$165,625,000
CREDIT AGREEMENT
Dated as of April 7, 2000
among
Terra Capital, Inc.
Terra Nitrogen (U.K.) Limited
Terra Nitrogen, Limited Partnership
as Borrowers
Terra Industries Inc.
as a Guarantor
and
The Lenders and Issuers Party Hereto
and
Citibank, N.A.
as Administrative Agent
Bankers Trust Company
as Documentation Agent
Xxxxxxx Xxxxx Xxxxxx Inc.
as Lead Arranger and Book Runner
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
TABLE OF CONTENTS
Page
----
Article I Definitions, Interpretation And Accounting Terms...............1
Section 1.1. Defined Terms..................................................1
Section 1.2. Computation of Time Periods...................................33
Section 1.3. Accounting Terms and Principles...............................33
Section 1.4. Certain Terms.................................................34
Article II The Facilities................................................34
Section 2.1. The Commitments...............................................34
Section 2.2. Borrowing Procedures..........................................35
Section 2.3. Swing Loans...................................................36
Section 2.4. Letters of Credit.............................................38
Section 2.5. Reduction and Termination of the Revolving Credit Commitments.43
Section 2.6. Repayment of Loans............................................43
Section 2.7. Evidence of Debt, Obligations of Borrowers....................43
Section 2.8. Optional Prepayments..........................................44
Section 2.9. Mandatory Prepayments.........................................45
Section 2.10. Interest......................................................46
Section 2.11. Conversion/Continuation Option................................47
Section 2.12. Fees..........................................................48
Section 2.13. Payments and Computations; Protective Advances................48
Section 2.14. Special Provisions Governing Eurodollar Rate Loans............50
Section 2.15. Capital Adequacy..............................................52
Section 2.16. Taxes.........................................................52
Section 2.17. Substitution of Lenders.......................................54
Article III. Conditions To Loans And Letters Of Credit.....................55
Section 3.1. Conditions Precedent to Initial Loans and Letters of Credit...55
Section 3.2. Conditions Precedent to Each Loan and Letter of Credit........58
Article IV. Representations and Warranties................................59
Section 4.1. Corporate Existence; Compliance with Law......................59
Section 4.2. Corporate Power; Authorization; Enforceable Obligations.......60
Section 4.3. Ownership of Subsidiaries.....................................61
Section 4.4. Financial Statements..........................................61
Section 4.5. Material Adverse Change.......................................62
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TABLE OF CONTENTS
(continued)
Section 4.6. Solvency......................................................62
Section 4.7. Litigation....................................................62
Section 4.8. Taxes.........................................................62
Section 4.9. Full Disclosure...............................................63
Section 4.10. Margin Regulations............................................63
Section 4.11. No Burdensome Restrictions; No Defaults.......................63
Section 4.12. Investment Company Act; Public Utility Holding Company Act....63
Section 4.13. Use of Proceeds...............................................64
Section 4.14. Insurance.....................................................64
Section 4.15. Labor Matters.................................................64
Section 4.16. ERISA.........................................................64
Section 4.17. Environmental Matters.........................................65
Section 4.18. Intellectual Property.........................................66
Section 4.19. Title; Real Property..........................................66
Section 4.20. Year 2000 Compliance..........................................68
Section 4.21. Pari Passu Obligations........................................68
Section 4.22. No Immunity...................................................68
Section 4.23. Canadian and English Requirements.............................68
Section 4.24. Level of Indebtedness.........................................68
Article V. Financial Covenants...........................................69
Section 5.1. Minimum Cash Flow.............................................69
Section 5.2. Capital Expenditures, Common Unit Purchases and Joint
Venture Investments...........................................70
Article VI. Reporting Covenants...........................................70
Section 6.1. Financial Statements..........................................70
Section 6.2. Default Notices...............................................72
Section 6.3. Litigation....................................................72
Section 6.4. Asset Sales...................................................72
Section 6.5. SEC Filings; Press Releases...................................72
Section 6.6. Labor Relations...............................................73
Section 6.7. Tax Returns...................................................73
Section 6.8. Insurance.....................................................73
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TABLE OF CONTENTS
(continued)
Section 6.9. ERISA Matters.................................................73
Section 6.10. Environmental Matters.........................................73
Section 6.11. Borrowing Base Determination and Fixed Asset Appraisals.......74
Section 6.12. Other Information.............................................75
Section 6.13. Material Documents............................................75
Article VII Affirmative Covenants.........................................75
Section 7.1. Preservation of Corporate Existence, Etc......................75
Section 7.2. Compliance with Laws, Etc.....................................76
Section 7.3. Conduct of Business...........................................76
Section 7.4. Payment of Taxes, Etc.........................................76
Section 7.5. Maintenance of Insurance......................................76
Section 7.6. Access........................................................76
Section 7.7. Keeping of Books..............................................77
Section 7.8. Maintenance of Properties, Etc................................77
Section 7.9. Application of Proceeds.......................................77
Section 7.10. Environmental.................................................77
Section 7.11. Additional Collateral and Guaranties; Further Assurances......78
Section 7.12. Cash Collateral Accounts and Cash Management System...........79
Section 7.13. Real Estate...................................................82
Section 7.14. Hedging Contracts.............................................82
Article VIII Negative Covenants............................................83
Section 8.1. Indebtedness..................................................83
Section 8.2. Liens, Etc....................................................84
Section 8.3. Investments...................................................85
Section 8.4. Sale of Assets................................................86
Section 8.5. Restricted Payments...........................................87
Section 8.6. Restriction on Fundamental Changes............................88
Section 8.7. Change in Nature of Business..................................88
Section 8.8. Transactions with Affiliates..................................89
Section 8.9. Restrictions on Subsidiary Distributions; No New Negative
Pledge........................................................89
Section 8.10. Modification of Constituent Documents.........................89
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TABLE OF CONTENTS
(continued)
Section 8.11. Modification of Material Documents............................89
Section 8.12. Subordinated Debt.............................................90
Section 8.13. Accounting Changes; Fiscal Year...............................90
Section 8.14. Margin Regulations............................................90
Section 8.15. Operating Leases; Sale/Leasebacks.............................90
Section 8.16. Cancellation of Indebtedness Owed.............................90
Section 8.17. No Speculative Transactions...................................90
Section 8.18. Compliance with ERISA and Foreign Plans.......................91
Section 8.19. Environmental.................................................91
Section 8.20. Payments to Minority Interests................................91
Article IX Events of Default.............................................91
Section 9.1. Events of Default.............................................91
Section 9.2. Remedies......................................................93
Section 9.3. Actions in Respect of Letters of Credit.......................94
Section 9.4. Rescission....................................................94
Article X The Administrative Agent; The Agents..........................95
Section 10.1. Authorization and Action......................................95
Section 10.2. Administrative Agent's Reliance, Etc..........................95
Section 10.3. The Administrative Agent Individually.........................96
Section 10.4. Lender Credit Decision........................................96
Section 10.5. Indemnification...............................................96
Section 10.6. Successor and Co-Administrative Agents........................97
Section 10.7. Concerning the Collateral and the Collateral Documents........97
Section 10.8. Collateral Matters Relating to Related Obligations............99
Section 10.9. Other Agents..................................................99
Article XI Miscellaneous................................................100
Section 11.1. Amendments, Waivers, Etc.....................................100
Section 11.2. Assignments and Participations...............................102
Section 11.3. Costs and Expenses...........................................104
Section 11.4. Indemnities..................................................105
Section 11.5. Limitation of Liability......................................106
Section 11.6. Right of Set-off.............................................106
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TABLE OF CONTENTS
(continued)
Section 11.7. Sharing of Payments, Etc....................................107
Section 11.8. Notices, Etc................................................107
Section 11.9. No Waiver; Remedies.........................................108
Section 11.10. Binding Effect..............................................109
Section 11.11. Governing Law...............................................109
Section 11.12. Submission to Jurisdiction; Service of Process..............109
Section 11.13. Waiver of Jury Trial........................................110
Section 11.14. No Immunity.................................................110
Section 11.15. Judgment Currency...........................................110
Section 11.16. Marshaling; Payments Set Aside..............................110
Section 11.17. Section Titles..............................................110
Section 11.18. Execution in Counterparts...................................110
Section 11.19. Entire Agreement............................................110
Section 11.20. Confidentiality.............................................110
Section 11.21. Refund of Tax Credits.......................................111
Schedules
Schedule I - Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule III - Projections
Schedule 2.4(k) - Letters of Credit
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.4 - Pro Forma Balance Sheet
Schedule 4.7 - Litigation
Schedule 4.8 - Taxes
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 7.12 - Accounts
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
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TABLE OF CONTENTS
(continued)
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Letter of Credit Request
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Forms of Opinions of Counsel for the Loan Parties
Exhibit H - Forms of Guaranties
Exhibit I - Forms of Pledge and Security Agreements
Exhibit J - Form of Terra Canada Junior General Security Agreement
Exhibit K - Form of Loan Purchase Agreement
Exhibit L - Form of Intercreditor Agreement
Exhibit M - Form of UK Debenture
Exhibit N - Forms of UK Assignment and Subordination Agreements
vi
Credit Agreement, dated as of April 7, 2000, among Terra Capital,
Inc., Delaware corporation ("Terra Capital"), Terra Nitrogen (U.K.), Limited, a
company incorporated in England and Wales ("Terra UK") and Terra Nitrogen,
Limited Partnership, a Delaware limited partnership ("TNLP") (Terra Capital,
Terra UK and TNLP each a "Borrower" and, collectively, the "Borrowers"), Terra
Industries Inc., a Maryland corporation ("Terra Industries"), the Lenders (as
defined below), the Issuers (as defined below) and Citibank, N.A. ("Citibank"),
as agent for the Lenders and the Issuers (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
Whereas, the Borrowers have requested that the Lenders and Issuers
make available for the purposes specified in this Agreement a revolving credit
and letter of credit facility;
Whereas, the Lenders and Issuers are willing to make available to the
Borrowers such revolving credit and letter of credit facility upon the terms and
subject to the conditions set forth herein; and
Whereas, on the Closing Date (as defined below) Terra International
(Canada) Inc., Citibank and certain lenders shall have entered into an amendment
and restatement of the Terra Canada Credit Agreement (as defined below);
Now, Therefore, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
Definitions, Interpretation And Accounting Terms
Section 1.1. Defined Terms. As used in this Agreement, the following terms
-------------
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Account" means any "account," as such term is defined in Section 9-
106 of the New York UCC, now owned or hereafter acquired by any Loan Party.
"Account Debtor" means any "account debtor," as such term is defined
in Section 9-105(1)(a) of the New York UCC.
"Account Triggering Event" means (a) with respect to Terra Canada, the
occurrence of a default (as defined in, and relating to the matters referred to
in Sections 9.1(f) or (g) of, the Terra Canada Credit Agreement), an event of
default (as defined in the Terra Canada Credit Agreement), or a Liquidity Event
of Failure and (b) with respect to Terra UK, the occurrence of a Default
(relating to the matters referred to in sections 9.1(f) or (g)), an Event of
Default, a Liquidity Event of Failure or any of the events specified in Clause
5.3 of the Debenture.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Advance Rate" means, at any time, (i) up to 85% in the case of
Eligible Receivables, (ii) up to the Seasonal Eligible Inventory Rate in the
case of Eligible Non-Spare Parts Inventory, and (iii) up to 10% in the case of
Eligible Spare Parts Inventory, in each case as such rates may be increased or
decreased from time to time with respect to any class of Eligible Receivables,
Eligible Non-Spare Parts Inventory or Eligible Spare Parts Inventory by the
Administrative Agent in its sole discretion, with any change in such rates to be
effective two (2) Business Days after written notice thereof from the
Administrative Agent to the Borrower; provided, however, that the Administrative
Agent shall not increase such rates above the rates set forth above as of the
Closing Date without the consent of the Lenders.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person, each officer, director, general partner or joint-venturer of
such Person, and each Person who is the beneficial owner of 10% or more of any
class of Voting Stock of such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Credit Agreement.
"Ammonium Nitrate Hedging Agreement" means an agreement dated December
31, 1997 between ICI Chemicals and Polymers Limited and Terra Canada pursuant to
which Terra Canada agrees to pay certain amounts to ICI Chemicals and Polymers
Limited by reference to ammonium nitrate prices.
"Anglo American" means Anglo American plc, a company incorporated in
England and Wales with company number 03564138.
"Anglo American Guaranty" means a guaranty and re-assignment agreement
dated on or about the date of this Agreement and executed by Anglo American in
favor of the Guaranteed Fixed Asset Lender.
"Anticipated Corporate Reorganization Transactions" means the
dissolution of Beaumont Methanol, substantially in accordance with the
reorganization structure set forth in Part II of Schedule 4.3, provided,
however, that 100% of the assets thereof shall continue to be beneficially owned
(directly or indirectly) by Terra Capital.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) with respect to the Term Loans
maintained as (A) Base Rate Loans, a rate equal to 3.00% per annum and (B)
Eurodollar Rate Loans, a rate equal to 4.00% per annum and (b) (i) during the
period commencing on the Closing Date and ending on the first anniversary of the
Closing Date with respect to the Revolving Loans maintained as (A) Base Rate
Loans, a rate equal to 1.75% per annum and (B) Eurodollar Rate Loans, a rate
equal to 2.75% per annum and (ii) thereafter in respect of Revolving Loans, as
of any date of determination, a per annum rate equal to the rate set forth below
opposite the applicable type of Loan and the then applicable Leverage Ratio
(determined for the twelve-month
2
period ending on the last day of the most recent Fiscal Quarter or Fiscal Year,
as applicable, for which Financial Statements have been delivered pursuant to
Section 6.1) set forth below:
Revolving Loans
-------------------------
Base Rate Eurodollar
Leverage Ratio Loans Rate Loans
---------------------------------------------------------
Greater than 5.0 to 1 1.75% 2.75%
---------------------------------------------------------
Less than or equal to 5.0 to
1 and greater than 4.0 to 1 1.50% 2.50%
---------------------------------------------------------
Less than or equal to 4.0 to 1 1.25% 2.25%
---------------------------------------------------------
Subsequent changes in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective as to all Revolving Loans one Business Day
after delivery by the Borrowers to the Administrative Agent of new consolidated
financial statements pursuant to Section 6.1(b) for each of the first three
Fiscal Quarters of each Fiscal Year and Section 6.1(c) for each Fiscal Year.
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Leverage Ratio), if the Borrowers shall fail to deliver such
financial statements within the time periods specified in Section 6.1(b) or (c),
as applicable, the Applicable Margin from and including the 46th day after the
end of such Fiscal Quarter or the 91st day after the end of such Fiscal Year, as
the case may be, to but not including the date the Borrowers deliver to the
Administrative Agent such financial statements shall equal the highest
Applicable Margin set forth above.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Arranger" means Xxxxxxx Xxxxx Barney Inc., in its capacity as Lead
Arranger and Book Runner for the Facility.
"Asset Sale" has the meaning specified in Section 8.4.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit A.
"Availability Reserve" means, with respect to any Borrower effective
as of two Business Days after the date of written notice of any determination
thereof to Terra Capital by the Administrative Agent, such amounts (without
duplication as to amounts included in the determination of any Eligibility
Reserve) as the Administrative Agent may from time to time establish against the
Available Credit of such Borrower, in the Administrative Agent's sole
discretion, in order either (a) to preserve the value of the Collateral or the
Administrative Agent's Lien thereon, or (b) to provide for the payment of
unanticipated liabilities of such Borrower or its Subsidiaries arising after the
Closing Date; provided, however, that the Administrative Agent shall apply
criteria in respect of the foregoing in accordance with its customary practice
with regard to similar credit facilities.
3
"Available Credit" means at any time in respect of (i) Terra Capital,
the Terra Capital Available Credit, (ii) Terra UK, the Terra UK Available
Credit, and (iii) TNLP, the TNLP Available Credit.
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent executed by any Person (other than a Loan Party) who is
in possession of Inventory on behalf of the Borrower pursuant to which such
Person acknowledges, among other things, the Administrative Agent's Lien with
respect thereto.
"Bankruptcy Code" means title 11, United States Code, as amended from
time to time.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times 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) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum plus (ii)
the rate per annum obtained by dividing (A) 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 market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day 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 (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for Citibank
in respect of liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits in the
United States, plus (iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits in
the United States; and
(c) the sum of (i) 0.5% per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any Loan during any period in which it bears
interest based on the Base Rate.
"Beaumont Ammonia" means Beaumont Ammonia, Inc., a Delaware
corporation and Subsidiary of Terra UK Holdings.
"Beaumont Holdings" means Beaumont Holdings Corporation, a Delaware
corporation and wholly owned Subsidiary of BMCH.
4
"Beaumont Methanol" means Beaumont Methanol, Limited Partnership, a
Delaware limited partnership.
"BMCH" means BMC Holdings, Inc., a Delaware corporation.
"Borrowing" means a borrowing consisting of Loans made on the same day
by the Lenders ratably according to their respective Commitments. A Borrowing
may be a Revolving Credit Borrowing or a Term Loan Borrowing.
"Borrowing Base" means, with respect to any Person (a) the sum of (i)
the product of the Advance Rate then in effect for Eligible Receivables and the
face amount of all Eligible Receivables of such Person's Borrowing Base
Contributors (calculated net of all finance charges, late fees and other fees
which are unearned, sales, excise or similar taxes, and credits or allowances
granted at such time), (ii) the product of the Advance Rate then in effect for
each class of Eligible Non-Spare Parts Inventory and the Eligible Non-Spare
Parts Inventory (valued at the lower of cost and market on a first-in, first-out
basis) constituting such class at such time of such Person's Borrowing Base
Contributors, (iii) the product of the Advance Rate then in effect for Eligible
Spare Parts Inventory and the Eligible Spare Parts Inventory of such Person's
Borrowing Base Contributors and (iv) 100% of cash maintained by such Person in a
cash collateral account opened for such purpose with the Administrative Agent
(including the L/C Cash Collateral Account and any other cash collateral account
referred to in Section 2.9 or Section 7.12(f)) on terms acceptable to, and
subject to a first priority Lien in favor of, the Administrative Agent less (b)
any Eligibility Reserves applicable to such Person then in effect; provided,
however that, for the purposes of calculating any of the foregoing amounts
denominated in Sterling, Canadian Dollars or Euros, the Dollar Equivalent of
such Sterling, Canadian Dollar or Euro amount shall be used .
"Borrowing Base Certificate" means a certificate of the Borrowers and
Terra Canada substantially in the form of Exhibit E.
"Borrowing Base Contributor" means (i) in respect of Terra Capital,
each of Terra Oklahoma, Port Xxxx, Beaumont Methanol and Beaumont Ammonia, (ii)
in respect of Terra UK, Terra UK only, (iii) in respect of TNLP, TNLP only and
(iv) in respect of Terra Canada, Terra Canada only.
"Borrowing Base Deficiency" means, at any time with respect to any
Borrower, any time during which the Available Credit of such Borrower is less
than zero.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Canadian Dollars" means the lawful money of Canada.
"Canadian Employee Benefit Plan" means any employee benefit, pension,
retirement or other equivalent or analogous plan or program established or
maintained by the Borrower or any of its Canadian Subsidiaries.
5
"Canadian Term Loan" means the Term Loan (as defined in the Terra
Canada Credit Agreement).
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cash Collateral Account" means the bank accounts identified as such
on Schedule 7.12 and each other account maintained from time to time by any Loan
Party with Citibank and designated a cash collateral account by Citibank.
"Cash Equivalents" means (a) securities issued or fully guaranteed or
insured by the United States government, the United Kingdom government or the
Canadian government or any agency thereof, (b) certificates of deposit,
eurodollar time deposits, overnight bank deposits and bankers' acceptances of
any commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations) which, at the time of
acquisition, are rated at least "A-1" by Standard & Poor's Rating Services
("S&P") or "P-1" by Xxxxx'x Investors Services, Inc. ("Moody's"), (c) commercial
paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's, (d) Canadian
Dollar denominated banker's acceptances of Canadian banks, and Canadian dollar-
denominated commercial paper, rated at least R1-mid by Dominion Bond Rating
Service and (e) shares of any money market fund that (i) has at least 95% of its
assets invested continuously in the types of investments referred to in clauses
(a) through (c) above, (ii) has net assets of not less than $500,000,000 and
(iii) is rated at least "A-1" by S&P or "P-1" by Moody's; provided, however,
that the maturities of all obligations of the type specified in clauses (a) and
(d) above shall not exceed 1 year and in clauses (b) and (c) above shall not
exceed 270 days.
"Cash Flow" means, with respect to Terra Industries and its
Subsidiaries for any period, an amount equal to EBITDA of Terra Industries and
its Subsidiaries for such period minus, to the extent not reflected in the
calculation of EBITDA, the sum of (i) TNCLP Minority Interest Payments and (ii)
provided such net cash amount is greater than zero, cash (net of cash in-flows
in respect thereof) used to finance obligations of discontinued operations of
Terra Industries and its Subsidiaries.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of a greater percentage of the issued and
outstanding Voting Stock of Terra Industries than that held directly or
indirectly by Anglo American; (b) Anglo American shall cease to own beneficially
at least 20% of the issued and outstanding Voting Stock of Terra Industries; or
(c) during any period of
6
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Terra Industries (together with any
new directors whose election by the board of directors of Terra Industries or
whose nomination for election by the stockholders of Terra Industries was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose elections or
nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in
office; provided, however, that the appointment of any directors which are
nominated by Anglo American in replacement of then existing directors which were
nominated by Anglo American shall not itself constitute a Change of Control.
"Chattel Paper" means any "chattel paper," as such term is defined in
Section 9-105(1)(b) of the New York UCC, now owned or hereafter acquired by any
Loan Party.
"Citibank" has the meaning specified in the preamble to this
Agreement.
"Closing Date" means the first date on which all of the conditions
specified in Section 3.1 have been satisfied or waived in accordance with
Section 11.1.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is granted under any of the Collateral Documents.
"Collateral Agent" has the meaning specified in the Intercreditor
Agreement.
"Collateral Documents" means the Pledge and Security Agreement, the
Debenture, the Mortgages, the Intercreditor Agreement, the Terra UK Share
Mortgage, the Junior Collateral Documents and any other document executed and
delivered by a Loan Party granting a Lien on any of its property to secure
payment of the Obligations.
"Commitment" means, with respect to each Lender, such Lender's
Revolving Credit Commitment (if any) and Term Loan Commitment (if any), and
"Commitments" means the aggregate Revolving Credit Commitments and the Term Loan
Commitments of all Lenders.
"Common Units" means the common units issued and outstanding under the
Agreement of Limited Partnership dated as of December 4, 1991 of TNCLP.
"Compliance Certificate" has the meaning specified in Section 6.1(d).
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP; provided, however,
that (a) the net income of any other Person in which such Person or one of its
Subsidiaries has a joint interest with a third party (which interest does not
cause the net income of such other Person to be consolidated into the net income
of such Person in accordance with GAAP) shall be included only to the extent of
the amount of dividends or distributions paid to such Person or Subsidiary, (b)
the net income of any Subsidiary of such Person that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or limitation,
and (c) any
7
one-time increase or decrease to net income which is required to be recorded
because of the adoption of new accounting policies, practices or standards
required by GAAP shall be excluded.
"Constituent Documents" means, with respect to any Person, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (ii) the by-laws (or the equivalent governing
documents) of such Person and (iii) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding any Loan Document but including any
Material Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its properties is subject.
"Current Assets" means, with respect to any Loan Party, all current
assets of such Loan Party which are of a type which is included in the
definition of "Borrowing Base" and all other assets of such Person which are not
Fixed Assets.
"Customary Permitted Liens" means, with respect to any Person, any of
the following Liens:
(a) Liens with respect to the payment of taxes, customs duties,
assessments or governmental charges in all cases which are not yet due or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialman, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;
(c) deposits made in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money) and surety,
appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the use
of real property which do not materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
8
(e) encumbrances arising under leases or subleases of real
property which do not in the aggregate materially detract from the value of
such real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(f) financing statements of a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's
business;
(g) expired financing statements and financing statements filed for
precautionary purposes in respect of operating leases; and
(h) Liens in favor of banks which arise under Article 4 of the New
York UCC on items in collection and documents relating thereto and proceeds
thereof.
"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) and (b) of the definition of "Indebtedness" by Terra
Industries or any of its Subsidiaries.
"Debenture" means the English law Debenture, substantially in the form
of Exhibit M, dated as of the Closing Date executed by Terra UK in favor of the
Collateral Agent.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Disbursement Accounts" means the bank accounts identified as such on
Schedule 7.12 and each other account maintained from time to time by the
Borrowers and Terra Canada with a bank acceptable to the Administrative Agent
for the purposes of paying disbursements.
"Document" means any "document," as such term is defined in Section 9-
105(1)(f) of the New York UCC, now owned or hereafter acquired by any Loan
Party.
"Documentary Letter of Credit" means any letter of credit issued by an
Issuer pursuant to Section 2.4 for the account of the Borrower, which is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by the Borrower or any of its Subsidiaries in the ordinary course of
its business.
"Dollar Equivalent" means with respect to any amount denominated in a
currency other than Dollars, at the time of determination thereof, the
equivalent of such currency in Dollars determined by using the rate of exchange
quoted by Citibank in New York, New York at 11:00 a.m. (New York time) on the
date of determination to prime banks in New York for the spot purchase in the
New York foreign exchange market of such amount of Dollars with such other
currency.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender (or
9
an Affiliate of such Lender) as such Lender may from time to time specify to the
Borrowers and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of Terra Industries
organized under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any provision for income
taxes, (ii) interest expense including net costs under Interest Rate Contracts,
(iii) loss from extraordinary items, (iv) any aggregate net loss from the sale,
exchange or other disposition of capital assets by such Person, (v) any other
non-cash loss or other items, (vi) depreciation, depletion and amortization of
intangibles or financing or acquisition costs and (vii) income allocation to
minority interests minus (c) the sum of, in each case to the extent included in
the calculation of such Consolidated Net Income but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, (iv) any aggregate net gain from the sale, exchange or
other disposition of capital assets by such Person, (v) any other non-cash gains
or other items and (vi) loss allocation to minority interests.
"Eligibility Reserves" means, with respect to any Borrower and Terra
Canada, effective as of two Business Days after the date of written notice of
any determination thereof to Terra Capital by the Administrative Agent, such
amounts as the Administrative Agent, in its sole discretion, may from time to
time establish against the gross amounts of Eligible Receivables, Eligible Non-
Spare Parts Inventory and Eligible Spare Parts Inventory of such Borrower's, or
Terra Canada's, Borrowing Base Contributors to reflect risks or contingencies
arising after the Closing Date which may affect any one or class of such items
and which have not already been taken into account in the calculation of the
Borrowing Base of such Borrower or Terra Canada (including in respect of (a)
preferential debts which under applicable law would be prior to the claims of
the Secured Creditors and (b) Inventory which is subject to title retention
claims of the suppliers thereof); provided, however, that the Administrative
Agent shall apply criteria in respect of the foregoing in accordance with its
customary practice with regard to similar credit facilities.
"Eligible Assignee" means (a) a Lender or any Affiliate or Approved
Fund of such Lender; (b) a commercial bank having total assets in excess of
$5,000,000,000; (c) a finance company, insurance company, other financial
institution or fund reasonably acceptable to the Administrative Agent, which is
regularly engaged in making, purchasing or investing in loans including, with
respect to any proposed assignment of all or a portion of a Lender's Revolving
Credit Commitment, revolving loans, and having total assets in excess of
$250,000,000 or, to the extent assets are less than such amount, a finance
company, insurance company, other financial institution or fund, reasonably
acceptable to the Administrative Agent and the Borrowers; or (d) a savings and
loan association or savings bank organized under the laws of the United States
or any State thereof which has a net worth, determined in accordance with GAAP,
in excess of $250,000,000.
"Eligible Finished Products" means Inventory comprised of finished
products (which are classified, in accordance with past practice, as Eligible
Finished Products in the Borrowers' accounting systems) and is otherwise
Eligible Inventory.
"Eligible Inventory" means, in respect of any Borrowing Base
Contributor, the Inventory of such Borrowing Base Contributor (other than any
Inventory which has been
10
consigned by such Borrowing Base Contributor), including raw materials and
finished goods (a) which is owned solely by such Borrowing Base Contributor, (b)
with respect to which the Collateral Agent has a valid and perfected first
priority Lien, (c) with respect to which no warranty contained in any of the
Loan Documents has been breached, (d) which is not, in the Administrative
Agent's sole discretion, obsolete or unmerchantable, (e) with respect to which
(in respect of any Inventory labeled with a brand name or trademark and sold by
such Borrowing Base Contributor pursuant to a trademark owned by such Borrowing
Base Contributor or a license granted to such Borrowing Base Contributor) the
Collateral Agent would have rights under such trademark or license pursuant to
the Pledge and Security Agreement or other agreement satisfactory to the
Administrative Agent to sell such Inventory in connection with a liquidation
thereof, and (f) which the Administrative Agent deems to be Eligible Inventory
based on such credit and collateral considerations as the Administrative Agent
may, in its sole discretion, deem appropriate. No Inventory of such Borrowing
Base Contributor shall be Eligible Inventory if such Inventory is located,
stored, used or held at the premises of a third party or premises that have been
mortgaged in favor of a third party (other than the Administrative Agent) unless
(i)(A) except during the period of 60 days following the Closing Date, the
Administrative Agent shall have received a Mortgagee Waiver, Landlord Waiver or
Bailee's Letter or (B) in the case of Inventory located on a leased or mortgaged
premises, an Eligibility Reserve satisfactory to the Administrative Agent shall
have been established with respect thereto and (ii) an appropriate UCC-1
financing statement shall have been executed and properly filed in the United
States and equivalent filings, as applicable, shall have been made in England &
Wales and Canada, as applicable.
"Eligible Non-Spare Parts Inventory" means Inventory comprised of
Eligible Finished Products and Eligible Raw Materials.
"Eligible Raw Materials" means Inventory comprised of raw materials
(which are classified in accordance with past practice, as raw materials in the
Borrowers' accounting systems) and which is otherwise Eligible Inventory.
"Eligible Receivable" means, in respect of any Borrowing Base
Contributor, the gross outstanding balance of those Accounts of such Borrowing
Base Contributor which arise out of sales of merchandise, goods or services in
the ordinary course of business, which are made by such Borrowing Base
Contributor to a Person that is not an Affiliate of such Borrowing Base
Contributor, which are not in dispute, and which constitute Collateral in which
the Collateral Agent has a fully perfected first priority Lien; provided,
however, that an Account shall in no event be an Eligible Receivable if:
(a) such Account is more than 60 days past the original due date
thereof; or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct with
respect to such Account; or
(c) the Account Debtor on such Account has disputed liability or
made any claim with respect to any other Account due from such Account
Debtor to such Borrowing Base Contributor but only to the extent of such
dispute or claim; or
11
(d) the Account Debtor on such Account has: (i) filed a petition
for bankruptcy or any other relief under the Bankruptcy Code or any other
law relating to bankruptcy, insolvency, reorganization or relief of
debtors; (ii) made an assignment for the benefit of creditors; (iii) had
filed against it any petition or other application for relief under the
Bankruptcy Code or any such other law; (iv) has failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation; or (v) had
or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(e) the Account Debtor on such Account or any of its Affiliates
is also a supplier to or creditor of such Borrowing Base Contributor
unless, and to the extent that (in respect of such Account), such supplier
or creditor has executed a no-offset letter satisfactory to the
Administrative Agent, in its sole discretion; or
(f) the sale represented by such Account is to an Account Debtor
located outside England & Wales in respect of Terra UK or outside the
United States or Canada in respect of any other Borrowing Base Contributor,
unless the sale is on letter of credit or acceptance terms acceptable to
the Administrative Agent, in its sole judgment; or
(g) the sale to such Account Debtor on such Account is on a xxxx-
on-hold, guaranteed sale, sale-and-return, sale-on-approval or consignment
basis; or
(h) such Account is subject to a Lien in favor of any Person
other than the Administrative Agent for the benefit of the Secured Parties;
or
(i) such Account is (but only to the extent that it is) subject
to any deduction, offset, counterclaim, return privilege or other
conditions other than volume sales discounts given in the ordinary course
of such Borrowing Base Contributor's business; or
(j) the Account Debtor on such Account is located, in respect of
the Borrowing Base Contributors of Terra Capital or TNLP, in New Jersey or
Minnesota, unless such Borrowing Base Contributor (i) has received a
certificate of authority to do business and is in good standing in such
state or (ii) has filed a Notice of Business Activities Report with the
appropriate office or agency of such state for the current year; or
(k) the Account Debtor on such Account is a Governmental
Authority, unless the Borrower has assigned its rights to payment of such
Account to the Administrative Agent pursuant to the Assignment of Claims
Act of 1940, as amended, in the case of a federal Governmental Authority,
and pursuant to applicable law, if any, in the case of any other
Governmental Authority, and such assignment has been accepted and
acknowledged by the appropriate government officers; or
(l) the Administrative Agent, in accordance with its customary
criteria, determines, in its sole discretion exercised reasonably, that
such Account may not be paid or otherwise is ineligible; or
12
(m) 50% or more of the outstanding Accounts of the Account Debtor
have become, or have been determined by the Administrative Agent, in
accordance with the provisions hereof, to be, ineligible; or
(n) the sale represented by such Account is denominated in a
currency other than (i) Dollars or Canadian Dollars in respect of any
Borrowing Base Contributor of Terra Capital, TNLP or Terra Canada or (ii)
Dollars, Sterling or Euros in respect of Terra UK; or
(o) such Account is not evidenced by an invoice or other writing
in form acceptable to the Administrative Agent, in its sole discretion; or
(p) such Borrowing Base Contributor, in order to be entitled to
collect such Account, is required to perform any additional service for, or
perform or incur any additional obligation to, the Person to whom or to
which it was made.
