EXHIBIT 4.7
[CONFORMED COPY]
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CREDIT AGREEMENT
dated as of December 31, 1997
and
Amended and Restated as of June 25, 1999
among
TERRA INTERNATIONAL (CANADA) INC.,
as Borrower
CERTAIN GUARANTORS
CERTAIN LENDERS
XXXXXXX XXXXX XXXXXX INC.,
as Arranger
and
CITIBANK, N.A.,
as Administrative Agent
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[Exhibits X-0, X-0, X-0 and D-4 are copies of Opinions as Delivered]
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms....................................... 2
Section 1.02. Computation of Time Periods................................. 30
Section 1.03. Accounting Terms............................................ 30
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. The Advances................................................ 31
Section 2.02. Effecting the Assignments of the Advances................... 32
Section 2.03. Repayment................................................... 33
Section 2.04. Termination of the Commitments.............................. 33
Section 2.05. Prepayments................................................. 33
Section 2.06. Interest.................................................... 34
Section 2.07. Conversion and Continuation of Advances..................... 35
Section 2.08. Increased Costs, Illegality, Etc............................ 36
Section 2.09. Payments and Computations................................... 38
Section 2.10. Taxes....................................................... 40
Section 2.11. Sharing of Payments, Etc.................................... 41
Section 2.12. Criminal Rate of Interest................................... 42
Section 2.13. Replacement of Lenders...................................... 42
ARTICLE III
CONDITIONS TO RESTATEMENT
Section 3.01. Conditions Precedent........................................ 43
Section 3.02. Conditions Precedent to Section 2.01(a) Assignments......... 47
Section 3.03. Determinations Under Section 3.01........................... 48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower.............. 48
Section 4.02. Representations and Warranties of each Lender............... 56
ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants....................................... 56
(i)
Section 5.02. Negative Covenants.......................................... 63
Section 5.03. Reporting Requirements...................................... 77
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default........................................... 82
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action.................................... 85
Section 7.02. Administrative Agent's Reliance, Etc........................ 86
Section 7.05. Indemnification............................................. 87
Section 7.06. Collateral Duties........................................... 87
Section 7.07. Successor Administrative Agent.............................. 88
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee............................................... 89
Section 8.02. Obligations Unconditional................................... 89
Section 8.03. Reinstatement............................................... 90
Section 8.04. Subrogation................................................. 90
Section 8.05. Remedies.................................................... 91
Section 8.06. Instrument for the Payment of Money......................... 91
Section 8.07. Continuing Guarantee........................................ 91
Section 8.08. Rights of Contribution...................................... 91
Section 8.09. General Limitation on Guarantee Obligations................. 92
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc................................... 92
Section 9.02. Notices, Etc................................................ 94
Section 9.03. No Waiver; Remedies......................................... 94
Section 9.04. Costs, Expenses and Indemnification......................... 95
Section 9.05. Right of Setoff............................................. 96
Section 9.06. Jurisdiction, Service of Process and Venue.................. 97
Section 9.07. Assignments and Participations.............................. 98
Section 9.08. Execution in Counterparts................................... 101
Section 9.09. Confidentiality............................................. 101
Section 9.10. WAIVER OF JURY TRIAL........................................ 101
Section 9.11. Survival.................................................... 101
Section 9.12. Captions.................................................... 102
Section 9.13. Successors and Assigns...................................... 102
(ii)
Section 9.14. No Immunity................................................. 102
Section 9.15. Judgment Currency........................................... 102
ANNEX A Applicable Margin
SCHEDULE 2.01 List of Outstanding Advances
SCHEDULE 4.01(b) Subsidiaries
SCHEDULE 4.01(c) List of Conflicts with Credit Instruments
SCHEDULE 4.01(d) List of Required Authorizations, Consents
SCHEDULE 4.01(j) Plans and Multiemployer Plans
SCHEDULE 4.01(q) Environmental Compliance Schedule
SCHEDULE 4.01(u) Open Tax Years
SCHEDULE 4.01(y) Existing Debt
SCHEDULE 5.02(a)(iii) Existing Liens
SCHEDULE 5.02(c) Existing Hedge Agreements
SCHEDULE 5.02(f) Investments
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B-1 Form of Amended and Restated Holdings Pledge Agreement
EXHIBIT B-2 Form of Amended and Restated Terra Capital Pledge and
Security Agreement
EXHIBIT B-3 Form of Amended and Restated Subsidiary Pledge and
Security Agreement
EXHIBIT B-4 Form of Amended and Restated TNLP Pledge and Security
Agreement
EXHIBIT B-5 Terra Canada Security Agreement
EXHIBIT B-6 Terra Canada Mortgage
EXHIBIT B-7 Form of Mortgage
EXHIBIT C Form of Restatement Date Notice
EXHIBIT D-1 Form of Opinion of Special U.S. Counsel to the Obligors
EXHIBIT D-2 Form of Opinion of Special Canadian Counsel to Terra
Canada
EXHIBIT D-3 Form of Opinion of Special New York Counsel to Citibank
EXHIBIT D-4 Form of Opinion of Special Canadian Counsel to Citibank
EXHIBIT E Form of Confirmation of Loan Purchase Agreement
EXHIBIT E-1 Loan Purchase Agreement
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Intercreditor Agreement
EXHIBIT H Form of New York Process Agent Acceptance
(iii)
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 31, 1997 and amended and
restated as of June 25, 1999 among:
(1) TERRA INTERNATIONAL (CANADA) INC., an Ontario corporation (the
"Borrower");
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(2) each of the corporations and limited partnerships listed on the
signature pages hereof under the caption "GUARANTORS";
(3) each of the lenders (the "Initial Lenders") listed on the signature
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pages hereof; and
(4) CITIBANK, N.A., as agent (together with its successor in such capacity
appointed pursuant to Article VII, the "Administrative Agent") for the
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Lenders hereunder.
PRELIMINARY STATEMENTS:
Capitalized terms used in these Preliminary Statements and not
otherwise defined have the meanings assigned to them in Section 1.01.
(a) The Borrower, the Guarantors, the Initial Lenders (or certain of
their Affiliates) and the Administrative Agent are parties to a Credit Agreement
dated as of December 31, 1997 and amended and restated as of March 31, 1998 (as
in effect on the Restatement Date, the "Existing Credit Agreement") pursuant to
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which such Lenders made term loans to the Borrower on December 31, 1997 in an
aggregate principal amount equal to $125,000,000.
(b) Terra has entered into an Asset Sale and Purchase Agreement dated
May 3, 1999 (as from time to time amended, the "Distribution Business Sale
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Agreement") between Terra and Cenex/Land O'Lakes Agronomy Company, a Minnesota
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corporation ("Cenex"), pursuant to which Terra has agreed to sell all of its
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right, title, and interest in and to the properties, assets, and rights of every
kind relating to the Distribution Business.
(c) The Borrower has requested that the Initial Lenders consent to
the sale by Terra of the Distribution Business as contemplated in the
Distribution Business Sale Agreement, all on the terms and conditions set forth
herein.
(d) The Borrower has also requested that the Initial Lenders amend
the Existing Credit Agreement, among other things to (i) reflect that portions
of the "Advances" outstanding under and as defined in the Existing Credit
Agreement are being assigned by the Lenders thereunder to the Initial Lenders
pursuant hereto, (ii) to modify certain covenants thereof and (ii) to make
certain other changes to the Existing Credit Agreement and the other Loan
Documents, all on the terms and conditions set forth herein, it being the
intention of the parties
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hereto that (i) the advances outstanding under the Existing Credit Agreement on
the Restatement Date shall continue and remain outstanding and not be repaid on
the Restatement Date and (ii) the amendment and restatement evidenced hereby
shall not establish a new debt obligation in substitution for, or a novation of,
such outstanding advances.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that
the Existing Credit Agreement shall (subject to the satisfaction of the
conditions precedent specified in Article III) be amended and restated to read
as set forth herein.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Debt" means, without duplication:
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(a) Debt of Subsidiaries of Terra acquired by Terra or any of
its Subsidiaries after the Restatement Date;
(b) Debt assumed by Terra (whether by operation of law or
contract or otherwise) in connection with mergers by Terra after the
Restatement Date consummated in accordance with Section
5.02(d)(ii)(y); and
(c) assumptions or Guarantees of other Acquired Debt by Terra or
one of its Subsidiaries.
"Administrative Agent" has the meaning specified in the recital of
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parties to this Agreement.
"Administrative Agent's Account" means the account of the
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Administrative Agent maintained by the Administrative Agent at its office
at 0 Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx, 00000, Account No. 368-
52248, Attention: Xxxxxxxxxx Xxxxx (or her successor), or such other
account maintained by the Administrative Agent as may be designated by the
Administrative Agent in a written notice to the Lenders and the Borrower.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Advances" has the meaning assigned to such term in Section 2.01.
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"Affiliate" means, as to any Person, any other Person that, directly
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or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
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"controlled by" and "under common control with") of a Person means the
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possession, direct or indirect, of the power to vote 10% or more of the
voting stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting stock, by contract or otherwise.
"AMCI Senior Note Indenture" means the Indenture dated as of October
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15, 1993 between Terra and Society National Bank, as Trustee, providing for
the issuance of the AMCI Senior Notes, as from time to time amended.
"AMCI Senior Notes" means the 10-3/4% senior notes of Terra due 2003
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issued pursuant to the AMCI Senior Note Indenture.
"Ammonia Loop" means the ammonia loop facility to be constructed as an
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extension of BMLP's methanol plant pursuant to the Engineering, Procurement
and Construction Agreement dated as of October 20, 1997 between TNC and
Xxxxxx Xxxxxxx USA Corporation, as from time to time amended.
"Ammonium Nitrate Hedging Agreement" means an agreement between the
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Borrower and ICI pursuant to which the Borrower agrees to pay certain
amounts to ICI in the event that the annual average price of ammonium
nitrate exceeds (Pounds)100 per tonne, as from time to time amended
(without prejudice to Section 5.02(l)).
"Applicable Lending Office" means, with respect to each Lender, such
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Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" has the meaning specified in Annex A.
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"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit F.
"BAI" means Beaumont Ammonia, Inc., a Delaware corporation and
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Subsidiary of Terra U.K. Holdings.
"Base Rate" means a fluctuating interest rate per annum in effect from
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time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
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(b) 0.50% per annum above the Federal Funds Rate; and
(c) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.50% per annum plus
(ii) the rate obtained by dividing (x) the latest three-week moving
average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States
money center banks, such three-week moving average (adjusted to the
bases of a year of 360 days) being determined weekly on each Monday
(or, if such date is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday
by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or terminated, on the
basis of quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing selected by
Citibank by (y) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. Dollar non-
personal time deposits in the United States plus (iii) the average
during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment rate
payable by Citibank to the Federal Deposit Insurance Corporation (or
any successor) for insuring U.S. Dollar deposits of Citibank in the
United States.
Each change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the time
of such change in the Base Rate.
"Base Rate Advance" means an Advance that bears interest as provided
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in Section 2.06(a)(i).
"Basic Documents" means the Loan Documents and the Intercreditor
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Agreement.
"Beaumont Holdings" means Beaumont Holdings Corporation, a Delaware
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corporation and wholly owned Subsidiary of BMCH.
"BMCH" means BMC Holdings, Inc., a Delaware corporation.
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"BMLP" means Beaumont Methanol, Limited Partnership, a Delaware
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limited partnership.
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"BMLP Class A Limited Partner" means the holder from time to time of
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the BMLP Class A Limited Partnership Interest.
"BMLP Class A Limited Partnership Interest" means the Class A limited
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partnership interest in BMLP.
"BMLP Mortgage" means a Deed of Trust, Assignment of Rents, Security
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Agreement and Fixture Filing in substantially the form attached hereto as
Exhibit B-7 among BMLP, BAI and the Collateral Agent, as amended from time
to time.
"BMLP Partnership Agreement" means the Second Amended and Restated
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Agreement of Limited Partnership of BMLP dated as of March 31, 1998 among
TMC, as general partner, BMCH, as Class B Limited Partner, and Nova
Products LLC, as BMLP Class A Limited Partner, or their successors and
assigns, as amended pursuant to the documentation delivered under Section
3.01(q) and as amended from time to time (without prejudice to Section
5.02(j)).
"BMLP Support and Option Agreement" means the Amended and Restated
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Support and Option Agreement dated as of March 31, 1998 among the Company,
the BMLP Class A Limited Partner and the beneficial owners of equity
interests in the BMLP Class A Limited Partner, as from time to time
amended.
"Borrower" has the meaning specified in the recital of parties to this
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Agreement.
"Business Day" means a day on which banks are not required or
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authorized to close in Xxx Xxxx Xxxx xxx Xxxxxxx, Xxxxxxx, Xxxxxx and, if
such Business Day relates to a Eurodollar Rate Advance, on which dealings
are carried on in the London interbank market.
"Canada" means the federal government of Canada and any agency,
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ministry or board thereof.
"Canadian Employee Benefit Plan" means any employee benefit, pension,
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retirement or other equivalent or analogous plan or program established or
maintained by the Borrower or any of its Canadian Subsidiaries.
"Capital Expenditures" means, for any period with respect to any
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Person, the sum of all expenditures during such period (whether paid in
cash or accrued as liabilities during such period) that, in conformity with
GAAP, are required to be included in or reflected on the balance sheet of
such Person in respect of equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, plus (without duplication) the amount of expenditures deemed to be
----
made in connection with equipment that is purchased simultaneously with the
trade-in of existing equipment owned by such Person to the extent the gross
amount of the purchase price of
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such purchased equipment exceeds the fair market value (as determined in
good faith by such Person) of the equipment then being traded in, but
excluding expenditures made in connection with the replacement or
restoration of assets to the extent such replacement or restoration is
financed from insurance proceeds paid on account of loss or damage to the
assets so replaced or restored.
"Capital Lease Obligations" means, for any Person, all obligations of
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such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of
this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
"Cash Interest Expense" means, for any Person for any period (without
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duplication), interest expense net of interest income, whether paid or
accrued (including the interest component of Capital Lease Obligations), on
all Debt of such Person for such period, including, without limitation, (a)
interest expense in respect of the Advances, (b) commissions, discounts and
other fees and charges payable in connection with letters of credit and (c)
the net payment, if any, payable in connection with any Hedge Agreement;
excluding, in each case, interest not payable in cash (including, without
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limitation, amortization of original issue discount and the interest
portion of any deferred payment obligation); all as determined in
accordance with GAAP for such period.
"Casualty Event" means, with respect to any property of any Person,
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any loss of or damage to, or any condemnation or other taking of, such
property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or other
compensation.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended.
"Citibank" means Citibank, N.A., a national banking association.
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"Closing Date" means December 31, 1997.
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"Collateral" means all "Collateral" referred to in the Security
----------
Documents and all other property that is subject to any Lien created by any
Terra Canada Security Document in favor of the Administrative Agent or any
Lien created by any Terra Capital Security Document in favor of the
Collateral Agent.
"Collateral Agent" means Citibank, in its capacity as Collateral Agent
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for the Secured Parties under and as defined in the Terra Capital Security
Documents and the Intercreditor Agreement, together with its successors in
such capacity.
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"Company" means Terra Capital, Inc., a Delaware corporation and the
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indirect parent of the Borrower.
"Confidential Information" means information identified as such that
------------------------
Terra or any of its Subsidiaries furnishes to the Administrative Agent or
any Lender, but does not include any such information once such information
has become generally available to the public or once such information has
become available to the Administrative Agent or any Lender from a source
other than Terra and its Subsidiaries (unless, in either case, such
information becomes so available as a result of the breach by the
Administrative Agent or a Lender of its duty of confidentiality set forth
in Section 9.09).
"Consolidated" refers to the consolidation of accounts in accordance
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with GAAP.
"Consolidated Group" means, collectively, Terra and its Consolidated
------------------
Subsidiaries, and a "member" of the Consolidated Group means Terra or any
such Subsidiary.
"Continuation", "Continue" and "Continued" each refers to a
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continuation of Eurodollar Rate Advances from one Interest Period to the
next Interest Period pursuant to Section 2.07.
"Conversion", "Convert" and "Converted" each refers to a conversion of
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Advances of one Type into Advances of the other Type pursuant to Section
2.07 or 2.08.
"Cumulative Adjusted Net Income" means, for any period, the sum, for
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each complete fiscal year of Terra (beginning with the fiscal year ending
December 31, 1995) during such period, of the Adjusted Net Income Amounts
for all such fiscal years. For purposes of this definition, "Adjusted Net
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Income Amount" means, for any fiscal year of Terra, the greater of (x) 33-
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1/3% of the net income of Terra and its Subsidiaries on a Consolidated
basis during such fiscal year and (y) $20,000,000.
"Debt" of any Person means (without duplication): (a) all
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indebtedness of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or services (other than
any trade payable having a tenor of not more than 365 days, or any like
item arising from the purchase of equipment or services having a tenor of
not more than 90 days, in each case incurred in the ordinary course of
business and on normal business terms and in each case not overdue by more
than 30 days, and other than any Obligations in respect of letters of
credit supporting any such trade payable or like item), (c) all Obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or
sale of such property), (e) all Capital Lease Obligations and Major
Operating Lease Obligations of such Person,
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(f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities (other than Obligations
in respect of letters of credit referred to in clause (b) of this
definition), (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Redeemable
capital stock, which Obligations shall be valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, (i) all Debt of others referred to in clauses (a) through (h)
above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (j) all Debt referred to in clauses (a) through (i) above secured
by (or for which the holder of such Debt has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though
such Person has not assumed or become liable for the payment of such Debt.
"Debt to Cash Flow Ratio" means, for any period, the ratio of:
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(1) Funded Debt of Terra and its Subsidiaries on a Consolidated
basis as of the last day of such period to
(2) (x) EBITDA of Terra and its Subsidiaries on a Consolidated
basis for such period multiplied by (y) the Ramp Up Period Multiplier
for such period.
In addition, solely for purposes of Section 5.04, in determining the
Debt to Cash Flow Ratio on any date or for any period when any Special
Refinancing Debt is outstanding, Funded Debt and EBITDA shall be determined
as follows during the period from the date on which such Special
Refinancing Debt is incurred until the Refinanceable Debt is refinanced or
replaced in accordance with Section 5.02(b)(1)(xix)(I):
(1) the Funded Debt component shall be determined excluding
either such Special Refinancing Debt or the related Refinanceable
Debt, whichever is lower in aggregate outstanding principal amount
(the "Excluded Debt"); and
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(2) the EBITDA component shall be determined excluding interest
expense on such Excluded Debt.
"Default" means any event that would constitute an Event of Default
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but for the requirement that notice be given or time elapse or both.
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"Disposition" means any sale, assignment, transfer or other
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disposition of any property (whether now owned or hereafter acquired) by
Terra or any of its Subsidiaries, but excluding any sale, assignment,
transfer or other disposition of any property (i) sold or disposed of in
the ordinary course of business and on ordinary business terms, or (ii) by
any Obligor or a wholly owned Subsidiary of an Obligor to another Obligor
or to a wholly owned Subsidiary of an Obligor, or (iii) that consists of
outmoded or obsolete items, provided that the aggregate value of all such
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excluded outmoded or obsolete items with a value of $1,000,000 or more each
shall not exceed $10,000,000, or (iv) that consists of items no longer
necessary in the business of Terra or any such Subsidiary, provided that
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the aggregate value of all such unnecessary items in any fiscal year of
Terra shall not exceed $250,000.
"Distribution Business" means the "Business" as defined in the
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Distribution Business Sale Agreement.
"Distribution Business Sale Agreement" has the meaning specified in
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the Preliminary Statements to this Agreement.
"Dividend Payments" means dividends (in cash, property or obligations)
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on, or other payments or distributions on account of, or the setting apart
of money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any shares of any class of
stock of the Company or of any warrants, options or other rights to acquire
the same (or to make any payment to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of Terra, the Company or any of their Subsidiaries,
other than any such payment made in the ordinary course of business of such
Person in connection with an executive compensation plan approved by the
Board of Directors of such Person), but excluding dividends payable solely
in shares of common stock of the Company.
"Domestic Lending Office" means, with respect to any Lender, the
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office of such Lender specified as its "Domestic Lending Office" in its
Administrative Questionnaire, or such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent.
"EBITDA" of any Person for any period means the following, determined
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in accordance with GAAP: net income (or net loss) plus the sum of (a)
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interest expense, (b) income tax expense and (c) depreciation expense,
amortization expense and other non-cash charges deducted in arriving at
such net income (or loss).
"Eligible Assignee" means (a) any other Lender or any affiliate of any
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Lender; (b) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$1,000,000,000; (c) a savings and loan association or savings bank
organized under the laws of the United States, or any State
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thereof, and having a net worth in excess of $100,000,000; (d) a commercial
bank organized under the laws of any other country that is a member of the
OECD or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having total assets in
excess of $1,000,000,000, so long as such bank is acting through a branch
or agency located in the country in which it is organized or another
country that is described in this clause (d); (e) the central bank of any
country that is a member of the OECD; (f) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $100,000,000; and (g) any
other Person (other than an Affiliate of the Company) approved by the
Administrative Agent and the Company, such approval of the Company not to
be unreasonably withheld or delayed.
"Environmental Action" means any administrative, regulatory or
--------------------
judicial suit, demand, demand letter, claim, notice of non-compliance or
violation, consent order or consent agreement relating in any way to any
violation of or liability under any Environmental Law or any Environmental
Permit, including without limitation (a) any claim by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any Environmental Law, (b) any
claim by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to the
environment and (c) any notice by any governmental or regulatory authority
alleging that Terra or any of its Subsidiaries is or may be responsible
for, or is a potentially responsible party with respect to, any cleanup,
removal, response, remedial or other actions or damages pursuant to any
Environmental Law.
"Environmental Law" means any federal, state, provincial or local
-----------------
governmental law, rule, regulation, order, writ, judgment, injunction or
decree relating to pollution or protection of the environment or the
treatment, storage, disposal, release, threatened release or handling of
Hazardous Materials, including, without limitation, CERCLA, the Resource
Conservation and Recovery Act, the Hazardous Materials Transportation Act,
the Clean Water Act, the Toxic Substances Control Act, the Clean Air Act,
the Safe Drinking Water Act, the Atomic Energy Act and the Federal
Insecticide, Fungicide and Rodenticide Act, in each case, as amended from
time to time.
"Environmental Permit" means any permit, approval, identification
--------------------
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
-11-
"ERISA Affiliate" of any Person means any other Person that for
---------------
purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of
Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
-----------
reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan of such Person or any of its ERISA Affiliates unless the 30-day
notice requirement with respect to such event has been waived pursuant to
regulations under Section 4043 of ERISA and excluding a reportable event
under Section 4043(c)(7) of ERISA; (b) the provision by the administrator
of any Plan of such Person or any of its ERISA Affiliates of a notice of
intent to terminate such Plan, pursuant to Section 4041(c) of ERISA as a
distress termination; (c) the cessation of operations at a facility of such
Person or any of its ERISA Affiliates in the circumstances described in
Section 4062(e) of ERISA; (d) the withdrawal by such Person or any of its
ERISA Affiliates 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;
(e) the satisfaction of the conditions set forth in Sections 302(f)(1)(A)
and (B) of ERISA to the creation of a lien upon property or rights to
property of such Person or any ERISA Affiliate for failure to make a
required payment to a Plan; (f) the adoption of an amendment to a Plan of
such Person or any of its ERISA Affiliates requiring the provision of
security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person
or any of its ERISA Affiliates, 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.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
------------------------
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" in its
Administrative Questionnaire (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
---------------
Rate Advance, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such average is not such a multiple)
of the rates per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at approximately 5:00 P.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Bank's Eurodollar Rate Advance
for such Interest Period (determined without giving effect to any
assignments or participations by
-12-
such Reference Bank) and for a period equal to such Interest Period by (b)
a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
-----
such Interest Period. The Eurodollar Rate for each Interest Period for each
Eurodollar Rate Advance shall be determined by the Administrative Agent on
the basis of applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
------- -------
Section 2.08.
"Eurodollar Rate Advance" means an Advance that bears interest as
-----------------------
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for each
----------------------------------
Eurodollar Rate Advance means the reserve percentage (if any) applicable
two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with deposits exceeding
$1,000,000,000 with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category
of liabilities that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Excluded Period" means, with respect to any additional amount payable
---------------
under Section 2.08, the period ending 120 days prior to the applicable
Lender's delivery of a certificate referenced in Section 2.08(a) or
2.08(b), as applicable, with respect to such additional amount.
