Exhibit 4.6
[CONFORMED COPY]
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 25, 1999
among
TERRA CAPITAL, INC.
as Borrower
CERTAIN GUARANTORS
CERTAIN LENDERS
CERTAIN ISSUING XXXXX
XXXXXXX XXXXX XXXXXX INC.,
as Arranger
and
CITIBANK, N.A.,
as Administrative Agent
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[Exhibits D-1 and D-2 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................................... 33
Section 1.03. Accounting Terms.............................................. 33
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01. The Advances.................................................. 34
Section 2.02. Making the Advances........................................... 35
Section 2.03. Repayment..................................................... 37
Section 2.04. Termination or Reduction of the Commitments................... 37
Section 2.05. Prepayments, Etc.............................................. 38
Section 2.06. Interest...................................................... 40
Section 2.07. Fees.......................................................... 41
Section 2.08. Conversion and Continuation of Advances....................... 41
Section 2.09. Increased Costs, Illegality, Etc.............................. 43
Section 2.10. Payments and Computations..................................... 45
Section 2.11. Taxes......................................................... 46
Section 2.12. Sharing of Payments, Etc...................................... 49
Section 2.13. Letters of Credit............................................. 49
Section 2.14. Replacement of Lenders........................................ 53
ARTICLE III
CONDITIONS OF
RESTATEMENT AND LENDING
Section 3.01. Conditions Precedent to Amendment and Restatement............. 55
Section 3.02. Conditions Precedent to Each Borrowing and Issuance........... 59
Section 3.03. Determinations Under Section 3.01............................. 59
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Company................. 60
Section 4.02. Representations and Warranties of each Lender................. 66
(i)
ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants........................................ 66
Section 5.02. Negative Covenants........................................... 72
Section 5.03. Reporting Requirements....................................... 85
Section 5.04. Financial Covenants.......................................... 88
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default............................................ 90
Section 6.02. Actions in Respect of the Letters of Credit Upon Default..... 93
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action..................................... 94
Section 7.02. Administrative Agent's Reliance, Etc......................... 95
Section 7.03. Citibank and Affiliates...................................... 95
Section 7.04. Lender Credit Decision....................................... 95
Section 7.05. Indemnification.............................................. 96
Section 7.06. Collateral Duties............................................ 96
Section 7.07. Successor Administrative Agent............................... 97
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee................................................ 97
Section 8.02. Obligations Unconditional.................................... 98
Section 8.03. Reinstatement................................................ 99
Section 8.04. Subrogation.................................................. 99
Section 8.05. Remedies..................................................... 99
Section 8.06. Instrument for the Payment of Money.......................... 99
Section 8.07. Continuing Guarantee......................................... 100
Section 8.08. Rights of Contribution....................................... 100
Section 8.09. General Limitation on Guarantee Obligations.................. 101
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc.................................... 101
Section 9.02. Notices, Etc................................................. 103
Section 9.03. No Waiver; Remedies.......................................... 103
Section 9.04. Costs, Expenses and Indemnification.......................... 104
Section 9.05. Right of Setoff.............................................. 105
Section 9.06. Governing Law; Submission to Jurisdiction.................... 105
Section 9.07. Assignments and Participations............................... 106
(ii)
Section 9.08. Execution in Counterparts................................. 109
Section 9.09. No Liability of the Issuing Banks......................... 109
Section 9.10. Confidentiality........................................... 110
Section 9.11. WAIVER OF JURY TRIAL...................................... 110
Section 9.12. Survival.................................................. 110
Section 9.13. Captions.................................................. 111
Section 9.14. Successors and Assigns.................................... 111
ANNEX A Applicable Commitment Fee Rate; Applicable Margin
SCHEDULE 2.01 List of Commitments
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
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 Form of Mortgage
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D-1 Form of Opinion of Special Counsel to the Obligors
EXHIBIT D-2 Form of Opinion of Special New York 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 Liquid Asset Coverage Certificate
(iii)
CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 25, 1999 among:
(1) TERRA CAPITAL, INC., a Delaware corporation (the "Company" or the
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"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 and the Issuing Banks 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 Company, TNLP, certain Guarantors, the Initial Lenders (or
certain of their Affiliates), the Issuing Banks and the Administrative Agent are
parties to an Amended and Restated Credit Agreement dated as of March 31, 1998
(as amended to and in effect on the Restatement Date, the "Existing Credit
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Agreement") providing, subject to the terms and conditions thereof, for the
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making of working capital advances to, and the issuance of letters of credit for
the account of, the Company and for the making of working capital advances to,
and the issuance of letters of credit for the account of, TNLP.
(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 Company has requested that (i) 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, (ii) the "TNLP Facility" provided for under the Existing Credit
Agreement and the "TNLP Commitments" referred to therein be terminated and (iii)
the "TNLP Advances" under the Existing Credit Agreement be converted into
Advances hereunder.
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(d) The Company has also requested that the Initial Lenders amend the
Existing Credit Agreement, among other things to modify certain covenants
thereof and 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 hereto that the advances and letters of
credit outstanding under the Existing Credit Agreement on the Restatement Date
shall continue and remain outstanding and not be repaid on the Restatement Date.
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 Section 3) 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.
"Adjusted Liquid Asset Coverage Amount" means, at any date, the Liquid
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Asset Coverage Amount as at such date divided by three.
"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
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designated by the Administrative Agent in a written notice to the Lenders,
each Issuing Bank and the Borrower.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Advance" means an Advance made or outstanding pursuant to Section
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2.01(a).
"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.
"Aggregate Outstanding Exposure" means, at any time, the aggregate
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principal amount of all Advances outstanding at such time plus the
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aggregate Letter of Credit Liability at such time.
"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 Terra
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Canada and ICI pursuant to which Terra Canada 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 Commitment Fee Rate" has the meaning specified in Annex A.
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"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.
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"Applicable Letter of Credit Fee Rate" means, at any time, a rate per
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annum equal to the Applicable Margin for Eurodollar Rate Advances in effect
at such time.
"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.
"Available Amount" of any Letter of Credit means the maximum amount
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available to be drawn under such Letter of Credit (assuming compliance with
all conditions to drawing specified therein).
"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;
(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
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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.
"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-5 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(p) 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.
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"Borrower's Account" means the account of the Borrower maintained with
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Citibank at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Account No. 4065-6098, or such other account maintained by the Borrower
with Citibank as may be designated by the Borrower in a written notice to
the Administrative Agent.
"Borrowing" means a borrowing consisting of simultaneous Advances of
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the same Type.
"Business Day" means a day on which banks are not required or
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authorized to close in New York City and, if such Business Day relates to a
Eurodollar Rate Advance, on which dealings are carried on in the London
interbank market.
"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
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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 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
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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
(including, without limitation, any Letter of Credit) and (c) the net
payment, if any, payable in connection with any Hedge Agreement; excluding,
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in each case, interest not payable in cash (including, without 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.
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"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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"Collateral" means all "Collateral" referred to in the Security
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Documents and all other property that is subject to any Lien created by any
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 Security Documents and
the Intercreditor Agreement, together with its successors in such capacity.
"Commitment" has the meaning specified in Section 2.01(a).
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"Commitment Amount Reduction" means, for each mandatory Commitment
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reduction on any Commitment Reduction Date pursuant to Section 2.04(b), the
lesser of (i) $12,187,500 and (ii) an amount equal to $20,000,000 minus the
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aggregate amount of principal payments or principal prepayments in respect
of the Advances under the Terra Canada Credit Facility for the Rolling
Period ending on such Commitment Reduction Date (which amount under this
clause (ii) shall not be less than zero).
"Commitment Reduction Dates" shall mean the Quarterly Dates falling on
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or nearest to June 30 of each year, commencing with June 30, 2000, through
and including June 30, 2002.
"Commitment Termination Date" means the earlier of (a) December 31,
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2002 (provided that if such day is not a Business Day, the Commitment
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Termination Date shall be the immediately preceding Business Day), and (b)
the termination or cancellation of the Commitments pursuant to the terms of
this Agreement.
"Confidential Information" means information identified as such that
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Terra or any of its Subsidiaries furnishes to the Administrative Agent, any
Issuing Bank 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, any Issuing
Bank or any Lender from a source other than Terra and its Subsidiaries
(unless, in either case, such information becomes so available as a
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result of the breach by the Administrative Agent, an Issuing Bank or a
Lender of its duty of confidentiality set forth in Section 9.10).
"Consolidated" refers to the consolidation of accounts in accordance
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with GAAP.
"Consolidated Group" means, collectively, Terra and its Consolidated
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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 2.08.
"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
2.08 or 2.09.
"Covered Transaction" means, collectively:
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(1) the Transactions (as defined in the Original Credit Agreement) or
any part thereof, including, without limitation, the Initial Merger and the
Second Merger referred to therein and any of the other transactions
contemplated thereby; and
(2) the SPU Redemption;
(3) the other "Covered Transactions" referred to in the Existing
Credit Agreement;
(4) the transactions contemplated by the sale of the Distribution
Business pursuant to the Distribution Business Sale Agreement; and
(5) the transactions contemplated hereby (including, without
limitation, the making of Advances and the issuance of Letters of Credit
hereunder).
"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
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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, (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):
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(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.
"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 (including, without limitation, the sale
of the Distribution Business by Terra pursuant to the Distribution Business
Sale Agreement), 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 excluded
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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 the
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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
---------------------
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)
-----------------
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
-----------------------
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.
