
Lessor agrees that, at the written request of the Lessee, it will take all such
action as may be required to
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
be taken by a lessor to elect under any provision of the Code substantially
similar to section 48(d) of the Internal Revenue Code of 1954, as amended prior
to the enactment of the Tax Reform Act of 1986, permitting a pass-through of an
investment tax credit to a lessee, to treat the Lessee as having acquired any
Unit of Equipment or any qualifying appliances, equipment and machinery attached
to any Parcel of Property acquired by the Lessor that would qualify for such a
credit (within the meaning of section 48(b) of the Code), provided that such
request is received by the Lessor reasonably in advance of the date on which the
Lessor is required to take such action, and the Lessee provides the Lessor in a
timely fashion with all information (other than identifying information
pertaining to the Lessor) required to take such action. The Lessor does not
represent or warrant to the Lessee that credits will be allowable with respect
to any Unit of Equipment or other property under the Code or that any election
will be effective to transfer any such credits that are allowable to the Lessee.
The Lessor shall have no liability to the Lessee resulting from the disallowance
to the Lessee of credits under the Code with respect to any Unit of Equipment or
other property unless such disallowance is directly and primarily attributable
to the failure of the Lessor to comply with its obligations under the first
sentence of this paragraph (b).
SECTION 35. NOTICES AND REQUESTS.
All notices, offers, acceptances, approvals, waivers, requests,
demands and other communications hereunder or under any other instrument,
certificate or other document delivered in connection with the transactions
described herein shall be in writing, shall be addressed as provided below and
shall be considered as properly given (a) if delivered in person, (b) if sent by
express courier service (including, without limitation, Federal Express, Emery,
DHL, Airborne Express, and other similar express delivery services), (c) in the
event overnight delivery services are not readily available, if mailed by
international airmail, postage prepaid, registered or certified with return
receipt requested, or (d) if sent by telecopy and confirmed, provided that, in
the case of a notice by telecopy, the sender shall in addition confirm such
notice by writing sent in the manner specified in clauses (a), (b) or (c) of
this Section 23. All notices shall be effective upon receipt by the addressee;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. For the purposes of notice, the addresses of the parties shall
be as set forth below; provided, however, that any party shall have the right to
change its address for notice hereunder to any other location by giving written
notice to the other party in the manner set forth herein.
The initial addresses of the parties hereto are as follows:
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
If to the Lessor:
Trinidad Ammonia Company, Limited Partnership
c/o Trinidad Ammonia Capital, Inc.
North Tower
World Financial Center
250 Vesey Street
New York, NY 10281
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to the Lessee:
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Senior Counsel
Telephone: (901) 758-5375
Telecopy: (901) 758-5201
and
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Assistant Treasurer
Telephone: (901) 758-5266
Telecopy: (901) 758-5202
With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: Chief Financial Officer
Telecopy: (306) 933-8844
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
and
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: General Counsel
Telecopy: (306) 933-8877
With a copy of all notices under this Section 23 to any Assignee at such address
as such Assignee may specify by written notice to the Lessor and the Lessee.
SECTION 36. COVENANT OF QUIET ENJOYMENT.
During the Lease Term of any Property or Equipment hereunder and
so long as no Event of Default or Potential Default shall have occurred and be
continuing, the Lessor recognizes the Lessee's right to uninterrupted use and
quiet enjoyment of the Property or Equipment on the terms and conditions
provided in this Lease without any interference from the Lessor or anyone
claiming through or under the Lessor.
SECTION 37. RIGHT TO PERFORM FOR LESSEE.
37.1 If the Lessee fails to perform or comply with any of its
covenants or agreements contained in this Lease, the Lessor may, upon reasonable
notice to the Lessee but without waiving or releasing any obligations or
default, itself perform or comply with such covenant or agreement, and the
amount of the reasonable expenses of the Lessor incurred in connection with such
performance or compliance, shall be payable by the Lessee, not later than
fifteen (15) days after written notice by the Lessor.
37.2 Without in any way limiting the obligations of the Lessee
hereunder, the Lessee hereby irrevocably appoints the Lessor as its agent and
attorney at the time at which the Lessee is obligated to deliver possession of
any Parcel of Property or Unit of Equipment to the Lessor, to demand and take
possession of such Parcel of Property or Unit of Equipment in the name and on
behalf of the Lessee from whomsoever shall be at the time in possession thereof.
SECTION 38. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Lessee may not consolidate with or merge into any other
corporation or sell or assign all or substantially all of its assets or its
interest in the Ammonia Project to any Person, unless the surviving corporation
or transferee Person shall assume, by execution and delivery of instruments
satisfactory to the Lessor prior to any such consolidation, merger, sale or
assignment, the obligations of the Lessee hereunder and become successor to the
Lessee, but the Lessee shall not thereby be released, without the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
consent of the Lessor, from its obligations hereunder and; provided, further,
that no Event of Default shall have occurred and be continuing, both prior and
after giving effect to any such consolidation, merger, sale or assignment and
such surviving corporation or transferee Person will, on a pro forma basis,
immediately after such consolidation, merger or sale, possess a consolidated net
worth and credit rating substantially equivalent to or greater than that of the
Lessee immediately prior to such consolidation, merger or sale. The terms and
provisions of this Lease shall be binding upon and inure to the benefit of the
Lessee and its respective successors and assigns.
SECTION 39. PERMITTED CONTESTS.
39.1 The Lessee shall not be required, nor shall the Lessor have
the right, to pay, discharge or remove any tax, assessment, levy, fee, rent,
charge or Lien, or to comply or cause any Parcel of Property or Unit of
Equipment to comply with any Legal Requirements applicable to any Parcel of
Property or Unit of Equipment or the occupancy, use or operation thereof, so
long as no Event of Default exists under this Lease with respect to any Parcel
of Property or Unit of Equipment, and, in the judgment of the Lessee's counsel,
the Lessee shall have reasonable grounds to contest the existence, amount,
applicability or validity thereof by appropriate proceedings, which proceedings
in the reasonable judgment of the Lessor, (i) shall not involve any material
danger that any Parcel of Property or Unit of Equipment or any Basic Rent or any
Additional Rent would be subject to sale, forfeiture or loss or loss of use as a
result of failure to comply therewith, (ii) shall not affect the payment of any
Basic Rent or any Additional Rent or other sums due and payable hereunder or
result in any such sums being payable to any Person other than the Lessor or any
Assignee, (iii) will not place the Lessor in any danger of any monetary civil
liability for which the Lessor is not adequately indemnified (the Lessee's
obligations under Section 11 of this Lease shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
penalty, or to any criminal liability, (iv) if involving taxes, shall suspend
the collection of taxes, and (v) shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which the Lessee or
the Parcel of Property or Unit of Equipment is subject and shall not constitute
a default thereunder (the "Permitted Contest"). The Lessee shall conduct all
Permitted Contests in good faith and with due diligence and shall promptly after
the final determination (including appeals) of any Permitted Contest pay and
discharge all amounts which shall be determined to be payable therein. The
Lessor shall at the Lessee's expense cooperate in good faith with the Lessee
with respect to all Permitted Contests conducted by the Lessee pursuant to this
Section 27, including, without limitation, in assisting in the preparation of,
and participating in, filings related to such Permitted Contests.
39.2 At least ten (10) days prior to the commencement of any
Permitted Contest, the Lessee shall notify the Lessor in writing thereof if the
amount in contest exceeds $1,000,000 and shall describe such proceeding in
reasonable detail. In the event that a taxing authority or subdivision thereof
proposes an additional assessment or levy of
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
any tax for which the Lessee is obligated to reimburse the Lessor under this
Lease, or in the event that the Lessor is notified of the commencement of an
audit or similar proceeding which could result in such an additional assessment,
then the Lessor shall in a timely manner notify the Lessee in writing of such
proposed levy or proceeding.
39.3 The Lessor and the Lessee agree that no Event of Default or
Potential Default shall be deemed to have occurred if the existence of the event
causing such Event of Default or Potential Default, as the case may be, is being
contested by the Lessee as a Permitted Contest in accordance with the terms of
this Section 27.
SECTION 40. LEASEHOLD INTERESTS.
The following provisions relate to the Site Lease, the Sublease
and each additional lease under which a leasehold interest in a Parcel of
Property is subleased to the Lessee or a Permitted Sublessee hereunder (each, a
"Ground Lease"):
40.1 The Lessee hereunder covenants and agrees to perform and to
observe and to cause each Permitted Sublessee to perform and observe all of the
terms, covenants, provisions, conditions and agreements of the underlying Ground
Leases on the Lessor's part as lessee or sublessee thereunder to be performed
and observed (including, without limitation, payment of all rent, additional
rent and other amounts payable by the Lessor as lessee under any Ground Lease)
to the end that all things shall be done which are necessary to keep unimpaired
the rights of the Lessor as lessee under any Ground Lease. The Lessee further
covenants that it shall cause to be exercised any renewal option contained in
the Ground Lease which relates to renewal occurring in whole or in part during
the term of this Lease. The Lessee agrees to cooperate fully with the Lessor to
enforce the Lessor's rights as the lessee under any Ground Lease as against the
lessor under such Ground Lease.
40.2 The Lessee covenants and agrees pursuant to Section 11
hereof to indemnify and hold harmless the Lessor and any Assignee from and
against any and all liability, loss, damage, suits, penalties, claims and
demands of every kind and nature (including, without limitation, reasonable
attorneys' fees and expenses) by reason of the Lessee's or any Permitted
Sublessee's failure to comply with any Ground Lease or the provisions of this
Section 28.
40.3 The Lessor and the Lessee agree that the Lessor shall have
no obligation or responsibility to provide services or equipment required to be
provided or repairs or restorations required to be made in accordance with the
provisions of any Ground Lease by the lessor thereunder. The Lessor shall in no
event be liable to the Lessee nor shall the obligations of the Lessee hereunder
be impaired or the performance thereof excused because of any failure or delay
on the part of the lessor under any Ground Lease in providing such services or
equipment or making such restorations or repairs and such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
failure or delay shall not constitute a basis for any claim against the Lessor
or any offset against any amount payable to the Lessor under this Lease.
40.4 The Lessor's interest under any Ground Lease shall not
expire, terminate or otherwise be extinguished without the prior written consent
of the Lessor.
40.5 The Lessee shall ensure that the Site Lease and the Sublease
shall each be a Mortgageable Ground Lease.
SECTION 41. MISCELLANEOUS.
41.1 All indemnities, representations and warranties, and the
obligation to pay Additional Rent contained in this Lease shall survive the
expiration or other termination hereof.
41.2 This Lease, the Unit Leasing Records and the AFL Unit
Leasing Records covering Property or Equipment leased pursuant hereto, the other
Operative Documents and the instruments, documents or agreements referred to
herein and therein constitute the entire agreement between the parties and no
representations, warranties, promises, guarantees or agreements, oral or
written, express or implied, have been made by any party hereto with respect to
this Lease or the Property or Equipment, except as provided herein or therein.
41.3 This Lease may not be amended, modified or terminated, nor
may any obligation hereunder be waived orally, and no such amendment,
modification, termination or waiver shall be effective for any purpose unless it
is in writing, signed by the party against whom enforcement thereof is sought. A
waiver on one occasion shall not be construed to be a waiver with respect to any
other occasion.
41.4 The captions in this Lease are for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof. Any provision of this Lease which is prohibited by law or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and the parties hereto shall negotiate in good
faith appropriate modifications to reflect such changes as may be required by
law, and, as nearly as possible, to produce the same economic, financial and tax
effects as the provision which is prohibited or unenforceable; and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Lessee and the Lessor hereby waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect. THIS LEASE HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
YORK. THE LESSEE AND THE LESSOR AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY
THE LAW OF
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
THE STATE OF NEW YORK, THIS LEASE, AND THE RIGHTS AND DUTIES OF THE LESSEE AND
THE LESSOR HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTIONS 5-1401
AND 5- 1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) IN ALL RESPECTS, INCLUDING
WITHOUT LIMITATION IN RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THE LESSEE HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN THE
COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND
RELATED TO OR IN CONNECTION WITH THIS LEASE OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES
AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS LEASE OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE AGREES NOT TO SEEK AND HEREBY
WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF
ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
ENFORCEMENT OF SUCH JUDGMENT. THE LESSEE AGREES THAT SERVICE OF PROCESS MAY BE
MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET
FORTH IN THIS LEASE OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. THE LESSOR
AND THE LESSEE EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER IN TORT OR CONTRACT OR OTHERWISE) IN ANY WAY
RELATED TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE LESSOR AND
THE LESSEE ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH (D) OF SECTION 29
HAVE BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN
CONNECTION THEREWITH.
41.5 In connection with any sale of Property or Equipment
pursuant to Section 15 or 19 of this Lease, when the Lessor transfers title,
such transfer shall be on an as-is, non-installment sale basis, without warranty
by, or recourse to, the Lessor, except that such title shall be free of any
Liens resulting from the Lessor's willful or knowing act or omission.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
41.6 In connection with the sale or purchase of Property or
Equipment pursuant to Section 15 or 19 of this Lease, the Lessee shall, without
limitation of any of its obligations hereunder or under any other Operative
Document, pay all transfer taxes, transfer gains taxes, mortgage recording tax,
if any, recording and filing fees and all other similar taxes, fees, expenses
and closing costs (including reasonable attorneys' fees) in connection with the
conveyance of such Property or Equipment to the Lessee or any purchaser.
41.7 If any costs of the Lessor related to the Agreement for
Lease which were not included in the Acquisition Cost of a Parcel of Property or
a Unit of Equipment are allocated to such Parcel of Property or such Unit of
Equipment pursuant to the definition of Unit Acquisition Cost in the Agreement
for Lease, the Lessee and the Lessor shall execute a revised AFL Unit Leasing
Record to amend the Acquisition Cost for such Parcel or such Unit of Equipment
to reflect such increase.
41.8 The Lessee and the Lessor agree to treat information
concerning the structure and documentation of the Agreement for Lease and this
Lease confidentially, except to the extent that disclosure is required by law
(in which circumstance such party will use reasonable efforts to notify the
other party prior to such disclosure of any information). The foregoing
constraint shall not include information: (i) that is now in the public domain
or subsequently enters the public domain without fault on the part of the party
proposing to disclose the same; (ii) currently known to the Lessee or the Lessor
from its own sources as evidenced by its prior written records; (iii) that the
Lessee or the Lessor receives from a third party not under any obligation to
keep such information confidential; or (iv) that is provided by Lessee or Lessor
to counsel, consultants, other advisors and regulatory authorities and Assignees
or proposed Assignees, provided such parties agree (including in writing if so
requested by the non-providing party) to treat any information so provided as
similarly confidential.
41.9 The Lessor recognizes the Lessee's right to call any
Property by such name or designation as the Lessee may deem appropriate or
reliable in the ordinary course of the Lessee's business and to place such
signs, labels, plates or other markings on any Property or Equipment as the
Lessee may desire in exercising such rights, subject to the provisions of
paragraph (b) of Section 8 hereof.
41.10 The Lessor shall provide to Lessee on the date hereof and
hereafter upon the reasonable request of the Lessee, a balance sheet of the
Lessor certified by the Lessor and showing that the Lessor's capitalization is
such that at least four percent (4%) of its capitalization consists of
contributions from the Lessor's general partner and limited partners.
41.11 In connection with the sale of any Property or Equipment
pursuant to the provisions of this Lease or the Purchase Option, the Lessor
shall convey, and the
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
purchaser shall accept a conveyance of, the Lessor's interest in the Operating
Agreement, the Gas Contract, all easements, licenses, Ground Leases, Ancillary
Facility Agreements and similar agreements for the benefit of such Property,
adjacent property or Equipment, such conveyance to be without warranty by, or
recourse to, the Lessor, except that such interest shall be free of any Liens
resulting from the Lessor's willful or knowing act or omission unrelated to an
occurrence of an Event of Default.
41.12 Upon the occurrence of an Event of Default and upon the
written request of the Lessee, which shall be received by the Lessor and any
Assignee not later than fifteen (15) Business Days subsequent to receipt by the
Lessee of notice (an "Event of Default Notice") from the Lessor or any Assignee
pursuant to this Lease that an Event of Default has occurred, the Lessee shall
have the right but not the obligation, not later than thirty (30) Business Days
after the Lessee received the notice of the Event of Default from the Lessor or
any Assignee, to purchase all Property and Equipment at a price equal to the
Acquisition Cost for such Property and Equipment, provided that the purchase
option contained in this paragraph shall only be available to the Lessee if the
purchase price and all other amounts paid by the Lessee would not in the
circumstances in which such payment is made constitute a preferential payment or
a voidable transfer pursuant to the provisions of the Federal Bankruptcy Code in
a bankruptcy proceeding by or against the Lessee and will not otherwise result
in the payment being subject to recapture from the Lessor. In connection with,
and as a condition to, the purchase of any Property and Equipment pursuant
hereto, (i) the Lessee shall pay at the time of purchase, in addition to the
Acquisition Cost of the Property and Equipment, all other amounts payable by the
Lessee under this Lease, including, without limitation, all Accrued Default
Obligations, and all transfer taxes, transfer gains taxes, mortgage recording
tax, if any, recording and filing fees and all other similar taxes, fees,
expenses and closing costs (including reasonable attorneys' fees) in connection
with the conveyance of such Property and Equipment to the Lessee and all other
amounts owing hereunder, and (ii) when the Lessor transfers title, such transfer
shall be on an as-is, non-installment sale basis, without warranty by, or
recourse to, the Lessor, except that such title shall be free of any Liens
resulting from the Lessor's willful or knowing act or omission.
41.13 Notwithstanding any provision of this Lease to the
contrary, for purposes of any Parcel of Property for which Substantial
Completion (as defined in the Agreement for Lease) has not yet been effected,
such Parcel shall continue to be subject to the provisions of the Agreement for
Lease, and the provisions of the first sentence of paragraph (a) of Section 8 of
this Lease, the final two sentences of paragraph (e) of Section 8 of this Lease,
the second and third sentences of paragraph (b) of Section 9 of this Lease,
paragraph (e) of Section 9 of this Lease, paragraph (f) of Section 9 of this
Lease, paragraph (g) of Section 9 of this Lease and clause (i) of paragraph (c)
of Section 10 of this Lease shall not be applicable to such Parcel.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
41.14 Subject to the terms and conditions contained in each
Assignment and Consent, the Lessor hereby assigns to the Lessee all of the
Lessor's right, title and interest in, to and under the Gas Contract, the
Operating Agreement and each Ancillary Facility Agreement from the date hereof
until the termination of the Lease Term with respect to the Ammonia Project.
SECTION 42. NO RECOURSE.
42.1 The Lessor's obligations hereunder are intended to be the
obligations of a limited partnership and of the corporation which is the general
partner thereof only and no recourse for the payment of any amount due under
this Lease or any other Operative Document or for any claim based thereon or
otherwise in respect thereof, shall be had against any limited partner of the
Lessor or any incorporator, shareholder, officer, director or Affiliate, as
such, past, present or future of such corporate general partner or of any
corporate limited partner or of any successor corporation to such corporate
general partner or any corporate limited partner of the Lessor, or against any
direct or indirect parent corporation of such corporate general partner or of
any limited partner of the Lessor or any other subsidiary or Affiliate of any
such direct or indirect parent corporation or any incorporator, shareholder,
officer or director, as such, past, present or future, of any such parent or
other subsidiary or Affiliate, it being understood that the Lessor is a limited
partnership formed for the purpose of the transactions involved in and relating
to this Lease and the Operative Documents on the express understanding
aforesaid. Nothing contained in this paragraph (a) of Section 30 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Lease and the Operative Documents and any other documents referred to
herein, of rights and remedies against the limited partnership or the corporate
general partner of the Lessor or the assets of the limited partnership or the
corporate general partner of the Lessor.
42.2 The Lessee's obligations hereunder are intended to be the
obligations of a limited partnership and of the corporation which is the general
partner thereof only and no recourse for any obligation of the Lessee hereunder,
or for any claim based thereon or otherwise in respect thereof, shall be had
against any limited partner of the Lessee or any incorporator, shareholder,
officer or director, or Affiliate, as such, past, present or future of such
corporate general partner or limited partner or of any successor corporation to
such corporate general partner or any corporate limited partner of the Lessee,
or against any direct or indirect parent corporation of such corporate general
partner or of any limited partner of the Lessee or any other subsidiary or
Affiliate of any such direct or indirect parent corporation or any incorporator,
shareholder, officer or director, as such, past, present or future, of any such
parent or other subsidiary or Affiliate. Nothing contained in this paragraph (b)
of Section 30 shall be construed to limit the exercise or enforcement, in
accordance with the terms of this Lease, the PCS Guaranty and the Operative
Documents and any other documents referred to herein, of rights and remedies
against the corporate
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
general partner of the Lessee or the assets of the corporate general partner of
the Lessee or against the Guarantor under the PCS Guaranty.
SECTION 43. NO MERGER.
There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in any Parcel of Property by reason of the
fact that the same person acquires or holds, directly or indirectly, this Lease
or the leasehold estate hereby created or any interest herein or in such
leasehold estate as well as the fee estate in any Parcel of Property or any
interest in such fee estate.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this
Lease to be executed and delivered by their duly authorized officers as of the
day and year first above written.
Trinidad Ammonia Company, Limited Partnership,
by Trinidad Ammonia Capital, Inc., its
General Partner
By____________________________________
Name:
Title:
PCS Nitrogen Fertilizer, L.P., by PCS Nitrogen
Fertilizer Operations, Inc., its General Partner
By____________________________________
Name:
Title:
<PAGE> 72
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT A
Type of Equipment or Property
1. Ammonia Project
2. Other**
- ----------
* To be determined by agreement of the Lessee and the Lessor.
<PAGE> 73
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT B
AFL UNIT LEASING RECORD to Lessor: Trinidad Ammonia Company,
the Amended and Restated Lease Agreement, Limited Partnership
dated as of May 16, 1997, between Lessee: PCS Nitrogen Fertilizer, L.P.
Trinidad Ammonia Company,
Limited Partnership, as lessor,
and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. AFL ULR No.:
Effective Date of this AFL
Unit Leasing Record ("AFL ULR") __________, 19__.
B. PLEASE COMPLETE THE FOLLOWING STATEMENTS, IF APPLICABLE:
1. This AFL ULR relates to [Deed/Ground Lease] dated __________ 19__.
PROPERTY DESCRIPTION AND RENTAL INFORMATION.
C. Type of Property (use category specified in Exhibit A to the Lease
Agreement)
D. Specific Description: (See Schedule A hereto if more space needed)
__________________________________________________________________________
__________________________________________________________________________
E. Location of
Property _______________________________________________________________
State County City Country
F. Unit Acquisition Cost under the Agreement for Lease as at the date hereof
is $_____________.
G. If the Effective Date of this AFL ULR is after the first day of the month
and prior to the Lease Rate Date in such month, the partial first month's
Basic Rent for Property placed under lease by this AFL ULR will be paid
from the date of this AFL ULR until the end of the month on the Basic Rent
Payment Date in such month. If the Effective Date of the AFL ULR falls on
or after the Lease Rate Date, the partial first month's Basic Rent will be
paid from the date of this AFL ULR until the end of the month on the next
succeeding Basic Rent Payment Date.
<PAGE> 74
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
H. The Initial Term and Renewal Term for the Property placed under lease
pursuant to this AFL ULR will be in accordance with the Lease Agreement.
I. The Basic Rent is as defined in the Lease Agreement.
J. Termination of the lease of the Property leased pursuant to this AFL ULR
will be in accordance with the Lease Agreement.
K. ACKNOWLEDGMENT AND EXECUTION
The undersigned Lessor hereby leases to the undersigned Lessee, and the
Lessee acknowledges delivery to it in good condition of the Property
described on this AFL ULR. The Lessee agrees to pay the Basic Rent,
Additional Rent and additional payments set forth in the Lease Agreement.
The covenants, terms and conditions of this lease are those appearing in
the Lease Agreement, as it may from time to time be amended, which
covenants, terms and conditions are hereby incorporated by reference. The
terms used herein have the meaning assigned to them in the Lease
Agreement.
PCS Nitrogen Fertilizer, L.P., Trinidad Ammonia Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Trinidad Ammonia Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By_____________________________ By_____________________________
Name: Name:
Title: Title:
2
<PAGE> 75
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT C
UNIT LEASING RECORD to Lessor: Trinidad Ammonia Company,
the Amended and Restated Lease Agreement, Limited Partnership
dated as of May 16, 1997, Lessee: PCS Nitrogen Fertilizer, L.P.
between Trinidad Ammonia Company,
Limited Partnership, as lessor,
and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. ULR No.:
Effective Date of this
Unit Leasing Record ("ULR") __________________, 19__.
B. PLEASE COMPLETE THE FOLLOWING STATEMENTS, IF APPLICABLE:
1. This ULR relates to [Deed/Ground Lease/Bill of Sale/Invoice] dated
__________________, 19__.
PROPERTY OR EQUIPMENT DESCRIPTION AND RENTAL INFORMATION
C. Type of Property or Equipment (use category specified in Exhibit A to the
Lease Agreement)
_____________________________
D. Specific Description (See Schedule A hereto if more space needed)
__________________________________________________________________________
__________________________________________________________________________
E. Location of Property
or Equipment _____________________________________________________
State County City Country
F. Basic Cost Additional Charges Sale & Use Tax Acquisition Cost
$ + $ + $ = $
---------------- --------------- --------------- ---------------
G. If the Effective Date of this ULR is after the first day of the month and
prior to the Lease Rate Date in such month, the partial first month's
Basic Rent for Property or
<PAGE> 76
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
Equipment placed under lease by this ULR will be paid from the date of
this ULR until the end of the month on the Basic Rent Payment Date in such
month. If the Effective Date of this ULR falls on or after the Lease Rate
Date, the partial first month's Basic Rent will be paid from the date of
this ULR until the end of the month on the next succeeding Basic Rent
Payment Date.
H. The Initial Term and Renewal Term for the Property or Equipment placed
under lease pursuant to this ULR will be in accordance with the Lease
Agreement.
I. The Basic Rent is as defined in the Lease Agreement.
J. Termination of the lease of the Property or Equipment leased pursuant to
this ULR will be in accordance with the Lease Agreement.
K. ACKNOWLEDGMENT AND EXECUTION
The undersigned Lessor hereby leases to the undersigned Lessee, and the
Lessee acknowledges delivery to it in good condition of the Property or
Equipment described on this ULR. The Lessee agrees to pay the Basic Rent,
Additional Rent and additional payments set forth in the Lease Agreement.
The covenants, terms and conditions of this lease are those appearing in
the Lease Agreement, as it may from time to time be amended, which
covenants, terms and conditions are hereby incorporated by reference. The
terms used herein have the meaning assigned to them in the Lease
Agreement.
PCS Nitrogen Fertilizer, L.P., Trinidad Ammonia Company,
Lessee Limited Partnership, Lessor
By PCS Nitrogen Fertilizer By Trinidad Ammonia Capital, Inc.,
Operations, Inc., its General Partner
its General Partner
By______________________________ By______________________________
Name: Name:
Title: Title:
2
<PAGE> 77
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
Description of the Ammonia Project
<PAGE> 78
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT E
Minimum Lease Payment Calculations
<PAGE> 79
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
Legal Description of Parcel of Property
Constituting Part of Ammonia Project
<PAGE> 80
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
Form of CRA Agreement
<PAGE> 81
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
TABLE OF CONTENTS
PAGE
----
PARTIES .................................................................. 1
SECTION 1. DEFINED TERMS ................................................ 1
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
LESSEE ....................................................... 17
SECTION 3. LEASE OF PROPERTY OR EQUIPMENT ............................... 22
SECTION 4. OPERATING LEASE .............................................. 24
SECTION 5. DELIVERY ..................................................... 24
SECTION 6. INITIAL TERM; RENEWAL TERM ................................... 28
SECTION 7. RENT AND OTHER PAYMENTS ...................................... 28
SECTION 8. RESTRICTED USE; COMPLIANCE WITH LAWS ......................... 30
SECTION 9. MAINTENANCE, IMPROVEMENT AND REPAIR OF PROPERTY OR
EQUIPMENT .................................................... 33
SECTION 10. INSURANCE .................................................... 35
SECTION 11. INDEMNITIES .................................................. 39
SECTION 12. LEASE RENEWAL ................................................ 42
SECTION 13. LEASE EXPIRATION ............................................. 43
SECTION 14. CHARACTER OF AMMONIA PROJECT ................................. 45
SECTION 15. LOSS OF OR DAMAGE TO PROPERTY OR EQUIPMENT ................... 45
SECTION 16. CONDEMNATION AND DEDICATION OF PROPERTY;
EASEMENTS .................................................... 47
i
<PAGE> 82
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 17. SURRENDER OF PROPERTY OR EQUIPMENT ........................... 48
SECTION 18. EVENTS OF DEFAULT ............................................ 49
SECTION 19. RIGHTS UPON DEFAULT .......................................... 51
SECTION 20. EQUIPMENT TO BE PERSONAL PROPERTY ............................ 55
SECTION 21. SALE OR ASSIGNMENT BY LESSOR ................................. 55
SECTION 22. INCOME TAXES ................................................. 55
SECTION 23. NOTICES AND REQUESTS ......................................... 56
SECTION 24. COVENANT OF QUIET ENJOYMENT .................................. 58
SECTION 25. RIGHT TO PERFORM FOR LESSEE .................................. 58
SECTION 26. MERGER, CONSOLIDATION OR SALE OF ASSETS ...................... 58
SECTION 27. PERMITTED CONTESTS ........................................... 59
SECTION 28. LEASEHOLD INTERESTS .......................................... 60
SECTION 29. MISCELLANEOUS ................................................ 61
SECTION 30. NO RECOURSE .................................................. 64
SECTION 31. NO MERGER .................................................... 65
Exhibit A - Categories of Equipment and Property
Exhibit B - Form of AFL Unit Leasing Record
Exhibit C - Form of Unit Leasing Record
Exhibit D - Description of the Ammonia Project
Exhibit E - Minimum Lease Payment Calculations
Exhibit F - Legal Description of Parcel of Property Constituting Part of Ammonia
Project
Exhibit G - Form of CRA Agreement
ii
<PAGE> 1
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(p)
AMENDED AND RESTATED AGREEMENT FOR LEASE
between
Nitrogen Leasing Company, Limited Partnership
and
PCS Nitrogen Fertilizer, L.P.