"Excluded Transactions" means, collectively:
---------------------
(1) the purchase, redemption or other acquisition of Senior
Preference Units pursuant to the SPU Redemption;
(2) capital contributions to Subsidiaries of Terra;
(3) the purchase of the BMLP Class A Limited Partnership
Interest as required under Section 3.01(q); and
(4) Investments permitted under Sections 5.02(f)(vi) and (xi).
"Existing Advances" means the "Advances" under, and as defined in, the
-----------------
Existing Credit Agreement outstanding as of the Restatement Date.
-13-
"Existing Credit Agreement" has the meaning assigned to such term in
-------------------------
the Preliminary Statements.
"Existing Lender" means each Initial Lender that is a "Lender" party
---------------
to the Existing Credit Agreement as of the Restatement Date.
"Existing Notes" means the "Notes" under, and as defined in, the
--------------
Existing Credit Agreement outstanding as of the Restatement Date.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Foreign Subsidiary" means a Subsidiary not organized under the laws
------------------
of the United States of America or any State thereof.
"Funded Debt" of any Person means, on any date, the sum (determined
-----------
without duplication) of: (a) all Debt of such Person that would be listed
as long-term debt (including Capital Lease Obligations and Major Operating
Lease Obligations) of such Person on a balance sheet of such Person
prepared in accordance with GAAP (including, without limitation, the
current portion of such Debt), plus (b) the aggregate principal amount of
----
all outstanding Advances; provided that:
--------
(1) the term "Funded Debt" shall include letters of credit
issued in connection with the insurance program of Terra and its
Subsidiaries only to the extent of unreimbursed drawings thereunder;
and
(2) the term "Funded Debt" shall not include Obligations under
Hedge Agreements.
For all purposes of this Agreement, "Funded Debt" shall not include
Guarantees by Terra U.K. of Terra U.K. Customer Debt and Guarantees by TI
of Terra Customer Debt.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the date of, and used in, the
preparation of the audited financial statements referred to in Section
4.01(f).
-14-
"Governmental Authority" means any nation or government, any central
----------------------
bank of any nation, any state, province, territory or other political
subdivision thereof and any other agency, body, department, bureau,
authority or other entity exercising executive, legislative, judicial,
regulatory, monetary, taxing or administrative functions of or pertaining
to government.
"Guarantee" by any Person means any arrangement by which such Person
---------
incurs Debt of the types referred to in clauses (i) and (j) of the
definition of "Debt" in respect of such Person.
"Guaranteed Obligations" has the meaning assigned to such term in
----------------------
Section 8.01.
"Guarantors" means, collectively, (x) Terra, Terra Capital Holdings,
----------
the Company, TNC, TI, BMCH, Beaumont Holdings, TMC, Terra U.K., BMLP, Port
Xxxx Corporation, Terra Oklahoma, Terra U.K. Holdings and BAI and (y) from
and after the SPU Redemption Time, TNLP and its successors.
"Hazardous Materials" means (a) petroleum or petroleum products,
-------------------
natural or synthetic gas, asbestos in any form that is or could become
friable, and radon gas, (b) any substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes",
"toxic substances", "toxic pollutants", "contaminants" or "pollutants", or
words of similar meaning and regulatory effect, under any Environmental Law
and (c) any other substance exposure to which is regulated under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
----------------
interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity future or option agreements
and other similar agreements designed to hedge against fluctuations in
interest rates, foreign exchange rates or commodity prices, including,
without limitation, the Ammonium Nitrate Hedging Agreement.
"Holdings Pledge Agreement" means an Amended and Restated Pledge
-------------------------
Agreement in substantially the form attached hereto as Exhibit B-1 between
Terra Capital Holdings and the Collateral Agent, as amended from time to
time.
"ICI" means, collectively, ICI Chemicals & Polymers Limited and
---
Imperial Chemical Industries Plc.
"Immaterial Subsidiary" means, as of any date of determination, any
---------------------
Subsidiary of Terra with not more than $500,000 of assets on such date nor
more than $100,000 of gross income for the fiscal year of Terra ended on or
most recently ended prior to such date.
"Indemnified Party" has the meaning specified in Section 9.04(b).
-----------------
-15-
"Initial Lenders" has the meaning specified in the recital of the
---------------
parties to this Agreement.
"Insufficiency" means, with respect to any Plan at any time, the
-------------
amount, if any, by which the "accumulated benefit obligation" (as defined
in Statement of Financial Accounting Standards 87) exceeds the fair market
value of the assets of such Plan as of the date of the most recent
actuarial valuation for such Plan, calculated using the actuarial methods,
factors and assumptions used in such valuation.
"Intercompany Debt" means Debt owed by Terra or one of its
-----------------
Subsidiaries to Terra or one of its Subsidiaries.
"Intercompany Receivables Facility" means a facility entered into by
---------------------------------
the Company and/or any of its Subsidiaries, as sellers, and one or more
Receivables Subsidiaries, as purchasers, providing for the sale of
Receivables by said sellers to said purchasers.
"Intercreditor Agreement" means the Collateral Agency and
-----------------------
Intercreditor Agreement attached as Exhibit G among the Borrower, certain
of the other Obligors, the Collateral Agent, the Administrative Agent and
the other Secured Parties referred to therein (or representatives on their
behalf), as amended from time to time.
"Interest Coverage Ratio" means, for any period, the ratio of:
-----------------------
(1) EBITDA of Terra and its Subsidiaries on a Consolidated basis
for such period to
(2) Cash Interest Expense of Terra and its Subsidiaries on a
Consolidated basis for such period.
In addition, solely for purposes of Section 5.04, in determining the
Interest Coverage Ratio on any date or for any period when any Special
Refinancing Debt is outstanding, EBITDA and Cash Interest Expense shall be
determined as follows during the period from the date on which such Special
Refinancing Debt is incurred until the Refinanceable Debt is refinanced or
replaced in accordance with Section 5.02(b)(1)(xix)(I):
(1) the EBITDA component shall be determined excluding interest
expense on either such Special Refinancing Debt or the related
Refinanceable Debt, whichever is lower in aggregate outstanding
principal amount (the "Excluded Debt"); and
-------------
-16-
(2) the Cash Interest Expense component shall be determined
excluding interest expense on such Excluded Debt.
"Interest Period" means, for each Eurodollar Rate Advance, the period
---------------
commencing on the date of such Eurodollar Rate Advance or the date of the
Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and
ending on the last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one, two, three
or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than 10:00 A.M. (New York City time) on the
second Business Day prior to the first day of such Interest Period, select;
provided that:
--------
(a) the Borrower may not select any Interest Period that ends
after any Principal Prepayment Date unless, after giving effect
thereto, the aggregate principal amount of Advances having Interest
Periods that end after such Principal Prepayment Date shall be equal
to or less than the aggregate principal amount of Advances scheduled
to be outstanding after giving effect to the payments of principal
required to be made on such Principal Prepayment Date;
(b) no Interest Period for any Advance may end after the
Maturity Date;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided that, if such extension would cause the last
--------
day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on the
last day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month), such Interest Period shall end on the last Business Day of the
appropriate subsequent calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
----------
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person,
including, without limitation, (a) any arrangement pursuant to which the
investor Guarantees Debt of another Person, (b) the acquisition of all or
substantially all of the assets of such Person or of any division of such
Person, and (c)
-17-
any merger of or consolidation with such Person; provided that the purchase
--------
of equipment, fixed assets, real property or improvements from such Person
do not constitute Investments in such Person to the extent the same
constitute Capital Expenditures.
"Lenders" means the Initial Lenders listed on the signature pages
-------
hereof and each Eligible Assignee that shall become a party hereto pursuant
to Section 9.07.
"Lien" means any lien, security interest or other charge or
----
encumbrance of any kind, contractual or statutory, or any other type of
preferential arrangement, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Security Documents and the Loan Purchase Agreement.
"Loan Purchase Agreement" means the Loan Purchase Agreement attached
-----------------------
as Exhibit E-1 between the Administrative Agent and Terra, as modified by
the Confirmation of Loan Purchase Agreement in substantially the form of
Exhibit E and as further amended from time to time.
"Major Operating Lease Obligations" means, for any Person, all
---------------------------------
obligations of such Person under an operating lease to pay required
termination payments or like payments in an amount exceeding $7,000,000 and
in an amount at least equal to 75% of the original acquisition cost of the
leased property under such operating lease.
"Management Agreements" means one or more management agreements
---------------------
between Terra and/or certain of its Subsidiaries and other Persons
providing for the performance by Terra or any of such Subsidiaries of
certain treasury, purchasing, legal and/or other services for its
Subsidiaries and such other Persons, as such agreements are in effect from
time to time.
"Margin Stock" has the meaning specified in Regulations U and X.
------------
"Material Adverse Change" means, with respect to any Person, any
-----------------------
material adverse change in the business, assets, operations, properties or
financial condition of such Person and its Subsidiaries taken as a whole,
or any material adverse change in the contingent liabilities of such Person
which could reasonably be expected to result in any of the foregoing, other
than any of the foregoing resulting solely from (i) a general economic
change in the industry of such Person and its Subsidiaries or (ii) the sale
by Terra of the Distribution Business on the terms and conditions as set
forth in the Distribution Business Sale Agreement.
-18-
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, assets, operations, properties or financial condition of Terra
and its Subsidiaries taken as a whole, or a material adverse effect on the
contingent liabilities of such Person which could reasonably be expected to
result in any of the foregoing (other than any of the foregoing resulting
solely from the sale by Terra of the Distribution Business on the terms and
conditions as set forth in the Distribution Business Sale Agreement), (b)
the rights and remedies of the Administrative Agent or any Lender under any
Loan Document or (c) the ability of any Obligor to perform its Obligations
under any Loan Document to which it is or is to be a party.
"Material Contract" means:
-----------------
(A) each Hedge Agreement;
(B) each contract to which Terra or any of its Subsidiaries is a
party (a "Specified Party") that (a) provides for the provision of
---------------
goods or services by the Specified Party or the receipt of goods or
services by the Specified Party, (b) has a term of more than one year
(unless such contract may be cancelled at the sole option of another
Person party to such contract), (c) involves the payment or receipt by
the Specified Party of consideration having a fair market value in
excess of $1,000,000 in any fiscal year of Terra and (d) provides for
either: (i) the provision of goods or services to another Person that
is obligated to purchase from the Specified Party a specified quantity
of such goods or services (but only to the extent that, if such other
Person did not purchase such quantity of such goods or services, the
Specified Party would not be readily able to sell such goods or
services at a price equal to or higher than the price set in such
contract) or (ii) the receipt of goods or services from another Person
that is obligated to supply to the Specified Party a specified
quantity of such goods or services (but only to the extent that, if
such other Person did not supply such quantity of such goods or
services, the Specified Party would not be readily able to purchase
such goods or services at a price less than or equal to the price set
in such contract); and
(C) each contract to which Terra or any of its Subsidiaries is a
party that, if such contract were to be terminated or the obligations
of any other Person party to such contract were to fail to be in full
force and effect, could reasonably be expected, either individually or
in the aggregate with any other such event, to have a Material Adverse
Effect.
"Material Subsidiary" means any Subsidiary of Terra other than an
-------------------
Immaterial Subsidiary.
"Maturity Date" means January 2, 2003 (or, if such date is not a
-------------
Business Day, the next succeeding Business Day).
-19-
"Minorco" means Minorco, S.A., a Luxembourg societe anonyme, and its
-------
successors.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
-------
"Mortgages" means, collectively, the Terra Oklahoma Mortgage, the BMLP
---------
Mortgage and the Port Xxxx Corporation Mortgage and each other Mortgage
covering real and other property of one or more of the Obligors as may be
executed and delivered in accordance with the terms and conditions set
forth herein.
"Multiemployer Plan" of any Person means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates 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" of any Person means a single employer plan,
----------------------
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one
Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates has or would have liability under Section 4064 or 4069 of ERISA
in the event such plan has been or were to be terminated.
"New York Process Agent" has the meaning assigned to such term in
----------------------
Section 9.06(b).
"1995 Terra Capital Credit Agreement" means the Amended and Restated
-----------------------------------
Credit Agreement dated as of December 14, 1995 among the Company and TNLP,
as Borrowers, certain guarantors, the lenders and issuing banks party
thereto and Citibank, N.A., as Agent, as amended to but excluding the date
hereof.
"1995 Terra Debt" means Debt incurred by Terra under the 1995 Terra
---------------
Debt Indenture.
"1995 Terra Debt Indenture" means the Indenture dated as of June 22,
-------------------------
1995 between Terra and First Trust National Association, as Trustee,
providing for the issuance of Terra's 10.50% Senior Notes, as from time to
time amended.
"Note" means a promissory note of the Borrower payable to the order of
----
a Lender, in substantially the form of Exhibit A, as from time to time
amended.
"Obligation" means, with respect to any Person, any obligation of such
----------
Person of any kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed,
-20-
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(g). Without limiting the generality of the foregoing, the
Obligations of the Obligors under the Loan Documents include (a) their
respective obligations to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable
under any Loan Document and (b) their respective obligations to reimburse
any amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Obligor.
"Obligors" means the Borrower and the Guarantors.
--------
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Other Distribution" means a Dividend Payment made with respect to the
------------------
capital stock of the Company except to the extent that the Company
determines, reasonably and in good faith, that such Dividend Payment (1) is
made to fund one or more of the items described in the definition of
"Specified Payments" in this Section 1.01 or (2) is made out of the then-
available amount of Cumulative Adjusted Net Income.
"Other Taxes" has the meaning specified in Section 2.10(b).
-----------
"Outside Subsidiary" means any Subsidiary of Terra (other than Terra
------------------
Capital Holdings or any of its Subsidiaries).
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Investments" means:
---------------------
(a) direct obligations of the United States of America, or of
any agency thereof, or obligations guaranteed as to principal and
interest by the United States of America, or by any agency thereof, in
either case maturing not more than one year from the date of
acquisition thereof;
(b) readily marketable direct obligations of the United States
of America, or of any agency thereof, or readily marketable
obligations guaranteed as to principal and interest by the United
States of America, or by any agency thereof, in either case maturing
not more than one year from the date of acquisition thereof;
(c) readily marketable direct obligations issued by any State of
the United States of America or any political subdivision thereof or
of the government of Canada or the United Kingdom or any agency
thereof, in each case maturing not more than one year from the date of
acquisition thereof and having the highest credit rating obtainable
from either of Moody's or Standard & Poor's;
-21-
(d) money market mutual funds (including, without limitation,
tax-free money market mutual funds) with assets consisting solely of
U.S. Dollars and securities principally of the types described in
paragraphs (a), (b) and (c) in this definition;
(e) certificates of deposit issued by, repurchase and reverse
repurchase agreements with, banker's acceptances of, and eurodollar
time deposits with, any Initial Lender or any bank or trust company
organized under the laws of the United States of America or any state
thereof, having capital, surplus and undivided profits of at least
$500,000,000 (or any national or regional brokerage firm) and whose
unsecured, unguaranteed long-term senior debt obligations are rated at
least A by Standard & Poor's and at least A2 by Moody's, maturing not
more than 270 days from the date of acquisition thereof;
(f) obligations of not more than $100,000 in the aggregate at
any one time of any bank or bank holding company with a capital and
surplus of less than $500,000,000 or whose unsecured, unguaranteed
long-term senior debt obligations are rated less than A by Standard &
Poor's or less than A2 by Moody's;
(g) commercial paper and variable rate demand notes, in each
case rated at least A-1 by Standard & Poor's or at least P-1 by
Moody's and maturing not more than 270 days from the date of
acquisition thereof;
(h) tax-exempt auction rate preferred stock and taxable and tax-
exempt auction rate securities, in each case rated at least AAA by
Standard & Poor's and Aaa by Moody's and maturing not more than 60
days from the date of acquisition thereof;
(i) "Liquidity Optimized Guaranteed Investment Contracts" with
insurance companies having short-term debt ratings of at least A-1 by
Standard & Poor's and P-1 by Moody's and maturing not more than 30
days from the date of acquisition thereof;
(j) Canadian dollar-denominated banker's acceptances of Canadian
banks rated at least R1-mid by Dominion Bond Rating Service
("Dominion") and maturing not more than one year from the date of
--------
acquisition thereof; and
(k) Canadian dollar-denominated commercial paper rated at least
R1-mid by Dominion and maturing not more than one year from the date
of acquisition thereof; and
-22-
(l) solely with respect to Terra U.K., (i) British government
bonds maturing not more than one year from the date of acquisition
thereof; (ii) money-market funds or composite funds with assets
consisting solely of Pounds Sterling, high-quality short-term
corporate securities and securities of the type described in clause
(i) in this paragraph (l); and (iii) funds held in corporate accounts
at banks organized under the laws of the United Kingdom having
capital, surplus and undivided profits not less than $350,000,000 or
at branches of U.S. banks located in the United Kingdom of the quality
described in paragraph (e) above.
"Permitted Liens" means such of the following as to which no
---------------
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced (or, if such a proceeding has been commenced, such
proceeding is being contested in good faith by appropriate proceedings and
enforcement of any Lien has been and is stayed):
(a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b),
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens, statutory landlord's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 30
days or which are being contested in good faith and by appropriate
proceedings,
(c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations,
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases (other than capital leases),
surety and appeal bonds, and performance bonds and other obligations
of a like nature incurred, in each case arising in the ordinary course
of business,
(e) as to any particular property at any time, such easements,
encroachments, covenants, rights of way, minor defects, irregularities
or encumbrances on title which do not materially impair the use of
such property for the purpose for which it is held by the owner
thereof,
(f) municipal and zoning ordinances that are not violated in any
material respect by the existing improvements and the present use made
by the owner thereof, and
(g) real estate taxes and assessments not yet delinquent.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, limited liability company, trust,
unincorporated association,
-23-
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
----
"Port Xxxx Corporation" means Port Xxxx Corporation, a Delaware
---------------------
corporation and a wholly owned Subsidiary of TI.
"Port Xxxx Corporation Mortgage" means a Mortgage, Assignment of
------------------------------
Rents, Security Agreement and Fixture Filing in substantially the form
attached hereto as Exhibit B-7 between Port Xxxx Corporation and the
Collateral Agent, as amended from time to time.
"Post-Default Rate" means a rate per annum equal to 2% plus the
----------------- ----
Applicable Margin plus the Base Rate as in effect from time to time.
----
"Pounds Sterling" and "(Pounds)" means lawful money of the United
--------------- --------
Kingdom.
"Preferred Stock" means, with respect to any corporation, capital
---------------
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Principal Prepayment Date" means the Quarterly Date falling in
-------------------------
December of each year, commencing December 1999 through and including
December 2001.
"Pro Rata Share" of any amount means, with respect to any Lender at
--------------
any time, the product of (a) a fraction the numerator of which is the
amount of such Lender's Advances and the denominator of which is the
aggregate Advances at such time, multiplied by (b) such amount.
-------------
"Purchase Event" means that:
--------------
(1) Liens on or with respect to any property of the Borrower or
any of its Subsidiaries have been created in favor of Terra or any of
its Subsidiaries, other than Liens permitted under any of clauses (i)
through (xviii) of Section 5.02(a); or
(2) the Borrower or any of its Subsidiaries has any outstanding
Debt owing to Terra or any of its Subsidiaries, other than Debt
permitted to be outstanding under any of clauses (i) through (vii) of
Section 5.02(b)(2); or
(3) the Borrower or any of its Subsidiaries has sold,
transferred or otherwise disposed of any of its property to Terra or
any of its Subsidiaries, other
-24-
than sales, transfers or other dispositions permitted under any of
clauses (i) through (ix) of Section 5.02(e); or
(4) the Borrower or any of its Subsidiaries has made any
Investments in Terra or any of its Subsidiaries, other than
Investments permitted under any of clauses (i) through (xv) of Section
5.02(f); or
(5) Minorco ceases to own, directly or indirectly, at least 20%
of the issued and outstanding shares of voting capital stock of Terra;
or Minorco ceases to hold, directly or indirectly, a plurality of the
issued and outstanding shares of capital stock of Terra.
"Quarterly Dates" means March 31, June 30, September 30 and December
---------------
31 in each year, the first of which shall be the first such day after the
Closing Date, provided that, if any such day is not a Business Day, the
--------
relevant Quarterly Date shall be the immediately preceding Business Day.
"Ramp Up Period Multiplier" means, for any period, (x) four divided by
-------------------------
(y) the number of fiscal quarters of Terra that both begin and end during
such period.
"Receivables" means accounts and notes receivable and, in each case,
-----------
related reserves.
"Receivables Facilities" means, collectively, (i) the August 1996
----------------------
Receivables Purchase Agreement among Terra Funding Corporation, as Seller,
the Company, as initial servicer, the financial institutions party thereto,
as Purchasers, and Bank of America National Trust and Savings Association,
as Agent and (ii) the Receivables Purchase Agreement dated as of March 31,
1994 among TI, as Seller, the financial institutions party thereto, as
Purchasers, and Bank of America National Trust and Savings Association,
successor to Continental Bank N.A., as agent, as from time to time amended.
"Receivables Subsidiary" means a Subsidiary of the Company that meets
----------------------
both of the following criteria:
(1) such Subsidiary is formed solely for the purpose of, and is
engaged solely in the business of, (x) purchasing Receivables of the
Company and one or more of its Subsidiaries under an Intercompany
Receivables Facility and/or (y) owning the capital stock of, or other
ownership interests in, one or more Receivables Subsidiaries; and
(2) all of the capital stock of and/or other ownership interests
in, such Subsidiary is owned beneficially and of record, directly or
indirectly, by Terra
-00-
Xxxxxxx Xxxxxxxx, the Company and/or one or more other Receivables
Subsidiaries.
"Redeemable" means any capital stock, Debt or other right or
----------
Obligation that (a) the issuer thereof has undertaken to redeem at a fixed
or determinable date or dates prior to the date on which the Advances are
to mature, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or
(b) is redeemable at the option of the holder thereof on any date prior to
the date on which the Advances are to mature. For purposes of this
Agreement, the BMLP Class A Limited Partnership Interest shall not be
deemed to be "Redeemable".
"Reference Banks" means Citibank, NationsBank, N.A. and The Bank of
---------------
Nova Scotia (or their respective Applicable Lending Offices, as the case
may be).
"Refinanceable Debt" has the meaning assigned to such term in Section
------------------
5.02(b)(1)(xix)(I).
"Register" has the meaning specified in Section 9.07(c).
--------
"Regulation U" and "Regulation X" mean Regulations U and X of the
------------ ------------
Board of Governors of the Federal Reserve System, respectively, as in
effect from time to time.
"Required Lenders" means at any time Lenders owed or holding in the
----------------
aggregate at least 51% of the sum of the then aggregate unpaid principal
amount of the Advances.
"Restatement Date" has the meaning assigned to such term in Section
----------------
3.01.
"Restricted Transactions" means, collectively, Capital Expenditures
-----------------------
and Specified Acquisitions.
"Rolling Period" means (i) for the fiscal quarter of Terra ending in
--------------
June 1999, such fiscal quarter, (ii) for the fiscal quarter of Terra ending
in September 1999, such fiscal quarter and the prior fiscal quarter of
Terra, (iii) for the fiscal quarter of Terra ending in December 1999, such
fiscal quarter and the prior two fiscal quarters of Terra and (iv)
thereafter, any period of four consecutive fiscal quarters of Terra.
"Security Documents" means, collectively, the Terra Capital Security
------------------
Documents and the Terra Canada Security Documents.
"Senior Financial Officer" means the Chief Financial Officer of Terra.
------------------------
"Senior Preference Units" means, collectively, (a) the "Senior
-----------------------
Preference Units" issued and outstanding under, and as defined in, the
Agreement of Limited Partnership dated as of December 4, 1991 of TNCLP, as
such Agreement of Limited Partnership is in
-26-
effect on the Closing Date, and (b) the "Common Units" into which such
Senior Preference Units have been converted in accordance with Section 5.5
of such Agreement of Limited Partnership.
"Single Employer Plan" of any Person means a single employer plan, as
--------------------
defined in Section 4001(a)(15) of ERISA, that is subject to Title IV of
ERISA and that (a) is maintained for employees or former employees of such
Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which
such Person or any of its ERISA Affiliates has or would have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
------- --------
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital.