-11-
"EBITDA" of any Person for any period means the following, determined
------
in accordance with GAAP: net income (or net loss) plus the sum of (a)
----
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
-----------------
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 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 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
-12-
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.
"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.
-13-
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
---------------
Rate Advance comprising part of the same Borrowing, 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 comprising part of such
Borrowing (determined without giving effect to any assignments or
participations by 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 comprising part of the
same Borrowing 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 2.09.
------- -------
"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 comprising part of the same Borrowing 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 2.09 or 2.13, the period ending 120 days prior to the
applicable Lender's delivery of a certificate referenced in Section
2.09(a), 2.09(b) or 2.13(d), as applicable, with respect to such additional
amount.
"Excluded Transactions" means, collectively:
---------------------
-14-
(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(p); and
(4) Investments permitted under Sections 5.02(f)(vi) and (xi).
"Existing Credit Agreement" has the meaning specified in the
-------------------------
Preliminary Statements to this Agreement.
"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 Outstanding Exposure
----
on such date; 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.
-15-
"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).
"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 specified in Section 8.01.
----------------------
"Guarantors" means, collectively, (x) Terra, Terra Capital Holdings,
----------
TNC, TI, BMCH, Beaumont Holdings, TMC, 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).
-----------------
-16-
"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 Company, 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
-------------
(2) the Cash Interest Expense component shall be determined
excluding interest expense on such Excluded Debt.
-17-
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same Borrowing, 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 Company may not select any Interest Period that ends
after any Commitment Reduction Date unless, after giving effect
thereto, the aggregate principal amount of Advances having Interest
Periods that end after such Commitment Reduction 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 Commitment Reduction Date;
(b) no Interest Period for any Advance may end after the
Commitment Termination 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
-18-
(c) 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.
"Issuing Bank" means each Lender specified on the signature pages
------------
hereof as an "Issuing Bank", together with its successors in such capacity,
provided that with respect to NationsBank, N.A. and its successors it shall
--------
be an Issuing Bank only with respect to the NationsBank L/C's.
"L/C Cash Collateral Account" means, collectively, one or more cash
---------------------------
collateral accounts maintained by the Administrative Agent with Citibank
for the benefit of the Lenders and Issuing Banks.
"L/C Related Documents" has the meaning specified in Section 2.13(e).
---------------------
"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.
"Letter of Credit" means a letter of credit issued by an Issuing Bank
----------------
for account of the Company or any of its Subsidiaries pursuant to Section
2.13(a).
"Letter of Credit Commitment" means, with respect to any Issuing Bank
---------------------------
at any time, the amount set forth opposite such Issuing Bank's name on
Schedule 2.01 under the caption "Letter of Credit Commitment", as such
amount may be reduced pursuant to Section 2.04.
"Letter of Credit Liability" means, as of any date of determination,
--------------------------
all of the liabilities of the Company to the Issuing Banks in respect of
Letters of Credit, whether any such liability is contingent or fixed, and
shall consist of the sum of (a) the aggregate Available Amount of all
Letters of Credit then outstanding, plus (b) the aggregate amount that has
----
then been paid by, and has not been reimbursed to, any Issuing Bank under
Letters of Credit.
"Letter of Credit Sublimit" means, at any time, the lesser of (i)
-------------------------
$45,000,000 and (ii) the aggregate amount of the Commitments hereunder at
such time.
"Letters of Credit" has the meaning specified in Section 2.13(a).
-----------------
"Lien" means any lien, security interest or other charge or
----
encumbrance of any kind, 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.
-19-
"Liquid Asset Coverage Amount" means, at any date, the aggregate
----------------------------
amount of Receivables and inventory of the members of the Consolidated
Group (determined on a Consolidated basis in accordance with GAAP) on such
date (as determined reasonably and in good faith by Terra); provided that
--------
(x) all Receivables not payable in Dollars or in any other freely
convertible currency shall be excluded and (y) all inventory not located
within the United States of America, Canada and the United Kingdom shall be
excluded.
"Liquid Asset Coverage Certificate" means a certificate of the Senior
---------------------------------
Financial Officer, substantially in the form of Exhibit H and appropriately
completed (which amounts therein, in the case of the Liquid Asset Coverage
Certificate delivered pursuant to Section 3.01(s), shall be determined
reasonably and in good faith by Terra).
"Liquid Asset Coverage Date" means a date as of which the Interest
--------------------------
Coverage Ratio is less than 2.00 to 1.00.
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Security Documents and the Loan Purchase Agreement.
"Loan Purchase Agreement" means an Amended and Restated 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.
-20-
"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, any Issuing Bank 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.
"Minorco" means Minorco, S.A., a Luxembourg societe anonyme, and its
-------
successors.
-21-
"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.
"NationsBank L/C's" means the Letters of Credit identified on Schedule
-----------------
1.
"Net Available Proceeds" means:
----------------------
(a) in the case of any Disposition, the aggregate amount of all
cash payments, and the fair market value of any non-cash
consideration, received by Terra and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (i) such
--------
Net Available Proceeds shall be net of (x) the amount of any legal,
title and recording tax expenses, commissions and other reasonable
fees and expenses (including reasonable expenses of preparing the
relevant property for sale) paid by Terra and its Subsidiaries in
connection with such Disposition and (y) any Federal, state and local
income or other taxes estimated in good faith to be payable by Terra
and its Subsidiaries as a result of such Disposition and (ii) such Net
Available Proceeds shall be net of any repayments by Terra or any of
its Subsidiaries of Debt to the extent that (x) such Debt is secured
by a Lien on the property that is the subject of such Disposition and
(y) the transferee of (or holder of a Lien on) such property requires
that such Debt be repaid as a condition to the purchase of such
property; and
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by Terra and its Subsidiaries (and, in the case of business
interruption insurance, not contractually required to be paid over to
Xxxxxx Xxxxxxx Leveraged Equity Fund II, as agent, or its successors
or assigns) in respect of such Casualty Event net of
-22-
(A) reasonable expenses incurred by Terra 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 Terra or any of its
Subsidiaries in respect of such Casualty Event and (C) amounts
promptly applied to or set aside for the repair or replacement of the
property suffering such Casualty Event; provided that the proceeds of
--------
insurance received by Terra and its Subsidiaries in connection with
the December 13, 1994 Casualty Event at the Port Xxxx Facility shall
be deemed to be applied to the repair or replacement of the Port Xxxx
Facility.
"Net Worth" means, for any Person at any time, the sum of the
---------
following for such Person and its Subsidiaries on a Consolidated basis:
(a) the amount of capital stock; plus
----
(b) the amount of surplus and retained earnings (or, in the case
of a surplus or retained earnings deficit, minus the amount of such
-----
deficit).
"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 Company payable to the order of
----
a Lender, in substantially the form of Exhibit A, as from time to time
amended.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
-------------------
"Notice of Issuance" has the meaning specified in Section 2.13(b)(i).
------------------
"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, 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, Letter of Credit commissions, 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.
-23-
"Obligors" means the Guarantors and the Company.
--------
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Original Credit Agreement" means the Credit Agreement dated as of
-------------------------
October 24, 1994 among the Company, Terra and TNLP, as borrowers, certain
Guarantors, the "Lenders" and "Issuing Banks" referred to therein and
Citibank, as Agent.
"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 2.11(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;
(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;
-24-
(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
(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 principally 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
-25-
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, 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 Facility" means TI's facility in Port Xxxx, Iowa.
------------------
"Port Xxxx Corporation" means Port Xxxx Corporation, a Delaware
---------------------
corporation and a wholly owned Subsidiary of TI.
-26-
"Port Xxxx Corporation Mortgage" means a Mortgage, Assignment of
------------------------------
Rents, Security Agreement and Fixture Filing in substantially the form
attached hereto as Exhibit B-5 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.
"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 hereunder (or, prior to the Commitment
Termination Date, the amount of such Lender's Commitment), and the
denominator of which is the aggregate Advances or Commitments, as the case
may be, hereunder at such time, multiplied by (b) such amount.
-------------
"Purchase Event" means:
--------------
(1) that during any period commencing January 1, 1995, the
aggregate amount of Dividend Payments with respect to the capital
stock of the Company during such period exceeds the sum of:
(a) the aggregate amount of Specified Payments for such
period plus
----
(b) Cumulative Adjusted Net Income for such period plus
----
(c) the amounts available during such period for Restricted
Transactions under Section 5.02(h) (provided that this clause (c)
--------
shall be determined, with respect to all periods prior to the
Restatement Date, as provided in the Existing Credit Agreement)
to the extent not utilized for Restricted Transactions during
such period; or
(2) that:
(A) Liens on or with respect to any property of the Company 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
-27-
(B) the Company 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
(C) the Company or any of its Subsidiaries has sold, transferred
or otherwise disposed of any of its property to Terra or any of its
Subsidiaries, other than sales, transfers or other dispositions
permitted under any of clauses (i) through (ix) of Section 5.02(e); or
(D) the Company 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).
"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
Restatement 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
-28-
(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 Capital Holdings, 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 Commitment Termination Date
hereunder, 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 on any date prior to the Commitment Termination Date at
the option of the holder thereof. 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, the then aggregate Unused Commitments and the
aggregate Available Amount of all Letters of Credit. For purposes of this
definition, the Available Amount of each Letter of Credit shall be
considered to be owed to the Lenders according to their respective Pro Rata
Shares.
"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 the Holdings Pledge Agreement, the Terra
------------------
Capital Pledge and Security Agreement, the Subsidiary Pledge and Security
Agreement, the
-29-
TNLP Pledge and Security Agreement, the Mortgages, each security agreement
or other grant of security now or hereafter made by any Obligor 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.