Dated as of May 16, 1997
THIS AMENDED AND RESTATED AGREEMENT HAS BEEN ASSIGNED AS
SECURITY FOR INDEBTEDNESS OF THE OWNER. SEE SECTION 17.
This Amended and Restated Agreement 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 Agreement
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any jurisdiction), no security interest in this Amended and
Restated Agreement may be created or perfected through the transfer or
possession of any counterpart other than the original counterpart which shall be
the counterpart identified as counterpart No. 1.
<PAGE> 2
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
AMENDED AND RESTATED AGREEMENT FOR LEASE
Amended and Restated Agreement for Lease 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 "Agreement"), between Nitrogen Leasing Company, Limited
Partnership, a Delaware limited partnership ("Owner") and PCS Nitrogen
Fertilizer, L.P. (formerly Arcadian Fertilizer, L.P.), a Delaware limited
partnership, individually and, to the extent provided for herein, as agent of
Owner (in either such capacity, the "Agent").
Owner and Agent entered into an Agreement for Lease, dated
as of March 27, 1996, as amended, and said parties now desire to further amend
and restate said Agreement for Lease. Accordingly, said Agreement for Lease and
all Exhibits thereto are hereby amended and restated in their entirety as herein
provided:
WHEREAS, Owner may from time to time acquire either (i) a
fee interest or (ii) a leasehold interest pursuant to a Ground Lease
(hereinafter defined) in certain Unit Premises (hereinafter defined); and
WHEREAS, on or about the date of this Agreement, Owner and
Agent propose to enter into the Lease (hereinafter defined), providing for the
lease or sublease by Agent of certain Unit Improvements (hereinafter defined)
which will be constructed and furnished on such Unit Premises pursuant to the
terms of this Agreement; and
WHEREAS, Owner desires to appoint Agent to act as agent for
Owner in connection with the selection of Owner's fee and/or leasehold interests
in Unit Premises from time to time, and with the construction of Unit
Improvements and the installation of Unit FF&E thereon, if any, and in
connection with all matters related to such construction, and Agent wishes to
accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Owner and Agent hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement each
of the following terms shall have the meaning specified with respect thereto:
Accrued Default Obligations: Defined pursuant to paragraph
(e) of subsection 11.2 hereof.
<PAGE> 3
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Acquisition Certificate: The written certification of Agent
to be delivered to Owner in connection with the making of the Initial Advance
hereunder, which contains the information and representations of Agent as
required by Section 4 of this Agreement, and which is substantially in the form
of Exhibit C hereto.
Affiliate: Defined pursuant to subsection 1.2 hereof.
AFL Unit Leasing Record: An instrument, substantially in
the form of Exhibit B hereto, evidencing the lease of a Unit under the Lease.
Agent: PCS Nitrogen Fertilizer, L.P. (formerly Arcadian
Fertilizer, L.P.), a Delaware limited partnership.
Agreement: This Amended and Restated Agreement for Lease,
as the same may be further amended, restated, modified or supplemented from time
to time pursuant to and in compliance with the Operative Documents.
Ammonia Project: The Unit Premises located in the Republic
of Trinidad and Tobago and described on Exhibit J hereto in which Owner will,
subject to the provisions hereof, acquire a leasehold interest and the related
Unit Improvements and Unit FF&E constituting the ammonia production plant which
are to be located on or about such Unit Premises, as described in Exhibit J
hereto.
Ancillary Facility Agreement: Any of the contracts entered
into by Agent or an Affiliate of Agent and assigned to Owner 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 as listed on Exhibits M-1
through M-3 hereto and the License Agreements relating to pipelines and similar
facilities necessary for the operation and maintenance of the Ammonia Project.
Ancillary Facility Agreement Consents: Each Estoppel
Certificate, Consent and Agreement (including all acknowledgments with respect
thereto) relating to an Ancillary Facility Agreement entered into by the
National Energy Corporation of Trinidad and Tobago Limited, the Trinidad and
Tobago Electricity Commission and the Water and Sewage Authority of Trinidad and
Tobago and the consents of Point Lisas and the Operator relating to the Sublease
Agreement.
Assignee: Defined pursuant to subsection 1.2 hereof.
Assignment Agreements: Each agreement entered into between
an Affiliate of Agent and Owner, pursuant to which such Affiliate's rights under
the Gas Contract, each Ancillary Facility Agreement and each License Agreement
are assigned to Owner.
ii
<PAGE> 4
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Business Day: Defined pursuant to subsection 1.2 hereof.
Cash Reserve Account: Defined in the CRA Agreement.
Cash Reserve Trigger Event: Each of (i) the date that the
Guarantor's senior unsecured long-term credit is rated below BBB- by Standard &
Poor's Ratings Group (or any successor entity thereto) and below Baa3 by Moody's
Investors Services, Inc. (or any successor entity thereto) and (ii) the date
following any CRA Release Event that the Guarantor's senior unsecured long-term
credit is again rated below BBB- by Standard & Poor's Ratings Group (or any
successor entity thereto) and below Baa3 by Moody's Investors Services, Inc. (or
any successor entity thereto).
Casualty Event: Any of the events specified in subsection
11.5 hereof.
Certificate of Increased Cost: The certificate delivered by
Agent to Owner pursuant to Section 7 hereof in connection with a request for a
Completion Advance, and which is substantially in the form of Exhibit F hereto.
Certificate of Substantial Completion: The certificate
delivered by Agent to Owner pursuant to Section 6 hereof in connection with a
request for a Final Advance, and which is substantially in the form of Exhibit E
hereto.
Completion Advance: Any advance made by Owner upon
satisfaction or waiver of the conditions set forth in Section 7 hereof.
Consent: Defined pursuant to subsection 1.2 hereof.
Construction Agreement: Each agreement between Owner and a
General Contractor, providing for the construction of Unit Improvements, as the
same may be amended, restated, modified or supplemented from time to time
pursuant to and in compliance with the Operative Documents. A copy of each
Construction Agreement related to the Ammonia Project is attached as Exhibit L-1
hereto.
Construction Agreement Surety: The guaranty of Dresser
Industries, Inc. with respect to the General Contractor's obligations under each
Construction Agreement, which guaranty is for the benefit of Owner. A copy of
such Construction Agreement Surety is attached as Exhibit L-2 hereto.
Construction Documents: The collective reference to the
Construction Agreement(s), the Unit Plans, the Permits and all other agreements
entered into by Agent or its Affiliate with respect to constructing, equipping,
furnishing and decorating the Unit.
iii
<PAGE> 5
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
CRA Agreement: Defined pursuant to subsection 1.2 hereof.
CRA Release Event: The date, following any Cash Reserve
Trigger Event, that the Guarantor's senior unsecured long-term credit is rated
BBB- or higher by Standard & Poor's Ratings Group (or any successor entity
thereto) and Baa3 or higher by Moody's Investors Services, Inc. (or any
successor entity thereto).
Credit Agreement: Defined pursuant to subsection 1.2
hereof.
Debt: Defined pursuant to subsection 1.2 hereof.
Designated Effective Date: Thirty (30) months from the date
on which the Initial Advance is made by Owner to Agent pursuant to Section 4
hereof. With respect to the Ammonia Project, the Designated Effective Date shall
be deemed to be September 30, 1998.
Effective Date: Defined pursuant to subsection 1.2 hereof.
Environmental Consultant: Pilko & Associates, Inc.
ERISA: Defined pursuant to subsection 1.2 hereof.
ERISA Event: Defined pursuant to subsection 1.2 hereof.
Event of Default: Any of the events constituting an Event
of Default, as specified in subsection 11.1 hereof.
Event of Unit Termination: Any of the events constituting
an Event of Unit Termination, as specified in subsection 11.3 hereof.
Final Advance: Any advance made by Owner upon satisfaction
or waiver of the conditions of Section 6 hereof.
Financing Costs: All interest costs (including, without
limitation, interest at a default rate), other costs, fees and expenses incurred
by or accrued to any date for the determination thereof for the account of Owner
under a Credit Agreement, and all costs, fees and expenses incurred by or
accrued for the account of Owner to such date in connection with obtaining
equity financing, including return on equity capital and interest on overdue
payments thereof.
Fiscal Quarter: Any of the three-month periods ending on
the last day of March, June, September and December in each year.
iv
<PAGE> 6
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Force Majeure Delay: Any delay caused by conditions beyond
the control of Agent or any of its Affiliates (assuming that Agent and its
Affiliates are in compliance with their obligations under the Operative
Documents), including, without limitation, acts of God or the elements, fire,
strikes, labor disputes, delays in delivery of material and disruption of
shipping, which does not have the effect of extending the Unit Completion Date
for the relevant Unit beyond two hundred and seventy (270) days in the
aggregate.
Gas Contract: 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).
General Contractor: Any contractor or contractors as may be
engaged by Agent or its Affiliate from time to time for construction of Unit
Improvements.
Governmental Action: Any action as defined in subsection
8.5 hereof.
Governmental Authority: Any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, or agencies, courts or arbitral panels having jurisdiction over
or application to any Unit Premises, Unit Improvements, Unit FF&E, Unit, Agent,
any Affiliate of Agent or Owner.
Ground Lease: Each ground lease, including, without
limitation, the Site Lease and the Sublease (each of which Site Lease and
Sublease must be a Mortgageable Ground Lease) and each additional lease under
which a leasehold interest in a Unit Premises is leased to Owner or is subleased
to Agent or a Permitted Sublessee (as defined in the Lease).
Guarantor: Potash Corporation of Saskatchewan Inc., a
corporation organized under the laws of the Province of Saskatchewan and an
Affiliate of Agent, and its successors.
Indemnified Person: Any Person as defined in Section 12
hereof.
Initial Advance: Any advance made by Owner upon
satisfaction or waiver of the conditions set forth in Section 4 hereof.
Insurance Requirements: Defined pursuant to subsection 1.2
hereof.
v
<PAGE> 7
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Interim Advance: Any advance made by Owner to Agent upon
satisfaction or waiver of the conditions set forth in Section 5 hereof.
Interim Advance Certificate: A certificate delivered by
Agent to Owner pursuant to Section 5 hereof in connection with a request for an
Interim Advance, and which is substantially in the form of Exhibit D hereto.
Lease: The Lease Agreement, dated as of March 27, 1996, by
and between Owner, as lessor, and Agent, as lessee, as amended (the "Original
Lease"), as further amended and restated as of the date hereof and as it may be
further amended, restated, modified or supplemented from time to time pursuant
to, and in compliance with, the provisions of the Operative Documents. A copy of
the Lease is attached as Exhibit A hereto.
Legal Requirements: 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
Authorities, 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 term of this Agreement, whether or not such compliance shall require
structural, unforeseen or extraordinary changes to any Unit or the operation,
occupancy or use thereof, except any thereof promulgated by a Governmental
Authority of the jurisdiction of organization of Owner with application
exclusively to Owner.
License Agreements: Defined pursuant to subsection 1.2
hereof.
Lien: Defined pursuant to subsection 1.2 hereof.
Material Subsidiaries: Potash Corporation of Saskatchewan
Sales Limited, LLC, PCS Nitrogen, Inc., PCS Phosphate Company, Inc. and any
other subsidiary of the Guarantor whose book value of assets is greater than 20%
of the book value of the assets of the Guarantor on a consolidated basis or
whose gross sales are greater than 20% of the gross sales of the Guarantor on a
consolidated basis.
Merrill Leasing: ML Leasing Equipment Corp., a Delaware
corporation.
Merrill Lynch: Merrill Lynch & Co., Inc., a Delaware
corporation.
Mortgageable Ground Lease: Defined pursuant to subsection
1.2 hereof.
Multiemployer Plan: Defined pursuant to subsection 1.2
hereof.
vi
<PAGE> 8
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Multiple Employer Plan: Defined pursuant to subsection 1.2
hereof.
Operating Agreement: Defined pursuant to subsection 1.2
hereof.
Operative Documents: This Agreement, the Lease, the
Construction Documents, the Project Documents, each Ground Lease, each
Assignment Agreement, the Ancillary Facility Agreement Consents, the PCS/NT Ltd.
Agreement, the Trinidad Government Agreement and the Point Lisas Agreement.
Operator: Defined pursuant to subsection 1.2 hereof.
Owner: Nitrogen Leasing Company, Limited Partnership or any
successor or successors to all of its rights and obligations as Owner hereunder.
PCS Guaranty: The guaranty agreement, dated as of the date
hereof, between the Guarantor and Owner, as the same may be amended, restated,
modified or supplemented from time to time.
PCS/N Ltd.: PCS Nitrogen Limited (formerly Arcadian
Nitrogen Limited), a Trinidad and Tobago private limited company.
PCS/NT Ltd.: PCS Nitrogen Trinidad Limited (formerly
Arcadian Trinidad Urea Limited, Arcadian Trinidad Ammonia Limited and Arcadian
Trinidad Limited), a Trinidad and Tobago private limited liability company.
PCS/NT Ltd. Agreement: 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: 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.
Permits: All consents, licenses, building, and operating
permits required for construction, completion, and operation of any Unit in
accordance with all Legal Requirements affecting such Unit.
Permitted Contest: Defined pursuant to paragraph (a) of
Section 16 hereof.
Permitted Liens: Defined pursuant to subsection 1.2 hereof.
Person: Defined pursuant to subsection 1.2 hereof.
vii
<PAGE> 9
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Plan: Defined pursuant to subsection 1.2 hereof.
Point Lisas: The Point Lisas Industrial Port Development
Corporation.
Point Lisas Agreement: The Deed of Direct Covenant dated
March 27, 1996 and all amendments, modifications and supplements related thereto
relating to the Site Lease entered into by Point Lisas.
Potential Default: Any event which, but for the lapse of
time, or giving of notice, or both, would constitute an Event of Default.
Potential Event of Unit Termination: Any event which, but
for the lapse of time, or giving of notice, or both, would constitute an Event
of Unit Termination.
Project Documents: The Gas Contract, the Operating
Agreement and each Ancillary Facility Agreement.
Project Parcel: The land, together with all required
appurtenant easements thereto, which is necessary for the siting, construction
and proper operation of the Ammonia Project as described on Exhibit K hereto.
Responsible Officer: The President, any Vice President or
Treasurer or Assistant Treasurer of the general partner of Agent, or any other
officer or similar official of the general partner of Agent responsible for the
administration of the obligations of Agent with respect to this Agreement.
Site Lease: 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: 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 Owner, as the same may
be amended, restated, modified or supplemented from time to time as permitted by
and in accordance with the Operative Documents.
Substantial Completion: With respect to any Unit, the
satisfaction or waiver of all requirements of Section 6 hereof.
viii
<PAGE> 10
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Surrender Date: Defined pursuant to paragraph (a) of
subsection 11.4 hereof.
Taking: Any event which is described in paragraph (b) of
subsection 11.5 hereof.
Trinidad Government Agreement: The Estoppel Certificate,
Consent and Agreement and all amendments, modifications and supplements thereto
relating to the Gas Contract entered into by the National Gas Company of
Trinidad and Tobago Limited.
Unit: Any Unit Premises and any Unit Improvements thereon
and related Unit FF&E, including without limitation the Ammonia Project.
Unit Acquisition Cost: With respect to any Unit the sum of
(a) the aggregate amount of advances made pursuant to this Agreement with
respect to the Unit and (b) all other costs of Owner (including costs incurred
by Agent but reimbursed by Owner) with respect to the Unit (except costs which
are not properly capitalized and costs for which Owner has been reimbursed or
chooses, in lieu of capitalization hereunder, to be reimbursed by Agent,
pursuant to the provisions of subsection 9.5 or Section 12 hereof) arising from
the acquisition, construction, equipping, and financing (including, without
limitation, Financing Costs and Owner's out-of-pocket expenses and fee
obligations in connection therewith) prior to the lease of the Unit under the
Lease, including all rent under any Ground Lease which is paid or prepaid by
Owner. Unit Acquisition Cost shall be reflected in the applicable AFL Unit
Leasing Record, as modified by any revised AFL Unit Leasing Record.
Unit Budget: The budget prepared or to be prepared by Agent
and delivered to, and approved by, Owner prior to the Initial Advance with
respect to any Unit, as amended from time to time, which budget shall set forth
in general detail costs relating to such of the following as Agent deems to be
appropriate: (a) the installation of Unit FF&E, if any, thereon; (b) all costs,
including, without limitation, the purchase price, survey and survey inspection
charges, appraisal, architectural, engineering, environmental analysis, soil
analysis and market analysis fees, title insurance premiums, brokerage
commissions, transfer fees and taxes that are customarily the responsibility of
the purchaser, closing adjustments for taxes, utilities and the like, escrow and
closing fees, recording and filing fees, the legal fees of Owner and Agent, and
all related costs and expenses incurred in acquiring and maintaining marketable
fee or leasehold title to such Unit and in leasing or subleasing such Unit to
Agent; (c) the costs of completion of the Unit Improvements in conformity with
the Unit Plans, the Construction Agreement or any contracts in replacement
thereof, including without limitation, costs of site preparation, acquiring or
granting easements and acquiring or installing equipment and all related
appliances, appurtenances, accessions, furnishings, materials and parts
(including all replacements and subsequent replacements thereto) in connection
with the completion of the Unit Improvements, making utility connections,
demolition, streets, parking areas, landscaping, development, off-site
improvements, design and related construction of the
ix
<PAGE> 11
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Unit Improvements and related facilities and the cost of necessary studies,
surveys, plans and permits, insurance and examination and incidental costs and
expenses related thereto incurred in acquiring and maintaining marketable fee or
leasehold title to such Unit and in leasing or subleasing such Unit and Unit
FF&E to Agent; (d) the costs of architects', attorneys', engineers' and other
professionals' fees and disbursements, in connection with the development,
planning, renovation, construction, start-up, testing and construction financing
of the Unit Improvements, including, without limitation, the fees and
disbursements of Owner's counsel in connection with this Agreement and the
duties of Owner hereunder, the Construction Agreement, and in all other matters
involving or reasonably related to this transaction; (e) costs of all charges
and assessments for the construction, improvement, maintenance, repair and
restoration of streets, roads, walks, sewer, gas, electrical, telephone and
water lines and other improvements levied upon the Unit until the Effective
Date; (f) the costs of all insurance, real estate, property and excise tax
assessments, sales and use taxes on materials used in construction, and other
operating and carrying costs paid, accrued, or levied upon the Unit or Owner in
connection with the Unit during the period from acquisition of the Unit Premises
until the Effective Date for such Unit; (g) costs of Agent's project
representatives (inspectors, consultants, etc.) incurred in its capacity as
agent for Owner; (h) a contingency amount of up to an additional twenty percent
(20%) of the aggregate of all such projected expenditures, which shall include
Financing Costs and otherwise shall be allocated to unexpected increases in the
costs associated with such Unit; and (i) any and all other costs arising from or
in connection with the construction period for such Unit Improvements during the
term of this Agreement. The Unit Budget with respect to the Ammonia Project
shall not exceed $301,000,000. A copy of the revised Unit Budget with respect to
the Ammonia Project is attached as Exhibit O hereto.
Unit Completion Date: With respect to the Ammonia Project,
May 15, 1998, unless an extension of the Unit Completion Date shall be agreed to
in writing among Agent, Owner and any Assignee, and with respect to any other
Unit, as agreed to in writing among Agent, Owner and any Assignee.
Unit FF&E: The specific items of furniture, fixtures and
equipment, if any, from the Unit FF&E Specifications which are installed or (if
such items have been acquired by Owner for installation) to be installed in a
particular Unit Improvement and any replacement parts thereof and for which
advances are made by Owner hereunder.
Unit FF&E Specifications: The list of furniture, fixtures
and equipment to be installed with the proceeds of advances hereunder in a
particular Unit Improvement, a copy of which with respect to the Ammonia Project
is attached as Exhibit G hereto.
Unit Improvements: The improvements to be constructed on an
individual Unit Premises in accordance with the Unit Plans for the Unit
Improvements to be built on such Unit Premises.
x
<PAGE> 12
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Unit Plans: The plans and specifications for the
construction and operating characteristics of any Unit Improvements, including,
without limitation, installation of curbs, sidewalks, gutters, landscaping,
utility connections (whether on or off the Unit Premises) and all fixtures
necessary for construction, operation and occupancy of the Unit and certain
equipment to be used in connection therewith, prepared or to be prepared by an
architect and Agent and approved by Owner, including such amendments,
modifications and supplements thereto as may from time to time be made by Agent;
provided that any subsequent material deviation from the Unit Plans selected for
the Unit shall be made only with Owner's prior consent, which consent shall not
be unreasonably withheld or delayed.
Unit Premises: Each individual parcel of land, in which
either a fee interest or a leasehold interest has been acquired by Owner for the
construction of Unit Improvements thereon, including without limitation the
Project Parcel.
Withdrawal Liability: Defined pursuant to subsection 1.2
hereof.
1.2 Other Definitional Provisions.
(a) For purposes of this Agreement, the terms "Affiliate",
"Assignee", "Business Day", "Consent", "CRA Agreement", "Credit Agreement",
"Debt", "Effective Date", "ERISA", "ERISA Event", "Insurance Requirements",
"License Agreements", "Lien", "Mortgageable Ground Lease", "Multiemployer Plan",
"Multiple Employer Plan", "Operating Agreement", "Operator", "Permitted Liens",
"Person", "Plan", and "Withdrawal Liability" shall have the meanings set forth
opposite those terms in the Lease, except that, for purposes of this Agreement,
the terms "the Lessor", "the Lessee" and "this Lease" if used in those
definitions in the Lease shall be deemed to be the terms "Owner", "Agent" and
"this Agreement", respectively, and if used in those definitions in the Lease,
each of the terms "Parcel", "Parcel of Property" and "Property" shall be deemed
to be the phrase "Unit Premises and related Unit Improvements" and each of the
terms "Unit of Equipment" and "Unit", shall be deemed to be an item of "Unit
FF&E".
(b) All terms defined in this Agreement shall have their
defined meanings when used in any certificate or other document made or
delivered pursuant hereto.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, paragraph, schedule and exhibit references are to this Agreement
unless otherwise specified.
xi
<PAGE> 13
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
SECTION 2. APPOINTMENT OF AGENT
2.1 Appointment and Duties of Agent. Subject to the terms
hereof, including, without limitation, the requirements of Section 4 hereof,
Owner hereby appoints Agent as its agent for the design, construction,
equipping, and installation of the Ammonia Project on the Project Parcel in
accordance with the Unit Plans and Unit Budget and, to the extent identified in
Exhibit G hereto, Unit FF&E with respect thereto and Agent hereby accepts such
appointment. By written agreement, Owner may appoint Agent as its agent in
respect of additional Unit Premises and Unit Improvements. Unit Improvements
must be of a type permitted to be leased under the Lease, as set forth in
Exhibit A to the Lease. Agent agrees to contract for, supervise and achieve the
good, workmanlike and timely completion of the Unit Improvements and
installation of Unit FF&E on each Unit Premises in accordance with the Unit
Budget and in all material respects in accordance with the Unit Plans, suitable
for its intended use. Owner and Agent agree that any obligation of Agent
herewith may be performed by an Affiliate of Agent; provided that Agent shall in
no event be relieved of any of its obligations under this Agreement by virtue of
any such performance. Upon request of Agent, Owner agrees to deliver to Agent a
separate executed power of attorney confirmatory of the power granted herein in
form suitable for recording. Owner and Agent agree that Agent shall be
responsible for the supervision of all matters relating to any Construction
Agreement; provided that, with respect to any Construction Agreement relating to
the Ammonia Project, all obligations of Owner under such Construction Agreement
shall be performed on Owner's behalf by PCS/N Ltd., an Affiliate of Agent;
provided, however, that Agent shall not be relieved of any of its obligations
hereunder.
2.2 Cost and Completion of a Unit. Owner and Agent agree
that (a) Unit Acquisition Cost shall be no more than $301,000,000 with respect
to the Ammonia Project and such amount as Agent, Owner and any Assignee agree in
writing with respect to any other Unit. Agent agrees to effect Substantial
Completion of any Unit Improvements on or before the applicable Unit Completion
Date. After receiving the Initial Advance with respect to a Unit, Agent may from
time to time amend, restate, modify, or supplement the Unit Plans, Unit Budget
or Unit FF&E Specifications relating thereto; provided that no such amendment,
modification or supplement shall increase the Unit Budget to an amount in excess
of the maximum cost for acquisition set forth in the first sentence of this
subsection 2.2 or result in the Unit not being completed on or prior to its Unit
Completion Date in all material respects in accordance with the Unit Plans.
Agent shall promptly deliver to Owner and any Assignee any such amended,
modified or supplemented Unit Plans, Unit Budget or Unit FF&E Specifications.
xii
<PAGE> 14
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
2.3 Lease of a Unit.
(a) Upon Substantial Completion of any Unit, Agent will
deliver to Owner the Certificate of Substantial Completion in the form of
Exhibit E hereto with respect to such Unit (including, without limitation, the
AFL Unit Leasing Record), and Agent shall request the Final Advance with respect
to such Unit. If the conditions set forth in Section 6 hereof have been
satisfied in the reasonable judgment of Owner, Owner, within five (5) Business
Days of receipt of the Certificate of Substantial Completion, a fully completed
AFL Unit Leasing Record executed by Agent and the other documents required in
Section 6 hereof, shall execute and deliver to Agent such AFL Unit Leasing
Record. Except as provided below, the Final Advance shall be made by Owner on
the date of execution by Owner of the AFL Unit Leasing Record. If Substantial
Completion of the Unit will not be effected on or before the Designated
Effective Date with respect to the Unit, Agent shall prepare and execute an AFL
Unit Leasing Record with respect to the Unit and deliver it to Owner, at least
five (5) days prior to the Designated Effective Date. Owner shall execute and
deliver to Agent the AFL Unit Leasing Record by the Designated Effective Date,
and Owner's obligation to make further advances, other than Completion Advances,
with respect to the Unit under this Agreement shall terminate on the Designated
Effective Date. Agent may request and receive on the Designated Effective Date
an advance pursuant to Section 5, provided all conditions to such advance under
Section 5 are met. Such AFL Unit Leasing Record shall have an Effective Date as
of the date of the Designated Effective Date. Execution and delivery by Agent of
the AFL Unit Leasing Record shall constitute (i) acknowledgment and
representation by Agent that each Unit included therein (taking into account its
then current state of construction) is in good condition, conforms in all
material respects to the Unit Plans and has been accepted for lease under the
Lease by Agent as of the Effective Date of the AFL Unit Leasing Record, (ii)
acknowledgment by Agent that each such Unit is subject to all of the covenants,
terms and conditions of the Lease, and (iii) certification by Agent that the
representations and warranties contained in Section 2 of the Lease are true and
correct in all material respects on and as of the Effective Date of the AFL Unit
Leasing Record as though made on and as of such date and that there exists on
such date no (1) Event of Default or, with respect to such Unit, Event of Unit
Termination or Casualty Event under this Agreement or Event of Default (as
defined in the Lease) or (2) Potential Default or, with respect to such Unit,
Potential Event of Unit Termination under this Agreement or Potential Default
(as defined in the Lease). Upon execution and delivery of an AFL Unit Leasing
Record by Owner, such Unit shall become a Parcel of Property (as defined in the
Lease).
(b) Notwithstanding the foregoing, but subject to the terms
of subsection 3.1 hereof, Agent may, by delivering to Owner a Certificate of
Increased Cost (in the form of Exhibit F hereto), at any time up to twelve (12)
months after the date on which the Final Advance has been made with respect to a
Unit or, if no Final Advance was made prior to the Designated Effective Date, at
any time prior to the Unit Completion Date, request Completion Advances in order
to pay construction costs that were not the subject of any previous advance.
xiii
<PAGE> 15
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Owner, within five (5) Business Days of receipt and upon Owner's approval of a
request for a Completion Advance and the Certificate of Increased Cost, shall
execute and deliver to Agent a revised AFL Unit Leasing Record for such Unit
reflecting such increased cost, and Agent, within five (5) Business Days of
receipt of such revised AFL Unit Leasing Record, shall sign the revised AFL Unit
Leasing Record and return it to Owner. If no Final Advance was made on or prior
to the Designated Effective Date, at the time Agent returns the executed revised
AFL Unit Leasing Record (which shall occur on a date on or prior to the Unit
Completion Date for such Unit), it shall also deliver the documents required by
Section 6 hereof as if a Final Advance was being made at such time. A Completion
Advance shall be made by Owner upon receipt of the revised AFL Unit Leasing
Record signed by Agent and, if applicable, the documentation required by the
previous sentence. Execution and delivery by Agent of the revised AFL Unit
Leasing Record shall constitute (i) acknowledgment and representation by Agent
that each Unit included therein is in good condition, conforms in all material
respects to the Unit Plans and has been accepted for lease under the Lease by
Agent as of the Effective Date of the AFL Unit Leasing Record, (ii)
acknowledgment by Agent that each such Unit is subject to all of the covenants,
terms and conditions of the Lease, and (iii) certification by Agent that the
representations and warranties contained in Section 2 of the Lease are true and
correct in all material respects on and as of the Effective Date of the revised
AFL Unit Leasing Record as though made on and as of such date and that there
exists on such date no (1) Event of Default or, with respect to such Unit, Event
of Unit Termination or Casualty Event under this Agreement or Event of Default
(as defined in the Lease) or (2) Potential Default or, with respect to such
Unit, Potential Event of Unit Termination under this Agreement or Potential
Default (as defined in the Lease).