"Special Refinancing Debt" has the meaning assigned to such term in
------------------------
Section 5.02(b)(1)(xix).
"Specified Acquisitions" means Investments (including, without
----------------------
limitation, Investments arising by reason of any merger or consolidation
permitted under Sections 5.02(d)(i)(y) and 5.02(d)(ii)(y), but excluding
the Excluded Transactions) consisting of acquisitions of ownership
interests in one or more entities engaged in the same or allied line or
lines of business as Terra and its Subsidiaries, taken as a whole.
"Specified Group" has the meaning specified in Section 5.02(e)(iii).
---------------
"Specified Payments" means, for any period, (a) all interest due and
------------------
payable on the AMCI Senior Notes and on the 1995 Terra Debt during such
period, (b) all scheduled dividends payable during such period on
convertible Preferred Stock or other equity securities issued and the
proceeds of which were applied to prepay the "Advances" under the Terra
Capital Credit Facility (to the extent the "Commitments" thereunder are
reduced simultaneously with such issuance), (c) ordinary and necessary
expenses incurred by Terra as a result of its operations as a publicly-held
holding company and (d) other payments in an aggregate amount up to
$5,000,000 per year to the extent required under pre-existing obligations.
-27-
"SPU Redemption" means the purchase, redemption or other acquisition
--------------
from time to time of all or a portion of the outstanding Senior Preference
Units by Terra and its Subsidiaries (or any of them):
(a) on such terms and conditions as could not reasonably be
expected to have a Material Adverse Effect; and
(b) in accordance in all material respects with the terms and
conditions hereof.
"SPU Redemption Time" means the time as of which all of the Senior
-------------------
Preference Units shall have been purchased or otherwise redeemed pursuant
to the SPU Redemption.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
-----------------
division of The XxXxxx-Xxxx Companies, Inc., and its successors.
"Subordinated Indebtedness" means Debt of Terra or any of its
-------------------------
Subsidiaries the payment of which is subordinated (on reasonably
satisfactory terms and pursuant to documentation satisfactory to the
Required Lenders) in right of payment to the prior payment in full of the
Advances.
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries. For all purposes of this Agreement and the other Loan
Documents, BMLP and each of BMLP's Subsidiaries shall be deemed to be
Subsidiaries of the Company so long as TMC or one of TMC's Subsidiaries is
the sole general partner of BMLP.
"Subsidiary Guarantor" means, collectively, (a) TNC, BMCH, Beaumont
--------------------
Holdings, TMC, Terra U.K., BMLP, Port Xxxx Corporation, Terra Oklahoma,
Terra U.K. Holdings and BAI and (b) each of the Borrower's other
Subsidiaries that from time to time Guarantees the Advances.
"Subsidiary Pledge and Security Agreement" means an Amended and
----------------------------------------
Restated Pledge and Security Agreement in substantially the form attached
hereto as Exhibit B-3 between certain of the Guarantors and the Collateral
Agent, as amended from time to time.
-28-
"Terra" means Terra Industries Inc., a Maryland corporation and an
-----
indirect parent of the Company.
"Terra Canada Group" means, collectively, the Borrower and its
------------------
Subsidiaries, and a "member" of the Terra Canada Group means, individually,
the Borrower and each such Subsidiary.
"Terra Canada Mortgage" means the Collateral Charge in favor of the
---------------------
Administrative Agent covering (inter alia) the Borrower's Courtright,
----- ----
Ontario manufacturing facility, attached as Exhibit B-6, as from time to
time amended.
"Terra Canada Security Agreement" means the General Security Agreement
-------------------------------
between the Borrower and the Administrative Agent attached as Exhibit B-5,
as from time to time amended.
"Terra Canada Security Documents" means, collectively, the Terra
-------------------------------
Canada Security Agreement, the Terra Canada Mortgage and each security
agreement or other grant of security now or hereafter made by the Borrower
to secure any of the Obligations hereunder and under the other Loan
Documents, and all recordings, registrations and other filings required by
this Agreement or any of the foregoing to be filed with respect to the
Liens created pursuant thereto.
"Terra Capital Credit Facility" means the Amended and Restated Credit
-----------------------------
Agreement dated as of June 25, 1999 among the Company, as Borrower, the
lenders and issuing banks party thereto and Citibank, as administrative
agent for said lenders and issuing banks, as from time to time amended.
"Terra Capital Holdings" means Terra Capital Holdings, Inc., a
----------------------
Delaware corporation and the direct parent of the Company.
"Terra Capital Pledge and Security Agreement" means an Amended and
-------------------------------------------
Restated Pledge and Security Agreement in substantially the form attached
hereto as B-2 between the Company and the Collateral Agent, as amended from
time to time.
"Terra Capital Security Documents" means, collectively, the Holdings
--------------------------------
Pledge Agreement, the Terra Capital Pledge and Security Agreement, the
Subsidiary Pledge and Security Agreement, the TNLP Pledge and Security
Agreement, the Mortgages, each security agreement or other grant of
security now or hereafter made by any Guarantor to secure any of the
Obligations hereunder and under the other Loan Documents, and all Uniform
Commercial Code financing statements required by this Agreement or any of
the foregoing to be filed with respect to the security interests in real or
personal property created pursuant thereto.
-29-
"Terra Customer Debt" means Debt of a customer of Terra or any of its
-------------------
Subsidiaries owing to Deere and Company ("Deere") or any of Deere's
-----
Subsidiaries, provided that:
--------
(1) such customer is required to repay such Debt in full within
15 months of the date on which such Debt is incurred;
(2) in the reasonable opinion of the TI, such customer is
creditworthy; and
(3) it is a condition of the extension of credit by Deere or its
Subsidiaries to such customer that TI Guarantees a portion of such
Debt.
"Terra Oklahoma" means Terra International (Oklahoma) Inc., a Delaware
--------------
corporation and a wholly owned Subsidiary of TI.
"Terra Oklahoma Mortgage" means a Mortgage, Assignment of Rents,
-----------------------
Security Agreement and Fixture Filing in substantially the form attached
hereto as Exhibit B-7 between Terra Oklahoma and the Collateral Agent, as
amended from time to time.
"Terra U.K." means Terra Nitrogen (U.K.) Limited, a corporation formed
----------
under the laws of England and a wholly owned Subsidiary of the Borrower.
"Terra U.K. Customer Debt" means Debt of a customer of Terra U.K.
------------------------
owing to Capital Bank Plc or another financial institution in the United
Kingdom, provided that:
--------
(1) such customer uses the entire principal proceeds of such
Debt to pay for goods and services purchased from Terra U.K.;
(2) such customer is required to repay such Debt in full within
12 months of the date on which such Debt is incurred;
(3) in the reasonable opinion of Terra U.K., such customer is
creditworthy; and
(4) it is a condition of the extension of credit by Capital Bank
Plc (or such other financial institution) to such customer that Terra
U.K. Guarantee a portion of such Debt.
"Terra U.K. Holdings" means Terra (U.K.) Holdings, Inc., a Delaware
-------------------
corporation and a direct Subsidiary of BMLP.
"Terra U.K. Offtake Agreement" means, collectively, one or more
----------------------------
nitrogen products offtake agreements between the Company and Terra U.K.
entered into in
-30-
connection with the transactions contemplated by the BMLP Partnership
Agreement and the BMLP Support and Option Agreement, as from time to time
amended.
"Terra U.K. Term Loan" has the meaning specified in Section
--------------------
5.02(b)(2)(vi).
"Terra U.K. Term Loan Agreement" means the credit agreement dated as
------------------------------
of December 31, 1997 providing for the Terra U.K. Term Loan, as from time
to time amended.
"TI" means Terra International, Inc., a Delaware corporation and a
--
wholly owned Subsidiary of the Company.
"TMC" means Terra Methanol Corporation, a Delaware corporation.
---
"TNC" means Terra Nitrogen Corporation, a Delaware corporation and a
---
wholly owned Subsidiary of the Company.
"TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited
-----
partnership and a Subsidiary of the Company.
"TNLP" means Terra Nitrogen, Limited Partnership, a Delaware limited
----
partnership and a Subsidiary of the Company.
"TNLP Notes" has the meaning assigned to such term in Section
----------
5.02(b)(2)(ii).
"TNLP Pledge and Security Agreement" means an Amended and Restated
----------------------------------
Pledge and Security Agreement in substantially the form attached hereto as
Exhibit B-4 between TNLP and the Collateral Agent, as amended from time to
time.
"Type" refers to the distinction between Advances bearing interest at
----
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"U.K. Nitrogen Assets" means the "Assets", as defined in the Sale of
--------------------
Business Agreement relating to the ICI Fertilizer Business dated November
20, 1997 between ICI, Terra U.K. and Terra.
"U.S. Dollars" and "$" means lawful money of the United States of
------------ -
America.
Section 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" mean
"to but excluding".
Section 1.03. Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with GAAP.
-31-
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. The Advances.
------------
(a) Outstanding Advances; Assignments.
---------------------------------
(i) The parties hereto agree that, on and after the Restatement Date,
all Existing Advances shall be advances of the Lenders ("Advances")
--------
outstanding hereunder, it being the intention of the parties hereto that
the Existing Advances shall continue and remain outstanding and not be
repaid on the Restatement Date.
(ii) In accordance with Section 9.07(a) of the Existing Credit
Agreement, the Existing Lenders hereby sell and assign to the Initial
Lenders, and the Initial Lenders hereby purchase and assume from the
Existing Lenders, all of the right, title and interest of the Existing
Lenders in and to the Existing Advances and Existing Notes and the other
rights and obligations of the Existing Lenders under the Existing Credit
Agreement as of the Restatement Date, in each case such that, after giving
effect to such sale and assignment, the amounts of the Advances
respectively owing to each Initial Lender hereunder as of the Restatement
Date will be as set forth on Schedule 2.01 opposite the name of such
Initial Lender under the caption "Outstanding Advances".
Each Existing Lender represents and warrants that, on and as of the
Restatement Date, it is the legal and beneficial owner of the interest being
assigned by it under this Section 2.01(a) and that such interest is free and
clear of any adverse claim created by such Existing Lender. No Existing Lender
makes any representation or warranty or assumes any responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto or
thereto; and no Existing Lender makes any representation or warranty or assumes
any responsibility with respect to the financial condition of any Obligor or the
performance or observance by any Obligor of any of its obligations hereunder or
under any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto. Except as expressly set forth in this Section
2.01(a), the sales and assignments of Existing Advances is made without recourse
to or representation or warranty by the Existing Lenders.
The Administrative Agent hereby waives payment of the processing and
recordation fees referred to in Section 9.07 of the Existing Credit Agreement
with respect to the assignments effected under this Section 2.01(a).
-32-
(b) No Responsibility to Third Parties. Neither the Administrative
----------------------------------
Agent nor any Lender shall have any responsibility as to the application or use
of any of the proceeds of any Advance.
Section 2.02. Effecting the Assignments of the Advances.
-----------------------------------------
(a) (i) The assignment of the Advances provided for by Section
2.01(a) shall be made on notice, given not later than 11:00 A.M. (New York City
time) on the Business Day of (or, if the Advances to be assigned are Eurodollar
Rate Advances, 10:00 A.M. (New York City time) on the second Business Day prior
to the date of) the proposed Restatement Date, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telex, telecopier or cable. Such notice (the "Restatement Date Notice") shall
-----------------------
be by telex, telecopier or cable, confirmed immediately in writing, in
substantially the form of Exhibit C, specifying therein (1) the requested
Restatement Date, (2) the requested Type of Advances to be Continued or
Converted on the Restatement Date and (3) if Eurodollar Rate Advances are to be
Continued or Converted on the Restatement Date, the requested Interest Period
therefor.
(ii) If Eurodollar Rate Advances are to be Continued or Converted on
the Restatement Date, the Administrative Agent shall promptly notify each
Lender of the applicable interest rate under Section 2.06(a)(ii).
(iii) Each Lender shall, before 1:00 P.M. (New York City time) on the
Restatement Date, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account,
in same day funds, such Lender's ratable portion of the Advances to be
acquired by it on such date pursuant to Section 2.01(a). After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent
will transfer same day funds to the Lenders entitled thereto.
(b) Anything in subsection (a) above to the contrary
notwithstanding, Eurodollar Rate Advances may not be outstanding under more than
8 separate Interest Periods at any one time.
(c) The Restatement Date Notice shall be irrevocable and binding on
the Borrower. If the Advances to be assigned on the Restatement Date are to
constitute Eurodollar Rate Advances, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in the Restatement Date
Notice the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be acquired by such Lender when
such Advance, as a result of such failure, is not assigned to it on such date.
-33-
(d) Unless the Administrative Agent shall have received notice from a
Lender (a "Non-Paying Lender") prior to 12:00 Noon (New York City time) on the
-----------------
Restatement Date that such Non-Paying Lender will not make available to the
Administrative Agent such Non-Paying Lender's purchase price for the ratable
portion of the Advances to be acquired by it on such date, the Administrative
Agent may assume that such Non-Paying Lender has made such portion available to
the Administrative Agent on the Restatement Date in accordance with Section
2.02(a) and the Administrative Agent may, in reliance upon such assumption, make
available to the other Lenders (the "Recipients") on such date a corresponding
----------
amount. If and to the extent that such Non-Paying Lender shall not have so made
such ratable portion available to the Administrative Agent and the
Administrative Agent shall have made available such corresponding amount to the
Recipients, such Non-Paying Lender and the Recipients severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the Restatement Date until the
date such amount is repaid to the Administrative Agent, at the Federal Funds
Rate. If such Non-Paying Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance for purposes of this Agreement.
(e) The failure of any Lender to pay to the Administrative Agent the
ratable portion of the Advances to be acquired by it on the Restatement Date
shall not relieve any other Lender of its obligation, if any, hereunder to pay
to the Administrative Agent the ratable portion of the Advances to be so
acquired by such Lender, but no Lender shall be responsible for the failure of
any other Lender to perform such other Lender's obligations hereunder.
Section 2.03. Repayment. The Borrower hereby promises to pay to the
---------
Administrative Agent for the account of each Lender the full outstanding
principal amount of such Lender's Advances on the Maturity Date. All repayments
of principal under this Section 2.03 shall be made together with interest
accrued to the date of such repayment on the principal amount repaid. Advances
once prepaid may not be reborrowed.
Section 2.04. Termination of the Commitments. The "Commitments" under
------------------------------
the Existing Credit Agreement were automatically and permanently reduced to zero
on December 31, 1997. Such "Commitments" may not be reinstated .
Section 2.05. Prepayments.
-----------
(a) Optional. The Borrower may, upon at least two Business Days'
--------
notice (in the case of prepayment of Eurodollar Rate Advances) or upon notice
given on the date of prepayment (in the case of prepayments of Base Rate
Advances) to the Administrative Agent (which notice shall state the proposed
date and aggregate principal amount of the prepayment), and if such notice is
given the Borrower shall, prepay the outstanding principal amount of the
Advances in the aggregate amount and on the date specified in such notice,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided that (x) each partial prepayment shall be in an
--------
aggregate principal amount of $3,000,000 or an integral multiple of $1,000,000
in excess thereof, (y) any such prepayment of a Eurodollar Rate Advance
-34-
other than on the last day of the Interest Period therefor shall be accompanied
by, and subject to, the payment of any amount payable under Section 9.04(c) in
respect of such prepayment and (z) each such notice shall be made on the
relevant day not later than, in the case of prepayments of Eurodollar Rate
Advances, 10:00 A.M. (New York City time) and, in the case of prepayments of
Base Rate Advances, 12:00 Noon (New York City time). Optional prepayments
pursuant to this paragraph (a) shall be applied to the installments of the
Advances set forth in paragraph (b) below in the direct order of their
maturities.
(b) Mandatory. The Borrower shall prepay the Advances on the
---------
Principal Prepayment Dates as follows:
Principal Prepayment Date Amount of Prepayment
------------------------- --------------------
Quarterly Date in
December 1999 $7,812,500.00
Quarterly Date in
December 2000 $7,812,500.00
Quarterly Date in
December 2001 $7,812,500.00
Optional prepayments pursuant to paragraph (a) above shall be applied to the
installments of the Advances set forth in this paragraph (b) in the direct order
of their maturities.
(c) All Prepayments. Each prepayment of Advances under Sections
---------------
2.05(a) and (b) shall be made for account of the Lenders according to their
respective Pro Rata Shares of the principal amount of the Advances then
outstanding. Advances once prepaid may not be reborrowed.
Section 2.06. Interest.
--------
(a) Ordinary Interest. The Borrower shall pay interest on the unpaid
-----------------
principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full at the following rates
per annum:
(i) Base Rate Advances. While such Advance is a Base Rate Advance, a
------------------
rate per annum equal at all times to the sum of (1) the Base Rate in effect
from time to time plus (2) the Applicable Margin in effect from time to
----
time, payable in arrears quarterly on each Quarterly Date and on the date
such Base Rate Advance shall be Converted (but only on the amount
Converted) or paid in full.
(ii) Eurodollar Rate Advances. While such Advance is a Eurodollar
------------------------
Rate Advance, a rate per annum equal at all times during each Interest
Period for such
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Advance to the sum of (1) the Eurodollar Rate for such Interest Period for
such Advance plus (2) the Applicable Margin in effect from time to time,
----
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each three-
month anniversary of the first day of such Interest Period occurring during
such Interest Period.
(b) Post-Default Interest. If (a) any Obligor shall fail to pay when
---------------------
due (by acceleration or otherwise) any amount payable under any Loan Document
after any applicable grace period provided in Section 6.01(a), or (b) (i) an
Event of Default shall have occurred and be continuing during any period and
(ii) the Administrative Agent or the Required Lenders, through the
Administrative Agent, shall have notified the Borrower thereof, the Borrower
shall, notwithstanding anything else in this Agreement to the contrary, pay to
the Administrative Agent for account of each Lender interest, during such
period, at the applicable Post-Default Rate on the outstanding principal of each
Advance, and on any other amount whatsoever then due and payable by the Borrower
hereunder or under the Notes held by such Lender to or for account of such
Lender, such interest to be payable from time to time on demand.
Section 2.07. Conversion and Continuation of Advances.
---------------------------------------
(a) Optional Conversion. The Borrower may on any Business Day, upon
-------------------
notice given to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the second Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.08 and 2.09, Convert all
or any portion of the Advances of one Type (and, in the case of Eurodollar Rate
Advances, having the same Interest Period); provided that any Conversion of
--------
Eurodollar Rate Advances into Base Rate Advances shall be made only on the last
day of an Interest Period for such Eurodollar Rate Advances, any Conversion of
Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less
than $3,000,000 or an integral multiple of $1,000,000 in excess thereof and no
Conversion of any Advances shall result in more than 8 separate Interest Periods
being outstanding. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
aggregate amount and Type of the Advances (and, in the case of Eurodollar Rate
Advances, the Interest Period therefor) to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Certain Mandatory Conversions.
-----------------------------
(i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances having the same Interest Period shall be reduced,
by payment or prepayment or otherwise, to less than $3,000,000 such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any outstanding Eurodollar Rate Advances in accordance with the
provisions contained in the
-36-
definition of "Interest Period" in Section 1.01 and in clause (a) or (c) of
this Section 2.07, the Administrative Agent will forthwith so notify the
Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default and upon notice from the Administrative Agent to the Borrower at
the request of the Required Lenders, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (y) the obligation of the
Lenders to make, or to Convert Advances into, or to Continue, Eurodollar
Rate Advances shall be suspended.
(c) Continuations. The Borrower may, on any Business Day, upon
-------------
notice given to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the second Business Day prior to the date of the proposed
Continuation and subject to the provisions of Sections 2.08, Continue all or any
portion of the outstanding Eurodollar Rate Advances having the same Interest
Period as such Eurodollar Rate Advances; provided that any such Continuation
--------
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Continuation of Eurodollar Rate Advances shall be in an
amount not less than $3,000,000 or an integral multiple of $1,000,000 in excess
thereof and no Continuation of any Advances shall result in more than 8 separate
Interest Periods being outstanding. Each such notice of Continuation shall,
within the restrictions specified above, specify (i) the date of such
Continuation, (ii) the aggregate amount of, and the Interest Period for, the
Advances being Continued and (iii) the duration of the initial Interest Period
for the Eurodollar Rate Advances subject to such Continuation. Each notice of
Continuation shall be irrevocable and binding on the Borrower.
Section 2.08. Increased Costs, Illegality, Etc.
---------------------------------
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of (to the extent any such introduction or change occurs
after the date hereof) any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
adopted or made after the date hereof (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost; provided that, before making any such demand, each Lender agrees
--------
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender. A certificate as to the
amount of such increased cost, submitted to the Borrower by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.
-37-
(b) If any Lender determines in good faith that compliance with any
law or regulation enacted or introduced after the date hereof or any guideline
or request from any central bank or other governmental authority adopted or made
after the date hereof (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to the Administrative Agent for the account of such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, (i) the
Required Lenders reasonably determine and notify the Administrative Agent that
the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such Interest Period,
or (ii) if fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances, the Administrative Agent shall forthwith so notify the Borrower and
the Lenders, whereupon (x) each Eurodollar Rate Advance will automatically, on
the last day of any then existing Interest Period therefor, Convert to a Base
Rate Advance, and (y) the obligation of the Lenders to make, or to Convert
Advances into, or to Continue, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and such Lenders that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of (to the extent any
such introduction or change occurs after the date hereof) any law or regulation
shall make it unlawful, or any central bank or other governmental authority
having appropriate jurisdiction shall assert in writing that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its obligations hereunder
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (i) each Eurodollar
Rate Advance of such Lender will automatically, upon such demand, Convert to a
Base Rate Advance and (ii) the obligation of such Lender to make, or to Convert
Advances into, or to Continue, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided that, before making any such demand, such Lender agrees to use
--------
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending
-38-
Office to continue to perform its obligations to make Eurodollar Rate Advances
or to continue to fund or maintain Eurodollar Rate Advances and would not, in
the judgment of such Lender, be otherwise disadvantageous to such Lender.
(e) The Borrower shall not be obligated to pay any additional amounts
arising pursuant to clauses (a) and (b) of this Section 2.08 that are
attributable to the Excluded Period with respect to such additional amount;
provided that if an applicable law, rule, regulation, guideline or request shall
--------
be adopted or made on any date and shall be applicable to the period (a
"Retroactive Period") prior to the date on which such law, rule, regulation,
------------------
guideline or request is adopted or made, the limitation on the Borrower's
obligations to pay such additional amounts hereunder shall not apply to the
additional amounts payable in respect of such Retroactive Period.
Section 2.09. Payments and Computations.
-------------------------
(a) The Borrower shall make each payment hereunder and under the
Notes not later than 12:00 Noon (New York City time) on the day when due in U.S.
Dollars to the Administrative Agent at the Administrative Agent's Account in
same day funds and, except as expressly set forth herein, without deduction,
set-off or counterclaim. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest hereunder ratably (other than amounts payable pursuant to Section
2.08(a), 2.08(b), 2.10 or 9.04(c)) to the Lenders for the account of their
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Basic Documents under circumstances for which the Basic
Documents do not specify the Advances to which, or the manner in which, such
funds are to be applied, and the Borrower has not otherwise directed how such
funds are to be applied (which direction is consistent with the terms of the
Basic Documents), the Administrative Agent may, but shall not be obligated to,
elect to distribute such funds to each Lender ratably in accordance with such
Lender's proportionate share of the principal amount of all outstanding
Advances, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender, and for application to such principal
installments, as the Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under any Note
held by such Lender, to
-39-
charge from time to time against any or all of the Borrower's accounts with such
Lender any amount so due (with notice to the Administrative Agent and the
Borrower promptly following such charge).
(d) Each Reference Bank party hereto agrees to furnish to the
Administrative Agent timely information for the purpose of determining each
Eurodollar Rate. If any one or more of the Reference Banks shall not furnish
such timely information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent shall determine
such interest rate on the basis of timely information furnished by the remaining
Reference Banks.
(e) All computations of interest shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest, fees or commissions are payable. Each
determination by the Administrative Agent of an interest rate hereunder made in
accordance with the provisions of this Agreement shall be conclusive and binding
for all purposes, absent manifest error.