"Eligible Spare Parts Inventory" means Inventory comprised of spare
parts (which are classified, in accordance with past practice, as spare parts in
the Borrowers' accounting system) and which is otherwise Eligible Inventory.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect, as amended or supplemented from time to time, relating to
pollution or the regulation or protection of occupational health and safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. (S)
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
(S) 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. (S) 136 et seq.); the Resource Conservation and Recovery Act,
as amended (42 U.S.C. (S) 6901 et seq.); the Toxic Substance Control Act, as
amended (42 U.S.C. (S) 7401 et seq.); the Clean Air Act, as amended (42 U.S.C.
(S) 740 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.
(S) 1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C.
(S) 651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. (S) 300f et
seq.); the Environmental Protection Act (Ontario); the Canadian Environmental
Protection Act; the Ontario Water Resources Act; and their state and local
counterparts or equivalents and any transfer of ownership notification or
approval statute, including the Industrial Site Recovery Act (N.J. Stat. Xxx.
(S) 13:1K-6 et seq.) and any similar or equivalent Requirement of Law of any
relevant jurisdiction.
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
13
"Equipment" means any "equipment," as such term is defined in Section
9-109(2) of the New York UCC, now owned or hereafter acquired by any Borrowing
Base Contributor.
"Equity Issuance" means the issue or sale of any Stock of Terra
Industries, any Loan Party or any Subsidiary of any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Material Subsidiaries within the meaning of Section 414
(b), (c), (m) or (o) of the Code.
"ERISA Event" means (i) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan as to which the 30 day notice requirement
has not been waived under applicable regulations; (ii) the withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (iii) the
complete or partial withdrawal of the Borrower, any of its Subsidiaries or any
ERISA Affiliate from any Multiemployer Plan; (iv) notice of reorganization or
insolvency of a Multiemployer Plan; (v) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (vi) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (vii) the failure to make any
required contribution to a Title IV Plan or Multiemployer Plan; (viii) the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA on
the Borrower or any of its Subsidiaries or any ERISA Affiliate; or (ix) any
other event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA.
"Euro" means the single currency of the participating states of the
European Union.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Base Rate" means the rate determined by the Administrative
Agent to be the offered rate for deposits in Dollars for the applicable Interest
Period which appears on the Dow Xxxxx Markets Telerate Page 3750 as of 11:00
a.m., London time, on the second full Business Day next preceding the first day
of each Interest Period. In the event that such rate does not appear on the Dow
Xxxxx Markets Telerate Page 3750 (or otherwise on the Dow Xxxxx Markets screen),
the Eurodollar Base Rate for the purposes of this definition shall be determined
by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent, or, in the
absence of such availability, the Eurodollar Base Rate shall be the rate of
interest determined by the Administrative Agent to be the rate per annum at
which deposits in Dollars are offered by the principal office of Citibank in
London to major banks in the London interbank market at 11:00 A.M. (London time)
two
14
Business Days before the first day of such Interest Period in an amount
substantially equal to the Eurodollar Rate Loan of Citibank for a period equal
to such Interest Period.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender (or an Affiliate of such Lender) as such Lender may
from time to time specify to the Borrowers and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities which includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1.
"Facilities" means (a) the Term Loan Facility and (b) the Revolving
Credit Facility.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the applicable Loan Party, or, if such asset shall have been the
subject of a relatively contemporaneous appraisal by an independent third party
appraiser, the basic assumptions underlying which have not materially changed
since its date, the value set forth in such appraisal, and (b) with respect to
any marketable Security at any date, the closing sale price of such Security on
the Business Day next preceding such date, as appearing in any published list of
any national securities exchange or the Nasdaq Stock Market or, if there is no
such closing sale price of such Security, the final price for the purchase of
such Security at face value quoted on such business day by a financial
institution of recognized standing which regularly deals in securities of such
type selected by the Administrative Agent.
"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 which is a Business Day, the average of the quotations for such day on
15
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated as of January 10, 2000,
addressed to Terra Industries from Citibank and the Arranger and accepted by
Terra Industries, with respect to certain fees to be paid from time to time to
Citibank and the Arranger.
"Financial Statements" means the financial statements of Terra
Industries and its Subsidiaries delivered in accordance with Sections 4.4 and
6.1.
"Fiscal Quarter" means each of the three month periods ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fixed Assets" means all owned and leased Real Property, Equipment and
(to the extent necessary to the operation of Equipment) general intangibles of
any Loan Party.
"Foreign Plan" means each Canadian Employee Benefit Plan and each
other retirement plan (including any statutory severance obligation requiring a
payment upon an employee's termination of employment for any reason other than
"cause" based on the employee's length of service) which is not subject to
reporting in accordance with GAAP and Financial Accounting Standard Bulletin No.
87 or 106, and as to which Terra Industries or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"General Intangible" means any "general intangible," as such term is
defined in Section 9-106 of the New York UCC, now owned or hereafter acquired by
any Loan Party.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranteed Fixed Asset Portion" means, at any time, that portion of
the principal amount of the Term Loan at such time that the Guaranteed Fixed
Asset Lender has not assigned or otherwise allocated to another Lender or has
not elected to hold for its own account pursuant to the Anglo American Guaranty.
"Guaranteed Fixed Asset Lender" means Citibank (or any of its
Affiliates) to the extent that it is the Lender of the Guaranteed Fixed Asset
Portion.
16
"Guarantor" means each of the Terra Capital Guarantors, the Terra UK
Guarantors, the TNLP Guarantors.
"Guaranty" means each guaranty substantially in the form of Exhibits
X-0, X-0 xx X-0 executed by the Guarantors and any other guaranty which may be
executed by a Loan Party from time to time in respect of the Obligations.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any Guaranty
Obligation shall be equal to the amount of the Indebtedness so guaranteed or
otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or which
bear interest, (c) all reimbursement and all obligations with respect to letters
of credit, bankers' acceptances, surety bonds and performance bonds, whether or
not matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables and accrued expenses incurred in the
ordinary course of business which are not overdue, (e) all indebtedness of such
Person 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), (f) all Capital
Lease Obligations and Major Operating Lease Obligations of such Person, (g) all
Guaranty Obligations of such Person, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any Stock or
Stock Equivalents of such Person, valued, in the case of
17
redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (i) all payments that
such Person would have to make in the event of an early termination on the date
Indebtedness of such Person is being determined in respect of Hedging Contracts
of such Person and (j) all Indebtedness referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including Accounts
and General Intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness.
"Indemnitees" has the meaning specified in Section 11.4.
"Indentures" means the 10-3/4% Senior Note Indenture dated October 15,
1993 between Terra Industries (as successor to AMCI) and Society National Bank
and the 10-1/2% Senior Note Indenture dated June 22, 1995 between Terra
Industries and First Trust National Association.
"Instrument" means any "instrument," as such term is defined in
Section 9-105(1)(i) of the New York UCC, now owned or hereafter acquired by any
Loan Party other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
"Intercompany Indebtedness" means Indebtedness owed by Terra
Industries or one of its Subsidiaries to Terra Industries or one of its
Subsidiaries.
"Intercreditor Agreement" means the amended and restated collateral
agency and intercreditor agreement substantially in the form of Exhibit L among
certain Borrowers and Guarantors, the Administrative Agent, the Terra Canada
Administrative Agent, the Collateral Agent and certain Lenders.
"Interest Period" means, in the case of any Eurodollar Rate Loan, (a)
initially, the period commencing on the date such Eurodollar Rate Loan is made
or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan
and ending one, two, three or six months thereafter, as selected by a Borrower
in its Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2 or 2.11, and (b) thereafter, if
such Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant
to Section 2.11, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending one, two, three or six months
thereafter, as selected by a Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.11;
provided, however, that all of the foregoing provisions relating to Interest
Periods in respect of Eurodollar Rate Loans are subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
18
(iii) no Borrower may select any Interest Period that ends
after the date of a scheduled principal payment on the Loans as set forth
in Article II unless, after giving effect to such selection, the aggregate
unpaid principal amount of the Loans for which Interest Periods end after
such scheduled principal payment shall be equal to or less than the
principal amount to which the Loans are required to be reduced after such
scheduled principal payment is made; and
(iv) there shall be outstanding at any one time no more than
seven Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
(c) any loan, advance (other than prepaid expenses, accounts receivable and
similar items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business and (d) any
deposit with a financial institution.
"Inventory" means any "inventory," as such term is defined in Section
9-109(4) of the New York UCC, now owned or hereafter acquired by any Borrowing
Base Contributor, and wherever located.
"Investment Property" means "investment property" as such term is
defined in Section 9-115(l)(f) of the New York UCC, now owned or hereafter
acquired by any Borrowing Base Contributor and wherever located.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issuer" means each Lender or Affiliate of a Lender that (a) is listed
on the signature pages hereof as an "Issuer" or (b) hereafter becomes an Issuer
with the approval of the Administrative Agent and the Borrower by agreeing
pursuant to an agreement with and in form and substance satisfactory to the
Administrative Agent and the Borrowers to be bound by the terms hereof
applicable to Issuers.
"Junior Collateral Documents" means (i) in respect of TNLP's
obligations for the TNLP Debt, the Junior Pledge and Security Agreement
(substantially in the form of Exhibit I-2) and related junior mortgages, each
dated as of the Closing Date among TNLP, Terra Capital and the Collateral Agent,
(ii) in respect of Terra UK's obligations for the Terra UK Debt, the debenture
dated December 31, 1997 executed by Terra UK in favor of Terra UK Holdings and
the related Assignment Agreement and Subordination Agreement (substantially in
the form of Exhibits N-1 and N-2) each dated as of the Closing Date among Terra
UK Holdings, Terra UK and the Collateral Agent and (iii) in respect of the Terra
Canada Junior Guaranty, the Junior General Security Agreement (substantially in
the form of Exhibit J) and related junior mortgages
19
each dated as of the Closing Date among Terra Canada, Terra UK Holdings and the
Collateral Agent, each of the foregoing being assigned to the Collateral Agent.
"Junior Loan Documents" means (i) in respect of the TNLP Debt, an
amended and restated demand promissory note dated the date hereof issued by TNLP
in favor of Terra Capital and (ii) in respect of the Terra UK Debt, a credit
agreement dated December 31, 1997 between Terra UK as borrower and Terra UK
Holdings as lender and a promissory note dated December 31, 1997 and amended and
restated on the date hereof issued by Terra UK in favor of Terra UK Holdings and
the Terra Canada Junior Guaranty dated the date hereof, each of the foregoing
being assigned to the Collateral Agent.
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent, executed by a landlord in respect of
Inventory of any Borrowing Base Contributor located at any leased premises of
such Borrowing Base Contributor pursuant to which such landlord, among other
things, waives or subordinates any Lien such landlord may have in respect of
such Inventory.
"L/C Cash Collateral Account" has the meaning specified in Section
9.3.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means each financial institution or other entity that (a) is
listed on the signature pages hereof as a "Lender" or (b) from time to time
becomes a party hereto by execution of an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to
Section 2.4.
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of each Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.4(e).
"Letter of Credit Request" has the meaning specified in Section
2.4(c).
"Letter of Credit Sublimit" has the meaning specified in Section
2.4(a)(iv).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Leverage Ratio" means, with respect to any Person for any period, the
ratio of (a) Indebtedness of the type specified in clauses (a), (b), (d), (e),
(f) and (h) of the definition of "Indebtedness" of such Person as of the last
day of such period to (b) Cash Flow for such Person for such period.
20
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease, any financing lease having substantially the same economic effect as any
of the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction naming the owner of the
asset to which such Lien relates as debtor but excluding any right of set-off.
"Liquidity Event of Failure" means any time at which the aggregate
Available Credit has been less than $10,000,000 for at least five successive
days.
"Loan" means any loan made by any Lender under this Agreement,
including each Revolving Loan, Swing Loan and Term Loan.
"Loan Documents" means, collectively, this Agreement, any Notes, each
Guaranty, the Anglo American Guaranty, the Fee Letter, each Letter of Credit
Reimbursement Agreement, the Terra Canada Credit Agreement, the Loan Documents
(as defined in the Terra Canada Credit Agreement), the Loan Purchase Agreement,
the Collateral Documents, the Junior Loan Documents each Assignment and
Acceptance and each certificate, agreement or document executed by a Loan Party
and delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.
"Loan Party" means each Borrower, each Guarantor and each other
Subsidiary of Terra Industries that executes and delivers a Loan Document.
"Loan Purchase Agreement" means the amended and restated Loan Purchase
Agreement dated as of the Closing Date between the Administrative Agent and
Terra Industries in substantially the form of Exhibit K.
"Lockbox" has the meaning specified in each Lockbox Agreement.
"Lockbox Accounts" means each bank account identified as such on
Schedule 7.12 and such other receivables collection accounts from time to time
maintained by the Borrowers and Terra Canada with a bank acceptable to the
Administrative Agent and subject to a Lockbox Agreement.
"Lockbox Agreement" means, with respect to any Loan Party the
agreement between each financial institution with which such Loan Party shall
have established a Lockbox Account (or any deposit or other account into which
proceeds of Accounts are deposited) and the Administrative Agent, substantially
in the form of Annex I to the Pledge and Security Agreement (with such changes
thereto as are satisfactory to the Administrative Agent), as such agreements may
be amended from time to time in accordance with the terms thereof.
"Major Operating Lease Obligations" means, in respect of 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 property
leased thereunder.
21
"Management Agreements" means each management agreement between Terra
Industries and/or any of its Subsidiaries and other Persons providing for the
performance by Terra Industries or any such Subsidiary of certain treasury,
purchasing, legal and/or other services for its Subsidiaries and such other
Persons, or such agreements are in effect from time to time.
"Material Adverse Change" means a material adverse change in any of
(a) the business, condition (financial or otherwise), operations, performance or
properties of any Borrower, individually, or Terra Industries and its
Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of
any Loan Document, (c) the perfection or priority of the Liens granted pursuant
to the Collateral Documents (except as expressly permitted hereby or thereby),
(d) the ability of the Borrowers to repay the Obligations or of the Loan Parties
to perform their obligations under the Loan Documents, or (e) the rights and
remedies of the Administrative Agent, the Collateral Agent or the Lenders under
the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, (i) at any time up to and
including the Closing Date, a Pre-Closing Material Adverse Change or (ii) at any
time following the Closing Date, a Material Adverse Change.
"Material Documents" means the Management Agreements, the Indentures,
the Ammonium Nitrate Hedging Agreement and the sale and leaseback agreement
entered into pursuant to the Permitted Sale Leaseback Transaction (if any).
"Material Subsidiary" means, at any time, each Borrower, each
Guarantor, TNCLP and any direct or indirect Subsidiary of Terra Industries
owning at least $500,000 of assets or generating at least $100,000 gross income
for the Fiscal Year most recently ended.
"Maximum Credit" means, at any time, the lesser of (a) the Revolving
Credit Commitments in effect at such time minus the aggregate amount of
Availability Reserves in effect at such time and (b) the sum of (i) the
aggregate Borrowing Base of Terra Capital and Terra UK at such time minus the
amount by which the Canadian Term Loan exceeds the Borrowing Base of Terra
Canada at such time and (ii) the Borrowing Base of TNLP at such time.
"Mortgage" means a mortgage, deed of trust or other real estate
security document made or required herein to be made by any Loan Party, pursuant
to which such Loan Party grants to the Collateral Agent a first priority Lien
(subject only to Customary Permitted Liens) on Real Property .
"Mortgage Value" means, with respect to any parcel of Eligible Real
Property, the lesser of (a) the maximum stated amount secured by the Lien on
such parcel of Eligible Real Property granted in favor of the Collateral Agent
pursuant to the relevant Mortgage and (b) the value of such parcel of Eligible
Real Property set forth in the appraisal delivered with respect thereto.
"Mortgagee Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent, executed by a mortgagee in respect of
Inventory of any Borrowing Base Contributor located at any mortgaged premises of
such Borrowing Base Contributor.
22
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Terra Industries, any of its Subsidiaries or any
ERISA Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means (a) proceeds received by Terra Industries or
its Subsidiaries after the Closing Date in cash or Cash Equivalents from any
Asset Sale, other than Asset Sales permitted under clauses (a) through (e) of
Section 8.4, net of (x) the reasonable cash costs of sale, assignment or other
disposition, (y) taxes paid or payable within 22 months of the date of such
Asset Sale as a result thereof (provided, however, that any such taxes which
are so payable shall be deposited in a Cash Collateral Account acceptable to the
Administrative Agent pending payment) and (z) any amount required to be paid or
prepaid on Indebtedness (other than the Obligations) secured by the assets
subject to such Asset Sale; provided, however, that the evidence of each of (x),
(y) and (z) are provided to the Administrative Agent in form and substance
satisfactory to it; (b) proceeds of insurance (net of (i) reasonable expenses
incurred directly in the collection thereof and (ii) (to the extent permitted
hereby) contractually required payments of Indebtedness (other than the
Obligations) secured by a Lien on the insured property (that is prior to any
Lien granted under the Collateral Documents)) on account of the loss of or
damage to any such assets or property, and payments of compensation for any such
assets or property taken by expropriation, condemnation or eminent domain, to
the extent such proceeds or payments exceed $2,000,000 in the aggregate; and (c)
proceeds received after the Closing Date by Terra Industries or its Subsidiaries
in cash or Cash Equivalents from (i) any Equity Issuance (other than any such
issuance of common Stock of Terra Industries occurring in the ordinary course of
business to any director, member of the management or employee of Terra
Industries or its Subsidiaries), or (ii) any Debt Issuance (except for
Indebtedness permitted under clauses (c) through (j) of Section 8.1), in each
case net of brokers' and advisors' fees and other costs incurred in connection
with such transaction; provided, however, that evidence of such costs is
provided to the Administrative Agent.
"Non-Funding Lender" has the meaning specified in Section 2.2(d).
"Non-Material Real Property" means any parcel of real property which
has an open market value (as reasonably determined by the Borrowers) of less
than $500,000 or (if leasehold) the lease rental payments in respect thereof are
less than $500,000 per annum.
"Non-U.S. Lender" means each Lender or Administrative Agent that is
not a United States person as defined in Section 7701(a)(30) of the Code.
"Note" means any Revolving Credit Note or Term Loan Note substantially
in the forms of Exhibit B-1 or B-2.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11.
"Obligations" means the Loans, the Letter of Credit Obligations, the
Canadian Term Loan and all other advances, debts, liabilities, obligations,
covenants and duties owing by the Loan Parties to the Administrative Agent, any
Lender, any Issuer, any Affiliate of any of them or any Indemnitee, of every
type and description, present or future, arising under this Agreement or under
any other Loan Document or under or in respect of any credit cards issued for
the
23
account of such Person by the Administrative Agent or any of its Affiliates, by
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign
exchange transaction, Hedging Contract or otherwise, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired and whether
or not evidenced by any note, guaranty or other instrument or for the payment of
money. The term "Obligations" includes all letter of credit, cash management and
other fees and all interest, charges, expenses, fees, attorneys' fees and
disbursements and other sums chargeable to the Loan Parties under this Agreement
or any other Loan Document and all obligations of the Loan Parties to cash
collateralize Letter of Credit Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Sale Leaseback Transaction" means a sale and leaseback
transaction pursuant to which certain of Terra Capital's US wholly-owned
nitrogen facilities are sold and leased back by Terra Capital or one of its
Subsidiaries, the terms of which (including those relating to covenants,
defaults and intercreditor arrangements) are satisfactory to the Administrative
Agent.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Pledge and Security Agreement" means the Pledge and Security
Agreement dated as of the Closing Date, in substantially the form of Xxxxxxx X-
0, xxxxx Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxx, XXXX, each Guarantor that is a
Domestic Subsidiary and the Collateral Agent.
"Port Xxxx" means Port Xxxx Corporation, a Delaware corporation.
"Pre-Closing Material Adverse Change" means a material adverse change
in any of (a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Borrower, individually, or Terra
Industries and its Subsidiaries, taken as a whole, (b) the legality, validity or
enforceability of any Loan Document, (c) the perfection or priority of the Liens
granted pursuant to the Collateral Documents, (d) the ability of the Borrowers
to repay the Obligations or of the Loan Parties to perform their obligations
under the Loan Documents, or (e) the rights and remedies of the Administrative
Agent, the Collateral Agent or the Lenders under the Loan Documents.
"Pro Forma Balance Sheet" has the meaning specified in Section 4.4(d).
"Projections" means (i) up until the delivery of any update or
restatement thereof pursuant to Section 6.1(e), those financial projections
contained in Schedule III, covering the Fiscal Years ending in 2000 through
2002, or (ii) thereafter, the most recent update or restatement of such
projections delivered pursuant to Section 6.1(e).
"Purchase Event" means the occurrence of any of the following:
24
(a) any Subsidiary of Terra Industries has any outstanding
Indebtedness owing to Terra Industries or any of its Subsidiaries, other
than Indebtedness permitted to be outstanding under Section 8.1 (except
clause (l) thereof); or
(b) Liens on or with respect to any property of any Subsidiary of
Terra Industries have been created in favor of Terra Industries or any of
its Subsidiaries, other than Liens permitted under Section 8.2 (except
clause (j) thereof); or
(c) any Subsidiary of Terra Industries has made any Investments in
Terra Industries or any of its Subsidiaries, other than Investments
permitted under Section 8.3 (except clause (n) thereof); or
(d) any Subsidiary of Terra Industries has sold, transferred or
otherwise disposed of any of its property to Terra Industries or any of its
Subsidiaries, other than sales, transfers or other dispositions permitted
under Section 8.4 (except clause (h) thereof); or
(e) Terra Industries or any of its Subsidiaries receive, declare,
order, pay, make or set apart any Restricted Payment other than Restricted
Payments permitted under Section 8.5 (except clause (e) thereof).
"Qualifying Lender" means:
(a) a bank as defined in (S) 840A for the purposes of (S) 349(3)(a) of
the UK Income and Corporation Taxes Act 1988 which is within the charge to
United Kingdom corporation tax in respect of payments of interest received
by it under this agreement and which is beneficially entitled to such
interest; or
(b) a bank, financial institution or corporation which is resident in
a country with which the United Kingdom has a double-taxation treaty under
which that bank, financial institution or corporation is entitled to
receive principal, interest and fees under this agreement without
withholding of United Kingdom Income Tax.
"Ratable Portion" or "ratably" means, with respect to any Lender, (a)
with respect to the Revolving Credit Facility, the percentage obtained by
dividing (i) the Revolving Credit Commitment of such Lender by (ii) the
aggregate Revolving Credit Commitments of all Lenders (or, at any time after the
Revolving Credit Termination Date, the percentage obtained by dividing the
aggregate outstanding principal balance of the Revolving Credit Outstandings
owing to such Lender by the aggregate outstanding principal balance of the
Revolving Credit Outstandings owing to all Lenders) and (b) with respect to the
Term Loan Facility, the percentage obtained by dividing (i) the Term Loan
Commitment of such Lender by (ii) the aggregate Term Loan Commitments of all
Lenders (or, at any time after the Closing Date, the percentage obtained by
dividing the aggregate principal amount of the Term Loans of such Lender by the
principal amount of the Term Loans of all Lenders).
"Real Property" means all of those plots, pieces or parcels of land
now owned, leased or hereafter acquired or leased by any Loan Party or any of
its Subsidiaries (the "Land"), together with the right, title and interest of
such Loan Party or Subsidiary, if any, in and to the streets, the land lying in
the bed of any streets, roads or avenues, opened or proposed, in front of, the
air space and development rights pertaining to the Land and the right to use
such air space and
25
development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefiting the Land and all
royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
"Register" has the meaning specified in Section 11.2(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the environment or
into or out of any property owned by such Person, including the movement of
Contaminants through or in the air, soil, surface water, ground water or
property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address any Release of any Contaminant in the
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the environment or (c) perform pre-
remedial studies and investigations and post-remedial monitoring and care.
"Required Lenders" means the Requisite Current Asset Lenders and the
Requisite Fixed Asset Lenders.
"Requirement of Law" means, with respect to any Person, all federal,
provincial, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Requisite Lenders" means those Lenders (other than the Guaranteed-
Fixed Asset Lender) and the Terra Canada Lenders having more than fifty percent
(50%) of the aggregate outstanding amount of (i) the aggregate Revolving Credit
Commitments or, after the Revolving Credit Termination Date, the aggregate
Revolving Credit Outstandings, (ii) (in their capacity (if any) as Lenders under
the Canadian Term Loan) the aggregate outstanding principal amount of the
Canadian Term Loan and (iii) the aggregate outstanding principal amount of the
Term Loans (other than the Guaranteed Fixed Asset Portion). Prior to the
Revolving Credit Termination Date, a Non-Funding Lender shall not be included in
the calculation of "Requisite Lenders."
"Requisite Current Asset Lenders" means the Revolving Credit Lenders
and Terra Canada Lenders having more than fifty percent (50%) of the aggregate
outstanding amount of (i) the Revolving Credit Commitments or, after the
Revolving Credit Termination Date, the Revolving Credit Outstandings and (ii)
the aggregate outstanding principal amount of the Canadian Term Loan. Prior to
the Revolving Credit Termination Date, a Non-Funding Lender shall not be
included in the calculation of "Requisite Current Asset Lenders."
26
"Requisite Fixed Asset Lenders" means Term Loan Lenders (other than
the Guaranteed Fixed Asset Lender) having more than fifty percent (50%) of the
Term Loan Commitments or, after the Closing Date, more than fifty percent (50%)
of the principal amount of all Term Loans (other than the Guaranteed Fixed Asset
Portion) then outstanding.
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person, but in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of Terra
Industries or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in Stock or Stock Equivalents or a dividend or
distribution payable solely to any Borrower and/or one or more Subsidiary
Guarantors, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Stock or
Stock Equivalents of Terra Industries or any of its Subsidiaries now or
hereafter outstanding other than one payable solely to Terra Industries and/or
one or more Subsidiary Guarantors or any cashless exercise of warrants or
options in respect of the foregoing, and (c) any payment or prepayment of
principal, premium (if any), interest, fees (including fees to obtain any waiver
or consent in connection with any Security) or other charges on, or redemption,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Subordinated Debt, other than any required redemptions, retirement,
purchases or other payments, in each case to the extent permitted to be made by
the terms of such Indebtedness after giving effect to any applicable
subordination provisions.
"Revolving Credit Borrowers" means each of Terra Capital, Terra UK and
TNLP.
"Revolving Credit Borrowing" means Revolving Loans made on the same
day by the Revolving Credit Lenders ratably according to their respective
Revolving Credit Commitments.
"Revolving Credit Commitment" means, with respect to each Revolving
Credit Lender, the commitment of such Lender to make Revolving Loans and acquire
interests in other Revolving Credit Outstandings in the aggregate principal
amount outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I under the caption "Revolving Credit Commitment," as amended
to reflect each Assignment and Acceptance executed by such Lender and as such
amount may be reduced pursuant to this Agreement.
"Revolving Credit Facility" means the Revolving Credit Commitments and
the provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
"Revolving Credit Lender" means each Lender having a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of a Revolving Credit
Borrower (other than Terra UK) payable to the order of any Revolving Credit
Lender in a principal amount equal to the amount of such Lender's Revolving
Credit Commitment evidencing the aggregate Indebtedness of the Borrower to such
Lender resulting from the Revolving Loans owing to such Lender.
27
"Revolving Credit Outstandings" means, at any particular time, the sum
of (a) the principal amount of the Revolving Loans outstanding at such time plus
(b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of (a) the
Scheduled Termination Date, (b) the date of termination of the Commitments
pursuant to Section 2.5 and (c) the date on which the Obligations become due and
payable pursuant to Section 9.2.
"Revolving Loan" has the meaning specified in Section 2.1(a).
"Scheduled Termination Date" means January 2, 2003.
"Seasonal Eligible Inventory Rate" means, in any calendar month with
respect to each type of Eligible Non-Spare Parts Inventory set forth below, the
applicable percentage set forth opposite such month under such type of Eligible
Non-Spare Parts Inventory:
--------------------------------------------------------------------------------------------------
Calendar Ammonia AN Natural Precious
Month Ammonia Nitrate UAN 28 Liquor Urea Other Methanol Gas Metals
--------------------------------------------------------------------------------------------------
January 70% 70% 70% 70% 60% 65% 70% 70% 70%
February 70% 70% 70% 70% 70% 65% 70% 70% 70%
March 70% 70% 70% 70% 70% 65% 70% 70% 70%
April 70% 70% 70% 70% 70% 65% 70% 70% 70%
May 70% 70% 70% 70% 70% 65% 70% 70% 70%
June 70% 70% 70% 70% 70% 65% 70% 70% 70%
July 70% 70% 70% 70% 65% 65% 70% 70% 70%
August 70% 70% 70% 70% 60% 65% 70% 70% 70%
September 65% 65% 70% 70% 55% 65% 70% 70% 70%
October 65% 65% 70% 70% 55% 65% 70% 70% 70%
November 70% 70% 70% 70% 60% 65% 70% 70% 70%
December 70% 70% 70% 70% 60% 65% 70% 70% 70%
--------------------------------------------------------------------------------------------------
"Secured Parties" means the Lenders, the Issuers, the Lenders (as
defined in the Terra Canada Credit Agreement), the Administrative Agent, the
Terra Canada Administrative Agent, the Collateral Agent, each other Secured
Party (as defined in the Intercreditor Agreement) and any other holder of any of
the Obligations.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
28
"Standby Letter of Credit" means any letter of credit issued pursuant
to Section 2.4 which is not a Documentary Letter of Credit.
"Sterling" and "(Pounds)" means the lawful money of the United
Kingdom.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Debt" means (a) Indebtedness under the Indentures and
(b) all other Indebtedness of Terra Industries or its Subsidiaries which is
subordinated in right of payment to the prior payment in full of the Loans.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity (a) of which an
aggregate of more than 50% of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person, or (b) the ordinary power to appoint the majority
of the members of the board of directors, managers, trustees or other
controlling Person of which is held by such Person and/or one or more
Subsidiaries of such Person.
"Subsidiary Guarantor" means, in respect of any Borrower, a Subsidiary
of such Borrower which has guaranteed all of such Borrower's Obligations.
"Swing Loan" has the meaning specified in Section 2.3.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Swing Loan Lender" means Citibank.
"Swing Loan Request" has the meaning specified in Section 2.3(b).
"Syndication Agent" has the meaning specified at the beginning of this
Agreement.
"Tax Affiliate" means, with respect to any Person, (a) any Subsidiary
of such Person, and (b) any Affiliate of such Person with which such Person
files or is eligible to file consolidated, combined or unitary Tax Returns.
"Tax Return" has the meaning specified in Section 4.8(a).
"Taxes" has the meaning specified in Section 2.15(a).
"Term Loan" has the meaning specified in Section 2.1(b).
"Term Loan Borrowers" means each of Terra UK and XXXX.
00
"Term Loan Borrowing" means Term Loans made on the same day by the
Term Loan Lenders ratably according to their respective Term Loan Commitments.
"Term Loan Commitment" means, with respect to each Term Loan Lender,
the commitment of such Lender to make Term Loans to each Term Loan Borrower in
the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I under the caption "Term Loan
Commitment" as amended to reflect each Assignment and Acceptance executed by
such Lender and as such amount may be reduced pursuant to this Agreement.
"Term Loan Facility" means the Term Loan Commitments and the
provisions herein related to the Term Loans.
"Term Loan Lender" means each Lender having a Term Loan Commitment.
"Term Loan Note" means a promissory note of TNLP payable to the order
of any Term Loan Lender in a principal amount equal to the amount of such
Lender's Term Loan Commitment evidencing the Indebtedness of TNLP to such Lender
resulting from the Term Loan owing to such Lender.
"Terra Canada" means Terra International (Canada) Inc., a corporation
governed by the laws of Ontario and an indirect wholly owned Subsidiary of the
Terra Capital.
"Terra Canada Administrative Agent" means the Administrative Agent as
defined in the Terra Canada Credit Agreement.
"Terra Canada Borrowing Base Adjustment" means, at any time, (a) in
the case of Terra Capital an amount equal to a portion of the Terra Canada
Borrowing Base Shortfall at such time designated by Terra Capital to reduce the
Terra Capital Available Credit and (b) in the case of Terra UK an amount equal
to the remaining portion of the Terra Canada Borrowing Base Shortfall at such
time designated by Terra Capital to reduce the Terra UK Available Credit;
provided, however, that Terra Capital shall determine by notice to the
Administrative Agent the respective amounts under clauses (a) and (b) above, the
aggregate amount of which shall at no time be less than the amount of the Terra
Canada Borrowing Base Shortfall.
"Terra Canada Borrowing Base Shortfall" means, at any time, the amount
by which the principal amount of the Canadian Term Loan exceeds the Borrowing
Base of Terra Canada at such time.
"Terra Canada Credit Agreement" means the Credit Agreement dated as of
December 31, 1997 and amended and restated as of March 31, 1998, as of June 25,
1999 and on the Closing Date of this Agreement among Terra Canada, the lenders
party thereto and Citibank, as administrative agent for said lenders.
"Terra Capital Available Credit" means, at any time, an amount equal
to (a) the lesser of (i) the then effective Revolving Credit Commitments and
(ii) (A) the Borrowing Base of Terra Capital at such time minus (B) the Terra
Canada Borrowing Base Adjustment of Terra Capital at such time minus (b) the sum
of (i) the aggregate Revolving Credit Outstandings owing by Terra Capital at
such time and (ii) any Availability Reserve applicable to Terra Capital in
effect at such time.
