CONFORMED COPY
AMENDMENT NO. 1
AMENDMENT NO. 1 (this "Agreement") dated as of September 30, 1998
among:
TERRA CAPITAL, INC., a Delaware corporation (the "Company");
TERRA NITROGEN, LIMITED PARTNERSHIP, a Delaware limited partnership
("TNLP" and, together with the Company, the "Borrowers);
each of the entities listed on the signature pages hereof under the
caption "GUARANTORS" (each such entity, and each of the Borrowers, an
"Obligor" and, collectively, the "Obligors");
each of the lenders (the "Lenders") listed on the signature pages
hereof; and
CITIBANK, N.A., as administrative agent for the Lenders and Issuing
Banks under the Credit Agreement referred to below (in such capacity, the
"Administrative Agent").
The Obligors, the Lenders, certain Issuing Banks and the
Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of March 31, 1998 (as from time to time amended, the "Credit
Agreement"). The Company has requested the Lenders to amend the Credit Agreement
in certain respects, and the Lenders are willing to so amend the Credit
Agreement, all on the terms and conditions set forth herein. Accordingly, the
parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Agreement,
terms defined in the Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to (i) the Administrative Agent's
receipt of this Agreement, duly executed by each of the Obligors, the Required
Lenders and the Administrative Agent and (ii) payment by Terra to the
Administrative Agent of such fees as Terra shall have agreed to pay in
connection herewith, but effective as of the date hereof, the Credit Agreement
shall be amended as follows:
A. Definitions. Section 1.01 of the Credit Agreement is amended by
inserting the following definitions:
"Refinanceable Debt" has the meaning assigned to such term in
Section 5.02(b)(1)(xxii)(I).
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"Special Refinancing Debt" has the meaning assigned to such term
in Section 5.02(b)(1)(xxii).
"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 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.
B. Adjusted Debt to Cash Flow Ratio Definition. The definition of
"Adjusted Debt to Cash Flow Ratio" in Section 1.01 of the Credit Agreement
is amended by adding the following sentence at the end thereof:
"In addition, solely for purposes of Section 5.04, in determining
the Adjusted 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)(xxii)(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
(2) the EBITDA component shall be determined excluding
interest expense on such Excluded Debt."
C. Adjusted Interest Coverage Ratio Definition. The definition of
"Adjusted Interest Coverage Ratio" in Section 1.01 of the Credit Agreement
is amended by adding the following sentence at the end thereof:
"In addition, solely for purposes of Section 5.04, in determining
the Adjusted 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)(xxii)(I):
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(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
(2) the Cash Interest Expense component shall be determined
excluding interest expense on such Excluded Debt."
D. Applicable Margin Definition. (i) The definition of "Applicable
Margin" in Section 1.01 of the Credit Agreement is amended by restating the
introductory clause therein as follows:
""Applicable Margin" means, (a) with respect to all Base Rate
Advances, 1.50% per annum and (b) with respect to all Eurodollar Rate
Advances, 3.00% per annum; provided that:"
(ii) The definition of "Applicable Margin" in Section 1.01 of the
Credit Agreement is further amended by restating the pricing grid therein
as follows:
"Applicable Margin (% p.a.)
---------------------------
Range of Debt Base Rate Eurodollar Rate
to Cash Flow Ratio Advances Advances
------------------------- --------- ---------------
Greater than 4.50 to 1 1.500% 3.000%
Less than or equal to
4.50 to 1 and greater
than 3.75 to 1 1.250% 2.500%
Less than or equal to
3.75 to 1 and greater
than 3.00 to 1 1.000% 2.000%
Less than or equal to
3.00 to 1 and greater
than 2.00 to 1 0.375% 1.250%
Less than or equal to
2.00 to 1 and greater
than 1.25 to 1 0.250% 0.750%
Less than or equal to
1.25 to 1 and greater
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than 0.75 to 1 0.000% 0.625%
Less than or equal to
0.75 to 1 0.000% 0.500%"
(iii) The definition of "Applicable Margin" in Section 1.01 of the
Credit Agreement is further amended by restating clause (2) therein as
follows:
"(2) (x) Notwithstanding any reduction in the Applicable Margin
below 0.375% per annum (in the case of Base Rate Advances) or 1.250%
per annum (in the case of Eurodollar Rate Advances) that would
otherwise be made pursuant to clause (1) above, the "Applicable
Margin" during the period from the Restatement Date until the
Quarterly Date in September, 1998 shall be not less than 0.375% per
annum (in the case of Base Rate Advances) and not less than 1.250% (in
the case of Eurodollar Rate Advances).