"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 effect on the Restatement 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).
---------------
-30-
"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 (to the extent the
Commitments hereunder 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.
"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.
-31-
"Subsidiary Guarantor" means, collectively, (x) TNC, BMCH, Beaumont
--------------------
Holdings, TMC, TI, 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.
"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.
"Terra" means Terra Industries Inc., a Maryland corporation and an
-----
indirect parent of the Company.
"Terra Canada" means Terra International (Canada) Inc., a corporation
------------
governed by the laws of Ontario and an indirect wholly owned Subsidiary of
the Company.
"Terra Canada Credit Facility" means the Credit Agreement dated as of
----------------------------
December 31, 1997 and amended and restated as of March 31,1998 among Terra
Canada, the lenders party thereto and Citibank, as administrative agent for
said lenders, as from time to time amended.
"Terra Canada Group" means, collectively, Terra Canada and its
------------------
Subsidiaries, and a "member" of the Terra Canada Group means, individually,
Terra Canada and each such Subsidiary.
"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 Exhibit B-2 between the Company and the Collateral Agent, as
amended from time to time.
"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.
-32-
"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-5 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 Terra Canada.
"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 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.
-33-
"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.
"Unused Commitment" means, with respect to any Lender at any time, (a)
-----------------
such Lender's Commitment at such time minus (without duplication) (b) the
-----
sum of (i) the aggregate outstanding principal amount of all Advances made
by such Lender and (ii) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit outstanding at such time and of
all unreimbursed drawings thereunder.
"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.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
-34-
Section 2.01. The Advances.
------------
(a) (i) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances ("Advances") to the Company from
--------
time to time on any Business Day during the period from the Restatement
Date until the Commitment Termination Date in an aggregate amount at any
one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.01 under the caption "Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth
for such Lender in the Register as such Lender's "Commitment" (such amount
being such Lender's "Commitment"), and, as to all Lenders, in an aggregate
----------
amount at any one time outstanding not to exceed $62,812,500.00; provided
--------
that the Lenders shall not be obligated to make additional Advances on any
Liquid Asset Coverage Date if the Aggregate Outstanding Exposure as of such
date (determined after giving effect to the making of such Advances) would
exceed the Adjusted Liquid Asset Coverage Amount as of such date.
On the Restatement Date (i) all outstanding "Terra Advances" and "TNLP
Advances" of each Lender under the Existing Credit Agreement shall
automatically, without any action on the part of any Person, be deemed to
be Advances hereunder and, without prejudice to the foregoing, the Borrower
shall irrevocably and unconditionally assume and agree to pay and perform
all of the obligations of TNLP, whether now existing or hereafter from time
to time arising, under the Existing Credit Agreement, including without
limitation the obligation of TNLP to pay the principal of and interest on
the "TNLP Advances" and the "TNLP Letters of Credit" as defined therein and
all other amounts payable by TNLP thereunder, (ii) the "TNLP Commitments"
of each Lender under the Existing Credit Agreement shall automatically,
without any action on the part of any Person, be terminated and (iii) all
Interest Periods under the Existing Credit Agreement in respect of the
"Terra Advances" and the "TNLP Advances" thereunder shall automatically be
terminated, and, subject to the provisions of Section 2.01(b), the Company
shall be permitted to Continue such "Terra Advances" as Eurodollar Rate
Advances hereunder, or to Convert such "Terra Advances" into Base Rate
Advances hereunder.
(ii) The Advances shall be made by the Lenders ratably according to
their respective Commitments.
(iii) Within the limits of each Lender's Commitment in effect from
time to time, the Company may borrow under this Section 2.01(a) and/or
obtain the issuance of Letters of Credit under Section 2.13, prepay
pursuant to Section 2.05(a) and reborrow under this Section 2.01(a);
provided that the aggregate outstanding principal amount of Advances when
--------
added to the aggregate Letter of Credit Liability may not at any time
exceed the aggregate amount of the Commitments at such time.
-35-
(iv) The proceeds of the Advances shall be used solely (A) for
general corporate purposes of the Company and its Subsidiaries, including,
without limitation, to finance the ongoing working capital needs of, and to
refinance outstanding Debt of, such Persons, (B) to finance all or a
portion of the SPU Redemption (subject to the provisions of Section
5.02(f)(ix))and (C) to repay the full (or any portion thereof) outstanding
principal amount of the loans (together with accrued interest thereon and
any and all other amounts owing thereunder) under the Terra Canada Credit
Facility.
(v) Notwithstanding the foregoing provisions of Section 2.01(a), the
Company agrees that, for a period of 30 consecutive days during each fiscal
year it will prepay the Advances in such amounts as shall be necessary so
the aggregate outstanding principal amount of the Advances shall not exceed
the Cleanup Amount as in effect at such time; provided that this Section
--------
2.01(a)(v) shall not prevent the Company from requesting the issuance of
Letters of Credit during any such period pursuant to Section 2.13, or the
Lenders from making Advances in respect thereof pursuant to Section
2.13(c), which Advances (subject to the other terms and conditions of this
Agreement) may remain outstanding during such period. For purposes hereof,
"Cleanup Amount" means, at any time during the periods set forth in column
--------------
(A) below, the respective amount set forth for such period in column (B)
below:
(A) (B)
Period Cleanup Amount
--------------- --------------
From January 1, 1999 to $60,000,000
December 31, 1999
From and after January 1, 2000 $30,000,000
(b) Minimum Amounts. Each Borrowing shall be in an aggregate amount
---------------
at least equal to $3,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(c) No Responsibility to Third Parties. Neither the Administrative
----------------------------------
Agent nor any Lender nor any Issuing Bank shall have any responsibility as to
the application or use of any of the proceeds of any Advance.
Section 2.02. Making the Advances.
-------------------
(a) (i) Except as otherwise provided in Section 2.13, each Borrowing
shall be made on notice, given not later than 11:00 A.M. (New York City
time) on the Business Day of (or, with respect to a Borrowing of Eurodollar
Rate Advances, 10:00 A.M. (New York City time) on the second Business Day
prior to the date of) the proposed Borrowing, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof
by telex, telecopier or cable. Each such notice of a Borrowing (a "Notice
------
of Borrowing") shall be by telex, telecopier or cable, confirmed
------------
-36-
immediately in writing, in substantially the form of Exhibit C, specifying
therein (1) the requested date of such Borrowing, (2) the requested Type of
Advances comprising such Borrowing, (3) the requested aggregate amount of
such Borrowing, (4) in the case of a Borrowing consisting of Eurodollar
Rate Advances, the requested initial Interest Period for each such Advance
and (5) whether the proposed Borrowing Date is a Liquid Asset Coverage Date
(and, if so, specifying therein the Liquid Asset Coverage Amount, the
Adjusted Liquid Asset Coverage Amount and the Aggregate Outstanding
Exposure before giving effect to the proposed Advances).
(ii) In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, 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
date of each Borrowing, 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 such
Borrowing. 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 Borrower's
Account; provided that the Administrative Agent shall first make a portion
--------
of such funds equal to any unreimbursed drawing under any Letter of Credit
available to each Issuing Bank having issued any such Letter of Credit for
reimbursement of such drawing.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower shall not select Eurodollar Rate Advances (y) for any Borrowing
if the aggregate amount of such Borrowing is less than $3,000,000 or (z) if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.08 or 2.09, and (ii) Eurodollar Rate Advances
may not be outstanding under more than 15 separate Interest Periods at any one
time.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of 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 such
Notice of Borrowing for such Borrowing 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 made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to 12:00 Noon (New York City time) on the date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender's ratable portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the
-37-
Administrative Agent on the date of such Borrowing in accordance with Section
2.02(a) and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such 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 Borrower, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section 2.06 to Advances comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
Section 2.03. Repayment. The Company hereby promises to pay to the
---------
Administrative Agent for the account of each Lender the full outstanding
principal amount of the Advances of such Lender on the Commitment Termination
Date. In addition, if following any Commitment Reduction Date the aggregate
principal amount of the Advances, together with the aggregate amount of all
Letter of Credit Liabilities, shall exceed the Commitments, the Company shall,
first, pay Advances and, second, provide cover for Letter of Credit Liabilities
in the manner specified in Section 2.05(d)) in an aggregate amount equal to such
excess. 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.
Section 2.04. Termination or Reduction of the Commitments.
-------------------------------------------
(a) Optional. The Borrower may at any time or from time to time,
--------
upon not less than two Business Days' notice to the Administrative Agent,
terminate in whole or reduce in part the Commitments, provided that (i) each
--------
partial reduction of the Commitments shall be in an aggregate amount of
$3,000,000 or an integral multiple of $1,000,000 in excess thereof, and (ii) the
aggregate amount of the Commitments shall not be reduced below the Letter of
Credit Commitment.
(b) Mandatory. The Commitments shall be automatically and
---------
permanently reduced to zero on the Commitment Termination Date. In addition,
the aggregate amount of the Commitments shall be automatically reduced on each
Commitment Reduction Date by an amount equal to the relevant Commitment Amount
Reduction (if any).
-38-
(c) Reductions Pro Rata; No Reinstatements. Each reduction of the
--------------------------------------
Commitments shall be applied to the Commitments of the Lenders pro rata
according to the respective amounts of their respective Commitments.
Commitments once terminated or reduced may not be reinstated.
Section 2.05. Prepayments, Etc.
-----------------
(a) Optional Prepayments. (i) 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 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).