30
"Terra Canada Junior Guaranty" means the Junior Guaranty dated as of
the Closing Date, substantially in the form of Exhibit H-4, executed by Terra
Canada in favor of Terra UK Holdings in respect of the Terra UK Debt, and
assigned to the Collateral Agent.
"Terra Canada Lenders" means the Lenders under, and as defined in,
the Terra Canada Credit Agreement.
"Terra Capital Guarantors" means each of (i) Terra Industries, (ii)
the Borrowing Base Contributors of Terra Capital, (iii) Terra Capital Holdings,
(iv) TNC, (v) TI, (vi) BMCH, (vii) Beaumont Holdings, (viii) TMC, (ix) Terra UK
Holdings and (x) any other Domestic Subsidiary (other than TNCLP and its
Subsidiaries) that becomes party to a Guaranty in respect of the Obligations of
Terra Capital.
"Terra Capital Holdings" means Terra Capital Holdings, Inc., a
Delaware corporation.
"Terra Oklahoma" means Terra International (Oklahoma) Inc., a Delaware
corporation and a wholly owned Subsidiary of TI.
"Terra UK Available Credit" means, at any time, an amount equal to (a)
the lesser of (i) the then effective Revolving Credit Commitments and (ii) (A)
the Borrowing Base of Terra UK at such time minus (B) the Terra Canada Borrowing
Base Adjustment of Terra UK at such time minus (b) the sum of (i) the aggregate
Revolving Credit Outstandings owing by Terra UK at such time and (ii) any
Availability Reserve applicable to Terra UK in effect at such time.
"Terra UK Customer Debt" means Indebtedness for borrowed money of a
customer of Terra UK owing to Capital Bank Plc or another financial institution
in the United Kingdom, provided that:
(a) such customer uses the entire principal proceeds of such
Indebtedness to pay for goods and services purchased from Terra UK;
(b) such customer is required to repay such Indebtedness in full
within 12 months of the date on which such Indebtedness is incurred;
(c) in the reasonable opinion of Terra UK, such customer is
creditworthy; and
(d) it is a condition of the extension of credit by Capital Bank
Plc (or such other financial institution) to such customer that Terra
UK guarantee a portion of such Indebtedness.
"Terra UK Debt" means Intercompany Indebtedness, in a principal amount
of $175,000,000 (which amount may be reduced by a prepayment of $40,000,000 on
the Closing Date), owed by Terra UK to Terra UK Holdings.
"Terra UK Guarantors" means each of (i) Terra Capital, (ii) the Terra
Capital Guarantors and (iii) Terra Canada.
31
"Terra UK Holdings" means Terra (U.K.) Holdings, Inc., a Delaware
corporation and a direct Subsidiary of Beaumont Methanol.
"Terra UK Share Mortgage" means the share mortgage executed by Terra
Canada dated June 30, 1999 in respect of the Stock of Terra UK.
"TI" means Terra International, Inc., a Delaware corporation and a
wholly owned Subsidiary of Terra Industries.
"Title IV Plan" means a pension plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).
"TMC" means Terra Methanol Corporation, a Delaware corporation.
"TNC" means Terra Nitrogen Corporation, a Delaware corporation and a
wholly owned Subsidiary of Terra Capital.
"TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited
partnership and a Subsidiary of Terra Capital.
"TNCLP Minority Interest Payments" means dividends and distributions
which are legally required to be paid to holders (other than Terra Industries
and its Subsidiaries) of limited partnership interests in TNCLP.
"TNLP Available Credit" means, at any time, an amount equal to (a) the
lesser of (i) the then effective Revolving Credit Commitments and (ii) the
Borrowing Base of TNLP at such time, minus (b) the sum of (i) the aggregate
Revolving Credit Outstandings owing by TNLP at such time and (ii) any
Availability Reserve applicable to TNLP in effect at such time.
"TNLP Debt" means Intercompany Indebtedness owing from time to time by
TNLP to Terra Capital.
"TNLP Guarantors" means (i) Terra Capital, (ii) the Terra Capital
Guarantors, (iii) TNCLP and (iv) any subsidiary of TNLP that becomes a party to
a Guaranty in respect of the Obligations of TNLP.
"TNLP Pledge and Security Agreement" means the Pledge and Security
Agreement dated as of the Closing Date, in substantially the form attached
hereto as Exhibit I-2 between TNLP and the Collateral Agent.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP minus (a) any minority interest in non-wholly-owned
Subsidiaries that would be reflected on a consolidated balance sheet of such
person and its Subsidiaries at such date prepared in conformity with GAAP and
(b) any Securities issued by such Person held as treasury securities.
"Unfunded Pension Liability" means, with respect to the Borrower at
any time, the sum of (a) the amount, if any, by which the present value of all
accrued benefits under each Title IV Plan (other than any Title IV Plan subject
to Section 4063 of ERISA) exceeds the fair
32
market value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, as determined as of the most recent valuation
date for such Title IV Plan using the actuarial assumptions in effect under such
Title IV Plan, and (b) the aggregate amount of withdrawal liability that could
be assessed under Section 4063 with respect to each Title IV Plan subject to
such Section, separately calculated for each such Title IV Plan as of its most
recent valuation date and (c) for a period of five years following a transaction
reasonably likely to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by the Borrower, any of its
Subsidiaries or any ERISA Affiliate as a result of such transaction.
"United Kingdom" and "UK" each means the territory known as the United
Kingdoms of England, Scotland, Wales and Northern Ireland.
"Unused Commitment Fee" has the meaning specified in Section 2.12(a).
"Unused Commitment Fee Rate" means 0.50% per annum.
"US Concentration Account" means the concentration account opened with
Citibank in New York, New York set forth on Schedule 7.12.
"Voting Stock" means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
"Year 2000 Compliant" means the ability of hardware, firmware or
software systems associated with information processing and delivery, operations
or services, operated by, provided to or otherwise necessary to the business or
operations of Terra Industries or any of its Subsidiaries to recognize and
properly perform date-sensitive functions involving certain dates prior to, and
at any date after, December 31, 1999.
Section 1.2. 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" each
mean "to but excluding" and the word "through" means "to and including."
Section 1.3. Accounting Terms and Principles.
-------------------------------
(a) Except as set forth below, all accounting terms not
specifically defined herein shall be construed in conformity with GAAP and
all accounting determinations required to be made pursuant hereto shall,
unless expressly otherwise provided herein, be made in conformity with
GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section
6.1 is hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board
33
or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of its independent public accountants and results in a change in
the results of any of the calculations required by Article V or Article
VIII which would not have occurred had such accounting change not occurred,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change with the desired result
that the criteria for evaluating compliance with such covenants by the
Borrower shall be the same after such change as if such change had not been
made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Article
V or Article VIII shall be given effect until such provisions are amended
to reflect such changes in GAAP.
Section 1.4. Certain Terms.
-------------
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article,
Section, subsection or clause in, this Agreement.
(b) References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule
to, or Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written
consent of the Requisite Lenders (or such other combination of Lenders as
may be required hereunder) is required hereunder for an amendment,
restatement, supplement or other modification to any such agreement and
such consent is not obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented
or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference
is operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer", "Administrative Agent" and
"Collateral Agent" include their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.6, references to Citibank in Section 10.3 and to
Citibank in the definitions of Base Rate and Eurodollar Rate shall be
deemed to refer to the financial institution then acting as the
Administrative Agent or one of its Affiliates if it so designates.
ARTICLE II
The Facilities
Section 2.1. The Commitments.
---------------
(a) Revolving Credit Commitments. On the terms and subject to the
conditions contained in this Agreement, each Revolving Credit Lender
severally agrees to make
34
loans (each a "Revolving Loan") to each Borrower from time to time
on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date in an aggregate amount not to exceed at
any time outstanding for all such loans by such Revolving Credit Lender
such Revolving Credit Lender's Revolving Credit Commitment; provided,
however, that at any time no Revolving Credit Lender shall be obligated to
make a Revolving Loan to any Borrower (i) in excess of such Revolving
Credit Lender's Ratable Portion of the Available Credit of such Borrower at
such time and (ii) to the extent that the aggregate Revolving Credit
Outstandings, after giving effect to such Revolving Loans, would exceed the
Maximum Credit in effect at such time. Within the limits of each Lender's
Revolving Credit Commitment, amounts of Revolving Loans repaid may be
reborrowed under this Section 2.1(a).
(b) Term Loan Commitments. On the terms and subject to the
conditions contained in this Agreement, each Term Loan Lender severally
agrees to make a loan (each a "Term Loan") to each Term Loan Borrower on
the Closing Date in an amount not to exceed such Lender's Term Loan
Commitment. The maximum aggregate Term Loans which may be advanced
hereunder to each respective Term Loan Borrower are (i) in respect of Terra
UK, $40,000,000 and (ii) in respect of TNLP, $10,000,000. Amounts of Term
Loans prepaid may not be reborrowed.
Section 2.2. Borrowing Procedures.
--------------------
(a) Each Revolving Credit Borrowing shall be made on notice given
by any Borrower to the Administrative Agent not later than 11:00 A.M. (New
York City time) (i) one Business Day, in the case of a Borrowing of Base
Rate Loans and (ii) three Business Days, in the case of a Borrowing of
Eurodollar Rate Loans, prior to the date of the proposed Revolving Credit
Borrowing; provided, however, in respect of Revolving Loans made on the
Closing Date (x) the Notice of Borrowing (as defined below) in respect
thereof may be given by 11.00 A.M. (New York City time) on the Closing Date
and (y) such Revolving Loans shall be made as Base Rate Loans and
thereafter may be converted to Eurodollar Rate Loans pursuant to Section
2.11. Each such notice shall be in substantially the form of Exhibit C (a
"Notice of Borrowing"), specifying (A) the proposed Borrower, (B) the date
of such proposed Revolving Credit Borrowing, (C) the amount of such
Borrower's Available Credit (in respect of which the Borrowing Base
component thereof may be calculated by reference to the Borrowing Base
Certificate most recently delivered to the Administrative Agent hereunder),
(D) the amount of the Revolving Loans then outstanding to each Borrower,
(E) the aggregate amount of such proposed Revolving Credit Borrowing, (F)
whether any portion of the proposed Revolving Credit Borrowing will be of
Base Rate Loans or Eurodollar Rate Loans and (G) the initial Interest
Period or Periods for any such Eurodollar Rate Loans, if applicable. The
Revolving Loans shall be made as Base Rate Loans unless (subject to Section
2.14) the Notice of Borrowing specifies that all or a portion thereof shall
be Eurodollar Rate Loans. Each Revolving Credit Borrowing, or portion
thereof, which is a Eurodollar Rate Loan shall be in an aggregate amount of
not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof. In the event that a Borrower requests a Base Rate Loan in an
amount of less than $5,000,000 the Administrative Agent may (at its option)
require such Revolving Credit Borrowing, or the relevant portion thereof,
to be made as a Swing Loan; provided, however, that to do so would not
conflict with the provisions of Section 2.3.
(b) The Term Loan Borrowings shall be made on the Closing Date upon
receipt of a Notice of Borrowing given by the Term Loan Borrowers to the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
Closing Date. The Notice of Borrowing
35
shall specify (A) the Closing Date and (B) the aggregate amount of such
proposed Term Loan Borrowing. The Term Loans shall initially be made as
Base Rate Loans and thereafter may be converted to Eurodollar Rate Loans
pursuant to Section 2.11.
(c) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and,
if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section
2.14(a). Each Revolving Credit Lender and Term Loan Lender shall, before
11:00 A.M. (New York City time) on the date of the proposed Borrowing, make
available to the Administrative Agent at its address referred to in Section
11.8, in immediately available funds, such Lender's Ratable Portion of such
proposed Borrowing. After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Sections 3.1
and 3.2, the Administrative Agent will make such funds available to the
relevant Borrower in such Borrower's Disbursement Account.
(d) Unless the Administrative Agent shall have received notice from
any Revolving Credit Lender or Term Loan Lender prior to the date of any
proposed 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 Ratable
Portion available to the Administrative Agent on the date of such Borrowing
in accordance with this Section 2.2 and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable 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, such Lender and the applicable 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 applicable Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the applicable
Borrower, the interest rate applicable at the time to the Loans comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate
for the first Business Day and thereafter at the interest rate applicable
at the time to the Loans comprising such Borrowing. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement. If the applicable Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not
relieve such Lender of any obligation it may have hereunder to such
Borrower.
(e) The failure of any Revolving Credit Lender to make a Revolving
Loan or any payment required by it on the date specified (a "Non-Funding
Lender"), including any payment in respect of its participation in Swing
Loans and Letter of Credit Obligations, shall not relieve any other
Revolving Credit Lender of its obligations to make such Loan or payment on
such date but no such other Lender shall be responsible for the failure of
any Non-Funding Lender to make a Revolving Loan or payment required under
this Agreement.
Section 2.3. Swing Loans.
-----------
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans
(each a "Swing Loan") otherwise available to any Borrower under the
Revolving Credit Facility from time to time on any Business Day during the
period from the Closing Date until the Revolving Credit Termination Date in
an
36
aggregate amount at any time outstanding at any time not to exceed the
lesser of (i) $15,000,000 and (ii) the Swing Loan Lender's Ratable Portion
of the amount by which the Maximum Credit exceeds the Revolving Credit
Outstandings at such time; provided, however, that no Swing Loan may be
made that, after giving effect thereto, would result in a Borrowing Base
Deficiency. The Swing Loan Lender shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Administrative Agent.
Each Swing Loan shall be a Base Rate Loan and (subject to Sections 2.6 and
2.9) shall be repaid within seven days of its making or if sooner upon any
Revolving Credit Borrowing. Within the limits set forth in the first
sentence of this Section 2.3(a), amounts of Swing Loans repaid may be
reborrowed under this Section 2.3(a).
(b) In order to request a Swing Loan, the relevant Borrower shall
telecopy to the Swing Loan Lender a duly completed request setting forth
the requested amount and date of the Swing Loan (a "Swing Loan Request"),
to be received by the Swing Loan Lender not later than 1:00 p.m. (New York
City time) on the day of the proposed Borrowing. Subject to the terms of
this Agreement, the Swing Loan Lender shall make its Swing Loan available
to the Borrower on the date of the relevant Swing Loan Request. The Swing
Loan Lender shall not make any Swing Loan in the period commencing on the
first Business Day after it receives written notice from any Lender that
one or more of the conditions precedent contained in Section 3.2 shall not
on such date be satisfied, and ending when such conditions are satisfied.
The Swing Loan Lender shall not otherwise be required to determine that, or
take notice whether, the conditions precedent set forth in Section 3.2
hereof have been satisfied in connection with the making of any Swing Loan.
(c) The Swing Loan Lender may demand at any time that each
Revolving Credit Lender pay to the Swing Loan Lender (for its account), in
the manner provided in subsection (d) below, such Revolving Credit Lender's
Ratable Portion of all or a portion of the outstanding Swing Loans, which
demand shall be in writing and shall specify the outstanding principal
amount of Swing Loans demanded to be paid.
(d) Each demand referred to in clause (c) above to each Revolving
Credit Lender shall be accompanied by a statement prepared by the Swing
Loan Lender specifying the amount of each Revolving Credit Lender's Ratable
Portion of the aggregate principal amount of the Swing Loans stated to be
outstanding in such notice or demanded to be paid pursuant to such demand,
and, notwithstanding whether or not the conditions precedent set forth in
Section 3.2 shall have been satisfied (which conditions precedent the
Revolving Credit Lenders for this purpose hereby irrevocably waive), each
Revolving Credit Lender shall, before 11:00 a.m. (New York City time) on
the Business Day next succeeding the date of such Revolving Credit Lender's
receipt of such written statement, make available to the Swing Loan Lender,
in immediately available funds, for the account of the Swing Loan Lender,
the amount specified in such statement. Upon such payment by a Revolving
Credit Lender, such Revolving Credit Lender shall, except as provided in
clause (f) below, be deemed to have made a Revolving Loan to the applicable
Borrower. The Swing Loan Lender shall use such funds to repay the Swing
Loans owing to it. To the extent that any Revolving Credit Lender fails to
make such payment available to the Swing Loan Lender, the applicable
Borrower shall repay such Swing Loan on demand.
(e) Upon the occurrence of a Default under Section 9.1(g), each
Revolving Credit Lender shall acquire, without recourse or warranty, an
undivided participation in each Swing Loan otherwise required to be repaid
by such Revolving Credit Lender pursuant to clause (d) above, which
participation shall be in a principal amount equal to such Revolving Credit
Lender's Ratable Portion of such Swing Loan, by paying to the Swing Loan
Lender on the date
37
on which such Revolving Credit Lender would otherwise have been required to
make a payment in respect of such Swing Loan pursuant to clause (d) above,
in immediately available funds, an amount equal to such Revolving Credit
Lender's Ratable Portion of such Swing Loan. If such amount is not in fact
made available by such Revolving Credit Lender to the Swing Loan Lender on
such date, the Swing Loan Lender shall be entitled to recover such amount
on demand from such Revolving Credit Lender together with interest accrued
from such date at the Federal Funds Rate for the first Business Day after
such payment was due and thereafter at the rate of interest then applicable
to Base Rate Loans.
(f) From and after the date on which any Revolving Credit Lender is
deemed to have made a Revolving Loan pursuant to clause (d) above with
respect to any Swing Loan or purchases an undivided participation interest
in a Swing Loan pursuant to clause (e) above, the Swing Loan Lender shall
promptly distribute to such Revolving Credit Lender such Revolving Credit
Lender's Ratable Portion of all payments of principal of and interest
received by the Swing Loan Lender on account of such Swing Loan other than
those received from a Lender pursuant to clause (d) or (e) above.
Section 2.4. Letters of Credit.
-----------------
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to issue one or more Letters of Credit at the
request of any Borrower for the account of such Borrower from time to time
during the period commencing on the Closing Date and ending on the earlier
of the Revolving Credit Termination Date and 30 days prior to the Scheduled
Termination Date; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or restrain
such Issuer from issuing such Letter of Credit or any Requirement of Law
applicable to such Issuer or any request or directive (whether or not
having the force of law but in relation with which such Issuer
customarily complies) from any Governmental Authority with jurisdiction
over such Issuer shall prohibit, or request that such Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuer with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuer is not otherwise compensated) not in effect on
the date of this Agreement or result in any unreimbursed loss, cost or
expense which was not applicable, in effect or known to such Issuer as
of the date of this Agreement and which such Issuer in good xxxxx xxxxx
material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Revolving Credit Lender or the applicable
Borrower, on or prior to the requested date of issuance of such Letter
of Credit, that one or more of the applicable conditions contained in
Sections 3.1 and 3.2 is not then satisfied;
(iii) after giving effect to the issuance of such Letter of
Credit, (A) the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit in effect at such time or (B) a Borrowing Base Deficiency
would result with respect to any Borrower;
38
(iv) after giving effect to the issuance of such Letter of
Credit, the sum of (i) the Letter of Credit Undrawn Amounts at such time
and (ii) the Reimbursement Obligations at such time exceeds $35,000,000
(the "Letter of Credit Sublimit"); or
(v) any fees due in connection with a requested issuance have
not been paid.
None of the Revolving Credit Lenders (other than the Issuers in their capacity
as such) shall have any obligation to issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit
be more than one year after the date of issuance thereof; provided,
however, that (i) any Letter of Credit with a one-year term may provide for
the renewal thereof for additional one-year periods and (ii) by not later
than the Revolving Credit Termination Date each Borrower shall provide cash
collateral in respect of any outstanding Letters of Credit issued for its
account at such date in accordance with Section 9.3.
(c) In connection with the issuance of each Letter of Credit, the
applicable Borrower shall give the relevant Issuer and the Administrative
Agent at least two Business Days' prior written notice (a "Letter of Credit
Request"), in substantially the form of Exhibit D (or in such other written
or electronic form as is acceptable to the Issuer), of the requested
issuance of such Letter of Credit. Such notice shall be irrevocable and
shall specify the applicable Borrower, the Issuer of such Letter of Credit,
the stated amount of the Letter of Credit requested, the date of issuance
of such requested Letter of Credit (which day shall be a Business Day), the
date on which such Letter of Credit is to expire (which date shall be a
Business Day), and the Person for whose benefit the requested Letter of
Credit is to be issued. Such notice, to be effective, must be received by
the relevant Issuer and the Administrative Agent not later than 11:00 A.M.
(New York City time) on the second Business Day prior to the requested
issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in this
Section 2.4, the relevant Issuer shall, on the requested date, issue a
Letter of Credit on behalf of any Borrower in accordance with such Issuer's
usual and customary business practices. No Issuer shall issue any Letter of
Credit in the period commencing on the first Business Day after it receives
written notice from any Lender that one or more of the conditions precedent
contained in Section 3.2 shall not on such date be satisfied, and ending
when such conditions are satisfied. The relevant Issuer shall not otherwise
be required to determine that, or take notice whether, the conditions
precedent set forth in Section 3.2 have been satisfied in connection with
the issuance of any Letter of Credit.
(e) If requested by the relevant Issuer, prior to the issuance of
each Letter of Credit by such Issuer, and as a condition of such issuance
and of the participation of each Revolving Credit Lender in the Letter of
Credit Obligations arising with respect thereto, the applicable Borrower
shall have delivered to such Issuer a letter of credit reimbursement
agreement, in such form as the Issuer may employ in its ordinary course of
business for its own account (a "Letter of Credit Reimbursement
Agreement"), signed by the applicable Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement
and this Agreement, the terms of this Agreement shall govern.
39
(f) Each Issuer shall:
(i) give the Administrative Agent written notice (or notice
by telephone, confirmed promptly thereafter in writing, which may be by
telecopier) of the issuance or renewal of a Letter of Credit issued by it,
of all drawings under a Letter of Credit issued by it and the payment (or
the failure to pay when due) by the applicable Borrower of any
Reimbursement Obligation when due (which notice the Administrative Agent
shall promptly transmit by telecopy or similar transmission to each
Revolving Credit Lender).
(ii) upon the request of any Revolving Credit Lender, furnish
to such Revolving Credit Lender copies of any Letter of Credit
Reimbursement Agreement to which such Issuer is a party and such other
documentation as may reasonably be requested by such Revolving Credit
Lender; and
(iii) no later than the first Business Day following the last
day of each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Revolving Credit Lender
requesting the same) and the Borrowers separate schedules for Documentary and
Standby Letters of Credit issued by it, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth the aggregate Letter of
Credit Obligations outstanding at the end of each month and any information
requested by the Borrowers or the Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of
Credit in accordance with the terms and conditions of this Agreement, such
Issuer shall be deemed to have sold and transferred to each Revolving
Credit Lender, and each Revolving Credit Lender shall be deemed irrevocably
and unconditionally to have purchased and received from such Issuer,
without recourse or warranty, an undivided interest and participation, to
the extent of such Revolving Credit Lender's Ratable Portion of the
Revolving Credit Commitments, in such Letter of Credit and the obligations
of the Borrowers with respect thereto (including all Letter of Credit
Obligations with respect thereto) and any security therefor and guaranty
pertaining thereto.
(h) Each Borrower agrees to pay to the Issuer of any Letter
of Credit the amount of all Reimbursement Obligations owing to such Issuer
under any Letter of Credit issued for its account when such amounts are due
and payable, irrespective of any claim, set-off, defense or other right
which such Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and such Borrower shall not have repaid such amount to such Issuer
pursuant to this clause (h) above or such payment is rescinded or set aside
for any reason, such Reimbursement Obligation shall be payable on demand
with interest thereon computed from the date on which such Reimbursement
Obligation arose to the date of repayment in full at the rate of interest
applicable to past due Revolving Loans bearing interest at a rate based on
the Base Rate during such period, and such Issuer shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Credit
Lender of such failure, and each Revolving Credit Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of such
Issuer the amount of such Revolving Credit Lender's Ratable Portion of such
payment in Dollars and in immediately available funds. If the
Administrative Agent so notifies such Lender prior to 11:00 A.M. (New York
City time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of
the amount of such payment on such Business Day in immediately available
funds. Upon such payment by a Revolving Credit Lender,
40
such Revolving Credit Lender shall, except during the continuance of a
Default or Event of Default under Section 9.1(g) and notwithstanding
whether or not the conditions precedent set forth in Section 3.2 shall have
been satisfied (which conditions precedent the Lenders hereby irrevocably
waive) be deemed to have made a Revolving Loan to the applicable Borrower
in the principal amount of such payment. Whenever any Issuer receives from
a Borrower a payment of a Reimbursement Obligation as to which the
Administrative Agent has received for the account of such Issuer any
payment from a Revolving Credit Lender pursuant to this clause (h) above,
such Issuer shall pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each Revolving Credit Lender, in immediately
available funds, an amount equal to such Revolving Credit Lender's Ratable
Portion of the amount of such payment adjusted, if necessary, to reflect
the respective amounts the Revolving Credit Lenders have paid in respect of
such Reimbursement Obligation.
(i) Each Borrower's obligation to pay each Reimbursement
Obligation and the obligations of the Revolving Credit Lenders to make
payments to the Administrative Agent for the account of the Issuers with
respect to Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms
of this Agreement, under any and all circumstances whatsoever, including
the occurrence of any Default or Event of Default, and irrespective of:
(i) any lack of validity or enforceability of any Letter
of Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of Credit or
any Loan Document;
(iii) the existence of any claim, set off, defense or
other right that any Borrower, any Loan Party, or other party
guaranteeing, or otherwise obligated with, such Borrower, any Subsidiary
or other Affiliate thereof or any other Person may at any time have
against the beneficiary under any Letter of Credit, Issuer, the
Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or 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 the Issuer under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any
kind of the Issuer, the Lenders, the Administrative Agent or any other
Person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of any
Borrower's obligations hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to any Borrower or any Revolving Credit
41
Lender. In determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof, the Issuer 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 and, in
making any payment under any Letter of Credit the Issuer may rely exclusively on
the documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuer.
(j) If and to the extent such Revolving Credit Lender shall
not have so made its Ratable Portion of the amount of the payment required
by clause (i) above available to the Administrative Agent for the account
of such Issuer, such Revolving Credit Lender agrees to pay to the
Administrative Agent for the account of such Issuer forthwith on demand
such amount together with interest thereon, for the first Business Day
after payment was first due at the Federal Funds Rate, and thereafter until
such amount is repaid to the Administrative Agent for the account of such
Issuer, at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility. The failure of any Revolving Credit Lender to
make available to the Administrative Agent for the account of such Issuer
its Ratable Portion of any such payment shall not relieve any other
Revolving Credit Lender of its obligation hereunder to make available to
the Administrative Agent for the account of such Issuer its Ratable Portion
of any payment on the date such payment is to be made, but no Revolving
Credit Lender shall be responsible for the failure of any other Revolving
Credit Lender to make available to the Administrative Agent for the account
of the Issuer such other Revolving Credit Lender's Ratable Portion of any
such payment.
(k) Schedule 2.4(k) contains a schedule of certain letters of
credit issued prior to the Closing Date by Citibank for the account of the
Borrower indicated thereon. On the Closing Date (i) such letters of credit,
to the extent outstanding, shall be automatically and without further
action by the parties thereto converted to Letters of Credit issued
pursuant to this Section 2.4 for the account of each applicable Borrower
and subject to the provisions hereof, and for this purpose the fees
specified in Section 2.12(b) shall be payable (in substitution for any fees
set forth in the applicable letter of credit reimbursement agreements or
applications relating to such letters of credit (and accordingly such
latter fees, other than amounts accrued in respect thereof through the
Closing Date, shall not be payable)) as if such letters of credit had been
issued on the Closing Date, (ii) such Revolving Credit Lenders have become
Issuers solely for the purpose of maintaining such letters of credit, (iii)
the face amount of such letters of credit shall be included in the
calculation of Letter of Credit Obligations, (iv) all liabilities of the
applicable Borrower with respect to such letters of credit shall constitute
Obligations and (vi) all fees with respect to such Letters of Credit
accrued through the Closing Date shall have been paid to the applicable
Issuer on or prior to the Closing Date. No letter of credit converted in
accordance with this Section 2.4(k) shall be amended, extended or renewed
without the prior written consent of the Administrative Agent.
42
Section 2.5. Reduction and Termination of the Revolving
------------------------------------------
Credit Commitments.
-------------------
(a) The Borrowers may, by notice on the Closing Date (or upon
at least three Business Days' prior notice at any time thereafter) to the
Administrative Agent, terminate in whole or reduce in part ratably the unused
portions of the respective Revolving Credit Commitments of the Revolving Credit
Lenders; provided, however, that each partial reduction shall be in the
aggregate amount of not less than $10,000,000 or an integral multiple of
$5,000,000 in excess thereof.
(b) The then current Revolving Credit Commitments shall be
permanently reduced on each date on which a prepayment of Revolving Loans or
Swing Loans is made pursuant to Section 2.9(a) and (b) (other than a mandatory
prepayment made from the Net Cash Proceeds of a Permitted Sale Leaseback
Transaction or from the sale or disposition of Inventory in the ordinary course
of business) or would be required to be made had the outstanding Revolving Loans
and Swing Loans equaled the Revolving Credit Commitments then in effect, in each
case in the amount of such prepayment (or deemed prepayment) (and the Revolving
Credit Commitment of each Lender shall be reduced by its Ratable Portion of such
amount).
Section 2.6. Repayment of Loans.
-------------------
(a) Each Borrower shall repay the entire unpaid principal
amount of its Revolving Loans on the Scheduled Termination Date.
(b) Each Term Loan Borrower shall repay its Term Loan on the
Fiscal Quarter Dates, in the aggregate amounts, pro rata between the Term Loans
of each Term Loan Borrower, as set forth below:
(i) each Fiscal Quarter Date, from and including
June 30 in the year 2000: $1,250,000
(ii) each Fiscal Quarter Date in the year 2001: $1,250,000
(iii) each Fiscal Quarter Date, other than
December 31, in the year 2002 $1,250,000
provided, however, that each Term Loan Borrower shall repay the entire unpaid
principal amount of its Term Loan on the Scheduled Termination Date.
Section 2.7. Evidence of Debt, Obligations of Borrowers.
------------------------------------------
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing Indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(b) The Administrative Agent shall maintain accounts in
accordance with its usual practice in which it will record (i) the amount of
each Loan made and, if a Eurodollar Rate Loan, the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable by each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
43
the Administrative Agent hereunder from each Borrower and each Lender's
share thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to
repay the Loans in accordance with their terms.
(d) Notwithstanding any other provision of the Agreement, in
the event that any Lender requests that any Borrower execute and deliver a
promissory note or notes payable to such Lender in order to evidence the
Indebtedness owing to such Lender by such Borrower hereunder, each such
Borrower will promptly execute and deliver a Note or Notes to such Lender
evidencing any Revolving Loans of such Lender, substantially in the forms
of Exhibit B, and the interests evidenced by such note or notes shall at
all times (including after assignment of all or part of such interests) be
evidenced by one or more Notes payable to the order of the payee named
therein; provided, however, that Terra UK shall not be required to execute
and deliver any promissory note or notes hereunder.
(e) Without affecting any guaranty or collateral obligation
of any Borrower or other Loan Party under any Loan Document, each Borrower
is severally liable in respect of its Obligations hereunder (in respect of
principal and interest only) and, as a Borrower, is not obligated in such
capacity to repay any Loan (or pay interest thereon) of another Borrower
hereunder. All other Obligations of the Borrowers hereunder are joint and
several.
Section 2.8. Optional Prepayments.
--------------------
(a) Revolving Loans. The Borrowers may (in addition to the
obligations under Section 2.9(d)), upon, (i) in respect of Swing Loans,
same day notice, (ii) in respect of Base Rate Loans, at least one Business
Day's prior notice, and (iii) in respect of Eurodollar Rate Loans, at least
four Business Days' prior notice, to the Administrative Agent, stating the
proposed date and aggregate principal amount of the prepayment, prepay the
outstanding principal amount of the Revolving Loans in whole or in part;
provided, however, that if any prepayment of any Eurodollar Rate Loan is
made by any Borrower other than on the last day of an Interest Period for
such Loan, such Borrower shall also pay any amounts owing pursuant to
Section 2.14(e); and, provided, further, that each partial prepayment
(other than in respect of Swing Loans or as required under Section 2.9)
shall be in an aggregate principal amount not less than $5,000,000 or
integral multiples of $1,000,000 in excess thereof. Upon the giving of such
notice of prepayment, the principal amount of Loans specified to be prepaid
shall become due and payable on the date specified for such prepayment.
(b) Term Loans. The Term Loan Borrowers may (subject as
provided below), upon (i) in respect of Base Rate Loans, at least one
Business Day's prior notice and (ii) in respect of Eurodollar Rate Loans,
at least four Business Days' prior notice, to the Administrative Agent,
stating the proposed date and aggregate principal amount of the prepayment,
prepay the outstanding principal amount of the Term Loans in pro rata
amounts between the Term Loans of each Term Loan Borrower, in whole or in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that if any prepayment of any
44
Eurodollar Rate Loan is made by a Borrower other than on the last day of an
Interest Period for such Loan, such Borrower shall also pay any amounts
owing pursuant to Section 2.14(e); and, provided, further, that each
partial prepayment shall be in an aggregate amount not less than $5,000,000
or integral multiples of $1,000,000 in excess thereof and that any such
partial prepayment shall be applied pro rata to the remaining installments
of such outstanding principal amount of the Term Loans. Upon the giving of
such notice of prepayment, the principal amount of the Term Loans specified
to be prepaid shall become due and payable on the date specified for such
prepayment.
(c) No Borrower shall have any right to prepay the principal
amount of any Revolving Loan or any Term Loan other than as provided in
this Section 2.8 or as required in Section 2.9.