For purposes of the Interest Act (Canada) and disclosure thereunder,
whenever interest or any fee to be paid hereunder or in connection herewith is
to be calculated on the basis of any period of time that is less than a calendar
year, the yearly rate of interest to which the rate determined pursuant to such
calculation is equivalent is the rate so determined multiplied by the actual
---------- --
number of days in the calendar year in which the same is to be ascertained and
divided by the number of days in such period of time. The rates of interest
------- --
under this Agreement are nominal rates, and not effective rates or yields. The
principle of deemed reinvestment of interest does not apply to any interest
calculation under this Agreement.
(f) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest; provided that, if such
--------
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the immediately preceding Business Day.
(g) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount
-40-
is distributed to such Lender until the date such Lender repays such amount to
the Administrative Agent, at the Federal Funds Rate.
Section 2.10. Taxes.
-----
(a) Any and all payments by the Obligors on or in respect of this
Agreement, the Advances, the Notes, the Security Documents, the recording,
registration, notarization or other formalization of any thereof, the
enforcement thereof or the introduction thereof in any judicial proceedings, or
on or in respect of any payments of principal, interest, premium, charges, fees
or other amounts made on, under or in respect of any thereof, shall be made, in
accordance with Section 2.09, free and clear of and without deduction or
withholding for any and all present and future income, stamp, registration and
other taxes and levies, imposts, deductions, charges, compulsory loans and
withholdings whatsoever, now or hereafter imposed, assessed, levied or collected
by any authority of or in any jurisdiction (including, without limitation,
Canada or any political subdivision or taxing authority thereof or therein, or
any federal or other association of or with which Canada may be a member or
associated and specifically including any withholding made pursuant to Part XIII
of the Income Tax Act (Canada) in respect of any interest payment hereunder),
excluding, in the case of each Lender, income or franchise taxes imposed on such
---------
Lender that are imposed on it by the state or foreign jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Obligor shall be
-----
required by law to deduct or withhold any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender or the Administrative Agent,
(i) the sum payable shall be increased as may be necessary so that after making
all required deductions or witholdings (including deductions applicable to
additional sums payable under this Section 2.10) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions or witholdings been made, (ii) such
Obligor shall make such deductions or witholdings and (iii) such Obligor shall
pay the full amount deducted or withheld to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, each Obligor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made by it hereunder or under the
Notes or from the execution, delivery or registration of this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
-----------
(c) Each Obligor will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.10) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from such date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
-41-
(d) Within 30 days after the date of any payment of Taxes, each
Obligor will furnish to the Administrative Agent, at its address referred to in
Section 9.02, appropriate evidence of payment thereof. If such Obligor shall
make a payment hereunder or under the Notes through an account or branch outside
the United States, or a payment is made on behalf of such Obligor by a payor
that is not a United States Person, such Obligor will, if no taxes are payable
in respect of such payment, furnish, or will cause such payor to furnish, to the
Administrative Agent, at such address, a certificate from the appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from or
not subject to Taxes. For purposes of this subsection (d), the terms "United
------
States" and "United States Person" shall have the meanings specified in Section
------ --------------------
7701 of the Internal Revenue Code.
(e) Any Lender claiming any additional amounts payable pursuant to
this Section 2.10 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office(s) if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.10 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(g) The Borrower represents and warrants that, as of the date hereof,
to the best of its knowledge after due inquiry, (i) neither this Agreement nor
the execution or delivery by the Borrower of this Agreement is subject to any
Taxes, and (ii) no payment to be made by the Borrower hereunder or under any
Note is subject to any Taxes.
Section 2.11. Sharing of Payments, Etc. If any Lender shall obtain
-------------------------
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.08(a), 2.08(b), 2.10 or 9.04(c)) in excess of its ratable
share of payments on account of the Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Advances owing to them as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them; provided that if all or
--------
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.11 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
-42-
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
Section 2.12. Criminal Rate of Interest. Notwithstanding any other
-------------------------
provisions of this Agreement, in no event shall the aggregate "interest" (as
defined in Section 347 ("Section 347") of the Criminal Code, Revised Statutes of
-----------
Canada, 1985, C-46, as the same shall be amended, replaced or re-enacted from
time to time) payable to the Lenders under this Agreement exceed the effective
annual rate of interest on the "credit advances" (as defined in Section 347)
hereunder lawfully permitted under Section 347 and, if any payment, collection
or demand pursuant to this Agreement in respect of "interest" (as defined in
Section 347) is determined to be contrary to the provisions of Section 347, such
payment, collection or demand shall be deemed to have been made by mutual
mistake of the Lenders and the Borrower and the amount of such payment or
collection shall be refunded by the Lenders to the Borrowers. For the purposes
of this Agreement, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the Advances on the basis of annual compounding for the lawfully
permitted rate of interest and, in the event of dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Administrative
Agent for the account of the Borrower will be conclusive for the purpose of such
determination in the absence of evidence to the contrary.
Section 2.13. Replacement of Lenders.
----------------------
(a) Subject to clause (b) below, in the event that any Lender
requests compensation pursuant to Section 2.08(a) or 2.08(b), or the obligation
of any Lender to make, or to Convert Base Rate Advances into, or to Continue,
Eurodollar Rate Advances shall be suspended pursuant to Section 2.08(c) or
2.08(d) (such Lender being herein called an "Affected Lender"), then, so long as
---------------
such condition exists, the Borrower may, after the date 30 days after the date
of such request or suspension, (x) designate an Eligible Assignee acceptable to
the Administrative Agent (which acceptance will not be unreasonably withheld)
that is not an Affiliate of the Borrower (such Eligible Assignee being herein
called a "Replacement Lender") to purchase the Affected Lender's Advances and
------------------
other rights under the Loan Documents (all without recourse to or representation
or warranty by, or expense to, the Affected Lender) for a purchase price equal
to the aggregate principal amount of the outstanding Advances held by the
Affected Lender plus all accrued but unpaid interest on such Advances owing to
----
the Affected Lender (and upon such purchase and substitution, and subject to the
execution and delivery to the Administrative Agent by the Replacement Lender of
documentation satisfactory to the Administrative Agent and compliance with the
requirements of Section 9.07(c), the Replacement Lender shall succeed to the
rights and obligations of the Affected Lender hereunder and the other Loan
Documents), and (y) pay to the Affected Lender all amounts payable to such
Affected Lender under Section 9.04(c), calculated as if the purchase by the
Replacement Lender constituted a mandatory prepayment of Advances by the
Borrower, and (z) pay to the Administrative Agent the processing and recordation
fee specified in Section 9.07(a)(vi) with respect to such assignment.
-43-
In the event that the Borrower exercises its rights under the
preceding sentence, the Affected Lender shall no longer be a party hereto or
have any rights or obligations hereunder or under the other Loan Documents;
provided that the obligations of the Borrower to the Affected Lender under
--------
Sections 2.08, 2.10 and 9.04 with respect to events occurring or obligations
arising before or as a result of such replacement shall survive such exercise.
(b) The Borrower may not exercise its rights under this Section 2.13:
(i) with respect to any Affected Lender unless the Borrower
simultaneously exercises such rights with respect to all Affected Lenders,
or
(ii) if a Default or an Event of Default has occurred and is then
continuing.
ARTICLE III
CONDITIONS TO RESTATEMENT
Section 3.01. Conditions Precedent. The Existing Credit Agreement
--------------------
shall be amended and restated to read in full as set forth herein on the date
(the "Restatement Date") on which the Administrative Agent shall notify the
----------------
Borrower that the Administrative Agent shall have received the following in form
and substance satisfactory to it:
(a) This Agreement, duly executed and delivered by each Obligor, the
Required Lenders and the Administrative Agent.
(b) The Notes, duly executed by the Borrower.
(c) The following documents, each dated the Restatement Date (unless
otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and in sufficient copies
for the Administrative Agent and each Lender:
(i) (1) for the Borrower, a copy of its charter (or equivalent
documents), as amended and in effect, certified by the appropriate
Canadian governmental authority, and a certificate from the Ontario
Ministry of Consumer and Commercial Relations to the effect that the
Borrower is a corporation incorporated under the Business Corporations
Act (Ontario) and has not been dissolved; (2) for the Subsidiary
Guarantor, a copy of its memorandum and articles of association, as
amended and in effect, certified by a duly authorized officer of the
Subsidiary Guarantor; and (3) for each other Obligor, a copy of the
charter, as amended and in effect, of such Obligor certified (as of a
date reasonably close to the Restatement Date) by the Secretary of
State of the jurisdiction of its organization and a certificate from
such Secretary of State dated
-44-
as of a date reasonably close to the Restatement Date as to the good
standing of and charter documents filed by such Obligor;
(ii) for each Obligor, a certificate of the Secretary or an
Assistant Secretary of such Obligor, dated the Restatement Date and
certifying (A) that attached thereto is a true and complete copy of
the by-laws (or equivalent documents) of such Obligor as amended and
in effect at all times from the date on which the resolutions referred
to in clause (B) were adopted to and including the date of such
certificate, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors of such Obligor
authorizing the execution, delivery and performance of such of the
Loan Documents to which such Obligor is or is intended to be a party
and the extensions of credit hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and
effect, (C) that the charter of such Obligor has not been amended
since the date of the certification thereto furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer of such Obligor executing such of the Loan Documents
to which such Obligor is intended to be a party and each other
document to be delivered by such Obligor from time to time in
connection therewith (and the Administrative Agent and each Lender may
conclusively rely on such certificate until it receives notice in
writing from such Obligor);
(iii) for each Obligor, a certificate of another officer of such
Obligor, dated the Restatement Date, as to the incumbency and specimen
signature of the Secretary or Assistant Secretary, as the case may be,
of such Obligor.
(d) (X) The Holdings Pledge Agreement, the Terra Capital Pledge and
Security Agreement, the Subsidiary Pledge and Security Agreement and the
TNLP Pledge and Security Agreement, in substantially the forms of Exhibits
X-0, X-0, X-0 and B-4, respectively, duly executed by each of the intended
parties thereto, together with:
(i) such appropriately completed and duly executed copies of
Uniform Commercial Code financing statements and financing statement
amendments as the Collateral Agent or any Secured Party (as defined in
the Intercreditor Agreement) shall have requested in order to continue
the perfection and protection of the Liens created by the Terra
Capital Security Documents and covering the Collateral described
therein;
(ii) executed and delivered documents for recordation and filing
of or with respect to such Security Documents that the Collateral
Agent or any such Secured Party may deem necessary or desirable in
order to continue the perfection and protection of the Liens created
thereby; and
-45-
(iii) legal opinions, in form and substance, and given by
counsel, satisfactory to the Administrative Agent, confirming that the
Terra Capital Security Documents are legal, valid, binding and
enforceable obligations of each Obligor party thereto and that the
security interests created thereby are a valid first and prior
perfected security interest in the Collateral.
(Y) (i) legal opinions, in form and substance, and given by counsel,
satisfactory to the Administrative Agent, confirming that the Terra Canada
Security Documents are legal, valid, binding and enforceable obligations of
each Obligor party thereto, that the security interests created thereby are
a valid and perfected security interest in the Collateral, and addressing
such other matters as the Administrative Agent or any Lender through the
Administrative Agent may reasonably request and (ii) all relevant
certificates evidencing the entitlement to the shares of common and
preferred stock of Terra U.K. (together with executed stock transfer forms
and undated stock powers duly executed in blank).
(e) such appropriately completed and duly executed copies of all
registrations, recordings and other filings (or undertakings to register),
together with any searches of filings related thereto, as the
Administrative Agent or any Lender shall have requested in order to
continue the perfection and protection of the Liens created by the Terra
Canada Security Documents and covering the Collateral described therein;
and such executed and delivered documents for recordation and filing of or
with respect to such Terra Canada Security Documents that the
Administrative Agent or any Lender (through the Administrative Agent) may
deem necessary or desirable in order to continue the perfection and
protection of the Liens created thereby.
(f) A Confirmation of Loan Purchase Agreement in substantially the
form of Exhibit E, duly executed and delivered by Terra and the
Administrative Agent.
(g) A favorable opinion of Xxxxxxxx & Xxxxx, special counsel for the
Obligors, substantially in the form of Exhibit D-1, and a favorable opinion
of Osler, Xxxxxx & Harcourt, special Canadian counsel for the Borrower,
substantially in the form of Exhibit D-2, and each as to such other matters
as the Administrative Agent or any Lender through the Administrative Agent
may reasonably request.
(h) A favorable opinion of Milbank, Tweed, Xxxxxx & XxXxxx LLP,
special New York counsel for Citibank, substantially in the form of Exhibit
D-3, and a favorable opinion of Blake, Xxxxxxx & Xxxxxxx, special Canadian
counsel for Citibank, substantially in the form of Exhibit D-4.
(i) A certificate of the Senior Financial Officer to the effect that:
(x) the representations and warranties contained in each Loan
Document are correct on and as of the Restatement Date, before and
after giving effect to the
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amendment and restatement provided for hereby, as though made on and
as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date); and
(y) no event has occurred and is continuing that constitutes a
Default or an Event of Default.
(j) Evidence of payment of (1) all accrued fees and expenses of the
Administrative Agent (including the reasonable and documented fees and
expenses of counsel to Citibank in connection with this Agreement to the
extent that statements for such fees and expenses have been delivered to
the Borrower at least one Business Day prior to the Restatement Date); and
(2) all interest accrued through the Restatement Date on the Existing
Advances and all other expenses payable under the Existing Credit
Agreement.
(k) Evidence of the existence of all insurance required to be
maintained by Terra hereunder and the designation of the Borrower as the
loss payee or named insured with respect to the Collateral under the Terra
Canada Security Documents as its interest may appear.
(l) Evidence that, since December 31, 1998, there has been no
Material Adverse Change.
(m) The New York Process Agent Acceptance, duly executed and
delivered by the New York Process Agent.
(n) Evidence that the amendment and restatement provided for by the
Terra Capital Credit Facility has occurred (or is occurring on the
Restatement Date).
(o) Evidence that the transactions contemplated in the Distribution
Business Sale Agreement to be consummated on the "Closing Date" (as defined
therein) have been consummated or are being consummated on the Restatement
Date, without waiver by Terra in any material respect unless such waiver is
consented to by the Administrative Agent and the Required Lenders.
(p) Evidence that Terra or one or more of its Subsidiaries shall have
purchased Receivables theretofore sold (by Terra and/or its Subsidiaries)
under one or more of the Receivables Facilities for an aggregate amount not
exceeding $150,000,000 and that the Receivables Facilities shall have been
cancelled in a manner satisfactory to the Administrative Agent.
(q) Evidence that Terra or one or more of its Subsidiaries shall have
purchased the BMLP Class A Limited Partnership Interest from the existing
BMLP Class A Limited Partner for an amount estimated to be $227,000,000
(such amount as determined in
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compliance with the BMLP Partnership Agreement, the BMLP Support and Option
Agreement and related documents).
(r) Evidence that (i) the BMLP Support and Option Agreement and the
Terra U.K. Offtake Agreement have been cancelled (in the case of the Terra
U.K. Offtake Agreement with no amounts being paid by Terra and/or any of
its Subsidiaries in connection therewith (including, without limitation,
amounts paid subsequent to the Restatement Date)) and (ii) the outstanding
principal amount of the "Terra Capital Note" as defined in the Existing
Credit Agreement shall have been paid in full or otherwise cancelled.
(s) The following documents, each of which shall be executed (and,
where appropriate, acknowledged) by Persons satisfactory to the
Administrative Agent:
(i) The Terra Oklahoma Mortgage, the BMLP Mortgage and the
Port Xxxx Corporation Mortgage, each in substantially the forms of
Exhibits B-7, duly executed by each of the intended parties thereto,
covering the facilities of the Company and its Subsidiaries located in
Woodward, Oklahoma, Port Xxxx, Iowa and Beaumont, Texas, in each case
duly executed and delivered by the intended parties thereto in
recordable form (in such number of copies as the Administrative Agent
shall have requested) and, to the extent necessary with respect to any
leasehold property to be subjected to a Mortgage, consents of the
respective landlords with respect to such property; and
(ii) to the extent necessary under applicable law, for filing
in the appropriate county land office, Uniform Commercial Code
financing statements covering fixtures, appropriately completed and
duly executed.
(t) Such other approvals, opinions and documents relating to this
Agreement and the transactions contemplated hereby as any Lender may,
through the Administrative Agent, reasonably request.
Section 3.02. Conditions Precedent to Section 2.01(a) Assignments.
---------------------------------------------------
The obligation of each Lender to effect the assignments of the Advances referred
to in Section 2.01 on the Restatement Date shall be subject to the further
conditions precedent that on the Restatement Date the following statements shall
be true:
(i) the representations and warranties contained in each Loan
Document are correct on and as of the Restatement Date, before and after
giving effect to the amendment and restatement of the Existing Credit
Agreement provided for hereby, as though made on and as of such date (or,
if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date); and
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(ii) no event has occurred and is continuing, or would result from
the transactions contemplated hereby to occur on the Restatement Date, that
constitutes a Default or an Event of Default.
Section 3.03. Determinations Under Section 3.01. For purposes of
---------------------------------
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the
Restatement Date specifying its objection thereto and such Lender shall not have
made available to the Administrative Agent such Lender's purchase price of the
Advances to be acquired by it pursuant to Section 2.01(a).
Section 3.04. Consent to Sale; Acknowledgement. Effective as of the
--------------------------------
Restatement Date, the Initial Lenders hereby consent to the sale by Terra of the
Distribution Business on the terms and conditions as set forth in the
Distribution Business Sale Agreement.
Section 3.05. Terra Canada Consent. The Borrower hereby acknowledges
--------------------
that each of the Terra Canada Security Documents continues unchanged and remains
in full force and effect to secure (as "Liabilities" as defined therein) the
obligations of the Borrower hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower. The
----------------------------------------------
Borrower represents and warrants as follows:
(a) Each Obligor (i) is a corporation (or, in the cases of TNLP and
BMLP, a limited partnership) duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified and in good standing as a foreign corporation (or limited
partnership, as the case may be) in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires it
to so qualify or be licensed and where, in each case, failure so to qualify
and be in good standing could reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite power (corporate or other) and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) is a complete and accurate list of
all Material Subsidiaries of each Obligor as of the Restatement Date,
showing as of such date (as to each such Subsidiary) the jurisdiction of
its organization, the number of shares of each class of capital stock or
partnership interests authorized, and the number outstanding and
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the percentage of the outstanding shares or interests of each such class
owned (directly or indirectly) by such Obligor and the number of shares
covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights. All of the outstanding capital stock or
partnership interests of all of such Subsidiaries has been validly issued,
is fully paid and non-assessable and is owned by such Obligor or one or
more of its Subsidiaries free and clear of all Liens, except those created
by the Security Documents. Each Material Subsidiary (i) is a corporation
(or, in the cases of TNLP and BMLP, a limited partnership) duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization, (ii) is duly qualified and in good standing as a foreign
corporation or limited partnership, as the case may be, in each other
jurisdiction in which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed and where, in each
case, failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite
power (corporate or other) and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted.
(c) The execution, delivery and performance by each Obligor of this
Agreement, the Notes and each other Loan Document to which it is or is
intended to be a party, and the consummation of the credit transactions
between the Borrower and Lenders contemplated hereby, are within such
Obligor's powers (corporate or other), have been (or will, prior to the
Restatement Date, be) duly authorized by all necessary corporate or other
action, and do not (i) contravene such Obligor's charter, by-laws or, in
the cases of TNLP and BMLP, its agreement of limited partnership, (ii)
violate any applicable law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation U and Regulation X), order,
writ, judgment, injunction, decree, determination or award (except for any
such violation, by action or inaction of any Obligor, that could not
reasonably be expected to have a Material Adverse Effect and that could not
result in any liability of any Lender), (iii) except as set forth on
Schedule 4.01(c), conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Obligor, any
of its Subsidiaries or any of their properties (except for any such
conflict, breach or default, caused by action or inaction of any Obligor,
that could not reasonably be expected to have a Material Adverse Effect and
that could not result in any liability of any Lender) or (iv) except for
the Liens created by the Security Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the
properties of any Obligor or any of its Subsidiaries. No Obligor or any of
its Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which could be
reasonably expected to have a Material Adverse Effect.
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(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Obligor of this Agreement, the Notes or any
other Loan Document to which it is or is to be a party, or for the
consummation of the credit transactions between Borrower and Lenders
contemplated hereby, (ii) the grant by any Obligor of the Liens granted by
it pursuant to the Security Documents, (iii) the perfection or maintenance
of the Liens created by the Security Documents (except for the filings
required to be made pursuant to Sections 3.01(c) and 3.01(e)) or (iv) the
exercise by the Collateral Agent, the Administrative Agent or any Lender or
any other Secured Party (as defined in the Security Documents) of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Security Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d), all of which have been duly obtained, taken, given or made and are
in full force and effect.
(e) This Agreement has been, and each of the Notes and each other
Loan Document when delivered will have been, duly executed and delivered by
each Obligor that is intended to be a party thereto. This Agreement is, and
each of the Notes and each other Loan Document when delivered will be, the
legal, valid and binding obligation of each Obligor that is intended to be
a party thereto, enforceable against such Obligor in accordance with its
terms.
(f) The balance sheet of Terra as at December 31, 1998 and the
related statements of income and cash flows of Terra for the twelve months
then ended, accompanied by an opinion of Deloitte & Touche, independent
public accountants, and the balance sheet of Terra as at March 31, 1999 and
the related statements of income and cash flows of Terra for the three
months then ended, duly certified by the chief financial officer of Terra,
copies of which have been furnished to each Lender, present fairly, in all
material respects, subject, in the case of said balance sheet as at March
31, 1999, and said statements of income and cash flows for the three months
then ended, to year-end audit adjustments, the financial condition of Terra
as at such dates and the results of the operations of Terra for the periods
ended on such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis. The unaudited balance sheet of
the Borrower as at December 31, 1998 and the related unaudited statements
of income and cash flows of the Borrower for the twelve months then ended,
and the unaudited balance sheet of the Borrower as at March 31, 1999 and
the related unaudited statements of income and cash flows of the Borrower
for the three months then ended, duly certified by the chief financial or
accounting officer of the Borrower, copies of which have been furnished to
each Lender, present fairly, in all material respects, subject, in the case
of said balance sheet as at March 31, 1999, and said statements of income
and cash flows for the three months then ended, to year-end audit
adjustments, the financial condition of the Borrower as at such dates and
the results of the operations of the Borrower for the periods ended on such
dates, all in accordance with generally accepted
-51-
accounting principles applied on a consistent basis. Since December 31,
1998, there has been no Material Adverse Change with respect to Terra.
(g) (A) No written information, exhibit or report (as at the
Restatement Date) furnished by any officer of Terra or the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of
the Loan Documents (when taken together) contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements made therein not misleading and (B) none of the information,
exhibits or reports furnished by any Obligor to the Administrative Agent or
any Lender pursuant to Section 5.03 contained (on the date of delivery
thereof) any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not misleading;
provided that the representations made in this Section 4.01(g) with respect
--------
to the U.K. Nitrogen Assets with respect to any time prior to the Closing
Date are made to the best of Terra's knowledge after due inquiry.
(h) There is no action, suit, litigation or proceeding against any
Obligor or any of its Subsidiaries or any of their respective property,
including any Environmental Action, pending before any court, governmental
agency or arbitrator, or (to the knowledge of any Obligor) threatened, nor
(to the knowledge of any Obligor) is there any investigation pending in
respect of any Obligor, that:
(1) could reasonably be expected to have a Material Adverse
Effect; or
(2) on the Restatement Date could reasonably be expected to
affect the legality, validity or enforceability of this Agreement, any
Note, any other Loan Document or the consummation of the transactions
contemplated hereby.
(i) No Obligor is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance will be used for any purpose which violates the provisions of the
regulations of the Board of Governors of the Federal Reserve System. After
applying the proceeds of each Advance, not more than 25% of the value of
the assets of the Borrower and of the Borrower and its Subsidiaries taken
as a whole (as determined in good faith by the Borrower) that are subject
to Section 5.02(a) or Section 5.02(e) will consist of or be represented by
Margin Stock. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U, the statements made in which shall be such, in
the opinion of each Lender, as to permit the transactions contemplated
hereby in accordance with Regulation U.
(j) Set forth on Schedule 4.01(j) is a complete and accurate list, as
of the Restatement Date, of (1) each Plan that is subject to Title IV of
ERISA and each Multiemployer Plan with respect to any employees or former
employees of any Obligor or any of its ERISA Affiliates and (2) each
Canadian Employee Benefit Plan.