2.4 Powers of Agent. Agent shall have the right to act for
and on behalf of Owner with full and complete authority to appear before each
applicable Governmental Authority to resolve issues related to the platting,
zoning and use of the Unit Premises, to obtain all Permits, to grant and obtain
easements for the benefit of any Unit Premises or which are reasonably deemed
necessary by Agent for the installation or operation of the Ammonia Project
(provided that no such action shall contravene any provision of any Ground
Lease) in all material respects in accordance with the Unit Plans, appoint,
employ and deal with the architects, engineers, consultants and contractors,
purchase and arrange for delivery of all materials, supplies, furniture,
fixtures, and equipment, and to approve all related vouchers, invoices and
statements. Notwithstanding the foregoing, Owner agrees to execute directly any
and all such documents which Governmental Authorities do not permit to be
exercised pursuant to a power of attorney or as Agent may reasonably deem to be
necessary to effect the purposes of this Agreement. No payment shall be made for
any property or services of such architects, engineers, consultants, or
contractors relating to the acquisition, construction and equipping of any Unit
without the prior approval of Agent, and each amount so approved and paid shall
be in accordance with the Unit Budget, and shall be part of the Unit Acquisition
Cost of such Unit. If Agent has unreasonably delayed or withheld giving the
approvals required to make such payments, Owner may make payments to any
architects, engineers,
xiv
<PAGE> 16
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
consultants, contractors, vendors or suppliers which are properly due and
payable in accordance with the contracts with said parties, and any such payment
so made shall be and become a part of the Unit Acquisition Cost of the Unit;
provided, however, that Owner shall not make any such payment if it is subject
to a Permitted Contest.
SECTION 3. ADVANCES
3.1 Agreement to Make Advances. Subject to the conditions
and upon the terms herein provided, including, without limitation, that the Unit
Budget not be exceeded, Owner agrees to make available to Agent advances from
time to time for each Unit up to an aggregate principal amount for such Unit
determined in accordance with the Unit Budget for such Unit and not in excess of
the maximum amount per Unit set forth in subsection 2.2 hereof. Subject to the
terms of this Agreement, Owner agrees to make (a) an Initial Advance with
respect to a Unit in accordance with Section 4 of this Agreement, (b) Interim
Advances from time to time in accordance with Section 5 of this Agreement, (c) a
Final Advance in accordance with Section 6 of this Agreement and (d) Completion
Advances in accordance with Section 7 of this Agreement.
3.2 Procedure for Advances. Agent shall give Owner notice
in accordance with Sections 4, 5, 6 and 7 hereof of its irrevocable request for
an advance pursuant to this Agreement, specifying a Business Day on which such
advance is to be made and the amount of the advance. Not later than 11:00 a.m.
New York time on the date for the advance specified in such notice, provided
that all conditions to that advance have been satisfied, Owner shall provide to
Agent, or to such other party as may be designated by Agent, in immediately
available funds, the amount of the advance then requested.
3.3 Determination of Amounts of Advances.
(a) Initial Advance. The amount of the Initial Advance with
respect to a Unit shall be made within the limits of the Unit Budget and in
accordance with the Acquisition Certificate, and shall be sufficient to pay in
full all components of Unit Acquisition Cost paid or incurred to the date
thereof including acquisition and closing costs of the respective Unit
including, without limitation, the purchase price, survey and survey inspection
charges, recording and filing fees, brokerage commissions, appraisal,
architectural, engineering, environmental analysis, soil analysis and market
analysis fees, transfer fees and taxes that are customarily the responsibility
of the purchaser, title insurance premiums, closing adjustments for taxes,
utilities, and the like, escrow fees, if any, construction materials and
existing structures, and the legal fees of Owner and Agent. All such costs for
which the Initial Advance is requested shall be set forth in the Unit Budget
attached to the Acquisition Certificate, and in the request for the Initial
Advance.
xv
<PAGE> 17
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(b) Interim Advances. Disbursements for the payment of or
the reimbursement of Agent for components of Unit Acquisition Cost for a Unit
shall be made upon the request of Agent from time to time, based upon the
certifications of Agent contained in an Interim Advance Certificate. Owner shall
have no obligation to make Interim Advances more often than once every seven (7)
days.
(c) Final Advance. The amount of the Final Advance shall be
made within the limits of the Unit Budget and in accordance with the Certificate
of Substantial Completion, and shall be sufficient, subject to the provisions of
paragraph (d) of this subsection 3.3, the payment of or the reimbursement of
Agent for components of Unit Acquisition Cost in connection with Substantial
Completion of the Unit, free of all Liens other than Permitted Liens. Owner
shall have no obligation to make the Final Advance unless Owner is satisfied
that all such costs as set forth in the Unit Budget, the Certificate of
Substantial Completion, and the request for the Final Advance have been actually
incurred, or in the case of punch list items will be incurred, in construction
and equipping of the Unit, free of all Liens, except for Permitted Liens and
shall not cause the Unit Acquisition Cost of the Unit to exceed the Unit Budget.
(d) Completion Advances. The amount of each Completion
Advance shall be made in accordance with and shall not exceed the amount set
forth in the Certificate of Increased Cost, shall not cause the Unit Acquisition
Cost of the Unit to exceed the Unit Budget, and shall be sufficient for payment
in full of all costs that are properly capitalizable and that were not the
subject of any previous advance with respect to such Unit. Owner shall have no
obligation to make a Completion Advance unless Owner is satisfied that all such
costs were reasonably estimated in the Unit Budget and are adequately set forth
in the Certificate of Increased Cost and will be sufficient for payment in full
of all costs with respect to such Unit.
3.4 Partial Advances. If any or all conditions precedent to
any advance have not been satisfied on the applicable date for a requested
advance, Owner, in its sole discretion, and with the consent of Assignee may,
but shall have no obligation to, disburse a part of the requested advance.
SECTION 4. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE WITH
RESPECT TO A UNIT
Owner's obligation to make the Initial Advance with respect
to a Unit shall be subject both to the satisfaction of the conditions set forth
in this Section 4 and to the receipt by Owner and any Assignee of the documents
set forth in this Section 4, in each case in form and substance reasonably
satisfactory to Owner and any Assignee. Owner and any Assignee shall have at
least five (5) Business Days to review the Acquisition Certificate and its
attachments prior to making any Initial Advance.
xvi
<PAGE> 18
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
The following are the documents to be received by Owner and
the conditions to be satisfied:
(a) Lease. With respect to the first advance only under
this Agreement, a fully executed copy of the Original Lease.
(b) Acquisition Certificate. A duly executed copy of the
Acquisition Certificate the statements in which shall be true.
(c) Warranty Deed. Where fee title is being acquired by
Owner, a photocopy of the executed purchase and sale agreement and the
warranty deed to be executed and delivered at the closing of the
acquisition of Owner's fee interest in such Unit Premises, conveying
marketable title to Owner, free of all Liens other than Permitted
Liens. For purposes of the Initial Advance, Permitted Liens shall not
include any mechanics' liens or materialmen's liens, or any taxes,
assessments, governmental charges or levies, except to the extent that
such taxes, assessments, governmental charges or levies are due and
payable but not yet delinquent, and have been properly apportioned with
the seller at closing.
(d) Memorandum of Lease Agreement. Except with respect to
the Ammonia Project, two original counterparts of a memorandum of lease
agreement in the appropriate form for recording in the jurisdiction in
which the Unit Premises is located, executed by Agent, as lessee, and
otherwise reasonably acceptable to Owner and Assignee.
(e) Ground Lease. Where a leasehold interest is being
acquired by Owner, a true and complete copy of the Site Lease, the
Sublease and each other Ground Lease, including a true and complete
copy of the legal description of the Unit Premises, executed or
intended to be executed and delivered at the closing of the acquisition
of Owner's leasehold interest, in a form approved by Owner, and
complying in all respects with this Agreement and with Section 28 of
the Lease, and not subject to any Liens other than Permitted Liens,
along with a memorandum of ground lease in statutory recordable form
and any necessary estoppel certificates, recognition and attornment
agreements, confirmations, and subordinations required by Owner's and
any Assignee's counsel regarding the Ground Lease. For purposes of the
Initial Advance, Permitted Liens shall not include any taxes,
assessments, governmental charges or levies, except to the extent that
such taxes, assessments, governmental charges or levies are due and
payable but not yet delinquent.
(f) Taxes. Certification by Agent that all past and current
taxes and assessments (excluding those which are due and payable but
not yet delinquent) applicable in respect of the acquisition of the
Unit or any component thereof by Owner,
xvii
<PAGE> 19
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
its leasing to Agent, or otherwise in connection with the transactions
contemplated hereby, and in respect of the Unit Premises have been paid
in full.
(g) Title Information. A copy of the underlying documents
of record affecting fee title to the Unit Premises from the appropriate
Governmental Authority, or such other evidence in respect of title as
Owner may reasonably request.
(h) Survey. A current survey or an update of an existing
survey of the Unit Premises prepared by a licensed public land
surveyor, and dated a date within one hundred eighty (180) days prior
to the date of the Initial Advance.
(i) Availability of Access Rights and Utilities.
Certification by Agent that all easements, licenses, rights of way,
access rights and utility services and facilities (including, without
limitation, gas, electrical, water and sewage services and facilities)
(i) which are necessary and required during the construction period
have been completed or will be available in such a manner as to assure
Owner that construction will not be impeded by a lack thereof and (ii)
which are necessary for the occupancy of the Unit and the installation
of the Unit Improvements thereon and for the completion and operation
of the Unit in accordance with the Unit Plans are or will be completed
in such a manner and at such a time as will assure the completion and
operation of the Unit on or before the Unit Completion Date.
(j) Permits. Certification by Agent that all Permits and
governmental approvals required for the construction of the Unit
Improvements (other than the governmental approval of the Town and
Country Planning Authority of the Republic of Trinidad and Tobago,
which approval will be obtained in the normal course) have been or will
be issued or obtained in such a manner as to assure Owner that
construction will not be impeded by a lack thereof and all such Permits
and governmental approvals required therefor which have been issued or
obtained are in full force and effect.
(k) Opinions of Counsel for Agent. An opinion of counsel
for Agent, in form and substance reasonably satisfactory to Owner and
Assignee, and an opinion of counsel for Agent licensed in the Republic
of Trinidad and Tobago, in form and substance reasonably satisfactory
to Owner and Assignee.
(l) Construction Agreements. A fully executed and complete
copy of each Construction Agreement or, if each such Construction
Agreement has not been executed on such date, a copy of the letter
agreement, dated February 16, 1996, between Owner and The M.W. Kellogg
Company with respect to construction of the Ammonia Project, a copy of
the interim work scope set forth in the four "Schedule A" books dated
January, 1996, and a copy of the letter agreement dated March 14, 1996,
xviii
<PAGE> 20
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
between The M.W. Kellogg Company and Owner with respect to the
anticipated cost and construction period with respect to the completion
of the Ammonia Project.
(m) Consent and Acknowledgement Documentation. Fully
executed originals of the Point Lisas Agreement, the PCS/NT Ltd.
Agreement, the Ancillary Facility Agreement Consents and the Trinidad
Government Agreement.
(n) Unit Plans. A copy of the Unit Plans satisfactory to
Owner and Assignee.
(o) Unit Budget. A copy of the Unit Budget and
certification by Agent that such Unit Budget is (i) true, complete and
correct, (ii) accurately representative at the time of delivery of all
expected costs to Owner of the Unit and (iii) within the dollar limits
set forth in the first sentence of subsection 2.2 hereof.
(p) Certificates of Insurance. Certificates of insurance or
other evidence reasonably acceptable to Owner certifying that the
insurance then carried or maintained on the Unit required by subsection
9.3 hereof complies with the terms of such subsection.
(q) Request for Advance. A duly executed AIA Document G722
(or substantially similar document), stating the total amount of the
Initial Advance requested, the date on which the advance is to be made,
the name, address and, if applicable, the escrow reference number of
the escrow or closing agent or party to whom the Initial Advance is to
be tendered, wiring instructions and an itemization of the various
costs constituting the amount of the Initial Advance in such detail as
will be necessary to provide disbursement instructions to the escrow or
closing agent, including, specifically, an accounting of all
expenditures for costs shown on the Unit Budget for which payment or
reimbursement is being requested with respect to the Unit. A form of
AIA Document G722 is attached hereto as Exhibit N.
(r) Environmental Certificate and Report. An environmental
certificate in substantially the form of Exhibit H hereto, duly
executed by the general partner of Agent, and an environmental report
satisfactory to Owner and any Assignee in all respects, prepared by the
Environmental Consultant. If Owner or Assignee shall reasonably require
additional assurance as to any matter or matters contained or not
adequately addressed in such environmental report, Owner or Assignee
may require that further investigation be conducted and a supplemental
or additional environmental report with respect to such matter or
matters, satisfactory to Owner and Assignee in all respects, be
delivered.
xix
<PAGE> 21
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(s) Use of Proceeds, No Liens and Representations of Agent.
(i) All costs and expenses which are the subject of the Initial Advance
requested have been paid in full or will be paid in full out of the
proceeds of the Initial Advance, (ii) there are no Liens on the Unit of
which Agent has knowledge that are not Permitted Liens, (iii) all
representations and warranties made in this Agreement, in the Lease and
in connection with the Initial Advance, are and remain true and correct
in all material respects on and as of the date of the Initial Advance
(except to the extent such representations and warranties expressly
relate specifically to an earlier date) and (iv) no Event of Default,
Potential Default or, with respect to the Unit for which the Initial
Advance is requested, Casualty Event, Event of Unit Termination or
Potential Event of Unit Termination, under this Agreement has occurred
and is continuing on the date such Initial Advance is to be made or by
reason of giving effect to such Initial Advance.
(t) Project Documents. With respect to the Ammonia Project,
copies of each Project Document.
(u) Appraisal. With respect to the Ammonia Project, an
appraisal prepared by Arthur Andersen & Co., which appraisal shall
include (i) a "value in use" fair market valuation of at least
$285,000,000 as of the date of Substantial Completion of the Ammonia
Project and (ii) a "value in use" fair market valuation of the Ammonia
Project of at least $199,500,000 as at March 31, 2003.
(v) Assignment Agreement. With respect to the Ammonia
Project, an executed Assignment Agreement with respect to each
Ancillary Facility Agreement and the Gas Contract.
(w) Unit FF&E Specifications. A true and complete copy of
the Unit FF&E Specifications with respect to the Unit.
SECTION 5. CONDITIONS PRECEDENT TO OWNER'S OBLIGATION TO
MAKE INTERIM ADVANCES AFTER THE INITIAL ADVANCE
WITH RESPECT TO A UNIT
Owner's obligation to make any Interim Advance with respect
to a Unit after the Initial Advance with respect to such Unit shall be subject
to the satisfaction of the conditions set forth in this Section 5 and to the
receipt by Owner and any Assignee of the documents set forth in this Section 5,
in each case in form and substance reasonably satisfactory to Owner and any
Assignee. Owner and any Assignee shall have at least five (5) Business Days to
review the Interim Advance Certificate and its attachments prior to making any
Interim Advance.
xx
<PAGE> 22
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Interim Advance Certificate. A duly executed Interim
Advance Certificate the statements in which shall be true.
(b) Continuing Representations of Agent. All
representations and warranties made in this Agreement, in the Lease,
and in connection with the Interim Advance, are and remain true and
correct in all material respects on and as of the date of the Interim
Advance as if made on and as of the date of the Interim Advance (except
to the extent such representations and warranties expressly relate
specifically to an earlier date) and no Event of Default, Potential
Default or, with respect to the Unit for which such Interim Advance is
requested, Casualty Event, Event of Unit Termination or Potential Event
of Unit Termination, under this Agreement has occurred and is
continuing on the date such Interim Advance is to be made or by reason
of giving effect to such Interim Advance.
(c) Construction Progress. If reasonably requested in
writing by Owner or any Assignee at least three (3) Business Days prior
to the making of an Interim Advance, Owner shall have received and
approved (i) an inspection report from an independent party
satisfactory to Owner or any Assignee, if any, covering conformity of
the work to the Unit Plans, quality of work completed, percentage of
work completed and (ii) true copies of unpaid invoices, receipted bills
and Lien waivers, and such other reasonably available supporting
information as Owner or any Assignee may reasonably request.
(d) Evidence of Compliance. Agent shall furnish Owner and
any Assignee with such additional or updated documents, reports,
certificates, affidavits and other information, in form and substance
reasonably satisfactory to Owner and any Assignee in its reasonable
judgment, as Owner and any Assignee may reasonably require to evidence
compliance by Agent with all of the provisions of this Agreement.
(e) Request for Advance. A duly executed AIA Document G722
(or a substantially similar document), stating the total amount of the
Interim Advance requested, the date on which such Interim Advance is to
be made, and a specific breakdown of items and costs for which the
Interim Advance is being made.
(f) No Other Security Interests. All materials and fixtures
incorporated in the construction of the Unit Improvements have been
purchased so that title thereto or a leasehold interest therein, as the
case may be, shall have vested in Owner immediately upon delivery
thereof to the Unit Premises, except for Permitted Liens, and Agent
shall have produced and furnished, if requested in writing by Owner at
least three (3)
xxi
<PAGE> 23
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Business Days prior to the making of an Interim Advance, the contracts,
bills of sale, statements, receipted vouchers, or other documents under
which title thereto or a leasehold interest therein is claimed;
provided that, if Agent does not have any documents under which title
thereto or a leasehold interest thereon is claimed, upon Owner's
request, Agent shall use commercially reasonable efforts to obtain such
documents.
(g) Statement of Expenditures. If requested in writing by
Owner, Agent or any General Contractor shall supply Owner with a
statement setting forth the names, addresses and amounts due or to
become due as well as the amounts previously paid to every contractor,
subcontractor or Person furnishing materials, performing labor or
entering into the construction of any part of the Unit Improvements.
(h) Construction Agreements. If not previously delivered to
Owner, a fully executed and complete copy of any Construction Agreement
in effect on such date.
(i) Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are and remain true and
correct in all material respects on and as of the date of the Interim
Advance as if made on and as of the date of the Interim Advance (except
to the extent such representations and warranties expressly relate
specifically to an earlier date) and no default under the PCS Guaranty
has occurred and is continuing on the date such Interim Advance is to
be made by reason of giving effect to such Interim Advance.
(j) Political Risk Insurance. Evidence reasonably
acceptable to Owner that the political risk insurance required by
paragraph (d) of Section 10 of the Lease has been obtained.
SECTION 6. CONDITIONS PRECEDENT TO THE FINAL ADVANCE WITH
RESPECT TO A UNIT
Owner's obligation to make the Final Advance with respect
to a Unit shall be subject to the satisfaction of the conditions set forth in
this Section 6 and to the receipt by Owner and any Assignee of the documents set
forth in this Section 6, in each case in form and substance reasonably
satisfactory to Owner and any Assignee. When all of the conditions set forth in
this Section 6 shall have been satisfied to the reasonable satisfaction of Owner
and any Assignee, Substantial Completion of a Unit shall be deemed to occur.
Owner and any Assignee shall have at least five (5) Business Days to review the
Certificate of Substantial Completion and its attachments prior to making a
Final Advance.
xxii
<PAGE> 24
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Certificate of Substantial Completion. A duly executed
Certificate of Substantial Completion the statements in which shall be
true.
(b) Construction and Equipping of the Unit. The Unit
Improvements (including all interior finish work, but exclusive of
punch list items) have been completed within the Unit Budget and in all
material respects in accordance with the Unit Plans and are accepted by
Agent.
(c) Permits. All Permits and governmental approvals (other
than the governmental approval of the Town and Country Planning
Authority of the Republic of Trinidad and Tobago, which approval will
be obtained in the normal course) with respect to the Unit shall have
been issued or obtained and shall be in full force and effect.
(d) Liens. The Unit, including interior finish work, has
been completed as contemplated in paragraph (b) above, free of all
Liens, except for Permitted Liens (all of which are to be itemized as
to the nature, amount, claimant and status), and there are no current
Permitted Contests with respect to the Unit (or, if any, the nature,
amount, claimant and status thereof).
(e) Final Survey. A final survey showing the completed Unit
Improvements, all easements on the Unit Premises, and indicating the
location of access to the Unit Premises and all utility and water
easements directly affecting the Unit Premises.
(f) Utilities. Connection has been made to all appropriate
utility facilities and the Unit Improvements are ready for occupancy
and operation.
(g) Continuing Representations of Agent. All
representations and warranties made in this Agreement, in the Lease,
and in connection with the Final Advance are to remain true and correct
in all material respects on and as of the date of the Final Advance
(except to the extent such representations and warranties expressly
relate specifically to an earlier date) as if made on and as of the
date of the Final Advance and no Event of Default, Potential Default
or, with respect to the Unit for which the Final Advance is requested,
Casualty Event, Event of Unit Termination or Potential Event of Unit
Termination, under this Agreement has occurred and is continuing on the
date such Final Advance is to be made or by reason of giving effect to
such Final Advance.
xxiii
<PAGE> 25
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(h) AFL Unit Leasing Record. An AFL Unit Leasing Record
prepared and duly executed by Agent. All Unit Premises and Unit
Improvements included in the Ammonia Project shall be included on one
(1) AFL Unit Leasing Record.
(i) Request for Advance. A duly executed AIA Document G722
(or a substantially similar document), stating the total amount of the
Final Advance requested, the date on which such advance is to be made,
wiring instructions and a specific breakdown of items and costs for
which the Final Advance is to be made.
(j) Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are and remain true and
correct in all material respects on and as of the date of the Final
Advance as if made on and as of the date of the Final Advance (except
to the extent such representations and warranties expressly relate
specifically to an earlier date) and no default under the PCS Guaranty
has occurred and is continuing on the date such Final Advance is to be
made or by reason of giving effect to such Final Advance.
SECTION 7. CONDITIONS PRECEDENT TO COMPLETION ADVANCES WITH
RESPECT TO A UNIT
Owner's obligation to make Completion Advances with respect
to a Unit shall be subject to the satisfaction of the conditions set forth in
this Section 7 and to the receipt by Owner and any Assignee of the documents set
forth in this Section 7, in each case in form and substance reasonably
satisfactory to Owner and Assignee. The amount of a Completion Advance shall not
cause the Unit Acquisition Cost of a Unit to exceed the Unit Budget. The
proceeds of a Completion Advance shall be used to pay in full all costs relating
to completion of such Unit for which Agent has received invoices subsequent to
such Effective Date. Owner and any Assignee shall have at least five (5)
Business Days to review the Certificate of Increased Cost and its attachments
prior to making such Completion Advance.
The following are the documents to be received by Owner and
any Assignee and the conditions to be satisfied:
(a) Certificate of Increased Cost. A duly executed
Certificate of Increased Cost the statements in which shall be true.
(b) Continuing Representations of Agent. All
representations and warranties made in this Agreement, in the Lease,
and in connection with the Completion Advance are and remain true and
correct in all material respects on and as of the date of such
Completion Advance (except to the extent such representations and
warranties expressly relate specifically to an earlier date) as if made
on and as of the date of such Completion Advance and no Event of
Default, Potential Default or, with
xxiv
<PAGE> 26
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
respect to the Unit for which such Completion Advance is requested,
Casualty Event, Event of Unit Termination or Potential Event of Unit
Termination under this Agreement has occurred and is continuing on the
date such Completion Advance is to be made or by reason of giving
effect to such Completion Advance.
(c) Request for Advance. A duly executed AIA Document G722
(or a substantially similar document), stating the total amount of the
Completion Advance requested, the date on which such advance is to be
made, wiring instructions and a specific breakdown of items and costs
for which such Completion Advance is to be made.
(d) Revised AFL Unit Leasing Record. A revised AFL Unit
Leasing Record prepared by Agent pursuant to subsection 2.3(b) hereof.
(e) Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are and remain true and
correct in all material respects on and as of the date of such
Completion Advance as if made on and as of the date of such Completion
Advance (except to the extent such representations and warranties
expressly relate specifically to an earlier date) and no default under
the PCS Guaranty has occurred and is continuing on the date such
Completion Advance is to be made or by reason of giving effect to such
Completion Advance.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF AGENT
Agent represents and warrants to Owner on the date hereof
and on the date of each advance occurring after the date hereof that:
8.1 Partnership Matters. Agent (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 Agreement 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) to the best of its knowledge after due inquiry, is duly qualified to do
business as a foreign limited partnership 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 where the failure to so
qualify would not materially impair the ability of Agent to perform its
obligations hereunder or under the other Operative Documents. The sole general
partner of Agent on the date hereof is PCS Nitrogen Fertilizer Operations, Inc.
xxv
<PAGE> 27
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
8.2 Power and Authority. The consummation by Agent of the
transactions contemplated by the Operative Documents and the execution, delivery
of and performance and observance by Agent of its obligations under this
Agreement and the other Operative Documents to which it is or is to be a party
have been duly authorized by all necessary action on the part of the partners of
Agent. None of the execution, delivery and performance by Agent of this
Agreement or any other Operative Document to which Agent is or is to be a party
will result in any violation of any term of the certificate of limited
partnership or the partnership agreement of Agent, or require the approval or
consent of any limited partner or general partner of Agent 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 Agent under, any indenture,
mortgage or other agreement or instrument to which Agent 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 Governmental Authority or
court having jurisdiction over Agent or any of its activities or properties.
8.3 Binding Agreement. Each of this Agreement and each
other Operative Document to which Agent is or is to be a party has been duly
authorized and has been or will be duly executed and delivered by Agent and,
assuming the due authorization, execution and delivery of this Agreement and any
other such Operative Document by the parties thereto other than Agent, this
Agreement is, and each such other Operative Document when executed and delivered
will be, the legal, valid and binding obligation of Agent, enforceable against
Agent according to their 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).
8.4 No 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 Agent,
threatened against or affecting Agent or any property or rights of Agent which
questions the enforceability of this Agreement or any other Operative Document
or which affects any or relates to any Unit Premises, Unit Improvements, Unit
FF&E or Unit or which, if adversely determined, would have a reasonable
possibility of causing a material adverse impact on the business of Agent in the
aggregate or would materially impair the ability of Agent to perform its
obligations hereunder or under any other Operative Document.
xxvi
<PAGE> 28
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
8.5 Consents, Approvals, Authorizations, Etc. 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 Authority 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 Agreement or
any other Operative Document or any Governmental Action (i) which is or will be
required in connection with any participation by Owner in the transactions
contemplated by, or the exercise of remedies or the enforcement of rights by
Owner under, this Agreement or any other Operative Document, any bill of sale,
deed, assignment, assumption, ownership agreement, or operating agreement
relating to any Unit Premises, Unit Improvements, Unit FF&E or Unit or (ii)
which is or will be required to be obtained by Owner, Agent, any Assignee or an
Affiliate of the foregoing, during the term of this Agreement, with respect to
any Unit Premises, Unit Improvements, Unit FF&E or Unit except the Governmental
Action of the Town and Country Planning Authority of the Republic of Trinidad
and Tobago, which Governmental Action Agent 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 Owner,
(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 Owner or any Assignee in any danger of any monetary civil liability
for which Owner or any Assignee is not adequately indemnified (Agent's
obligations under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner 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 Unit Premises, Unit Improvements, Unit FF&E or
Unit 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 Agent 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
Owner, any Assignee or any Affiliate of the foregoing and which are not solely
dependent on the nature of the Unit Premises, Unit Improvements, Unit FF&E or
Units or the business of Agent.
8.6 Compliance with Legal Requirements and Insurance
Requirements. The construction, operation, use, and physical condition of each
Unit Premises, the Unit Improvements, Unit and item of Unit FF&E comply 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 Owner or any Assignee in any danger of any monetary civil liability
which Owner or any Assignee is not adequately indemnified for (Agent's
obligations under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner 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 Unit Premises,
xxvii
<PAGE> 29
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Unit Improvements, Unit FF&E or Unit or in any material risk of the loss, sale
or forfeiture or loss of use of any thereof.
8.7 No Default. Neither Agent nor the Guarantor is in
violation of or in default under or with respect to any Legal Requirement in any
respect which could have a materially adverse effect on the business,
operations, properties or financial or other condition of Agent or the
Guarantor, or which could materially adversely affect the ability of Agent to
perform its obligations under this Agreement or any other Operative Document to
which Agent is a party or the ability of the Guarantor to perform its
obligations under the PCS Guaranty.
8.8 Ownership; Liens. No Unit Premises, Unit Improvements,
Unit FF&E or Unit is subject to any Lien, except for Permitted Liens.
8.9 Financial Statements. Agent has furnished to Owner
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.
8.10 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 Agent to perform its obligations under this Agreement or any
other Operative Document to which Agent is a party or the ability of the
Guarantor to perform its obligations under the PCS Guaranty.
8.11 Suitability of Each Unit Premises. Each Unit Premises
is suitable in all material respects (including, without limitation, ground
conditions, utilities, and condition of title) for the construction and
operation of the related Unit Improvements in all material respects in
accordance with the related Unit Plans.