(ii) Each prepayment of Advances under this Section 2.05(a) shall be
made for account of the Lenders according to their Pro Rata Shares of the
principal amount of the Advances.
(b) Mandatory Prepayments; Commitment Reductions.
--------------------------------------------
(i) Sale of Assets. Without limiting the obligation of the Company
--------------
to obtain the consent of the Required Lenders pursuant to Section 5.02(e)
to any Disposition not otherwise permitted hereunder, immediately upon the
consummation of each Disposition (other than (x) the sale of the
Distribution Business by Terra pursuant to the Distribution Business Sale
Agreement and (y) 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) occurring on or after the Restatement Date the
Company shall prepay the Advances (and/or provide cover for Letter of
Credit Liabilities as specified in Section 2.05(d)), and the Commitments
shall be subject to automatic reduction, in an aggregate amount equal to
the Net Available Proceeds of such Disposition; provided that the following
--------
shall not be deemed to be Dispositions for purposes of this clause (i):
-39-
(1) the sale by the Company or any of its Subsidiaries of
Receivables under an Intercompany Receivables Facility;
(2) the sale of any property by any member of the Terra Canada
Group (to the extent the proceeds of such Disposition have been
applied to prepay the loans outstanding under the Terra Canada Credit
Facility);
(3) the transactions relating to the construction of the Ammonia
Loop;
(4) the transactions under the Ammonium Nitrate Hedging
Agreement and
(5) prior to the SPU Redemption Date, Dispositions by TNLP (but
only to the extent the Net Available Proceeds of such Disposition
exceed the aggregate principal amount of TNLP Notes then outstanding).
(ii) Casualty Events. Upon the date 90 days following the receipt by
---------------
Terra or any of its Subsidiaries of the proceeds of insurance, condemnation
award or other compensation in respect of any Casualty Event affecting any
property of Terra or any of its Subsidiaries, the Company shall prepay the
Advances (and/or provide cover for Letter of Credit Liabilities as
specified in Section 2.05(d)), and the Commitments shall be subject to
automatic reduction, in an aggregate amount, if any, equal to the Net
Available Proceeds of such Casualty Event not theretofore applied, or
committed to be applied, to the repair or replacement of such property or
set aside for such purpose; provided that the following events shall not
--------
require prepayments (and/or Commitment reductions) pursuant to this clause
(ii):
(1) Casualty Events affecting property of any member of the
Terra Canada Group (to the extent the proceeds of insurance,
condemnation awards or other compensation are applied to the repair or
replacement of such property or are applied to prepay the loans
outstanding under the Terra Canada Credit Facility); and
(2) prior to the SPU Redemption Date, Casualty Events affecting
property of TNLP (to the extent the proceeds of insurance,
condemnation awards or other compensation are applied to the repair or
replacement of such property or exceed the aggregate principal amount
of TNLP Notes then outstanding).
Nothing in this clause (ii) shall be deemed to limit any obligation of
Terra or any of its Subsidiaries pursuant to any of the Security Documents
to remit to a collateral or similar account (including, without limitation,
a Collateral Account under and as defined in the Security Documents)
maintained by the Collateral Agent pursuant to any of the Security
Documents the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event.
-40-
(iii) Liquid Asset Coverage Events. If on any Liquid Asset Coverage
----------------------------
Date the Aggregate Outstanding Exposure exceeds the Adjusted Liquid Asset
Coverage Amount, the Company shall prepay the Advances (and/or provide
cover for Letter of Credit Liabilities as specified in Section 2.05(d)) in
an aggregate amount equal to such excess. No prepayment pursuant to this
clause (iii) shall require the Commitments to be reduced pursuant to
Section 2.05(c).
(c) Application. On the dates specified in clauses (i) and (ii) of
-----------
Section 2.05(b), the Commitments shall be reduced automatically in an aggregate
amount equal to the amount specified in such paragraphs (and to the extent that,
after giving effect to such reduction, the Aggregate Outstanding Exposure would
exceed the Commitments, the Company shall, first, prepay Advances and, second,
provide cover for Letter of Credit Liabilities as specified in paragraph (d)
below, in an aggregate amount equal to such excess).
(d) Cover for Letter of Credit Liabilities. In the event that the
--------------------------------------
Company shall be required pursuant to Section 2.03 or Section 2.05(b) to provide
cover for Letter of Credit Liabilities, the Company shall effect the same by
paying to the Administrative Agent same day funds in an amount equal to the
required amount, which funds shall be deposited in the L/C Cash Collateral
Account until such time as the Letters of Credit shall have been terminated and
all of the Letter of Credit Liabilities paid in full.
(e) Payments with Interest. All prepayments under this Section 2.05
----------------------
shall be made together with accrued interest to the date of such prepayment on
the principal amount prepaid.
Section 2.06. Interest.
--------
(a) Ordinary Interest. The Company 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 eff ect 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 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
-41-
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. Fees.
----
(a) Commitment Fee. The Borrower hereby promises to pay to the
--------------
Administrative Agent for the account of each Lender a commitment fee on the
average daily Unused Commitment of such Lender for the period from the
Restatement Date (or from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
other than the Initial Lenders) until the Commitment Termination Date at the
Applicable Commitment Fee Rate, payable in arrears (x) quarterly after the
Restatement Date on each Quarterly Date and (y) on the Commitment Termination
Date.
(b) Letter of Credit Commission, Etc. The Company hereby promises to
---------------------------------
pay to the Administrative Agent (A) for the account of each Issuing Bank a non-
refundable fronting fee at a rate per annum to be agreed upon between such
Issuing Bank and the Borrower and consented to by the Administrative Agent in
respect of each Letter of Credit issued by it for the period from the date of
issuance thereof until such Letter of Credit has been drawn in full, expires or
is terminated and (B) for the account of each Lender a non-refundable commission
on such Lender's Pro Rata Share of the average daily aggregate Available Amount
of all Letters of Credit then outstanding at the Applicable Letter of Credit Fee
Rate, such fees to be payable in arrears on each Quarterly Date and on the
Commitment Termination Date and calculated, for any day, after giving effect to
any payments made under such Letter of Credit on such day.
(c) Letter of Credit Expenses. The Borrower shall pay to each
-------------------------
Issuing Bank, for its own account, such commission, issuance fees, transfer fees
and other fees and charges in connection with the issuance or administration of
the Letters of Credit issued by it as the Borrower and such Issuing Bank shall
agree; provided that all fees and other charges payable pursuant to this Section
--------
2.07(c) shall be the customary amounts charged by such Issuing Bank in
connection with the issuance or administration of similar letters of credit and
the amounts so determined shall be adjusted as necessary to avoid a duplicative
payment hereunder.
Section 2.08. Conversion and Continuation of Advances.
---------------------------------------
-42-
(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 2.09 and 2.10, Convert all
or any portion of the Advances of one Type outstanding hereunder (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 the minimum amount specified in Section
2.02(b)(i) and no Conversion of any Advances shall result in a greater number of
separate Interest Periods in respect of Eurodollar Rate Advances than permitted
under Section 2.02(b)(ii). 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 comprising any Borrowing 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 definition of "Interest Period" in
Section 1.01 and in clause (a) or (c) of this Section 2.08, 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 2.09, Continue all or any
portion of the Eurodollar Rate Advances outstanding hereunder having the same
Interest Period as such Eurodollar Rate Advances; provided that any
--------
-43-
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 the minimum Borrowing amount specified in
Section 2.02(b)(i) and no Continuation of any Eurodollar Rate Advances shall
result in a greater number of separate Interest Periods in respect of Eurodollar
Rate Advances hereunder than permitted under Section 2.02(b)(ii). 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 2.09. 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 hereunder, 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.
(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 or the issuance of the
Letters of Credit (or similar contingent obligations), 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 or to the issuance or maintenance
of any Letters of Credit. A
-44-
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 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 2.09 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.
-45-
Section 2.10. 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 or commitment fees hereunder ratably (other than amounts payable
pursuant to Section 2.09(a), 2.09(b), 2.11, 2.13(d) or 9.04(c), or amounts
payable to an Issuing Bank in respect of Letters of Credit) 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
and the Available Amount of all Letters of Credit then outstanding, 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 the Note
held by such Lender, to 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 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.
-46-
(e) All computations of interest, fees and Letter of Credit
commissions 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, fee or commission hereunder made in accordance with the
provisions of this Agreement shall be conclusive and binding for all purposes,
absent manifest error.
(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 or commitment fee, as the
case may be; 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 is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
Section 2.11. Taxes.
-----
(a) Any and all payments by each Obligor hereunder or under the Notes
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
---------
the case of each Issuing Bank, each Lender and the Administrative Agent, net
income taxes that are imposed by the United States and franchise taxes and net
income taxes that are imposed on such Issuing Bank, such Lender or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Issuing Bank, such Lender or the Administrative Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of
such Issuing Bank and each Lender, franchise taxes and net income taxes that are
imposed on it by the state or foreign jurisdiction of such Issuing Bank's or
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 an Obligor shall
-----
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Issuing Bank, any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
-47-
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Issuing Bank, 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 been made, (ii) such Obligor
shall make such deductions and (iii) such Obligor shall pay the full amount
deducted 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 Issuing Bank, 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 2.11) paid by such Issuing Bank, 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 Issuing Bank, such Lender or the Administrative Agent (as the case may
be) makes written demand therefor.