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(k) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of any Obligor or any of its ERISA Affiliates that
could reasonably be expected to have a Material Adverse Effect.
(l) Since the date of the Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan of any Obligor
or any of its ERISA Affiliates, there has been no change in the funding
status of any such Plan except to the extent that such change is not
reasonably expected to have a Material Adverse Effect.
(m) Neither any Obligor nor any of its ERISA Affiliates has incurred
or is reasonably expected to incur any withdrawal liability to any
Multiemployer Plan except to the extent such withdrawal liability is not
reasonably expected to have a Material Adverse Effect.
(n) Neither any Obligor nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA.
(o) As of the Restatement Date, the aggregate annualized cost on a
pay-as-you-go basis (including, without limitation, the cost of insurance
premiums) with respect to post-retirement benefits under welfare plans
(other than post-retirement benefits required to be provided by Section
4980B of the Code or applicable state law) for which Terra and its
Subsidiaries is liable does not exceed $1,000,000.
(p) Neither the business nor the properties of any Obligor or any of
its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that could reasonably be expected to have a Material Adverse
Effect.
(q) Except as set forth on Part I of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, the operations and properties of each Obligor and
each of its Subsidiaries comply in all material respects with all
Environmental Laws, all necessary Environmental Permits have been obtained
and are in effect for the operations and properties of each Obligor and its
Subsidiaries, each Obligor and its Subsidiaries are in compliance in all
material respects with all such Environmental Permits, and no circumstances
exist that could (i) form the basis of an Environmental Action against any
Obligor or any of its Subsidiaries or (ii) cause any such property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
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(r) Except as set forth on Part II of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, as of the Restatement Date none of the properties
of any Obligor or any of its Subsidiaries is listed or proposed for listing
on the National Priorities List under CERCLA or on the Comprehensive
Environmental Response, Compensation and Liability Information System
maintained by the Environmental Protection Agency or any analogous state
list of sites requiring investigation or cleanup, and no underground
storage tanks, as such term is defined in 42 U.S.C. 6901, are located on
any property of any Obligor or any of its Subsidiaries.
(s) Except as set forth on Part III of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, as of the Restatement Date neither any Obligor nor
any of its Subsidiaries has been notified in writing by any federal, state,
provincial or local governmental agency or any other Person that any
Obligor or any of its Subsidiaries is potentially liable for the remedial
or other costs with respect to treatment, storage, disposal, release,
arrangement for disposal or transportation of any Hazardous Materials
generated by any Obligor or any of its Subsidiaries, and Hazardous
Materials have not been generated, used, treated, handled, stored or
disposed of on, or released or transported to or from, any property of such
Obligor (or, to its knowledge, any adjoining property) except in compliance
in all material respects with all Environmental Laws and Environmental
Permits, and all other wastes generated at any such properties by any
Obligor or any of its Subsidiaries (and their respective agents, employees
and contractors) have been disposed of in compliance with all Environmental
Laws and Environmental Permits.
(t) Each Obligor and each of its Subsidiaries has filed, has caused
to be filed or has been included in, all federal and state income tax
returns and all other material tax returns (federal, state, provincial,
local and foreign) required to be filed and has paid (or is contesting in
good faith by appropriate proceedings) all taxes shown thereon to be owing,
together with applicable interest and penalties.
(u) Set forth on Schedule 4.01(u) is a complete and accurate list, as
of the date hereof, of each taxable year of Terra for which federal income
tax returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "Open Year").
---------
(v) As of the Restatement Date, there are no adjustments to the
federal income tax liability of Terra proposed by the Internal Revenue
Service with respect to Open Years. No issues have been raised by the
Internal Revenue Service in respect of Open Years that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(w) Neither any Obligor nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment
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company," as such terms are defined in the Investment Company Act of 1940,
as amended. Neither any Obligor nor any of its Subsidiaries is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended. Neither the making of any Advances
nor the application of the proceeds or repayment thereof by the Borrower,
nor the consummation of the other transactions contemplated hereby, will
violate any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(x) Each of Terra and the Borrower (both individually and
collectively with their respective Subsidiaries) is Solvent.
(y) Set forth on Part I of Schedule 4.01(y) is a complete and
accurate list, as of the Restatement Date, of all existing Debt of each
Obligor, showing as of the Restatement Date (i) the principal amount
outstanding thereunder, (ii) whether such Debt is secured by any Lien and
(iii) the aggregate principal amount of such Debt scheduled to be paid
during each fiscal year of Terra to and including the fiscal year of Terra
in which the Advances are to mature.
(z) This Agreement and each of the other Loan Documents are in proper
legal form under the laws of Canada for the enforcement thereof against the
Borrower under such laws, and under the laws of the United Kingdom for the
enforcement thereof against the Subsidiary Guarantor under such laws, and
if each of the Loan Documents were stated to be governed by such law, they
would constitute legal, valid and binding obligations of the Borrower or
the Subsidiary Guarantor, as the case may be, thereunder, enforceable in
accordance with their respective terms. All formalities (if any) required
under the laws of Canada (or, with respect to the Guarantee by the
Subsidiary Guarantor, the United Kingdom) for the validity and
enforceability of each of the Loan Documents (including, without
limitation, any necessary registration, recording or filing with any court
or other authority therein) have been accomplished, and no Taxes are
required to be paid and no notarization is required, for the validity and
enforceability thereof.
(aa) This Agreement and the other Loan Documents and the obligations
evidenced hereby and thereby are and will at all times be direct and
unconditional general obligations of the Borrower, and rank and will at all
times rank in right of payment and otherwise at least pari passu with all
---- -----
unsecured Debt of the Borrower, whether now existing or hereafter
outstanding, subject to statutory priority and the effect of bankruptcy and
insolvency law. The Obligations of the Subsidiary Guarantor under Article
VIII are and will at all times be direct and unconditional general
obligations of the Subsidiary Guarantor, and rank and will at all times
rank in right of payment and otherwise at least pari passu with all
---- -----
unsecured Debt of the Subsidiary Guarantor, whether now existing or
hereafter outstanding, subject to statutory priority and the effect of
bankruptcy and insolvency law. There exists no Lien (including any Lien
arising out of any attachment, judgment or execution), nor any segregation
or other preferential arrangement of any
-55-
kind, on, in or with respect to any of the property or revenues of the
Borrower or any of its Subsidiaries, except as expressly permitted by
Section 5.02(a).
(bb) Each of the Borrower and the Subsidiary Guarantor is subject to
civil and commercial law with respect to its obligations under this
Agreement and each of the other Loan Documents. The execution, delivery and
performance by the Borrower and the Subsidiary Guarantor of this Agreement
and each of the other Loan Documents constitute private and commercial acts
rather than public or governmental acts. Neither the Borrower, the
Subsidiary Guarantor nor any of their respective properties or revenues is
entitled to any right of immunity in any jurisdiction from suit, court
jurisdiction, judgment, attachment (whether before or after judgment), set-
off or execution of a judgment or from any other legal process or remedy
relating to the obligations of the Borrower or the Subsidiary Guarantor, as
the case may be, under this Agreement or any of the other Loan Documents.
(cc) The Borrower (i) has good title, or valid and subsisting
leasehold interests or licenses, to all of its material properties and
assets; and (ii) does not hold any assets as trustee of any trust, except
for employee benefit plans for which the Borrower may be trustee or other
fiduciary.
(dd) Except as could not reasonably be expected to have a Material
Adverse Effect, the Borrower and its Subsidiaries have complied in all
material respects with all applicable laws regarding each Canadian Employee
Benefits Plan (including, where applicable, the Pension Benefits Act
(Ontario) and the Income Tax Act (Canada); and each Canadian Employee
Benefits Plan is, and has been, maintained and administered in substantial
compliance with its terms, applicable collective bargaining agreements and
all applicable laws (including, where applicable, the Pension Benefits Act
(Ontario) and the Income Tax Act (Canada)).
(ee) There exists no outstanding liability of the Borrower or any of
its Subsidiaries with respect to any Canadian Employee Benefit Plan that
has been terminated, which liability could reasonably be expected to have a
Material Adverse Effect.
(ff) The Borrower and its Subsidiaries have paid when due all amounts
which the Borrower and its Subsidiaries are required to have paid under the
terms of each Canadian Employee Benefit Plan or applicable law as
contributions to such Canadian Employee Benefit Plan (excluding any
nonpayment that could not reasonably be expected to have a Material Adverse
Effect); as of the date of the most recent audit performed with respect to
the Borrower's Canadian Employee Benefit Plans, no accumulated funding
deficiency, whether or not waived, resulting from the action or inaction of
the Borrower or any of its Subsidiaries existed with respect to any
Canadian Employee Benefit Plan; and, to the best knowledge of the Borrower,
no accumulated funding deficiency, whether or not waived,
-56-
resulting from the action or inaction of the Borrower or any of its
Subsidiaries exists with respect to any Canadian Employee Benefit Plan; and
(gg) Each Plan is fully funded, on a going concern basis, in
accordance with its terms and regulatory requirements as outlined by the
Pension Benefits Act (Ontario), administrative requirements of the Pension
Commission of Ontario and the most recent actuarial report filed with the
Pension Commission of Ontario in respect of such Plan, as and to the extent
applicable, except to the extent any failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(hh) Neither the Borrower nor any Subsidiary of the Borrower
sponsors, maintains or contributes to, or has at any time in the preceding
six-year period sponsored, maintained or contributed to any "multi-employer
pension plan" (as defined in the Pension Benefits Act (Ontario)).
(ii) The Borrower has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations that
could be adversely affected by the inability of the computer applications
used by the Borrower or any of its Subsidiaries to recognize and perform
properly date-sensitive functions involving certain dates prior to, on and
on any date after December 31, 1999 (the "Year 2000 Problem"), (ii)
-----------------
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis, and (iii) to date, implemented that plan substantially in
accordance with the timetable. Based on the foregoing, the Borrower
believes that all computer applications that are material to its or any of
its Subsidiaries' business and operations are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions for
all dates before, on and after January 1, 2000, except to the extent that a
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 4.02. Representations and Warranties of each Lender. Each
---------------------------------------------
Lender hereby represents and warrants that such Lender, in good faith, has not
relied upon Margin Stock as collateral for the Obligations of the Obligors
hereunder and under the other Loan Documents.
ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants. So long as any principal of or
---------------------
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, Terra will, and will cause each of the Obligors to:
(a) Compliance with Laws, Etc. Comply, and cause each of its
--------------------------
Subsidiaries to comply, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with
ERISA and the Racketeer Influenced and
-57-
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970
(except to the extent that non-compliance with any thereof could not
reasonably be expected to have a Material Adverse Effect).
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
----------------------
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; provided that neither such Obligor
--------
nor any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained to the extent required by GAAP, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
----------------------------------
its Subsidiaries and all lessees and other Persons occupying its properties
to comply, with all Environmental Laws and Environmental Permits applicable
to its operations and properties; obtain and renew, and cause each of its
Subsidiaries to obtain and renew, all Environmental Permits necessary for
its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary to
remove and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; provided that
--------
(i) neither such Obligor nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves to the extent required by GAAP are
being maintained with respect to such circumstances and (ii) no such
compliance with laws and permits, obligation to obtain or renew permits or
obligation to undertake any such investigation, study, sampling, testing,
removal, remedial or other action shall be required hereunder to the extent
no Material Adverse Effect could reasonably be expected to result from any
failure to so comply, obtain, renew or undertake, either individually or in
the aggregate.
(d) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Material Subsidiaries to maintain, with responsible and reputable insurance
companies or associations, insurance, including business interruption
insurance with respect to each manufacturing plant, in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses.
(e) Preservation of Corporate Existence, Etc. Subject to Section
-----------------------------------------
5.02(d) and (e), preserve and maintain, and cause each of its Material
Subsidiaries to preserve and maintain, its corporate or partnership
existence, rights (charter and statutory) and franchises; provided that:
--------
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(1) BMLP may be dissolved; and
(2) neither any Obligor nor any of its Subsidiaries shall be
required to preserve any right or franchise if the Board of Directors
of such Obligor or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of such Obligor or such Subsidiary, as the case may be, and
that the loss thereof will not have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and as may be
-----------------
reasonably requested from time to time, permit the Administrative Agent or
any of the Lenders or any agents or representatives thereof to examine and
make copies of and abstracts from the records and books of account of, and
visit the properties of, such Obligor and any of its Subsidiaries (in the
presence of an appropriate officer or representative of the relevant
Obligor), and to discuss the affairs (including, but not limited to, the
compliance by such Obligor and its Subsidiaries with all Environmental
Laws), finances and accounts of such Obligor and any of its Subsidiaries
with any of their officers or directors and with their independent
certified public accountants.
(g) Preparation of Environmental Reports. Upon either (i) the
------------------------------------
acquisition of any real property by such Obligor or any of its Subsidiaries
the purchase price of which exceeds $1,000,000 or (ii) the occurrence and
during the continuance of a Default or Event of Default arising under
Section 5.01(c), and in each case at the written request of the
Administrative Agent, such Obligor shall provide to the Administrative
Agent within a reasonable time after such acquisition or request, as the
case may be, at the expense of such Obligor, an environmental site
assessment report for the acquired property (in the case of an acquisition
as described in clause (i)) or for any properties of such Obligor which are
the subject of any such Default or Event of Default (in the case of an
event as described in clause (ii)) prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent, indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance, removal or remedial action in connection with any Hazardous
Materials on such properties (provided that if such Obligor, in the
--------
exercise of its reasonable judgment, determines not to have such an
environmental site assessment report prepared, such Obligor shall instead
deliver to the Administrative Agent a copy of such Obligor's internal site
assessment report relating to relevant property). Without limiting the
generality of the foregoing, if the Administrative Agent determines at any
time that a material risk exists that any such report will not be provided
within a reasonable time following such request, the Administrative Agent
may retain an environmental consulting firm to prepare such report at the
expense of such Obligor, such Obligor and each of its Subsidiaries hereby
granting to the Administrative Agent, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to
the rights of tenants, to enter onto its properties to undertake such an
assessment.
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(h) Keeping of Books. Keep, and cause each of its Material
----------------
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of such Obligor and each such Subsidiary in accordance with
GAAP.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
-------------------------------
each of its Material Subsidiaries to maintain and preserve, except to the
extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
-----------------------------------
otherwise perform all obligations in respect of all leases of real
property, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, except to the extent any such lease is no longer
used or useful in the conduct of its business or which, in the exercise of
the reasonable judgment of the relevant Obligor, is to be refinanced and
except to the extent failure to comply with the foregoing would not have a
Material Adverse Effect, and cause each of its Material Subsidiaries to do
so.
(k) Performance and Compliance with Material Contracts. Perform and
--------------------------------------------------
observe, and cause each of its Subsidiaries to perform and observe, all the
terms and provisions of each Material Contract to be performed or observed
by it, maintain each such Material Contract in full force and effect and
enforce each such Material Contract in accordance with its terms, except to
the extent the failure to do any of the foregoing could not reasonably be
expected to have a Material Adverse Effect.
(l) Transactions with Affiliates. Conduct, and cause each of its
----------------------------
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of its Affiliates on terms that are fair and
reasonable and no less favorable to such Obligor or such Subsidiary than
would obtain in a comparable arm's-length transaction with a Person that is
not an Affiliate; provided that this Section 5.01(l) shall not be
--------
applicable to:
(i) transactions between such Obligor and wholly owned
Subsidiaries of Terra or between wholly owned Subsidiaries of Terra
unless otherwise prohibited by this Agreement;
(ii) compensation paid for services rendered by any director or
officer of such Obligor or any director or officer of a Subsidiary of
such Obligor serving at the direction or request of such Obligor to
the extent such compensation is determined in the good faith exercise
of business judgment by the Board of Directors of such Obligor to be
reasonable and appropriate to the functions of such office;
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(iii) transactions under Intercompany Receivables Facilities;
and
(iv) transactions under the Management Agreements.
(m) Further Assurances. (i) Promptly upon reasonable request by the
------------------
Administrative Agent or any Lender through the Administrative Agent,
correct, and cause each Subsidiary promptly to correct, any material defect
or error that may be discovered in any Loan Document, which material defect
or error is the result of any untrue statement of material fact under any
Loan Document or the omission to state a material fact necessary to make
the statements made therein not misleading, or in the execution,
acknowledgment or recordation of any Loan Document, (ii) promptly upon
reasonable request by the Collateral Agent, the Administrative Agent or any
Lender through the Administrative Agent do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register, and cause any
such Subsidiary promptly to do, execute, acknowledge, deliver, record, re-
record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, pledge agreements, assignments, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as
the Collateral Agent, the Administrative Agent or any Lender through the
Administrative Agent may reasonably require from time to time in order to
(A) subject to the Liens created by any of the Security Documents any of
such Obligor's and its Subsidiaries' properties, rights or interests
covered or now or hereafter intended to be covered by any of the Security
Documents, (B) perfect and maintain the validity, effectiveness and
priority of any of the Security Documents and the Liens intended to be
created thereby and (C) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Collateral Agent the rights
granted or now or hereafter intended to be granted to it under any Security
Document or under any other instrument executed in connection with any
Security Document to which such Obligor, any other Obligor or any of their
respective Subsidiaries is or may become a party, (iii) (1) in the event
that the Company or any of its Subsidiaries (other than a Foreign
Subsidiary) shall form or acquire any new Subsidiary (other than a Foreign
Subsidiary), Terra will cause such new Subsidiary to (x) become a
"Subsidiary Guarantor" hereunder and a "Grantor" under the Subsidiary
Pledge and Security Agreement pursuant to documentation in form and
substance satisfactory to the Administrative Agent and the Collateral
Agent, (y) cause such new Subsidiary to take such action (including,
without limitation, delivering such shares of stock and executing and
delivering such Uniform Commercial Code financing statements) as shall be
necessary to create and perfect valid and enforceable first priority Liens
on substantially all of the personal property and, upon the request of the
Administrative Agent, any material real estate of such new Subsidiary as
collateral security for the obligations of such new Subsidiary hereunder
and (z) deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those
delivered by each Obligor pursuant to Section 3.01 on the Restatement Date
or as the Administrative Agent shall have requested and (2) in the event
that the Company or any of its Subsidiaries (other than any Foreign
Subsidiary or any member of the Terra
-61-
Canada Group shall form or acquire any new Subsidiary that shall constitute
a Subsidiary hereunder Terra shall take such action as shall be necessary
to ensure that all of the stock or other ownership interests of such new
Subsidiary are pledged to the Collateral Agent pursuant to the relevant
Terra Capital Security Document, provided that in no event shall more than
--------
65% of the stock or other ownership interests of any such Subsidiary that
is a Foreign Subsidiary be required to be pledged pursuant to this clause
(m) and (iv) (1) in the event that the Borrower or any of its Subsidiaries
shall form or acquire any new Subsidiary, the Borrower will cause such new
Subsidiary to (x) become a "Subsidiary Guarantor" hereunder and a grantor
under the Terra Canada Security Agreement pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the Collateral
Agent, (y) cause such new Subsidiary to take such action (including,
without limitation, delivering such shares of stock and executing and
delivering such Uniform Commercial Code financing statements or similar
instruments) as shall be necessary to create and perfect valid and
enforceable first priority Liens on substantially all of the personal
property and, upon the request of the Administrative Agent, any material
real estate of such new Subsidiary as collateral security for the
obligations of such new Subsidiary hereunder and (z) deliver such proof of
corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by each Obligor pursuant to
Section 3.01 on the Restatement Date or as the Administrative Agent shall
have requested and (2) in the event that the Borrower or any of its
Subsidiaries shall form or acquire any new Subsidiary, hereunder the
Borrower shall take such action as shall be necessary to ensure that all of
the stock or other ownership interests of such new Subsidiary are pledged
to the Collateral Agent pursuant to the Terra Canada Security Agreement.
(n) Ownership of the Obligors. Take, and will cause each of its
-------------------------
Subsidiaries to take, such action from time to time as shall be necessary
to ensure that:
(i) Terra will at all times own, beneficially and of record, all
of the issued and outstanding capital stock (other than directors'
qualifying shares) of Terra Capital Holdings;
(ii) Terra Capital Holdings will at all times own, beneficially
and of record, all of the issued and outstanding capital stock (other
than directors' qualifying shares) of the Company, and will own no
other property (other than (x) cash, (y) other property incidental to
its business as a holding company and (z) capital stock of, or other
ownership interests in, Receivables Subsidiaries);
(iii) the Company will at all times own:
(1) beneficially and of record, all of the issued and
outstanding capital stock (other than directors' qualifying
shares) of TI, BMCH, TMC and TNC and
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(2) no other property, other than:
(A) cash and Permitted Investments,
(B) Receivables of one or more of its
Subsidiaries transferred to it, and capital stock of,
or other ownership interests in, Receivables
Subsidiaries,
(C) Senior Preference Units purchased pursuant to
the SPU Redemption, and capital stock of a wholly owned
Subsidiary of the Company organized for the purpose of
holding such Senior Preference Units,
(D) other property incidental to its business as
a holding company,
(E) other property used solely in connection with
its performance of services pursuant to the terms of
the Management Agreements,
(F) the TNLP Notes and
(G) other Investments permitted to be held by the
Company pursuant to Section 5.02(f) (to the extent such
Investments, in the case of those made under clauses
(iv), (v) and (vi) of said Section 5.02(f), are subject
to the Lien of the Security Documents); and
(iv) TNCLP will at all times own no property other than
ownership interests of TNLP and its successors (other than cash,
Senior Preference Units purchased pursuant to the SPU Redemption and
other property incidental to its business as a holding company).
In the event that any such additional shares of stock or other ownership
interests shall be issued to an Obligor by any domestic Subsidiary or first
tier Foreign Subsidiary thereof, the respective Obligor agrees forthwith to
deliver to the Collateral Agent pursuant to the Security Documents the
certificates (if any) evidencing such ownership interests accompanied by
undated powers executed in blank and to take such other action as the
Collateral Agent or the Administrative Agent shall request to perfect the
security interest created therein pursuant to the Security Documents,
provided that in no event shall such Obligor be required to pledge more
--------
than 65% of the stock or other ownership interests of any Foreign
Subsidiary thereof. Without limiting the foregoing, neither TNCLP nor TNLP
shall convert to a corporate form except pursuant to the SPU Redemption.
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(o) Delivery of Management Agreements. On or prior to the date of
---------------------------------
execution of each Management Agreement, notify the Administrative Agent
thereof (and the Administrative Agent shall notify the Lenders thereof
promptly) and shall deliver to the Administrative Agent a certified copy
thereof (each such Management Agreement to be in form and substance
reasonably satisfactory to the Administrative Agent). Promptly following
each amendment, waiver and consent relating to a Management Agreement (but
subject to Section 5.02(p)), Terra shall give the Administrative Agent
notice thereof (and the Administrative Agent shall notify the Lenders
thereof promptly), and shall deliver to the Administrative Agent a
certified or conformed copy of each such amendment, waiver and consent.
(p) Net Available Proceeds of Casualty Events. Cause the Borrower
-----------------------------------------
and its Subsidiaries to invest in the Borrower's business all proceeds of
casualty insurance, condemnation awards and other compensation (in any
event not including proceeds of business interruption insurance) received
by it in respect of Casualty Events (net of (A) reasonable expenses
incurred by the Borrower and its Subsidiaries in connection therewith, (B)
contractually required repayments of Debt to the extent secured by a Lien
on the property suffering such Casualty Event and any income and transfer
taxes payable by the Borrower in respect of such Casualty Event).
(q) Post-Closing Covenants Relating to Registrations, Etc. Cause the
------------------------------------------------------
Borrower, within 30 days after the date hereof, to provide to the
Administrative Agent such evidence of registrations, recordings and other
filings as the Administrative Agent shall have requested in order to
perfect the Liens created by the Terra Canada Security Documents and
covering the Collateral described therein.
(r) Compliance with Canadian Plans, Etc. Cause the Borrower and each
------------------------------------
of the Borrower's Subsidiaries to comply with all laws relating or
pertaining to Canadian Employee Benefit Plans (except to the extent that
non-compliance with any thereof could not reasonably be expected to have a
Material Adverse Effect).