8.12 ERISA.
(a) No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan.
xxviii
<PAGE> 30
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(b) As of the last annual actuarial valuation date, the
funded current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90 percent, other than with respect to Plans whose unfunded
current liability does not exceed $1,000,000 in the aggregate, and there has
been no material adverse change in the funding status of any such Plan since
such date.
(c) Agent has not incurred or is reasonably expected to
incur any Withdrawal Liability to any Multiemployer Plan.
(d) Agent 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 subsection 8.9 hereof, Agent 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 Agreement will not
involve any non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code.
8.13 Ground Lease. Each Ground Lease is a Mortgageable
Ground Lease, except to the extent agreed to in writing by Owner and Assignee,
and is in full force and effect and has not been modified, amended or changed in
any manner that has not been approved in writing by Owner, nor is there any
material default under any Ground Lease nor event which, with the giving of
notice or the passage of time or both, would constitute a default under such
Ground Lease, nor to the best knowledge of Agent has any party under any Ground
Lease commenced any action or given or received any notice for the purpose of
terminating any Ground Lease.
8.14 Operating Agreement. The Operating Agreement has been
duly authorized, executed and delivered by the Operator and, assuming the due
authorization, execution and delivery of the Operating Agreement by Owner, is a
legal, valid and binding obligation of the Operator, enforceable according to
its terms.
8.15 Gas Contract. The Gas Contract has been duly
authorized, executed and delivered by Affiliates of Agent 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 each such Affiliate of Agent, enforceable according to its terms.
xxix
<PAGE> 31
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
8.16 Ancillary Facility Agreements. Each Ancillary Facility
Agreement has been duly authorized, executed and delivered by Agent or an
Affiliate of Agent and, assuming the due authorization, execution and delivery
of each Ancillary Facility Agreement by the parties thereto other than Agent or
an Affiliate of Agent, is a legal, valid and binding obligation of Agent or such
Affiliate, enforceable according to its terms.
8.17 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 9. AFFIRMATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains
in effect, Agent shall keep and perform fully each and all of the following
covenants:
9.1 Performance under Other Agreements. Agent shall duly
perform and observe in all material respects all of the covenants, agreements
and conditions on its part to be performed and observed hereunder and under each
other Operative Document to which it is a party, except to the extent that
Agent's obligation in respect of such covenant, agreement or condition may be
subject to a Permitted Contest.
9.2 No Encroachments. The Unit Improvements shall be
constructed entirely on the related Unit Premises and shall not encroach upon or
overhang (unless consented to by the affected property owner or permitted by the
terms of any easement, license or right-of-way agreement) any easement or
right-of-way or the land of others, and when erected shall be wholly within any
building restriction lines, however established. If Owner shall have a
reasonable basis to believe any Unit Improvements are not in compliance with
this subsection 9.2, Owner may request, and Agent shall furnish from time to
time satisfactory evidence of compliance with the foregoing covenants,
including, without limitation, a survey prepared by a surveyor or engineer. If
any discrepancies exist between the legal description set forth on the survey
described in Section 4(h) hereof and the final as-built survey described in
Section 6(f) hereof, Owner and Agent shall cooperate, at Agent's expense, in
amending the legal descriptions in all recorded documents creating or
encumbering or otherwise affecting the Unit Premises, including, without
limitation, any easements, to reflect the correct as-built description.
xxx
<PAGE> 32
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
9.3 Insurance.
(a) Insurance with respect to each Unit Premises, the Unit
Improvements, Unit FF&E and Unit. Agent will maintain or cause to be maintained
on each Unit Premises, the Unit Improvements, Unit FF&E and Unit insurance of
the same types, in the same amounts and on the same terms and conditions as the
insurance required by paragraph (c) through (l) of Section 10 of the Lease,
except that the terms "Owner", "Agent" and "this Agreement" shall substitute for
the terms "the Lessor", "the Lessee" and "this Lease", respectively, the phrase
"Unit Premises, Unit Improvements, Unit FF&E and Unit" shall substitute for the
phrase "Parcel of Property" or "Property", references to "Equipment" or "Unit of
Equipment" shall be deemed deleted, and the phrase "Unit Acquisition Cost" shall
substitute for the phrase "Acquisition Cost"; provided that in lieu of the
insurance required by paragraph (c)(i) of Section 10 of the Lease, Agent shall,
as Owner's agent, maintain or cause to be maintained for Owner All Risk
Builders' Risk Completed Value Non-Reporting Form Insurance, including collapse
coverage and fire insurance with extended coverage, in an amount not less than
one hundred percent (100%) of the completed insurable value of the respective
Unit Improvements and Unit FF&E; provided, however, that with respect to the
Ammonia Project, Agent shall not be required to maintain or cause to be
maintained All Risk Builders' Risk Completed Value Non-Reporting Form Insurance
until such date as any Unit Improvements or Unit FF&E relating to the Ammonia
Project are located in the Republic of Trinidad and Tobago. The term "completed
insurable value" as used herein means the actual replacement cost, including the
cost of debris removal, but excluding the cost of constructing foundation and
footings. Such insurance may provide for such deductibles and Agent may
self-insure with respect to the required coverage to the extent consistent with
Agent's customary practice with respect to similar property owned by Agent.
(b) Use or Operation of Unit Premises, Unit Improvements,
Unit FF&E or Unit. Agent covenants that it will not use, carry on construction
with respect to, or occupy any Unit or permit the use, construction, or
occupancy of any Unit Premises, Unit Improvements, Unit FF&E or Unit at a time
when the insurance required by paragraph (a) of this subsection is not in force
with respect to such Unit Premises, Unit Improvements, Unit FF&E or Unit.
(c) Construction Bonding. In order to secure the
performance by the General Contractor for the Ammonia Project of its obligations
under its Construction Agreement, Agent shall furnish to Owner and maintain the
Construction Agreement Surety in such amounts and for such durations as may be
required pursuant to such Construction Agreement.
9.4 Inspection. 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), Owner or Assignee or any
authorized representatives of either of them, shall have
xxxi
<PAGE> 33
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
during reasonable business hours the right of entry and free access to each Unit
Premises, the Unit Improvements, Unit FF&E and each Unit and the right to
inspect all work done, labor performed and materials furnished in and about each
Unit Premises, the Unit Improvements, Unit FF&E and each Unit and at reasonable
times the right to inspect all contracts of Agent relating to each Unit
Premises, the Unit Improvements, Unit FF&E and each Unit, but neither Owner nor
any Assignee shall have any duty to make any such inspection; provided that
Agent shall be permitted to withhold from Owner or any Assignee any information
with respect to its business or work products not related to any Unit Premises,
Unit Improvements, Unit FF&E or Unit. Owner may recover from Agent (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 (as defined in the Lease), in an amount not to exceed, when
aggregated with (A) the expenses referred to in clause (i) of paragraph (d) of
Section 8 of the Lease, and (B) the fees and expenses of Owner and any Assignee
for engineering services, $130,000 in the aggregate (ii) the reasonable costs
and expenses associated with any such inspection which are incurred following
the occurrence and during the continuation of any Event of Default throughout
the term of this Agreement and (iii) all of Owner's and any Assignee's mortgage
recordation, lien and filing fees, and all out-of-pocket expenses of Owner's
legal counsel and any Assignee's legal counsel, and all out-of-pocket expenses
of any Assignee. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, Agent shall not be required to reimburse Owner
for any of the foregoing costs and expenses to the extent such costs and
expenses are capitalized by Owner in Unit Acquisition Cost.
9.5 Expenses. Agent shall pay, whether or not Owner is
obligated to make any Advance under Sections 3 through 7 hereof, upon demand all
obligations, costs and expenses incurred in good faith by Owner with respect to
any and all transactions contemplated herein and the preparation of any document
reasonably required hereunder and the prosecution or defense of any action or
proceeding or other litigation affecting Agent or any Unit Premises, Unit
Improvements, Unit FF&E or Unit, including (without limiting the generality of
the foregoing) all Financing Costs not capitalized by Owner in Unit Acquisition
Cost and amounts required to reimburse Owner for its obligations, costs and
expenses arising in connection with the termination of any Credit Agreement
(whether as a result of a default thereunder or otherwise), costs incurred in
connection with obligations of Owner under or in respect of any interest rate
swap, cap, collar or other financial hedging arrangement, including without
limitation costs incurred by Owner 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, title and conveyancing charges, recording and filing fees
and taxes, title search fees, rent under the Ground Leases, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax stamp expenses,
insurance premiums (including title insurance premiums), brokerage commissions,
finders' fees, placement fees, court costs, surveyors', photographers',
appraisers', architects', engineers', accountants' and reasonable attorneys'
fees and disbursements, and will reimburse
xxxii
<PAGE> 34
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
to Owner all expenses paid by Owner of the nature described in this subsection
9.5 which have been or may be incurred by Owner with respect to any and all of
the transactions contemplated herein. In the event Agent shall fail to reimburse
Owner within ten (10) Business Days after presentation of a bill and demand for
payment therefor, Owner may pay or deduct from the advances to be made any of
such expenses and any proceeds so applied shall be deemed advances under this
Agreement, and deducted from the total funds available to Agent under this
Agreement. Notwithstanding anything to the contrary contained in the foregoing,
Agent shall not be required to reimburse Owner for any of the foregoing
obligations, costs and expenses which constitute properly capitalizable costs
under generally accepted accounting principles. Expenses incurred by Owner
(including, without limitation, Financing Costs) in financing obligations, costs
and expenses pending allocation as a capitalized cost to a Unit shall be payable
by Agent hereunder, if not capitalized by Owner. Agent shall not be required to
pay any start-up costs associated with the commencement of operations at the
Ammonia Project or any related operating costs associated with the Ammonia
Project, which costs and expenses shall be borne by the Operator under the
Operating Agreement.
9.6 Certificates; Other Information. Agent shall furnish to
Owner:
(a) concurrently with the delivery of the financial
statements referred to in subsection 9.6(b) hereof, a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, Agent during such period has observed or performed
in all material respects all of its covenants and other agreements, and
satisfied in all material respects every condition contained in this
Agreement and in the Construction Documents to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Event of Default or Potential Default except as
specified in such certificate;
(b) 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 Agent's or the
Guarantor's operations, business, property, assets, financial condition
or litigation as Owner shall reasonably request, (iii) promptly after a
Responsible Officer of Agent obtains knowledge of any Event of Default
or Potential Default or Event of Unit Termination or Potential Event of
Unit Termination or Casualty Event, a certificate of a Responsible
Officer of Agent specifying to the extent known the nature and period
of existence of such Event of Default or Potential Default or Event of
Unit Termination or Potential Event of Unit Termination or Casualty
Event, and what action, if any, Agent has taken, is taking, or proposes
to take with re-
xxxiii
<PAGE> 35
spect thereto and (iv) promptly after a Responsible Officer of Agent
obtains knowledge of any material adverse change in the financial
condition or business of Agent or the Guarantor or of any litigation of
the type described in subsection 8.4 hereof, a certificate of a
Responsible Officer of Agent describing such change or litigation as
the case may be.
9.7 Conduct of Business and Maintenance of Existence. Agent
shall preserve, renew and keep in full force and effect its existence as a
limited partnership (except as otherwise permitted herein), and take all
reasonable action to maintain all rights, privileges and franchises material to
the conduct of its business, and comply with all Legal Requirements; except any
Legal Requirements, the non-compliance with which, individually or in the
aggregate, (i) will not place either Owner or any Assignee in any danger of any
monetary civil liability which Owner or any Assignee is not adequately
indemnified for (Agent's obligations under Section 12 of this Agreement shall be
deemed to be adequate indemnification if no Event of Default exists) or any
other material civil liability or penalty or subject Owner 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 Unit Premises, Unit
Improvements, Unit FF&E or Unit or in any material risk of the loss, sale or
forfeiture or loss of use of any thereof; provided, however, that nothing
contained in this subsection 9.7 shall prevent Agent from ceasing or omitting to
exercise any rights, privileges or franchises which in the reasonable judgment
of Agent can no longer be profitably exercised or prevent Agent from selling,
abandoning or otherwise disposing of any property, the retention of which in the
reasonable judgment of Agent is inadvisable in relation to the business of
Agent, or prevent any liquidation of any subsidiary of Agent, or any merger,
consolidation or sale, permitted by the provisions of subsection 10.2 hereof.
9.8 Notices. Agent shall give notice to Owner promptly upon
the occurrence of:
(a) any notice given by or to Agent pursuant to any of the
Construction Documents that a default has occurred thereunder;
(b) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of the Unit Improvements
that is reasonably likely to extend the Unit Completion Date (without
taking into account any Force Majeure Delay);
(c) any "Event of Default" or "Potential Default" under the
Lease; and
(d) notices received from the lessor under any Ground
Lease.
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THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action, if any, Agent proposes to take with respect thereto.
9.9 Legal Requirements and Insurance Requirements. Agent
shall comply with every Insurance Requirement and Legal Requirement affecting
(i) the execution, delivery and performance of this Agreement and the
Construction Documents to which Agent is a party and (ii) any Unit Premises,
Unit Improvements, item of Unit FF&E or Unit, and Agent will not do or permit
any act or thing which is contrary to any Insurance Requirement or which is
contrary to any Legal Requirement; except any Legal Requirements, the
non-compliance with which, individually or in the aggregate, (i) will not place
either Owner or any Assignee in any danger of any monetary civil liability which
Owner or any Assignee is not adequately indemnified for (Agent's obligations
under Section 12 of this Agreement shall be deemed to be adequate
indemnification if no Event of Default exists) or any other material civil
liability or penalty or subject Owner 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 Unit Premises, Unit Improvements, Unit
FF&E or Unit or in any material risk of the loss, sale or forfeiture or loss of
use of any thereof.
9.10 Payment of Taxes. With respect to any Unit Premises,
Unit Improvements, Unit FF&E or Unit, Agent shall make all required reports to
the appropriate taxing authorities and Owner shall capitalize and include as an
element of Unit Acquisition Cost of a Unit during the term of this Agreement the
taxes that Agent would be required to pay if such Unit Premises, Unit
Improvements or Unit was a Parcel of Property under paragraph (c) of Section 9
of the Lease.
9.11 Filings, Etc. Agent shall promptly and duly execute,
deliver, file, and record, all such documents, statements, filings, and
registrations, and take such further action as Owner 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 Owner's or any Assignee's title to and interest in any Unit
Premises, Unit Improvements, Unit FF&E and any Unit and any Assignee's interest
in this Agreement, any Unit Premises, Unit Improvements, Unit FF&E or any Unit
as against Agent or any third party in any applicable jurisdiction. All costs
and expenses arising out of Agent's obligations under this subsection 9.11 shall
be capitalized by Owner and included as an element of Unit Acquisition Cost of a
Unit.
9.12 Use of Proceeds. The proceeds of each advance shall be
used by Agent for payment of costs specified in the applicable request for the
advance and in accordance with the respective Unit Budget or to reimburse Agent
for any such costs paid by Agent.
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<PAGE> 37
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
9.13 Compliance with Other Requirements. Agent shall use
every commercially reasonable precaution to prevent loss or damage to any Unit
Premises, Unit Improvements, Unit FF&E, or any Unit and to prevent injury to
third Persons or property of third Persons. Agent shall cooperate fully with
Owner and any additional insured or loss payee and all insurance companies
providing insurance pursuant to subsection 9.3 hereof in the investigation and
defense of any claims or suits arising from the ownership or operation of
equipment or ownership, use, or occupancy of any Unit Premises, Unit
Improvements, Unit FF&E or any Unit and Owner and any Indemnified Person shall
comply, at the expense of Agent, with all reasonable requests for assistance of
Agent and any insurance companies in connection therewith; provided, that
nothing contained in this subsection shall be construed as imposing on Owner any
duty to investigate or defend any such claims or suits. Agent shall comply and
shall use reasonable efforts to cause all Persons operating equipment on, using
or occupying any Unit Premises, Unit Improvements, Unit FF&E, or any Unit to
comply with every Insurance Requirement and Legal Requirement regarding
acquiring, titling, registering, leasing, subleasing, insuring, using,
occupying, operating and disposing of any Unit Premises, Unit Improvements, Unit
FF&E, or any Unit, and, if applicable, the licensing of operators thereof;
except any Legal Requirements, the non-compliance with which, individually or in
the aggregate, (i) will not place either Owner or any Assignee in any danger of
any monetary civil liability which Owner or any Assignee is not adequately
indemnified for (Agent's obligations under Section 12 of this Agreement shall be
deemed to be adequate indemnification if no Event of Default exists) or any
other material civil liability or penalty or subject Owner 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 Unit Premises, Unit
Improvements, Unit FF&E or Unit or in any material risk of the loss, sale or
forfeiture or loss of use of any thereof.
9.14 Site Lease. Agent agrees to pay or cause to be paid,
on or before the first Business Day of each calendar year, all rent to be due
under the Site Lease for such calendar year.
9.15 Cash Reserve Account. Upon the first occurrence of a
Cash Reserve Trigger Event, Agent shall (i) 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 Owner (the "Cash Reserve Account") and (ii) deposit into the Cash Reserve
Account, within ninety (90) days from the date of such Cash Reserve Trigger
Event, an amount equal to ten percent (10%) of the aggregate amount of advances
received by Agent from Owner through such date pursuant to the terms of this
Agreement, to be held as provided in the CRA Agreement. In addition, by 1:00
p.m. of the Business Day immediately succeeding each date on which Owner
receives any subsequent advance (including any advance deemed to have been made)
under any Credit Agreement (whether such advance is for the purpose of making
advances to Agent hereunder, or to pay accrued interest, reimbursement
obligations, fees or expenses owing thereunder, to make
xxxvi
<PAGE> 38
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
distributions in respect of the equity of Owner or for any other purpose
permitted thereunder), Agent will deliver or cause to be delivered to such Cash
Reserve Account cash, to be held as provided in the CRA Agreement, in an amount
equal to at least ten percent (10%) of the aggregate amount of such advance;
provided that Owner shall deliver to Agent, no later than 1:00 p.m. on the date
of such advance, a statement describing the amount and purposes of such advance
and the amount to be deposited in the Cash Reserve Account by Agent with respect
thereto. Notwithstanding the immediately preceding sentence, upon the occurrence
of a CRA Release Event (A) Agent shall no longer be obligated to make deposits
into the Cash Reserve Account, and (B) all funds previously deposited into the
Cash Reserve Account by Agent shall, within one (1) Business Day thereof, be
released to Agent; provided, however, that upon the subsequent occurrence of a
Cash Reserve Trigger Event, (i) Agent shall deposit into the Cash Reserve
Account, within ninety (90) days from the date of such Cash Reserve Trigger
Event, an amount equal to ten percent (10%) of the aggregate amount of advances
received by Agent from Owner through such date pursuant to the terms of this
Agreement, to be held as provided in the CRA Agreement, and (ii) by 1:00 p.m. of
the Business Day immediately succeeding each date on which Owner receives any
subsequent advance (including any advance deemed to have been made) under any
Credit Agreement (whether such advance is for the purpose of making advances to
Agent hereunder, or to pay accrued interest, reimbursement obligations, fees or
expenses owing thereunder, to make distributions in respect of the equity of
Owner or for any other purpose permitted thereunder), Agent will deliver or
cause to be delivered to such Cash Reserve Account cash, to be held as provided
in the CRA Agreement, in an amount equal to at least ten percent (10%) of the
aggregate amount of such advance; provided that Owner shall deliver to Agent, no
later than 1:00 p.m. on the date of such advance, a statement describing the
amount and purposes of such advance and the amount to be deposited in the Cash
Reserve Account by Agent with respect thereto. After the Effective Date, Agent
shall have no obligation under this Agreement to deposit into the Cash Reserve
Account any additional amounts pursuant to the terms of this subsection 9.15.
9.16 Consent Agreements. Agent agrees to deliver to Owner
and Assignee, on or before the date that is one hundred twenty (120) days from
the date of this Agreement, an executed copy of each consent with respect to
each of the Assignment Agreements.
SECTION 10. NEGATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains
in effect, Agent shall not directly or indirectly:
10.1 Changes in Unit Plans or Unit Budget. (a) Modify or
supplement in any material respect any Unit Plans or any Unit Budget without the
prior written consent of Owner (which consent will not be unreasonably withheld
or delayed) and all Governmental Authorities which previously have approved the
matters to be changed, if the effect of the failure to obtain such consent will,
(i) place either Owner or any Assignee in any danger of
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<PAGE> 39
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
any monetary civil liability for which Owner or any Assignee is not adequately
indemnified for (Agent's obligations under Section 12 of this Agreement shall be
deemed to be adequate indemnification if no Event of Default exists) or any
other material civil liability or penalty or subject Owner or any Assignee to
any criminal liability as a result of a failure to comply therewith, (ii) result
in a material diminution in the value of any Unit Premises, Unit Improvements,
Unit FF&E or Unit or in any material risk of the loss, sale or forfeiture or
loss of use of any thereof, or (iii) materially impair the ability of Agent to
perform its obligations hereunder or (b) receive advances with respect to a Unit
which exceed the Unit Budget for such Unit.
10.2 Prohibition of Fundamental Changes. Consolidate with or
merge into any other Person as such prohibition is set forth in Section 26 of
the Lease, except that the term "Owner" shall substitute for the term "the
Lessor" and the term "Agent" shall substitute for the term "the Lessee".
10.3 Acquire Fee or Leasehold Interest. Acquire a fee or
leasehold interest on behalf of Owner in any Unit Premises other than the
Project Parcel until Agent has delivered all documents required by Section 4
hereof and in the reasonable judgment of Owner satisfied the conditions set
forth in such Section 4.
10.4 Assignment of Obligations. Except as provided in
subsection 2.1 hereof, assign its obligations hereunder to any other party.
SECTION 11. EVENTS OF DEFAULT, EVENTS OF UNIT TERMINATION AND
CASUALTY EVENTS
11.1 Events of Default. The occurrence of any of the following
shall constitute an Event of Default:
(a) Failure to Make Payments. Failure of Agent to make any
payment required by Section 9.15, 11.2(e), 11.4(a), 11.6 or 19 hereof
when due or failure by Agent to pay any other amount due hereunder for
more than fifteen (15) days after written demand for such other
payment.
(b) Unauthorized Assignments, Etc. Except as provided in
subsection 2.1 hereof, assignment by Agent of any interest in this
Agreement or any advance to be made hereunder or any interest in
either.
(c) Misrepresentations. Any representation or warranty made or
deemed made or certified to by Agent in this Agreement or any Operative
Document or which is contained in any certificate, document or
financial or other statement furnished under
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<PAGE> 40
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
or in connection with this Agreement shall prove to have been false or
inaccurate in any material respect on or as of the date made or deemed
made.
(d) Involuntary Bankruptcy, Etc. The entry of a decree or
order for relief in respect of Agent 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 Agent or the Guarantor or of any substantial part
of Agent's or the Guarantor's property, or ordering the winding up or
liquidation of Agent's or the Guarantor's affairs, in an involuntary
case under the U.S. Federal Bankruptcy Code, as now or hereafter
constituted, 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 Agent or
the Guarantor of an involuntary case under the U.S. Federal Bankruptcy
Code, as now or hereafter constituted, 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.
(e) Voluntary Bankruptcy, Etc. Entry or deemed entry of an
order for relief in any case under the U.S. Federal Bankruptcy Code or
the Bankruptcy and Insolvency Act (Canada), as now or hereafter
constituted, involving Agent or the Guarantor or the suspension or
discontinuance of Agent's or the Guarantor's business operations,
Agent's or the Guarantor's insolvency (however evidenced) or Agent's or
the Guarantor's admission of insolvency or bankruptcy, or the
commencement by Agent or the Guarantor of a voluntary case under the
U.S. Federal Bankruptcy Code, as now or hereafter constituted, the
Bankruptcy and Insolvency Act (Canada), as now or hereafter
constituted, or any other applicable federal, state or provincial
bankruptcy, insolvency, reorganization, composition or other similar
law of any jurisdiction, or the consent by Agent or the Guarantor to
the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official)
of Agent or the Guarantor or of any substantial part of Agent's or the
Guarantor's property, or the making by Agent or the Guarantor of an
assignment for the benefit of creditors, or the failure of Agent or the
Guarantor generally to pay its debts as such debts become due, or the
taking of partnership or other action by or on behalf of Agent or the
Guarantor in furtherance of any such action.
(f) Certain Covenants. Agent shall default in the performance
or observance of any agreement, covenant or condition contained in
Section 10 hereof.
(g) Other Defaults. Agent shall default in the performance or
observance of any other term, covenant, condition or obligation
contained in this Agreement or any
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<PAGE> 41
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
other Operative Document (except a Ground Lease), and if such default
is capable of cure, such default shall continue for thirty (30) days
after written notice shall have been given to Agent by Owner specifying
such default and requiring such default to be remedied; provided that,
if such default is of a nature that it is capable of being cured, but
not within such thirty (30) day period, and Agent shall have diligently
commenced curing such default within such thirty (30) day period and
Agent shall have proceeded diligently and in good faith thereafter to
complete curing such default, such thirty (30) day period shall be
extended to one hundred eighty (180) days; provided further that an
Event of Unit Termination and a Casualty Event shall not constitute an
Event of Default hereunder.
(h) Default under Lease. An Event of Default (as defined in
the Lease) shall occur under the Lease or the Lease shall be terminated
or otherwise cease to be in full force and effect.
(i) Payment of Obligations. An Event of Default (as defined in
the PCS Term Credit Agreement) shall occur under the PCS Term Credit
Agreement. 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.
(j) Defaults under any Ground Lease. Agent 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 Unit Premises, 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 Owner without opportunity to cure, as tenant thereunder, or
if any of the terms, covenants or conditions of the Site Lease, the
Sublease or any Ground Lease shall in any manner be modified, changed,
terminated, supplemented, altered or amended in any material respect
without the consent of Owner and any Assignee.
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<PAGE> 42
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(k) Gas Contract; Ancillary Facility Agreements; PCS Guaranty.
The Gas Contract, any Ancillary Facility Agreement, the PCS Guaranty or
any other Operative Document shall be modified, changed, terminated,
supplemented, altered or amended in any material respect without the
consent of Owner and Assignee.
(l) PCS Guaranty. (i) The PCS Guaranty ceases to be in full
force and effect prior to the termination thereof in accordance with
its terms, or (ii) 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.
(m) Guarantor Representations. 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.
(n) The Guarantor ceases to directly or indirectly own all of
the outstanding partnership interests of Agent and issued and
outstanding shares of the capital stock of PCS Nitrogen Fertilizer
Operations, Inc.
11.2 Owner's Rights upon an Event of Default.
(a) Upon the occurrence and continuation of any Event of
Default Owner 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 Agent of an Event of Default
Notice (as defined in Section 19 hereof), Agent has not made a request to
purchase all Unit Premises, Unit Improvements, Unit FF&E or Units under Section
19 or, if Agent 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 19):
(i) Terminate this Agreement and/or Owner's obligations to
make any further advances hereunder by written notice to Agent, subject
to the maximum amount Owner shall be entitled to recover from Agent, as
described in paragraph (f) of this subsection 11.2;
(ii) Take immediate possession of any Unit Premises, Unit
Improvements, Unit FF&E and Unit and remove any equipment or property
of Owner in the possession of Agent, wherever situated, and for such
purpose, enter upon any Unit Premises, Unit Improvements or Unit
without liability to Agent for so doing; provided that the taking of
possession of any Unit Premises, Unit Improvements, Unit FF&E or Unit
shall take place in a commercially reasonable manner;
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<PAGE> 43
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(iii) Whether or not any action has been taken under (a)
above, sell any Unit Premises, Unit Improvements, Unit FF&E or Unit
(free of or subject to the rights of Agent or any other Person under
this Agreement and with or without the concurrence or request of
Agent);
(iv) Hold, use, occupy, operate, remove, lease, sublease or
keep idle any Unit Premises, Unit Improvements, Unit FF&E or Unit as
Owner in its sole discretion may determine, without any duty to account
to Agent with respect to any such action or inaction, except that Owner
agrees that any profit it derives from the occupation or use of any
Unit Premises, Unit Improvements, Unit FF&E or Unit while exercising
its rights under this subsection 11.2 will be applied to reduce the
Accrued Default Obligations; and
(v) 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.
(b) Suit or suits for the recovery of any default in the
payment of any sum due hereunder or for damages may be brought by Owner from
time to time at Owner's election, and nothing herein contained shall be deemed
to require Owner to await the date whereon this Agreement or the term hereof
would have expired by limitation had there been no such default by Agent or no
such termination or cancellation.
(c) The receipt of any payments under this Agreement by Owner
with knowledge of any breach of this Agreement by Agent or of any default by
Agent in the performance of any of the terms, covenants or conditions of this
Agreement, shall not be deemed to be a waiver of any provision of this
Agreement.
(d) No receipt of moneys by Owner from Agent after the
termination or cancellation hereof in any lawful manner shall reinstate or
continue this Agreement, or operate as a waiver of the right of Owner to recover
possession of any Unit Premises, Unit Improvements, Unit FF&E or Unit by proper
suit, action, proceedings or remedy or operate as a waiver of the right to
receive any and all amounts owing by Agent to or on behalf of Owner hereunder;
it being agreed that, after the service of notice to terminate or cancel this
Agreement, and the expiration of the time therein specified, if the default has
not been cured in the meantime, or after the commencement of suit, action or
summary proceedings or of any other remedy, or after a final order, warrant or
judgment for the possession of any Unit Premises, Unit Improvements, Unit FF&E
or Unit, Owner 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, operation and occupation of the Unit
Premises,
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<PAGE> 44
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Unit Improvements, Unit FF&E or Unit, or at the election of Owner, on account of
Agent's liability hereunder and will be applied to reduce the Accrued Default
Obligations.