(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) and subsection (e),
the terms "United States" and "United States Person" shall have the meanings
------------- --------------------
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement (in the case of each Initial Lender) and on the date of the
Assignment and Acceptance pursuant to which it became a Lender (in the case of
each other Lender), and from time to time thereafter if requested in writing by
the Borrower or the Administrative Agent (but only so long as such Lender
remains lawfully able to do so after the date such Lender becomes a Lender
hereunder), provide the Administrative Agent and the Borrower with either (i)
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
and the Notes or certifying that the income receivable pursuant to this
Agreement and the Notes is
-48-
effectively connected with the conduct of a trade or business in the United
States or (ii) Internal Revenue Service form W-8BEN, upon which the Borrower is
entitled to rely, from a Lender that has not at the time such Lender becomes a
Lender hereunder been named in any notice issued by the Secretary of the
Treasury (or such Secretary's authorized delegate) pursuant to Sections
881(c)(2)(B) or 871(h)(5) of the Internal Revenue Code, or any successor form or
statement prescribed by the Internal Revenue Service in order to establish that
such Lender is entitled to treat the interest payments under this Agreement and
the Notes as portfolio interest that is exempt from withholding tax under the
Internal Revenue Code, together with a certificate stating that such Lender is
not described in Section 881(c)(3) of the Internal Revenue Code. If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero (or if the Lender cannot provide at such time such form because it is not
entitled to reduced withholding under a treaty, the payments are not effectively
connected income and the payments do not qualify as portfolio interest),
withholding tax at such rate (or at the then existing U.S. statutory rate if the
Lender cannot provide the form) shall be excluded from Taxes unless and until
such Lender provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be excluded from Taxes
for periods governed by such form; provided that, if at the date of the
--------
Assignment and Acceptance pursuant to which a Lender assignee becomes a party to
this Agreement, the Lender assignor was entitled to payments under subsection
(a) in respect of United States withholding tax with respect to interest paid at
such date, then, to the extent such tax results in liability for such payments,
the term Taxes shall include (in addition to withholding taxes that may be
imposed in the future or other amounts otherwise includable in Taxes) United
States interest withholding tax, if any, applicable with respect to the Lender
assignee on such date.
(f) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate form
described in Section 2.11(e) (other than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection (e)), such
Lender shall not be entitled to indemnification under subsection (a) or (c) with
respect to Taxes imposed by the United States.
(g) Any Lender or any Issuing Bank claiming any additional amounts
payable pursuant to this Section 2.11 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 or Issuing Bank, be otherwise disadvantageous to such Lender or Issuing
Bank.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall survive the payment in full of principal and interest
hereunder and under the Notes.
-49-
Section 2.12. 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 2.09(a), 2.09(b), 2.11, 2.13(d) or 9.04(c), or payments to
an Issuing Bank in respect of Letters of Credit) 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 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
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 2.13. Letters of Credit.
-----------------
(a) Issuance of Letters of Credit, Etc. The Borrower may request one
-----------------------------------
or more Issuing Banks to issue, on the terms and conditions hereinafter set
forth, letters of credit for the account of the Borrower (letters of credit so
issued being herein called "Letters of Credit") from time to time on any
-----------------
Business Day during the period from the Restatement Date until the date 90 days
prior to the Commitment Termination Date; provided that:
--------
(i) the Commitments shall be utilized under this Section 2.13 solely
for the issuance of Letters of Credit for the account of the Company and,
to the extent specified by the Company, any of its wholly owned
Subsidiaries;
(ii) the aggregate Available Amount of all Letters of Credit issued
by all Issuing Banks shall not exceed at any time the Letter of Credit
Sublimit, and the Aggregate Outstanding Exposure shall not exceed the
aggregate Commitments of the Lenders on such Business Day;
(iii) if the date on which such request is made (or the date as of
which such Letter of Credit is to be issued) is a Liquid Asset Coverage
Date, the Aggregate Outstanding Exposure as of such date (determined after
giving effect to the making of Advances on such date and the issuance of
such Letter of Credit as of such date) would not exceed the Adjusted Liquid
Asset Coverage Amount as of such date;
-50-
(iv) the aggregate amount of all Letter of Credit Liabilities under
Letters of Credit issued by any Issuing Bank shall not exceed at any time
the Letter of Credit Commitment of such Issuing Bank; and
(v) no Letter of Credit shall have an expiration date later than, or
shall permit the account party or the beneficiary to require the renewal
thereof to a date beyond, the date 30 days prior to the Commitment
Termination Date.
On the Restatement Date, all outstanding "Terra Letters of Credit" and "TNLP
Letters of Credit" under the Existing Credit Agreement (the "Existing Letters of
-------------------
Credit") shall automatically, without any action on the part of any Person, be
------
deemed to be Letters of Credit hereunder for all purposes of this Agreement. On
each day during the period commencing with the issuance by an Issuing Bank of
any Letter of Credit (or, in the case of any Existing Letter of Credit, during
the period commencing with the Restatement Date) and until such Letter of Credit
shall have been drawn in full or expired or been terminated, the Commitment of
each Lender shall be deemed to be utilized for all purposes of this Agreement in
an amount equal to such Lender's Pro Rata Share of the then undrawn amount of
such Letter of Credit.
(b) Request for Issuance.
--------------------
(i) Each Letter of Credit shall be issued upon notice, given not
later than 1:00 P.M. (New York City time) two Business Days prior to the
date of the proposed issuance of such Letter of Credit, by the Borrower to
the relevant Issuing Bank, which shall give to the Administrative Agent and
each Lender prompt notice thereof by telex or telecopier. Each such notice
of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
------------------
telex or telecopier, confirmed promptly in writing, specifying therein (A)
the requested date of such issuance (which shall be a Business Day), (B)
the Available Amount requested for such Letter of Credit, (C) the
expiration date of such Letter of Credit, (D) the account party or parties
for such Letter of Credit, (E) the name and address of the issuer and the
beneficiary of such Letter of Credit, (F) the form of such Letter of Credit
and (G) whether the date of such notice (or the proposed issuance date) is
a Liquid Asset Coverage Date (and, if so, specifying therein the Liquid
Asset Coverage Amount, the Adjusted Liquid Asset Coverage Amount and the
Aggregate Outstanding Exposure before giving effect to the proposed
issuance), together with a description of the nature of the transactions or
obligations proposed to be supported thereby. If the requested form of
such Letter of Credit is acceptable to such Issuing Bank in its discretion,
such Issuing Bank will, upon fulfillment of the applicable conditions set
forth in Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 9.02 or as otherwise agreed with the
Borrower in connection with such issuance.
(ii) Each Issuing Bank shall furnish (A) to the Administrative Agent
on the first Business Day of each week a written report summarizing the
issuance and expiration dates of Letters of Credit issued by such Issuing
Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank,
-51-
(B) to each Lender and to the Borrower on the first Business Day of each
month, a written report summarizing the issuance and expiration dates of
the Letters of Credit issued by such Issuing Bank during the preceding
month and drawings during such month under all Letters of Credit issued by
the Issuing Bank and (C) to the Administrative Agent and each Lender on the
first Business Day of each calendar quarter, a written report setting forth
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit issued by such Issuing Bank.
(c) Drawing and Reimbursement.
-------------------------
(i) The payment by an Issuing Bank of a draft drawn under any Letter
of Credit shall constitute for all purposes of this Agreement the making by
such Issuing Bank of an advance to the Borrower in the amount of such
payment, which the Borrower agrees to repay on demand and, if not paid on
demand, shall bear interest, from the date demanded to the date paid in
full (and which interest shall be payable on demand), (x) from and
including the date of demand to but not including the second Business Day
thereafter at the Base Rate in effect for each such day plus the Applicable
----
Margin in effect for each such day, and (y) from and including said second
Business Day thereafter at the Post-Default Rate. Without limiting the
obligations of the Borrower hereunder, upon demand by such Issuing Bank
through the Administrative Agent, each Lender shall make Advances in an
aggregate amount equal to the amount of such Lender's Pro Rata Share of
such advance by making available for the account of its Applicable Lending
Office to the Administrative Agent for the account of such Issuing Bank, by
deposit to the Administrative Agent's Account, in same day funds, an amount
equal to the sum of (A) its Pro Rata Share of the outstanding principal
amount of such advance plus (B) interest accrued and unpaid to and as of
----
such date on the outstanding principal amount of such advance.
(ii) Each Lender agrees to make such Advances on the Business Day on
which demand therefor is made by the relevant Issuing Bank through the
Administrative Agent (provided that notice of such demand is given not
--------
later than 12:00 Noon (New York City time) on such Business Day) or (if
notice of such demand is given after such time) the first Business Day next
succeeding such demand.
(iii) If and to the extent that any Lender shall not have so made the
amount of such Advance available to the Administrative Agent for account of
such Issuing Bank, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount together with interest thereon, for each
day from the date of demand by the relevant Issuing Bank until the date
such amount is paid to the Administrative Agent, at the Federal Funds Rate.
(iv) The Advances provided for in this Section 2.13 shall be made by
the Lenders irrespective of whether there has occurred and is continuing
any Default or Event of Default or of whether any other condition precedent
specified in Article III has not been
-52-
satisfied, and the obligation of each Lender to make such Advances is
absolute and unconditional.
(d) Increased Costs.