Section 5.02. Negative Covenants. So long as any principal of or
------------------
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, Terra will not, and will not permit any of its Material
Subsidiaries to:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
-----------
any of its Material Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file, or permit any of its Subsidiaries to
sign or file, under the Uniform Commercial Code or other applicable
personal property security legislation of any jurisdiction, a financing
statement that names such Obligor or any of its Subsidiaries as debtor, or
sign, or permit any of its Subsidiaries to sign, any security agreement
authorizing any secured party thereunder to file such financing statement,
or assign, or permit any of its Subsidiaries to assign, any accounts or
other
-64-
right to receive income, excluding from the operation of the foregoing
---------
restrictions the following:
(i) Liens created by the Terra Capital Security Documents to
secure the "Secured Obligations" referred to therein;
(ii) Permitted Liens; Liens in favor of banks which arise under
Article 4 of the Uniform Commercial Code on items in collection and
documents relating thereto and proceeds thereof; and Liens in favor of
customs and revenue authorities arising as a matter of law to secure
customs duties in connection with the importation of goods;
(iii) Liens existing on the Restatement Date and described on
Part I of Schedule 5.02(a)(iii);
(iv) On or prior to September 25, 1999, Liens on cash (in an
aggregate amount, for Terra and its Subsidiaries taken as a whole, not
exceeding $15,000,000 at any time) to secure the Obligations in
respect of letters of credit permitted under Section 5.02(b)(1)(iv)
(provided that all such Liens permitted under this clause (iv) are
--------
released and discharged (to the satisfaction of the Administrative
Agent) by not later than September 25, 1999);
(v) Purchase money Liens upon or in property acquired or held
by Terra or such Subsidiary in the ordinary course of business to
secure the purchase price of such property or to secure Debt
(including, without limitation, commercial letters of credit) incurred
solely for the purpose of financing the acquisition, construction or
improvement of any such property to be subject to such Liens, or Liens
existing on any such property at the time of acquisition (and not
created in anticipation thereof), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount;
provided that (x) no such Lien shall extend to or cover any property
--------
other than the property being acquired, constructed or improved, and
no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced; and (y) the Debt secured by any such Lien shall at no
time exceed 100% of the fair market value (as determined in good faith
by the Senior Financial Officer) of such property at the time it was
acquired;
(vi) Any Lien arising after the Restatement Date in favor of any
state of the United States of America or any agency, political
subdivision or instrumentality thereof, upon any pollution abatement
or control facilities being financed in compliance with Section
103(c)(4)(F) of the Internal Revenue Code of 1986, as in effect on the
date of this Agreement (or any successor statute which is similar in
all substantive respects), the interest payable in respect of which
financing is excluded from gross income under said Section 103,
provided that (x)
--------
-65-
the Debt secured by such Lien is not prohibited by clause (b)(1) of
this Section 5.02, and (y) such Lien does not cover any other property
at any time owned by Terra or any Material Subsidiary;
(vii) Liens on property that is the subject of a capital lease
outstanding on the Restatement Date and set forth in Part II of
Schedule 5.02(a)(iii) to secure the performance of the Capital Lease
Obligations relating thereto;
(viii) Liens upon property of a Person that becomes a Subsidiary
of Terra after the Restatement Date, each of which Liens existed on
such property before the time such Person became a Subsidiary of Terra
and was not created in anticipation thereof; provided that no such
--------
Lien shall extend to or cover any property of Terra or any of its
Subsidiaries other than the property subject to such Liens at the time
such Person became a Subsidiary of Terra and improvements thereon;
(ix) Leases or subleases, and licenses or sublicenses, granted
to third Persons not interfering in any material respect with the
business of Terra or such Subsidiary, and registrations or notices
made in respect thereof;
(x) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Terra or such Subsidiary;
(xi) Liens arising from financing statements (whether under the
Uniform Commercial Code, the Ontario Personal Property Security Act or
similar legislation) regarding operating leases permitted by this
Agreement;
(xii) Any interest or title of a lessor or sublessor or licensor
under any lease or license permitted or not prohibited by this
Agreement;
(xiii) Additional Liens upon property created after March 31,
1998, provided that the aggregate Debt secured thereby and incurred on
--------
and after the Restatement Date shall not exceed $5,000,000 in the
aggregate at any one time outstanding;
(xiv) Liens on property constituting all or part of the Ammonia
Loop incurred in connection with the construction thereof (which Liens
shall be terminated upon the completion thereof or as soon thereafter
as reasonably practicable);
(xv) The replacement, extension or renewal of any Lien
permitted by clauses (iii), (viii), (xiii) and (xiv) above upon or in
the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the
-66-
principal amount or change in any direct or contingent obligor) of the
Debt secured thereby;
(xvi) Liens under the Terra Canada Security Documents to secure
the obligations hereunder and under the other Loan Documents;
(xvii) Liens on property of Terra U.K. to secure the Terra U.K.
Term Loan;
(xviii) Liens securing obligations of the Company and its
Subsidiaries under Hedge Agreements in respect of nitrogen and natural
gas prices permitted by Section 5.02(c); and
(xix) Liens on property of Terra and its Subsidiaries (other
than (1) property subject to the Liens under the Security Documents
and (2) property subject to any Liens securing Debt of Terra or such
Subsidiaries) in favor of Terra or any of its Subsidiaries to secure
Debt owing to Terra or any of its Subsidiaries.
(b) Debt.
----
(1) Generally. Create, incur, assume or suffer to exist, or permit
---------
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) Debt under the Loan Documents;
(ii) Debt in respect of Hedge Agreements permitted by Section
5.02(c);
(iii) Debt in respect of unsecured trade payables (and
Obligations in respect of letters of credit supporting such trade
payables);
(iv) Debt (including, without limitation, Obligations in respect
of letters of credit) not secured by any Lien (other than Liens
permitted by Section 5.02(a)(iv)), so long as, on the date of the
incurrence thereof, the aggregate principal amount (or the U.S. Dollar
equivalent of the aggregate principal amount) of all Debt of Terra and
its Subsidiaries on a Consolidated basis (as reasonably determined by
the Senior Financial Officer on and as of the date of such incurrence)
then outstanding under this clause (iv) (including, without
limitation, the Debt proposed to be incurred on such date) does not
exceed $10,000,000;
(v) Obligations of the Company and its Subsidiaries under the
Intercompany Receivables Facilities;
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(vi) Debt securities of Terra issued in a public offering
pursuant to an effective registration statement the terms of which
(including, without limitation, as to interest rates, amortization
(provided that in any event no payments of principal, redemptions,
---------
sinking fund payments or the like shall be scheduled to be made before
the date on which the Advances are to mature), redemption, average
life to maturity, covenants, events of default and other terms) are
reasonably satisfactory to the Required Lenders;
(vii) Debt outstanding (or committed to be made available) as at
the Restatement Date and set forth on Schedule 4.01(y);
(viii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(ix) Intercompany Debt permitted under Section 5.02(b)(2);
(x) Debt secured by Liens permitted under Section 5.02(a)(v);
purchase money Debt secured by Liens permitted under 5.02(a)(viii);
and Debt in an aggregate principal amount not exceeding $5,000,000 at
any one time outstanding secured by Liens permitted under Section
5.02(a)(xiii);
(xi) Acquired Debt in an aggregate principal amount not
exceeding $10,000,000 at any one time outstanding;
(xii) 1995 Terra Debt (and Debt of Terra evidenced by
instruments issued in exchange for such Debt), and renewals,
refinancings and replacements thereof (without increase in the
principal amount or change in any direct or contingent obligor, and on
such other terms and conditions as shall be no less favorable to Terra
and its Subsidiaries than the Debt being so renewed, refinanced or
replaced);
(xiii) renewals, refinancings and replacements of the Debt
permitted under clauses (vi), (vii), (x) and (xi) above and clause
(xv) below (without increase in the principal amount or change in any
direct or contingent obligor and not including any Debt to be paid or
prepaid with the proceeds of Advances);
(xiv) Debt of Terra to former shareholders of Xxxxxxxx Elevator
Company in an aggregate principal amount not exceeding $7,000,000;
(xv) Debt of the Company under the Terra Capital Credit
Facility, and Guarantees thereof by Terra and one or more of its
Subsidiaries;
(xvi) Guarantees by Terra U.K. of Terra U.K. Customer Debt;
provided that:
--------
-68-
(A) the aggregate principal amount of such Debt so
Guaranteed by Terra U.K. with respect to any customer at any time
shall not exceed 50% of the aggregate principal amount of the
Terra U.K. Customer Debt of such customer outstanding at such
time; and
(B) the aggregate principal amount of Terra U.K. Customer
Debt Guaranteed by Terra U.K. at any time during any fiscal year
of Terra U.K. shall not exceed (x) (Pounds)15,000,000 minus (y)
-----
the aggregate amount of payments made by Terra U.K. under all
such Guarantees during such fiscal year;
(xvii) unsecured Debt of Terra U.K. in an aggregate principal
amount not at any time exceeding (Pounds)2,000,000;
(xviii) unsecured Debt of the Borrower in an aggregate principal
amount not at any time exceeding $2,000,000 (or its equivalent in
Canadian Dollars at the time of the borrowing thereof); and
(xix) Debt of Terra and its Subsidiaries ("Special Refinancing
-------------------
Debt"), provided that:
----
(I) such Special Refinancing Debt refinances or replaces
Debt outstanding under clause (vi), (vii) or (xv) of this Section
5.02(b)(1) ("Refinanceable Debt") within 45 days after the
incurrence of such Special Refinancing Debt;
(II) the proceeds of such Special Refinancing Debt are
used, among other things, to refinance or replace Refinanceable
Debt, to pay call premiums (if any) on the Refinanceable Debt so
refinanced or replaced and reasonable fees and expenses incurred
by Terra and its Subsidiaries in connection therewith;
(III) the aggregate principal amount of outstanding Special
Refinancing Debt does not exceed the aggregate principal amount
of Refinanceable Debt so refinanced or replaced plus $16,500,000;
and
(IV) until the proceeds of such Special Refinancing Debt
are applied to the outstanding principal amount of Refinanceable
Debt, such proceeds are held in an account pursuant to escrow or
similar arrangements in form and substance satisfactory to the
Administrative Agent; and
-69-
(xx) Guarantees incurred by TI prior to the Restatement Date;
provided that the aggregate outstanding principal amount of Terra
--------
Customer Debt Guaranteed by TI at any time during any fiscal year of
TI shall not exceed $2,600,000 plus the Indemnified Amount then in
----
effect. For purposes of this Section 5.02(b)(1)(xx) "Indemnified
Amount" at any time means the lesser of (A) the aggregate outstanding
principal amount of Terra Customer Debt Guaranteed by TI as to which
Cenex shall have agreed to indemnify TI and (B) $7,400,000.
(2) Intercompany Debt. Create, incur, assume or suffer to exist, or
-----------------
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Intercompany Debt other than:
(i) Intercompany Debt outstanding on the Restatement Date
(other than Debt of TNLP);
(ii) Intercompany Debt of TNLP to the Company evidenced by
promissory notes payable to the Company (such notes collectively the
"TNLP Notes"), provided that (i) such Debt is used solely to finance
----------- --------
the ongoing working capital needs of TNLP, to finance Capital
Expenditures by TNLP permitted to be made under 5.02(h) and to finance
Investments by TNLP permitted to be made by Section 5.02(f)(xiv) and
(ii) such Debt is secured by a first and prior perfected security
interest in favor of the Company covering property of TNLP having an
aggregate fair market value not at any time less than the aggregate
principal amount of the TNLP Notes outstanding at such time;
(iii) additional Intercompany Debt of any wholly owned
Subsidiary of Terra (other than Debt of TNLP, Terra Canada and Terra
U.K.);
(iv) additional Intercompany Debt of Terra Canada and Terra U.K.
in an aggregate principal amount not at any time exceeding
$75,000,000;
(v) additional Intercompany Debt of members of the Terra Canada
Group the proceeds of which are used solely to repay the Advances
(together with accrued interest and fees thereon) hereunder;
(vi) Debt of Terra U.K. to Terra U.K. Holdings in an aggregate
principal amount not exceeding $175,000,000 and outstanding on the
Restatement Date (the "Terra U.K. Term Loan"), provided that any
-------------------- --------
portion of the Terra U.K. Term Loan that is prepaid or repaid and
subsequently reborrowed shall not be permitted by this clause (v);
(vii) additional Intercompany Debt of any Subsidiary of TNLP to
TNLP in an aggregate principal amount not exceeding $500,000; and
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(viii) additional Intercompany Debt.
(c) Hedge Agreements. Enter into or permit to be outstanding, or
----------------
permit any of its Subsidiaries to enter into or permit to be outstanding,
any Hedge Agreement other than:
(1) Hedge Agreements entered into prior to the Restatement Date
in respect of interest rates, foreign exchange rates or natural gas
prices and identified on Schedule 5.02(c);
(2) the Ammonium Nitrate Hedging Agreement; and
(4) other Hedge Agreements entered into in the ordinary course
of business and in a reasonably prudent manner and not for speculative
purposes, in each case in order to protect against the fluctuation in
interest rates, foreign exchange rates, natural gas prices or nitrogen
prices.
(d) Mergers, Etc. Merge or consolidate with or into, or enter into
-------------
any transaction of amalgamation with, any Person, or permit any of its
Material Subsidiaries to do so, except that:
(i) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (x) any Subsidiary of the
Company may be merged or consolidated with or into the Company
(provided that the Company shall be the continuing or surviving
---------
corporation) or any other wholly owned Subsidiary of the Company and
(y) the Company or any of its Subsidiaries may merge or consolidate
with any other Person; provided that (1) in the case of a merger or
--------
consolidation of the Company, the Company is the continuing or
surviving corporation, and (2) in any other case, the continuing or
surviving corporation is a wholly owned Subsidiary of the Company; and
(ii) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (x) any Outside Subsidiary
may be merged or consolidated with or into Terra (provided that Terra
--------
shall be the continuing or surviving corporation) or any other wholly
owned Outside Subsidiary of Terra and (y) Terra or any of its Outside
Subsidiaries may merge or consolidate with any other Person (other
than Terra Capital Holdings or any of its Subsidiaries); provided that
--------
(1) in the case of a merger or consolidation of Terra, Terra is the
continuing or surviving corporation, and (2) in any other case, the
continuing or surviving corporation is a wholly owned Outside
Subsidiary of Terra.
Notwithstanding anything in this Section 5.02(d) to the contrary, the
Borrower shall not enter into any transaction of amalgamation with, or
merge or consolidate with or into, any Person unless (x) (1) the Borrower
shall be the continuing or surviving corporation or (2)
-71-
the continuing or surviving corporation has assumed, pursuant to a written
instrument in form and substance satisfactory to the Administrative Agent
and each Lender and (y) after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
----------------------
dispose of (including, without limitation, in a sale-leaseback
transaction), or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of (including, without limitation, in a sale-leaseback
transaction), any of its assets, including (without limitation) any
manufacturing plant or substantially all assets constituting the business
of a division, branch or other unit operation, except:
(i) sales of inventory and Permitted Investments in the
ordinary course of its business;
(ii) sales or other dispositions of obsolete or worn-out
equipment no longer used or useful in its business;
(iii) dispositions of assets by one member of the Specified
Group to another member of the Specified Group (where "Specified
---------
Group" means, collectively, the Company and each of its wholly owned
-----
Subsidiaries);
(iv) (W) to the extent not permitted pursuant to clause (iii)
above, dispositions of assets by one Obligor to another and by an
Obligor to one of its or any other Obligor's wholly owned
Subsidiaries, (X) other Dispositions with the consent of the Required
Lenders, (Y) other Dispositions (and other sales, assignments,
transfers or other dispositions of property sold or disposed of in the
ordinary course of business and on ordinary business terms and other
sales, assignments, transfers or other dispositions of items no longer
necessary in the business of Terra or any of its Subsidiaries) in an
aggregate amount not to exceed $5,000,000 in any period of 12
consecutive months (beginning after the Restatement Date) and (Z)
dispositions of precious metals for recovery from spent catalysts and
repurchases thereof for catalytic purposes; provided that, in the case
--------
of all Dispositions under this clause (iv) (A) each such asset is sold
for an amount not less than its fair market value and (B) no such
asset may be sold to the extent that it is, individually or when
considered with any other asset or assets sold or expected to be sold
in such period (but taking into account property acquired in exchange
for, or to be acquired substantially contemporaneously with the
disposition of, the assets so sold or expected to be sold), material
to the business, assets, operations, properties or financial condition
of Terra and its Subsidiaries taken as a whole, and to the extent the
assets subject to the Disposition constituted part of the Collateral,
all other cash and non-cash proceeds of such Disposition become
subject to the Lien created by the Security Documents in accordance
with the terms thereof;
-72-
(v) nothing in this Section 5.02(e) shall prohibit the Company
or any of its Subsidiaries from selling Receivables under any
Intercompany Receivables Facility;
(vi) transfers of assets by Terra or one of the Outside
Subsidiaries, directly or indirectly, to a wholly owned Subsidiary of
Terra (a "Recipient") so long as the consideration paid by such
---------
Recipient (if any) for all such assets does not exceed the fair market
value of such property;
(vii) (A) transfers of assets by Terra or one of its wholly
owned Subsidiaries to TNCLP or a Subsidiary thereof so long as the
consideration paid to Terra and its wholly owned Subsidiaries for all
such assets is not less than the fair market value of such property;
and (B) transfers of assets by TNCLP or a Subsidiary thereof to Terra
or one of its wholly owned Subsidiaries so long as the consideration
paid by Terra and its wholly owned Subsidiaries for all such assets
does not exceed the fair market value of such property;
(viii) dividends with respect to the capital stock of Terra U.K.
for any fiscal year of the Borrower in an aggregate amount not
exceeding the aggregate amount required to be paid by the Borrower to
ICI pursuant to the terms of the Ammonium Nitrate Hedging Agreement
for such fiscal year;
(ix) the sale of the Distribution Business by Terra pursuant to
the Distribution Business Sale Agreement (including, without
limitation, the sale, assignment, transfer or disposition to one or
more third parties of any property excluded from the sale of the
Distribution Business pursuant to Section 4.1.13.3 of the Distribution
Business Sale Agreement) and the sale by BMLP of all or any portion of
its ownership interests in its methanol plant located in Beaumont,
Texas; and
(x) additional dividends, sales, leases, transfers and other
dispositions of property by the Borrower and its Subsidiaries (other
than (1) property subject to the Liens under the Security Documents
and (2) property subject to any Liens securing Debt of the Borrower or
such Subsidiary) to Terra or any of its Subsidiaries.
(f) Investments. Make or hold, or permit any of its Subsidiaries to
-----------
make or hold, any Investment, other than:
(i) Investments by Terra and its Subsidiaries in cash and
Permitted Investments;
-73-
(ii) Investments constituting (A) operating deposit accounts
with banks and (B) Receivables arising in the ordinary course of
business on ordinary business terms, in each case in accordance with,
and subject to the terms of, the Security Documents;
(iii) Investments described in Schedule 5.02(f);
(iv) Investments arising solely by reason of any merger or
consolidation expressly permitted by Section 5.02(d)(i)(x) or
5.02(d)(ii)(x);
(v) Specified Acquisitions to the extent permitted to be made
under Section 5.02(h);
(vi) Investments consisting of acquisitions of property
(including, without limitation, ownership interests in any Person) by
Terra or any of its Subsidiaries so long as (x) the aggregate fair
market value of all such property acquired in any fiscal year of Terra
shall not exceed $50,000,000, and (y) the consideration paid by Terra
and its Subsidiaries for each such acquisition consists solely of
equity securities issued by Terra;
(vii) Investments in respect of Hedge Agreements permitted by
Section 5.02(c);
(viii) Investments made pursuant to Terra's Supplemental
Deferred Compensation Plan, and its Excess Benefit Plan, each as in
effect from time to time;
(ix) Investments by Terra and its Subsidiaries consisting of
the purchase, redemption or other acquisition of Senior Preference
Units pursuant to the SPU Redemption, provided that the aggregate
--------
amount of all such Investments under this clause (ix) for any fiscal
year of Terra plus the aggregate amount of Capital Expenditures and
----
Specified Acquisitions by Terra and its Subsidiaries during such
fiscal year does not exceed (i) $80,000,000 for the fiscal year of
Terra ending December 31, 1999 and (ii) $35,000,000 for each fiscal
year of Terra ending thereafter;
(x) Debt (including Guarantees of Debt) constituting
Investments, to the extent such Debt is permitted under Section
5.02(b);
(xi) capital contributions to Receivables Subsidiaries;
(xii) Investments in respect of the purchase of the BMLP Class A
Limited Partnership Interest as required under Section 3.01(p);
-74-
(xiii) Investments by one member of the Specified Group in
another member of the Specified Group (other than members of the Terra
Canada Group);
(xiv) Investments by TNLP in any Subsidiary or Affiliate of
TNLP in an aggregate amount not exceeding at any one time $500,000;
(xv) Investments by Terra or Terra Capital Holdings in the
Company; and
(xvi) additional Investments by the Borrower and its
Subsidiaries in Terra or any of its Subsidiaries.
(g) Payments to Minority Interests. Pay or cause to be paid, or
------------------------------
permit any of its Subsidiaries to pay or cause to be paid, to any holder of
a minority interest any amount with respect to such minority interest in
excess of the amount to which such holder is legally entitled, unless Terra
or such Subsidiary simultaneously receives payment in an amount equal to or
greater than its ratable share of the amount of the related distribution
(determined in accordance with the respective interests then held by Terra
and such Subsidiary, on the one hand, and such holder, on the other),
provided that the SPU Redemption and payments pursuant to the purchase of
--------
the BMLP Class A Limited Partnership Interest as required under Section
3.01(p) (and any payments related thereto after the Restatement Date) will
not constitute a breach of this Section 5.02(g).
(h) Restricted Transactions, Etc. Make any Capital Expenditures or
-----------------------------
Specified Acquisitions, except for Capital Expenditures and Specified
Acquisitions such that the aggregate amount of all Investments permitted
under Section 5.02(f) (ix) for any fiscal year of Terra plus the aggregate
----
amount of Capital Expenditures and Specified Acquisitions by Terra and its
Subsidiaries during such fiscal year does not exceed (i) $80,000,000 for
the fiscal year of Terra ending December 31, 1999 and (ii) $35,000,000 for
each fiscal year of Terra ending thereafter.
(i) Change in Nature of Business. Make, or permit any of its
----------------------------
Material Subsidiaries to make, any material change in the nature of the
business of Terra and its Subsidiaries taken as a whole as carried on at
the Restatement Date, provided that the sale by Terra of the Distribution
--------
Business as contemplated in the Distribution Business Sale Agreement, the
sale by Terra of all of its ownership interests in BMLP or the sale by BMLP
of all of its ownership interests in its methanol plant located in
Beaumont, Texas shall not constitute a breach of this Section 5.02(i).
(j) Charter Amendments. Amend, or permit any of its Material
------------------
Subsidiaries to amend, its articles of incorporation or bylaws, or amend
any partnership agreement to which it or any of its Subsidiaries is a party
(except for amendments to authorize the issuance of preferred or common
stock), in each case to the extent any such amendment could reasonably be
expected to have a Material Adverse Effect.
-75-
(k) Accounting Changes. Make or permit, or permit any of its
------------------
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles in effect in the United States; provided that in the
--------
event of any change in generally accepted accounting principles from the
date of the financial statements referred to in Section 4.01(f) and upon
delivery of any financial statement and accompanying certificate of
compliance required to be furnished under subsections (b) and (c) of
Section 5.03, Terra shall deliver to the Lenders a statement of
reconciliation conforming any information contained in such financial
statement and a certificate of compliance required to be furnished pursuant
to subsections (b) and (c) of Section 5.03 with GAAP (it being understood
that compliance with financial covenants herein shall be measured and
determined on the basis of GAAP).
(l) Amendment of Ammonium Nitrate Hedging Agreement. Consent to or
------------------------------------------------
accept any cancellation or termination of the Ammonium Nitrate Hedging
Agreement, amend, modify or change in any manner any material term or
condition thereof, waive any default under or any breach of any material
term or condition thereof, agree in any manner to any other amendment,
modification or change of any material term or condition thereof, in each
case without the prior consent of the Lenders.