(e) Agent hereby expressly confirms that, in any event,
including after any Event of Default, and notwithstanding any termination of
this Agreement or reentry or repossession by Owner, Agent shall be liable for,
and Owner may recover from Agent, (i) all of Owner's obligations, costs and
expenses incurred in good faith in connection with its obligations under this
Agreement and for which Owner may demand reimbursement pursuant to subsection
9.5 hereof, (ii) all amounts payable hereunder or under any other Operative
Document and (iii) all losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses, commissions, filing fees
and sales or transfer taxes) sustained by Owner by reason of such Event of
Default and the exercise of Owner's remedies with respect thereto, including, in
the event of a sale by Owner of any Unit Premises, Unit Improvements, Unit FF&E
or Unit pursuant to this subsection 11.2, all costs and expenses associated with
such sale. The amounts payable in clauses (i) through (iii) 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 Agent of
any Unit Premises, Unit Improvements, Unit FF&E or Unit or the anticipated
receipt of income therefrom subsequent to Agent's possession of such Unit
Premises, Unit Improvements, Unit FF&E or Unit.
(f) After an Event of Default, Owner may sell its interest in
any Unit Premises, Unit Improvements, Unit FF&E and Unit in any commercially
reasonable manner upon any terms that Owner deems satisfactory, free of any
rights of Agent or any Person claiming through or under Agent. In the event of
any such sale, or in the event Owner elects not to sell any Unit Premises, Unit
Improvements, Unit FF&E or Unit, in addition to the Accrued Default Obligations,
Owner shall be entitled to recover from Agent, as liquidated damages, and not as
a penalty, an amount equal to 84.5% of the Unit Acquisition Cost of any Unit
Premises, Unit Improvements, Unit FF&E and Units under this Agreement. Proceeds
of any such sale received by Owner, or, in the event Owner elects not to sell,
proceeds at any time thereafter received by Owner from any sale, occupation,
operation, use or lease of any Unit Premises, Unit Improvements, Unit FF&E or
Unit (net of all reasonable costs and expenses incurred by Owner in connection
with any sale, occupation, operation, use or lease of any Unit Premises, Unit
Improvements, Unit FF&E or Unit) in excess of 15.5% of the Unit Acquisition Cost
of such Unit Premises, Unit Improvements, Unit FF&E or Unit, shall be credited
against the Accrued Default Obligations Agent is required to pay under this
subsection 11.2. If such excess proceeds exceed the Accrued Default Obligations,
or, if Agent has paid all amounts required to be paid under this subsection
11.2, such excess shall be paid by Owner to Agent. If Agent converts any such
Unit Premises, Unit Improvements, Unit FF&E or Unit after an Event of Default,
or if such Unit Premises, Unit Improvements, Unit FF&E or Unit is lost or
destroyed, in addition to the Accrued Default Obligations, Owner may cause such
Agent to pay to Owner, and Agent shall pay to Owner, as liquidated damages and
not as a
xliii
<PAGE> 45
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
penalty, an amount equal to 84.5% of the Unit Acquisition Cost of such Unit
Premises, Unit Improvements, Unit FF&E or Unit.
(g) In the event of a sale pursuant to this subsection 11.2,
upon receipt by Owner of the amounts payable hereunder, Owner shall transfer all
of Owner's right, title and interest in and to the Unit Premises, Unit
Improvements, Unit FF&E and Unit to the purchaser thereof.
(h) In addition to its other rights in this subsection 11.2,
Owner may exercise its various rights under the Operating Agreement, the Gas
Contract, the Ancillary Facility Agreements or any Construction Agreement or
transfer such rights to the purchaser in a sale.
(i) No remedy referred to in this subsection 11.2 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 Owner at law or in equity,
and the exercise in whole or in part by Owner of any one or more of such
remedies shall not preclude the simultaneous or later exercise by Owner of any
or all such other remedies. No waiver by Owner 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.
11.3 Events of Unit Termination. The occurrence of any of the
following shall constitute an Event of Unit Termination with respect to a Unit:
(a) Nonconforming Work. If the construction of the Unit
Improvements, or any part thereof, deviates from the Unit Plans and
results in a material diminution in the value of any Unit Premises,
Unit Improvements, Unit FF&E or Unit or there shall be any structural
defect in any Unit Improvement and Agent fails to correct such
nonconforming work or structural defect in a reasonably prompt and
satisfactory fashion after notice and demand by Owner.
(b) Failure to Complete. If as of the close of business on a
Unit Completion Date the related Unit Improvements have not for
whatever reason (including an event of force majeure deferring
completion beyond the Force Majeure Delay) been completed as herein
provided, or if the Certificate of Substantial Completion and AFL Unit
Leasing Record have not been executed and delivered by the respective
Unit Completion Date, or if Owner shall reasonably determine during the
course of construction that the Unit Improvements cannot for whatever
reason (including an event of force majeure deferring completion beyond
the Force Majeure Delay) be completed by the Unit Completion Date.
xliv
<PAGE> 46
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(c) Unsatisfactory Title. If at any time title to the Ammonia
Project or any other Unit is not reasonably satisfactory to Owner by
reason of any Lien, encumbrance, or other environmental defect
affecting title, except for Permitted Liens, and such Lien, encumbrance
or other defect is not corrected by and at the expense of Agent within
ninety (90) days after notice to Agent.
(d) Other Security Agreements. If (i) Agent executes any
chattel mortgage or other security agreement on any materials, fixtures
or articles of personal property used in the construction or operation
of the Unit Improvements or if any such materials, fixtures or articles
are purchased pursuant to any conditional sales contract or other
security agreement or otherwise so that the title thereto will not vest
in Owner free from encumbrance or (ii) Agent does not furnish to Owner
upon request the contracts, bills of sale, statements, receipted
vouchers and other agreements and documents, or any of them, under
which Owner claims title to such materials, fixtures or articles.
(e) Permits. If Agent shall fail in respect of the Ammonia
Project to obtain or be unable to obtain any material Permit, or if any
Permit shall be revoked or otherwise cease to be in full force and
effect unless, if such revocation or cessation shall not be due to
Agent's negligence or willful misconduct, Agent shall have obtained
reinstatement or reissuance of such Permit within thirty (30) days
after the revocation or expiration thereof, or if such reinstatement or
reissuance is of a nature that it cannot be completely effected within
thirty (30) days, Agent shall have diligently commenced application for
such reinstatement or reissuance and shall thereafter be diligently
proceeding to complete said reinstatement or reissuance.
11.4 Owner's Rights upon Event of Unit Termination.
(a) If any Event of Unit Termination with respect to a Unit
shall occur, Owner shall have no further obligation to make advances to Agent
with respect to such Unit, and Agent shall, upon written notice by Owner of such
Event of Unit Termination, either (i) purchase such Unit within ninety (90) days
after written notice by Owner of such Event of Unit Termination at a price equal
to the Unit Acquisition Cost for such Unit, or (ii) pay to Owner, within five
(5) Business Days of Owner's written notice of such Event of Unit Termination
(the "Surrender Date"), an amount equal to 89.9% of the Unit Acquisition Cost of
such Unit and to be subject to the requirements of paragraph (b) of this
subsection 11.4. In the event Agent elects to purchase such Unit from Owner, at
the time of such sale, Agent shall be required, in addition to its obligation to
pay all amounts contemplated by subsection 9.5 hereof, to pay to Owner Owner's
obligations, costs, losses, damages, and expenses (including, without
limitation, taxes and reasonable attorneys' fees and expenses) sustained by
Owner in good faith by reason of such Event of Unit Termination and exercise of
Owner's rights under this subsection 11.4.
xlv
<PAGE> 47
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
(b) In the event Agent elects to proceed under clause (ii) of
subsection 11.4(a) and makes the payment contemplated thereby, Owner may sell
such Unit to a third party and Agent shall have no further right, claim or
interest in such Unit. If Owner shall fail to sell such Unit within seven (7)
days of the Surrender Date, the Assignee shall have the right, but not the
obligation, to sell such Unit to a third party. The proceeds of sale received by
Owner or such Assignee, as the case may be, from any sale of such Unit shall be
retained by Owner or such Assignee, as the case may be, provided that if the
proceeds of sale exceed 10.1% of the Unit Acquisition Cost of such Unit, such
excess shall be paid by Owner or such Assignee, as the case may be, to Agent net
of all amounts to be paid by Agent to Owner pursuant to the last sentence of
subsection 11.4(a) hereof.
11.5 Casualty Events. The occurrence of any of the following
shall constitute a Casualty Event with respect to a Unit:
(a) Damage or Destruction. If any Unit Improvements are
partially or totally damaged or destroyed by fire or any other cause and the
restoration thereof cannot reasonably be expected to be completed so that the
Unit Improvements will be completed on or before the applicable Unit Completion
Date, subject to any Force Majeure Delay.
(b) Takings. If the use, occupancy or title to any Unit 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") and
such Taking affects a substantial portion of a Unit. Upon receipt of proceeds
from any award or sale made in connection with such Taking, so long as no Event
of Default or Potential Default has occurred and is continuing, and so long as
Agent has made all payments to Owner required under subsection 11.6 hereof,
Owner shall remit to Agent the net amount of such proceeds remaining after
reimbursement for all costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by Owner in connection with the negotiation
and settlement of any proceedings related to such Taking. If such proceeds are
received prior to Agent making the payments required under subsection 11.6
hereof, the net proceeds shall be applied to the amount payable thereunder. A
Taking shall be deemed "to affect a substantial portion" of a Unit if after such
Taking such Unit is, or will be, in Agent's reasonable judgment, unusable for
Agent's ordinary business purposes.
11.6 Owner's Rights upon the occurrence of a Casualty Event.
If any Casualty Event shall occur, (i) Agent shall promptly notify Owner in
writing of such event, (ii) on a date designated by Agent, which shall be a date
within ninety (90) days following such event, Agent shall pay to Owner an amount
equal to 84.5% of the Unit Acquisition Cost of such Unit and (iii) Agent shall
be required, in addition to its obligation to pay all amounts contemplated by
subsection 9.5 hereof, to pay to Owner Owner's obligations, costs, losses,
damages, and expenses (including, without limitation, taxes and reasonable
attorneys' fees and expenses) sustained by Owner by reason of such Casualty
Event and exercise of Owner's rights
xlvi
<PAGE> 48
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
under this subsection 11.6. Insurance and condemnation proceeds, if any,
received by Owner that, together with the amounts paid by Agent to Owner
pursuant to clause (ii) of the preceding sentence, exceed the Unit Acquisition
Cost of such Unit, shall be paid by Owner to Agent upon payment by Agent of all
amounts referred to in clause (iii) of the preceding sentence.
SECTION 12. INDEMNITIES
(a) Agent shall, and hereby does, indemnify and hold harmless
Owner, Merrill Lynch, Merrill Leasing, any Assignee, any successor or successors
and any Affiliate of each of them, and their respective officers, directors,
incorporators, shareholders, partners (general and limited, including, without
limitation, the general and limited partners of Owner), employees, agents and
servants (each of the foregoing an "Indemnified Person") from and against all
liabilities (including, without limitation, strict liability in tort and
environmental law), taxes, losses, obligations, claims (including, without
limitation, strict liability in tort), damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, reasonable attorneys'
and accountants' fees and expenses) or judgments of any nature relating to or in
any way arising out of:
(i) The Operative Documents and the transactions
contemplated thereby and the ordering, delivery, assembly,
installation, acquisition, construction (including, without
limitation, all obligations of Owner under any Construction
Agreement), title on acquisition, rejection, installation,
possession, titling, retitling, registration, reregistration,
custody by Agent of title and registration documents,
ownership, use, non-use, misuse, financing (including, without
limitation, all obligations of Owner under or in respect of
any interest rate swap, cap, collar or other financial hedging
arrangement and any amounts payable by Owner 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), lease, sublease, refinancing, operation,
transportation, repair, return, redelivery or control of any
Unit Premises, Unit Improvements, Unit FF&E or Unit, or the
release of hazardous substances on, under, to or from, or the
generation or transportation of hazardous substances to or
from, any Unit Premises except (x) to the extent that such
costs are included in the Unit Acquisition Cost of such Unit
Premises, Unit Improvements, Unit FF&E or Unit, (y) for any
general administrative expenses of Owner, and (z) for the
income taxes with respect to which indemnification is excluded
under paragraph (c) of Section 11 of the Lease; and
(ii) Any of the claims, demands, fees, taxes,
violations of contract, or any other matter or situation
described in or contemplated by the indemnification
provisions of subparagraphs (b), (c) and (d) of Section 11 of
the
xlvii
<PAGE> 49
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Lease, except that this Agreement shall substitute the terms
"Owner" for "the Lessor", "Agent" for "the Lessee", "this
Agreement" for "this Lease", and shall substitute the phrase
"Unit Premises, Unit Improvements, Unit FF&E or Unit" for the
phrase "Property or Equipment."
(b) The indemnification required under this Section 12 shall
be upon the terms provided in the paragraphs of Section 11 of the Lease
following paragraph (d) thereof, except that this Agreement shall substitute the
terms in the same manner as described in subparagraph (a)(ii) above.
SECTION 13. LEASEHOLD INTERESTS
The provisions of Section 28 of the Lease shall govern each
Ground Lease hereunder, including without limitation the Site Lease, the
Sublease and each additional lease under which a leasehold interest in a Unit
Premises is subleased to Agent or an Affiliate of Agent hereunder, except this
Agreement shall substitute the terms "Owner" for "the Lessor", "Agent" for "the
Lessee", "Unit Premises, Unit Improvements, Unit FF&E and Unit" for "Parcel of
Property" and "Section 13" for "Section 28".
SECTION 14. PURCHASES
In connection with, and as a condition to, the purchase of any
Unit Premises, Unit Improvements, Unit FF&E or Unit pursuant hereto, (i) Agent
shall pay at the time of purchase, in addition to the Unit Acquisition Cost and
all other amounts payable by Agent under this Agreement, and without limitation
of any of its obligations hereunder or under any other Operative Document, 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
Unit Premises, Unit Improvements, Unit FF&E or Unit to Agent and all other
amounts owing hereunder, and (ii) when Owner transfers title, such transfer
shall be on an as-is, non-installment sale basis, without warranty by, or
recourse to, Owner, except that such title shall be free of any Liens resulting
from Owner's willful or knowing act or omission not contemplated by this
Agreement, the Lease or the transactions contemplated thereby.
SECTION 15. CHARACTER OF AMMONIA PROJECT
It is the intention of Owner and Agent that the components of
the Ammonia Project identified as personal property components in Exhibit J
hereto maintain their character as personal property for commercial law
purposes. Agent shall take all 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.
xlviii
<PAGE> 50
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
SECTION 16. PERMITTED CONTESTS
(a) Agent shall not be required, nor shall Owner have the
right, to pay, discharge or remove any tax, assessment, levy, fee, rent, charge,
Lien or encumbrance, or to comply or cause any Unit Premises, Unit Improvements
item of Unit FF&E or Unit to comply with any Legal Requirement applicable to any
Unit Premises, Unit Improvements item of Unit FF&E or Unit or the occupancy, use
or operation thereof, so long as no Event of Default exists under this
Agreement, and, in the judgment of Agent's counsel, Agent shall have reason able
grounds to contest the existence, amount, applicability or validity thereof by
appropriate proceedings, which proceedings in the reasonable judgment of Owner,
(i) shall not involve any material danger that any Unit Premises, Unit
Improvements, item of Unit FF&E or Unit would be subject to sale, forfeiture,
loss or loss of use as a result of failure to comply therewith, (ii) shall not
affect the payment of any sums due and payable hereunder or result in any such
sums being payable to any Person other than Owner or any Assignee, (iii) will
not place Owner in any danger of any monetary civil liability which is not
adequately indemnified (Agent's obligations under Section 12 of this Agreement
shall be deemed to be adequate indemnification if no Event of Default exists) or
any other material civil liability or penalty or to any criminal liability, (iv)
if involving taxes, shall suspend the collection of the taxes, and (v) shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Agent or any Unit Premises, Unit Improvements, item of Unit
FF&E, or Unit is subject and shall not constitute a default thereunder (the
"Permitted Contest"). Agent 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. Owner shall at Agent's expense
cooperate in good faith with Agent with respect to all Permitted Contests
conducted by Agent pursuant to this Section 16, including without limitation in
assisting in the preparation of, and participating in, filings related to such
Permitted Contests.
(b) At least ten (10) days prior to the commencement of any
Permitted Contest, Agent shall notify Owner 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 Agent is obligated to
reimburse Owner under this Agreement, or in the event that Owner is notified of
the commencement of an audit or similar proceeding which could result in such an
additional assessment, then Owner shall in a timely manner notify Agent in
writing of such proposed levy or proceeding.
(c) Owner and Agent agree that no Event of Default, Potential
Default, Event of Unit Termination or Potential Event of Unit Termination shall
be deemed to have occurred if the existence of the event causing such Event of
Default, Potential Default, Event of Unit Termination or Potential Event of Unit
Termination, as the case may be, is being contested by Agent as a Permitted
Contest in accordance with the terms of this Section 16.
xlix
<PAGE> 51
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
SECTION 17. SALE OR ASSIGNMENT BY OWNER
(a) Owner shall have the right to obtain equity and debt
financing for the acquisition and ownership of any Unit Premises, Unit
Improvements, Unit FF&E and Unit by selling or assigning its right, title and
interest in any or all amounts due from Agent or any third Person under this
Agreement; provided, that any such sale or assignment shall be subject to the
rights and interests of Agent under this Agreement.
(b) Any Assignee shall, except as otherwise agreed by Owner
and Assignee, have (to the exclusion of Owner) all the rights, powers,
privileges and remedies of Owner hereunder, and Agent's obligations as between
itself and such Assignee hereunder shall not be subject to any claims or defense
that Agent may have against Owner, 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 Agent may have against Owner. Upon written notice
to Agent of any such assignment, Agent shall thereafter make payments of any and
all sums due hereunder to Assignee, to the extent specified in such written
notice, and only such payments to the applicable Assignee shall discharge the
obligation of Agent 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 Owner
hereunder, and any such duty, covenant or condition shall be and remain the sole
obligation of Owner.
SECTION 18. GENERAL CONDITIONS
The following conditions shall be applicable throughout the
term of this Agreement:
18.1 Survival. All indemnities, representations and warranties
and the obligation to pay Additional Rent (as defined in the Lease) shall
survive the expiration or other termination hereof.
18.2 No Waivers. No advance hereunder shall constitute a
waiver of any of the conditions of Owner's obligation to make further advances
nor, in the event Agent is unable to satisfy any such condition, shall any
waiver of such condition have the effect of precluding Owner from thereafter
declaring such inability to be an Event of Default as herein provided. Any
advance made by Owner and any sums expended by Owner pursuant to this Agreement
shall be deemed to have been made pursuant to this Agreement, notwithstanding
the existence of an uncured Event of Default. No advance at a time when an Event
of Default exists shall constitute a waiver of any right or remedy of Owner
existing by reason of such Event of Default, including, without limitation, the
right to refuse to make further advances.
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<PAGE> 52
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
18.3 Owner and Assignee Sole Beneficiaries. All conditions of
the obligation of Owner to make advances hereunder are imposed solely and
exclusively for the benefit of Owner and Assignee and their assigns and no other
Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Owner will refuse to
make advances in the absence of strict compliance with any or all thereof and no
other Person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Owner, with the consent of Assignee, at any time if in its sole discretion, it
deems it advisable to do so. Inspections and approvals of any Unit Plans, Unit
Premises, Unit Improvements, Unit FF&E, and Unit and the workmanship and
materials used therein impose no responsibility or liability of any nature
whatsoever on Owner, and no Person shall, under any circumstances, be entitled
to rely upon such inspections and approvals by Owner for any reason.
18.4 No Offsets, Etc. The obligations of Agent to pay all
amounts payable pursuant to this Agreement shall be absolute and unconditional
under any and all circumstances of any character (including, without limitation,
the circumstances set forth in clauses (A) through (K) below), and such amounts
shall be paid without notice, demand, defense (except the defense of prior
payment), setoff, 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 Agent to lease and pay Basic Rent (as defined in the Lease) for a
Unit upon Substantial Completion is without any warranty or representation,
express or implied, as to any matter whatsoever on the part of Owner or any
Assignee or any Affiliate of either, or anyone acting on behalf of any of them.
AGENT HAS SELECTED AND SHALL SELECT ALL UNIT PREMISES, UNIT
IMPROVEMENTS, UNITS AND ITEMS OF UNIT FF&E CONSTRUCTED, ACQUIRED OR ORDERED ON
THE BASIS OF ITS OWN JUDGMENT. NEITHER OWNER 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 UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E, OR AS TO
WHETHER ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E OR THE
OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES,
REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN OWNER AND AGENT, ANY ASSIGNEE OR ANY INDEMNIFIED
PERSON, AGENT WAIVES ANY AND ALL DEFENSES (EXCEPT THE DEFENSE OF FINAL AND
INDEFEASIBLE PRIOR PAYMENT), SET-OFFS, DEDUC-
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<PAGE> 53
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
TIONS, COUNTERCLAIMS (OTHER THAN COMPULSORY COUNTERCLAIMS) (OR OTHER RIGHTS),
EXISTING OR FUTURE, TO ITS OBLIGATION TO PAY ALL AMOUNTS PAYABLE HEREUNDER,
INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS
FOR USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT
FF&E, 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 AGENT MAY HAVE AGAINST OWNER,
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 ANY UNIT PREMISES,
UNIT IMPROVEMENTS, OR UNIT OR ANY TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING
WITH RESPECT TO THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM
OF UNIT FF&E IN WHOLE OR IN PART, OR CESSATION OF THE USE OR POSSESSION OF ANY
UNIT PREMISES, UNIT IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E BY AGENT FOR ANY
REASON WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION, CONFISCATION,
REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY UNIT PREMISES, UNIT
IMPROVEMENTS, UNIT OR ITEM OF UNIT FF&E IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT
OR ITEMS OF UNIT FF&E BY AGENT;
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST AGENT OR OWNER 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
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<PAGE> 54
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
REQUIREMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS AGREEMENT OR
ANY OTHER INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF OWNER OR AGENT
TO ENTER INTO THIS AGREEMENT;
(I) 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;
(J) AGENT 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
(K) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER RELATING
TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, WHETHER OR NOT SIMILAR TO
ANY OF THE FOREGOING.
AGENT 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 AGREEMENT EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS
HEREOF. The making of payments under this agreement by Agent (including without
limitation payments pursuant to Section 12 hereof) shall not be deemed to be a
waiver of any claim or claims that Agent may in a separate action assert against
Owner or any other Person. Owner agrees to repay Agent amounts paid to Owner to
the extent such payments were in error and are not required by any of the terms
and provisions of this Agreement.
18.5 No Recourse.
(a) Owner'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 Agreement or any other Operative Document, or for any claim based thereon
or otherwise in respect thereof, shall be had against any limited partner of
Owner 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 Owner, or against any direct or
indirect parent corporation of such corporate general partner or of any limited
partner of Owner or any other subsidiary or Affiliate or any
liii
<PAGE> 55
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
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 Owner is a limited
partnership formed for the purpose of the transactions involved in and relating
to this Agreement, the Lease and the Operative Documents on the express
understanding aforesaid. Nothing contained in this subsection 18.5(a) shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Agreement, the 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 Owner or the assets of the limited partnership
or the corporate general partner of Owner.
(b) Agent'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 Agent hereunder, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any limited partner of Agent 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 Agent, or against
any direct or indirect parent corporation of such corporate general partner or
of any limited partner of Agent 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 subsection 18.5(b) shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Agreement, the Lease, the PCS Guaranty and the Operative Documents and any
other documents referred to herein, of rights and remedies against (i) Agent or
the corporate general partner of Agent or the assets of Agent or the corporate
general partner of Agent or (ii) the Guarantor for obligations under the PCS
Guaranty.
18.6 Notices.
(a) 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 (i) if delivered in
person, (ii) if sent by express courier service (including, without limitation,
Federal Express, Emery, DHL, Airborne Express, and other similar express
delivery services), (iii) 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 (iv) 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 (i), (ii) or (iii) of paragraph (a) of this subsection
18.6. All notices shall be effective upon receipt by the addressee; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
For the
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<PAGE> 56
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
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 Owner:
Nitrogen Leasing Company, Limited Partnership
c/o Nitrogen Leasing Capital, Inc.
North Tower
World Financial Center
250 Vesey Street
New York, NY 10281
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to Agent:
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Senior Counsel
Telephone: (901) 758-5375
Telecopy: (901) 758-5201
and
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Assistant Treasurer
Telephone: (901) 758-5266
Telecopy: (901) 758-5202
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<PAGE> 57
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: Chief Financial Officer
Telecopy: (306) 933-8844
and
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: General Counsel
Telecopy: (306) 933-8877
With a copy of all notices under this subsection 18.6 to any Assignee at such
address as such Assignee may specify by written notice to Owner and Agent.
(b) Owner shall use reasonable efforts to give to Agent,
within five days of receipt, a copy of all notices received by Owner pursuant to
any Credit Agreement and any other notices received with respect to any Unit
Premises, Unit Improvements, item of Unit FF&E, or Unit.
18.7 Modifications. Neither this Agreement nor any provision
hereof may be changed, waived or terminated, orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver or
termination is sought.
18.8 Rights Cumulative. All rights, powers and remedies herein
given to Owner are cumulative and not alternative, and are in addition to all
statutes or rules of law; any forbearance or delay by Owner in exercising the
same shall not be deemed to be a waiver thereof, and the exercise of any right
or partial exercise thereof shall not preclude the further exercise thereof, and
the same shall continue in full force and effect until specifically waived by an
instrument in writing executed by Owner. All representations and covenants by
Agent shall survive the making of the advances, and the provisions hereof shall
be binding upon and inure to the benefit of the respective successors and
permitted assigns, if any, of the parties hereto. Except to the extent provided
in subsection 2.1 hereof, Agent may not, however, assign its rights or
obligations as agent hereunder.
18.9 GOVERNING LAW. THIS AGREEMENT HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK. AGENT AND OWNER AGREE THAT, TO THE MAXIMUM
EXTENT PERMITTED BY THE LAWS
lvi
<PAGE> 58
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
OF THE STATE OF NEW YORK, THIS AGREEMENT, AND THE RIGHTS AND DUTIES OF AGENT AND
OWNER 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. AGENT HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTIES, 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 AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO
THE EXTENT PERMITTED BY APPLICABLE LAW, AGENT 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 AGREEMENT 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, AGENT AGREES NOT TO SEEK AND HEREBY WAIVES THE
RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER
NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH
JUDGMENT. AGENT AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED
OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY
METHOD AUTHORIZED BY THE LAWS OF NEW YORK. OWNER AND AGENT EXPRESSLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN
TORT OR CONTRACT OR OTHERWISE) RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. OWNER AND AGENT ACKNOWLEDGE THAT THE PROVISIONS OF THIS
SUBSECTION 18.9 HAVE BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY
COUNSEL IN CONNECTION THEREWITH.
18.10 Confidentiality. Agent and Owner agree to treat
information concerning the structure and documentation of this Agreement and the
Lease confidentially, except to the extent that disclosure is required by law
(in which circumstance such party will use reasonable efforts to notify the
other party prior to such disclosure of any information). The foregoing
constraint shall not include information: (i) that is now in the public domain
or subsequently
lvii
<PAGE> 59
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
enters the public domain without fault on the part of the party proposing to
disclose the same; (ii) currently known to Agent or Owner from its own sources
as evidenced by its prior written records; (iii) that Agent or Owner receives
from a third party not under any obligation to keep such information
confidential; and (iv) that is provided by Owner or Agent to counsel,
consultants, other advisors and regulatory authorities, and Assignees or
proposed Assignees, provided that such parties agree (including in writing if so
requested by the non-providing party) to treat any information so provided as
similarly confidential.
18.11 Captions. The captions in this Agreement are for
convenience of reference only, and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
18.12 Unit Designation. Owner recognizes Agent's right to call
any Unit by such name or designation as Agent may deem appropriate or reliable
in the ordinary course of Agent's business and to place such signs, labels,
plates or other markings on any Unit Premises, Unit Improvements or Unit as
Agent may desire in exercising such right, subject to the provisions of
subsection 9.11 hereof.
18.13 Owner Capitalization. Owner shall provide to Agent on
the date hereof and hereafter upon the reasonable request of Agent, a balance
sheet of Owner certified by Owner and showing that Owner's capitalization is
such that at least 3.9% of its capitalization shall consist of contributions
from Owner's general partner and limited partners.
18.14 Conveyance of Easements, Etc. In connection with any
sale of any Unit Premises, Unit Improvements, Unit FF&E or Unit pursuant to this
Agreement, Owner shall convey, and the purchaser shall accept a conveyance of,
Owner'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 Unit Premises, Unit Improvements, Unit FF&E or Unit, or
adjacent property, such conveyance to be without warranty by, or recourse to,
Owner, except that such interest shall be free of any Liens resulting from
Owner's willful or knowing act or omission unrelated to an occurrence of an
Event of Default or an Event of Unit Termination.