(y) Notwithstanding any reduction in the Applicable Margin below
1.000% per annum (in the case of Base Rate Advances) or 2.000% per
annum (in the case of Eurodollar Rate Advances) that would otherwise
be made pursuant to clause (1) above, the "Applicable Margin" during
the period from the Quarterly Date in September, 1998 until the
Quarterly Date in March, 1999 shall be not less than 1.000% per annum
(in the case of Base Rate Advances) and not less than 2.000% (in the
case of Eurodollar Rate Advances)."
E. Debt to Cash Flow Ratio Definition. The definition of "Debt to Cash
Flow Ratio" in Section 1.01 of the Credit Agreement is amended by adding
the following sentence at the end thereof:
"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)(xxii)(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
(2) the EBITDA component shall be determined excluding
interest expense on such Excluded Debt."
F. Funded Debt Definition. The definition of "Funded Debt" in Section
1.01 of the Credit Agreement is amended by restating the last sentence
therein as follows:
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"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."
G. Interest Coverage Ratio Definition. The definition of "Interest
Coverage Ratio" in Section 1.01 of the Credit Agreement is amended by
adding the following sentence at the end thereof:
"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)(xxii)(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
(2) the Cash Interest Expense component shall be determined
excluding interest expense on such Excluded Debt."
H. Debt. Section 5.02(b)(1) of the Credit Agreement is amended by
deleting the "and" at the end of clause (xx) thereof, substituting "; and"
for the period at the end of clause (xxi) thereof and adding the following
new clauses (xxii) and (xxiii) thereto:
"(xxii) 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 (xviii) 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;
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(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
(V) all of the direct obligors on such Special Refinancing
Debt are direct obligors on the related Refinanceable Debt, and
all of the contingent obligors on such Special Refinancing Debt
are direct or contingent obligors on the related Refinanceable
Debt; and
(xxiii) Guarantees by TI of Terra Customer Debt; provided that
the aggregate principal amount of Terra Customer Debt Guaranteed by TI
at any time during any fiscal year of TI shall not exceed
$10,000,000."
I. Financial Covenants. Section 5.04 of the Credit Agreement is
amended by restating paragraphs (a), (b), (c) and (d) to read as follows:
"(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
-------------- ------------
September, 1998 4.50 to 1.00
December, 1998 4.50 to 1.00
March, 1999 4.50 to 1.00
June, 1999 5.00 to 1.00
September, 1999 5.00 to 1.00
December, 1999 4.50 to 1.00
March, 2000 4.50 to 1.00
June, 2000 5.00 to 1.00
September, 2000 5.00 to 1.00
December, 2000 4.50 to 1.00
March and December of
each fiscal year after 2000 3.00 to 1.00
June and September of
each fiscal year after 2000 3.50 to 1.00
(b) Adjusted Debt to Cash Flow Ratio. Maintain the Adjusted
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:
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Each
Rolling Period
Ending In Ratio
-------------- ------------
September, 1998 4.50 to 1.00
December, 1998 4.50 to 1.00
March, 1999 4.50 to 1.00
June, 1999 5.00 to 1.00
September, 1999 5.00 to 1.00
December, 1999 4.50 to 1.00
March, 2000 4.50 to 1.00
June, 2000 5.00 to 1.00
September, 2000 5.00 to 1.00
December, 2000 4.50 to 1.00
March and December of
each fiscal year after 2000 3.00 to 1.00
June and September of
each fiscal year after 2000 3.50 to 1.00
(c) 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
-------------- ------------
1998, 1999 and 2000 2.00 to 1.00
2001 and thereafter 3.50 to 1.00
(d) Adjusted Interest Coverage Ratio. Maintain the Adjusted
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
-------------- ------------
1998, 1999 and 2000 2.00 to 1.00
2001 and thereafter 3.50 to 1.00
J. General. References in the Credit Agreement to "this Agreement"
(including indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as
amended hereby.
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Section 3. Representations and Warranties. The Company hereby
represents and warrants to the Administrative Agent and the Lenders that:
(a) the representations and warranties contained in each Loan Document
are correct on and as of the date hereof, 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
(b) no event has occurred and is continuing that constitutes a Default
or an Event of Default.
Section 4. Miscellaneous. Except as herein provided, the Credit
Agreement and each of the other Loan Documents shall remain unchanged and in
full force and effect. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
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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 BORROWERS
-------------
TERRA CAPITAL, INC.
By /s/X. X. Xxxxx
----------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
TERRA NITROGEN, LIMITED PARTNERSHIP
By Terra Nitrogen Corporation, its General
Partner
By /s/X. X. Xxxxxxxxx
--------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
GUARANTORS
----------
TERRA INDUSTRIES INC.
By /s/X. X. Xxxxx
----------------
Name: Xxxxxxx X. Xxxxx
Title: S.V.P. and C.F.O.
TERRA CAPITAL HOLDINGS, INC.