Section 2.9. Mandatory Prepayments.
---------------------
(a) Subject to the provisions of the Intercreditor Agreement,
upon receipt by Terra Industries, the Borrowers or any of their respective
Subsidiaries of Net Cash Proceeds arising (i) from an Asset Sale or a Debt
Issuance, each Borrower shall immediately prepay its Loans (or provide cash
collateral in respect of Letter of Credit) such that the aggregate amount
of all such payments is equal to 100% of such Net Cash Proceeds, (ii) from
an Equity Issuance each Borrower shall immediately prepay its Loans (or
provide cash collateral in respect of Letters of Credit) such that the
aggregate amount of all such payments is equal to 50% of such Net Cash
Proceeds, or (iii) from an insured loss or casualty event (being, other
than proceeds in respect of business interruption, "Insurance Proceeds"),
each Borrower shall immediately prepay its Loans (or provide cash
collateral in respect of Letters of Credit) such that the aggregate amount
of all such payments is equal to 100% of such Net Cash Proceeds; provided,
however, (x) any Net Cash Proceeds arising from the sale or other
disposition of any property by Terra Canada or its Subsidiaries, shall not
be required to be applied to the Loans (or as cash collateral in respect of
Letters of Credit) to the extent that such proceeds have been applied to
prepay obligations in respect of the Canadian Term Loan (in accordance with
the Intercreditor Agreement) and (y) any Insurance Proceeds (which do not
exceed $20,000,000 in respect of any single loss or event) may (provided,
and for so long as, no Default or Event of Default shall have occurred
which is continuing), at the request of the Borrowers, be applied in
replacing or reinstating the affected assets; provided further that (A)
such Net Cash Proceeds are so applied (or contractually committed to be so
applied) within 360 days (the "Reinstatement Date") following the
occurrence of the event giving rise to such Net Cash Proceeds, (B) such Net
Cash Proceeds are deposited in a cash collateral account maintained with,
and subject to a first priority Lien in favor of, the Administration Agent
(which cash collateral may be included in the calculation of relevant
Borrowing Base pending its application hereunder) over which the
Administrative Agent shall possess sole dominion and control and
(notwithstanding Section 11.1(a)(ix)) any Net Cash Proceeds deposited in
such account for such purpose may not subsequently be withdrawn without the
approval of the Administrative Agent and (C) any such Net Cash Proceeds or
any portion thereof not applied in replacement or reinstatement of the
affected assets (x) by the Reinstatement Date or (y) at any time during the
continuance of a Default or Event of Default at any time prior to the
Reinstatement Date, shall be applied as mandatory prepayment of the Loans
(or as cash collateral in respect of Letters of Credit) at such time. Any
such mandatory prepayment shall be applied in accordance with the
provisions of the Intercreditor Agreement.
45
(b) All repayments of Revolving Loans and Swing Loans
required to be made pursuant to this Section 2.9 (except a repayment
arising from the Permitted Sale Leaseback Transaction) shall result in a
permanent reduction of the Revolving Credit Commitments to the extent
provided in Section 2.5(b).
(c) If at any time, either (i) the aggregate principal amount
of Revolving Credit Outstandings exceeds the Maximum Credit at such time or
(ii) a Borrowing Base Deficiency exists in respect of any Borrower, each
Borrower shall forthwith (or if such Borrowing Base Deficiency has occurred
through receivables which were previously classified as Eligible
Receivables being reclassified as ineligible, in which case upon the
expiration of two Business Days during which such Borrowing Base Deficiency
remains continuing) prepay its Swing Loans first and then its Revolving
Loans then outstanding such that the aggregate amount of all such payments
is equal to such excess or otherwise sufficient to eliminate such
deficiency. If any such excess or deficiency remains after repayment in
full of the aggregate outstanding Swing Loans and Revolving Loans, each
Borrower shall provide cash collateral for its Letter of Credit Obligations
in the manner set forth in Section 9.3 to the extent required to eliminate
such excess or deficiency.
(d) Each Borrower agrees that all available funds (others
than those funds representing Net Cash Proceeds which are to be otherwise
applied pursuant to this Section 2.9) in the Cash Collateral Account of
such Borrower shall be applied on a daily basis; first to repay the
outstanding principal amount of its Swing Loans until its Swing Loans shall
have been repaid in full; second to repay the outstanding principal balance
of its Revolving Loans until its Revolving Loans shall have been repaid in
full; and third to any other Obligations then due and payable. If there are
no Loans outstanding and no other Obligations are then due and payable,
then the funds in the Cash Collateral Account shall be retained in such
Cash Collateral Account, or (if required by the Administrative Agent)
transferred to the L/C Cash Collateral Account, to cash collateralize the
Letter of Credit Obligations then outstanding and any contingent
obligations which such Borrower may have under any Guaranty or any guaranty
of the Canadian Term Loan); provided, however, that (subject to Section
7.12(d)(iii) in respect of Terra UK) if on any Business Day after giving
effect to the foregoing applications any funds are on deposit in its Cash
Collateral Account and no Default or Event of Default shall have occurred
and be continuing, the applicable Borrower may direct the Administrative
Agent to (and the Administrative Agent shall) disburse such funds to such
Borrower's Disbursement Account.
Section 2.10. Interest.
--------
(a) Rate of Interest. All Loans and the outstanding amount of
all other Obligations shall bear interest, in the case of Loans, on the
unpaid principal amount thereof from the date such Loans are made and, in
the case of such other Obligations, from the date such other Obligations
are due and payable until, in all cases, paid in full, except as otherwise
provided in Section 2.10(c), as follows:
(i) if a Base Rate Loan or such other Obligation, at a
rate per annum equal to the sum of (A) the Base Rate as in effect from time
to time, plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal
to the sum of (A) the Eurodollar Rate determined for the applicable
Interest Period, plus (B) the Applicable Margin in effect from time to time
during such Eurodollar Interest Period.
46
(b) Interest Payments. (i) Interest accrued on each Base Rate
Loan (including Swing Loans) shall be payable in arrears (A) on the first
day of each calendar month, commencing on the first such day following the
making of such Base Rate Loan, and (B) if not previously paid in full, at
maturity (whether by acceleration or otherwise) of such Base Rate Loan;
(ii) interest accrued on each Eurodollar Rate Loan shall be payable in
arrears (A) on the last day of each Interest Period applicable to such Loan
and, in respect of any Interest Period of six months' duration, on the day
which is three months following commencement of such Interest Period and
also on the last day of such Interest Period, (B) upon the payment or
prepayment thereof in full or in part, and (C) if not previously paid in
full, at maturity (whether by acceleration or otherwise) of such Eurodollar
Rate Loan; and (iii) interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such
Obligation, becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest
specified in Section 2.10(a) or elsewhere herein, effective immediately
upon the occurrence of an Event of Default, and for as long thereafter as
such Event of Default shall be continuing, the principal balance of all
Loans and the amount of all other Obligations shall bear interest at a rate
which is two percent per annum in excess of the rate of interest applicable
to such Obligations from time to time.
Section 2.11. Conversion/Continuation Option.
------------------------------
(a) The Borrowers may elect (i) at any time to convert Base
Rate Loans (other than Swing Loans) or any portion thereof to Eurodollar
Rate Loans, or (ii) at the end of any applicable Interest Period, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans
or to continue such Eurodollar Rate Loans or any portion thereof for an
additional Interest Period; provided, however, that the aggregate amount of
the Eurodollar Loans for each Interest Period complies with the provisions
of Section 2.2(a). Each conversion or continuation shall be allocated among
the Loans of each Lender in accordance with its Ratable Portion. Each such
election shall be in substantially the form of Exhibit F hereto (a "Notice
of Conversion or Continuation") and shall be made by giving the
Administrative Agent at least three Business Days' prior written notice
specifying (A) the amount and type of Loan being converted or continued,
(B) in the case of a conversion to or a continuation of Eurodollar Rate
Loans, the applicable Interest Period, and (C) in the case of a conversion,
the date of conversion (which date shall be a Business Day and, if a
conversion from Eurodollar Rate Loans, shall also be the last day of the
applicable Interest Period).
(b) The Administrative Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the
options selected therein. Notwithstanding the foregoing, no conversion in
whole or in part of Base Rate Loans to Eurodollar Rate Loans, and no
continuation in whole or in part of Eurodollar Rate Loans upon the
expiration of any applicable Interest Period, shall be permitted at any
time at which (i) a Default or an Event of Default shall have occurred and
be continuing or (ii) the continuation of, or conversion into, would
violate any of the provisions of Section 2.14. If, within the time period
required under the terms of this Section 2.11, the Administrative Agent
does not receive a Notice of Conversion or Continuation from any Borrower
containing a permitted election to continue any Eurodollar Rate Loans for
an additional Interest Period or to convert any such Loans, then, upon the
expiration of the applicable Interest Period, such Loans will be
automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
47
Section 2.12. Fees.
----
(a) Unused Commitment Fee. The Borrowers agree to pay to each
Revolving Credit Lender a commitment fee on the actual amount by which the
Revolving Credit Commitment of such Revolving Credit Lender exceeds the sum
of (i) such Lender's Ratable Portion of the outstanding Revolving Loans and
outstanding Letter of Credit Obligations and (ii) the outstanding portion
of any Swing Loans made by such Lender (the "Unused Commitment Fee") on
each day from the date hereof until the Revolving Credit Termination Date
at the Unused Commitment Fee Rate, payable in arrears (x) on the last day
of each calendar month, commencing on the first such day following the date
of this Agreement and (y) on the Revolving Credit Termination Date.
(b) Letter of Credit Fees. The Borrowers agree to pay the
following amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each
Issuer of a Letter of Credit, with respect to each Letter of Credit issued
by such Issuer, an issuance fee equal to 0.50% per annum of the maximum
amount available from time to time to be drawn under such Letter of Credit,
payable in arrears (A) on the first day of each calendar month, commencing
on the first such day following the issuance of such Letter of Credit and
(B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit
of the Revolving Credit Lenders, with respect to each Letter of Credit, a
fee accruing at a rate per annum equal to the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans of the maximum amount
available from time to time to be drawn under such Letter of Credit,
payable in arrears (A) on the first day of each calendar month commencing
on the first such day following the issuance of such Letter of Credit and
(B) on the Revolving Credit Termination Date; provided, however that during
the continuance of an Event of Default, such fee shall be increased by two
percent per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with
respect to the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance with
such Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
(c) Additional Fees. The Borrowers have agreed to pay to the
Administrative Agent and the Arranger additional fees, the amount and dates
of payment of which are embodied in the Fee Letter. Any cash management
fees payable by or on behalf of any Loan Party shall be payable
irrespective of whether accounts are opened in the name of any Loan Party
or by the Administrative Agent or any of its Affiliates in its name in
respect of any Loan Party.
Section 2.13. Payments and Computations; Protective Advances.
----------------------------------------------
(a) The Borrowers shall make each payment hereunder
(including fees and expenses) not later than 11:00 A.M. (New York City
time) (provided, however, that repayments of Swing Loans shall be made not
later than 4:00 P.M. (New York City time)) on the day when
48
due, in Dollars, to the Administrative Agent at its address referred to in
Section 11.8 in immediately available funds without set-off or
counterclaim. The Administrative Agent will promptly thereafter cause to be
distributed immediately available funds relating to the payment of
principal or interest or fees to the Lenders, in accordance with the
application of payments set forth in clauses (e) and (f) of this Section
2.13, as applicable, for the account of their respective Applicable Lending
Offices; provided, however, that amounts payable pursuant to Section
2.14(c), 2.14(e), 2.15 or 2.16 shall be paid only to the affected Lender or
Lenders and amounts payable with respect to Swing Loans shall be paid only
to the Swing Loan Lender. Payments received by the Administrative Agent
after 11:00 A.M. (New York City time) shall be deemed to be received on the
next Business Day.
(b) All computations of interest and fees 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 and fees are
payable. Each determination by the Administrative Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder 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 fees, as the case may
be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding
Business Day. All repayments of any Revolving Loans shall be applied first
to repay such Loans outstanding as Base Rate Loans and then to repay such
Loans outstanding as Eurodollar Rate Loans with those Eurodollar Rate Loans
which have earlier expiring Eurodollar Interest Periods being repaid prior
to those which have later expiring Eurodollar Interest Periods.
(d) Unless the Administrative Agent shall have received
notice from the Borrowers to the Lenders prior to the date on which any
payment is due hereunder that the Borrowers will not make such payment in
full, the Administrative Agent may assume that the Borrowers have 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 Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrowers shall not have
made such payment in full to the Administrative Agent, each Lender shall
repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon at the Federal
Funds Rate, for the first Business Day, and, thereafter, at the rate
applicable to Base Rate Loans, 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.
(e) Subject to the provisions of clause (f) of this Section
2.13 and (except as otherwise provided in Section 2.9), all payments and
any other amounts received by the Administrative Agent from or for the
benefit of any Borrower shall be applied first, to pay principal of and
interest on any portion of the Loans which the Administrative Agent may
have advanced to such Borrower pursuant to the express provisions of this
Agreement on behalf of any Lender, for which the Administrative Agent has
not then been reimbursed by such Lender or such Borrower; second, to pay
all other Obligations owing by such Borrower then due and payable; and
third, as such Borrower so designate. Payments in respect of Swing Loans
received by the Administrative Agent shall be distributed to the Swing Loan
Lenders; payments in respect of
49
Revolving Loans received by the Administrative Agent shall be distributed
to each Lender in accordance with such Lender's Ratable Portion of the
Revolving Credit Commitments; payments in respect of the Term Loans
received by the Administrative Agent shall be distributed to each Term Loan
Lender in accordance with such Lender's Ratable Portion of the Term Loans;
and all payments of fees and all other payments in respect of any other
Obligation shall be allocated among such of the Lenders and Issuers as are
entitled thereto, and, if to the Lenders, in proportion to their respective
Ratable Portions.
(f) After the occurrence and during the continuance of an
Event of Default, each Borrower hereby irrevocably waives the right to
direct the application of any and all payments in respect of the
Obligations owing by such Borrower and any proceeds of Collateral of such
Borrower, and agrees that all such payments and proceeds of Collateral
shall be applied to the Obligations in accordance with the provisions of
the Intercreditor Agreement.
(g) All payments of Reimbursement Obligations, interest,
fees, expenses and other sums due and payable in respect of the Loans of
any Borrower and all expenses, disbursements and advances incurred by the
Administrative Agent pursuant to the Loan Documents after the occurrence
and during the continuance of an Event of Default which the Administrative
Agent, in its sole discretion, deems necessary or desirable to preserve or
protect the Collateral of such Borrower or any portion thereof or to
enhance the likelihood or maximize the amount of repayment of the
Obligations owing by such Borrower may, at the option of the Administrative
Agent, be paid from the proceeds of Swing Loans or Revolving Loans. Each
Borrower hereby authorizes the Swing Loan Lenders to make Swing Loans
pursuant to Section 2.3(a) and the Lenders to make Revolving Loans pursuant
to Section 2.2(a), from time to time in such Swing Loan Lender's or such
Lender's discretion, which are in the amounts of any and all principal
payable with respect to the interest, fees, expenses and other sums payable
in respect of the Loans of such Borrower, and further authorizes the
Administrative Agent to give the Lenders notice of any Borrowing with
respect to such Loans and to distribute the proceeds of such Loans to pay
such amounts. Each Borrower agrees that all such Loans so made shall be
deemed to have been requested by it, as applicable, (irrespective of the
satisfaction of the conditions in Section 3.2, which conditions the
Revolving Credit Lenders irrevocably waive) and directs that all proceeds
thereof shall be used to pay such amounts.
Section 2.14. Special Provisions Governing Eurodollar Rate
--------------------------------------------
Loans.
------
(a) Determination of Interest Rate. The Eurodollar Rate for
each Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition
of "Eurodollar Rate." The Administrative Agent's determination shall be
presumed to be correct, absent manifest error, and shall be binding on the
Borrowers.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In
the event that: (i) the Administrative Agent reasonably determines that
adequate and fair means do not exist for ascertaining the applicable
interest rates by reference to which the Eurodollar Rate then being
determined is to be fixed; or (ii) the Requisite Lenders notify the
Administrative Agent that the Eurodollar Rate for any Interest Period will
not adequately reflect the cost to the Lenders of making or maintaining
such Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrowers and the Lenders, whereupon each
Eurodollar Loan will automatically, on the last day of the current Interest
Period for such Loan, convert into a Base
50
Rate Loan and the obligations of the Lenders to make Eurodollar Rate Loans
or to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended
until the Administrative Agent shall notify the Borrowers that the
Requisite Lenders have determined that the circumstances causing such
suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall
reasonably determine that the introduction of or any change (where such
introduction or change occurs after the date of this Agreement) in or in
the interpretation of any law, treaty or governmental rule, regulation or
order (other than any change by way of imposition or increase of reserve
requirements included in determining the Eurodollar Rate Reserve Percentage
and other than any change in the rate of tax on, or determined by reference
to, the net income or profits of such Lender (including franchise taxes) or
capital of such Lender) or the compliance by such Lender with any
guideline, request or directive (where such guideline, request or directive
is issued after the date of this Agreement) from any central bank or other
Governmental Authority (whether or not having the force of law but in
relation to which such Lender customarily complies), there shall be any
increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans made to any Borrower, then such
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. A certificate as to the
amount of such increased cost, submitted to the applicable Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of or any change
in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the date of this Agreement shall make it
unlawful, or any central bank or other Governmental Authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to
make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar
Rate Loans, then, on notice thereof and demand therefor by such Lender to
the Borrowers through the Administrative Agent, (i) the obligation of such
Lender to make or to continue Eurodollar Rate Loans and to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended, and each such
Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are
then outstanding, each applicable Borrower shall immediately (or, if lawful
to do so, on the last day of the current Interest Period relating thereto)
convert each such Loan into a Base Rate Loan. If at any time after a Lender
gives notice under this Section 2.14(d) such Lender determines that it may
lawfully make Eurodollar Rate Loans, such Lender shall promptly give notice
of that determination to the applicable Borrower and the Administrative
Agent, and the Administrative Agent shall promptly transmit the notice to
each other Lender. Each Borrower's right to request, and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall thereupon be
restored.
(e) Breakage Costs. In addition to all amounts required to
be paid by the Borrowers pursuant to Section 2.10, each Borrower shall
compensate each Lender, upon demand, for all losses, expenses and
liabilities (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Lender's Eurodollar Rate Loans to such
Borrower but excluding any loss of the Applicable Margin on the relevant
Loans) which that Lender may sustain (i) if for any reason (other than
under Section 2.14(b)) a proposed Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a
51
Notice of Conversion or Continuation given by such Borrower or in a
telephonic request by it for borrowing or conversion or continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 2.11, (ii) if for any reason any Eurodollar Rate Loan
is prepaid (including mandatorily pursuant to Section 2.9) on a date which
is not the last day of the applicable Interest Period, (iii) as a
consequence of a required conversion of a Eurodollar Rate Loan to a Base
Rate Loan as a result of any of the events indicated in Section 2.14(d), or
(iv) as a consequence of any failure by a Borrower to repay Eurodollar Rate
Loans when required by the terms hereof. The Lender making demand for such
compensation shall deliver to the applicable Borrower concurrently with
such demand a written statement as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
(f) Excluded Period. No Lender or Issuer shall be entitled
to make a claim under Clauses 2.14(c), 2.15 or 2.16 unless it has notified
the Administrative Agent of its intention to make such claim within 180
days of such Lender or Issuer becoming aware of the circumstances giving
rise to such claim.
Section 2.15. Capital Adequacy. If at any time any Lender
-----------------
reasonably determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance
with any such law, treaty, rule, regulation, or order, or (c) compliance
with any guideline or request or directive issued after the date hereof
from any central bank or other Governmental Authority (whether or not
having the force of law) shall have the effect of reducing the rate of
return on such Lender's (or any corporation controlling such Lender's)
capital as a consequence of its obligations hereunder or under or in
respect of any Letter of Credit to a level below that which such Lender or
such corporation could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such
Lender (with a copy of such demand to the Administrative Agent), the
applicable 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 for such reduction. A
certificate as to such amounts submitted to the applicable Borrower and the
Administrative Agent by such Lender shall be conclusive and binding for all
purposes absent manifest error.
Section 2.16. Taxes.
-----
(a) Subject to Section 2.16(f) below, any and all payments by
the Borrowers under each Loan Document shall be made 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 (i) in the case of each Lender and the Administrative
Agent (A) taxes imposed on or measured by its net income, and franchise
taxes imposed on it, by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Administrative Agent
(as the case may be) is organized or in which it maintains any office or
operations and (B) any United States withholding taxes payable with respect
to payments under the Loan Documents under laws (including any statute,
treaty or regulation) in effect on the Closing Date (or, in the case of an
Eligible Assignee, the date of the Assignment and Acceptance) applicable to
such Lender or the Administrative Agent, as the case may be, but not
excluding any United States withholding payable as a result of any change
in such laws occurring after the Closing Date (or the date of such
Assignment and Acceptance) (but excluding taxes set forth in clause (A)
above) and (ii) in the case of each Lender, taxes imposed on or measured by
its net
52
income, and franchise taxes imposed on it, by the jurisdiction in which
such Lender's Applicable Lending Office is located (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If any Taxes shall be required
by law to be deducted from or in respect of any sum payable by any Borrower
under any Loan Document to any Lender or the Administrative Agent (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 2.16) 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 Borrower shall make
such deductions, (iii) such Borrower shall pay the full amount deducted to
the relevant taxing authority or other authority in accordance with
applicable law, and (iv) such Borrower shall deliver to the Administrative
Agent evidence of such payment.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies of the United States or any political subdivision
thereof or any applicable foreign jurisdiction, and all liabilities with
respect thereto, which arise from any payment made by such Borrower or any
of its Subsidiaries under any Loan Document or from the execution, delivery
or registration of, or otherwise with respect to, any Loan Document
(collectively, "Other Taxes").
(c) Each Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.16) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including for penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date 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 or
Other Taxes, the applicable Borrower will furnish to the Administrative
Agent, at its address referred to in Section 11.8, the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.16 shall survive the payment in full of the
Obligations.
(f) On the date of the Assignment and Acceptance pursuant to
which any Non-U.S. Lender becomes a Lender after the Closing Date, if
requested by the Borrowers or the Administrative Agent, each Non-U.S.
Lender that is entitled at such time to an exemption from United States
withholding tax shall provide the Administrative Agent and the Borrowers
with two completed copies of IRS Form W-8 (Ben or ECI as appropriate
including any required certifications) or other applicable form,
certificate or document prescribed by the IRS certifying as to such Non-
U.S. Lender's entitlement to such exemption from United States withholding
tax with respect to all payments to be made to such Non-U.S. Lender under
the Loan Documents. Unless the Borrowers and the Administrative Agent have
received forms or other documents satisfactory to them indicating that
payments under any Loan Document to or for a Non-U.S. Lender are not
subject to United States withholding tax, the Borrowers or the
Administrative Agent shall withhold taxes from such payments at the
applicable statutory rate.
53
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.16 shall use its reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change
the jurisdiction of its Applicable Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such
additional amounts which would be payable or may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender. If any Lender is not, with reasonable
efforts, able to change the jurisdiction of its Applicable Lending Office
in accordance with this Section 2.16(g), then such Lender shall use its
reasonable efforts to complete such tax forms and make such filings as
would avoid the need for, or reduce the amount of, any such additional
amounts which would be payable or may thereafter accrue; provided, however,
that completion of such forms and making of such filings would not in the
sole discretion of such Lender be disadvantageous to it.
(h) (i) As at the date of this Agreement, the Administrative
Agent and each Lender represents and warrants to the Loan Parties that (to
the extent that any payments are to be made to it hereunder by Terra UK) it
is a Qualifying Lender, (ii) if a Lender ceases to be a Qualifying Lender
(except as a result of the introduction of, change in, or change in the
interpretation, administration or application of, any law or regulation or
any practice or concession of the United Kingdom Inland Revenue occurring
after the date of this Agreement) or any transfer, sale, negotiation or
assignment is made pursuant to Section 11.2 to a non-Qualifying Lender,
then the Loan Parties shall not be liable to pay any amount under Section
2.16(a) in excess of the amount which it would have been obliged to pay if
that Lender had remained a Qualifying Lender. Each Lender shall notify the
Administrative Agent who in turn shall notify Terra Capital as soon as
reasonably practicable after it becomes aware that it has ceased to be a
Qualifying Lender.
Section 2.17. Substitution of Lenders. In the event that (a)
------------------------
(i) any Lender makes a claim under Section 2.14 (c) or Section 2.15, or
(ii) it becomes illegal for any Lender to continue to fund or make any
Eurodollar Rate Loan and such Lender notifies the Borrowers pursuant to
Section 2.14(d), or (iii) the Borrowers are required to make any payment
pursuant to Section 2.16 that is attributable to any Lender, or (iv) any
Lender is a Non-Funding Lender, (b) in the case of clause (a)(i) above, as
a consequence of increased costs in respect of which such claim is made,
the effective rate of interest payable to such Lender under this Agreement
with respect to its Loans materially exceeds the effective average annual
rate of interest payable to the Requisite Lenders under this Agreement and
(c) Lenders holding at least 75% of the Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrowers may substitute another financial
institution for such Affected Lender hereunder, upon reasonable prior
written notice (which written notice must be given within 90 days following
the occurrence of any of the events described in clauses (a)(i), (ii),
(iii) or (iv)) by the Borrowers to the Administrative Agent and the
Affected Lender that the Borrowers intend to make such substitution, which
substitute financial institution must be an Eligible Assignee and, if not a
Lender, reasonably acceptable to the Administrative Agent; provided,
however, that if more than one Lender claims increased costs, illegality or
right to payment arising from the same act or condition and such claims are
received by the Borrowers within 30 days of each other then the Borrowers
may substitute all, but not (except to the extent the Borrowers have
already substituted one of such Affected Lenders before the Borrowers'
receipt of the other Affected Lenders' claim) less than all, Lenders making
such claims. In the event that the proposed substitute financial
institution or other entity is reasonably acceptable to the Administrative
Agent and the written notice was properly issued under this Section 2.17,
the
54
Affected Lender shall sell and the substitute financial institution or
other entity shall purchase, pursuant to an Assignment and Acceptance, all
rights and claims of such Affected Lender under the Loan Documents and the
substitute financial institution or other entity shall assume and the
Affected Lender shall be relieved of its Revolving Credit Commitments and
all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (other than exemplary
or punitive damages, to the extent permitted by applicable law) in respect
of any such unperformed obligations). Upon the effectiveness of such sale,
purchase and assumption (which, in any event shall be conditioned upon the
payment in full by the Borrowers to the Affected Lender in cash of all
fees, unreimbursed costs and expenses and indemnities accrued and unpaid
through such effective date), the substitute financial institution or other
entity shall become a "Lender" hereunder for all purposes of this Agreement
having a Revolving Credit Commitment (if applicable) in the amount of such
Affected Lender's Revolving Credit Commitment assumed by it and such
Revolving Credit Commitment (if applicable) of the Affected Lender shall be
terminated, provided that all indemnities under the Loan Documents shall
continue in favor of such Affected Lender.
ARTICLE III
Conditions To Loans And Letters Of Credit
Section 3.1. Conditions Precedent to Initial Loans and Letters
-------------------------------------------------
of Credit. The obligation of each Lender to make the Loans requested to be
---------
made by it on the Closing Date and the obligation of each Issuer to issue
Letters of Credit on the Closing Date is subject to the satisfaction of all
of the following conditions precedent (unless waived by the Requisite
Lenders or the time for satisfaction thereof has been extended by the
Administrative Agent) :
(a) Certain Documents. The Administrative Agent shall have
received on the Closing Date each of the following, each dated the Closing
Date unless otherwise indicated or agreed to by the Administrative Agent,
in form and substance satisfactory to the Administrative Agent and in
sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by the
Borrowers and, for the account of each Lender requesting the same, a
Note or Notes of each Borrower (other than Terra UK) conforming to the
requirements set forth herein;
(ii) A Guaranty, duly executed by each Guarantor and
the Terra Canada Junior Guaranty, duly executed by Terra Canada;
(iii) The Anglo American Guaranty, duly executed by
Anglo American;
(iv) Each Collateral Document, duly executed by each
Borrower and each Guarantor expressed to be a party thereto, together
with:
(A) evidence satisfactory to the Administrative
Agent that the Collateral Agent (for the benefit of the Secured
Parties) has (subject only to Customary Permitted Liens) a valid
and perfected first priority security interest in the
Collateral, including (A) such documents duly executed by each
Loan Party as the Administrative Agent may request with respect
to the perfection of its security interests in the Collateral
(including evidence satisfactory to the
55
Administrative Agent that financing statements under the UCC and other
applicable documents under the laws of any jurisdiction have been
appropriately filed with respect to the perfection of Liens created by
the Collateral Documents), (B) copies of UCC search reports and the
equivalent in each other relevant jurisdiction as of a recent date
listing all effective financing statements that name any Loan Party as
debtor, together with copies of such financing statements, none of
which shall cover the Collateral except for those which shall be
terminated on the Closing Date) and (C) evidence of termination and
release of any existing Liens which are not Permitted Liens;
(B) share certificates representing all of certificated
Pledged Stock being pledged pursuant to the Pledge and Security
Agreements and stock powers for such share certificates executed in
blank;
(C) all instruments representing Pledged Notes (including
the note evidencing the Terra UK Debt and TNLP Debt) and collateral
therefor being pledged pursuant to the Junior Collateral Documents
duly endorsed in favor of the Collateral Agent or in blank; and
(D) Control Account Letters (as defined in the Pledge and
Security Agreement) from (A) all securities intermediaries with
respect to all securities accounts and securities entitlements of each
applicable Loan Party, and (B) all futures commission agents and
clearing houses with respect to all commodities contracts and
commodities accounts held by each applicable Loan Party;
(E) Evidence of the completion of all recordings and
filings as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect and protect the Liens created by the
Pledge and Security Agreement on certain intellectual property;
(F) in respect of the Mortgages together: (x) in respect of
mortgaged Real Property which is located in the United States, title
insurance policies, current as-built surveys, zoning letters,
certificates of occupancy, and in respect of all mortgaged Real
Property documents of title and title reports in each case
satisfactory in form and substance to the Administrative Agent, in its
sole discretion; (y) evidence that counterparts of the Mortgages have
been recorded (except as permitted, in respect of Real Property in
England, under Section 7.11) in all places to the extent necessary or
desirable, in the judgment of the Administrative Agent, to create a
valid and enforceable first priority lien (subject only to Customary
Permitted Liens) on property described therein in favor of the
Collateral Agent for the benefit of the Secured Parties (or in favor
of such other trustee as may be required or desired under local law);
and (z) an opinion of counsel in each state or jurisdiction in which
any Mortgage is recorded in form and substance and from counsel
reasonably satisfactory to the Administrative Agent;
(v) a favorable opinion of (A) Xxxxxxxx & Xxxxx, counsel to each
of the Loan Parties, in substantially the form of Exhibit G, (B) counsel to
the Loan Parties in England and Canada and in each other relevant
jurisdiction in the Xxxxxx Xxxxxx,
00
addressed to the Administrative Agent and the Lenders and addressing such
other matters as any Lender through the Administrative Agent may reasonably
request and (C) counsel to the Administrative Agent as to the
enforceability of the Credit Agreement and the other Loan Documents to be
executed on the Closing Date and (D) counsel to Anglo American in respect
of Anglo American and the Anglo American Guaranty;
(vi) the Loan Purchase Agreement and the Intercreditor
Agreement each duly executed by the parties thereto;
(vii) a copy of the articles or certificate of incorporation
(or equivalent organizational documents under its jurisdiction of
incorporation) of each Loan Party and Anglo American, certified as of a
recent date by the Secretary of State of the state or jurisdiction of
incorporation of such Loan Party or by another Person acceptable to the
Administrative Agent, together with certificates of such official attesting
to the good standing of each such Loan Party (other than Terra UK) in each
state in which it conducts business;
(viii) a certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party and Anglo American who has been authorized to
execute and deliver any Loan Document or other document required hereunder
to be executed and delivered by or on behalf of such Loan Party and Anglo
American, (B) the by-laws (or equivalent Constituent Document) of such Loan
Party and Anglo American as in effect on the date of such certification,
(C) the resolutions of such Loan Party's and Anglo American's Board of
Directors (or equivalent governing body) approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (D) that there have been no changes in
the certificate of incorporation (or equivalent Constituent Document) of
such Loan Party and Anglo American from the certificate of incorporation
(or equivalent Constituent Document) delivered pursuant to the immediately
preceding clause;
(ix) a certificate of the Chief Financial Officer of each
Borrower, stating that such Borrower is Solvent after giving effect to the
initial Loans and Letters of Credit, the application of the proceeds
thereof in accordance with Section 7.9 and the payment of all estimated
legal, accounting and other fees related hereto and thereto;
(x) a certificate of a Responsible Officer to the effect that
(i) the condition set forth in Section 3.2(b) has been satisfied, (ii) no
litigation not listed on Schedule 4.7 shall have been commenced against any
Loan Party or any of its Subsidiaries which is reasonably likely to be
adversely determined and, if adversely determined, would have a Material
Adverse Effect and (iii) no Pre-Closing Material Adverse Change has
occurred;
(xi) evidence satisfactory to the Administrative Agent and the
Lenders that the insurance policies required by Section 7.5 and any
Collateral Document are in full force and effect, together with
endorsements naming the Collateral Agent, on behalf of the Secured Parties,
as an additional insured and/or loss payee under all insurance policies to
be maintained with respect to the properties of Terra Industries, the
Borrowers and each of their Subsidiaries; and
57
(xii) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Cash Management. The Administrative Agent shall have received
evidence that, as of the Closing Date, the procedures with respect to cash
management required by Section 7.12 and the Collateral Documents have been
established and are currently being maintained by each Loan Party, together with
copies of all executed Lockbox Agreements and blocked account agreements
executed by such Loan Party in connection therewith.