(m) Certain Obligations Respecting Subsidiaries. Enter into, or
-------------------------------------------
permit any of its Subsidiaries (other than a Receivables Subsidiary) to
enter into, after the Restatement Date, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the declaration or payment of dividends
or the making of loans or advances to or Investments in or the sale,
assignment, transfer or other disposition of property to Terra or any
Subsidiary thereof (other than a Receivable Subsidiary); provided that:
--------
(1) the Terra U.K. Term Loan Agreement (or any agreement which
refinances part or all of the Terra U.K. Term Loan Agreement) may
restrict such actions by Terra U.K. and its Subsidiaries; and
(2) this Agreement and the other Loan Documents may restrict
such actions by the Borrower and its Subsidiaries.
(n) Subordinated Indebtedness. Purchase, redeem, retire or otherwise
-------------------------
acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness (other than Intercompany Debt) (and such Obligor
will not permit any of its Subsidiaries to do any of the foregoing), in
each case except for regularly scheduled payments of principal and interest
in respect thereof required pursuant to the instruments evidencing such
Subordinated Indebtedness, or amend the documentation creating or
evidencing such Subordinated Indebtedness.
-76-
(o) Transactions with Affiliates. Except to the extent otherwise
----------------------------
expressly permitted hereunder, enter into any transaction with any
Affiliate on terms less favorable than would pertain in a transaction
entered into with a third party on an arm's-length basis.
(p) Amendments to Management Agreements. Without the consent of the
-----------------------------------
Administrative Agent, amend, modify or change in any material respect the
terms or conditions of any Management Agreement.
(q) Margin Stock. Permit more than 25%, after applying the proceeds
------------
of each Advance, of the value of the assets of the Borrower and of the
Borrower and its Subsidiaries taken as a whole (as determined in good faith
by the Borrower) that are subject to Section 5.02(a) or Section 5.02(e) to
consist of or be represented by Margin Stock.
(r) Dividend Payments. On any Restricted Payment Date, make or
-----------------
declare any dividend payment (in cash, property or obligations) on, or
other payment or distribution on account of, or set apart money for a
sinking or other analogous fund for, or purchase, redeem, retire or
otherwise acquire, any shares of any class of stock of Terra or any
warrants, options or other rights to acquire the same (or make any payment
to any Person, such as "phantom stock" payments, where the amount thereof
is calculated with reference to the fair market or equity value of Terra,
other than any such payment made in the ordinary course of business of such
Person in connection with an executive compensation plan approved by the
Board of Directors of such Person), but excluding dividends payable solely
in shares of common stock of Terra. For purposes of this Section 5.02(r)
"Restricted Payment Date" means a date as of which the Debt to Cash Flow
Ratio for the most recently concluded Rolling Period is greater than or
equal to 5.50 to 1.00.
(s) Canadian Employee Benefit Plan Compliance. Permit the Borrower
-----------------------------------------
or any of the Borrower's Subsidiaries:
(i) to terminate any Canadian Employee Benefit Plan in a
manner, or take any other action with respect to any Canadian Employee
Benefit Plan, which could reasonably be expected to have a Material
Adverse Effect;
(ii) to fail to make full payment when due of all amounts which,
under the provisions of any Canadian Employee Benefit Plan, any
agreement relating thereto or any applicable law, the Borrower or a
Subsidiary of the Borrower is required to pay as contributions
thereto, except where the failure to make such payments could not
reasonably be expected to have Material Adverse Effect;
-77-
(iii) to permit to exist any accumulated funding deficiency,
whether or not waived, with respect to any Canadian Employee Benefit
Plan in an amount which could reasonably be expected to have a
Material Adverse Effect;
(iv) to allow the actuarial present value of the benefit
liabilities (computed on an accumulated benefit obligation basis in
accordance with generally accepted accounting principles in Canada and
with Canadian actuarial standards) under all Canadian Employee Benefit
Plans in the aggregate to exceed the current value of the assets of
all such Canadian Employee Benefit Plans in the aggregate that are
allocable to such benefit liabilities, in each case only to the extent
such liabilities and assets relate to benefits to be paid to employees
of the Borrower or its Subsidiaries, by an amount that could
reasonably be expected to have a Material Adverse Effect.
Section 5.03. Reporting Requirements. So long as any principal of or
----------------------
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid:
(a) Default Notice. Each Obligor will furnish to the Administrative
--------------
Agent, as soon as possible and in any event within five Business Days after
such Obligor knows or has reason to believe that a Default or Event of
Default has occurred (which Default or Event of Default is continuing on
the date of the following statement), a statement of the Senior Financial
Officer setting forth details of such Default or Event of Default and the
action that such Obligor has taken and proposes to take with respect
thereto.
(b) Quarterly Financials. As soon as available and in any event
--------------------
within 60 days after the end of each of the first three quarters of each
fiscal year of Terra, Terra will furnish to the Administrative Agent, with
sufficient copies for each Lender, a Consolidated balance sheet of Terra
and its Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of Terra and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal
year in reasonable detail and duly certified (subject to year-end audit
adjustments) by the Senior Financial Officer as having been prepared in
accordance with GAAP, together with (i) a certificate of said officer (A)
stating that no Default or Event of Default has occurred and is continuing
or, if a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action that Terra has taken and
proposes to take with respect thereto, (B) stating that since December 31,
1998, there has been no Material Adverse Change with respect to Terra and
(C) providing a comparison between the financial position and results of
operations set forth in such financial statements with the comparable
information set forth in the financial projections and budget most recently
delivered pursuant Section 5.03(l) of the 1995 Terra Capital Credit
Agreement or Section 5.03(l) and (ii) a schedule in form satisfactory to
the Administrative Agent of the computations used by Terra in determining
compliance with the covenants contained in Section 5.04.
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As soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, the
Borrower will furnish to the Administrative Agent, with sufficient copies
for each Lender, a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements of
income and cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal
year in reasonable detail and duly certified (subject to year-end audit
adjustments) by the Senior Financial Officer as having been prepared in
accordance with GAAP and attaching a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrower in
determining, as of the end of such fiscal quarter, compliance with the
covenants contained in Section 5.04.
(c) Annual Financials. As soon as available and in any event within
-----------------
110 days after the end of each fiscal year of Terra, Terra will furnish to
the Administrative Agent, with sufficient copies for each Lender, a copy of
the annual audit report for such year for Terra and its Subsidiaries,
including therein a Consolidated balance sheet of Terra and its
Subsidiaries as of the end of such fiscal year and Consolidated statements
of income and cash flows of Terra and its Subsidiaries for such fiscal
year, setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year accompanied by an unqualified opinion
of Deloitte & Touche or other independent public accountants of nationally
recognized standing stating that, except as expressly disclosed therein,
said Consolidated financial statements present fairly, in all material
respects, the Consolidated financial position and results of operations of
Terra and its Consolidated Subsidiaries as of the last day of, and for,
such fiscal year, together with (i) a certificate of such accounting firm
to the Lenders stating that in the course of the regular audit of the
business of Terra and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a Default or Event of
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof (it being understood that
said accountants shall have no liability to the Administrative Agent, the
Lenders for failure to obtain knowledge of any Default or Event of
Default), (ii) a schedule in form satisfactory to the Administrative Agent
of the computations used by such accountants in determining, as of the end
of such fiscal year, compliance with the covenants contained in Section
5.04 and (iii) a certificate of the Senior Financial Officer (A) stating
that no Default or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action that Terra has taken and proposes to
take with respect thereto, (B) stating that since December 31, 1998, there
has been no Material Adverse Change with respect to Terra and (C) providing
a comparison between the financial position and results of operations set
forth in such financial statements with the comparable information set
forth in the
-79-
financial projections and budget most recently delivered pursuant to
Section 5.03(l) of the 1995 Terra Capital Credit Agreement or Section
5.03(l).
As soon as available and in any event within 110 days after the end of
each fiscal year of the Borrower, the Borrower will furnish to the
Administrative Agent, with sufficient copies for each Lender, a copy of the
Consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for such fiscal year, setting
forth in each case in comparative form the corresponding figures for the
preceding fiscal year in reasonable detail and duly certified by the Senior
Financial Officer as having been prepared in accordance with GAAP,
accompanied by a schedule prepared by Deloitte & Touche or other
independent public accountants of nationally recognized standing in form
satisfactory to the Administrative Agent setting forth the computations
used by such accountants in determining, as of the end of such fiscal year,
compliance with the covenants contained in Section 5.04.
(d) ERISA Events. Promptly and in any event within 10 Business Days
------------
after any Obligor knows or has reason to know that any ERISA Event
(including, for this purpose, a reportable event listed in Section
4043(c)(7) of ERISA) with respect to any Obligor or any of its ERISA
Affiliates has occurred, Terra will furnish to the Administrative Agent a
statement of the Senior Financial Officer describing such ERISA Event and
the action, if any, that such Obligor or such ERISA Affiliate has taken and
proposes to take with respect thereto.
(e) Plan Terminations. Promptly and in any event within 10 Business
-----------------
Days after receipt thereof by any Obligor or any of its ERISA Affiliates,
such Obligor will furnish to the Administrative Agent copies of each notice
from the PBGC stating its intention to terminate any Plan of any Obligor or
any of its ERISA Affiliates or to have a trustee appointed to administer
any such Plan.
(f) Plan Annual Reports. Promptly and in any event within 30 days
-------------------
after the filing thereof with the Internal Revenue Service, each Obligor
will furnish to the Administrative Agent copies of such Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of each Obligor or any of its ERISA Affiliates that is
then being maintained for employees or former employees of such Person.
(g) Multiemployer Plan Notices. Promptly and in any event within
--------------------------
five Business Days after receipt thereof by any Obligor or any of its ERISA
Affiliates from the sponsor of a Multiemployer Plan of any Obligor or any
of its ERISA Affiliates, such Obligor will furnish to the Administrative
Agent copies of each notice concerning (i) the imposition of withdrawal
liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan or (iii) the amount of liability incurred, or that is
reasonably expected to be incurred, by
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such Obligor or any of its ERISA Affiliates in connection with any event
described in clause (i) or (ii).
(h) Litigation. Promptly after the commencement thereof, Terra will
----------
furnish to the Administrative Agent notice of all actions, suits,
investigations, litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, affecting any Obligor or any of its Subsidiaries of the type
described in Section 4.01(h).
(i) Environmental Conditions. Promptly after receiving notice
------------------------
thereof, Terra will furnish to the Administrative Agent notice of any
condition or occurrence on any property of any Obligor that results in a
material noncompliance by any Obligor or any of its Subsidiaries with any
Environmental Law or Environmental Permit which noncompliance could
reasonably be expected to have a Material Adverse Effect, or could (i) form
the basis of an Environmental Action against any Obligor or any of its
Subsidiaries or such property that could reasonably be expected to have a
Material Adverse Effect or (ii) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law that could reasonably be expected to have Material
Adverse Effect.
(j) Public Filings. Terra shall, promptly upon their becoming
--------------
available, deliver to the Administrative Agent and each Lender copies of
all registration statements and regular periodic reports, if any, that
Terra, the Company or TNCLP shall have filed with the Securities and
Exchange Commission (or any governmental agency substituted therefor) or
any national securities exchange.
(k) Shareholder Reports, Etc. Terra shall deliver to the
-------------------------
Administrative Agent and each Lender promptly upon the mailing thereof to
the shareholders of Terra or TNCLP generally or to holders of Subordinated
Indebtedness or 1995 Terra Debt generally, copies of all financial
statements and proxy statements so mailed.
(l) Financial Projections and Budget. As soon as available and in
--------------------------------
any event within 110 days after the first day of each fiscal year of Terra,
Terra will furnish to the Administrative Agent, with sufficient copies for
each Lender, financial projections and a budget for such fiscal year and
each subsequent fiscal year of Terra to and including the fiscal year in
which the Advances are to mature, in each case in form and detail similar
to the financial projections and budget delivered under Section 5.03(l) of
the 1995 Terra Capital Credit Agreement.
(m) Other Information. Each Obligor shall furnish to the Lenders
-----------------
through the Administrative Agent such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Obligor or any of its Subsidiaries as the
Administrative Agent or any Lender may from time to time reasonably
request.
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(n) Canadian Employee Benefit Plans. The Borrower shall provide to
-------------------------------
the Administrative Agent (with sufficient copies for each Lender) copies of
each material report (including applicable schedules) with respect to each
Canadian Employee Benefit Plan or any trust created thereunder as the
Administrative Agent (or any Lender, through the Administrative Agent) may
reasonably request.
Section 5.04. Financial Covenants. So long as any principal of or
-------------------
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, Terra will:
(a) Debt to Cash Flow Ratio. Maintain the Debt to Cash Flow Ratio at
-----------------------
not more than the ratio set forth below for each Rolling Period ending in
the respective periods set forth below:
Each
Rolling Period
Ending In Ratio
-------------- -----
June, 1999 6.30 to 1.00
September, 1999 8.80 to 1.00
December, 1999 9.20 to 1.00
March, 2000 9.50 to 1.00
June, 2000 7.50 to 1.00
September, 2000 7.00 to 1.00
December, 2000 6.50 to 1.00
March, June, September
and December of
fiscal year 2001 6.00 to 1.00
March, June, September
and December of
fiscal year 2002 4.50 to 1.00
(b) Interest Coverage Ratio. Maintain the Interest Coverage Ratio at
-----------------------
not less than the ratio set forth below for each Rolling Period ending in
the respective periods set forth below:
Each
Rolling Period
Ending In Ratio
-------------- -----
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June, 1999 1.00 to 1.00
September, 1999 1.00 to 1.00
December, 1999 1.10 to 1.00
March, 2000 1.10 to 1.00
June, 2000 1.40 to 1.00
September, 2000 1.40 to 1.00
December, 2000 1.40 to 1.00
March, 2001 1.40 to 1.00
June, 2001 2.00 to 1.00
September, 2001 2.00 to 1.00
December, 2001 2.00 to 1.00
March, June, September
and December of
fiscal year 2002 2.50 to 1.00
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
-----------------
(a) the Borrower (i) shall fail to pay when due any principal of any
Advance made to it or (ii) shall fail for three Business Days to pay when
due any interest on any Advance made to it or any other amount payable by
it under any Loan Document; or
(b) any representation or warranty made by any Obligor (or any of its
officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) any Obligor shall fail to perform or observe any term, covenant
or agreement contained in clause (n) of Section 5.01, or clause (a), (b),
(c), (d), (e), (g), (i), (q) or (r) of Section 5.02, or clause (a), (e) or
(i) of Section 5.03, or Section 5.04; or
(d) Terra shall fail to pay and perform its obligations under the
Loan Purchase Agreement; or
(e) any Obligor shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for a period of 30 days;
or
(f) any Obligor or any of its Material Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal or notional amount
of at least $10,000,000 in the aggregate (but
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excluding Debt outstanding hereunder) of such Obligor or such Subsidiary
(as the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or otherwise to
cause, or to permit the holder or holders (or an agent or trustee on its or
their behalf) thereof to cause, such Debt to mature; or any such Debt shall
be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease
such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or
(g) any Obligor or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Obligor or any of its Material Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts or any similar relief in under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver,
administrative receiver, trustee, liquidator, provisional liquidator,
administrator, custodian, or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 60 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Obligor or any of its Material Subsidiaries
shall take any corporate or partnership action to authorize any of the
actions set forth above in this subsection (g); or
(h) any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any Obligor or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect, unless such judgment or order shall have been vacated,
satisfied or dismissed or bonded pending appeal; or
(i) any non-monetary judgment or order shall be rendered against any
Obligor or any of its Subsidiaries that could be reasonably likely to have
a Material Adverse Effect,
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and there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have
been vacated, satisfied, discharged or bonded pending appeal; or
(j) any Security Document shall for any reason (other than pursuant
to the terms hereof and thereof) cease to create a valid and perfected
first priority Lien (subject only to Permitted Liens) on the Collateral
purported to be covered thereby; or
(k) any ERISA Event shall have occurred with respect to a Plan of any
Obligor or any of its ERISA Affiliates and the amount (determined as of the
date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the Insufficiency of any and all other Plans of the Obligors and their
ERISA Affiliates with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Obligors and their ERISA Affiliates
related to such ERISA Event) could reasonably be expected to have a
Material Adverse Effect; provided that with respect to any Multiple
--------
Employer Plan, such Insufficiency shall include only the portion thereof
attributable to such Obligor or its ERISA Affiliates; or
(l) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that it has incurred withdrawal liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Obligors and
their ERISA Affiliates as withdrawal liability (determined as of the date
of such notification), could reasonably be expected to have a Material
Adverse Effect; or
(m) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate annual
contributions of the Obligors and their ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount that could reasonably be expected to have a
Material Adverse Effect; or
(n) there shall have been asserted against Terra or any of its
Subsidiaries an Environmental Claim that, in the judgment of the Required
Lenders, is reasonably likely to be determined adversely to Terra or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by Terra or any of its Subsidiaries but after
deducting any portion thereof that is reasonably expected to be paid by
other creditworthy Persons); or
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(o) TI ceases to own directly all of the issued and outstanding
shares of voting capital stock of the Borrower; or
(p) any license, consent, authorization, registration or approval at
any time necessary to enable the Borrower or any of its Subsidiaries to
comply with any of its obligations under this Agreement or any other Loan
Document shall be revoked, withdrawn or withheld or shall be modified or
amended in a manner prejudicial, in the opinion of the Required Lenders
(acting reasonably), to the interests of the Lenders hereunder; or the
Government of Canada, or any agency or political subdivision thereof, shall
promulgate or declare effective any law, rule or regulation that, in the
opinion of the Required Lenders, could have a Material Adverse Effect; or
(q) there shall have been asserted against the Borrower or any of its
Subsidiaries any claims or liabilities in respect of any Canadian Employee
Benefit Plans that, in the reasonable good faith judgment of the Required
Lenders, could reasonably be likely to have a Material Adverse Effect;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Advances and the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Advances and the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of an actual or deemed entry
--------
of an order for relief with respect to any Obligor or any of its Subsidiaries
under the Federal Bankruptcy Code, or any Event of Default under paragraph (f)
above with respect to the Borrower shall occur, the Advances and the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action. Each Lender hereby appoints
------------------------
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Basic Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Basic
Documents, including, without limitation, enforcement or collection of the
Notes, the Administrative Agent shall not be required to exercise any discretion
or take any action, and shall not be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) except
upon the instructions of the Required Lenders, and such
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instructions shall be binding upon all Lenders and all holders of the Notes;
provided that the Administrative Agent shall not be required to take any action
--------
that exposes it to personal liability or that is contrary to this Agreement or
applicable law. The Administrative Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrower or Terra pursuant to the terms
of this Agreement. The parties hereto acknowledge and agree that neither Bank of
America National Trust and Savings Association nor The Bank of Nova Scotia shall
have any rights or obligations in their respective capacities as Syndication
Agents hereunder. No party designated on the signature pages hereof as a
"Syndication Agent" shall have any liability or responsibility whatsoever
hereunder in such capacity.
Each Lender:
(1) hereby authorizes the Administrative Agent to execute and deliver
the documents referred to in clauses (d) and (s) of Section 3.01, and each
Lender agrees that it is bound by the Security Documents as if such Lender
were a signatory thereto;
(2) hereby authorizes the Administrative Agent to execute and deliver
a Confirmation of Loan Purchase Agreement in substantially the form of
Exhibit E, and each Lender agrees that it is bound by the Loan Purchase
Agreement as if such Lender were a signatory thereto; and
(3) hereby authorizes the Collateral Agent to execute and deliver the
documents referred to in clauses (d) and (s) of Section 3.01.
Section 7.02. Administrative Agent's Reliance, Etc. Neither the
-------------------------------------
Administrative Agent nor any of its respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Basic Documents, except for its or their
own gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Administrative Agent (i) may treat the payee of any Note
as the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
9.07; (ii) may consult with legal counsel (including counsel for any Obligor),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by them in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
of them for any statements, warranties or representations made in or in
connection with the Loan Documents; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Obligor or to inspect the
property (including the books and records) of any Obligor; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Basic Document or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Basic Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
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telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
Section 7.03. Citibank and Affiliates. With respect to the Advances
-----------------------
made by it and the Note issued to it, Citibank shall have the same rights and
powers under the Basic Documents as any other Lender and may exercise the same
as though it were not the Administrative Agent or the Collateral Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Citibank in its individual capacity. Citibank and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures for, accept
investment banking engagements from and generally engage in any kind of business
with, any Obligor, any of its Subsidiaries, any of its Affiliates and any Person
who may do business with or own securities of any Obligor or any such Subsidiary
or Affiliate, all as if Citibank were not the Administrative Agent and without
any duty to account therefor to the Lenders.
Section 7.04. Lender Credit Decision. Each Lender acknowledges that
------- ----------------------
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Section 4.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
Section 7.05. Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent (to the extent not promptly reimbursed by the Borrower),
ratably according to the principal amounts of the Notes then held by each of
them, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against any of them in any way relating to or arising out of the Basic Documents
or any action taken or omitted by any of them under the Basic Documents;
provided that no Lender shall be liable for any portion of such liabilities,
--------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. Without limitation of the foregoing,
each Lender agrees to reimburse (x) the Administrative Agent promptly upon
demand for its ratable share of any costs and expenses payable by the Borrower
under Section 9.04 of this Agreement and (y) the Collateral Agent under the
Terra Capital Security Documents, in each case to the extent that the
Administrative Agent or the Collateral Agent, as the case may be, is not
promptly reimbursed for such costs and expenses by the Borrower.
Section 7.06. Collateral Duties.
-----------------
(a) Except for action expressly required of the Administrative Agent
hereunder and under the other Basic Documents, the Administrative Agent shall in
all cases be fully justified in refusing to act hereunder and thereunder unless
it shall be further indemnified to its
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satisfaction by the Lenders proportionately in accordance with the Obligations
then due and payable to each of them against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
(b) Except as expressly provided herein, the Administrative Agent
shall have no duty to take any affirmative steps with respect to the collection
of amounts payable in respect of the Collateral. The Administrative Agent shall
incur no liability as a result of any private sale of the Collateral.
(c) The Lenders hereby consent, and agree upon written request by the
Collateral Agent or the Administrative Agent to execute and deliver such
instruments and other documents as the Collateral Agent or Administrative Agent
may deem desirable to confirm such consent, to the release of the Liens on any
of the Collateral, including any release in connection with any sale, transfer
or other disposition of the Collateral or any part thereof in accordance with
the Basic Documents.
(d) The parties hereto acknowledge that each of the Collateral Agent
and the Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent or the Administrative Agent, as the case may be, accords its
own property, it being understood that none of the Collateral Agent, the
Administrative Agent or any Lender shall have responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Agent, Administrative Agent or any Lender has or is deemed to
have knowledge of such matters, or (b) taking any necessary steps to preserve
rights against any parties with respect to any Collateral.
Section 7.07. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign at any time by giving written notice thereof the Lenders and
the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint (subject, so long as no Default or Event of
Default has occurred and is continuing, to the consent of the Borrower, which
consent shall not be unreasonably withheld) a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the Administrative Agent, as the case may be, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint (subject,
so long as no Default or Event of Default has occurred and is continuing, to the
consent of the Borrower, which consent shall not be unreasonably withheld) a
successor Administrative Agent, which shall be an Initial Lender or a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring
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Administrative Agent, as the case may be, and such retiring Administrative Agent
shall be discharged from its duties and obligations under the Basic Documents.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to the
benefit of the Administrative Agent as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement and under the
Security Documents.
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee. The Guarantors hereby jointly and
-------------
severally guarantee to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Advances made by the Lenders to, and the Notes held by each
Lender of, the Borrower and all other amounts from time to time owing to the
Lenders or the Administrative Agent by the Borrower under this Agreement and
under the Notes and by any Obligor under any of the other Loan Documents, in
each case strictly in accordance with the terms thereof (such obligations being
herein collectively called the "Guaranteed Obligations"). The Guarantors hereby
----------------------
further jointly and severally agree that if the Borrower shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Guarantors will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
Section 8.02. Obligations Unconditional.
-------------------------
(a) The obligations of the Guarantors under Section 8.01 are absolute
and unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Borrower under
this Agreement, the Notes or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 8.02 that the obligations of the Guarantors hereunder shall be absolute
and unconditional, joint and several, under any and all circumstances.