---------------
(i) If any change in any law or regulation or in the interpretation
thereof (to the extent any such change occurs after the date hereof) by any
court or administrative or governmental authority charged with the
administration thereof shall either (x) impose, modify or deem applicable
any reserve, special deposit or similar requirement against letters of
credit or guarantees issued by, or assets held by, or deposits in or for
the account of, any Issuing Bank or any Lender or (y) impose on any Issuing
Bank or any Lender any other condition regarding this Agreement or such
Issuing Bank or such Lender or any Letter of Credit, and the result of any
event referred to in the preceding clause (x) or (y) shall be to increase
the cost to such Issuing Bank or Lender of issuing or maintaining any
Letter of Credit or any commitment hereunder in respect of Letters of
Credit, then, upon demand by such Issuing Bank or such Lender, the Borrower
shall immediately pay to such Issuing Bank or such Lender, from time to
time as specified by such Issuing Bank or such Lender, additional amounts
that shall be sufficient to compensate such Issuing Bank or such Lender for
such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower by such Issuing Bank or such Lender shall
be conclusive and binding for all purposes, absent manifest error.
(ii) The Borrower shall not be obligated to pay any additional
amounts arising pursuant to this Section 2.13(d) that are attributable to
the Excluded Period with respect to such additional amounts; 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 obligation to pay such additional amounts hereunder shall not
apply to the additional amounts payable in respect of such Retroactive
Period.
(e) Obligations Absolute. The Obligations of the Borrower under this
--------------------
Agreement and any other agreement or instrument relating to any Letter of Credit
(as hereafter amended, supplemented or otherwise modified from time to time,
collectively, the "L/C Related Documents") shall, to the extent permitted by
---------------------
law, be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of such L/C Related Document under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of any one or more of such
other documents and agreements, including, but not limited to, the L/C
Related Documents;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document
-53-
or any other amendment or waiver of or any consent to departure from all or
any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by an Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of such Letter of Credit, except to the extent that such payment resulted
from such Issuing Bank's willful misconduct or gross negligence in
determining whether such draft or certificate complies on its face with the
terms of such Letter of Credit;
(vi) any exchange, release or nonperfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(f) NationsBank L/C's. As of the Restatement Date, the NationsBank
-----------------
L/C's shall be deemed to have been issued hereunder and shall be considered
Letters of Credit for all purposes hereunder.
Section 2.14. Replacement of Lenders.
----------------------
(a) Subject to clause (c) below, in the event that any Lender
requests compensation pursuant to Section 2.09(a), 2.09(b) or 2.13(d), 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
2.09(c) or 2.09(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, either:
(i) (x) designate an Eligible Assignee acceptable to the
Administrative Agent and each Issuing Bank (which acceptance will not be
unreasonably withheld) that is not an Affiliate of the Borrower (such
Eligible Assignee being herein called a "Replacement
-----------
-54-
Lender") to assume the Affected Lender's Commitment and other obligations
------
hereunder and 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 and
----
accrued but unpaid fees owing to the Affected Lender (and upon such
assumption, 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; or
(ii) (x) terminate the Commitment of the Affected Lender and (y) pay
to the Affected Lender the aggregate principal amount of the outstanding
Advances held by the Affected Lender plus all accrued but unpaid interest
----
on such Advances and accrued but unpaid fees owing to the Affected Lender
plus all amounts payable to the Affected Lender under Section 9.04(c) as a
----
result of such prepayment.
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 2.09, 2.11
and 9.04 with respect to events occurring or obligations arising before or as a
result of such replacement shall survive such exercise.
(b) If the Borrower exercises its rights under clause (a)(ii) above,
the Borrower may, not later than the date 60 days after such exercise, designate
an Eligible Assignee acceptable to the Administrative Agent and each Issuing
Bank (which acceptance will not be unreasonably withheld) that is not an
Affiliate of the Borrower (such Eligible Assignee being herein called a
"Substitute Lender") to assume Commitments hereunder and to make Advances
-----------------
hereunder in an amount equal to the respective Commitments and Advances of the
Affected Lender under each of the Facilities and, subject to (x) the execution
and delivery to the Administrative Agent by the Substitute Lender of
documentation satisfactory to the Administrative Agent, (y) the payment by the
Borrower to the Administrative Agent of the processing and recordation fee
specified in Section 9.07(a)(vi) with respect to such assignment, and (z)
compliance with Section 9.07(c), the Substitute Lender shall succeed to the
rights and obligations of the Affected Lender hereunder and under the other Loan
Documents. Upon the Substitute Lender so becoming a party hereto, the Borrower
shall borrow Advances from the Substitute Lender and/or prepay the principal of
the Advances of the other Lenders in such manner as will result in the
outstanding principal amount of the Advances being held by the Lenders according
to their respective Pro Rata Shares.
-55-
(c) The Borrower may not exercise its rights under this Section
2.14:
(i) with respect to any Affected Lender unless the Borrower
simultaneously exercises such rights with respect to all Affected Lenders,
(ii) if a Default or an Event of Default has occurred and is then
continuing, or
(iii) with respect to any exercise of rights under clause (b) above,
if, at the time of such exercise, the aggregate amount of the Commitments
that shall have been terminated pursuant to said clause (b) (including the
Commitments then proposed to be terminated) shall exceed 30% of the
aggregate amount of the Commitments in effect on the Restatement Date.
ARTICLE III
CONDITIONS OF
RESTATEMENT AND LENDING
Section 3.01. Conditions Precedent to Amendment and Restatement. 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 Company 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, each Lender and each Issuing Bank:
(i) for each 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
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 of such Obligor as
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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); and
(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) 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 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
(iii) legal opinions, in form and substance, and given by
counsel, satisfactory to the Administrative Agent, confirming that the
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.
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(e) The results of a recent search, by a Person satisfactory to the
Administrative Agent, of Uniform Commercial Code, judgment and tax lien
filings in each relevant jurisdiction where property of the Obligors is
located, and the results of such search shall reveal no Liens on any of the
property of the Obligors except for those permitted under Section 5.02(a)
or Liens to be discharged on or prior to the Effective Date pursuant to
documentation satisfactory to the Administrative Agent.
(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 as to such other
matters as the Agent, any Issuing Bank or any Lender through the 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-2.
(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 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 "Advances"
outstanding under and as defined in the Existing Credit Agreement, all
accrued commitment fees, all accrued letter of credit fees and all other
expenses payable thereunder.
(k) Evidence of the existence of all insurance required to be
maintained by Terra hereunder.
(l) Evidence that, since December 31, 1998, there has been no
Material Adverse Change.
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(m) 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.
(n) The existing Terra Canada Credit Facility shall have been amended
and restated pursuant to the Amended and Restated Credit Agreement dated
the date hereof among Terra Canada, the lenders parties thereto and
Citibank, as Administrative Agent, shall have been executed and delivered
by each of the parties thereto to the Administrative Agent.
(o) 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.
(p) 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 compliance with the BMLP Partnership
Agreement, the BMLP Support and Option Agreement and related documents).
(q) 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.
(r) 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 Exhibit
B-5, 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
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(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.
(s) A Liquid Asset Coverage Certificate as of the Restatement Date.
(t) Such other approvals, opinions and documents relating to this
Agreement and the transactions contemplated hereby as any Lender or any
Issuing Bank may, through the Administrative Agent, reasonably request.
Section 3.02. Conditions Precedent to Each Borrowing and Issuance.
---------------------------------------------------
The obligation of each Lender to make an Advance on the occasion of each
Borrowing (excluding, however, the making of any Advance pursuant to Section
2.13), and the right of the Borrower to request the issuance of Letters of
Credit, shall be subject to the further conditions precedent that on the date of
such Borrowing or issuance the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, 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);
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default; and
(iii) if the date of such Borrowing or issuance is a Liquid Asset
Coverage Date, the Adjusted Liquid Asset Coverage Amount as of such date is
not less than the Aggregate Outstanding Exposure as of such date
(determined after giving effect to the making of such Advances or the
issuance of such Letter of Credit).
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.
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Section 3.04. Consent to Sale. 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 Consents. Each Obligor hereby acknowledges that
--------------
each of the Terra Capital Security Documents continues unchanged and remains in
full force and effect to secure (as "Secured Obligations" as defined therein)
the obligations of the Obligors hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Company. The
---------------------------------------------
Company 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 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
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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 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.
(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 Section 3.01(d)) or (iv) the exercise by the Collateral
Agent, the Administrative Agent, any Lender or Issuing Bank 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.
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(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. 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 to the
Administrative Agent, any Issuing Bank 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, any Issuing Bank
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 December 31, 1997 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
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(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 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.
(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
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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.
(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 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.
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(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,
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 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 issuance of any Letters of Credit, 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 Company (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 Commitment Termination Date is
scheduled to occur.
(z) 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)
-----------------
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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, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, 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 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
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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:
(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, any Issuing Bank 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.
-68-
(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.
(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.
-69-
(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;
(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 or Issuing Bank 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 or Issuing Bank 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 or Issuing Bank through
the
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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 and (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), the Company and its Subsidiaries 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 a Foreign Subsidiary and any member of the
Terra Canada Group) shall form or acquire any new Subsidiary, the
Company 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 Subsidiary Pledge
and Security Agreement, 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).
(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
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(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
(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,
-72-
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.
(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.