(c) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, and the
Lenders, as applicable, all fees due and payable on or before the Closing Date
(including all such fees described in the Fee Letter), and all expenses due and
payable on or before the Closing Date.
(d) Consents, Etc. Each Loan Party shall have received all consents
and authorizations required pursuant to any material Contractual Obligation
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Loan Parties lawfully (A) to execute, deliver and perform, in all material
respects, their respective obligations hereunder, the Loan Documents to which
each of them, respectively, is, or shall be, a party and each other agreement or
instrument to be executed and delivered by each of them, respectively, pursuant
thereto or in connection therewith, and (B) to create and perfect the Liens on
the Collateral to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents.
(e) Material Documents. Delivery to the Administrative Agent of
certified copies of all Material Documents together with a certificate of the
Secretary or an Assistant Secretary of Terra Capital that, as at the Closing
Date, such Material Documents of which copies are attached thereto (i) are true
and complete copies of the originals thereof and (ii) are in full force and
effect and have not been modified or amended from such attached copies.
(f) Terra Canada Credit Agreement. The Terra Canada Credit Agreement
shall have been amended and restated on the Closing Date and shall be effective
in accordance with its terms.
(g) Funds Flow Statement. Terra Capital shall have provided to the
Administrative Agent a statement showing the proposed sources and applications
of funds on the Closing Date.
Section 3.2. Conditions Precedent to Each Loan and Letter of Credit.
------------------------------------------------------
The obligation of each Lender on any date (including the Closing Date) to make
any Loan and of each Issuer on any date (including the Closing Date) to issue
any Letter of Credit is subject to the satisfaction of all of the following
conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing or, in the case of Swing Loans, a duly executed
Swing Loan Request and with respect to any Letter of Credit, the Administrative
Agent and the Issuer shall have received a duly executed Letter of Credit
Request.
58
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or issuance, both before and
after giving effect thereto and to the application of the proceeds from any such
Loan and to such issuance:
(i) The representations and warranties set forth in Article IV
and in the other Loan Documents shall be true and correct on and as of the
Closing Date and shall be true and correct in all material respects on and
as of any such date after the Closing Date with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date;
(ii) no Default or Event of Default has occurred and is
continuing;
(iii) there shall have occurred no Material Adverse Change or
any event or circumstances which would have a Material Adverse Effect; and
(iv) (other than with respect to a Term Loan Borrowing) the applicable
Borrower shall have delivered the Borrowing Base Certificate required by
Section 6.11(a).
(c) Borrowing Base. Other than with respect to a Term Loan Borrowing,
after giving effect to the Revolving Loans or Letters of Credit requested to be
made or issued on any such date and the use of proceeds thereof, (i) no
Borrowing Base Deficiency shall exist and (ii) the Revolving Credit Outstandings
on such date shall not exceed the Maximum Credit in effect on such date.
(d) No Legal Impediments. The making of the Loans or the issuance of
such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance and is not enjoined,
temporarily, preliminarily or permanently.
Each submission by a Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by such Borrower of the
proceeds of each Loan requested therein, and each submission by a Borrower to an
Issuer of a Letter of Credit Request and the issuance of each Letter of Credit
requested therein, shall be deemed to constitute a representation and warranty
by such Borrower as to the matters specified in Section 3.2(b) on the date of
the making of such Loan or the issuance of such Letter of Credit.
ARTICLE IV
Representations and Warranties
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, Terra Industries and each of the Borrowers represent
and warrant to the Lenders, the Issuers and the Administrative Agent that, on
and as of the Closing Date, after giving effect to the making of the Loans and
other financial accommodations on the Closing Date and on and as of each date as
required by Section 3.2(b)(i):
Section 4.1. Corporate Existence; Compliance with Law. Each Loan
----------------------------------------
Party (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) is duly qualified as a
foreign corporation and in good standing under the laws
59
of each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect; (c) has all requisite power and authority and the legal right to own,
pledge, mortgage and operate its properties, to lease the property it operates
under lease and to conduct its business as now or currently proposed to be
conducted; (d) is in compliance with its Constituent Documents; (e) is in
compliance with all applicable Requirements of Law except where the failure to
be in compliance would not in the aggregate have a Material Adverse Effect; and
(f) has all necessary licenses, permits, consents or approvals from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings which can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not in the aggregate have a Material Adverse Effect.
Section 4.2. Corporate Power; Authorization; Enforceable Obligations.
-------------------------------------------------------
(a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation of the transactions
contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been duly authorized by all necessary corporate
action, including the consent of shareholders where required;
(iii) do not and will not (A) contravene any Loan Party's or any
of its Subsidiaries' respective Constituent Documents, (B) violate any
other applicable Requirement of Law applicable to any Loan Party (including
Regulations U and X of the Federal Reserve Board), or any order or decree
of any Governmental Authority or arbitrator applicable to any Loan Party,
(C) conflict with or result in the breach of, or constitute a default
under, or result in or permit the termination or acceleration of, any
Contractual Obligation of any Loan Party or any of its Subsidiaries, or (D)
result in the creation or imposition of any Lien upon any of the property
of any Loan Party or any of its Subsidiaries, other than those in favor of
the Secured Parties pursuant to the Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those listed on Schedule 4.2 and which have
been obtained or made, copies of which have been or will be delivered to
the Administrative Agent pursuant to Section 3.1, and each of which on the
Closing Date will be in full force and effect and, with respect to the
Collateral, filings required to perfect the Liens created by the Collateral
Documents.
(b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party thereto. This Agreement is, and
the other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such Loan
Party in accordance with its terms.
60
Section 4.3. Ownership of Subsidiaries.
-------------------------
Set forth on Part I of Schedule 4.3 hereto is a complete and accurate
list showing, as of the Closing Date, all Material Subsidiaries of Terra
Industries and, as to each such Subsidiary, the jurisdiction of its
incorporation, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Closing Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by Terra Industries. No Stock of any Subsidiary of Terra Industries
is subject to any outstanding option, warrant, right of conversion or purchase
or any similar right (except in respect of the Common Units). All of the
outstanding Stock of each Subsidiary of Terra Industries owned (directly or
indirectly) by Terra Industries has been validly issued, is fully paid and non-
assessable and is owned by Terra Industries or a Subsidiary of Terra Industries,
free and clear of all Liens (other than the Lien in favor of the Secured Parties
created pursuant to the Collateral Documents or the Canadian Collateral
Documents). Except as set forth in Schedule 4.3, neither Terra Industries nor
any such Subsidiary is a party to, or has knowledge of, any agreement binding on
it which restricts the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. Terra Industries does not own or
hold, directly or indirectly, any Stock of any Person other than such
Subsidiaries and Investments permitted by Section 8.3.
Section 4.4. Financial Statements.
--------------------
(a) The consolidated balance sheet of Terra Industries and its
Subsidiaries as at December 31, 1998, and the related consolidated statements of
income, retained earnings and cash flows of Terra Industries and its
Subsidiaries for the fiscal year then ended, certified by Deloitte & Touche LLP,
and the consolidated balance sheets of Terra Industries and its Subsidiaries as
at September 30, 1999, and the related consolidated statements of income,
retained earnings and cash flows of Terra Industries and its Subsidiaries for
the 9 months then ended, copies of which have been furnished to each Lender,
fairly present (in all material respects), subject, in the case of said balance
sheets as at September 30, 1999, and said statements of income, retained
earnings and cash flows for the 12 months then ended, to the absence of footnote
disclosure and normal recurring year-end audit adjustments, the consolidated
financial condition of Terra Industries and its Subsidiaries as at such dates
and the consolidated results of the operations of Terra Industries and its
Subsidiaries for the period ended on such dates, all in conformity with GAAP.
(b) Neither Terra Industries nor any of its Subsidiaries has any
material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment which is not either (i)
reflected in the Financial Statements referred to in clause (a) above or in the
notes thereto or (ii) permitted by this Agreement.
(c) The Projections have been prepared by Terra Industries in light
of the past operations of its business, and reflect projections for the fiscal
periods covered thereby on a month by month basis for the first year and on a
year by year basis thereafter. The Projections are based upon estimates and
assumptions stated therein, all of which Terra Industries believes to be
reasonable and fair in light of current conditions and current facts known to
Terra Industries and at the time such Projections were prepared and reflect
Terra Industries' good faith and reasonable estimates of the future financial
performance of Terra Industries and its Subsidiaries and of the other
information projected therein for the periods set forth therein (it being
understood that no representation is made that such Projections will be
realized).
61
(d) The unaudited pro forma consolidated and consolidating balance
sheet of Terra Industries and its Subsidiaries (the "Pro Forma Balance Sheet")
contained in Schedule 4.4, has been prepared as of February 29, 2000, reflects
as of such date, on a pro forma basis, the consolidated financial condition of
Terra Industries and its Subsidiaries, and the assumptions expressed therein
were reasonable based on the information available to Terra Industries at the
time so prepared and on the Closing Date.
Section 4.5. Material Adverse Change. Since December 31, 1998, there
-----------------------
has been no Material Adverse Change and there have been no events or
developments that in the aggregate have had a Material Adverse Effect.
Section 4.6. Solvency. Both before and after giving effect to (a) the
--------
Loans and Letter of Credit Obligations to be made or extended on the Closing
Date or such other date as Loans and Letter of Credit Obligations requested
hereunder are made or extended, (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of the Borrower, and the consummation of the
other financing transactions contemplated hereby and (c) the payment and accrual
of all transaction costs in connection with the foregoing, each Loan Party is
Solvent.
Section 4.7. Litigation. There are no pending or, to the knowledge of
----------
Terra Industries or any Borrower, threatened actions, investigations or
proceedings affecting Terra Industries or any of its Material Subsidiaries
before any court, Governmental Authority or arbitrator which would reasonably be
expected to be adversely determined and which, if adversely determined, would
have a Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any of the Loan Documents is not restrained or
enjoined (either temporarily, preliminarily or permanently). Schedule 4.7 lists
all litigation pending against any Loan Party at the date hereof which, if
adversely determined, would have a Material Adverse Effect.
Section 4.8. Taxes.
-----
(a) All federal, state, provincial, local and foreign income and
franchise and other material tax returns, reports and statements (collectively,
the "Tax Returns") required to be filed by Terra Industries and each of its
Subsidiaries and its Tax Affiliates have been filed with the appropriate
Governmental Authorities in all jurisdictions in which such Tax Returns are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all material taxes, charges and other impositions reflected
therein or otherwise due and payable have been paid prior to the date on which
any fine, penalty, interest, late charge or loss may be added thereto for non-
payment thereof except where contested in good faith and by appropriate
proceedings if adequate reserves therefor have been established on the books of
Terra Industries and each of its Subsidiaries or such Tax Affiliate in
conformity with GAAP. Except as set forth on Schedule 4.8 (or as otherwise
notified from time to time after the Closing Date in writing to the
Administrative Agent) no Tax Return is under audit or examination by any
Governmental Authority and no notice of such an audit or examination or any
assertion of any claim for Taxes has been given or made by any Governmental
Authority. Proper and accurate amounts have been withheld by each Loan Party and
each of its Tax Affiliates from their respective employees for all periods in
compliance (in all material respects) with the tax, social security and
unemployment withholding provisions of applicable Requirements of Law and such
withholdings have been timely paid to the respective Governmental Authorities.
62
(b) Neither Terra Industries, any of its Subsidiaries or any of its
Tax Affiliates has (i) except as set forth on Schedule 4.8 (or as otherwise
notified from time to time after the Closing Date in writing to the
Administrative Agent) executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for the filing of any Tax Return or the assessment or
collection of any charges; (ii) any obligation under any tax sharing agreement
or arrangement other than that to which the Administrative Agent has a copy
prior to the date hereof; or (iii) been a member of an affiliated, combined or
unitary group other than the group of which Terra Industries is the common
parent.
Section 4.9. Full Disclosure.
---------------
The written information prepared or furnished by the Loan Parties or
on their behalf (by their officers or advisors (including legal, environmental
and financial advisors and consultants)) in connection with this Agreement and
the Terra Canada Credit Agreement or the consummation of the financing when
taken as a whole does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein
or herein not misleading.
Section 4.10. Margin Regulations. Neither Terra Industries nor its
------------------
Material Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Borrowing will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock in contravention of
Regulation U or X of the Federal Reserve Board.
Section 4.11. No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) Neither Terra Industries nor any of its Subsidiaries (i) is a
party to any Contractual Obligation the compliance with which would have a
Material Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, will result in the creation
of a Lien (other than a Lien permitted under Section 8.2) on the property or
assets of any thereof or (ii) is subject to any charter or corporate restriction
which would have a Material Adverse Effect.
(b) Neither Terra Industries nor any of its Subsidiaries is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of Terra Industries and the Borrowers, no other party is in
default under or with respect to any Contractual Obligation owed to Terra
Industries or its Subsidiaries, other than, in either case, those defaults which
in the aggregate would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of Terra Industries and the Borrowers,
there is no Requirement of Law applicable to any Loan Party the compliance with
which by such Loan Party would have a Material Adverse Effect.
Section 4.12. Investment Company Act; Public Utility Holding Company
------------------------------------------------------
Act. Neither Terra Industries nor any of its Subsidiaries is (a) an "investment
---
company" or an
63
"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 or (b) a "holding company," or an "affiliate" or a "holding
company" or a "subsidiary company" of a "holding company," as each such term is
defined and used in the Public Utility Holding Act of 1935, as amended.
Section 4.13. Use of Proceeds. The proceeds of the Loans and the
---------------
Letters of Credit are being used by the Borrowers solely to refinance existing
Indebtedness of the Borrowers and their Subsidiaries, and for the payment of
related transaction costs, fees and expenses; and (ii) for their working capital
and general corporate purposes. No amount of the Revolving Loans and Letters of
Credit may be used to repay the Term Loans.
Section 4.14. Insurance. All policies of insurance of any kind or
---------
nature of Terra Industries or any of its Subsidiaries, including policies of
life, fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are in full force and effect and are of a nature and provide
such coverage as is sufficient and as is customarily carried by businesses of
the size and character of such Person. None of Terra Industries or any of its
Subsidiaries has been refused insurance for any material coverage which it had
applied or had any policy of insurance terminated (other than at its request).
Section 4.15. Labor Matters.
-------------
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving Terra Industries or any of its
Subsidiaries, other than those which in the aggregate would not have a Material
Adverse Effect.
(b) There are no unfair labor practices, grievances or complaints
pending, or, to the Borrowers' knowledge, threatened against or involving Terra
Industries or any of its Subsidiaries, nor are there any arbitrations or
grievances threatened involving Terra Industries or any of its Subsidiaries,
other than those which, in the aggregate, if resolved adversely to Terra
Industries or such Subsidiary, would not have a Material Adverse Effect.
(c) Except as set forth on Schedule 4.15, as of the Closing Date,
there is no collective bargaining agreement covering any of the employees of
Terra Industries or its Subsidiaries.
(d) Schedule 4.15 sets forth as of the date hereof, all material
consulting agreements, executive employment agreements, executive compensation
plans, deferred compensation agreements, employee stock purchase and stock
option plans and severance plans of Terra Industries and any of its
Subsidiaries.
Section 4.16. ERISA.
-----
(a) Schedule 4.16 separately identifies as of the date hereof all
Title IV Plans, all Multiemployer Plans and all Foreign Plans.
(b) Each employee benefit plan of Terra Industries or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code does so
qualify, and any trust created
64
thereunder is exempt from tax under the provisions of Section 501 of the Code,
except where all such failures would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur, any
ERISA Event which would have a Material Adverse Effect.
(e) Except to the extent set forth on Schedule 4.16, none of Terra
Industries, any of its Subsidiaries or any ERISA Affiliate would have any
Withdrawal Liability as a result of a complete withdrawal as of the date hereof
from any Multiemployer Plan.
(f) The accrued and vested liability under each Foreign Plan and
under all Foreign Plans in the aggregate does not exceed the amount of such
liability reflected in the Financial Statements by an amount which could
reasonably be expected to have a Material Adverse Effect, after taking into
account the availability of any assets of such Foreign Plan or otherwise
specifically allocable to such liability.
Section 4.17. Environmental Matters.
---------------------
(a) Except as set forth on Schedule 4.17, the operations of Terra
Industries and each of its Subsidiaries have been and are in compliance with all
Environmental Laws, including obtaining and complying in all material respects
with all Permits required by Environmental Laws ("Environmental Permits"), other
than non-compliances that in the aggregate would not have a reasonable
likelihood of Terra Industries and its Subsidiaries incurring Environmental
Liabilities and Costs in excess of $1,000,000.
(b) Except as set forth on Schedule 4.17, Terra Industries and its
Subsidiaries have obtained and currently possess all Environmental Permits
necessary for their operations, all such Permits are in good standing and Terra
Industries and each of its Subsidiaries is in compliance with the terms and
conditions of such Permits except for failures that in the aggregate would not
have a reasonable likelihood of Terra Industries and its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $1,000,000 .
(c) Except as set forth on Schedule 4.17, none of the Terra
Industries or any of its Subsidiaries or any real property currently or, to its
knowledge, previously owned, operated or leased by or for Terra Industries or
any of its Subsidiaries is subject to any pending or, to its knowledge
threatened, written claim, order, agreement, notice of violation, notice of
potential liability or other allegation or is the subject of any pending or, to
its knowledge, threatened proceeding or governmental investigation under or
pursuant to Environmental Laws other than those that in the aggregate would not
have a reasonable likelihood of Terra Industries and its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $1,000,000.
(d) Except as set forth on Schedule 4.17, none of Terra Industries or
any of its Subsidiaries is a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901 et
seq., the regulations thereunder or any state analog.
65
(e) Except as set forth on Schedule 4.17, there are no facts,
circumstances or conditions arising out of or relating to the operations or
ownership of real property owned or operated by Terra Industries or any of its
Subsidiaries that could reasonably be expected to give rise to Environmental
Liabilities and Costs which are not specifically included in the financial
information furnished to the Lenders other than those that in the aggregate
would not have a reasonable likelihood of resulting in Terra Industries or any
of its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000.
(f) Except as set forth on Schedule 4.17, as of the date hereof, no
Environmental Lien has attached to any property of Terra Industries or any of
its Subsidiaries and to its knowledge no facts, circumstances or conditions
exist that could reasonably be expected to result in any such lien attaching to
any such property.
(g) Except as set forth on Schedule 4.17, Terra Industries and each
of its Subsidiaries has provided the Administrative Agent with copies of all
material environmental, health or safety audits, studies, assessments,
inspections, investigations or other environmental health and safety reports
relating to the operations of Terra Industries and its Subsidiaries or their
real property that are in the possession, custody or control of Terra Industries
or any of its Subsidiaries.
Section 4.18. Intellectual Property. Terra Industries and its
---------------------
Subsidiaries own or license or otherwise have the right to use all licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights (including all
Intellectual Property as defined in the Pledge and Security Agreement) that are
necessary and material to the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any material private label
brands of Terra Industries or any of its Subsidiaries. To the Borrowers' and
Terra Industries' knowledge, no slogan or other advertising device, product,
process, method, substance, part or component, or other material now employed,
or now contemplated to be employed, by Terra Industries or any of its
Subsidiaries infringes upon or conflicts in any material respect with any rights
owned by any other Person, and no claim or litigation regarding any of the
foregoing is pending or threatened.
Section 4.19. Title; Real Property.
--------------------
(a) Schedule 4.19 sets forth all the Real Property (other than Non-
Material Real Property) owned by Terra Industries and its Material Subsidiaries
at the date hereof and each of Terra Industries and its Subsidiaries has good
and marketable title to, or valid leasehold interests in, all such Real Property
and good title to all personal property purported to be owned by it, including
those reflected on the most recent Financial Statements delivered by the
Borrowers, and none of such properties and assets is subject to any Lien, except
Liens permitted under Section 8.2. Terra Industries and its Subsidiaries have
received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect in all material respects Terra Industries' and its Material
Subsidiaries' right, title and interest in and to all such property.
66
(b) Set forth on Schedule 4.19 hereto is a complete and accurate list
of all Real Property (other than Non-Material Real Property) owned and leased by
Terra Industries and its Material Subsidiaries showing as of the Closing Date
the street address, county or other relevant jurisdiction, state, and record
owner. Each Loan Party has good, indefeasible and marketable fee simple (or,
where relevant, leasehold) title to all Real Property purported to be owned by
it, which ownership is free and clear of all Liens other than Liens created or
permitted by the Loan Documents.
(c) Except as set forth on Schedule 4.19 (or otherwise notified in
writing to the Administrative Agent in respect of Real Property acquired after
the Closing Date), neither Terra Industries nor any of its Subsidiaries owns or
holds, or is obligated under or a party to, any option, right of first refusal
or other contractual right to purchase, acquire, sell, assign or dispose of any
Real Property (other than Non-Material Real Property) owned or leased by Terra
Industries or any of its Subsidiaries except as permitted by the Loan Documents.
(d) All material components of all improvements included within the
Real Property owned or leased by Terra Industries or any of its Subsidiaries
(collectively, "Improvements"), including the roofs and structural elements
thereof and the heating, ventilation, air conditioning, plumbing, electrical,
mechanical, sewer, waste water, storm water, paving and parking equipment,
systems and facilities included therein, are in working order and repair to the
extent necessary for the effective and orderly conduct of the business,
operations and activities of Terra Industries and its Subsidiaries in all
material respects (but in any event to a standard not lower than that generally
maintained by Terra Industries and its Subsidiaries during the two year period
preceding the date hereof). All water, gas, electrical, steam, compressed air,
telecommunication, sanitary and storm sewage lines and systems and other similar
systems serving the Real Property owned or leased by Terra Industries or any of
its Subsidiaries are installed and operating and are sufficient to enable the
Real Property owned or leased by Terra Industries or its Subsidiaries to
continue to be used and operated in the manner currently being used and
operated, and neither Terra Industries nor any of its Subsidiaries has any
knowledge of any factor or condition that could result in the termination or
material impairment of the furnishing thereof. No Improvement or portion thereof
is dependent for its access, operation or utility on any land, building or other
Improvement not included in the Real Property owned or leased by Terra
Industries or any of its Subsidiaries or over which it has a right of way or
easement.
(e) No portion of any Real Property owned or leased by Terra
Industries or any of its Subsidiaries has suffered any material damage by fire
or other casualty loss which has not heretofore been substantially repaired and
restored to its original condition except with respect to which repair has been
commenced (as set forth on Schedule 4.19 (or otherwise notified in writing to
the Administrative Agent after the Closing Date)) and is being diligently
progressed. Except as set forth on Schedule 4.19 (or otherwise notified in
writing to the Administrative Agent after the Closing Date), no portion of any
Real Property owned or leased by Terra Industries or any of its Subsidiaries is
located in a special flood hazard area as designated by any federal Governmental
Authority.
(f) All Permits required to have been issued or appropriate to enable
all real property owned or leased by Terra Industries or any of its Subsidiaries
to be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, other than those which in the aggregate would not have a Material
Adverse Effect.
67
(g) None of Terra Industries or any of its Subsidiaries has received
any notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any real property owned or leased by Terra
Industries or any of its Subsidiaries or any part thereof, except those which,
in the aggregate, would not have a Material Adverse Effect.
Section 4.20. Year 2000 Compliance. None of the areas within the
--------------------
business and operations of each of Terra Industries and its Subsidiaries has
been adversely affected by the risk that computer applications used by Terra
Industries or its Subsidiaries were not Year 2000 Compliant and Terra Industries
and its Subsidiaries have developed and implemented a comprehensive program to
eliminate any future non-compliance.
Section 4.21. Pari Passu Obligations. This Agreement and the other
----------------------
Loan Documents and the obligations evidenced hereby and thereby are and will at
all times be direct and unconditional general obligations of the Borrowers, and
rank and will at all times rank in right of payment and otherwise at least pari
passu with all unsecured Indebtedness of the Borrowers, whether now existing or
hereafter outstanding, subject to statutory priority and the effect of
bankruptcy and insolvency law.
Section 4.22. No Immunity. Terra UK is subject to civil and
-----------
commercial law with respect to its obligations under this Agreement and each of
the other Loan Documents. The execution, delivery and performance by Terra UK of
this Agreement and each of the other Loan Documents constitute private and
commercial acts rather than public or governmental acts. Neither Terra UK nor
any of its properties or revenues is entitled to any right of immunity in any
jurisdiction from suit, court jurisdiction, judgment, attachment (whether before
or after judgment), set-off or execution of a judgment or from any other legal
process or remedy relating to the obligations of Terra UK, as the case may be,
under this Agreement or any of the other Loan Documents.
Section 4.23. Canadian and English Requirements. This Agreement and
---------------------------------
each of the other Loan Documents are in proper legal form under the laws of
England for the enforcement thereof against Terra UK under such laws, and if
each of the Loan Documents were stated to be governed by such law, they would
constitute legal, valid and binding obligations of Terra UK, as the case may be,
thereunder, enforceable in accordance with their respective terms. All
formalities (if any) required under the laws of England in respect of Terra UK
for the validity and enforceability of each of the Loan Documents (including,
without limitation, any necessary registration, recording or filing with any
court or other authority therein), except as otherwise expressly provided
herein, have been accomplished, and no Taxes are required to be paid and no
notarization is required, for the validity and enforceability thereof.
Section 4.24. Level of Indebtedness. All Indebtedness of Terra
---------------------
Capital and its Material Subsidiaries in respect of bank credit facilities
(including facilities which are committed but not utilized, but excluding any
Indebtedness referred to in Schedule 8.1) outstanding on the Closing Date, after
giving effect to the making of Loans and other financial accommodations on the
Closing Date and the application of proceeds thereof, do not exceed $225,000,000
in aggregate.
68
ARTICLE V
Financial Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, Term Loans, interest or fees thereon and expenses related thereto)
or the Commitments remain outstanding, unless the Requisite Lenders otherwise
consent in writing, Terra Industries agrees with the Lenders and the
Administrative Agent that:
Section 5.1. Minimum Cash Flow. Terra Industries will have, as of the
-----------------
last day of each Fiscal Quarter set forth below, Cash Flow for the number of
Fiscal Quarters indicated below ending on such day of not less than the
following:
----------------------------------------------------------------
Fiscal Quarters Minimum Cash Flow
----------------------------------------------------------------
1 Fiscal Quarter ended March 31, 2000 $0
2 Fiscal Quarters ended June 30, 2000 $25,000,000
3 Fiscal Quarters ended September 30, 2000 $35,000,000
4 Fiscal Quarters ended December 31, 2000 $45,000,000
----------------------------------------------------------------
4 Fiscal Quarters ended March 31, 2001 $57,000,000
4 Fiscal Quarters ended June 30, 2001 $77,000,000
4 Fiscal Quarters ended September 30, 2001 $83,000,000
4 Fiscal Quarters ended December 31, 2001 $90,000,000
----------------------------------------------------------------
4 Fiscal Quarters ended March 31, 2002 and $90,000,000
each 4 Fiscal Quarter period thereafter
----------------------------------------------------------------
69
Section 5.2. Capital Expenditures, Common Unit Purchases and Joint
--------------------------------------------------------------
Venture Investments. Terra Industries will not permit (a) Capital Expenditures
-------------------
(excluding any Capital Expenditures financed by insurance proceeds to the extent
permitted hereunder) to be made or incurred during each Fiscal Year set forth
below, (b) the aggregate Dollar amount expended during such Fiscal Year in
purchasing Common Units permitted under Section 8.3(h) and (c) the cash
Investments in joint ventures made during such Fiscal Year permitted under
Section 8.3(m) (i) in the case of clause (a) only, to be less than the minimum
amount set forth below and (ii) in the case of clauses (a), (b) and (c) in
aggregate to be in excess of the maximum amount set forth below, for such Fiscal
Year:
--------------------------------------------------------------------------------
Fiscal Year Maximum Amount Minimum Amount
--------------------------------------------------------------------------------
Fiscal Year ended December 31, 2000 $25,000,000 $12,000,000
--------------------------------------------------------------------------------
Fiscal Year ended December 31, 2001 $35,000,000 $15,000,000
--------------------------------------------------------------------------------
Fiscal Year ended December 31, 2002 $35,000,000 $15,000,000
--------------------------------------------------------------------------------
ARTICLE VI
Reporting Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, Term Loans, interest or fees thereon and expenses related thereto)
or the Commitments remain outstanding, unless the Requisite Lenders (except as
provided in Section 11.1) otherwise consent in writing, the Borrower agrees with
the Lenders and the Administrative Agent that:
Section 6.1. Financial Statements. Terra Industries shall furnish to
--------------------
the Lenders the following Financial Statements:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month (other than March, June and September) in each Fiscal Year, financial
information regarding Terra Industries and its Subsidiaries consisting of
consolidated and consolidating unaudited balance sheets as of the close of such
month and the related statements of income and cash flow for such month and that
portion of the current Fiscal Year ending as of the close of such month, setting
forth in comparative form the figures for the corresponding period in the prior
year and the figures contained in the Projections, in each case certified by a
Responsible Officer of Terra Industries as fairly presenting the consolidated
and consolidating financial position of Terra Industries and its Subsidiaries as
at the dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
(b) Quarterly Reports. Within 45 days after the end of each Fiscal
Quarter (other than a Fiscal Quarter ending December 31) in each Fiscal Year,
financial information regarding Terra Industries and its Subsidiaries consisting
of consolidated and consolidating unaudited balance sheets as of the close of
such
70
quarter and the related statements of income and cash flow for such quarter
and that portion of the Fiscal Year ending as of the close of such quarter,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections, in each case
certified by a Responsible Officer of Terra Industries as fairly presenting the
consolidated and consolidating financial position of Terra Industries and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
(c) Annual Reports. Within 90 days after the end of each Fiscal Year,
financial information regarding Terra Industries and its Subsidiaries consisting
of consolidated and consolidating balance sheets of Terra Industries and its
Subsidiaries as of the end of such year and related statements of income and
cash flows of Terra Industries and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such consolidated
financial statements, without qualification as to the scope of the audit by
Deloitte & Touche LLP or other independent public accountants acceptable to the
Administrative Agent, together with the report of such accounting firm stating
that (i) such financial statements fairly present the consolidated financial
position of Terra Industries and its Subsidiaries as at the dates indicated and
the results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except for
changes with which such independent certified public accountants shall concur
and which shall have been disclosed in the notes to the financial statements),
and (ii) the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards, and accompanied by a certificate stating that in
the course of the regular audit of the business of Terra Industries and its
Subsidiaries such accounting firm has obtained no knowledge that a Default or
Event of Default in respect of the financial covenants contained in Article V
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 in respect of such
financial covenants, a statement as to the nature thereof.
(d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clauses (b) and (c) of this Section 6.1, a
certificate of a Responsible Officer of a Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
determining the Leverage Ratio (for purposes of determining the Applicable
Margin) and demonstrating compliance with each of the financial covenants
contained in Article V which is tested on a quarterly basis and (ii) stating
that, to the best of such Responsible Officer's knowledge, no Default or Event
of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, stating the nature thereof and the
action which the Borrower proposes to take with respect thereto.
(e) Business Plan. Not later than 60 days after the end of each
Fiscal Year, and containing substantially the types of financial information
contained in the Projections delivered pursuant to clause (i) of the definition
of such term in Section 1.1, (i) the annual business plan of Terra Industries
for the next succeeding Fiscal Year approved by the Board of Directors of Terra
Industries, (ii) forecasts prepared by management of Terra Industries for each
fiscal month in the next succeeding Fiscal Year, and (iii) forecasts prepared by
management of Terra Industries for each of the succeeding Fiscal Years through
Fiscal Year 2002, including, in each instance described in clause (ii) and
clause (iii) above, (A) a projected year-end consolidated balance sheet and
income statement and statement of cash flows and (B) a statement of all of the
material assumptions on which such forecasts are based.
71
(f) Management Letters, Etc. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from its independent
certified public accountants;
(g) Loans and Intercompany Loan Balances. Together with each delivery
of any financial statement pursuant to clauses (b) or (c) of this Section 6.1, a
summary of the outstanding Loans and the outstanding balance of all Intercompany
Indebtedness as of the last day of the fiscal quarter covered by such financial
statement (or more frequently as may be required by the Administrative Agent),
certified by a Responsible Officer.
(h) Additional Information. Promptly, from time to time, such other
information regarding the operations, including information regarding specific
product categories and lines of business of Terra Industries and its
Subsidiaries, business affairs and financial condition of Terra Industries or
any of its Subsidiaries, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.
Section 6.2. Default Notices. As soon as practicable, and in any
---------------
event within five Business Days after a Responsible Officer of any Loan Party
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect or which has any reasonable
likelihood of causing or resulting in a Material Adverse Change, the Borrowers
shall give the Administrative Agent notice specifying the nature of such Default
or Event of Default or other event, including the anticipated effect thereof,
which notice, if given by telephone, shall be promptly confirmed in writing on
the next Business Day.
Section 6.3. Litigation. Promptly after the commencement thereof, the
----------
Borrowers shall give the Administrative Agent written notice of the commencement
of all actions, suits and proceedings before any domestic or foreign
Governmental Authority or arbitrator, affecting Terra Industries or any of its
Subsidiaries and known to a Responsible Officer, which in the reasonable
judgment of Terra Industries or such Subsidiary, could reasonably be expected to
expose Terra Industries or such Subsidiary to liability in an amount aggregating
$500,000 or more or which, if adversely determined, would have a Material
Adverse Effect.