(b) Without limiting the generality of the foregoing clause (a), it
is agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Guarantors hereunder which shall remain
absolute and unconditional as described above:
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(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
Section 8.03. Reinstatement. The obligations of the Guarantors under
-------------
this Article VIII shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantors jointly and
severally agree that they will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
Section 8.04. Subrogation. To the extent that, as a result of this
-----------
Article VIII, any Lender would be subject to an extended preference period under
Section 547 of the Bankruptcy Code (or any similar provisions under any other
applicable law), each Guarantor hereby waives all rights of subrogation, whether
arising by contract or operation of law (including, without limitation, any such
right arising under the Bankruptcy Code) or otherwise, by reason of any payment
by it pursuant to the provisions of this Article VIII and agrees with the
Borrower for the benefit of each of its creditors (including, without
limitation, each Lender and the Administrative
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Agent) that any such payment by it shall constitute a contribution of capital by
such Guarantor to the Borrower (or an investment in the equity capital of the
Borrower by such Guarantor).
Section 8.05. Remedies. The Guarantors jointly and severally agree
--------
that, as between the Guarantors and the Lenders, the obligations of the Borrower
under this Agreement and the Notes may be declared to be forthwith due and
payable as provided in Article VI (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Article VI)
for purposes of Section 8.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Guarantors for purposes
of said Section 8.01.
Section 8.06. Instrument for the Payment of Money. Each Guarantor
-----------------------------------
hereby acknowledges that the guarantee in this Article VIII constitutes an
instrument for the payment of money, and consents and agrees that any Lender or
the Administrative Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
Section 8.07. Continuing Guarantee. The guarantee in this Article
--------------------
VIII is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 8.08. Rights of Contribution. The Guarantors hereby agree, as
----------------------
between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor's Pro Rata Portion (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 8.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Article VIII and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.
For purposes of this Section 8.08, (i) "Excess Funding Guarantor"
------------------------
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Portion of such Guaranteed
Obligations, (ii) "Excess Payment" shall mean, in respect of any Guaranteed
--------------
Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Portion of such Guaranteed Obligations and (iii) "Pro Rata Portion" shall
----------------
mean, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x)
the amount by which the aggregate present fair saleable value of all properties
of such Subsidiary Guarantor
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(excluding any shares of stock of any other Subsidiary Guarantor) exceeds the
amount of all the debts and liabilities of such Subsidiary Guarantor (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of such Subsidiary Guarantor hereunder and any obligations of
any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of all
properties of the Company and all of the Subsidiary Guarantors exceeds the
amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of the
Company and the Subsidiary Guarantors hereunder) of the Company and all of the
Subsidiary Guarantors, all as of the Restatement Date. If any Subsidiary becomes
a Subsidiary Guarantor hereunder subsequent to the Restatement Date, then for
purposes of this Section 8.08 such subsequent Subsidiary Guarantor shall be
deemed to have been a Subsidiary Guarantor as of the Restatement Date and the
aggregate present fair saleable value of the properties, and the amount of the
debts and liabilities, of such Subsidiary Guarantor as of the Restatement Date
shall be deemed to be equal to such value and amount on the date such Subsidiary
Guarantor becomes a Subsidiary Guarantor hereunder.
Section 8.09. General Limitation on Guarantee Obligations. In any
-------------------------------------------
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 8.01
would otherwise, taking into account the provisions of Section 8.08, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under said
Section 8.01, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by such
Guarantor, any Lender, the Administrative Agent or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc.
--------------------------
(a) No amendment or waiver of any provision of this Agreement, the
Notes or the other Basic Documents, nor any consent to any departure by any
Obligor from any provision of this Agreement, the Notes or the other Basic
Documents, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that:
--------
(i) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following:
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(1) waive any of the conditions specified in Section 3.01;
(2) change the percentage of the aggregate unpaid principal
amount of the Advances, or the number or percentage of Lenders, that
shall be required for the Lenders or any of them to take any action
hereunder;
(3) amend this Section 9.01;
(4) reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder;
(5) postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable
hereunder or amend Section 2.03 or 2.05;
(6) release any Guarantor from its obligations under
Article VIII; or
(7) amend, modify or supplement the Intercreditor
Agreement;
(ii) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each Lender that would be adversely
affected by such amendment, waiver or consent:
(1) subject such Lender to any additional obligations;
(2) reduce the principal of, or interest on, the Notes held
by such Lender or any fees or other amounts payable hereunder to such
Lender;
(3) postpone any date fixed for any payment of principal
of, or interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender; or
(4) change the order of application of any prepayment set
forth in Section 2.05 in any manner that materially affects such
Lender; and
(iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement, any Note or any other Basic
Document.
(b) Except as otherwise provided in the Security Documents or the
Intercreditor Agreement, the Administrative Agent shall not consent to release
any Collateral or terminate any Lien under any Security Document unless such
release or termination shall be consented to in
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writing by Lenders owed or holding in the aggregate at least 75% of the then
aggregate unpaid principal amount of the Advances; provided that:
--------
(1) the consent of all Lenders shall be required to release all or
substantially all of the Collateral, except upon the termination of the
Liens created by each of the Security Documents in accordance with the
terms thereof; and
(2) no such consent shall be required to release any Lien covering
property that is the subject of a disposition of property permitted
hereunder and, upon such a permitted disposition, such property shall be
deemed to be transferred free and clear of the Lien of the Security
Documents without any action on the part of any party (and the
Administrative Agent is hereby authorized to execute such releases and
other documents, and to take such other action, as the Company may
reasonably request to give effect thereto).
Section 9.02. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing (including telecopy communication)
and mailed, telecopied or delivered:
(a) if to any Obligor, care of Terra Industries Inc., 000 Xxxxxx
Xxxxxx, Xxxxx Xxxx, Xxxx 00000, Attention: Xxxxxxx X. Xxxxx, Senior Vice
President and Chief Financial Officer, telephone number (000) 000-0000;
telecopier number (000) 000-0000;
(b) if to any Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire;
(c) if to the Administrative Agent, at its address at 0 Xxxxx Xxx,
Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx, 00000, Attention: Xxxxxxxxxx Xxxxx (or her
successor), telephone number (000) 000-0000, telecopier number (302) 894-
6120, with a copy to Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxx Xxxxxxx, telephone number 000-000-0000, telecopier
number 000-000-0000;
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed or telecopied, be effective when deposited in the mails or
transmitted by telecopier, respectively, except that notices and communications
to the Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
-------------------
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
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Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Administrative Agent or any Lender relating in any way to this Agreement should
be dismissed or stayed by reason, or pending the resolution, of any action or
proceeding commenced by any Obligor relating in any way to this Agreement
whether or not commenced earlier. To the fullest extent permitted by applicable
law, the Obligors shall take all measures necessary for any such action or
proceeding commenced by the Administrative Agent or any Lender to proceed to
judgment prior to the entry of judgment in any such action or proceeding
commenced by any Obligor.
Section 9.04. Costs, Expenses and Indemnification.
-----------------------------------
(a) The Borrower agrees to pay on demand (i) all costs and expenses
of the Administrative Agent and the Lenders in connection with the preparation,
execution, delivery, administration, modification and amendment of the Basic
Documents including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, insurance, consultant, search, filing and recording fees
and expenses, ongoing audit expenses and all other reasonable out-of-pocket
expenses incurred by the Administrative Agent (including the reasonable and
documented fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx LLP, special New
York counsel to Citibank, and Blake, Xxxxxxx & Xxxxxxx, special Canadian counsel
to the Administrative Agent, but not, under this clause (A) or clause (B) below,
of any other counsel) whether or not any of the transactions contemplated by
this Agreement are consummated, (B) the reasonable and documented fees and
expenses of counsel for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Basic Documents, and (C) with respect to negotiations with
any Obligor or with other creditors of any Obligor or any of its Subsidiaries
arising out of any Default or Event of Default or any events or circumstances
that may reasonably be expected to give rise to a Default or Event of Default
and with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Administrative Agent and the Lenders in connection
with the enforcement of the Basic Documents, whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without limitation, the
reasonable and documented fees and expenses of counsel for the Administrative
Agent and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
-----------
Party") from and against any and all claims, damages, losses, liabilities and
-----
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with the U.K. Nitrogen
Acquisition or the actual or alleged presence of
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Hazardous Materials on any property owned by an Obligor or any Environmental
Action relating in any way to any Obligor or any of its Subsidiaries, in each
case whether or not such investigation, litigation or proceeding is brought by
any Obligor, its directors, shareholders or creditors or an Indemnified Party or
any Indemnified Party is otherwise a party thereto and whether or not the U.K.
Nitrogen Acquisition or the other transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability or expense
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. The Borrower also agrees not to assert any claim against the
Administrative Agent any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the U.K. Nitrogen Acquisition or any part
thereof or the other transactions contemplated herein or in any other Basic
Document or the actual or proposed use of the proceeds of the Advances. For
purposes of this Section 9.04(b), the term "non-appealable" includes any
judgment as to which all appeals have been taken or as to which the time for
taking an appeal shall have expired.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.03, 2.05, 2.07(b)(i) or 2.08(d) or
as the result of acceleration of the maturity of the Notes pursuant to Section
6.01 or for any other reason, the Borrower shall, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) If any Obligor fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
reasonable and documented fees and expenses of counsel and indemnities, such
amount may be paid on behalf of such Obligor by the Administrative Agent or any
Lender, in its sole discretion.
Section 9.05. Right of Setoff. Upon (a) the occurrence and during the
---------------
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
and all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, irrespective of whether such Lender
shall have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such setoff
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and application; provided that the failure to give such notice shall not affect
--------
the validity of such setoff and application. The rights of each Lender under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that such Lender may have.
Section 9.06. Jurisdiction, Service of Process and Venue.
------------------------------------------
(a) This Agreement and the Notes shall be governed by, and construed
in accordance with, the law of the State of New York. Each party hereto hereby
agrees that any suit, action or proceeding with respect to this Agreement, the
Notes the other Loan Documents or any judgment entered by any court in respect
thereof may be brought in the United States District Court for the Southern
District of New York, in the Supreme Court of the State of New York sitting in
New York County (including its Appellate Division), or in any other appellate
court in the State of New York, as the party commencing such suit, action or
proceeding may elect in its sole discretion; and each party hereto hereby
irrevocably submits to the jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. Each party hereto further submits,
for the purpose of any such suit, action, proceeding or judgment brought or
rendered against it, to the appropriate courts of the jurisdiction of its
domicile.
(b) Each of the Borrower and the Subsidiary Guarantors hereby agrees
that service of all writs, process and summonses in any such suit, action or
proceeding brought in the State of New York may be made upon Corporation Service
Company, presently located at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, X.X.X.
(the "New York Process Agent"), and each of the Borrower and the Subsidiary
----------------------
Guarantor hereby confirms and agrees that the New York Process Agent has been
duly and irrevocably appointed as its agent and true and lawful attorney-in-fact
in its name, place and stead to accept such service of any and all such writs,
process and summonses, and agrees that the failure of the New York Process Agent
to give any notice of any such service of process to the Borrower and the
Subsidiary Guarantor, as the case may be, shall not impair or affect the
validity of such service or of any judgment based thereon. Each of the Borrower
and the Subsidiary Guarantor hereby further irrevocably consents to the service
of process in any suit, action or proceeding in said courts by the mailing
thereof by the Administrative Agent or any Lender by registered or certified
mail, postage prepaid, at its address specified in Section set forth beneath its
signature hereto.
(c) Nothing herein shall in any way be deemed to limit the ability of
the Administrative Agent or the Lenders to serve any such writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Borrower or the Subsidiary Guarantor in such other
jurisdictions, and in such manner, as may be permitted by applicable law.
(d) Each of the Obligors hereby irrevocably waives any objection that
it may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document brought in the Supreme Court of the State of New York, County of New
York or in the United States District Court for the Southern
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District of New York, and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.07. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Advances owing to it and the Note or
Notes held by it); provided that:
--------
(i) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an affiliate of a
Lender or an assignment of all of a Lender's rights and obligations under
this Agreement, the amount of the Advances of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no
event be less than the lesser of (x) such Lender's Advances hereunder and
(y) $5,000,000 or an integral multiple of $1,000,000 in excess thereof
(except as otherwise agreed by the Borrower and the Administrative Agent),
(ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an affiliate of a
Lender, each such assignment shall be made only upon the prior written
approval of the Borrower and the Administrative Agent, such approval not to
be unreasonably withheld,
(iii) each such assignment shall be to an Eligible Assignee,
(iv) each such assignment by a Lender of its Advances or Note shall
be made in such manner so that the same portion of its Advances and Note is
assigned to the respective assignee,
(v) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to
such assignment and a processing and recordation fee in the aggregate
amount of $3,000, and
(vi) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance
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covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Obligor
or the performance or observance by the Obligors of any of their respective
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at its address referred to in Section 9.02 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders, and principal
amount of the Advances owing to, each Lender from time to time (the "Register").
--------
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. No assignment shall be
effective until it is recorded in the Register pursuant to this Section 9.07(c).
The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, and the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit F hereto, (i) accept such Assignment and
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Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such assignee in an amount
equal to the principal amount of Advances assigned to it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a portion of
such Facilities, a new Note or Notes to the order of the assigning Lender in an
amount equal to the Advances so retained by it hereunder. Such new Note or Notes
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell participations in or to all or a portion of
its rights and/or obligations under this Agreement (including, without
limitation, all or a portion of the Advances owing to it and the Note or Notes
held by it); provided that (i) such Lender's obligations under this Agreement
--------
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Agreement,
(iv) the Obligors, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (v) no participant under any
such participation shall have any right to approve any amendment or waiver of
any provision of any Basic Document, or any consent to any departure by any
Obligor therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
--------
the assignee or participant or proposed assignee or participant shall agree in
writing to preserve the confidentiality of any Confidential Information received
by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
(h) Anything in this Section 9.07 to the contrary notwithstanding,
each Lender shall be permitted to pledge all or any part of its right, title and
interest in, to and under the Advances and Notes held by it to any trustee for
the benefit of the holders of such Lender's securities.
-101-
(i) Anything in this Section 9.07 to the contrary notwithstanding,
neither Terra nor any of its Subsidiaries or Affiliates may acquire (whether by
assignment, participation or otherwise), and no Lender shall assign or
participate to Terra or any of its Subsidiaries or Affiliates, any interest in
any Advance or other amount owing hereunder without the prior consent of each
Lender; provided that the Lenders may assign all of their interests in the
--------
Advances and such other amounts pursuant to the Loan Purchase Agreement.
Section 9.08. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.09. Confidentiality. Neither the Administrative Agent nor
---------------
any Lender shall disclose any Confidential Information to any Person without the
prior consent of the Company, other than (a) to the Administrative Agent's or
such Lender's Affiliates and their officers, directors, employees, agents and
advisors (including independent auditors and counsel) and to actual or
prospective assignees and participants, and then only on a confidential basis,
(b) as required by any law, rule or regulation or judicial process, (c) as
requested or required by any state, federal or foreign authority or examiner
regulating or having authority over Lenders or the Lenders' respective
activities and (d) in connection with credit inquiries from suppliers of the
Borrower and/or its Subsidiaries and other Persons who, from time to time,
inquire as to the creditworthiness of the Borrower.
Section 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE
--------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE BASIC
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 9.11. Survival. The obligations of the Borrower under
--------
Sections 2.08, 2.10 and 9.04, the obligations of each Guarantor under Section
8.03, and the obligations of the Lenders under Section 7.05, shall survive the
repayment of the Advances. In addition, each representation and warranty made,
or deemed to be made by a notice of any extension of credit, herein or pursuant
hereto shall survive the making of such representation and warranty, and no
Lender shall be deemed to have waived, by reason of making any extension of
credit hereunder, any Default or Event of Default that may arise by reason of
such representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Administrative Agent may have had notice
or knowledge or reason to believe that such representation or warranty was false
or misleading at the time such extension of credit was made.
-102-
Section 9.12. Captions. The table of contents and captions and
--------
section headings appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.
Section 9.13. Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided that no Obligor may assign any of its
--------
rights or obligations hereunder or under the other Basic Documents without the
prior consent of all of the Lenders and the Administrative Agent.
Section 9.14. No Immunity. To the extent that the Borrower or the
-----------
Subsidiary Guarantor may be or become entitled, in any jurisdiction in which
judicial proceedings may at any time be commenced with respect to this
Agreement, the Notes or any other Loan Document, to claim for itself or its
properties or revenues any immunity from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment, execution of a
judgment or from any other legal process or remedy relating to its respective
obligations under this Agreement, the Notes or any other Loan Document, and to
the extent that in any such jurisdiction there may be attributed such an
immunity (whether or not claimed), the Borrower and the Subsidiary Guarantor
each hereby irrevocably agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.
Section 9.15. Judgment Currency. This is an international loan
-----------------
transaction in which the specification of U.S. Dollars is of the essence, and
U.S. Dollars shall in each instance be the currency of account and payment in
all instances. A payment obligation in U.S. Dollars hereunder shall not be
discharged by an amount paid in another currency (the "Other Currency"), whether
--------------
pursuant to any judgment expressed in or converted into any Other Currency or in
another place except to the extent that such tender or recovery results in the
effective receipt by the Lender of the full amount of U.S. Dollars payable to
the Administrative Agent and the Lenders under this Agreement. If for the
purpose of obtaining judgment in any court it is necessary to convert a sum due
hereunder in U.S. Dollars into the Other Currency, the rate of exchange that
shall be applied shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase U.S. Dollars in New York, New
York with the Other Currency on the Business Day next preceding the day on which
such judgment is rendered. The obligation of the Borrower in respect of any such
sum due from it to the Administrative Agent and the Lenders hereunder or under
any other Loan Document shall, notwithstanding the rate of exchange actually
applied in rendering such judgment, be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent or any Lender of any
sum adjudged to be due hereunder in the Other Currency the Administrative Agent
may in accordance with normal banking procedures purchase U.S. Dollars with the
amount of the judgment currency so adjudged to be due; and the Borrower hereby,
as a separate obligation and notwithstanding any such judgment, agrees to
indemnify the Administrative Agent and the Lenders against, and to pay the
Administrative Agent and Lenders on demand, in U.S. Dollars, the amount (if any)
by which the sum originally due to the Administrative Agent
-103-
and the Lenders in U.S. Dollars hereunder exceeds the amount of the Other
Currency so purchased.
-104-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWER
------------
TERRA INTERNATIONAL (CANADA) INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
GUARANTORS
----------
TERRA INDUSTRIES INC.
By /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Title: S.V.P. and C.F.O.
TERRA CAPITAL HOLDINGS, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
TERRA CAPITAL, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
TERRA NITROGEN CORPORATION
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------------
Title: Vice President
-105-
TERRA INTERNATIONAL, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
TERRA METHANOL CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
BMC HOLDINGS, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
BEAUMONT HOLDINGS CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
TERRA NITROGEN (U.K.) LIMITED
By /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Title: Director
TERRA NITROGEN, LIMITED PARTNERSHIP
By: Terra Nitrogen Corporation, its General
Partner
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Title: Vice President
-106-
BEAUMONT METHANOL, LIMITED
PARTNERSHIP
By: TERRA METHANOL CORPORATION, as
the General Partner
By /s/Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BEAUMONT AMMONIA, INC.
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------------------
Title: Vice President
PORT XXXX CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Title: Vice President
TERRA INTERNATIONAL (OKLAHOMA) INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Title: Treasurer
TERRA (U.K.) HOLDINGS, INC.
By /s/ Xxxxxx Xxxxxxxxx
------------------------------------------------
Title: Vice President
-107-
THE ADMINISTRATIVE AGENT
------------------------
CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Title: Attorney-in-Fact
THE LENDERS
-----------
CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Title: Attorney-in-Fact
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Xxx X. Xxxxxxxxxxxx
-----------------------------------------
Title: Managing Director
NATIONSBANK, N.A.
By /s/ Xxx X. Xxxxxxxxxxxx
-----------------------------------------
Title: Managing Director
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Xxxxx
-----------------------------------------
Title: Senior Manager Loan Operations
-108-
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Title: Senior Vice President & Group Head
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Xxxxx X. Xxxxx
-----------------------------------------
Title: Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------------
Title: Vice President
By /s/ Xxx Xxxxxxxx
-----------------------------------------
Title: Senior Vice President
-109-
XXXXXX TRUST & SAVINGS BANK
By /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------------
Title: First Vice President
Managing Director
By /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Title: Vice President, Manager
BANQUE NATIONALE DE PARIS
By /s/ Xxxxxx Xxxxxx du Xxxxxx
------------------------------------------
Title: Executive Vice President
And General Manager
By Not Required
------------------------------------------
Title:
-110-
THE BANK OF NEW YORK
By /s/ Xxxx-Xxxx Xxxxxxx
------------------------------------------
Title: Vice President
NORWEST BANK IOWA, NATIONAL
ASSOCIATION
By /s/ Xxxx Xxxxxx
------------------------------------------
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
By /s/ Xxxx X. Xxxxxxxxxx
------------------------------------------
Title: Vice President
By /s/ Xxx Xxxxx
------------------------------------------
Title: Senior Credit Officer
-111-
THE SUMITOMO BANK, LIMITED
By /s/ Xxxx Xxxxxx
------------------------------------
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: First Vice President
-112-
THE SYNDICATION AGENTS
----------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Xxx X. Xxxxxxxxxxxx
--------------------------------------------
Title: Managing Director
THE BANK OF NOVA SCOTIA
By /s/ M.D. Xxxxx
--------------------------------------------
Title: Agent Operations
By Not Required
--------------------------------------------
Title:
ANNEX A
Applicable Margin
-----------------
"Applicable Margin" means, (a) with respect to all Base Rate Advances,
-----------------
3.50% per annum and (b) with respect to all Eurodollar Rate Advances, 5.00% per
annum; provided that:
--------
(1) The Applicable Margin shall, from the Restatement Date until the
Quarterly Date falling in September, 1999, be (a) with respect to all Base
Rate Advances, 2.50% per annum and (b) with respect to all Eurodollar Rate
Advances, 4.00% per annum.
(2) Subject to clause (1) above, if for any Rolling Period ending on
or after the June 30, 1999 the Debt to Cash Flow Ratio for such Rolling
Period shall be within any of the ranges specified in the schedule below,
then, subject to the delivery to the Administrative Agent of a certificate
of the Senior Financial Officer demonstrating the same prior to the first
Quarterly Date (the "relevant Quarterly Date") occurring after the end of
-----------------------
such Rolling Period, the "Applicable Margin" shall be changed to the
percentage per annum for the respective Type of Advance set forth opposite
the reference to such range in such schedule during the period commencing
on the relevant Quarterly Date until the next succeeding Quarterly Date
thereafter:
Applicable Margin (% p.a.)
--------------------------
Range of Debt Base Rate Eurodollar Rate
to Cash Flow Ratio Advances Advances
------------------ -------- --------
Greater than 8.00 to 1 3.50% 5.00%
Less than or equal to
8.00 to 1 and greater
than 7.50 to 1 3.00% 4.50%
Less than or equal to
7.50 to 1 and greater
than 7.00 to 1 2.50% 4.00%
Less than or equal to
7.00 to 1 and greater
than 6.50 to 1 2.25% 3.75%
Less than or equal to
6.50 to 1 and greater
than 6.00 to 1 2.00% 3.50%
-2-
Less than or equal to
6.00 to 1 1.75% 3.25%
SCHEDULE 2.01
Outstanding Advances
--------------------
Lender Outstanding Advances
------ --------------------
Citibank, N.A. $13,140,274.70
Banque Nationale de Paris $10,608,552.19
Bank of America National Trust and $ 9,862,500.00
Savings Association
The Bank of Nova Scotia $ 9,862,500.00
U.S. Bank National Association $ 8,625,000.00
The Chase Manhattan Bank $ 8,491,847.81
NationsBank, N.A. $ 8,491,847.81
The Fuji Bank, Limited $ 6,167,762.81
Credit Lyonnais Chicago Branch $ 5,944,293.75
Dresdner Bank AG, New York and $ 5,944,293.75
Grand Cayman Branches
Xxxxxx Trust & Savings Bank $ 5,944,293.75
Suntrust Bank, Atlanta $ 5,944,293.75
The Bank of New York $ 4,245,924.37
Cooperatieve Centrale Raiffeisen- $ 3,396,738.75
Boerenleenbank, B.A., "Rabobank
Nederland", New York Branch
Norwest Bank Iowa, National Association $ 3,396,738.75
The Sumitomo Bank, Limited $ 3,396,738.75
First National Bank of Chicago $ 2,467,105.31
Credit Agricole Indosuez $ 1,256,793.75