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, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, 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 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 right to receive
income, excluding from the operation of the foregoing restrictions the
---------
following:
(i) Liens created by the Loan Documents;
(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;
-73-
(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) 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
--------
-74-
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;
(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 Uniform Commercial Code financing
statements 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
principal amount or change in any direct or contingent obligor)
of the Debt secured thereby;
(xvi) Liens on property of Terra Canada to secure the Terra
Canada Credit Facility;
(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
-75-
(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;
(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 Commitment Termination Date),
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;
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(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 Terra Canada under the Terra Canada Credit
Facility in an aggregate principal amount not at any time
exceeding $118,000,000, 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:
--------
(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)
(pound)15,000,000 minus (y) the aggregate amount of payments
-----
made by Terra U.K. under all such Guarantees during such
fiscal year;
-77-
(xvii) unsecured Debt of Terra U.K. in an aggregate
principal amount not at any time exceeding (pound)2,000,000;
(xviii) unsecured Debt of Terra Canada in an aggregate
principal amount not at any time exceeding $2,000,000 (or its
equivalent in Canadian Dollars at the time of borrowing thereof);
(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
(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:
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(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
outstanding principal amount of the loans (together with accrued
interest and fees thereon) under the Terra Canada Credit Facility;
(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
(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 exchanges rates or natural
gas prices and identified on Schedule 5.02(c);
(2) the Ammonium Nitrate Hedging Agreement; and
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(3) 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 with or into or consolidate with or into 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.
(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;
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(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, (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 (C) the Net Available
Proceeds of such Disposition are applied in accordance with and to the
extent required by Section 2.05(b), 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;
(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;
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(viii) dividends with respect to the capital stock of Terra U.K.
paid to Terra Canada for any fiscal year of Terra in an aggregate
amount not exceeding the aggregate amount required to be paid by Terra
Canada 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 sales, leases, transfers and other dispositions
of property by 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 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;
(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
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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);
(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 Terra 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
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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.
(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, Etc. 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
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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) the Terra Canada Credit Facility may restrict such actions by
Terra Canada 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.
(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.
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(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.
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, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder:
(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 and each Issuing Bank, 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 Existing Credit
Agreement or Section 5.03(l), (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used
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by Terra in determining compliance with the covenants contained in Section
5.04 and (iii) a Liquid Asset Coverage Certificate as at the last day of
such accounting period.
(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 and each
Issuing Bank, 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 or the Issuing Banks 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 financial projections and budget most recently delivered
pursuant to Section 5.03(l) of the Existing Credit Agreement or Section
5.03(l).
(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.
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(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 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, each Issuing Bank and each
Lender copies of all registration statements and regular periodic reports,
if any, that Terra, the Company or TNCLP shall
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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, each Issuing Bank 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 and each Issuing Bank, 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 Commitment Termination Date is scheduled to
occur, in each case in form and detail similar to the financial projections
and budget delivered under Section 5.03(l) of the Existing 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, any Issuing Bank or any Lender may from time to time
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:
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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:
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Each
Rolling Period
Ending In Ratio
-------------- -----
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
(c) Net Worth. Maintain the Net Worth of Terra on each day of not less
---------
than (i) $550,000,000 plus (ii) the aggregate increase in the amount of
----
capital stock and additional paid-in capital of Terra subsequent to
December 31, 1998 plus (iii) 50% of net income of Terra and its
----
Subsidiaries on a Consolidated basis (if positive) for each fiscal year of
Terra ending on or after December 31, 1999.
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 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
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(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 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 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, trustee, 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
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(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, 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) 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; or
(l) 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
(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 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
(n) 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
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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
(o) 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
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances and of each Issuing Bank
to issue Letters of Credit to be terminated, whereupon the same shall forthwith
terminate (and this clause (i) shall also be applicable if there shall occur a
Purchase Event), and (ii) 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, (x)
the obligation of each Lender to make Advances and of any Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) 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.
Section 6.02. Actions in Respect of the Letters of Credit Upon Default. If
--------------------------------------------------------
any Event of Default shall have occurred and be continuing, the Administrative
Agent may, irrespective of whether it is taking any of the actions described in
Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Administrative Agent on behalf of the
Lenders in same day funds at the Administrative Agent's Office, for deposit in
the relevant L/C Cash Collateral Account, an amount equal to the aggregate
Available Amount of all Letters of Credit then outstanding, which funds shall be
retained by the Administrative Agent in the relevant L/C Collateral Account as
collateral security for the Letter of Credit Liabilities until such time as the
Letters of Credit shall have been terminated and all of such Letter of Credit
Liabilities paid in full.
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If at any time the Administrative Agent determines that any funds held
in the relevant L/C Cash Collateral Account are subject to any right or claim of
any Person other than the Administrative Agent and the Lenders or that the total
amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrower will, forthwith upon demand by the Administrative Agent,
pay to the Administrative Agent, as additional funds to be deposited and held in
the relevant L/C Cash Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then
----
held in such L/C Cash Collateral Account that the Administrative Agent
determines to be free and clear of any such right and claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action. Each Lender and each Issuing
------------------------
Bank 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
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 Issuing Bank and
each Lender prompt notice of each notice given to it by the Borrower or Terra
pursuant to the terms of this Agreement. No party designated on the signature
pages hereof as a "Syndication Agent" or a "Documentation Agent" shall have any
liability or responsibility whatsoever hereunder in such capacity.
Each Lender and Issuing Bank:
(1) hereby authorizes the Administrative Agent to execute and deliver
the documents referred to in clauses (d) and (r) of Section 3.01, and each
Lender and Issuing Bank agrees that it is bound by the Security Documents
as if such Lender or Issuing Bank, as the case may be, 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 and Issuing Bank agrees that it is bound by the
Loan Purchase Agreement as if such Lender or Issuing Bank, as the case may
be, were a signatory thereto; and
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(3) hereby authorizes the Collateral Agent to execute and deliver the
documents referred to in clauses (d) and (r) 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 Issuing Bank or 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 Issuing Bank or 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 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 its
-----------------------
Commitment, 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 or
any Issuing Bank.
Section 7.04. Lender Credit Decision. Each Lender and each Issuing
----------------------
Bank acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Issuing Bank 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 and each Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative
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Agent, any Issuing Bank 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 Note then held by each of them
(or if no Advances are at the time outstanding, ratably according to the amounts
of their Commitments), 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
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 satisfaction by the Lenders and the
Issuing Banks 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 and the Issuing Banks 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
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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, any
Lender or any Issuing Bank 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, any Lender or any Issuing Bank 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 to the Issuing
Banks, 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
Issuing Banks and 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 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, each Issuing Bank 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 Note
held by each Lender of, the Company and all other amounts from time to time
owing to the Lenders, each Issuing Bank or the Administrative Agent by the
Company under this
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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 Company 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 Company 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:
(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, any Issuing Bank or any Lender as security for any of
the Guaranteed Obligations shall fail to be perfected.
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The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent, any Issuing Bank 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, each Issuing
Bank and each Lender on demand for all reasonable costs and expenses (including,
without limitation, fees of counsel) incurred by the Administrative Agent, such
Issuing Bank 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 or Issuing Bank would be subject to an extended
preference period under Section 547 of the Bankruptcy Code, 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, each
Issuing Bank and the Administrative 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 and the Issuing Banks, 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,
any Issuing Bank or the Administrative Agent,
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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 Subsidiary 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 (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.
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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, any Issuing Bank, 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:
(1) waive any of the conditions specified in Section 3.01;
(2) change the percentage of the Commitments or 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
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(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) increase the Commitment of such Lender or 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 (x)
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, and (y) signed by each Issuing Bank in addition to the Lenders
required to take such action, amend Section 2.07, 2.13 or 3.02, increase
the Letter of Credit Sublimit or otherwise affect the rights or obligations
of any Issuing Bank under this Agreement.
(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 writing by Lenders owed or
holding in the aggregate at least 75% of the sum of the then aggregate unpaid
principal amount of the Advances, the then aggregate Unused Commitments and the
aggregate Available Amount of all Letters of Credit (for which purposes the
Available Amount of each Letter of Credit shall be considered to be owed to the
Lenders according to their respective Pro Rata Shares under which such Letter of
Credit has been issued); 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
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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 any Issuing Bank, at its address beneath its signature
hereto;
(d) 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;
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, any Issuing Bank 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.
Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Administrative Agent, any Issuing Bank 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, any Issuing Bank or
any Lender to proceed to judgment prior to the entry of judgment in any such
action or proceeding commenced by any Obligor.
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Section 9.04. Costs, Expenses and Indemnification.
-----------------------------------
(a) The Borrower agrees to pay on demand (i) all costs and expenses
of the Administrative Agent, the Issuing Banks 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 counsel to Citibank, 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, the Issuing Banks 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, each Issuing Bank and each Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Issuing Bank 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 Covered Transactions or the actual or alleged presence of
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
Covered Transactions 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
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assert any claim against the Administrative Agent, any Issuing Bank, 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 Covered Transactions 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, 2.08(b)(i) or 2.09(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 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. Governing Law; Submission to Jurisdiction. This
-----------------------------------------
Agreement and the Notes shall be governed by, and construed in accordance with,
the law of the State of New
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York. Each Obligor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to the laying of
the venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a 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 its Commitments, the
Advances owing to it and the Note 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 Commitment 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 Commitment 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, the Administrative Agent and each
Issuing Bank, 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,
Commitment or Note hereunder shall be made in such manner so that the
same portion of its Advances, Commitment and Note hereunder 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 the Note
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.
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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 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 the Commitment
of, 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
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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 the Note 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
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 a new Note to the order of such assignee in an amount equal to the portion
of the Advances assumed by it pursuant to such Assignment and Acceptance and, if
the assigning Lender has retained a portion of its Advances, a new Note to the
order of the assigning Lender in an amount equal to the portion so retained by
it hereunder. Such new Note shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note, 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 its Commitment or the Advances owing to it and
the Note held by it); provided that (i) such Lender's obligations under this
--------
Agreement (including, without limitation, its Commitment) 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 such Note for all purposes of this Agreement, (iv) the Obligors,
the Administrative Agent, the Issuing Banks 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 Issuing Bank may (subject to the prior written consent of
Terra, such consent not to be unreasonably withheld) assign all or any portion
of its rights and obligations under this Agreement to one or more successor
Issuing Banks that is 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 and, upon the acceptance of such assignment, the respective
successor Issuing Banks shall succeed to such portion of such rights and
obligations and such assigning
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Issuing Bank shall be discharged from its duties and obligations under this
Agreement to such extent, including, without limitation, such portion of its
Letter of Credit Commitment.