SECTION 19. AGENT'S RIGHT TO PURCHASE
Upon the occurrence of an Event of Default and upon the
written request of Agent, which shall be received by Owner and any Assignee not
later than fifteen (15) Business Days subsequent to receipt by Agent of notice
(an "Event of Default Notice") from Owner or any Assignee pursuant to this
Agreement that an Event of Default has occurred, Agent shall have the right, but
not the obligation, not later than thirty (30) Business Days after Agent
receives the notice of the Event of Default from Owner or any Assignee, to
purchase all Units at a price equal to the Unit Acquisition Cost for such Units;
provided that the purchase option
lviii
<PAGE> 60
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
contained in this paragraph shall only be available to Agent if the purchase
price and all other amounts paid by Agent would not in the circumstances in
which such payment is made constitute a preferential payment or a voidable
transfer pursuant to the provisions of the Federal Bankruptcy Code in a
bankruptcy proceeding by or against Agent and will not otherwise result in the
payment being subject to recapture from Owner. In connection with, and as a
condition to, the purchase of all Units pursuant hereto, (i) Agent shall pay at
the time of purchase, in addition to the Unit Acquisition Cost, all other
amounts payable by Agent under this Agreement, 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 Unit to Agent and all other amounts
owing hereunder, and (ii) when Owner transfers title, such transfer shall be on
an as-is, non-installment sale basis, without warranty by, or recourse to,
Owner, except that such title shall be free of any Liens resulting from Owner's
willful or knowing act or omission.
lix
<PAGE> 61
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the parties have executed this Agreement
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:
<PAGE> 62
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
SCHEDULE I
List of Assignment Agreement Consents
1) Consent with respect to assignment of Water Supply Agreement
2) Consent with respect to assignment of Electricity Supply Agreement
3) Consent with respect to assignment of Point Lisas Agreement
4) Consent with respect to assignment of Savonetta Pier User Agreement
5) Consent with respect to assignment of Gas Contract
<PAGE> 63
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT A
Copy of Amended and Restated Lease Agreement
<PAGE> 64
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT B
AFL UNIT LEASING RECORD to Lessor: Nitrogen Leasing
Company, Limited Partnership
the Amended and Restated Lease
Agreement, dated as of May 16, 1997, Lessee: PCS Nitrogen Fertilizer, L.P.
between Nitrogen Leasing Company,
Limited Partnership, as lessor,
and PCS Nitrogen Fertilizer, L.P.,
as lessee (the "Lease Agreement").
A. Unit Premises 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__.
UNIT PREMISES 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
Unit Premises __________________________________________________
State County City Country
F. Unit Acquisition Cost under the Amended and Restated 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 Unit Premises 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
<PAGE> 65
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
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.
H. The Initial Term and Renewal Term for the Unit Premises 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 or Equipment 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 and otherwise as
required by the Lease of the Unit Premises 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, Nitrogen Leasing Company,
L.P., Lessee, by Limited Partnership,
PCS Nitrogen Fertilizer Lessor, by
Operations, Inc., its Nitrogen Leasing Capital,
General Partner Inc., its
General Partner
By_______________________ By_______________________
Name: Name:
Title: Title:
2
<PAGE> 66
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT C
FORM OF ACQUISITION CERTIFICATE
WITH RESPECT TO UNIT PREMISES LOCATED AT _____________***
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement for Lease"), dated as
of May 16, 1997, entered into between Nitrogen Leasing Company, Limited
Partnership ("Owner") and Agent, hereby certifies to Owner and Assignee as
follows:
1. Legal Description. Attached hereto at Tab 1 is a
complete and correct copy of the legal description of
the Unit Premises located at _____________. The Unit
Premises are being (acquired in fee; leased pursuant
to a Ground Lease).
2. Unit Plans. Attached hereto at Tab 2 is a complete
and correct copy of the Unit Plans for the Unit
Improvement to be constructed on the Unit Premises,
and initialed to show Agent's and Owner's approval.
3. Unit Budget. Attached hereto at Tab 3 is a complete
and correct copy of the Unit Budget for the Unit,
including an itemization of all Unit Acquisition
Costs to Owner incurred to date or to be incurred in
connection with the acquisition of Owner's interest
in the Unit Premises and with the construction and
equipping of the Unit.
4. Unit FF&E Specifications. Attached hereto at Tab 4 is
a complete and correct copy of the Unit FF&E
Specifications initialed to show Agent's approval.
[IF NO UNIT FF&E ARE CONTEMPLATED, PLEASE INDICATE
THIS.]
5. Title Information. Attached hereto at Tab 5 is a copy
of the underlying documents of record affecting fee
title to the Unit Premises from the appropriate
Governmental Authority or such other evidence of
title reasonably required by Owner in paragraph (g)
of Section 4 of the Agreement for Lease.
- --------
*** All capitalized terms used in this Certificate shall have the meanings
given to such terms in the Agreement for Lease.
<PAGE> 67
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
6. Utilities. All easements, licenses, rights of way,
rights of access and utility services and facilities
(including, without limitation, gas, electrical,
water and sewage services and facilities) (a) which
are necessary and required during the construction
period [HAVE BEEN COMPLETED; OR WILL BE AVAILABLE IN
SUCH A MANNER THAT CONSTRUCTION WILL NOT BE IMPEDED
BY A LACK THEREOF] and (b) which are necessary for
the occupancy of the Unit and the installment of the
Unit Improvements thereon and for the completion and
operation of the Unit in accordance with the Unit
Plans are or will be completed in such a manner and
at such a time as will assure the completion and
operation of the Unit on or before the Unit
Completion Date.
7. Permits. All Permits required for the construction of
the Unit Improvements (other than the governmental
approval of the Town and Country Planning Authority
of the Republic of Trinidad and Tobago, which
approval will be obtained in the normal course) have
been or will be issued in such a manner that
construction will not be impeded by a lack thereof.
No work for which a Permit or governmental approval
is required will be commenced or continued unless and
until such permit or governmental approval required
therefor has been issued or obtained, and once issued
or obtained will remain in full force and effect.
8. Construction Agreements. Attached hereto at Tab 6 is
a complete and correct copy of each Construction
Agreement, or if each such Construction Agreement has
not been executed on such date, a copy of the letter
agreement, dated February 16, 1996 between Owner and
The M.W. Kellogg Company with respect to construction
of the Ammonia Project, a copy of the interim work
scope set forth in the four "Schedule A" books dated
January, 1996, and a copy of the letter agreement
dated March 14, 1996 between The M.W. Kellogg Company
and Owner with respect to the anticipated cost and
construction period with respect to the completion of
the Ammonia Project.
9. Request for Advance. Attached hereto at Tab 7 is a
duly executed AIA Document G722 or a substantially
similar document.
2
<PAGE> 68
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
10. Representations of Agent. (i) All costs and expenses
which are the subject of the Initial Advance
requested have been paid in full or will be paid in
full out of the proceeds of the Initial Advance, (ii)
there are no Liens on the Unit Premises of which
Agent has knowledge that are not Permitted Liens,
(iii) all representations and warranties made in the
Agreement for Lease, in the Lease, and in connection
with the Initial Advance, are and remain true and
correct in all material respects on and as of the
date of the Initial Advance (except to the extent
such representations and warranties expressly relate
specifically to an earlier date) and (iv) no Event of
Default, Potential Default or, with respect to the
Unit for which the Initial Advance is requested,
Event of Unit Termination or Casualty Event or
Potential Event of Unit Termination, under the
Agreement for Lease has occurred and is continuing on
the date such Initial Advance is to be made or by
reason of giving effect to such Initial Advance.
11. Appraisal. If this advance relates to the Ammonia
Project, attached hereto at Tab 8 is an appraisal
prepared by Arthur Andersen & Co., which appraisal
shall include (i) a "value in use" fair market
valuation of the Ammonia Project as of the date of
Substantial Completion of the Ammonia Project, which
fair market valuation shall equal or exceed
$285,000,000, and (ii) a "value in use" fair market
valuation of the Ammonia Project of at least
$199,500,000 as at March 31, 2003.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations,
Inc., its General Partner
By: _______________________________
Name:
Title:
Unit Completion Date:
3
<PAGE> 69
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
FORM OF INTERIM ADVANCE CERTIFICATE
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR AN INTERIM ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Nitrogen Leasing Company, Limited Partnership ("Owner"),
delivers this Interim Advance Certificate pursuant to Section 5 of the Agreement
with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with the Interim
Advance are and remain true and correct in all
material respects on and as of the date of the
Interim Advance (except to the extent such
representations and warranties expressly relate
specifically to an earlier date) and no Event of
Default, Potential Default or, with respect to the
Unit for which the Interim Advance is requested,
Event of Unit Termination or Casualty Event or
Potential Event of Unit Termination under this
Agreement has occurred and is continuing on the date
such Interim Advance is to be made or by reason of
giving effect to such Interim Advance.
2. Construction Progress. If reasonably requested in
writing by Owner at least three (3) Business Days
prior to the making of an Interim Advance, attached
hereto at Tab 1 is (a) an inspection report from an
independent party and (b) true copies of unpaid
invoices, receipted bills and Lien waivers and such
other supporting information as may be requested by
Owner.
3. No Other Security Interests. All materials and
fixtures incorporated in the construction of the Unit
Improvements have been purchased so that title
thereto shall have vested in Owner immediately upon
delivery thereof to the Unit Premises, except for
Permitted Liens and if requested by Owner at least
three (3) Business Days prior to the making of an
Interim Advance, attached hereto at Tab 2 are copies
of the contracts, bills of sale,
<PAGE> 70
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
statements, receipted vouchers, or other documents
under which title thereto is claimed.
4. Statements of Expenditures. If requested in writing
by Owner, attached hereto at Tab 3 is a statement
setting forth the names, addresses and amounts due or
to become due as well as the amounts previously paid
to every contractor or subcontractor furnishing
materials, performing labor or entering into the
construction of any part of the Unit Improvements.
5. Request for Advance. Attached hereto at Tab 4 is a
duly executed AIA Document G722 or a substantially
similar document.
6. Evidence of Compliance. If requested, attached hereto
at Tab 5 are such documents, reports, certificates,
affidavits and other information as reasonably
required by Owner and any Assignee to evidence
compliance by Agent with all of the provisions of the
Agreement.
7. Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are
and remain true and correct in all material respects
on and as of the date of the Interim Advance as if
made on and as of the date of the Interim Advance
(except to the extent such representations and
warranties expressly relate specifically to an
earlier date) and no default under the Guaranty has
occurred and is continuing on the date such Interim
Advance is to be made or by reason of giving effect
to such Interim Advance.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations,
Inc., its General Partner
By: _______________________________
Name:
Title:
2
<PAGE> 71
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT E
FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR A FINAL ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Nitrogen Leasing Company, Limited Partnership ("Owner"),
delivers this Certificate of Substantial Completion pursuant to Section 6 of the
Agreement with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Construction and Equipping of the Unit. The Unit
Improvements (including all interior finish work, but
exclusive of punch list items) has been completed
within the Unit Budget and in all material respects
in accordance with the Construction Agreement and the
Unit Plans and are accepted by Agent.
2. Permits. All Permits and governmental approvals
(other than the governmental approval of the Town and
Country Planning Authority of the Republic of
Trinidad and Tobago, which approval will be obtained
in the normal course) with respect to the Unit have
been issued or obtained and are in full force and
effect.
3. Liens. The Unit, including interior finish work, has
been completed as contemplated in paragraph (b) of
Section 6 of the Agreement free of all Liens, except
for Permitted Liens (all of which are to be itemized
as to the nature, amount, claimant and status) and
there are no current Permitted Contests with respect
to the Unit (or, if any, the nature, amount, claimant
and status thereof).
4. Final Survey. Attached hereto at Tab 3 is a final
survey showing the completed Unit Improvements, all
easements on the Unit Premises and indicating the
location of access to the Unit Premises and all
utility and water easements directly affecting the
Unit Premises.
<PAGE> 72
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
5. Utilities. Connection has been made to all
appropriate utility facilities and the Unit
Improvements are ready for occupancy and operation.
6. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with this Final
Advance are and remain true and correct in all
material respects on and as of the date of the Final
Advance (except to the extent such representations
and warranties expressly relate specifically to an
earlier date) and no Event of Default, Potential
Default or, with respect to the Unit for which the
Final Advance is requested, Event of Unit Termination
or Casualty Event or Potential Event of Unit
Termination under this Agreement has occurred and is
continuing on the date such Final Advance is to be
made or by reason of giving effect to such Final
Advance.
7. AFL Unit Leasing Record. Attached hereto at Tab 4 is
a duly executed AFL Unit Leasing Record.
8. Request for Advance. Attached hereto at Tab 5 is a
duly executed AIA Document G722 or a substantially
similar document.
9. Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are
and remain true and correct in all material respects
on and as of the date of the Final Advance as if made
on and as of the date of the Final Advance (except to
the extent such representations and warranties
expressly relate specifically to an earlier date) and
no default under the PCS Guaranty has occurred and is
continuing on the date such Final Advance is to be
made or by reason of giving effect to such Final
Advance.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations,
Inc., its General Partner
By: _______________________________
Name:
2
<PAGE> 73
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
Title:
3
<PAGE> 74
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
FORM OF CERTIFICATE OF INCREASED COST
WITH RESPECT TO UNIT PREMISES LOCATED AT _________
IN CONNECTION WITH A REQUEST FOR A COMPLETION ADVANCE
PCS Nitrogen Fertilizer, L.P. ("Agent"), under a certain
Amended and Restated Agreement for Lease (the "Agreement"), dated as of May 16,
1997, entered into with Nitrogen Leasing Company, Limited Partnership ("Owner"),
delivers this Certificate of Increased Cost pursuant to Section 7 of the
Agreement with respect to the above noted Unit Premises. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:
1. Continuing Representations of Agent. All
representations and warranties made in the Agreement,
in the Lease, and in connection with this Completion
Advance are and remain true and correct in all
material respects on and as of the date of the
Completion Advance (except to the extent such
representations and warranties expressly relate
specifically to an earlier date) and no Event of
Default, Potential Default or, with respect to the
Unit for which such Completion Advance is requested,
Event of Unit Termination or Casualty Event or
Potential Event of Unit Termination under this
Agreement has occurred and is continuing on the date
such Completion Advance is to be made or by reason of
giving effect to such Completion Advance.
2. Revised AFL Unit Leasing Record. Attached hereto at
Tab 1 is a revised AFL Unit Leasing Record prepared
by Agent.
3. Request for Advance. Attached hereto at Tab 2 is a
duly executed AIA Document G722 or a substantially
similar document.
4. Representations of Guarantor. All representations and
warranties of the Guarantor in the PCS Guaranty are
and remain true and correct in all material respects
on and as of the date of this Completion Advance as
if made on and as of the date of such Completion
Advance (except to the extent such representations
and warranties expressly relate specifically to an
earlier date) and no default under the PCS Guaranty
has occurred and is
<PAGE> 75
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
continuing on the date such Completion Advance is to
be made or by reason of giving effect to such
Completion Advance.
Dated: __________ __, 19__ PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations,
Inc., its General Partner
By: _______________________________
Name:
Title:
2
<PAGE> 76
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
UNIT FF&E SPECIFICATIONS
<PAGE> 77
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT H
ENVIRONMENTAL CERTIFICATE
1. PCS Nitrogen Fertilizer, L.P. ("Agent"), is a party to a
certain Amended and Restated Agreement for Lease, dated as of May 16, 1997 (the
"Agreement for Lease"), entered into with Nitrogen Leasing Company, Limited
Partnership ("Owner"). Agent is herewith delivering to Owner and Cooperative
Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland", New York Branch
(the "Assignee") an Acquisition Certificate with respect to a leasehold interest
in certain premises located at the Ward of Couva, County of Caroni in the
Republic of Trinidad and Tobago. Capitalized terms used herein and not otherwise
defined shall have the meaning given such terms in the Agreement for Lease.
2. Except as described in the Environmental Report
(hereinafter defined), Agent has no actual knowledge and has not given or
received any notice indicating, that (a) any prior or present owner, operator,
tenant or occupant of any portion of the Unit has spilled, released, disposed
of, or discharged (collectively "managed") any Hazardous Substances (hereinafter
defined) on, from, beneath or affecting the Unit or any portion thereof in
amounts or concentrations requiring remediation under applicable Environmental
Regulations; (b) any prior or present owner, operator, tenant or occupant of any
portion of the Unit Premises has received any notice, directive, citation,
subpoena, summons, order to show cause, complaint or other communication from
any Governmental Authority or entity or Person with respect to the management of
any Hazardous Substances on, from, beneath or affecting the Unit Premises or any
portion thereof; (c) Agent has not given notice to any insurance broker or
insurance carrier under any insurance policy that there has been an occurrence
relating to the release of Hazardous Substances on, from, beneath, or affecting
the Unit or any portion thereof; or (d) there are currently any agreements,
consent orders, decrees or other directives of any applicable court or
governmental or quasi-governmental agency requiring any tests, studies,
inspections, work, monitoring or other removal or remedial activities with
respect to the management of any Hazardous Substances on, from, beneath or
affecting the Unit Premises or any portion thereof, or any threatened proceeding
concerning the Unit Premises or any portion thereof which is related to
Environmental Regulations (hereinafter defined).
3. For purposes of this document, the following terms shall
have the following meanings: (i) "Environmental Regulations" shall mean each and
every applicable federal, state or local law, statute, ordinance, code, rule,
order, regulation, or other published requirement (including but not limited to,
consent decrees and administrative orders) of any jurisdiction regulating,
relating or imposing obligations,
<PAGE> 78
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
liabilities or standards of conduct with respect to human health or safety, to
the environment, or to Hazardous Substances, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act, as
amended ("CERCLA") (42 U.S.C. Section 9601, et seq.), as amended by the
Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Sections
9601-9675), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et seq.), the Emergency Planning and Community Right-To-Know Act,
as amended (42 U.S.C. Section 11001, et seq.) the Water Pollution Control Act,
as amended (33 U.S.C. Section 1251, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), and any so
called "Superfund" or "Superlien" law, (ii) "Environmental Report" shall mean
the environmental report delivered pursuant to paragraph (v) of Section 4 of the
Agreement for Lease to and accepted by Owner and the Assignee in connection with
the acquisition of the Unit Premises, and (iii) "Hazardous Substances" shall
mean, without limitation, any solid, liquid or gaseous wastes, substances or
materials containing or constituting urea formaldehyde, polychlorinated
biphenyls, petroleum products, methane, radioactive materials, hazardous wastes,
hazardous or toxic substances, or related materials, asbestos or any material
containing asbestos, pollutants, or any other substance, material, chemical
compound, waste or item defined as or determined by a governmental authority
having jurisdiction to be hazardous or toxic pursuant to any Environmental
Regulations applicable to the Unit Premises or the business operations conducted
thereon.
PCS Nitrogen Fertilizer, L.P., by
PCS Nitrogen Fertilizer Operations, Inc.,
its General Partner
By: _________________________________________
Title: ______________________________________
2
<PAGE> 79
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT I
OPERATING AGREEMENT
<PAGE> 80
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT J
DESCRIPTION OF THE AMMONIA PROJECT
<PAGE> 81
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT K
PROJECT PARCEL
<PAGE> 82
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT L-1
CONSTRUCTION AGREEMENTS FOR AMMONIA PROJECT
<PAGE> 83
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT L-2
CONSTRUCTION AGREEMENT SURETY
<PAGE> 84
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-1
ELECTRICITY SUPPLY AGREEMENT
<PAGE> 85
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-2
WATER SUPPLY AGREEMENT
<PAGE> 86
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT M-3
SAVONETTA PIER USER AGREEMENT
<PAGE> 87
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT N
FORM OF AIA DOCUMENT G722
<PAGE> 88
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT O
REVISED UNIT BUDGET
<PAGE> 89
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS......................................................... 1
SECTION 2. APPOINTMENT OF AGENT................................................ 12
SECTION 3. ADVANCES............................................................ 15
SECTION 4. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE
WITH RESPECT TO A UNIT.............................................. 17
SECTION 5. CONDITIONS PRECEDENT TO OWNER'S OBLIGATION
TO MAKE INTERIM ADVANCES AFTER THE INITIAL
ADVANCE WITH RESPECT TO A UNIT...................................... 21
SECTION 6. CONDITIONS PRECEDENT TO THE FINAL ADVANCE
WITH RESPECT TO A UNIT.............................................. 23
SECTION 7. CONDITIONS PRECEDENT TO COMPLETION
ADVANCES WITH RESPECT TO A UNIT..................................... 25
SECTION 8. REPRESENTATIONS AND WARRANTIES OF AGENT............................. 26
SECTION 9. AFFIRMATIVE COVENANTS............................................... 31
SECTION 10. NEGATIVE COVENANTS.................................................. 38
SECTION 11. EVENTS OF DEFAULT, EVENTS OF UNIT
TERMINATION AND CASUALTY EVENTS..................................... 39
SECTION 12. INDEMNITIES......................................................... 48
SECTION 13. LEASEHOLD INTERESTS................................................. 49
SECTION 14. PURCHASES........................................................... 49
SECTION 15. CHARACTER OF AMMONIA PROJECT........................................ 50
SECTION 16. PERMITTED CONTESTS.................................................. 50
</TABLE>
i
<PAGE> 90
THIS AMENDED AND RESTATED AGREEMENT
FOR LEASE IS CONFIDENTIAL AND PROPRIETARY
<TABLE>
<S> <C>
SECTION 17. SALE OR ASSIGNMENT BY OWNER......................................... 51
SECTION 18. GENERAL CONDITIONS.................................................. 52
SECTION 19. AGENT'S RIGHT TO PURCHASE........................................... 60
</TABLE>
Schedule I LIST OF ASSIGNMENT AGREEMENT CONSENTS
EXHIBITS
<TABLE>
<S> <C>
Exhibit A The Amended and Restated Lease Agreement
Exhibit B Form of AFL Unit Leasing Record
Exhibit C Form of Acquisition Certificate
Exhibit D Form of Interim Advance Certificate
Exhibit E Form of Certificate of Substantial Completion
Exhibit F Form of Certificate of Increased Cost
Exhibit G Unit FF&E Specifications
Exhibit H Environmental Certificate
Exhibit I Operating Agreement
Exhibit J Description of the Ammonia Project
Exhibit K Project Parcel
Exhibit L-1 Construction Agreements for Ammonia Project
Exhibit L-2 Construction Agreement Surety
Exhibit M-1 Electricity Supply Agreement
Exhibit M-2 Water Supply Agreement
Exhibit M-3 Savonetta Pier User Agreement
Exhibit N Form of AIA Document G722
Exhibit O Revised Unit Budget
</TABLE>
ii
<PAGE> 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
<PAGE> 2
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.
-iv-
<PAGE> 3
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
<PAGE> 4
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
-2-
<PAGE> 5
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.
-3-
<PAGE> 6
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 & Fischer publication); and
(ii) the high International Caribbean Market Price for Anhydrous
Ammonia on the spot market as reported for such week in the
manner aforesaid by the said publication.
(b) The "Fertecon Caribbean Price" for any calendar week shall be the
average of:
(i) the low FOB Caribbean Ammonia Spot Price as reported for
such week in the Table "AMMONIA SPOT PRICE INDICATIONS" by
the publication Fertecon Weekly Ammonia Fax (a Fertecon
Limited publication); and
(ii) the high FOB Caribbean Ammonia Spot Price as reported for
such week in the manner aforesaid by the said publication.
(c) The "FMB Trinidad Price" for any calendar week shall be the
average of:
-4-
<PAGE> 7
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
-5-
<PAGE> 8
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 Moody's Investors Services, Inc. (or any successor entity thereto) and (ii)
the date following any CRA Release Event that the Guarantor's senior unsecured
long-term credit is again rated below BBB- by Standard & Poor's Ratings Group
(or any successor entity thereto) and below Baa3 by Moody's Investors Services,
Inc. (or any successor entity thereto).
"Code" means the Internal Revenue Code of 1986, as amended.
-6-
<PAGE> 9
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
"Companies Act" means Companies Act, Chapter 31, No. 1, of May 1, 1939,
as amended.
"Computation Period" has the meaning set forth in subclause (a)(iii) of
the definition of Basic Rent in Section 1 hereof.
"Consent" means each consent or acknowledgement or similar instrument
of the Lessee with respect to an Assignment, as the same may be amended,
restated, modified or supplemented from time to time.
"CRA Agreement" means the Cash Reserve Account Agreement to be entered
into among the Lessee, the Lessor and the CRA Bank within five (5) Business Days
following the initial occurrence of a Cash Reserve Trigger Event, which
agreement shall be substantially in the form of Exhibit G hereto.
"CRA Bank" means the bank party to the CRA Agreement.
"CRA Release Event" means the date, following any Cash Reserve Trigger
Event, that the Guarantor's senior unsecured long-term credit is rated BBB- or
higher by Standard & Poor's Ratings Group (or any successor entity thereto) and
Baa3 or higher by Moody's Investors Services, Inc. (or any successor entity
thereto).
"Credit Agreement" means each credit or loan agreement, including any
amendment, restatement, modification or supplement with respect thereto, which
has been entered into between the Lessor and a lender or lenders related to the
financing of Property or Equipment, as the same may be amended, restated,
modified or supplemented from time to time.
"Debt" means, at any particular time, the aggregate of (without
duplication):
(a) the aggregate of the amounts which would, in accordance with
generally accepted accounting principles, be classified on the
consolidated balance sheet of the Guarantor at such time as
indebtedness for borrowed money of the Guarantor and as capital
leases of the Guarantor (but specifically excluding
Subordinated Debt); and
(b) the aggregate indebtedness for borrowed money of entities other
than the Guarantor and its consolidated subsidiaries to the
extent
-7-
<PAGE> 10
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
-8-
<PAGE> 11
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
-9-
<PAGE> 12
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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<PAGE> 13
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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<PAGE> 14
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).
-12-
<PAGE> 15
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.
"Merrill Leasing" means ML Leasing Equipment Corp., a Delaware
corporation.
"Merrill Lynch" means Merrill Lynch & Co., Inc., a Delaware
corporation.
"Mortgageable Ground Lease" means a Ground Lease for a Parcel of
Property to be subleased to the Lessee which is delivered to the Lessor for
execution by the Lessor, or assigned to the Lessor by an assignment in form and
substance satisfactory to the Lessor, and having such terms and characteristics
as may be required by the Lessor and any Assignee, which terms and
characteristics shall include, without limitation, the following: (a) free
assignability to any lender as security for a borrowed money obligation of the
Lessor and, upon foreclosure of such security, by such lender to any third
party; (b) a term of at least five years in excess of the Initial Term of the
Parcel of Property to which such Ground Lease relates; (c) no provisions for
percentage or variable rent; and (d) no provision for a security deposit. A
Mortgageable Ground Lease shall be delivered with such estoppel certificates,
recognition and attornment agreements, or confirmation of customary mortgagee
protection as are reasonably acceptable to the Lessor and any Assignee.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Lessee or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees the Lessee or
any ERISA Affiliate and at least one Person other than the Lessee and the ERISA
Affiliates or (b) was so maintained and in respect of which the Lessee or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
-13-
<PAGE> 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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<PAGE> 17
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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<PAGE> 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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<PAGE> 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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<PAGE> 20
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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<PAGE> 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
-19-
<PAGE> 22
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 bill of sale, deed, assignment, assumption, ownership
agreement, operating agreement, or other agreement relating to any Property or
Equipment or (ii) which is or will be required to be obtained by the Lessor, the
Lessee, any Assignee or any Affiliate of the foregoing, during the term of this
Lease, with respect to any Property or Equipment except the Governmental Action
of the Town and Country Planning Authority in the Republic of Trinidad and
Tobago, which Governmental Action the Lessee reasonably believes will be
obtained in the normal course, and such other Governmental Actions, (A) as have
been duly obtained, given or accomplished, with true copies thereof delivered to
the Lessor, (B) as may be required by applicable law not now in effect, (C)
which, individually or in the aggregate, if not obtained or effected, (x) will
not place either the Lessor or any Assignee in any danger of any monetary civil
liability for which the Lessor or any Assignee is not 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.
-20-
<PAGE> 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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<PAGE> 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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<PAGE> 25
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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<PAGE> 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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<PAGE> 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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<PAGE> 28
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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<PAGE> 29
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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<PAGE> 30
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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<PAGE> 31
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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<PAGE> 32
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 BILL OF SALE OF ANY
PROPERTY OR EQUIPMENT EXECUTED IN CONNECTION WITH THIS LEASE OR ANY OTHER
INFIRMITY THEREIN OR LACK OF POWER OR AUTHORITY OF ANY PARTY THERETO TO ENTER
INTO SUCH BILL OF SALE;
(J) ANY RESTRICTION ON THE EXCHANGE OF THE CURRENCY OF THE REPUBLIC OF
TRINIDAD AND TOBAGO INTO U.S. DOLLARS OR THE TRANSFER OF FUNDS TO THE UNITED
STATES;
(K) THE LESSEE OR ANY OTHER PERSON AT ANY TIME HAVING IMMUNITY FROM
SUIT, PREJUDGMENT, ATTACHMENT, ATTACHMENT IN AID OF EXECUTION OR EXECUTION ON
THE GROUNDS OF SOVEREIGNTY OR OTHERWISE; OR
(L) ANY OTHER CIRCUMSTANCES OR HAPPENING 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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<PAGE> 33
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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<PAGE> 34
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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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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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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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
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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
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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
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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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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SECTION 23. INDEMNITIES.