Section 6.4. Asset Sales. Prior to any Asset Sale anticipated to
-----------
generate in excess of $10,000,000 (or its Dollar Equivalent) in Net Cash
Proceeds, Terra Industries shall send the Administrative Agent a notice (a)
describing such Asset Sale or the nature and material terms and conditions of
such transaction and (b) stating the estimated Net Cash Proceeds anticipated to
be received by Terra Industries or any of its Subsidiaries.
Section 6.5. SEC Filings; Press Releases. Promptly after the sending
---------------------------
or filing thereof, the Borrowers shall send the Administrative Agent copies of
(a) all reports which Terra Industries or any of its Material Subsidiaries sends
to its security holders generally, (b) all reports and registration statements
which Terra Industries or any of its Subsidiaries files with the Securities and
Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc., (c) all press releases and (d)
all other statements concerning material changes or developments in the business
of such Loan Party made available by any Loan Party to the public.
72
Section 6.6. Labor Relations. Promptly after a Responsible Officer
---------------
becomes aware of the same, the Borrowers shall give the Administrative Agent
written notice of (a) any material labor dispute to which Terra Industries or
any of its Material Subsidiaries is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person's plants and
other facilities, and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other
facility of any of such Person.
Section 6.7. Tax Returns. Upon the request of any Lender, through the
-----------
Administrative Agent, the Borrowers will provide copies of all federal, state,
material local and foreign tax returns and reports filed by Terra Industries or
any of its Subsidiaries in respect of taxes measured by income (excluding sales,
use and like taxes).
Section 6.8. Insurance. As soon as is practicable and in any event
---------
within 90 days after the end of each Fiscal Year, the Borrowers will furnish the
Administrative Agent (in sufficient copies for each of the Lenders) with (a) a
report in form and substance reasonably satisfactory to the Administrative Agent
and the Lenders outlining all material insurance coverage maintained as of the
date of such report by Terra Industries and its Material Subsidiaries and the
duration of such coverage and (b) an insurance broker's statement that all
premiums then due and payable with respect to such coverage have been paid.
Section 6.9. ERISA Matters. The Borrowers shall furnish the
-------------
Administrative Agent (with sufficient copies for each of the Lenders):
(a) promptly and in any event within 30 days after a Responsible
Officer of Terra Industries, any of its Material Subsidiaries or any ERISA
Affiliate knows or has reason to know that any ERISA Event has occurred;
(b) promptly and in any event within 10 days after a Responsible
Officer of Terra Industries, any of its Material Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a written statement of a Responsible Officer of
Terra Industries describing such ERISA Event or waiver request and the action,
if any, which Terra Industries, its Subsidiaries and ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with the PBGC or the
IRS pertaining thereto;
(c) simultaneously with the date that Terra Industries, any of its
Material Subsidiaries or any ERISA Affiliate files a notice of intent to
terminate any Title IV Plan, if such termination would require material
additional contributions in order to be considered a standard termination within
the meaning of Section 4041(b) of ERISA, a copy of each notice.
Section 6.10. Environmental Matters. The Borrowers shall provide the
---------------------
Administrative Agent promptly and in any event within 10 days of a Responsible
Officer of Terra Industries or any Subsidiary learning of any of the following,
written notice of any of the following:
(a) that any Loan Party is or may be liable to any Person as a result
of a Release or threatened Release which could reasonably be expected to subject
such Loan Party to Environmental Liabilities and Costs of $1,000,000 or more;
73
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is subject to any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition which could reasonably be expected to result in a violation of or
liability under any Environmental Law, except for violations and liabilities the
consequence of which in the aggregate would have no reasonable likelihood of
subjecting the Loan Parties collectively to Environmental Liabilities and Costs
of $1,000,000 or more;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
which in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $1,000,000 or more;
(e) any proposed acquisition of stock, assets or real estate, or any
proposed leasing of property, or any other action by any Loan Party or any of
its Subsidiaries the consequences of which in the aggregate have reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $1,000,000 or more;
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws which in the aggregate have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that in each case in the aggregate
would cost $1,000,000 or more or subject the Loan Parties to additional
Environmental Liabilities and Costs of $1,000,000 or more; and
(g) upon written request by the Administrative Agent or by any Lender
through the Administrative Agent, following (i) the acquisition by a Loan Party
or its Subsidiary of a fee interest in any Real Property, (ii) the occurrence of
a Default or Event of Default pursuant to Section 7.10 or (iii) the occurrence
(or the reasonable belief by the Administrative Agent, following consultation
with the Borrowers, of the occurrence) of any of the matters to be notified by
the Borrowers under this Section 6.10, a report prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent providing, as
appropriate in the circumstances, an assessment of the status of any
Environmental Liabilities and Costs and other environmental, health or safety
compliance, hazard or liability issue arising in relation thereto, which
assessment shall be reasonable in scope in light of the circumstances, perceived
risks and the facts known at the time. Without limiting 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 the Borrowers.
Section 6.11. Borrowing Base Determination and Fixed Asset
--------------------------------------------
Appraisals.
----------
(a) The Borrowers shall furnish to the Administrative Agent no later
than Wednesday of each week or more frequently as may be requested by the
Administrative Agent, a Borrowing Base Certificate for each Borrower and Terra
Canada as of the immediately preceding Friday (or the relevant third preceding
Business Day if requested more frequently) executed by a Responsible Officer of
each Borrower and Terra Canada together with reasonably detailed supporting
information and documentation acceptable to the Administrative Agent.
74
(b) Each Borrower shall conduct, or shall cause to be conducted, at
its expense, and upon request of the Administrative Agent, and present to the
Administrative Agent for approval, such appraisals, investigations and reviews
as the Administrative Agent shall reasonably request for the purpose of
determining each Borrowing Base, all upon notice and at such times during normal
business hours and as often as may be reasonably requested. Each Borrower shall
furnish to the Administrative Agent any information which the Administrative
Agent may reasonably request regarding the determination and calculation of its
or Terra Canada's Borrowing Base including correct and complete copies of any
invoices, underlying agreements, instruments or other documents and the identity
of all Account Debtors in respect of Accounts referred to therein.
(c) The Borrowers shall notify the Administrative Agent in writing
promptly upon any Borrower receiving or otherwise gaining knowledge that the
Revolving Credit Outstandings in respect of such Borrower would result in a
Borrowing Base Deficiency.
(d) The Administrative Agent may, at the Borrowers' sole cost and
expense, make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that the Administrative Agent
considers advisable and from time to time obtain fixed asset appraisals, and the
Borrowers shall furnish all such assistance and information as the
Administrative Agent may reasonably require in connection therewith including
fixed asset appraisals.
Section 6.12. Other Information. The Borrowers will provide the
-----------------
Administrative Agent or any Lender with such other information respecting the
business, properties, condition, financial or otherwise, or operations of Terra
Industries or any of its Subsidiaries as any Lender through the Administrative
Agent may from time to time reasonably request.
Section 6.13. Material Documents. The Borrowers will provide to the
------------------
Administrative Agent on or before the date of execution, or amendment, waiver or
consent (which amendment, waiver or consent shall comply with Section 8.11) in
respect of each Material Document, notification thereof together with a
certified copy of such Material Document or amendment, waiver or consent as
applicable.
Section 6.14. Foreign Benefit Plans. The Borrower shall provide to
---------------------
the Administrative Agent (with sufficient copies for each Lender) copies of each
material report (including applicable schedules) with respect to each Foreign
Plan or any trust created thereunder as the Administrative Agent (or any Lender,
through the Administrative Agent) may reasonably request.
ARTICLE VII
Affirmative Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, Term Loans, interest or fees thereon and expenses related thereto)
or the Commitments remain
75
outstanding, unless the Requisite Lenders (except as provided in Section 11.1)
otherwise consent in writing, each Borrower agrees with the Lenders and the
Administrative Agent that:
Section 7.1. Preservation of Corporate Existence, Etc. Each
-----------------------------------------
of Terra Industries and the Borrowers shall, and shall cause each of its
Subsidiaries to, preserve and maintain its corporate or partnership existence,
rights (charter and statutory) and franchises, except (i) as permitted by
Sections 8.3 and 8.4, (ii) Anticipated Corporate Reorganization Transactions and
(iii) the abandonment of such rights and franchises which are no longer
necessary or desirable to the conduct of the business of Terra Industries or its
Subsidiaries and which abandonment would not have a Material Adverse Effect.
Section 7.2. Compliance with Laws, Etc. Each of Terra
--------------------------
Industries and the Borrowers shall, and shall cause each of its Subsidiaries to,
comply with all applicable Requirements of Law, Contractual Obligations and
Permits (and maintain in full force and effect all contracts constituting such
Contractual Obligations and such Permits), except where the failure so to comply
would not in the aggregate have a Material Adverse Effect.
Section 7.3. Conduct of Business. Each of Terra Industries
-------------------
and the Borrowers shall, and shall cause each of its Subsidiaries to, (a)
conduct its business in the ordinary course and substantially in accordance with
past practice and (b) use its reasonable efforts, in the ordinary course and
substantially in accordance with past practice, to preserve its business and the
goodwill and business of the customers, advertisers, suppliers and others having
business relations with the Borrower or any of its Subsidiaries, except in each
case where the failure to comply with the covenants in each of clauses (a) and
(b) above would not in the aggregate have a Material Adverse Effect.
Section 7.4. Payment of Taxes, Etc. Each of Terra Industries
---------------------
and the Borrowers shall, and shall cause each of its Material Subsidiaries to,
pay and discharge before the same shall become delinquent, all material lawful
governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings and adequate reserves therefor
have been established on the books of such Loan Party or the appropriate
Subsidiary in conformity with GAAP.
Section 7.5. Maintenance of Insurance. Each of Terra
------------------------
Industries and the Borrowers shall (i) maintain, and cause to be maintained for
each other Loan Party and each of its Material Subsidiaries insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which
Terra Industries, such Borrower or such Subsidiary operates, and such other
insurance as may be reasonably requested by the Requisite Lenders and the
Administrative Agent (as a result of any report delivered pursuant to Section
6.8 or the Lenders or Administrative Agent becoming aware of any fact or
circumstances following the Closing Date which would indicate that it would be
prudent and consistent with industry practice for such additional insurance to
be obtained), and, in any event, all insurance required by any Collateral
Documents and (ii) cause all such insurance to name the Collateral Agent on
behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after 30 days' written
notice thereof to the Administrative Agent.
76
Section 7.6. Access. Each of Terra Industries and the
------
Borrowers shall from time to time, permit, and shall cause each of its
Subsidiaries to permit, the Administrative Agent and the Lenders, or any agents
or representatives thereof, within one Business Days after written notification
of the same (except that during the continuance of an Event of Default, no such
notice shall be required) to (a) examine and make copies of and abstracts from
the records and books of account of such Loan Party and each of its
Subsidiaries, (b) visit the properties of such Loan Party and each of its
Subsidiaries, (c) discuss the affairs, finances and accounts of such Loan Party
and each of its Subsidiaries with any of their respective officers or directors,
and (d) communicate directly with the Borrowers' independent certified public
accountants; provided, however, that the Borrowers may participate in such
communication unless a Default or Event of Default has occurred and is
continuing). Each of Terra Industries and the Borrowers shall authorize their
independent certified public accountants to disclose to the Administrative Agent
or any Lender any and all financial statements and other information of any
kind, as the Administrative Agent or any Lender reasonably requests from the
Borrower, any other Loan Party or any of its Subsidiaries and which such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of such Loan Party or any of its Subsidiaries.
Section 7.7. Keeping of Books. Each of Terra Industries and
----------------
the Borrowers shall, and shall cause each other Loan Party and each of its
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of Terra Industries, the Borrowers and
each such Subsidiary.
Section 7.8. Maintenance of Properties, Etc. Each of Terra
------------------------------
Industries and the Borrowers shall, and shall cause each of its Subsidiaries to,
maintain and preserve, (a) all of its properties which are necessary in the
conduct of its business in such working order and condition to the extent
necessary for the effective and orderly conduct of the business, operations and
activities of Terra Industries and its Subsidiaries in all material respects
(but in any event to a standard not lower than that generally maintained by
Terra Industries and its Subsidiaries during the two year period preceding the
date hereof), (b) all rights, permits, licenses, approvals and privileges
(including all Permits) which are used or necessary in the conduct of its
business, and (c) all registered patents, trademarks, trade names, copyrights
and service marks with respect to its business; except where the failure to so
maintain and preserve in the aggregate would have no Material Adverse Effect.
Section 7.9. Application of Proceeds. The Borrowers shall use
-----------------------
the entire amount of the proceeds of the Loans as provided in Section 4.13.
Section 7.10. Environmental. Each of Terra Industries and the
-------------
Borrowers shall, and shall cause each of its Subsidiaries to comply in all
material respects with Environmental Laws and, without limiting the foregoing,
each of Terra Industries and the Borrowers shall, at their sole cost and
expense, upon receipt of a notification or otherwise obtaining knowledge of any
Release or other event that has a reasonable likelihood of Terra Industries and
its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000, (i) conduct or pay for consultants to conduct, tests or assessments
of environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (ii) take such Remedial
Action as required by Environmental Laws or as any Governmental Authority
lawfully requires or as is appropriate and consistent with good business
77
practice to address the Release or event; provided, however, that Terra
Industries and the Borrowers shall not be deemed to be in violation of this
Section 7.10 where a failure to comply with any provision hereof would not
reasonably be expected to result in Terra Industries and its Subsidiaries
incurring Environmental Liabilities and Costs in excess of $1,000,000.
Section 7.11. Additional Collateral and Guaranties; Further
---------------------------------------------
Assurances.
----------
(a) At least fifteen (15) Business Days prior to (i) entering
into (except under the Permitted Sale and Leaseback Transaction) any Lease
(other than a renewal of an existing Lease) for the principal place of
business and chief executive office of any Borrower (other than Terra UK)
or any Guarantor or any other Lease (including any renewal) in which the
annual rental payments are anticipated to equal or exceed $1,000,000 or
(ii) acquiring of any material owned real property, such Borrower shall,
and shall cause such Guarantor to, provide the Administrative Agent written
notice thereof. Upon written request of the Administrative Agent, the
Borrower shall, and shall cause such Subsidiary Guarantor to, execute and
deliver to the Administrative Agent, for the benefit of the Secured
Parties, immediately upon the acquisition of any such Lease or owned real
property, a mortgage, deed of trust, assignment or other appropriate
instrument evidencing a Lien upon any such Lease or real property, together
with such title policies, certified surveys, and local counsel opinions
with respect thereto and such other agreements, documents and instruments
which the Administrative Agent deems necessary or desirable, the same to be
in form and substance satisfactory to the Administrative Agent and to be
subject only to (i) Liens permitted under Section 8.2 and (ii) such other
Liens as the Administrative Agent may reasonably approve.
(b) To the extent not delivered to the Administrative Agent
on or before the Closing Date, each of Terra Industries and the Borrowers
agree promptly to, or ensure that each of its Material Subsidiaries shall
promptly (or, to the extent legally restricted from doing so at the date
hereof, promptly following the removal of such restriction), (i) execute
and deliver to the Administrative Agent such further, and such amendments
to the, Collateral Documents as the Administrative Agent deems necessary or
advisable in order to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected first priority security interest in the
Stock and Stock Equivalents and other debt Securities of any Material
Subsidiary which are owned by Terra Industries or any of its Subsidiaries
and requested to be pledged by the Administrative Agent; provided, however,
that in no event shall any Loan Party or any of its Subsidiaries be
required to pledge in excess of 65% of the outstanding Stock of any first
tier Material Subsidiary that is not a Domestic Subsidiary or any of the
outstanding stock of any Subsidiary of such first tier Subsidiary (except
to the extent that such pledge is to secure the Obligations of Terra UK or
the obligations under any Guaranty of such Obligations), or (ii) deliver to
the Administrative Agent the certificates (if any) representing such Stock
and Stock Equivalents and other debt Securities, together with (A) in the
case of such certificated Stock and Stock Equivalents, undated stock powers
endorsed in blank, and (B) in the case of such certificated debt
Securities, endorsed in blank, in each case executed and delivered by a
Responsible Officer of the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Material Subsidiary (A) to become a party to a
Guaranty and the applicable Collateral Documents and (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Secured Parties a perfected security interest in the
Collateral described in the Collateral Documents with respect to such new
Material Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Collateral Documents or by law or as may be reasonably requested by the
Administrative Agent and (iv) if requested by the Administrative
78
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Agent; provided, however, that
such new Material Subsidiary, if not a Domestic Subsidiary, shall only be
required to guarantee and secure the Obligations of Terra UK.
(c) Promptly upon TNCLP becoming, directly or indirectly, a
wholly-owned Subsidiary of Terra Industries through the acquisition of
Common Units, TNCLP and its Subsidiaries shall execute and deliver to the
Administrative Agent such additional documents as the Administrative Agent
may reasonably request to ensure that any Guaranty and Collateral provided
by TNCLP or its Subsidiaries in respect of the Obligations of TNLP shall
extend to guaranty and secure all the Obligations.
(d) Terra Industries and its Subsidiaries shall ensure that
with respect to the Ammonium Nitrate Hedging Agreement, any gas Hedging
Contract and any other Hedging Contract nominated by the Administrative
Agent, all payments to Terra Industries or its Subsidiaries thereunder by
the applicable counterparty thereto shall be made directly to a Cash
Collateral Account or Lockbox Account (approved for such purpose by the
Administrative Agent) and an irrevocable instruction (in form and substance
satisfactory to the Administrative Agent) shall have been given by Terra
Industries or its relevant Subsidiary to such counterparty to make payments
thereunder to such Cash Collateral Account or Lockbox Account.
(e) Promptly upon the reasonable request by the
Administrative Agent, each of Terra Industries and the Borrowers shall, and
shall ensure that each of its Subsidiaries shall, take such action as the
Administrative Agent may request (including the execution, amendment,
delivery, filing and registration of any Loan Document or other document,
certificate, agreement or instrument) in order to correct any material
defect or error which may be discovered which impairs, or may fail to
provide, the intended legality, effectiveness, accuracy, perfection or
priority of any Loan Document.
(f) Within (i) 21 days of the date of this Agreement, Terra
UK shall provide to the Administrative Agent evidence of the timely
registration of the Debenture at Companies House in England and Wales; and
(ii) the priority period specified in the priority searches delivered under
Section 3.1; and (iii) in respect of the Real Property which is located in
England, Terra UK shall provide to the Administrative Agent evidence of the
timely registration of the Debenture at H.M. Land Registry in respect of
all Real Property mortgaged thereby.
Section 7.12. Cash Collateral Accounts and Cash Management
--------------------------------------------
System. As soon as reasonably practicable and in any event not later than
------
60 days following the Closing Date, Terra Industries and each Borrower
shall ensure that the following accounts and cash management systems shall
be implemented and maintained:
(a) Terra Capital, TNLP, Terra UK and Terra Canada shall have
established Cash Collateral Accounts and Lockbox Accounts and Terra Capital
shall have established the US Concentration Account as set forth on
Schedule 7.12 or as may otherwise be approved by the Administrative Agent.
(b) The Administrative Agent shall (subject as provided
below) possess sole dominion and control over the Cash Collateral Accounts
and the US Concentration Account. As long as any of the obligations under
(and as defined in) the Terra Canada Credit Agreement or the Obligations
(in each case in respect of Revolving Credit Outstandings, Term Loans, the
principal
79
amount of the Canadian Term Loan, interest or fees thereon and expenses
related thereto) or any of the Commitments remain outstanding, no Loan
Party nor any Person or entity claiming by, through or under any Loan Party
shall have any control over the use of, or any right to effect a withdrawal
from, any Cash Collateral Account or the US Concentration Account;
provided, however, that at such times as an Account Triggering Event shall
not have occurred and be continuing in respect of any Loan Party each of
Terra UK and Terra Canada may by written notice instruct the Administrative
Agent to make payments from its Cash Collateral Account to its Disbursement
Account subject to and in accordance with the provisions of clauses (d)(ii)
and (iii) below. All amounts in the Cash Collateral Accounts of Terra
Capital, TNLP and (for Dollar denominated receivables) Terra Canada shall
be applied by the Administrative Agent as specified in clause(d)(i) below.
(c) Each Borrower and Terra Canada shall instruct its Account
Debtors to mail their remittances to a Lockbox and such Loan Party shall
take all steps necessary or desirable, in the Administrative Agent's sole
discretion, to cause its Account Debtors to mail their remittances to such
Lockbox. Each Borrower and Terra Canada shall mail to its Lockbox any
remittances received directly by it as soon as possible (but in any event
no later than the Business Day immediately following receipt).
(d) Notwithstanding Section 11.1(a)(ix), each Borrower and
Terra Canada shall maintain a cash management system acceptable to the
Administrative Agent including one or more Lockboxes as follows:
(i) In the case of Terra Capital and TNLP, such cash
management system shall provide for (A) all funds received by each such
Borrower to be deposited in a Lockbox or Lockbox Account covered by a
Lockbox Agreement, (B) daily deposit of remittances received in the
Lockbox to the Lockbox Account, (C) daily sweeping of the funds in the
Lockbox Account to the US Concentration Account (provided that in
respect of amounts in the Lockbox Accounts maintained with Security
National, such amounts shall (unless the Administrative Agent otherwise
requires) be swept to the US Concentration Account only on the written
instruction of the relevant Borrower, but that such amounts shall not
otherwise be withdrawn from such Lockbox Accounts) and (D) upon receipt
of notice from Terra Capital (as provided in the following sentence),
allocation and transfer of such amounts in the US Concentration Account
to the appropriate Cash Collateral Account of Terra Capital, TNLP or, if
applicable the Disbursement Account of Terra Canada. Terra Capital shall
notify the Administrative Agent within two Business Days of the deposit
of any proceeds of Collateral in the US Concentration Account which
portion of such proceeds is owned by Terra Capital, TNLP or, if
applicable, Terra Canada. All funds on deposit in the Cash Collateral
Accounts in respect of Terra Capital and TNLP shall be applied in the
manner specified in Section 2.9(d) and in respect of Terra Canada shall
be applied as specified in clause (d)(ii)below.
(ii) In the case of Terra Canada, such cash management
system shall provide for (A) all funds received by it to be deposited in
a Lockbox or Lockbox Account covered by a Lockbox Agreement located in
New York (in respect of US Dollar denominated receivables) and in Sarnia
(in respect of all other receivables), (B) daily deposit of remittances
received in each Lockbox to each corresponding Lockbox Account, (C)
daily sweeping of the funds in the New York Lockbox Account to the US
Concentration Account and (upon the written instruction of Terra Canada)
the transfer of
80
the funds in the Sarnia Lockbox Account to a Disbursement Account of
Terra Canada or as Terra Canada may otherwise instruct the
Administrative Agent and (D) upon receipt of notice from Terra Capital
(as provided in clause (d)(i) above), allocation and transfer of such
amounts owned by Terra Canada in the US Concentration Account to a
Disbursement Account of Terra Canada or as Terra Canada may otherwise
instruct the Administrative Agent. Terra Canada shall notify the
Administrative Agent within two Business Days of the deposit of any
proceeds of Collateral in either of the Lockboxes. As long as no Account
Triggering Event in respect of Terra Canada has occurred and is
continuing, all funds on deposit in the Lockbox or Lockbox Account of
Terra Canada or in the US Concentration Account (to the extent owned by
it) shall, upon written notice from Terra Canada to the Administrative
Agent, be transferred to a Disbursement Account of Terra Canada or as
Terra Canada may otherwise direct. Upon and during the continuance of an
Account Triggering Event in respect of Terra Canada, no amount in the
Lockbox or Lockbox Account of Terra Canada or in the US Concentration
Account (to the extent owned by it) may be withdrawn therefrom without
the approval of the Administrative Agent; provided, however, that except
following and during the continuance of an Event of Default, no amounts
in any of the foregoing accounts, or in any Cash Collateral Account,
which are owned by Terra Canada shall be applied in repayment (other
than a voluntary prepayment pursuant to the Terra Canada Credit
Agreement) of the Canadian Term Loan.
(iii) In the case of Terra UK, such cash management
system shall provide for (A) all funds received by it to be deposited in
a Lockbox or Lockbox Account covered by a Lockbox Agreement located in
London, (B) daily deposit of remittances received in each Lockbox to
each corresponding Lockbox Account, (C) (upon the written instruction of
Terra UK) the transfer of the funds in its Lockbox Accounts to a
Disbursement Account of Terra UK or as Terra UK may otherwise instruct
the Administrative Agent . Terra UK shall notify the Administrative
Agent within two Business Days of the deposit of any proceeds of
Collateral in its Lockbox. All funds on deposit in the Lockbox Account
of Terra UK shall be applied in the manner specified in Section 2.9(d);
provided, however, that if no Account Triggering Event in respect of
Terra UK has occurred and is continuing, upon written notice from Terra
UK to the Administrative Agent, such funds may be transferred to a
Disbursement Account of Terra UK. Upon and during the continuance of an
Account Triggering Event in respect of Terra UK, no amount may be
withdrawn from Terra UK's Lockbox Account without the approval of the
Administrative Agent.
(e) Each Borrower and Terra Canada shall, not later than the
Closing Date (or such later date as shall be acceptable to the
Administrative Agent in its sole discretion), deliver to the Administrative
Agent the Lockbox Agreements, covering such accounts as the Administrative
Agent shall direct, each duly executed by each party thereto.
(f) Any Loan Party may deposit any cash and Cash Equivalents
held by it, which are not required to be applied in any other manner under
the Loan Documents, into such collateral account as may be approved by the
Administrative Agent for the purpose of including such cash or Cash
Equivalents in the calculation of a Borrowing Base. The Administrative
Agent shall possess sole dominion and control over any such account and
(notwithstanding Section 11.1(a)(ix)) any cash or Cash Equivalents
deposited in such account for such purpose may not subsequently be
withdrawn by a Loan Party without the approval of the Administrative Agent.
81
(g) The Administrative Agent may convert into Dollars any
amount not denominated in Dollars which is deposited in any Cash Collateral
Account or which is otherwise received by it from or for the account of any
Loan Party (which pursuant to the Loan Documents is to be applied to the
payment of the Obligations) and each Borrower hereby agrees to indemnify
the Administrative Agent and each other Indemnitee (as defined in Section
11.4(a)) from and against any loss, liability, cost or expense incurred by
it in connection with such conversion and any Indemnitee entering into any
currency exchange contract in the ordinary course of business for such
purpose.
(h) None of Terra Industries or its Subsidiaries shall,
following and during the continuance of an Account Triggering Event, a
Default or Event of Default, maintain cash or Cash Equivalents (other than
in respect of those funds referred to in Section 8.3(j)) in aggregate in
excess of $3,000,000 outside of those accounts which are Lockbox Accounts,
the US Concentration Account or Cash Collateral Accounts.
Section 7.13. Real Estate.
-----------
(a) Each Borrower shall, and shall ensure that each Loan
Party shall, use all commercially reasonable efforts to deliver within 30
days after the Closing Date (or such later date as shall be acceptable to
the Administrative Agent in its sole discretion) such Landlord Lien Waivers
and Bailee's Waivers as the Administrative Agent shall request in its sole
discretion exercised reasonably.
(b) Each Borrower shall, and shall cause each other Loan
Party and each of its Subsidiaries to, use all commercially reasonable
efforts to, (i) comply in all material respects with all of their
respective obligations under all of their respective Leases now or
hereafter held respectively by them with respect to Real Property (other
than Non-Material Real Property), including the Leases set forth in
Schedule 4.19; (ii) not modify, amend, cancel, extend or otherwise change
in any materially adverse manner any of the terms, covenants or conditions
of any such Leases; (iii) not assign or sublet any other Lease if such
assignment or sublet would have a Material Adverse Effect; (iv) provide the
Administrative Agent with a copy of each notice of default under any Lease
received by such Loan Party or any of its Subsidiaries immediately upon
receipt thereof and deliver to the Administrative Agent a copy of each
notice of default sent by such Loan Party or any of its Subsidiaries under
any Lease simultaneously with its delivery of such notice under such Lease;
and (v) notify the Administrative Agent at least 14 days prior to the date
the Borrower or any Subsidiary takes possession of, or becomes liable
under, any new leased premises or Lease, whichever is earlier.
(c) Each Borrower shall ensure that (at the Borrowers'
expense) each Borrower or Subsidiary thereof which is the fee or leasehold
owner of the following Real Property, shall, within 60 days after the
Closing Date, deliver or cause to be delivered to the Administrative Agent
current as-built surveys, for the Real Property located in Beaumont, Texas,
Blytheville, Arkansas, Sergeant Bluff (Port Xxxx), Iowa, Verdigris,
Oklahoma, and Woodward, Oklahoma, more particularly described on Schedule
4.19, reasonably satisfactory in form and substance to the Administrative
Agent. In the event that such surveys reveal any matters which would have
(i) a Material Adverse Effect, (ii) any material adverse effect on the
value of the relevant Collateral or (iii) any adverse effect (x) on the
Collateral Agent's ability to obtain title insurance policies in form and
substance satisfactory to Administrative Agent or (y) on the Collateral
Agent's rights or remedies under any title insurance policies, the
Borrowers shall
82
ensure that such matters are corrected or cured in a manner and by such
date as the Administrative Agent may reasonably specify.
Section 7.14. Hedging Contracts. Terra Industries and its
Subsidiaries shall at all times maintain interest rate and natural gas
Hedging Contracts, on terms and with counterparties reasonably satisfactory
to the Administrative Agent and in accordance with their usual practices
over the two year period preceding the date of this Agreement, to provide
protection to Terra Industries and its Subsidiaries against fluctuations in
interest rates and natural gas prices.
ARTICLE VIII
Negative Covenants
As long as any of the Obligations (in respect of Revolving
Credit Outstandings, interest or fees thereon and expenses related thereto)
or the Commitments remain outstanding, without the written consent of
(except as provided in Section 11.1) the Requisite Lenders, Terra
Industries and each Borrower agree with the Lenders and the Administrative
Agent that:
Section 8.1. Indebtedness. Terra Industries will not, and
------------
will not permit any of its Subsidiaries to, directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable
with respect to any Indebtedness except:
(a) the Obligations;
(b) Indebtedness existing on the date of this Agreement and
disclosed on Schedule 8.1;
(c) Capital Lease Obligations and purchase money Indebtedness
incurred by Terra Industries or its Subsidiaries to finance the acquisition
of Fixed Assets in an aggregate outstanding principal amount not to exceed
$10,000,000 at any time; provided, however, that the Capital Expenditure
related thereto is otherwise permitted by Section 5.2;
(d) Indebtedness arising under a Permitted Sale Leaseback
Transaction;
(e) Renewals, extensions, refinancings and refundings of
Indebtedness permitted by clause (b) of this Section 8.1; provided,
however, that any such renewal extension, refinancing or refunding is in an
aggregate principal amount not greater than the principal amount of, and is
on terms no less favorable to Terra Industries or such Subsidiary,
including as to weighted average maturity, than the Indebtedness being
renewed, extended, refinanced or refunded;
(f) Intercompany Indebtedness which is a permitted Investment
under Section 8.3(e).
(g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;
(h) Obligations under Hedging Contracts required by Section
7.14 or as permitted by Section 8.17;
83
(i) unsecured Indebtedness not otherwise permitted under this
Section 8.1 in an aggregate outstanding principal amount not to exceed
$5,000,000 at any time;
(j) Indebtedness secured by Liens permitted under Section
8.2(i);
(k) Guarantees by Terra UK of Terra UK Customer Debt;
provided that:
(i) the aggregate principal amount of such Debt so
guaranteed by Terra UK with respect to any customer at any time shall not
exceed 50% of the aggregate principal amount of the Terra UK Customer Debt
of such customer outstanding at such time; and
(ii) the aggregate principal amount of Terra UK Customer
Debt guaranteed by Terra UK at any time during any Fiscal Year shall not
exceed (x) (Pounds)15,000,000 minus (y) the aggregate amount of payments
made by Terra UK under all such guarantees during such Fiscal Year;
(l) any other Intercompany Indebtedness.
Section 8.2. Liens, Etc. Terra Industries will not, and will
not permit any of its Subsidiaries to, create or suffer to exist, any Lien upon
or with respect to any of its properties or assets, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and
disclosed on Schedule 8.2 or expressly permitted by Section 8.3(e) or
constituting cash collateral for letters of credit respectively issued by Bank
of America N.A. (formerly Nationsbank, N.A.) and Rabobank Nederland, each as set
forth on Schedule 8.1 (the terms and amount of such cash collateral to be
reasonably satisfactory to the Requisite Lenders);
(c) Customary Permitted Liens of the Borrower and its
Subsidiaries;
(d) purchase money Liens granted by the Borrower or any
Subsidiary of the Borrower (including the interest of a lessor under a Capital
Lease and Liens to which any property is subject at the time of the Borrower's
or such Subsidiary's acquisition thereof) securing Indebtedness permitted under
Section 8.1(c) and limited in each case to the property purchased with the
proceeds of such purchase money Indebtedness or subject to such Capital Lease;
(e) any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness secured by any Lien permitted by clause (d) of
this Section 8.2 without any change in the assets subject to such Lien;
(f) Liens in favor of lessors, sublessors or licensors under
any lease or license otherwise permitted by this Agreement;
(g) Liens created pursuant to the Permitted Sale Leaseback
Transaction;
84
(h) Liens not otherwise permitted by the foregoing clauses of
this Section 8.2 securing obligations or other liabilities of any Loan Party;
provided, however, that the aggregate outstanding amount of such obligations and
liabilities secured by such Liens shall not exceed $1,000,000 at any time;
(i) Liens which are licenses and sub-licenses granted to
Persons that are not Affiliates of Terra Industries or any of its Subsidiaries
in the ordinary course of business and not interfering in any material respect
with the business and operations of Terra Industries or any of its Subsidiaries;
and
(j) Liens on property of any of Terra Industries and its
Subsidiaries (other than (i) property subject to Liens under the Collateral
Documents and (ii) Liens securing Indebtedness of Terra Industries or its
Subsidiaries) in favor of Terra Industries or any of its Subsidiaries to secure
Intercompany Indebtedness owing to Terra Industries or any of its Subsidiaries.