(g) Any Issuing Bank and 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 Issuing Bank or Lender.
(h) 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 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.
(i) 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 Note held by it to any trustee for
the benefit of the holders of such Lender's securities.
(j) 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 or Issuing Bank shall
assign or participate to Terra or any of its Subsidiaries or Affiliates, any
interest in any Commitment, Advance or other amount owing hereunder without the
prior consent of each Lender; provided that the Lenders and the Issuing Banks
--------
may assign all of their interests in the Commitments, 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. No Liability of the Issuing Banks. The Borrower assumes
---------------------------------
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
relevant Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such
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Issuing Bank against presentation of documents that do not comply with the terms
of a Letter of Credit, including failure of any documents to bear any reference
or adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that the Borrower shall have a claim against such Issuing Bank, and such
------
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but
not consequential, damages suffered by the Borrower that the Borrower proves
were caused by (i) such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) such Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 9.10. Confidentiality. Neither the Administrative Agent, any
---------------
Issuing Bank 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, such Issuing Bank'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 their Subsidiaries and other
Persons who, from time to time, inquire as to the creditworthiness of the
Borrower.
Section 9.11. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE
--------------------
ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING BANKS 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, THE LETTERS OF CREDIT OR THE ACTIONS OF
THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY ISSUING BANK IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 9.12. Survival. The obligations of the Borrower under
--------
Sections 2.09, 2.11 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 and the termination of the Commitments. In addition,
each representation and warranty made, or deemed to be made by a notice of any
extension of credit (whether by means of an Advance or a Letter of Credit),
herein or pursuant hereto shall survive the making of such representation and
warranty, and no Lender or Issuing Bank shall be deemed to have waived, by
reason of making any extension of credit hereunder (whether by means of an
Advance or a Letter of Credit), 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, such Issuing Bank or the
Administrative Agent
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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.
Section 9.13. 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 9.14. 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, the Issuing Banks and the Administrative
Agent.
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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 BORROWER
------------
TERRA CAPITAL, 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 NITROGEN CORPORATION
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Title: Vice President
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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 INTERNATIONAL, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
TERRA NITROGEN, LIMITED PARTNERSHIP
By: Terra Nitrogen Corporation,
its General Partner
By /s/Xxxxxx Xxxxxxxxx
-----------------------------
Title: Vice President
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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
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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
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U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK
By /s/ Xxxx X. Xxxxxxx
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Title: Vice President
THE FUJI BANK, LIMITED
By /s/ Xxxxx X. Xxxxxxxx
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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
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Title: Vice President
By /s/ Xxx Xxxxxxxx
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Title: Senior Vice President
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XXXXXX TRUST & SAVINGS BANK
By /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President
SUNTRUST BANK, ATLANTA
By /s/ Xxxxxx Xxxxxxxx
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Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By /s/ Xxxxxxxxx X. Xxxxxx
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Title: First Vice President
Managing Director
By /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President, Manager
BANQUE NATIONALE DE PARIS
By /s/ Xxxxxx Xxxxxx du Xxxxxx
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Title: Executive Vice President
and General Manager
By Not Required
--------------------------------------
Title:
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THE BANK OF NEW YORK
By /s/ Xxxx-Xxxx Xxxxxxx
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Title: Vice President
NORWEST BANK IOWA, NATIONAL
ASSOCIATION
By /s/ Xxxx Xxxxxx
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Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
By /s/ Xxxx X. Xxxxxxxxxx
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Title: Vice President
By /s/ Xxx Xxxxx
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Title: Senior Credit Officer
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THE SUMITOMO BANK, LIMITED
By /s/ Xxxx X. Xxxxxx
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Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Xxxxxx X. Xxxxx
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Title: First Vice President
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THE ISSUING BANKS
-----------------
CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
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Title: Attorney-in-Fact
NATIONSBANK, N.A.
By /s/ Xxx X. Xxxxxxxxxxxx
--------------------------------------
Title: Managing Director
THE SYNDICATION AGENT
---------------------
NATIONSBANK, N.A.
By /s/ Xxx X. Xxxxxxxxxxxx
--------------------------------------
Title: Managing Director
THE DOCUMENTATION AGENT
-----------------------
THE CHASE MANHATTAN BANK
By /s/ Xxxx X. Xxxxxxx
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Title: Vice President
ANNEX A
Applicable Commitment Fee Rate; Applicable Margin
-------------------------------------------------
"Applicable Commitment Fee Rate" means 0.875% per annum; provided
------------------------------ --------
that:
(1) The Applicable Commitment Fee Rate shall, from the Restatement
Date until the Quarterly Date falling in September, 1999, be 0.625% per
annum.
(2) Subject to clause (1) above, if for any Rolling Period ending on
or after 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 Commitment Fee Rate" shall be changed
to the percentage per annum 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:
Range of Debt Applicable Commitment
to Cash Flow Ratio Fee Rate
------------------ --------------
Greater than 8.00 to 1 0.875%
Less than or equal to
8.00 to 1 and greater
than 7.50 to 1 0.750%
Less than or equal to
7.50 to 1 and greater
than 7.00 to 1 0.625%
Less than or equal to
7.00 to 1 0.500%
"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.
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(2) Subject to clause (1) above, if for any Rolling Period ending on
or after 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%
Less than or equal to
6.00 to 1 1.75% 3.25%
SCHEDULE 2.01
Commitments
-----------
Letter of Credit
Lender Commitment Commitment
------ ---------- ----------
Citibank, N.A. $7,924,715.55 $20,000,000.00
Bank of America National Trust and $4,841,946.43 $ 0
Savings Association
The Bank of Nova Scotia $4,841,946.42 $ 0
U.S. Bank National Association $4,630,178.57 $ 0
NationsBank, N.A. $4,551,630.47 $ 4,644,132.00
The Chase Manhattan Bank $4,551,630.46 $ 0
The Fuji Bank, Limited $3,305,921.12 $ 0
Credit Agricole Indosuez $3,186,141.27 $ 0
Credit Lyonnais Chicago Branch $3,186,141.27 $ 0
Xxxxxxxx Xxxx XX, Xxx Xxxx and $3,186,141.27 $ 0
Grand Cayman Branches
Xxxxxx Trust & Savings Bank $3,186,141.27 $ 0
Suntrust Bank, Atlanta $3,186,141.27 $ 0
Banque Nationale de Paris $3,173,684.30 $ 0
Xxx Xxxx xx Xxx Xxxx $2,275,815.14 $ 0
Cooperatieve Centrale Raiffeisen- $1,820,652.26 $ 0
Boerenleenbank, B.A., "Rabobank
Nederland", New York Branch
Norwest Bank Iowa, National Association $1,820,652.26 $ 0
The Sumitomo Bank, Limited $1,820,652.26 $ 0
The First National Bank of Chicago $1,322,368.41 $ 0
EXHIBIT H
[Form of Liquid Asset Coverage Certificate]
LIQUID ASSET COVERAGE CERTIFICATE
Quarterly accounting period ended ____________, ____
Reference is made to the Amended and Restated Credit Agreement dated
as of June 25, 1999 (as modified and supplemented and in effect from time to
time, the "Credit Agreement"), between Terra Capital Inc. (the "Company"),
---------------- -------
certain Subsidiary Guarantors therein, the lenders party thereto and Citibank,
N.A, as Administrative Agent. Terms defined in the Credit Agreement are used
herein as defined therein.
Pursuant to Section 5.03(b) of the Credit Agreement, the undersigned,
the Senior Financial Officer, hereby certifies that, to the best of [his/her]
knowledge, attached hereto as Annex 1 is a true and accurate calculation of the
Liquid Asset Coverage Amount as at the end of the quarterly accounting period
ended ____________, ____ determined in accordance with the requirements of the
Credit Agreement.
All inventory covered by this Certificate has been produced in
compliance with all applicable laws, including, without limitation, the minimum
wage and overtime requirements of the Fair Labor Standards Act of 1938, as
amended.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
duly executed as of the __________ day of ____________, ____.
____________________________
Title:
Annex 1
TERRA CAPITAL INC.
Liquid Asset Coverage Certificate
(000's omitted)
================================================================================
Receivables -- beginning balance period ended
____________, ____ ______
Receivables -- ending balance period ended
____________, ____ ______
Minus: ineligible Receivables at period end (determined without duplication):
-----
Receivables not payable in Dollars
or convertible currency ______
Total ineligible Receivables ______
Total Eligible Receivables ______
================================================================================
Beginning period inventory balance
____________, ____ ______
Ending period inventory balance
____________, ____ ______
Minus: ineligible inventory at period end (determined without duplication):
-----
Inventory not located in U.S., Canada or U.K. ______
Total Eligible Inventory ______
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================================================================================
Liquid Asset Coverage Amount:
Eligible Receivables ______
Plus: Eligible Inventory ______
----
Subtotal ______
Liquid Asset Coverage Amount: ______
================================================================================
Loan Balance Period begin
____________, ____ ______
Loan Balance Period end
____________, ____ ______
Letter of Credit Liabilities ______
Total outstandings ______
================================================================================
Availability (overadvance) ______
================================================================================