The Lessee shall, and hereby does, indemnify and hold harmless the
Lessor, Merrill Lynch, Merrill Leasing, any Assignee, any successor or
successors, and any Affiliate of each of them, and their respective officers,
directors, incorporators, shareholders, partners (general and limited,
including, without limitation, the general and limited partners of the Lessor),
employees, agents and servants (each of the foregoing an "Indemnified Person")
from and against all liabilities (including, without limitation, strict
liability in tort), taxes, losses, obligations, claims (including, without
limitation, strict liability in tort), damages, penalties, causes of action,
suits, costs and expenses (including, without limitation, attorneys' and
accountants' fees and expenses) or judgments of any nature relating to or in any
way arising out of:
23.1 The Operative Documents and the transactions contemplated thereby
and the ordering, delivery, acquisition, construction, assembly, installation,
title on acquisition, rejection, installation, possession, titling, retitling,
registration, reregistration, 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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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 Section 15, paragraph (q) of
Section 2, paragraph (r) 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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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, Emery, DHL,
Airborne Express, and other similar express delivery services), (c) in the event
overnight delivery services are not readily available, if mailed by
international airmail, postage prepaid, registered or certified with return
receipt requested, or (d) if sent by telecopy and confirmed; provided that in
the case of a notice by telecopy, the sender shall in addition confirm such
notice by writing sent in the manner specified in clauses (a), (b) or (c) of
this Section 23. All notices shall be effective upon receipt by the addressee;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
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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
250 Vesey Street
New York, NY 10281
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to the Lessee:
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Senior Counsel
Telephone: (901) 758-5375
Telecopy: (901) 758-5201
and
PCS Nitrogen Fertilizer, L.P.
3175 Lenox Park Boulevard
Suite 400
Memphis, Tennessee 38115-4256
Attention: Assistant Treasurer
Telephone: (901) 758-5266
Telecopy: (901) 758-5202
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
With copies to the Guarantor at the following address:
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: Chief Financial Officer
Telecopy: (306) 933-8844
and
Potash Corporation of Saskatchewan Inc.
122-1st Avenue South
Saskatoon, Saskatchewan S7K 7G3 Canada
Attention: General Counsel
Telecopy: (306) 933-8877
With a copy of all notices under this Section 23 to any Assignee at such address
as such Assignee may specify by written notice to the Lessor and the Lessee.
SECTION 36. COVENANT OF QUIET ENJOYMENT.
During the Lease Term of any Property or Equipment hereunder and so
long as no Event of Default or Potential Default shall have occurred and be
continuing, the Lessor recognizes the Lessee's right to uninterrupted use and
quiet enjoyment of the Property or Equipment on the terms and conditions
provided in this Lease without any interference from the Lessor or anyone
claiming through or under the Lessor.
SECTION 37. RIGHT TO PERFORM FOR LESSEE.
37.1 If the Lessee fails to perform or comply with any of its covenants
or agreements contained in this Lease, the Lessor may, upon reasonable notice to
the Lessee but without waiving or releasing any obligations or default, itself
perform or comply with such covenant or agreement, and the amount of the
reasonable expenses of the Lessor incurred in connection with such performance
or compliance, shall be payable by the Lessee, not later than fifteen (15) days
after written notice by the Lessor.
37.2 Without in any way limiting the obligations of the Lessee
hereunder, the Lessee hereby irrevocably appoints the Lessor as its agent and
attorney at the time at which the Lessee is obligated to deliver possession of
any Parcel of Property or Unit of Equipment to the Lessor, to demand and take
possession of such Parcel of Property or Unit
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<PAGE> 67
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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<PAGE> 69
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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<PAGE> 70
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
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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<PAGE> 71
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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<PAGE> 72
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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<PAGE> 73
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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<PAGE> 74
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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<PAGE> 75
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:
<PAGE> 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.
<PAGE> 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.
<PAGE> 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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<PAGE> 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/Bill of Sale/Invoice] dated
____________________ __, 19__.
PROPERTY OR EQUIPMENT DESCRIPTION AND RENTAL INFORMATION
C. Type of Property or Equipment (use category specified in Exhibit A to the
Lease Agreement)
____________________________________
D. Specific Description (See Schedule A hereto if more space needed)
___________________________________________________________________________
___________________________________________________________________________
E. Location of Property
or Equipment ___________________________________________________
State County City Country
F. Basic Cost Additional Charges Sale & Use Tax Acquisition Cost
$__________ + $__________________ + $______________ = $_______________
<PAGE> 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:
-2-
<PAGE> 81
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT D
Description of the Ammonia Project
<PAGE> 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
<PAGE> 83
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT F
Minimum Lease Payment Calculations
<PAGE> 84
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT G
Form of CRA Agreement
<PAGE> 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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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
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<PAGE> 1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(r)
AMENDED AND RESTATED PURCHASE OPTION AGREEMENT
This Amended and Restated Purchase Option Agreement (the "Agreement"),
dated as of the 16th day of May, 1997, between Nitrogen Leasing Company, Limited
Partnership (the "Owner") and PCS Nitrogen Fertilizer Operations, Inc. (the
"General Partner").
PRELIMINARY STATEMENTS
1. PCS Nitrogen, Inc. (formerly Arcadian Corporation) and the Owner
have entered into a Purchase Option Agreement, dated as of the March 27, 1996
(the "Original Purchase Option Agreement"), whereby PCS Nitrogen, Inc. was
granted certain purchase rights described therein.
2. PCS Nitrogen, Inc. and the General Partner have entered into an
Assignment Agreement, dated as of May 16, 1997, whereby PCS Nitrogen, Inc.
assigned all of its rights and obligations under the Original Purchase Option
Agreement to the General Partner.
3. The parties hereto desire to amend the Original Purchase Option
Agreement to consummate the transactions contemplated by the Amended and
Restated Lease Agreement, dated as of May 16, 1997 between PCS Nitrogen
Fertilizer, L.P. and the Owner (the "Lease"), the Amended and Restated Agreement
for Lease and certain related documents.
4. The Lease contemplates that the General Partner shall be granted
the Purchase Option (as hereinafter defined), pursuant to which the Owner shall
be obligated, under certain circumstances, to sell to the General Partner all
Property and Equipment subject to the Lease (the "Property and Equipment") for a
total purchase price equal to (i) in the case of a purchase during the Initial
Term, the Acquisition Cost of the Property and Equipment on the Exercise Date
(as hereinafter defined) and (ii) in the case of a purchase during the Renewal
Term, the fair market value of the Property and Equipment on the Exercise Date.
5. The parties hereto are amending the Original Purchase Option
Agreement in order to more fully set forth the Purchase Option contemplated by
the Lease and certain
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
related documents. Accordingly, in consideration of the foregoing, the covenants
and conditions hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by each of the
parties hereto, said parties hereby agree that Original Purchase Option
Agreement is hereby amended and restated in its entirety as herein provided:
ARTICLE 1.
PURCHASE OPTION
SECTION (a) Grant and Exercise of Purchase Option. Owner hereby grants
to the General Partner the right to purchase the Ammonia Project on the terms
and pursuant to the conditions set forth herein. Pursuant to the terms of
paragraph (a) of Section 12 of the Lease, the Lessee shall, not earlier than 450
days and not later than one (1) year prior to the end of the Initial Term,
request in writing that the Owner obtain bank commitments acceptable to the
Owner and the Lessee in order to finance the Owner's ownership of the Property
and Equipment under the Lease during a Renewal Term. Upon such request, the
Owner shall advise the Lessee and the General Partner in writing not later than
300 days prior to the end of the Initial Term, indicating whether the Owner has
been able to obtain such binding bank commitments for a Renewal Term. If the
Owner has advised the Lessee and the General Partner that it has been able to
obtain such binding bank commitments, the General Partner shall have the right,
during the Initial Term and during the Renewal Term, if any, upon written notice
(the "Option Notice") to the Owner and the Lessee not later than 270 days prior
to the Lease Termination Date, to purchase the Property and Equipment for the
sale price described in Section 1.02 hereof, on the date which is six (6) months
prior to the Lease Termination Date (the "Exercise Date").
SECTION (b) Purchase Price for Property and Equipment. The purchase
price for the Property and Equipment shall be (i) in the case of a purchase
during the Initial Term, the Acquisition Cost of the Property and Equipment on
the Exercise Date and (ii) in the case of a purchase during the Renewal Term,
the fair market value of the Property and Equipment on the Exercise Date (the
"Sale Price") and shall be payable by the General Partner to the Owner on the
Exercise Date, provided that the Lessee shall have no obligation whatsoever to
pay any portion of said purchase price, it being understood that all parties
hereto shall look only to the General Partner for payment of said purchase
price. In addition to the Sale Price, the General Partner shall 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 from the Owner to the General Partner.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION (c) Transfer of Property and Equipment. Upon payment by the
General Partner of all amounts owing to the Owner pursuant to Section 1.02
hereof, the Owner shall transfer title to the Property and Equipment to the
General Partner by a bill of sale, quitclaim deed and such other conveyance
instruments as the General Partner may reasonably require to convey all such
Property and Equipment, which bill of sale, quitclaim deed and other conveyance
instruments shall be satisfactory in all respects to the General Partner in its
sole discretion. The transfer of the Owner's interest in the Property and
Equipment shall be on an as-is, non-installment sale basis, without warranty by,
or recourse to, the Owner, except that such title shall be free of any Liens
resulting from the Owner's willful or knowing act or omission. Upon the sale of
the Property and Equipment, as set forth herein, the Owner's interest in the
Property and Equipment shall thereupon vest in the General Partner, free and
clear of any Lien in favor of the Owner or any Assignee.
SECTION (d) Assignment of Contracts. Upon payment by the General
Partner of all amounts owing to the Owner pursuant to Section 1.02 hereof, (i)
the Owner shall convey, and the General Partner shall accept a conveyance of,
the Owner's interest in all contracts, easements, licenses, operating
agreements, and similar agreements relating to the construction, equipping, use
and operation of the Property and Equipment, including without limitation the
Gas Contract, the Operating Agreement and the Ancillary Facility Agreements,
(ii) the General Partner shall execute such agreements and acknowledgements as
shall in the Owner's reasonable judgment be required to reflect such conveyance,
(iii) such conveyance shall be made without warranty by, or recourse to, the
Owner, except that such interest shall be free of any Liens resulting from the
Owner's willful or knowing act or omission, and (iv) the General Partner shall
assume any and all liabilities and obligations of the Owner, of whatever kind or
nature, whether absolute or contingent, direct or indirect, fixed or contingent,
or known or unknown, arising from or based upon any act, omission, event,
condition or circumstance arising from the Property and Equipment.
ARTICLE 2.
FAILURE OF THE GENERAL PARTNER
TO PURCHASE
In the event the General Partner has provided written notice to the
Owner and the Lessee pursuant to Section 1.01 of this Agreement of its intent to
purchase the Property and Equipment on the date which is six (6) months prior to
the end of the Initial Term, and the General Partner fails to effect such
purchase on such date, the General Partner shall have no further right to
purchase any Property or Equipment during the Initial Term. In the event the
General Partner has provided written notice to the Owner and the Lessee pursuant
to Section 1.01 of this Agreement of its intent to purchase the Property and
Equipment on the date which
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
is six (6) months prior to the end of the Renewal Term, and the General Partner
fails to effect such purchase on such date, the General Partner shall have no
further right to purchase the Property or Equipment under this Agreement. If the
General Partner has not provided written notice to the Owner and the Lessee
pursuant to Section 1.01 of this Agreement of its intent to purchase the
Property and Equipment on the date which is six (6) months prior to the end of
the Initial Term or the Renewal Term, as the case may be, the General Partner
shall have no further right to purchase the Property and Equipment during such
Initial Term or Renewal Term, as the case may be.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS
SECTION (a) The General Partner hereby represents and warrants to the
Owner that:
(i) the General Partner (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(ii) has the requisite corporate power and legal right to own and operate its
properties and to carry on its business as presently conducted, and (iii) to the
best of its knowledge after due inquiry, is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which its ownership
or leasing of properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not materially
impair the ability of the General Partner to perform its obligations hereunder;
(ii) the General Partner has full power and authority to execute
and deliver this Agreement and any documents referred to herein and to perform
its obligations in accordance herewith and therewith;
(iii) all acts, consents, licenses, orders, authorizations,
approvals, waivers, extensions, and variances of, and notices to or filings
with, any governmental or public body and other proceedings to be taken by or on
the part of the General Partner to authorize the General Partner to perform
hereunder and under any documents referred to herein or contemplated hereby have
been duly and properly taken;
(iv) this Agreement has been duly authorized, executed and
delivered by the General Partner and, assuming the due authorization, execution
and delivery of this Agreement by the Owner, this Agreement constitutes the
legal, valid and binding obligation of the General Partner, enforceable in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and to
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law); and
(v) the execution, delivery and performance hereof by the General
Partner and any obligations contemplated herein will not result in any violation
of any term of the articles of incorporation or the by-laws of the General
Partner, do not require stockholder approval or the approval or consent of any
trustee or holders of indebtedness of the General Partner 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 General Partner under, any
indenture, mortgage or other agreement or instrument to which the General
Partner 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 General
Partner or any of its activities or properties.
SECTION (b) The Owner hereby represents and warrants to the General
Partner that:
(i) the Owner (i) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, (ii) has
the requisite power and legal right to own and operate its properties and to
carry on its business as presently conducted and (iii) to the best of its
knowledge after due inquiry, is duly qualified to do business as a foreign
limited partnership in good standing in each jurisdiction in which its ownership
or leasing of properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not materially
impair the ability of the Owner to perform its obligations hereunder;
(ii) the Owner has full power and authority to execute and deliver
this Agreement and any documents referred to herein and to perform its
obligations in accordance herewith and therewith;
(iii) all acts, consents, licenses, orders, authorizations,
approvals, waivers, extensions and variances of, and notices to or filings with,
any governmental or public body and other proceedings to be taken by or on the
part of the Owner to authorize the Owner to perform hereunder and under any
documents referred to herein or contemplated hereby have been duly and properly
taken;
(iv) this Agreement has been duly authorized, executed and
delivered by the Owner and, assuming the due authorization, execution and
delivery of this Agreement
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
by the General Partner, this Agreement constitutes the legal, valid and binding
obligation of the Owner, enforceable in accordance with 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);
(v) the execution, delivery and performance hereof by the Owner
and any obligations contemplated herein will not result in any violation of any
term of the certificate of limited partnership or the partnership agreement of
the Owner, do not require the approval or consent of any limited partner or
general partner of the Owner, 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 Owner under, any indenture, mortgage or other
agreement or instrument to which the Owner 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 Owner or any of its activities or properties; and
(vi) upon the sale of the Property and Equipment, as contemplated
hereby, the Owner's interest in the Property and Equipment will vest in the
General Partner, free and clear of all Liens (other then Permitted Liens).
ARTICLE 4.
MISCELLANEOUS
SECTION (a) Assignment. No party to this Agreement may assign any of
its rights or delegate any of its obligations hereunder without the prior
written consent of the other party hereto; provided that, (i) the Owner shall be
permitted to assign its right, title and interest in this Agreement to the
Assignee without the prior written consent of the General Partner and (ii) the
General Partner shall be permitted to assign its right, title and interest in
this Agreement to any Affiliate of the General Partner (other than the Lessee)
without the prior written consent of the Owner.
SECTION (b) Indemnification. The General Partner hereby agrees to
indemnify the Owner, 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 Owner), employees, agents and
servants from, and holds each of them harmless against, any and all liabilities,
taxes, losses, obligations, claims, damages, penalties, causes of action, suits,
costs
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
and expenses (including, without limitation, attorneys' and accountants' fees)
to which any of them may become subject, insofar as such liabilities, taxes,
losses, obligations, claims, damages, penalties, causes of action, suits, costs
and expenses arise out of this Agreement, including without limitation the
failure of the General Partner to purchase the Property and Equipment after
notice to the Owner and the Lessee of its intent to purchase the Property and
Equipment on the Exercise Date.
SECTION (c) Amendments and Waivers. Any term, covenant, agreement or
condition of this Agreement may be amended, or compliance therewith may be
waived, only by an instrument or instruments in writing executed by each of the
parties hereto. A waiver on one occasion shall not be construed to be a waiver
with respect to any other occasion.
SECTION (d) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION (e) Headings. The headings of sections contained in this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
SECTION (f) Entire Agreement. This Agreement sets forth the entire
agreement among the parties hereto with respect to the subject matter hereof and
no representations, warranties, promises, guaranties or agreements, oral or
written, express or implied, have been made by any party hereto with respect to
this Agreement or the Property or Equipment, except as provided herein.
SECTION (g) Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
SECTION (h) Definitions. Unless otherwise indicated, capitalized terms
used and not otherwise defined herein shall have the respective meanings given
to them in the Lease.
SECTION (i) Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an original,
provided that all such counterparts, taken together, shall constitute but one
and the same agreement.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION 4.10. Specific Performance. The Owner and the General Partner
acknowledge that the Purchase Option is a unique and valuable right, without
which the parties hereto would lose substantial benefits. The parties hereto
have concluded that, upon breach of this Agreement by any of the parties hereto,
legal remedies would be inadequate and impracticable to enforce, in that, among
other things, it would be difficult to calculate with reasonable certainty the
legal damages payable as a result of such breach; therefore, the obligations of
each of the parties hereto shall be enforceable by means of a suit for specific
performance brought by any one or more of the other parties hereto.
SECTION (a) WAIVER OF JURY TRIAL. THE PARTIES HERETO EXPRESSLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES HERETO
ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 4.11 HAVE BEEN BARGAINED FOR AND
THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.
SECTION (b) Notices. All notices, requests, demands and other
communications hereunder shall be governed by, and given in accordance with and
at the addresses determined pursuant to, Section 23 of the Lease.
SECTION (c) Term. This Agreement shall terminate upon the earlier of
(a) the expiration or termination of the Lease, or (b) the exercise of the
Purchase Option and the consummation of all transactions contemplated in such
event hereunder; provided, however, that the obligations of the General Partner
contained in Section 4.02 of this Agreement shall survive the expiration or
termination of this Agreement and shall continue in full force and effect.
SECTION (d) Limitation of Liability. (i) The Owner's obligations
hereunder are intended to be the obligations of the limited partnership and of
the corporation which is the general partner thereof only and no recourse for
any obligation of the Owner hereunder, or for any claim based thereon or
otherwise in respect thereof, shall be had against any limited partner of the
Owner 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 Owner, or against any direct or indirect parent
corporation of such corporate general partner or of any limited partner of the
Owner or any other subsidiary or affiliate of any such direct or indirect parent
corporation or any incorporator, shareholder, officer or director, as such,
past, present or future, of any such parent or other subsidiary or affiliate, it
being understood that the Owner and the general partner thereof are a limited
partnership and a
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
corporation, respectively, formed for the purpose of the transactions involved
in and relating to this Agreement on the express understanding aforesaid.
Nothing contained in this Section shall be construed to limit the exercise or
enforcement, in accordance with the terms of this Agreement and any other
documents referred to herein, of rights and remedies against the limited
partnership or the corporate general partner of the Owner or the assets of the
limited partnership or the corporate general partner of the Owner.
(ii) The General Partner's obligations hereunder are intended to
be the corporate obligations of the General Partner only and no recourse for any
obligation of the General Partner hereunder, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, or affiliate, as such, past, present or
future, of the General Partner or of any successor corporation, or against any
direct or indirect parent corporation of the General Partner 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 Section shall be construed to limit the exercise or enforcement, in
accordance with the terms of this Agreement and any other documents referred to
herein, of rights and remedies against the General Partner or the assets of the
General Partner.
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THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
PCS NITROGEN FERTILIZER OPERATIONS,
INC.
By_______________________________________
Name:
Title:
NITROGEN LEASING COMPANY,
LIMITED PARTNERSHIP
By: NITROGEN LEASING CAPITAL,
INC., its General Partner
By_______________________________________
Name:
Title:
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<PAGE> 1
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
EXHIBIT 10(s)
AMENDED AND RESTATED PURCHASE OPTION AGREEMENT
This Amended and Restated Purchase Option Agreement (the "Agreement"),
dated as of the 16th day of May, 1997, between Trinidad Ammonia Company, Limited
Partnership (the "Owner") and PCS Nitrogen Fertilizer Operations, Inc. (the
"General Partner").
PRELIMINARY STATEMENTS
1. PCS Nitrogen, Inc. (formerly Arcadian Corporation) and the Owner
have entered into a Purchase Option Agreement, dated as of June 29, 1995 (the
"Original Purchase Option Agreement"), whereby PCS Nitrogen, Inc. was granted
certain purchase rights described therein.
2. PCS Nitrogen, Inc. and the General Partner have entered into an
Assignment Agreement, dated as of May 16, 1997, whereby PCS Nitrogen, Inc.
assigned all of its rights and obligations under the Original Purchase Option
Agreement to the General Partner.
3. The parties hereto desire to amend the Original Purchase Option
Agreement to consummate the transactions contemplated by the Amended and
Restated Lease Agreement, dated as of May 16, 1997, between PCS Nitrogen
Fertilizer, L.P. and the Owner (the "Lease"), the Amended and Restated Agreement
for Lease and certain related documents.
4. The Lease contemplates that the General Partner shall be granted the
Purchase Option (as hereinafter defined), pursuant to which the Owner shall be
obligated, under certain circumstances, to sell to the General Partner all
Property and Equipment subject to the Lease (the "Property and Equipment") for a
total purchase price equal to (i) in the case of a purchase during the Initial
Term, the Acquisition Cost of the Property and Equipment on the Exercise Date
(as hereinafter defined) and (ii) in the case of a purchase during the Renewal
Term, the fair market value of the Property and Equipment on the Exercise Date.
<PAGE> 2
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
5. The parties hereto are amending the Original Purchase Option
Agreement in order to more fully set forth the Purchase Option contemplated by
the Lease and certain related documents. Accordingly in consideration of the
foregoing, the covenants and conditions hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto, said parties hereby agree that
Original Purchase Option Agreement is hereby amended and restated in its
entirety as herein provided:
ARTICLE 5
PURCHASE OPTION
SECTION (a) Grant and Exercise of Purchase Option. Owner hereby grants
to the General Partner the right to purchase the Ammonia Project on the terms
and pursuant to the conditions set forth herein. Pursuant to the terms of
paragraph (a) of Section 12 of the Lease, the Lessee shall, not earlier than 450
days and not later than one (1) year prior to the end of the Initial Term,
request in writing that the Owner obtain bank commitments acceptable to the
Owner and the Lessee in order to finance the Owner's ownership of the Property
and Equipment under the Lease during a Renewal Term. Upon such request, the
Owner shall advise the Lessee and the General Partner in writing not later than
300 days prior to the end of the Initial Term, indicating whether the Owner has
been able to obtain such binding bank commitments for a Renewal Term. If the
Owner has advised the Lessee and the General Partner that it has been able to
obtain such binding bank commitments, the General Partner shall have the right,
during the Initial Term and during the Renewal Term, if any, upon written notice
(the "Option Notice") to the Owner and the Lessee not later than 270 days prior
to the Lease Termination Date, to purchase the Property and Equipment for the
sale price described in Section 1.02 hereof, on the date which is six (6) months
prior to the Lease Termination Date (the "Exercise Date").
SECTION (b) Purchase Price for Property and Equipment. The purchase
price for the Property and Equipment shall be (i) in the case of a purchase
during the Initial Term, the Acquisition Cost of the Property and Equipment on
the Exercise Date and (ii) in the case of a purchase during the Renewal Term,
the fair market value of the Property and Equipment on the Exercise Date (the
"Sale Price") and shall be payable by the General Partner to the Owner on the
Exercise Date, provided that the Lessee shall have no obligation whatsoever to
pay any portion of said purchase price, it being understood that all parties
hereto shall look only to the General Partner for payment of said purchase
price. In addition to the Sale Price, the General Partner shall 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
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<PAGE> 3
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
connection with the conveyance of such Property or Equipment from the Owner to
the General Partner.
SECTION (c) Transfer of Property and Equipment. Upon payment by the
General Partner of all amounts owing to the Owner pursuant to Section 1.02
hereof, the Owner shall transfer title to the Property and Equipment to the
General Partner by a bill of sale, quitclaim deed and such other conveyance
instruments as the General Partner may reasonably require to convey all such
Property and Equipment, which bill of sale, quitclaim deed and other conveyance
instruments shall be satisfactory in all respects to the General Partner in its
sole discretion. The transfer of the Owner's interest in the Property and
Equipment shall be on an as-is, non-installment sale basis, without warranty by,
or recourse to, the Owner, except that such title shall be free of any Liens
resulting from the Owner's willful or knowing act or omission. Upon the sale of
the Property and Equipment, as set forth herein, the Owner's interest in the
Property and Equipment shall thereupon vest in the General Partner, free and
clear of any Lien in favor of the Owner or any Assignee.
SECTION (d) Assignment of Contracts. Upon payment by the General
Partner of all amounts owing to the Owner pursuant to Section 1.02 hereof, (i)
the Owner shall convey, and the General Partner shall accept a conveyance of,
the Owner's interest in all contracts, easements, licenses, operating
agreements, and similar agreements relating to the construction, equipping, use
and operation of the Property and Equipment, (ii) the General Partner shall
execute such agreements and acknowledgements as shall in the Owner's reasonable
judgment be required to reflect such conveyance, (iii) such conveyance shall be
made without warranty by, or recourse to, the Owner, except that such interest
shall be free of any Liens resulting from the Owner's willful or knowing act or
omission, and (iv) the General Partner shall assume any and all liabilities and
obligations of the Owner, of whatever kind or nature, whether absolute or
contingent, direct or indirect, fixed or contingent, or known or unknown,
arising from or based upon any act, omission, event, condition or circumstance
arising from the Property and Equipment.
ARTICLE 6.
FAILURE OF THE GENERAL PARTNER
TO PURCHASE
In the event the General Partner has provided written notice to the
Owner and the Lessee pursuant to Section 1.01 of this Agreement of its intent to
purchase the Property and Equipment on the date which is six (6) months prior to
the end of the Initial Term, and the General Partner fails to effect such
purchase on such date, the
- xv -
<PAGE> 4
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
General Partner shall have no further right to purchase any Property or
Equipment during the Initial Term. In the event the General Partner has provided
written notice to the Owner and the Lessee pursuant to Section 1.01 of this
Agreement of its intent to purchase the Property and Equipment on the date which
is six (6) months prior to the end of the Renewal Term, and the General Partner
fails to effect such purchase on such date, the General Partner shall have no
further right to purchase the Property or Equipment under this Agreement. If the
General Partner has not provided written notice to the Owner and the Lessee
pursuant to Section 1.01 of this Agreement of its intent to purchase the
Property and Equipment on the date which is six (6) months prior to the end of
the Initial Term or the Renewal Term, as the case may be, the General Partner
shall have no further right to purchase the Property and Equipment during such
Initial Term or Renewal Term, as the case may be.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS
SECTION (a) The General Partner hereby represents and warrants to the
Owner that:
(i) the General Partner (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(ii) has the requisite corporate power and legal right to own and operate its
properties and to carry on its business as presently conducted, and (iii) to the
best of its knowledge after due inquiry, is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which its ownership
or leasing of properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not materially
impair the ability of the General Partner to perform its obligations hereunder.
(ii) the General Partner has full power and authority to execute
and deliver this Agreement and any documents referred to herein and to perform
its obligations in accordance herewith and therewith;
(iii) all acts, consents, licenses, orders, authorizations,
approvals, waivers, extensions, and variances of, and notices to or filings with
any governmental or public body and other proceedings to be taken by or on the
part of the General Partner to authorize the General Partner to perform
hereunder and under any documents referred to herein or contemplated hereby have
been duly and properly taken;
- xvi -
<PAGE> 5
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(iv) this Agreement has been duly authorized, executed and
delivered by the General Partner and, assuming the due authorization, execution
and delivery of this Agreement by the Owner, this Agreement constitutes the
legal, valid and binding obligation of the General Partner, enforceable in
accordance with 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); and
(v) the execution, delivery and performance hereof by the General
Partner and any obligations contemplated herein will not result in any violation
of any term of the articles of incorporation or the by-laws of the General
Partner, do not require stockholder approval or the approval or consent of any
trustee or holders of indebtedness of the General Partner 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 General Partner under, any
indenture, mortgage or other agreement or instrument to which the General
Partner 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 General
Partner or any of its activities or properties.
SECTION (b) The Owner hereby represents and warrants to the
General Partner that:
(i) the Owner (i) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, (ii) has
the requisite power and legal right to own and operate its properties and to
carry on its business as presently conducted and (iii) to the best of its
knowledge after due inquiry, is duly qualified to do business as a foreign
limited partnership in good standing in each jurisdiction in which its ownership
or leasing of properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not materially
impair the ability of the Owner to perform its obligations hereunder;
(ii) the Owner has full power and authority to execute and deliver
this Agreement and any documents referred to herein and to perform its
obligations in accordance herewith and therewith;
- xvii -
<PAGE> 6
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
(iii) all acts, consents, licenses, orders, authorizations,
approvals, waivers, extensions and variances of, and notices to or filings with
any governmental or public body and other proceedings to be taken by or on the
part of the Owner to authorize the Owner to perform hereunder and under any
documents referred to herein or contemplated hereby have been duly and properly
taken;
(iv) this Agreement has been duly authorized, executed and
delivered by the Owner and, assuming the due authorization, execution and
delivery of this Agreement by the General Partner, this Agreement constitutes
the legal, valid and binding obligation of the Owner, enforceable in accordance
with 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);
(v) the execution, delivery and performance hereof by the Owner
and any obligations contemplated herein will not result in any violation of any
term of the certificate of limited partnership or the partnership agreement of
the Owner, do not require the approval or consent of any limited partner or
general partner of the Owner, 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 Owner under, any indenture, mortgage or other
agreement or instrument to which the Owner 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 Owner or any of its activities or properties; and
(vi) upon the sale of the Property and Equipment, as contemplated
hereby, the Owner's interest in the Property and Equipment will vest in the
General Partner, free and clear of all Liens (other then Permitted Liens).
ARTICLE 8.