Section 8.3. Investments. Terra Industries will not, and will
-----------
not permit any of its Subsidiaries to, directly or indirectly make or maintain
any Investment except:
(a) Investments existing on the date of this Agreement and
disclosed on Schedule 8.3;
(b) Investments in cash and Cash Equivalents, including those
held in bank accounts (but subject to Section 7.12(h)), and which (i) in respect
of Terra Industries and Terra Capital Holdings shall not together exceed in
aggregate $1,000,000 at any time (provided, however, for as long as no Event of
Default has occurred and is continuing, such amount shall be increased (but for
a period of not more than three consecutive Business Days) to the extent
necessary to permit those Restricted Payments to be made that are due and
payable and are permitted to be made under Section 8.5(b)) and (ii) which (at
any time while Intercompany Indebtedness is outstanding which is owing to Terra
Industries or any of its Domestic Subsidiaries by any Subsidiary of Terra
Industries that is not a Domestic Subsidiary) shall not be held outside of the
United States in an aggregate amount which is in excess of $20,000,000 for more
than 5 consecutive Business Days;
(c) Investments in Accounts, contract rights and Chattel
paper, notes receivable and similar items arising or acquired in the ordinary
course of business substantially in accordance with the past practice of Terra
Industries and its Subsidiaries;
(d) Investments received in settlement of amounts due to
Terra Industries or any of its Subsidiaries effected in the ordinary course of
business;
(e) Investments in Intercompany Indebtedness (i) owing by or
to Terra Capital or any of the Terra Capital Guarantors (which are wholly-owned
Subsidiaries of Terra Capital) to or from Terra Capital or any of the Terra
Capital Guarantors (which are wholly-owned Subsidiaries of Terra Capital), (ii)
owing by or to Terra Capital to or from TNLP (provided that, (A) if such
Intercompany Indebtedness is owing by TNLP to Terra Capital, such Indebtedness
is evidenced by an intercompany promissory note payable to the order of Terra
Capital on demand and the obligations thereunder are subordinated to the
Obligations and secured by a Lien on the assets of TNLP, which note and security
shall be pledged in favor of, and on terms acceptable to,
85
the Administrative Agent and (B) no such Intercompany Indebtedness shall be
permitted for the purpose of TNLP or TNCLP making Restricted Payments),
(iii) owing by Terra Capital to Terra UK, or by Terra UK to Terra Capital
which is incurred in the ordinary course of business, (iv) owing by Terra
Capital to Terra Canada, or by Terra Canada to Terra Capital which is
incurred in the ordinary course of business, or (v) owing by or to Terra UK
to or from Terra Canada;
(f) loans or advances to employees of any Borrower or any of
its Subsidiaries in the ordinary course of business (other than for the
purposes of acquiring Stock), which loans and advances shall not exceed the
aggregate outstanding principal amount of $500,000 at any time;
(g) Investments (other than Intercompany Indebtedness and
Indebtedness which is referred to in clause (f) above) not otherwise
permitted hereby in an aggregate outstanding amount not to exceed
$1,000,000 at any time;
(h) Investments by Terra Capital in Common Units purchased
after the Closing Date; provided, however, that the amount of such Common
Units shall not in aggregate exceed 500,000 and the purchase price therefor
shall not in aggregate exceed $5,000,000 (which Investments shall be
included in the financial covenant calculation contained in Section 5.2);
(i) Investments which are permitted Indebtedness under
Sections 8.1(a), (b), (c), (d), (e), (g), (h), (i), (j), or (k);
(j) Investments to match employee-directed funds under the
Deferred Supplemental Savings Plan;
(k) Investments which are non-cash Investments in Capital
Stock which are necessary (and only to the extent necessary) to effect the
Anticipated Corporate Reorganization;
(l) Equity Investments by (i) Terra Industries or any of its
wholly-owned Domestic Subsidiaries in any of its respective (directly)
wholly-owned Domestic Subsidiaries which is a Terra Capital Guarantor, (ii)
by TNCLP or any of its wholly-owned Domestic Subsidiaries in any of its
respective (directly) wholly-owned Domestic Subsidiaries which is a
Borrower or Guarantor in respect of the Obligations of TNLP, (iii) by Terra
Canada or any of its wholly-owned Subsidiaries (which is incorporated in
Canada) in any of its respective (directly) wholly-owned Subsidiaries
(which is incorporated in Canada) which is a Guarantor in respect of the
Obligations of Terra Canada or (iv) by Terra UK or any of its wholly-owned
Subsidiaries (which is incorporated in England and Wales) in any of its
respective (directly) wholly-owned Subsidiaries (which is incorporated in
England and Wales) which is a Guarantor in respect of the Obligations of
Terra UK;
(m) Investments by Terra Industries or its Subsidiaries in
any joint venture with any Person which (i) are cash Investments (to the
extent permitted under Section 5.2) and (ii) are not cash Investments (to
the extent permitted under Section 8.4(g)); and
(n) Investments by Terra Industries and its Subsidiaries in
Terra Industries or any of its Subsidiaries.
Section 8.4. Sale of Assets. Terra Industries will not, and
will not permit any of its Subsidiaries to, sell, convey, transfer, lease
or otherwise dispose of, any of its assets or any
86
interest therein (including the sale or factoring at maturity or collection
of any accounts) to any Person, or permit or suffer any other Person to
acquire any interest in any of its assets or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Stock or Stock
Equivalent (any such disposition being an "Asset Sale"), except:
(a) the sale or disposition in the ordinary course of
business of Inventory, Cash Equivalents and precious metals recovered from
spent catalysts;
(b) the sale or disposition of Equipment which has become
obsolete or is replaced in the ordinary course of business; provided,
however, that the aggregate Fair Market Value of all such equipment
disposed of in any Fiscal Year shall not exceed $10,000,000;
(c) the lease or sublease of Real Property or personal
property which does not constitute a sale and leaseback, other than the
Permitted Sale and Leaseback;
(d) assignments and licenses of intellectual property of the
Borrower and its Subsidiaries in the ordinary course of business;
(e) any sale or disposition of Inventory or Equipment (i)
among Terra Capital and any wholly-owned Domestic Subsidiary of Terra
Capital which is a Terra Capital Guarantor, (ii) among TNCLP, TNLP and any
wholly-owned Domestic Subsidiary of TNCLP which is a Guarantor in respect
of the Obligations of TNLP, (iii) among Terra UK and any wholly-owned
Subsidiary of Terra UK (which is incorporated in England and Wales) which
is a Guarantor in respect of the Obligations of Terra UK, (iv) among Terra
Canada and any wholly-owned Subsidiary of Terra Canada (which is
incorporated in Canada) which is a Guarantor in respect of the Obligations
of Terra Canada, (v) by Terra Industries or one of its wholly-owned
Domestic Subsidiaries to TNCLP or one of its wholly-owned Domestic
Subsidiaries so long as (in the case of this clause (v)) the consideration
is paid in cash to such transferor for all such assets in an amount not
less than the Fair Market Value thereof or (vi) by Terra Industries or its
Subsidiaries (except TNCLP or any of its Subsidiaries) to its Affiliates so
long as (in the case of this clause (vi)) the consideration is paid in cash
to such transferor for all such assets in an amount not less than the Fair
Market Value thereof;
(f) the Permitted Sale Leaseback Transaction;
(g) any other Asset Sales (including any disposition of
assets to a joint venture by Terra Industries or its Subsidiaries) the
aggregate Fair Market Value of which shall not at any time exceed
$5,000,000; and
(h) additional Asset Sales by Terra Industries and its
Subsidiaries (other than in respect of (i) property subject to Liens under
the Security Documents and (ii) property subject to Liens securing
Indebtedness of Terra Industries or such Subsidiary) to Terra Industries or
any of its Subsidiaries.
Section 8.5. Restricted Payments. Terra Industries will not
-------------------
and it will not permit any of its Subsidiaries to, directly or indirectly,
declare, order, pay, make or set apart any sum for any Restricted Payment
except:
(a) Restricted Payments by any Subsidiary of a Borrower to
such Borrower or any Subsidiary of such Borrower;
87
(b) cash dividends on the Stock of Terra Capital to Terra
Capital Holdings and on the Stock of Terra Capital Holdings to Terra
Industries, paid and declared in any Fiscal Year solely for the purpose of
funding the following:
(i) ordinary operating expenses and scheduled debt
service of Terra Industries (including in respect of the Indentures) not
in excess of $40,000,000 in any Fiscal Year and payments by Terra
Industries of the foregoing;
(ii) payments by Terra Industries in respect of foreign,
federal, state or local taxes owing by Terra Industries in respect of
Terra Capital and its Subsidiaries, but not greater than the amount that
would be payable by Terra Capital, on a consolidated basis, if Terra
Capital were the taxpayer; and
(iii) payments (net of cash in-flows) by Terra Industries
to finance discontinued operations not exceeding $5,000,000 in any
Fiscal year;
provided, however, that the Restricted Payments described in clause (b) above
shall not be permitted if either (A) an Event of Default or Default shall have
occurred and be continuing at the date of declaration or payment thereof or
would result therefrom or (B) such Restricted Payment is prohibited under the
terms of any Indebtedness (other than the Obligations) of the Loan Parties or
any of their respective Subsidiaries;
(c) TNCLP Minority Interest Payments; provided, however, that
such Restricted Payments shall not be permitted if (i) any Intercompany
Indebtedness is outstanding and owing by TNCLP or by TNLP, (ii) an Event of
Default or Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom or (iii) such
Restricted Payment is prohibited under the terms of any Indebtedness (other
than the Obligations) of the Loan Parties or any of their respective
Subsidiaries;
(d) Restricted Payments permitted under Section 8.3(h); and
(e) any other Restricted Payment to Terra Industries by any
Subsidiary of Terra Industries.
Section 8.6. Restriction on Fundamental Changes. Except
----------------------------------
pursuant to an Anticipated Corporate Reorganization Transaction, Terra
Industries will not, and will not permit any of its Material Subsidiaries
to, (a) merge with any Person, (b) consolidate with any Person, (c) acquire
all or substantially all of the Stock or Stock Equivalents of any Person,
(d) acquire all or substantially all of the assets of any Person or all or
substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person, (e) except as permitted by
Section 8.3(m), enter into any joint venture or partnership with any Person
or (f) acquire or (unless, after giving effect thereto, Terra Industries
and the Borrowers are in compliance with Sections 7.11 and 8.3(l)) create
any Subsidiary; provided, however, that any Loan Party may merge or be
consolidated with any of its wholly-owned Subsidiaries but only if (i) such
Loan Party is the surviving entity and no Material Adverse Change, Default
or Event of Default would result from such merger or consolidation and (ii)
all such parties to such merger or consolidation are incorporated solely in
either the United States (or any state or subdivision thereof), Canada or
England and Wales (as the case may be).
88
Section 8.7. Change in Nature of Business. (a) Terra
----------------------------
Industries will not, and will not permit any of its Subsidiaries to, make
any material change in the nature or conduct of its business as carried on
at the date hereof; (b) each of Terra Industries and Terra Capital Holdings
will at no time own any property other than Investments in its Subsidiaries
which are its Subsidiaries at the date hereof, cash and Cash Equivalents
(to the extent permitted under Section 8.3), other property incidental to
its business as a holding company or necessary to the performance of its
obligations under the Management Agreements, and (c) Terra Industries shall
ensure that TNCLP will at no time own any property other than ownership
interests in TNLP, cash and other property incidental to its business as a
holding company.
Section 8.8. Transactions with Affiliates. Terra Industries
----------------------------
will not, and will not permit any of its Subsidiaries to, except as
otherwise expressly permitted herein, do any of the following: (a) make any
Investment in any of its Affiliates which is not its Subsidiary; (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any of
its Affiliates which is not its Subsidiary; (c) merge into or consolidate
with or purchase or acquire assets from any of its Affiliates which is not
its Subsidiary; (d) repay any Indebtedness to any of its Affiliates which
is not its Subsidiary; or (e) enter into any other transaction directly or
indirectly with or for the benefit of any of its Affiliates which is not
its Subsidiary (including guarantees and assumptions of obligations of any
such Affiliate), except for (i) transactions in the ordinary course of
business on a basis no less favorable to it as would be obtained in a
comparable arm's length transaction with a Person not an Affiliate and (ii)
salaries and other employee compensation or fees to officers or directors
of Terra Industries or any of its Subsidiaries commensurate with current
compensation levels.
Section 8.9. Restrictions on Subsidiary Distributions; No New
------------------------------------------------
Negative Pledge. Other than pursuant to the Loan Documents and any agreements
---------------
governing any purchase money Indebtedness or Capital Lease Obligations permitted
by clause (b), (c), or (e) of Section 8.1(in which latter case, any prohibition
or limitation shall only be effective against the assets financed thereby) or in
connection with an Asset Sale which is permitted under Section 8.4 (in respect
only of the assets subject thereto) or pursuant to customary anti-assignment
provisions contained in leases or licenses permitted under this Agreement or as
otherwise contained, at the date hereof, in the Indentures, Terra Industries
will not, and will not permit any of its Subsidiaries to, (a) agree to enter
into or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of such Subsidiary to pay dividends or
make any other distribution or transfer of funds or assets or make loans or
advances to or other Investments in, or pay any Indebtedness owed to, Terra
Industries or any other Subsidiary of Terra Industries or (b) enter into or
suffer to exist or become effective any agreement which prohibits or limits the
ability of the Borrowers or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, to secure the Obligations, including any agreement which
requires other Indebtedness or Contractual Obligation to be equally and ratably
secured with the Obligations.
Section 8.10. Modification of Constituent Documents. Terra
-------------------------------------
Industries will not, and will not permit any of its Subsidiaries to, change its
capital structure (including in the terms of its outstanding Stock) or otherwise
amend its Constituent Documents, except for changes and amendments which (i) do
not materially and adversely affect the rights and privileges of Terra
Industries or any of its Subsidiaries, or the interests of the Administrative
Agent, the Lenders and the Issuers under the Loan Documents or in the Collateral
or (ii) are compulsory
89
under any applicable Requirement of Law or to comply with the mandatory
requirements of any stock exchange on which Terra Industries or any of its
Subsidiaries are listed.
Section 8.11. Modification of Material Documents. Terra
----------------------------------
Industries will not, and will not permit any of its Subsidiaries to, (a)
alter, rescind, terminate, amend, supplement, waive or otherwise modify any
provision of any Material Document (except for modifications which do not
materially and adversely affect the rights and privileges of Terra
Industries or any of its Subsidiaries under such Material Document, or the
interests of the Secured Parties under the Loan Documents or in the
Collateral) or (b) permit any material breach or default to exist under any
Material Document or take or fail to take any action thereunder, without
the prior consent of the Requisite Lenders, which consent shall not be
unreasonably withheld.
Section 8.12. Subordinated Debt. Terra Industries will not,
-----------------
and will not permit any of its Subsidiaries to 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 Debt (other than Intercompany Indebtedness), in each case
except for regularly scheduled payments of principal and interest in
respect thereof required pursuant to the instruments evidencing such
Subordinated Debt, or amend in any manner materially adverse to the
interests of the Lenders and the Issuers the documentation creating or
evidencing such Subordinated Debt.
Section 8.13. Accounting Changes; Fiscal Year. Terra
-------------------------------
Industries will not, and will not permit any of its Subsidiaries to, change
its (a) accounting treatment and reporting practices or tax reporting
treatment, except as required by GAAP or any Requirement of Law and
disclosed to the Lenders and the Administrative Agent or (b) Fiscal Year.
Section 8.14. Margin Regulations. The Borrowers will not, and
------------------
will not permit any of their Subsidiaries to, use all or any portion of the
proceeds of any credit extended hereunder to purchase or carry Margin
Stock.
Section 8.15. Operating Leases; Sale/Leasebacks.
---------------------------------
(a) Terra Industries will not, and will not permit any of its
Material Subsidiaries to, become or remain liable as lessee or guarantor or
other surety with respect to any operating lease (other than in connection
with the Permitted Sale Leaseback Transaction), unless (i) the aggregate
amount of all rents paid or accrued under all such operating leases shall
not exceed $5,000,000 in any Fiscal Year or (ii) in respect of, or in
replacement (upon substantially equivalent terms) of, operating leases
existing at the date of this Agreement and disclosed in the consolidated
financial statements (including the footnotes thereto) of Terra Industries
and its Subsidiaries for the Fiscal Year ended December 31, 1999.
(b) Except for the Permitted Sale Leaseback Transaction,
Terra Industries will not, and will not permit any of its Material
Subsidiaries to, enter into any sale and leaseback transaction.
Section 8.16. Cancellation of Indebtedness Owed. Terra
---------------------------------
Industries will not, and will not permit any of its Subsidiaries to, cancel
any claim or Indebtedness owed to it except
90
(i) in the ordinary course of business consistent with past practice, (ii)
Investments permitted by Section 8.3(d), or (iii) in an aggregate amount
not exceeding $1,000,000.
Section 8.17. No Speculative Transactions. Terra Industries
---------------------------
will not and will not permit any of its Material Subsidiaries to, engage in any
speculative transaction or in any transaction involving Hedging Contracts except
as required by Section 7.14 or for the sole purpose of hedging in the normal
course of business and consistent with industry practices.
Section 8.18. Compliance with ERISA and Foreign Plans. Terra
---------------------------------------
Industries will not, and will not permit any of its Material Subsidiaries to, or
cause or permit any ERISA Affiliate to, cause or permit to occur (a) an event
which could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or (b) an ERISA Event that would have a Material
Adverse Effect or (c) breach any Requirement of Law or obligations pertaining to
any Foreign Plan that would have a Material Adverse Effect.
Section 8.19. Environmental. Terra Industries will not, and
-------------
will not permit any of its Subsidiaries to, dispose of any Contaminant in
violation of any Environmental Law; provided, however, that the Loan Parties
shall not be deemed in violation of this Section 8.19 if, as the consequence of
all such disposals, such Loan Party could not reasonably be expected to incur
Environmental Liabilities and Costs in excess of $1,000,000.
Section 8.20. Payments to Minority Interests. Terra Industries
------------------------------
shall not 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 (including any
TNCLP Minority Interest Payment) with respect to such minority interest in
excess of the amount to which such holder is legally entitled, unless Terra
Industries 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
Industries and such Subsidiary, on the one hand, and such holder, on the other);
provided, however, that the purchase of Common Units permitted by Section 8.3(h)
will not constitute a breach of this Section 8.20.
ARTICLE IX
Events of Default
Section 9.1. Events of Default. Each of the following events
-----------------
shall be an Event of Default:
(a) Any Borrower shall fail to pay any principal of any Loan
or any Reimbursement Obligation (other than in connection with a Borrowing Base
Deficiency) when the same becomes due and payable; or
(b) Any Borrower shall fail to pay any interest on any Loan,
any fee under any of the Loan Documents or any other Obligation (other than one
referred to in clause (a) above) and such non-payment continues for a period of
five Business Days after the due date therefor;
91
(c) any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by any Loan Party (or any of its
officers) in connection with any Loan Document shall prove to have been
incorrect in any material respect when made or deemed made;
(d) Terra Industries shall fail to pay or perform its
obligations under the Loan Purchase Agreement; or
(e) any Loan Party shall fail to perform or observe (i) any
term, covenant or agreement contained in Article V, Sections 6.1(a) through
(e) and (g), 6.2, 7.1, 7.6, 7.11 or 7.12 or Article VIII (except Section
8.19) or (ii) any other term, covenant or agreement contained in this
Agreement or in any other Loan Document if such failure under this clause
(ii) shall remain unremedied for 30 days after the earlier of the date on
which (A) a Responsible Officer of a Borrower becomes aware of such failure
or (B) written notice thereof shall have been given to a Borrower by the
Administrative Agent or any Lender; or
(f) (i) Terra Industries or any of its Subsidiaries shall
fail to make any payment on any Indebtedness (other than the Obligations)
of Terra Industries or any such Subsidiary (or any Guaranty Obligation in
respect of Indebtedness of any other Person) having a principal amount of
$10,000,000 or more, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise); or (ii) any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Indebtedness, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (iii) any such
Indebtedness shall become or be declared to be due and payable, or required
to be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(g) Terra Industries 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 Terra Industries or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts or any similar relief
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 custodian, receiver, trustee, administrative receiver,
liquidator, provisional liquidator, administrator, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceedings instituted against Terra Industries or any
of its Material Subsidiaries (but not instituted by it), either such
proceedings shall remain undismissed or unstayed for a period of 30 days or
any of the actions sought in such proceedings shall occur; or Terra
Industries or any of its Material Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection
(f); or
(h) one or more judgments or orders (or other similar
process) involving, in any single case or in the aggregate, an amount in
excess of $10,000,000 (in the case of a money judgment), or which would
have a Material Adverse Effect (in the case of a non-money judgment) to the
extent not covered by insurance shall be rendered against one or more of
Terra Industries and its Subsidiaries and shall remain unpaid and either
(i) enforcement proceedings shall have been commenced and be continuing 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
92
during such period such judgment or order shall have been vacated,
satisfied, discharged or bonded pending appeal); or
(i) an ERISA Event shall occur or there shall be asserted
against the Borrower or any of its Subsidiaries any claim or liability in
respect of any Foreign Plan which is reasonably likely to have a Material
Adverse Effect or the amount of all liabilities and deficiencies resulting
therefrom, whether or not assessed, exceeds $1,000,000 in the aggregate; or
(j) any material provision (as determined by the
Administrative Agent) of any Collateral Document or any Guaranty after
delivery thereof pursuant to this Agreement or any other Loan Document
shall for any reason cease to be valid and binding, or enforceable against,
on any Loan Party thereto, or any Loan Party shall so state in writing; or
(k) any Collateral Document shall for any reason cease to
create a valid Lien on any of the Collateral purported to be covered
thereby or except as permitted by the Loan Documents, such Lien shall cease
to be a perfected and first priority Lien or any Loan Party shall so state
in writing; or
(l) there shall occur any Change of Control; or
(m) there shall occur a Borrowing Base Deficiency for two or
more consecutive Business Days; or
(n) there shall have been asserted (in any action, suit,
proceeding or investigation) against Terra Industries or any of its
Subsidiaries any violation or liability under any Environmental Law that,
in the judgment of the Requisite Lenders, is reasonably likely to be
determined adversely to Terra Industries or any of its Subsidiaries, and
(either individually or in the aggregate) is reasonably likely to have a
Material Adverse Effect (after taking into account any contribution in
respect thereof that is reasonably expected to be paid by other
creditworthy Persons); or
(o) one or more of Terra Industries and its Subsidiaries
shall have entered into one or more consent or settlement decrees or
agreements or similar arrangements with a Governmental Authority or one or
more judgments, orders, decrees or similar actions shall have been entered
against one or more of Terra Industries and its Subsidiaries based on or
arising from the violation of or pursuant to any Environmental Law, or the
generation, storage, transportation, treatment, disposal or Release of any
Contaminant and, in connection with all the foregoing, Terra Industries and
its Subsidiaries are likely to incur Environmental Liabilities and Costs in
excess of $1,000,000 in the aggregate (unless the foregoing is reasonably
being appealed by Terra Industries or its Subsidiaries and has been bonded
pending appeal); or
(p) any Event of Default (as defined in the Terra Canada
Credit Agreement) shall have occurred and be continuing.
Section 9.2. Remedies. During the continuance of any Event of
Default, the Administrative Agent (i) may, and shall at the request of the
Requisite Lenders, by notice to the Borrowers declare that all or any
portion of the Revolving Credit Commitments be terminated, whereupon the
obligation of each Revolving Credit Lender to make any Loan and each Issuer
to issue any Letter of Credit shall immediately terminate, and/or (ii) may
and shall at the request of the Requisite Lenders, by notice to the
Borrowers, declare the Loans, all interest thereon and all
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other amounts and Obligations payable under this Agreement to be forthwith
due and payable, whereupon the Loans, all such interest and all such
amounts and Obligations 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, however, that
upon the occurrence of the Event of Default specified in Section 9.1 (g)
above (except to the extent that such Event of Default has occurred in
respect of Terra Industries and/or Terra Capital Holdings) or upon
acceleration of the Obligations owing under the Terra Canada Credit
Agreement, (A) the Commitments of each Revolving Credit Lender to make
Revolving Loans and of each Lender and Issuer to issue or participate in
Letters of Credit shall automatically be terminated and (B) the Loans, all
such interest and all such amounts and Obligations 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
Borrowers. In addition to the remedies set forth above, the Administrative
Agent may instruct the Collateral Agent, on behalf of the Secured Parties,
to exercise any remedies provided for by the Collateral Documents in
accordance with the terms thereof or any other remedies provided by
applicable law.
Section 9.3. Actions in Respect of Letters of Credit. Upon
---------------------------------------
the Revolving Credit Termination Date or as required by Section 2.9, the
Borrowers shall pay to the Administrative Agent in immediately available
funds at the Administrative Agent's office referred to in Section 11.8, for
deposit in a cash collateral account (the "L/C Cash Collateral Account") to
be maintained with and in the name of the Administrative Agent on behalf of
the Revolving Credit Lenders at such place as shall be designated by the
Administrative Agent, an amount equal to (a) 110% of the sum of all
outstanding Letter of Credit Obligations which are denominated in Dollars
and (b) 125% of the sum of all outstanding Letter of Credit Obligations (if
any) which are denominated in currencies other than Dollars. The
Administrative Agent may, from time to time after funds are deposited in
the L/C Cash Collateral Account, apply funds then held in the L/C Cash
Collateral Account to the payment of any amounts, in accordance with
Section 2.13(f), as shall have become or shall become due and payable by
the Borrowers to the Issuers or the Revolving Credit Lenders in respect of
the Letter of Credit Obligations. The Administrative Agent shall promptly
give written notice of any such application; provided, however, that the
failure to give such written notice shall not invalidate any such
application. Neither the Borrowers nor any Person claiming on behalf of or
through the Borrowers shall have any right to withdraw any of the funds
held in the L/C Cash Collateral Account at any time prior to the
termination of all outstanding Letters of Credit and the payment in full of
all then outstanding and payable monetary Obligations.
Section 9.4. Rescission. If at any time after termination of
----------
the Commitments and/or acceleration of the maturity of the Loans, the
Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have
become due otherwise than by acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified
herein) and all Events of Default and Defaults (other than non-payment of
principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section
11.1, then upon the written consent of the Requisite Lenders and written
notice to the Borrowers, the termination of the Revolving Credit
Commitments and/or the acceleration and their consequences may be rescinded
and annulled; but such action shall not affect any subsequent Event of
Default or Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the
Lenders and the Issuers to a decision which may be made at the election of
the Requisite Lenders; they are not intended to benefit the Borrowers and
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do not give the Borrowers the right to require the Lenders to rescind or
annul any acceleration hereunder, even if the conditions set forth herein
are met.
ARTICLE X
The Administrative Agent; The Agents
Section 10.1. Authorization and Action.
------------------------
(a) Each Lender and each Issuer hereby appoints Citibank as
the Administrative Agent hereunder and each Lender and each Issuer
authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent under such
agreements and to exercise such powers as are reasonably incidental
thereto. Without limitation of the foregoing, each Lender and each Issuer
hereby authorizes the Administrative Agent to execute and deliver, and to
perform its obligations under, each of the Loan Documents to which the
Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents
and that under the Collateral Documents the Administrative Agent is acting
as agent for the Lenders, Issuers and the other Secured Parties.
(b) As to any matters not expressly provided for by this
Agreement, the Intercreditor Agreement and the other Loan Documents
(including enforcement or collection), the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Requisite
Lenders, and such instructions shall be binding upon all Lenders and each
Issuer; provided, however, that the Administrative Agent shall not be
required to take any action which (i) the Administrative Agent in good
faith believes exposes it to personal liability unless the Administrative
Agent receives an indemnification satisfactory to it from the Lenders and
the Issuers with respect to such action or (ii) is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to
each Lender and each Issuer prompt notice of each notice given to it by any
Loan Party pursuant to the terms of this Agreement or the other Loan
Documents.
(c) In performing its functions and duties hereunder and
under the other Loan Documents, the Administrative Agent is acting solely
on behalf of the Lenders and the Issuers and its duties are entirely
administrative in nature. The Administrative Agent does not assume and
shall not be deemed to have assumed any obligation other than as expressly
set forth herein and in the other Loan Documents or any other relationship
as the agent, fiduciary or trustee of or for any Lender, Issuer or holder
of any other Obligation. The Administrative Agent may perform any of its
duties under any of the Loan Documents by or through its agents or
employees.
Section 10.2. Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any
such Affiliate shall be liable for any action taken or omitted to be taken
by it, him, her or them under or in connection with this Agreement or the
other Loan Documents, except for its, his, her or their own gross
negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent (a) may treat the payee of any Note as its holder
until such Note has been assigned in accordance with Section 11.2; (b) may
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rely on the Register to the extent set forth in Section 11.2(c); (c) may
consult with legal counsel (including counsel to the Borrowers or any
other Loan Party), 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 it in accordance with the advice of such
counsel, accountants or experts; (d) makes no warranty or representation
to any Lender or Issuer and shall not be responsible to any Lender or
Issuer for any statements, warranties or representations made by or on
behalf of Terra Industries or any of its Subsidiaries in or in connection
with this Agreement or any of the other Loan Documents; (e) shall not have
any duty to ascertain or to inquire either as to the performance or
observance of any of the terms, covenants or conditions of this Agreement
or any of the other Loan Documents or the financial condition of any Loan
Party, or the existence or possible existence of any Default or Event of
Default; (f) shall not be responsible to any Lender or Issuer for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (g) shall
incur no liability under or in respect of this Agreement or any of the
other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy) or any telephone
message believed by it to be genuine and signed or sent by the proper
party or parties.
Section 10.3. The Administrative Agent Individually. With
-------------------------------------
respect to its Ratable Portion, Citibank shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders," "Required Lenders," "Requisite Lenders," "Requisite
Current Asset Lenders" or "Requisite Fixed Asset Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity as a Lender or as one of
such class of Lenders. Citibank and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or
other business with any Loan Party as if it were not acting as the
Administrative Agent.
Section 10.4. Lender Credit Decision. Each Lender and each
----------------------
Issuer acknowledges that it shall, independently and without reliance upon
the Administrative Agent or its Affiliates or any other Lender conduct its
own independent investigation of the financial condition and affairs of the
Borrower and each other Loan Party in connection with the making and
continuance of the Loans and with the issuance of the Letters of Credit.
Each Lender and each Issuer also acknowledges that it will, independently
and without reliance upon the Administrative Agent or its Affiliates 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 and other Loan Documents.
Section 10.5. Indemnification. Each Lender agrees to indemnify
---------------
the Administrative Agent and each of its Affiliates, and each of their
respective directors, officers, employees, agents and advisors (to the
extent not reimbursed by the Borrowers), from and against such Lender's
aggregate Ratable Portion of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including fees and disbursements of legal counsel) of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against, the Administrative Agent or any of its Affiliates, directors,
officers, employees, agents and advisors in any way relating to or arising
out of this Agreement or the other Loan Documents or any action taken or
omitted by the Administrative Agent under this Agreement or the other Loan
Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits,
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costs, expenses or disbursements resulting from the Administrative Agent's
or such Affiliate's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any out-
of-pocket expenses (including fees and disbursements of legal counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement
or the other Loan Documents, to the extent that the Administrative Agent is
not reimbursed for such expenses by the Borrowers or another Loan Party.
Section 10.6. Successor and Co-Administrative Agents.
--------------------------------------
(a) Subject to clause (b) below, the Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrowers.
Upon any such resignation, the Requisite Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Requisite Lenders, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent selected from among the Lenders. Each such appointment shall be
subject to the prior written approval of the Borrowers (which approval may
not be unreasonably withheld and shall not be required upon the occurrence
and during the continuance of an Event of Default); (b) Notwithstanding
clause (a) above, the Administrative Agent may at any time appoint any
Affiliate (or Affiliates) of the Administrative Agent each as (i) a
successor Administrative Agent in the event that the Administrative Agent
wishes to retire as Administrative Agent or (ii) (in connection with the
performance and exercise of its rights and obligations under the Loan
Documents) as co-Administrative Agent, which appointment and (if relevant)
resignation shall be effective upon the Administrative Agent giving written
notice thereof to the Lenders and the Borrowers. Any such appointment
and/or resignation under this clause (b) shall not require the consent of
any Lender or Borrower. (c) Upon the acceptance of any appointment as
Administrative Agent by a successor Administrative Agent or co-
Administrative Agent pursuant to clauses (a) or (b) above, each such
successor Administrative Agent shall succeed to, and each such co-
Administrative Agent shall accede to, and become vested with all the
rights, powers, privileges and duties of the retiring or remaining
Administrative Agent, and in the case of a retiring Administrative Agent,
such Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
retiring Administrative Agent's resignation hereunder as Administrative
Agent, the retiring Administrative Agent shall continue to have the benefit
of this Article X as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
Section 10.7. Concerning the Collateral and the Collateral
--------------------------------------------
Documents.