By /s/X. X. Xxxxxxxxx
--------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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XXXXX XXXXXXXX CORPORATION
By /s/X. X. Xxxxxxxxx
--------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
TERRA METHANOL CORPORATION
By /s/X. X. Xxxxxxxxx
--------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
BMC HOLDINGS, INC.
By /s/X. X. Xxxxx
----------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
TERRA INTERNATIONAL, INC.
By /s/X. X. Xxxxx
----------------
Name: Xxxxxxx X. Xxxxx
Title: S.V.P. and C.F.O.
THE ADMINISTRATIVE AGENT
------------------------
CITIBANK, N.A.
By /s/Xxxxxx Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx Xxxxxx
Title: Attorney-in-Fact
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COMMITMENTS THE LENDERS
----------- -----------
Terra Commitment CITIBANK, N.A.
----------------
$44,683,934.79
TNLP Commitment
---------------
$3,154,116.21 By /s/Xxxxxx Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxx
Title: Attorney-in-Fact
Terra Commitment BANK OF AMERICA NATIONAL TRUST
---------------- AND SAVINGS ASSOCIATION
$26,980,000.00
TNLP Commitment
---------------
$1,927,142.00 By /s/X. X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
Terra Commitment THE BANK OF NOVA SCOTIA
----------------
$26,980,000.00
TNLP Commitment
---------------
$1,927,142.00 By /s/F.C.H. Xxxxx
-------------------------------------
Name: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
Terra Commitment FIRST BANK NATIONAL ASSOCIATION
----------------
$25,800,000.00
TNLP Commitment
---------------
$1,842,857.00 By /s/Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-00-
Xxxxx Xxxxxxxxxx THE CHASE MANHATTAN BANK
----------------
$25,362,319.00
TNLP Commitment
---------------
$1,811,594.00 By /s/Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Terra Commitment NATIONSBANK, N.A.
----------------
$25,362,319.00
TNLP Commitment
---------------
$1,811,594.00 By /s/Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Terra Commitment THE FUJI BANK, LIMITED
----------------
$18,421,053.00
TNLP Commitment
---------------
$1,315,790.00 By /s/Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Joint General Manager
Terra Commitment CREDIT AGRICOLE INDOSUEZ
----------------
$17,753,623.00
TNLP Commitment
---------------
$1,268,116.00 By /s/Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: First Vice President
Head of Corporate Banking Chicago
By /s/W. Xxxxx Xxxxxx
------------------------------------------
Name: W. Xxxxx Xxxxxx
Title: First Vice President
-00-
Xxxxx Xxxxxxxxxx CREDIT LYONNAIS CHICAGO BRANCH
----------------
$17,753,623.00
TNLP Commitment
---------------
$1,268,116.00 By /s/Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Terra Commitment DRESDNER BANK AG, NEW YORK AND
---------------- GRAND CAYMAN BRANCHES
$17,753,623.00
TNLP Commitment
---------------
$1,268,116.00 By /s/Xxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
By /s/A. Xxxxxxx Xxxxxx
-------------------------------------
Name: A. Xxxxxxx Xxxxxx
Title: First Vice President
Terra Commitment XXXXXX TRUST & SAVINGS BANK
----------------
$17,753,623.00
TNLP Commitment
---------------
$1,268,116.00 By /s/Xxxxxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
Terra Commitment SUNTRUST BANK, ATLANTA
----------------
$17,753,623.00 By /s/Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
TNLP Commitment
---------------
$1,268,116.00 By /s/Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Group Vice President
-00-
Xxxxx Xxxxxxxxxx BANQUE NATIONALE DE PARIS
----------------
$17,684,211.00
TNLP Commitment
---------------
$1,263,158.00 By /s/Xxxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
By /s/Xxxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
Terra Commitment THE BANK OF NEW YORK
----------------
$12,681,159.00
TNLP Commitment
---------------
$905,797.00 By /s/Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Terra Commitment COOPERATIEVE CENTRALE RAIFFEISEN-
---------------- BOERENLEEBANK, B.A. "RABOBANK
$10,144,928.00 NEDERLAND," New York Branch
TNLP Commitment
---------------
$724,638.00 By /s/Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: Senior Credit Officer
By /s/Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Terra Commitment NORWEST BANK IOWA, NATIONAL
---------------- ASSOCIATION
$10,144,928.00
TNLP Commitment
---------------
$724,638.00 By /s/Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
-15-
Terra Commitment THE SUMITOMO BANK, LIMITED
----------------
$10,144,928.00
TNLP Commitment
---------------
$724,638.00 By /s/Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Terra Commitment FIRST NATIONAL BANK OF CHICAGO
----------------
$6,842,105.21
TNLP Commitment
---------------
$526,315.79 By /s/Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: First Vice President