MISCELLANEOUS
- xviii -
<PAGE> 7
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
SECTION (a) Assignment. No party to this Agreement may assign any of
its rights or delegate any of its obligations hereunder without the prior
written consent of the other party hereto; provided that, (i) the Owner shall be
permitted to assign its right, title and interest in this Agreement to the
Assignee without the prior written consent of the General Partner and (ii) the
General Partner shall be permitted to assign its right, title and interest in
this Agreement to any Affiliate of the General Partner (other than the Lessee)
without the prior written consent of the Owner.
SECTION (b) Indemnification. The General Partner hereby agrees to
indemnify the Owner, 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 Owner), employees, agents and
servants from, and holds each of them harmless against, any and all liabilities,
taxes, losses, obligations, claims, damages, penalties, causes of action, suits,
costs and expenses (including, without limitation, attorneys' and accountants'
fees) to which any of them may become subject, insofar as such liabilities,
taxes, losses, obligations, claims, damages, penalties, causes of action, suits,
costs and expenses arising out of this Agreement, including without limitation
the failure of the General Partner to purchase the Property and Equipment after
notice to the Owner and the Lessee of its intent to purchase the Property and
Equipment on the Exercise Date.
SECTION (c) Amendments and Waivers. Any term, covenant, agreement or
condition of this Agreement may be amended, or compliance therewith may be
waived, only by an instrument or instruments in writing executed by each of the
parties hereto. A waiver on one occasion shall not be construed to be a waiver
with respect to any other occasion.
SECTION (d) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION (e) Headings. The headings of sections contained in this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
SECTION (f) Entire Agreement. This Agreement sets forth the entire
agreement among the parties hereto with respect to the subject
- xix -
<PAGE> 8
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
matter hereof and no representations, warranties, promises, guaranties or
agreements, oral or written, express or implied, have been made by any party
hereto with respect to this Agreement or the Property or Equipment, except as
provided herein.
SECTION (g) Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
SECTION (h) Definitions. Unless otherwise indicated, capitalized terms
used and not otherwise defined herein shall have the respective meanings given
to them in the Lease.
SECTION (i) Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an original,
provided that all such counterparts, taken together, shall constitute but one
and the same agreement.
SECTION 8.10. Specific Performance. The Owner and the General Partner
acknowledge that the Purchase Option is a unique and valuable right, without
which the parties hereto would lose substantial benefits. The parties hereto
have concluded that, upon breach of this Agreement by any of the parties hereto,
legal remedies would be inadequate and impracticable to enforce, in that, among
other things, it would be difficult to calculate with reasonable certainty the
legal damages payable as a result of such breach; therefore, the obligations of
each of the parties hereto shall be enforceable by means of a suit for specific
performance brought by any one or more of the other parties hereto.
SECTION (a) WAIVER OF JURY TRIAL. THE PARTIES HERETO EXPRESSLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES HERETO
ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 4.11 HAVE BEEN BARGAINED FOR AND
THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.
SECTION (b) Notices. All notices, requests, demands and other
communications hereunder shall be governed by, and given in accordance with and
at the addresses determined pursuant to, Section 23 of the Lease.
SECTION (c) Term. This Agreement shall terminate upon the earlier of
(a) the expiration or termination of the Lease, or (b) the exercise
- xx -
<PAGE> 9
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
of the Purchase Option and the consummation of all transactions contemplated in
such event hereunder; provided, however, that the obligations of the General
Partner contained in Section 4.02 of this Agreement shall survive the expiration
or termination of this Agreement and shall continue in full force and effect.
SECTION (d) Limitation of Liability. (i) The Owner's obligations
hereunder are intended to be the obligations of the limited partnership and of
the corporation which is the general partner thereof only and no recourse for
any obligation of the Owner hereunder, or for any claim based thereon or
otherwise in respect thereof, shall be had against any limited partner of the
Owner 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 Owner, or against any direct or indirect parent
corporation of such corporate general partner or of any limited partner of the
Owner or any other subsidiary or affiliate of any such direct or indirect parent
corporation or any incorporator, shareholder, officer or director, as such,
past, present or future, of any such parent or other subsidiary or affiliate, it
being understood that the Owner and the general partner thereof are a limited
partnership and a corporation, respectively, formed for the purpose of the
transactions involved in and relating to this Agreement on the express
understanding aforesaid. Nothing contained in this Section shall be construed to
limit the exercise or enforcement, in accordance with the terms of this
Agreement and any other documents referred to herein, of rights and remedies
against the limited partnership or the corporate general partner of the Owner or
the assets of the limited partnership or the corporate general partner of the
Owner.
(ii) The General Partner's obligations hereunder are intended to be
the corporate obligations of the General Partner only and no recourse for any
obligation of the General Partner hereunder, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, or affiliate, as such, past, present or future
of the General Partner or of any successor corporation, or against any direct or
indirect parent corporation of the General Partner 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 Section shall
be construed to limit the exercise or enforcement, in accordance with the terms
of this Agreement and any other documents referred to herein, of rights and
remedies against the General Partner or the assets of the General Partner.
- xxi -
<PAGE> 10
THIS AMENDED AND RESTATED AGREEMENT FOR LEASE
IS CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers as of the day and year
first above written.
PCS NITROGEN FERTILIZER OPERATIONS,
INC.
By_______________________________________
Name:
Title:
TRINIDAD AMMONIA COMPANY,
LIMITED PARTNERSHIP
By: TRINIDAD AMMONIA CAPITAL,
INC., its General Partner
By_______________________________________
Name:
Title:
- xxii -
<PAGE> 1
EXHIBIT 10(w)
SHORT-TERM INCENTIVE PLAN
Potash Corporation [POTASH CORPORATION
May 7, 1997 of Saskatchewan Inc LOGO]
<PAGE> 2
POTASH CORPORATION OF SASKATCHEWAN INC.
SHORT-TERM INCENTIVE PLAN
This Short-Term Incentive Plan (the "Plan") is intended to aid in maintaining
and developing strong management in the Potash Corporation of Saskatchewan Inc.
and its direct and indirect subsidiaries (the "Corporation") by providing
financial incentives to key employees, in addition to their basic salaries, in
recognition of their achievement of objectives which contribute materially to
the success of the Corporation's business interests.
1. DEFINITIONS
In this Plan, except where the context otherwise indicates, the
following definitions apply:
a. "Award Percentage" means a percentage based on the table
contained in Schedule I and calculated in accordance with
the formulae contained in Schedule I;
b. "Board" means Board of Directors of Potash Corporation of
Saskatchewan Inc.;
c. "CEO" means the Chief Executive Officer, from time to time,
of Potash Corporation of Saskatchewan Inc.;
d. "Committee" means the Compensation Committee of the Board;
e. "Entitled Employee" means an employee of the Corporation
who is designated by the Committee as eligible to receive
an Incentive Award under this Plan (and which employee is
in the employ of the Corporation as of the end of the
Year).
f. i. "Entitled Subsidiary Employee" means an
Entitled Employee who is attached to one of
the direct or indirect subsidiaries of the
Corporation and who is not an Entitled
Operations Employee;
ii. "Entitled Operations Employee" means an
Entitled Employee who is attached to one of
the Operating facilities of the Corporation
or its direct or indirect subsidiaries.
g. "Equity" for any year means the average of the opening and
closing balances (after adding to the closing balance any
amount accrued in such year in respect of Incentive Awards)
for the fiscal year as reported in the audited financial
statements of the Corporation for such year;
h. "Incentive Awards" means financial incentives awarded to
Entitled Employees
II-1
<PAGE> 3
pursuant to the Plan;
i. "Net Income" for any year means the amount reported as net
income in the audited financial statement of the
Corporation plus research and development expenditures, tax
expenditures, plus any amount accrued in such year in
respect of Incentive Awards, as adjusted by the Committee
at its discretion to account for the effect of any
extraordinary nonrecurring charges or credits;
j. "Return on Equity" or "ROE' means the product obtained by
first dividing Net Income in any year by Equity and
multiplying the resulting quotient by 100;
k. "Target ROE" means the Return on Equity projected in the
approved budget;
l. "Target Percentage" means the Award Percentage at Target
ROE as shown in the table contained in Schedule I.
m. "Termination of Employment" means the cessation of
employment with the Corporation;
n. "Year" means any given fiscal year of the Corporation;
2. LIMITATION OF AWARD INCENTIVES
Generally, no Incentive Award shall be granted under this Plan with
respect to any Year in which the Return on Equity is less than 50% of
the Target ROE; provided, however, that the Committee may elect, in
its discretion, to make Incentive Awards in any year regardless of
the Return on Equity.
3. AWARDS GRANTABLE
An Incentive Award is grantable with respect to any Year to any
Entitled Employee who has not less than three months' employment with
the Corporation during such Year. Entitled Employees who have been
employed by the Corporation for less than one year shall have their
Incentive Awards pro-rated in accordance with their period of
employment.
4. METHOD OF DETERMINING INCENTIVE AWARDS
a. Entitled Employees shall be divided, as determined by the
Committee in consultation with the CEO, into seven groups as
follows:
TIER I Corporate President, Chairman & CEO
TIER II Corporate Senior Vice Presidents,
Subsidiary Presidents, and
Selected Subsidiary Executive Vice Presidents
II-2
<PAGE> 4
TIER III Corporate Vice Presidents
Subsidiary Executive Vice Presidents
and Selected Subsidiary Vice Presidents
TIER IV Selected Subsidiary Vice Presidents
Selected Corporate Executive employees
TIER V Subsidiary Operations General Managers
Selected Subsidiary Vice Presidents
Selected Directors
TIER VI Corporate Director Class
Subsidiary Director Class
Selected Subsidiary Superintendents
TIER VII Selected Key Manager Class - Corporate
Provided that the CEO may, from time to time, designate an
employee for inclusion in one of the above-mentioned groups
when, but for such designation, the employee would otherwise
not be included in such group.
b. Entitled Employees (except Entitled Subsidiary Employees and
Entitled Operations employees)
The Incentive Award for each Entitled Employee who is not an
Entitled Subsidiary Employee or Entitled Division Employee
will be the Award Percentage of the annual salary of such
employee, with a deviation of plus or minus 10% of the award
so determined, which deviation will be dependent upon the
Entitled Employee's performance as determined by his or her
supervisor and approved in accordance with the provisions of
this Plan.
c. ENTITLED SUBSIDIARY EMPLOYEES
Incentive Awards for each Entitled Subsidiary Employee shall
be the sum of (i) and (ii) below which amount shall be arrived
at by calculating:
(i) The award payable if calculated in accordance with
the provisions of paragraph 4(b), and thereafter
dividing the award so calculated by 2.
(ii) An award arrived at by calculating the Target
Percentage of the annual salary of such employee and
adjusting that award by applying a formula to be
developed from time to time by the CEO in
consultation with the Senior Vice President,
Administration and the appropriate Subsidiary
President, which
II-3
<PAGE> 5
formula shall reasonably reflect the actual results
of the Subsidiary to which the employee is attached
as compared to the approved budget for that
Subsidiary and thereafter dividing the adjusted award
by 2.
d. ENTITLED OPERATIONS EMPLOYEE
Incentive Awards for each Entitled Operations Employee shall
be the sum of (i) and (ii) below which amount shall be arrived
at by calculating:
i. The award payable if calculated in accordance with
the provisions of paragraph 4(b) and thereafter
dividing the award so calculated by 2.
ii. An award arrived at by calculating the target
percentage of the annual salary of such employee and
adjusting that award by applying a formula to be
developed from time to time by the CEO in
consultation with the Senior Vice President,
Administration and the appropriate Subsidiary
President, which formula shall reasonably reflect the
actual results of the Operating facility to which the
employee is attached as compared to the approved
budget for that Operating facility and thereafter
dividing the adjusted award by 2.
e. GENERAL
The Incentive Award for any Entitled Employee may exceed or be
below the amount calculated in accordance with the foregoing
formulae at the discretion of the CEO. Incentive Awards
falling outside the established range shall be recommended by
the CEO and shall be approved by the Committee in the normal
course of administering the Incentive Compensation Plan.
5. GRANTING AUTHORITY AND ADMINISTRATION
The Committee shall, on the recommendation of the CEO, approve the
number and amount of Incentive Awards for any given year within three
months after the end of such year. The Committee shall conclusively
interpret the provisions of this Plan and decide all questions of fact
arising in the application. Determinations and interpretations in
individual cases may be made by the CEO with due regard to consistency
with any prior action by the Committee and such determination shall be
binding and conclusive upon the individual employees concerned and
persons claiming under them.
6. NON-ASSIGNMENT
Rights and Incentive Awards granted under this Plan are not
assignable, except that in the case of the death of an Entitled
Employee any Incentive Award which would otherwise be paid to such
employee shall be paid to his or her estate. Incentive Awards are
not subject, in
II-4
<PAGE> 6
whole or in part, to attachment, execution or levy of any kind.
7. AMENDMENTS
The Board may from time to time amend this Plan, or any provision
thereof, except that the terms and conditions of Incentive Awards
which have been granted cannot be amended so as to adversely affect
the rights of the grantee without his or her consent.
8. TERM
This Plan shall be effective on and from January 1, 1997, shall apply
to Incentive Awards for fiscal year 1997 and thereafter, and shall
terminate only by appropriate action of the Board.
II-5
<PAGE> 7
SCHEDULE I
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Group Award Percentage at Award Award Percentage at
Threshold ROE Percentage at Maximum
(50% Of Target ROE) Target ROE (150% of Target ROE)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tier I
Corporate President, Chairman
and CEO 25% 50% 100%
- ---------------------------------------------------------------------------------------------------------------------
Tier II
Corporate Sr. V.Ps.
Subsidiary Presidents 20% 40% 80%
- ---------------------------------------------------------------------------------------------------------------------
Tier III
Corporate V.Ps
Subsidiary Executive V.Ps 15% 30% 60%
Selected Subsidiary V.Ps
- ---------------------------------------------------------------------------------------------------------------------
Tier IV
Selected Subsidiary V.Ps 12.5% 25% 50%
- ---------------------------------------------------------------------------------------------------------------------
Tier V
Subsidiary Operations
General Managers 10% 20% 40%
Selected Subsidiary V.Ps
Selected Directors
- ---------------------------------------------------------------------------------------------------------------------
Tier VI
Corporate Director Class
Subsidiary Director Class 7.5% 15% 30%
Selected Subsidiary
Superintendents
- ---------------------------------------------------------------------------------------------------------------------
Tier VII
Selected Key Manager Class -
Corporate 5% 10% 20%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
II-6
<PAGE> 8
FORMULA
The Award Percentage shall be calculated in accordance with the following
formulae:
(I) Where the ROE is less than the Target ROE:
<TABLE>
<S> <C> <C> <C>
Tier I -- 50% (AROE)
Tier II -- 40% (AROE)
Tier III -- 30% (AROE)
Tier IV -- 25% (AROE)
Tier V -- 20% (AROE)
Tier VI -- 15% (AROE)
Tier VII -- 10% (AROE)
</TABLE>
(ii) Where the ROE is equal to or greater than the Target ROE:
<TABLE>
<S> <C> <C> <C> <C>
Tier I -- 100% (AROE) - 50%
Tier II -- 80% (AROE) - 40%
Tier III -- 60% (AROE) - 30%
Tier IV -- 50% (AROE) - 25%
Tier V -- 40% (AROE) - 20%
Tier VI -- 30% (AROE) - 15%
Tier VII -- 20% (AROE) - 10%
</TABLE>
NOTES:
(i) Adjusted ROE (AROE)) = ROE X 100
----------------
Target ROE
(ii) Where AROE is greater than 150 (i.e. the maximum return on
equity) the AROE is deemed to be 150.
II-7
<PAGE> 1
EXHIBIT 10(x)
LONG-TERM INCENTIVE PLAN
Potash Corporation [POTASH CORPORATION
May 7, 1997 of Saskatchewan Inc LOGO]
II-8
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1 - PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.03 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.04 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.05 Grant Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.06 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.07 Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.08 Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.09 Target Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 Executive Tiers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.12 Unit Grant Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3 - ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.01 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.02 Rights Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.03 Subsequent Grant Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4 - UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.01 Description and Value of a Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.02 Grant of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.03 Redemption of Units
(a) Part One Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Part Two Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.04 Performance Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.05 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5 - EVENTS AFFECTING ENTITLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.01 Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Voluntary Termination or Termination for Cause . . . . . . . . . . . . . . . . . . . . . . 7
(b) Involuntary Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.02 Disability or Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.03 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6 - ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.01 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.02 Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7 - RIGHTS OF EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.01 Non-Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.02 Rights to Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.03 No Extension of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 8 - ADMINISTRATION AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.01 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.02 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.03 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.04 Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 4
SECTION 1 - PURPOSE
1.01 PURPOSE
The Potash Corporation of Saskatchewan Inc. Long-Term Incentive
Plan is established as a vehicle by which equity-based incentives
may be awarded to retain high potential, high value employees, to
recognize and reward their significant contributions to the
long-term success of the Company, and to align their interests
more closely with the shareholders of the Company.
<PAGE> 5
SECTION 2 - DEFINITIONS
In this Plan, the following words, when capitalized have the following meaning:
2.01 BOARD
K "Board" means the Board of Directors of the Company.
2.02 COMMITTEE
"Committee" means the Compensation Committee of the Board.
2.03 COMPANY
"Company" means Potash Corporation of Saskatchewan Inc. and its
direct and indirect subsidiaries.
2.04 EMPLOYEE
"Employee" means an employee of the Company designated as a Tier I
through Tier V executive.
2.05 GRANT DATE
"Grant Date" means January 1, 1994 and the January 1 every third
year thereafter, or such other dates as are determined from time
to time by the Committee and approved by the Board.
2.06 PLAN
"Plan" means this Potash Corporation of Saskatchewan Inc.
Long-Term Incentive Plan.
2.07 REDEMPTION DATE
Redemption Date means the date established by the Committee upon
which Units are redeemed for cash in accordance with Section 4
(Units).
<PAGE> 6
2.08 SALARY
Salary means the Employee's base annual salary on the Grant Date
which amount may, at the discretion of the Committee, be adjusted
to reflect anticipated changes in actual salary during the life of
the Units.
2.09 TARGET BONUS
"Target Bonus" means, in the case of a Tier I Executive 50% of
Salary; in the case of a Tier II Executive 40% of Salary; in the
case of a Tier III Executive 30% of Salary; in the case of Tier
IV executive 25% of Salary; in the case of Tier V Executive 20%
of Salary.
2.10 TIER I, II, III, IV OR V EXECUTIVE
Tier I, II, III, IV or V Executive means an employee of the
Company designated by the Committee as a Tier I, II, III, IV or V
Executive.
2.11 UNIT
"Unit" means a Unit as described in Section 4 (Units).
2.12 UNIT GRANT DATE
Unit Grant Date means the Grant Date upon which a particular
number of Units were granted.
<PAGE> 7
SECTION 3 - ELIGIBILITY AND PARTICIPATION
3.01 ELIGIBILITY
This Plan applies to Employees whom the Committee designates as
eligible for a grant of Units pursuant to Section 4 (Units).
3.02 RIGHTS UNDER THE PLAN
An Employee who has been granted Units shall continue to have
rights in respect of such Units until redeemed for cash as
described in Section 4 (Units), subject to Section 5 (Events
Affecting Entitlement).
3.03 SUBSEQUENT GRANT DATES
A grant of Units to an Employee on a Grant Date shall not be
construed to create a right to a grant of Units on a Subsequent
Grant Date.
<PAGE> 8
SECTION 4 - UNITS
4.01 DESCRIPTION AND VALUE OF A UNIT
A unit is a notional amount equal to the market value of a common
share of the Company.
The market value of a common share in respect of a Grant Date or a
Redemption Date for Employees who receive their salary in United
States currency shall be the closing value of such a share on the
day first preceding such date in which a round lot of such shares
was traded, as listed on the New York Stock Exchange.
The market value of a common share in respect of a Grant Date or a
Redemption Date for employees who receive their salary in Canadian
currency shall be the closing value of such a share on the day
first preceding such date in which a round lot of such shares was
traded as listed on the New York Stock Exchange and converted to
Canadian currency based on the published exchange rate of the Bank
of Canada in effect on the close of business on the business day
immediately preceding the Grant Date or the Redemption Date.
4.02 GRANT OF UNITS
On each Grant Date, the Committee shall grant Units to each
eligible Employee, using the following formula as a general
guideline, subject to adjustments approved by the Committee upon
the recommendation of the chief executive officer of the company.
Employee's Target Bonus
DIVIDED BY
one Unit on the Grant Date
MULTIPLIED BY 3
The total Units granted shall be divided equally into two parts
and treated separately for redemption purposes. Part One Units
shall be redeemed in accordance with Section 4.03(a) below. Part
Two Units shall be redeemed in accordance with Section 4.03(b)
below.
<PAGE> 9
4.03 REDEMPTION OF UNITS
Units shall be redeemed for cash at market value on a Redemption
Date in accordance with paragraphs (a) and (b) below.
(a) PART ONE UNITS
The Redemption Date for Part One Units shall be determined
by the Committee, but in no event shall the Redemption
Date be later than the last day of the second calendar
year following the calendar year of the Unit Grant Date.
(b) PART TWO UNITS
One third of the Part Two Units shall be redeemed on or
before each of the first, second and third anniversaries
of the Unit Grant Date. The Redemption Dates for Part Two
Units shall be determined by the Committee. In no event
shall any Redemption Date for Part Two Units be later than
the end of the second calendar year following the calendar
year of the Unit Grant Date.
4.04 PERFORMANCE ADJUSTMENTS
Notwithstanding Sections 4.01, 4.02 and 4.03 above, the
number of Units to be redeemed on a Redemption Date in
respect of Part One Units shall be dependent on the
performance of the Company and the Employee, based upon
criteria determined by the Committee from time to time.
Such criteria shall include the cash flow of the Company,
the Company's operating results and net income as
contained in the most recent financial statements of the
Company, and return on equity. In lieu of the number of
Part One Units calculated in accordance with Section 4.02,
the Committee may, on or before the Redemption Date,
reduce or increase the number of Units redeemable by 50%.
4.05 ADJUSTMENTS
The number and value of Units held by an Employee shall be
adjusted to account for divisions or consolidations of the common
shares of the Company.
<PAGE> 10
SECTION 5 - EVENTS AFFECTING ENTITLEMENT
5.01 TERMINATION OF EMPLOYMENT
(a) VOLUNTARY TERMINATION OR TERMINATION FOR CAUSE
An Employee who voluntarily terminates employment with the
Company or who is terminated by the Company other than in
accordance with the prevailing retirement policy of the
Company, for cause (as determined by the Company), prior
to retirements, shall forfeit his or her interest in the
Units not yet redeemed pursuant to Section 4.03
(Redemption of Units).
(b) INVOLUNTARY TERMINATION
The Units held by an Employee who is involuntarily
terminated by the Company, for reasons other than cause,
shall be redeemed on the dates set out in Section 4
(Units), provided, however, that in addition to the
adjustments contemplated in Section 4.04 (Performance
Adjustments), the Committee shall reduce the number of
Units redeemable pro rata based on the proportion between:
(a) the number of months between the date employment
terminates and the Redemption Date and (b) the number of
months between the Grant Date and the Redemption Date.
5.02 DISABILITY OR RETIREMENT
The Units of an Employee who becomes disabled and who qualifies
for benefits under the long-term disability insurance plan
sponsored by the Company or of an Employee who retires from the
Company, shall be redeemed in accordance with Section 5.01 (b),
based on the date benefits commence under the long-term disability
insurance plan or retirement date, as the case may be.
5.03 DEATH
The Units of an Employee who dies shall be redeemed in accordance
with Section 5.01(b), based on the Employee's date of death.
<PAGE> 11
SECTION 6 - ADMINISTRATION
6.01 RECORDS
The Company shall maintain records indicating the number of Units
credited to an Employee under the Plan from time to time, the
Grant Dates of such Units and the market value of a common share
of the Company on such Grant Dates, as listed on the New York
Stock Exchange. Such records shall be conclusive as to all
matters involved in the administration of the Plan.
6.02 STATEMENTS
The Company shall furnish annual statements to each Employee
indicating the number of Units credited to the Employee, the Grant
Dates of the Units and the market value of a common share of the
Company on such Grant Dates, as listed on the New York Stock
Exchange and such other information that the Company considered
relevant to the Employee.
<PAGE> 12
SECTION 7 - RIGHTS OF EMPLOYEES
7.01 NON-ASSIGNABILITY
The rights of an Employee under the Plan are non-transferable, in
whole or in part, in any manner.
7.02 RIGHTS TO SHARES
This Plan shall not be interpreted to create any entitlement of an
Employee to the common shares of the Company, or to the dividends
payable pursuant thereto.
7.03 NO EXTENSION OF RIGHTS
Nothing contained in the Plan shall give any Employee the right to
be retained in the service of the Company nor shall it interfere
with the right of the Company to discharge the Employee.
Participation in this Plan shall not give any Employee any right
or claim to any benefit except to the extent provided in the Plan.
<PAGE> 13
SECTION 8 - ADMINISTRATION AND TERMINATION
8.01 ADMINISTRATION
The Company and the Committee may make such rules as they deem
necessary or advisable for the administration and operation of the
Plan. The Company and the Committee may delegate to any person
any administrative duties and powers under the Plan. All
decisions and interpretations of the Company and the Committee
respecting the Plan and all rules made pursuant thereto, shall be
binding on the Company, the Committee and the Employees and their
respective legal representatives.
8.02 AMENDMENT
The Board, on the recommendation of the Committee, may amend the
Plan at any time, provided, however, that no amendment shall
reduce the interests of the Employees in respect of any Units
previously granted to an Employee, without the Employee's written
consent.
8.03 TERMINATION
The Company may terminate the Plan at any time, in which case all
Units granted to Employees shall be redeemed in cash as of the
termination date of the Plan.
8.04 APPLICABLE LAWS
The Plan shall be governed by and construed in accordance with the
laws applicable in the Province of Saskatchewan.
<PAGE> 1
EXHIBIT 11
POTASH CORPORATION OF SASKATCHEWAN INC.
COMPUTATION OF PER SHARE EARNINGS
FOR THE QUARTERS ENDED JUNE 30
(Figures and amounts expressed in thousands of U.S. dollars, except per share
and per option amounts)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
YTD -1997 YTD -1996 Q2-1997 Q2-1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A Net Income as reported, Canadian GAAP 153,345 116,076 96,980 52,398
- --------------------------------------------------------------------------------------------------------------
B Items adjusting net income (4,292) (4,318) (1,118) (1,091)
- --------------------------------------------------------------------------------------------------------------
C Net Income, US GAAP (A+B) 149,053 111,758 95,862 51,307
- --------------------------------------------------------------------------------------------------------------
D Weighted average number of shares 50,770 45,513 53,685 45,543
outstanding
- --------------------------------------------------------------------------------------------------------------
E Options outstanding to purchase 1,627 1,289 1,627 1,289
equivalent shares
- --------------------------------------------------------------------------------------------------------------
F Average exercise price per option $52.90 $43.55 $52.90 $43.55
- --------------------------------------------------------------------------------------------------------------
G Average market price per share 79.56 67.91 78.67 $65.47
- --------------------------------------------------------------------------------------------------------------
H Period end market price per share 75.06 66.25 75.06 $66.25
- --------------------------------------------------------------------------------------------------------------
I Rate of Return available on option 0.05 0.05 0.05 0.05
proceeds
- --------------------------------------------------------------------------------------------------------------
CANADIAN GAAP
- --------------------------------------------------------------------------------------------------------------
Basic earnings per share (A/D $3.02 $2.55 $1.81 $1.15
- --------------------------------------------------------------------------------------------------------------
Fully diluted earnings per share
J Imputed earnings on option proceeds
(E*F*1) 4,302 2,807 4,302 2,807
- --------------------------------------------------------------------------------------------------------------
Fully diluted earnings per share $3.01 $2.54 $1.83 $1.18
((A+J)/(D+E))
- --------------------------------------------------------------------------------------------------------------
UNITED STATES GAAP
- --------------------------------------------------------------------------------------------------------------
Basic earnings per share
Net additional shares issuable 545 462 533 432
K (E-(E*F/G))
- --------------------------------------------------------------------------------------------------------------
Basic earnings per share (C/(D+K)) $2.90 $2.43 $1.77 $1.12
- --------------------------------------------------------------------------------------------------------------
Fully diluted earnings per share
L Net additional shares issuable
(E-(E*F/H)) 480 442 480 442
- --------------------------------------------------------------------------------------------------------------
Fully diluted earnings per share
(C/(D+L)) $2.91 $2.43 $1.77 $1.12
- --------------------------------------------------------------------------------------------------------------
D+K Weighted average shares for US GAAP 51,315 45,975 54,218 45,975
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 99,087
<SECURITIES> 0
<RECEIVABLES> 353,456
<ALLOWANCES> (6,486)
<INVENTORY> 345,395
<CURRENT-ASSETS> 825,909
<PP&E> 3,566,311
<DEPRECIATION> (591,583)
<TOTAL-ASSETS> 4,435,702
<CURRENT-LIABILITIES> 477,146
<BONDS> 1,270,718
0
0
<COMMON> 1,206,125
<OTHER-SE> 900,514
<TOTAL-LIABILITY-AND-EQUITY> 4,435,702
<SALES> 1,141,482
<TOTAL-REVENUES> 1,141,482
<CGS> 842,303
<TOTAL-COSTS> 842,303
<OTHER-EXPENSES> 53,952
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,378
<INCOME-PRETAX> 207,849
<INCOME-TAX> 54,504
<INCOME-CONTINUING> 153,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153,345
<EPS-PRIMARY> 3.02
<EPS-DILUTED> 3.01
</TABLE>