---------
(a) Each Lender and each Issuer agrees that (subject to the
provisions of the Intercreditor Agreement) any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the
express terms of this Agreement or the Intercreditor Agreement, a greater
or different proportion or combination of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater or different proportion or combination) of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders, Issuers and
97
other Secured Parties. Without limiting the generality of the foregoing,
the Administrative Agent shall have the sole and exclusive right and
authority to (i) act as the disbursing and collecting agent for the Lenders
and the Issuers with respect to all payments and collections arising in
connection herewith and with the Collateral Documents; (ii) execute and
deliver the Intercreditor Agreement and each Loan Document and accept
delivery of each such agreement delivered by Terra Industries or any of its
Subsidiaries; (iii) appoint Citibank as Collateral Agent under the
Intercreditor Agreement, to act as collateral agent for the Lenders, the
Issuers and the other Secured Parties for purposes of executing and
delivering each Collateral Document and the perfection of all security
interests and Liens created by such agreements and all other purposes
stated therein; provided, however, the Administrative Agent hereby
appoints, authorizes and directs each Lender and Issuer to act as
collateral sub-agent for the Administrative Agent, the Lenders and the
Issuers for purposes of the perfection of all security interests and Liens
with respect to Terra Industries' and its Subsidiaries' respective deposit
accounts maintained with, and cash and Cash Equivalents held by, such
Lender or such Issuer; (iv) except as provided in the Intercreditor
Agreement with respect to the Collateral Agent, manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests
and Liens created or purported to be created by the Collateral Documents;
and (vi) except as may be otherwise specifically restricted by the terms
hereof or of the Intercreditor Agreement, or of any other Loan Document,
exercise all remedies given to the Administrative Agent, the Lenders, the
Issuers and the other Secured Parties and direct the Collateral Agent in
accordance with the terms hereof and of the Intercreditor Agreement with
respect to the Collateral under the Loan Documents relating thereto,
applicable law or otherwise.
(b) Each of the Lenders and the Issuers hereby directs, in
accordance with the terms hereof, the Administrative Agent to release or
instruct the Collateral Agent to release (or, in the case of clause (ii)
below, release or subordinate) any Lien held by the Collateral Agent for
the benefit of the Lenders and the Issuers:
(i) against all of the Collateral, upon termination of
the Commitments and payment and satisfaction in full of all Loans,
Reimbursement Obligations and all other Obligations which have matured and
which the Administrative Agent has been notified in writing are then due
and payable (and, in respect of contingent Letter of Credit Obligations,
with respect to which cash collateral has been deposited or a back-up
letter of credit has been issued, in either case on terms satisfactory to
the Administrative Agent and the applicable Issuers);
(ii) against any assets that are subject to a Lien
permitted by Section 8.2(d), (e) or (g);
(iii) against any part of the Collateral sold or disposed
of by a Loan Party if such sale or disposition is permitted by this
Agreement (or permitted pursuant to a waiver or consent of a transaction
otherwise prohibited by this Agreement) or, if not pursuant to such sale or
disposition, if such release is consented to by all the Lenders; and
(iv) against any cash collateral to the extent permitted
under Section 7.12 or Section 2.9.
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
instruct the Collateral Agent to execute and deliver or file such termination
and partial release statements and
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do such other things as are necessary to release Liens to be released pursuant
to this Section 10.7 promptly upon the effectiveness of any such release.
Section 10.8. Collateral Matters Relating to Related
--------------------------------------
Obligations. The benefit of the Loan Documents and of the provisions of this
-----------
Agreement relating to the Collateral shall extend to and be available in respect
of any Obligation which arises under any Hedging Contract or which is otherwise
owed to Persons other than the Administrative Agent, the Arranger, the Lenders
and the Issuers (collectively, "Related Obligations") solely on the condition
and understanding, as among the Administrative Agent and all Secured Parties,
that (i) the Related Obligations shall be entitled to the benefit of the Loan
Documents and the Collateral to the extent expressly set forth in this Agreement
and the other Loan Documents and to such extent the Administrative Agent shall
hold, and have the right and power to act with respect to, the Guaranty and the
Collateral on behalf of and as agent for the holders of the Related Obligations
but the Administrative Agent is otherwise acting solely as agent for the Lenders
and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any holder of Related
Obligations; (ii) all matters, acts and omissions relating in any manner to the
Guaranty, the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement, the Intercreditor Agreement and the other Loan Documents and
no separate Lien, right, power or remedy shall arise or exist in favor of any
Secured Party under any separate instrument or agreement or in respect of any
Related Obligation; and (iii) each Secured Party shall be bound by all actions
taken or omitted, in accordance with the provisions of this Agreement, the
Intercreditor Agreement and the other Loan Documents, by the Administrative
Agent and the Requisite Lenders (or, where required by the express terms of this
Agreement or Intercreditor Agreement, a greater or different proportion or
combination of the Lenders), each of whom shall be entitled to act at its sole
discretion and exclusively in its own interest given its own Commitments and its
own interest in the Loans, Letter of Credit Obligations and other Obligations to
it arising under this Agreement or the other Loan Documents, without any duty or
liability to any other Secured Party or as to any Related Obligation and without
regard to whether any Related Obligation remains outstanding or is deprived of
the benefit of the Collateral or becomes unsecured or is otherwise affected or
put in jeopardy thereby; and (iv) no holder of Related Obligations and no other
Secured Party (except the Administrative Agent, the Arranger, the Lenders and
the Issuers, to the extent set forth in this Agreement) shall have any right to
be notified of, or to direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under this Agreement, the
Intercreditor Agreement or the Loan Documents; and (v) no holder of any Related
Obligation shall exercise any right of setoff, banker's lien or similar right
except as expressly provided in Section 11.6.
Section 10.9. Other Agents. Each party acknowledges that the
Person (except in its capacity as a Lender or Issuer) designated as
"Documentation Agent" and the Arranger shall in each case have no liability
hereunder. In the event that the Person identified as "Documentation Agent"
shall not become a Lender within 30 days of the Closing Date, such Person shall
cease to be the Documentation Agent and its title as such shall be removed from
the cover of this Agreement.
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ARTICLE XI
Miscellaneous
Section 11.1. Amendments, Waivers, Etc.
-------------------------
(a) No amendment or waiver of any provision of this Agreement
or any other Loan Document nor consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be in
writing and signed by the Requisite Lenders, and then any such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by the relevant
Lenders referred to below, in addition to (except as provided in clause (x)
below) the Requisite Lenders, do any of the following:
(i) waive any of the conditions specified in Section
3.1 (without the consent of all Lenders) or 3.2 (without the consent of
all Revolving Credit Lenders) except with respect to a condition based
upon another provision hereof, the waiver of which requires only the
concurrence of the Requisite Lenders;
(ii) increase the Commitments of any Lender or subject
any Lender to any additional obligations (without the consent of each
such Lender);
(iii) extend the scheduled final maturity of any Loan,
or waive, reduce or postpone any scheduled date fixed for the payment or
reduction of principal (it being understood that Sections 2.6 and 2.9 do
not provide for scheduled dates fixed for payment) or of the Commitments
(without the consent of each Lender directly affected thereby);
(iv) reduce the principal amount of any Loan or
Reimbursement Obligation (other than by the payment or prepayment
thereof) (without the consent of each Lender directly affected thereby);
(v) reduce the rate of interest on any Loan or
Reimbursement Obligations or any fee payable hereunder (without the
consent of each Lender directly affected thereby);
(vi) postpone any scheduled date fixed for payment of
such interest or fees (without the consent of each Lender directly
affected thereby);
(vii) change the percentage of aggregate Commitments or
unpaid principal amount of the Loans or the number or percentage of
Lenders which shall be required for the Lenders or any of them to take
any action hereunder (without the consent of each Lender, other than the
Guaranteed Fixed Asset Lender);
(viii) increase the Advance Rates above the rates set
forth in the definition thereof (without the consent of each Revolving
Credit Lender);
(ix) (without limiting Section 7.12) release a
substantial portion of Collateral except as provided in Section 10.7(b)
or release any Subsidiary Guarantor from its obligations under its
Guaranty except in connection with sale or other disposition
100
permitted by this Agreement (or permitted pursuant to a waiver or
consent of a transaction otherwise prohibited by this Agreement)
(without the consent of each Lender, other than the Guaranteed Fixed
Asset Lender);
(x) consent to any Asset Sale not expressly permitted under
this Agreement (x) where such Asset Sale is in respect of Current
Assets, without the consent of the Requisite Current Asset Lenders only
and (y) where such Asset Sale is in respect of Fixed Assets, without the
consent of the Requisite Fixed Asset Lenders only (provided, however,
that any Asset Sale which would result in the Term Loans being repaid in
full shall only require the consent of the Requisite Lenders); or
(xi) amend Section 10.7(b) or this Section 11.1 or the
definition of the terms "Required Lenders," "Requisite Lenders,"
"Requisite Current Asset Lenders," "Requisite Fixed Asset Lenders" or
"Ratable Portion" (without the consent of each Lender affected thereby);
and provided, further, (A) that any modification of the application of payments
to the Term Loans pursuant to Section 2.9 and the Intercreditor Agreement shall
require the consent of the Requisite Fixed Asset Lenders and any such
modification of the application of payments to the Revolving Loans pursuant to
Section 2.9 and the Intercreditor Agreement or the reduction of Revolving Credit
Commitments pursuant to Sections 2.5 and 2.9, shall require the consent of the
Requisite Current Asset Lenders and (B) that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no
obligation to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Borrowers in any
case shall entitle the Borrowers to any other or further notice or demand in
similar or other circumstances.
(c) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all Lenders
in addition to the Requisite Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
Section 11.1 being referred to as a "Non-Consenting Lender"), then, so long as
the Lender that is acting as the Administrative Agent is not a Non-Consenting
Lender, at the Borrower's request, the Administrative Agent or an Eligible
Assignee that is acceptable to the Administrative Agent shall have the right
with the Administrative Agent's consent and in the Administrative Agent's sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall, upon the
Administrative Agent's request, sell and assign to the Lender that is acting as
the Administrative Agent or such Eligible Assignee, all of the Commitments,
Revolving Credit Outstandings and Term Loans of such Non-Consenting Lender for
an amount equal to the principal balance of all Revolving Loans held by the Non-
Consenting Lender and all accrued interest and fees with respect thereto through
the date of sale, such purchase and sale to be consummated pursuant to an
executed Assignment and Acceptance.
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Section 11.2. Assignments and Participations.
------------------------------
(a) Each Lender may sell, transfer, negotiate or assign to
one or more Eligible Assignees all or a portion of its rights and
obligations hereunder (including all of its rights and obligations with
respect to the Term Loans, the Revolving Loans, the Swing Loans and the
Letters of Credit); provided, however, that (i) (A) if any such assignment
shall be of the assigning Lender's Revolving Credit Outstandings and
Revolving Credit Commitment, such assignment shall cover the same
percentage of such Lender's Revolving Credit Outstandings and Revolving
Credit Commitment, and (B) if any such assignment shall be of the assigning
Lender's Term Loans and Term Loan Commitment, such assignment shall cover
the same percentage of such Lender's Term Loans and Term Loan Commitment,
(ii) the aggregate amount 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 (if less than the Assignor's entire
interest) be less than (in the case of (x) the Term Loans (or Term Loan
Commitments) or (y) in the case of (in aggregate) the Revolving Credit
Outstandings (and/or the Revolving Credit Commitments) and the Canadian
Term Loans) $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, except, in either case, (A) with the consent of Terra Capital and
the Administrative Agent or (B) if such assignment is being made to a
Lender or an Affiliate or Approved Fund of such Lender, and (iii) if such
Eligible Assignee is not, prior to the date of such assignment, a Lender or
an Affiliate or Approved Fund of a Lender, such assignment shall be subject
to the prior consent of the Administrative Agent and Terra Capital (which
consent shall not be unreasonably withheld or delayed); provided, however,
that, notwithstanding any other provision of this Section 11.2, the consent
of the Borrowers shall not be required for any assignment which occurs when
any Event of Default shall have occurred and be continuing. Any such
assignment (i) need not be ratable as between the Term Loan Facility and
the Revolving Credit Facility but (ii) shall be ratable as between the
Revolving Credit Facility and the Canadian Term Loan.
(b) The parties to each assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with any Note (if the assigning
Lender's Loans are evidenced by a Note) subject to such assignment. Upon
such execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount
of $3,500 from and after the effective date specified in such Assignment
and Acceptance, (i) the assignee thereunder shall become a party hereto
and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender, and if such Lender
were an Issuer, of such Issuer hereunder and thereunder, and (ii) the
assignor thereunder shall, to the extent that rights and obligations under
this Agreement have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except those which survive the payment
in full of the Obligations) and be released from its obligations to the
extent corresponding thereto under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment
(and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under the
Loan Documents, such Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.8 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recording of the
names and addresses of the Lenders and the Commitments of and
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principal amount of the Loans and Letter of Credit Obligations 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 Loan Parties, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Administrative Agent 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, the Administrative Agent shall, if
such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrowers. Within
five Business Days after its receipt of such notice, the Borrowers, at
their own expense, shall, if requested by such assignee, execute and
deliver to the Administrative Agent, new Notes to the order of such
assignee in an amount equal to the Revolving Credit Commitments or Term
Loans assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has surrendered any Note for exchange in connection with
the assignment and has retained Revolving Credit Commitments or Term Loans
hereunder, new Notes to the order of the assigning Lender in an amount
equal to the Revolving Credit Commitments or Term Loans retained by it
hereunder. Such new Notes shall be dated the same date as the surrendered
Notes and be in substantially the form of Exhibit B.
(e) In addition to the other assignment rights provided in
this Section 11.2, each Lender may assign, as collateral or otherwise, any
of its rights under this Agreement (including rights to payments of
principal or interest on the Loans) to (i) any Federal Reserve Bank
pursuant to Regulation A of the Federal Reserve Board without notice to or
consent of the Borrowers or the Administrative Agent and (ii) any trustee
for the benefit of the holders of such Lender's Securities; provided,
however, that no such assignment shall release the assigning Lender from
any of its obligations hereunder.
(f) Each Lender may sell participations to one or more
Persons in or to all or a portion of its rights and obligations under the
Loan Documents (including all its rights and obligations with respect to
the Term Loans, the Revolving Loans and Letters of Credit). The terms of
such participation shall not, in any event, require the participant's
consent to any amendments, waivers or other modifications of any provision
of any Loan Documents, the consent to any departure by any Loan Party
therefrom, or to the exercising or refraining from exercising any powers or
rights which such Lender may have under or in respect of the Loan Documents
(including the right to enforce the obligations of the Loan Parties),
except if any such amendment, waiver or other modification or consent would
(i) reduce the amount, or postpone any date fixed for, any amount (whether
of principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of
the Collateral other than in accordance with Section 10.7(b). In the event
of the sale of any participation by any Lender, (A) such Lender's
obligations under the Loan Documents shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties for the
performance of such obligations, (C) such Lender shall remain the holder of
such Obligations for all purposes of this Agreement, and (D) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Each participant shall be
entitled to the benefits of Sections 2.14(c), 2.14(e), 2.15 and 2.16 as if
it were a Lender; provided, however, that anything herein to
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the contrary notwithstanding, the Borrower shall not, at any time, be
obligated to pay to any participant of any interest of any Lender, under
Section 2.14(c), 2.14(e), 2.15 or 2.16, any sum in excess of the sum which
the Borrowers would have been obligated to pay to such Lender in respect of
such interest had such participation not been sold.
(g) Any Issuer may at any time assign its rights and
obligations hereunder to any other Lender by an instrument in form and
substance satisfactory to the Borrowers, the Administrative Agent, such
Issuer and such Lender. If any Issuer ceases to be a Lender hereunder by
virtue of any assignment made pursuant to this Section 11.2, then, as of
the effective date of such cessation, such Issuer's obligations to issue
Letters of Credit pursuant to Section 2.4 shall terminate and such Issuer
shall be an Issuer hereunder only with respect to outstanding Letters of
Credit issued prior to such date.
Section 11.3. Costs and Expenses.
------------------
(a) Each Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable
internal and external audit, legal, appraisal, valuation, filing, document
duplication and reproduction and investigation expenses and for all other
reasonable and documented out-of-pocket costs and expenses of every type
and nature (including, without limitation, the reasonable and documented
fees, expenses and disbursements of the Administrative Agent's New York and
English counsel, Weil, Gotshal & Xxxxxx LLP and Canadian counsel and
additional local legal counsel, auditors, accountants, appraisers,
printers, insurance and environmental advisers, and other consultants and
agents) reasonably incurred by the Administrative Agent in connection with
(i) the Administrative Agent's audit and investigation of Terra Industries
and its Subsidiaries in connection with the preparation, negotiation and
execution of the Loan Documents and the Administrative Agent's periodic
audits of Terra Industries and its Subsidiaries, as the case may be; (ii)
the preparation, negotiation, execution and interpretation of this
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III), the Loan
Documents and any proposal letter or commitment letter issued in connection
therewith and the making of the Loans hereunder; (iii) the creation,
perfection or protection of the Liens under the Loan Documents (including,
without limitation, any reasonable and documented fees and expenses for
local counsel in various jurisdictions); (iv) the ongoing administration of
this Agreement and the Loans, including consultation with attorneys in
connection therewith and with respect to the Administrative Agent's rights
and responsibilities hereunder and under the other Loan Documents; (v) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the
Obligations, any Loan Party, any of Terra Industries' Subsidiaries, this
Agreement or any of the other Loan Documents; (vii) the response to, and
preparation for, any subpoena or request for document production with which
the Administrative Agent is served or deposition or other proceeding in
which the Administrative Agent is called to testify, in each case, relating
in any way to the Obligations, any Loan Party, any of Terra Industries'
Subsidiaries, this Agreement or any of the other Loan Documents; and (viii)
any amendments, consents, waivers, assignments, restatements, or
supplements to any of the Loan Documents and the preparation, negotiation,
and execution of the same.
(b) Each Borrower further agrees to pay or reimburse the
Administrative Agent and each of the Lenders and Issuers upon demand for
all reasonable and documented out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys' fees (including
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allocated costs of internal counsel and costs of settlement), incurred by
the Administrative Agent, such Lenders or Issuers (i) in enforcing any Loan
Document or Obligation or any security therefor or exercising or enforcing
any other right or remedy available by reason of an Event of Default; (ii)
in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of Terra Industries' Subsidiaries and
related to or arising out of the transactions contemplated hereby or by any
of the other Loan Documents; and (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in
clauses (i) through (iii) above.
Section 11.4. Indemnities.
-----------
(a) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and each Issuer and each of their
respective Affiliates, and each of the directors, officers, employees,
agents, representative, attorneys, consultants and advisors of or to any of
the foregoing (including those retained in connection with the satisfaction
or attempted satisfaction of any of the conditions set forth in Article
III) (each such Person being an "Indemnitee") from and against any and all
claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses of any kind or nature
(including reasonable and documented fees and disbursements of counsel to
any such Indemnitee, but excluding taxes (other than those covenanted to be
paid by the Borrowers under this Agreement) imposed on or measured by the
Indemnitee's net income and franchise taxes, imposed on it, by the
jurisdiction (or any political subdivision thereof) under the laws of which
such Indemnitee is organized or in which its principal office or Applicable
Lending Office is located) which may be imposed on, incurred by or asserted
against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee
is a party thereto, whether direct, indirect, or consequential and whether
based on any federal, state or local law or other statutory regulation,
securities or commercial law or regulation, or under common law or in
equity, or in contract, tort or otherwise, relating to or arising out of
this Agreement, any other Loan Document, any Obligation, any Letter of
Credit, or any act, event or transaction related or attendant to any
thereof, or the use or intended use of the proceeds of the Loans or Letters
of Credit or in connection with any investigation of any potential matter
covered hereby (collectively, the "Indemnified Matters"). Without limiting
the foregoing, Indemnified Matters include (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or
future operations of Terra Industries or any of its Subsidiaries involving
any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or
any contiguous real estate; (ii) any costs or liabilities incurred in
connection with any Remedial Action concerning Terra Industries or any of
its Subsidiaries; (iii) any costs or liabilities incurred in connection
with any Environmental Lien in respect of any assets or properties of Terra
Industries and its Subsidiaries; (iv) any costs or liabilities incurred in
connection with any other matter (concerning Terra Industries or any of its
Subsidiaries) under any Environmental Law, including CERCLA and applicable
state property transfer laws, whether, with respect to any of such matters,
such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor in interest to Terra Industries or
any of its Subsidiaries, or the owner, lessee or operator of any property
of Terra Industries or any of its Subsidiaries by virtue of foreclosure,
except, with respect to those matters referred to in clauses
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(i), (ii), (iii) and (iv) above, to the extent incurred following (A)
foreclosure by the Administrative Agent, any Lender or any Issuer, or the
Administrative Agent, any Lender or any Issuer having become the successor
in interest to Terra Industries or any of its Subsidiaries, and (B)
attributable solely to acts of the Administrative Agent, such Lender or
such Issuer or any agent on behalf of the Administrative Agent or such
Lender; provided, however, that the Borrowers shall not have any obligation
under this Section 11.4 to an Indemnitee with respect to any Indemnified
Matter caused by or resulting from the gross negligence or willful
misconduct of that Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.
(b) Each Borrower shall indemnify the Administrative Agent,
the Lenders and each Issuer for, and hold the Administrative Agent, the
Lenders and each Issuer harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against the
Administrative Agent, the Lenders and the Issuers for any broker, finder or
consultant with respect to any agreement, arrangement or understanding made
by or on behalf of any Loan Party or any of its Subsidiaries in connection
with the transactions contemplated by this Agreement.
(c) Each Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 11.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any
Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
Section 11.5. Limitation of Liability. Each Borrower agrees
-----------------------
that no Indemnitee shall (except for breach by such Indemnitee of its
obligations under this Agreement and the other Loan Documents) have any
liability (whether direct or indirect, in contract, tort or otherwise) to
any Loan Party or any of their respective Subsidiaries or any of their
equity holders or creditors for or in connection with the transactions
contemplated hereby and in the other Loan Documents, except to the extent
such liability is found in a final judgment by a court of competent
jurisdiction to have resulted from such Indemnitee's gross negligence or
willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or
punitive damages and each of Terra Industries and each Borrower hereby
waives, releases and agrees (for itself and on behalf of its Subsidiaries)
not to xxx upon any such claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
Section 11.6. Right of Set-off. Upon the occurrence and
----------------
during the continuance of any Event of Default each Lender and each
Affiliate of a Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and 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 or
its Affiliates to or for the credit or the account of any Borrower against
any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any demand under this Agreement or any other
Loan Document and although such Obligations may be unmatured. Each Lender
agrees promptly to notify the applicable Borrower after any such set-off
and application made by such Lender or its Affiliates; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.
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Section 11.7. Sharing of Payments, Etc.
-------------------------
(a) Subject to the provisions of the Intercreditor Agreement,
if any Lender (other than the Guaranteed Fixed Asset Lender) shall obtain
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off or otherwise) on account of, as the case may be, the Term
Loans or Revolving Loans made by it (other than pursuant to Section 2.14,
2.15 or 2.16) in excess of its Ratable Portion under, respectively, the
Term Loan Facility or the Revolving Credit Facility as applicable, in
respect of payments obtained by, respectively, all the Term Loan Lenders or
the Revolving Credit Lenders, on account of such Obligations, such Lender
(a "Purchasing Lender") shall (subject to the provisions of the
Intercreditor Agreement) forthwith purchase from the other Term Loan
Lenders (other than the Guaranteed Fixed Asset Lender) or the Revolving
Credit Lenders, as the case may be, (each, a "Selling Lender") such
participations in their Loans or other Obligations as shall be necessary to
cause such Purchasing Lender to share the excess payment ratably with each
of them.
(b) If all or any portion of any payment received by a
Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling
Lender shall repay to the Purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Selling
Lender's ratable share (according to the proportion of (i) the amount of
such Selling 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.
(c) Each Borrower agrees that any Purchasing Lender so
purchasing a participation from a Selling Lender pursuant to this Section
11.7 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 11.8. Notices, Etc. All notices, demands, requests
and other communications provided for in this Agreement shall be given in
writing, or by any telecommunication device capable of creating a written
record, and addressed to the party to be notified as follows:
(a) if to any Loan Party:
care of Terra Industries, Inc.,
000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
Telecopy no: (000) 000-0000
(b) if to any Lender, at its Domestic Lending Office
specified opposite its name on Schedule II or on the signature page of any
applicable Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its
name on the signature page hereof; and
107
(d) if to the Administrative Agent:
(i) (for collateral and administrative matters)
Citibank , N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy No: (000) 000-0000
with a copy to (for collateral monitoring matters):
Citibank , N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No: (000) 000-0000
And
(ii) (for advances)
Citibank, N.A.
0 Xxxxx Xxx
Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000]
Attention: Xxxxxxxxx Xxxxx
Telecopy No: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy no: (000) 000-0000
or at such other address as shall be notified in writing (i) in the case of the
Loan Parties and the Administrative Agent, to the other parties and (ii) in the
case of all other parties, to the Borrower and the Administrative Agent. All
such notices and communications shall be effective upon personal delivery (if
delivered by hand, including any overnight courier service), when deposited in
the mails (if sent by mail), or when properly transmitted (if sent by a
telecommunications device); provided, however, that notices and communications
to the Administrative Agent pursuant to Article II or X shall not be effective
until received by the Administrative Agent.
Section 11.9. No Waiver; Remedies. No failure on the part of
-------------------
any Lender, Issuer or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right
108
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.
Section 11.10. Binding Effect. This Agreement shall become
--------------
effective when it shall have been executed by the Borrowers and the
Administrative Agent and when the Administrative Agent shall have been
notified by each Lender that such Lender has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrowers, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrowers shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent
of the Lenders.
Section 11.11. Governing Law. This Agreement and the rights and
-------------
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 11.12. Submission to Jurisdiction; Service of Process.
----------------------------------------------
(a) Any legal action or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the
State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement,
each Borrower hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
The parties hereto hereby irrevocably waive any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of
any such action or proceeding in such respective jurisdictions.
(b) Terra UK hereby irrevocably designates, appoints and
empowers Terra Industries (the "Process Agent"), in the case of any suit,
action or proceeding brought in the United States of America as its
designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents that may be served in any action or
proceeding arising out of or in connection with this Agreement or any Loan
Document. Such service may be made by mailing (by registered or certified
mail, postage prepaid) or delivering a copy of such process to Terra UK in
care of the Process Agent at the Process Agent's above address, and Terra
UK hereby irrevocably authorizes and directs the Process Agent to accept
such service on its behalf. As an alternative method of service, Terra UK
irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing (by registered or certified mail,
postage prepaid) of copies of such process to the Process Agent or Terra UK
at its address specified in Section 11.8. The Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each of Terra Capital and TNLP hereby irrevocably
consents to the service of any and all legal process, summons, notices and
documents in any suit, action or proceeding brought in the United States of
America arising out of or in connection with this Agreement or any of the
other Loan Documents by the mailing (by registered or certified mail,
postage prepaid) or delivering of a copy of such process to such Borrower
at its address specified in Section 11.8. Each such Borrower agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
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(c) Nothing contained in this Section 11.12 shall affect the
right of the Administrative Agent or any Lender to serve process in any
other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower or any other Loan Party in any other
jurisdiction.
(d) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the spot rate of exchange
quoted by the Administrative Agent at 11:00 a.m. (New York time) on the
Business Day preceding that on which final judgment is given, for the
purchase of Dollars, for delivery two Business Days thereafter.
Section 11.13. Waiver of Jury Trial. Each of the
--------------------
Administrative Agent, the Lenders, the Issuers and the Borrower irrevocably
waives trial by jury in any action or proceeding with respect to this
Agreement or any other Loan Document.
Section 11.14. No Immunity. To the extent that Terra UK may be
-----------
or become entitled, in any jurisdiction in which judicial proceedings may
at any time be commenced with respect to this Agreement or any other Loan
Document, to claim for itself or its properties or revenues any immunity
from suit, court jurisdiction, attachment prior to judgment, attachment in
aid of execution of a judgment, execution of a judgment or from any other
legal process or remedy relating to its respective obligations under this
Agreement or any other Loan Document, and to the extent that in any such
jurisdiction there may be attributed such an immunity (whether or not
claimed) Terra UK each hereby irrevocably agrees not to claim and hereby
irrevocably waives such immunity to the fullest extent permitted by the
laws of such jurisdiction.
Section 11.15. Judgment Currency. This is an international loan
-----------------
transaction in which the specification of Dollars is of the essence, and
Dollars shall in each instance be the currency of account and payment in
all instances. A payment obligation in Dollars hereunder shall not be
discharged by an amount paid in another currency (the "Other Currency"),
whether pursuant to any judgment expressed in or converted into any Other
Currency or in another place except to the extent that such tender or
recovery results in the effective receipt by the Lenders of the full amount
of Dollars payable to the Administrative Agent, the Collateral Agent and
the Lenders under this Agreement. If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in Dollars into
the Other Currency, the rate of exchange that shall be applied shall be
that at which in accordance with normal banking procedures the
Administrative Agent could purchase U.S. Dollars in New York, New York with
the Other Currency on the Business Day next preceding the day on which such
judgment is rendered. The obligation of Terra UK in respect of any such sum
due from it to the Administrative Agent, the Collateral Agent and the
Lenders hereunder or under any other Loan Document shall, notwithstanding
the rate of exchange actually applied in rendering such judgment, be
discharged only to the extent that on the Business Day following receipt by
the Administrative Agent, the Collateral Agent or any Lender of any sum
adjudged to be due hereunder in the Other Currency the Administrative Agent
may in accordance with normal banking procedures purchase Dollars with the
amount of the judgment currency so adjudged to be due; and the Borrower
hereby, as a separate obligation and notwithstanding any such judgment,
agrees to indemnify the Administrative Agent, the Collateral Agent and the
Lenders against, and
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to pay the Administrative Agent, the Collateral Agent and Lenders on
demand, in Dollars, the amount (if any) by which the sum originally due to
the Administrative Agent and the Lenders in Dollars hereunder exceeds the
amount of the Other Currency so purchased.
Section 11.16. Marshaling; Payments Set Aside. None of the
------------------------------
Administrative Agent, any Lender or any Issuer shall be under any
obligation to marshal any assets in favor of the Borrowers or any other
party or any other Lender which does not have an equivalent interest in the
Facilities or against or in payment of any or all of the Obligations. To
the extent that the Borrowers make a payment or payments to the
Administrative Agent, the Lenders or the Issuers or any of such Persons
receives payment from the proceeds of the Collateral or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be
repaid to a trustee, receiver or any other party, then to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
Section 11.17. Section Titles. The Section titles contained in
--------------
this Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
Section 11.18. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties 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. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature
pages are attached to the same document.
Section 11.19. Entire Agreement. This Agreement, together with
----------------
all of the other Loan Documents and all certificates and documents
delivered hereunder or thereunder, embodies the entire agreement of the
parties and supersedes all prior agreements and understandings relating to
the subject matter hereof.
Section 11.20. Confidentiality. Each Lender and the
---------------
Administrative Agent (a) agrees to keep information obtained by it pursuant
hereto and the other Loan Documents confidential in accordance with such
Lender's or the Administrative Agent's, as the case may be, customary
practices and (b) agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not
disclose any of such information other than (i) to such Lender's or the
Administrative Agent's, as the case may be, employees, representatives and
agents who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this
Agreement and who are advised of the confidential nature of such
information, (ii) to the extent such information presently is or hereafter
becomes available to such Lender or the Administrative Agent, as the case
may be, on a non-confidential basis from a source other than the Borrowers,
(iii) to the extent disclosure is required by law, regulation or judicial
order or requested or required by bank regulators or auditors, or (iv) to
assignees or participants or potential assignees or participants who agree
to be bound by the provisions of this Section 11.20.
Section 11.21. Refund of Tax Credits. If:
---------------------
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(a) Terra UK makes a payment under Section 2.16(a) (a "Tax
Payment") in respect of a payment to a Lender or the Administrative Agent
under this agreement; and
(b) that Lender or the Administrative Agent determines in its
discretion that it has obtained a refund of tax or obtained and used a
credit against tax on its overall net income (a "Tax Credit") which that
Lender or as appropriate the Administrative Agent in its discretion is able
to identify as attributable to that Tax Payment,
then if it can do so without any adverse consequences for that Lender or if
applicable the Administrative Agent, that Lender or if applicable the
Administrative Agent shall reimburse Terra UK such amount as that Lender or
if applicable the Administrative Agent determines to be such proportion of
that Tax Credit as will leave that lender or if applicable the
Administrative Agent (after that reimbursement) in no better or worse
position in respect of its overall tax liabilities that it would have been
in if no Tax Payment had been required. A Lender or where applicable the
Administrative Agent shall have an absolute discretion as to whether to
claim any Tax Credit (and, if it does claim, the extent order and manner in
which it does so). Neither the Lender nor the Administrative Agent should
be obliged to disclose any of its tax affairs or computations to Terra UK
or any other Loan Party.
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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.
Borrowers
---------
Terra Capital, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: Vice President
Terra Nitrogen (U.K.), Limited
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: Secretary
Terra Nitrogen, Limited Partnership
By: Terra Nitrogen Corporation,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: Vice President
Guarantor
---------
Terra Industries Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: Senior Vice President
Administrative Agent
--------------------
Citibank, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President
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Issuer
------
Citibank, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President
Lender
------
Citibank, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President
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SCHEDULE I
COMMITMENTS
-----------
Revolving Credit Term Loan
Lender Commitment Commitment
Citibank, N.A. $115,625,000 $50,000,000
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SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
----------------------------------------------------
1. Citibank, N.A.
Domestic Lending Office:
0 Xxxxx Xxx
Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxx Xxxxx
Telecopy: 000 000 0000
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