EXHIBIT 4
[Conformed Copy]
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of December 31, 1997
among
TERRA CAPITAL, INC.
and
TERRA NITROGEN, LIMITED PARTNERSHIP,
as Borrowers
CERTAIN GUARANTORS
CERTAIN LENDERS
CERTAIN ISSUING BANKS
and
CITIBANK, N.A.,
as Administrative Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms.................................... 2
Section 1.02. Computation of Time Periods.............................. 45
Section 1.03. Accounting Terms......................................... 45
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01. The Advances............................................. 46
Section 2.02. Making the Advances...................................... 50
Section 2.03. Repayment................................................ 52
Section 2.04. Termination or Reduction of the
Commitments............................................. 52
Section 2.05. Prepayments, Etc......................................... 53
Section 2.06. Interest................................................. 56
Section 2.07. Fees..................................................... 57
Section 2.08. Conversion and Continuation of Advances.................. 58
Section 2.09. Increased Costs, Illegality, Etc......................... 59
Section 2.10. Payments and Computations................................ 62
Section 2.11. Taxes.................................................... 64
Section 2.12. Sharing of Payments, Etc................................. 66
Section 2.13. Letters of Credit........................................ 67
Section 2.14. Replacement of Lender.................................... 73
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Amendment and
Restatement............................................. 75
Section 3.02. Conditions Precedent to Each Borrowing
and Issuance............................................ 78
Section 3.03. Determinations Under Section 3.01........................ 79
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the
Company................................................. 79
Section 4.02. Representations and Warranties of each
Lender.................................................. 86
(i)
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ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants.................................... 86
Section 5.02. Negative Covenants....................................... 95
Section 5.03. Reporting Requirements................................... 112
Section 5.04. Financial Covenants...................................... 116
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default........................................ 117
Section 6.02. Actions in Respect of the Letters of
Credit Upon Default..................................... 121
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action................................. 122
Section 7.02. Administrative Agent's Reliance, Etc..................... 122
Section 7.03. Citibank and Affiliates.................................. 123
Section 7.04. Lender Credit Decision................................... 123
Section 7.05. Indemnification.......................................... 124
Section 7.06. Collateral Duties........................................ 124
Section 7.07. Successor Administrative Agent........................... 125
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee............................................ 126
Section 8.02. Obligations Unconditional................................ 127
Section 8.03. Reinstatement............................................ 128
Section 8.04. Subrogation.............................................. 129
Section 8.05. Remedies................................................. 129
Section 8.06. Instrument for the Payment of Money...................... 129
Section 8.07. Continuing Guarantee..................................... 129
Section 8.08. Rights of Contribution................................... 130
Section 8.09. General Limitation on Guarantee
Obligations............................................. 131
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc................................ 131
Section 9.02. Notices, Etc............................................. 133
Section 9.03. No Waiver; Remedies...................................... 134
Section 9.04. Costs, Expenses and Indemnification...................... 135
Section 9.05. Right of Setoff.......................................... 136
Section 9.06. Governing Law; Submission to
Jurisdiction............................................ 137
Section 9.07. Assignments and Participations........................... 137
(ii)
Section 9.08. Execution in Counterparts................................ 142
Section 9.09. No Liability of the Issuing Banks........................ 142
Section 9.10. Confidentiality.......................................... 142
Section 9.11. WAIVER OF JURY TRIAL..................................... 143
Section 9.12. Survival................................................. 143
Section 9.13. Captions................................................. 143
Section 9.14. Successors and Assigns................................... 143
Section 9.15. NationsBank Assignments.................................. 144
SCHEDULES
---------
SCHEDULE 2.01 List of Commitments and Lending
Offices
SCHEDULE 4.01(b) Subsidiaries
SCHEDULE 4.01(c) List of Conflicts with Credit Instruments
SCHEDULE 4.01(d) List of Required Authorizations, Consents
SCHEDULE 4.01(j) Plans and Multiemployer Plans
SCHEDULE 4.01(q) Environmental Compliance Schedule
SCHEDULE 4.01(u) Open Tax Years
SCHEDULE 4.01(y) Existing Debt
SCHEDULE 5.02(a)(iii) Existing Liens
SCHEDULE 5.02(c) Existing Hedge Agreements
SCHEDULE 5.02(f) Investments
EXHIBITS
--------
EXHIBIT A-1 Form of Terra Note
EXHIBIT A-2 Form of TNLP Note
EXHIBIT B-1 Form of Amended and Restated Holdings Pledge
Agreement
EXHIBIT B-2 Form of Amended and Restated Terra Capital
Pledge Agreement
EXHIBIT B-3 Form of Amended and Restated Subsidiary
Pledge and Security Agreement
EXHIBIT B-4 Form of Amended and Restated TNLP Pledge and
Security Agreement
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D [Intentionally Omitted]
EXHIBIT E Loan Purchase Agreement
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Provisions Relating to Certain Investments
EXHIBIT H Form of Intercreditor Agreement
(iii)
CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 31, 1997
among:
(1) TERRA CAPITAL, INC., a Delaware corporation (the "Company");
(2) TERRA NITROGEN, LIMITED PARTNERSHIP, a Delaware limited partnership
and a Subsidiary of the Company ("TNLP");
(3) each of the corporations and limited partnerships listed on the
signature pages hereof under the caption "GUARANTORS";
(4) each of the lenders (the "Initial Lenders") listed on the signature
pages hereof; and
(5) CITIBANK, N.A., as agent (together with its successor in such capacity
appointed pursuant to Article VII, the "Administrative Agent") for the
Lenders and the Issuing Banks hereunder.
PRELIMINARY STATEMENTS:
Capitalized terms used in these Preliminary Statements and not
otherwise defined have the meanings assigned to them in Section 1.01.
(a) The Company, TNLP, certain Guarantors, the Initial Lenders (or
certain of their Affiliates), the Retiring Lenders, the Issuing Banks and the
Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of December 14, 1995 (as heretofore amended to and in effect on the
Restatement Date, the "Existing Credit Agreement") providing, subject to the
terms and conditions thereof, for the making of working capital advances to, and
the issuance of letters of credit for the account of, the Company and for the
making of working capital advances to, and the issuance of letters of credit for
the account of, TNLP.
(b) The Company, TNLP, the Guarantors, the Initial Lenders, the
Issuing Banks and the Administrative Agent wish to amend the Existing Credit
Agreement, among other things:
(1) to permit the Company to acquire, indirectly through Terra U.K.,
the U.K. Nitrogen Assets from ICI pursuant to the Sale of Business
Agreement (the "U.K. Nitrogen Acquisition");
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(2) to permit the BMLP Restructuring to occur;
(3) to permit the Company, indirectly through Terra U.K. Holdings, to
construct the Ammonia Loop (and, in that connection, to create Beaumont
Ammonia, Inc., a Delaware corporation and Subsidiary of Terra U.K.
Holdings, the principal business of which shall be the construction and
operation of the Ammonia Loop);
(4) to make certain other changes to the Existing Credit Agreement
and the other Loan Documents (including, without limitation, to provide
that (x) the "Applicable Commitment Fee Rate" during the period from the
Restatement Date until the Quarterly Date in December, 1998 shall be not
less than 0.375% per annum and (y) the "Applicable Margin" during the
period from the Restatement Date until the Quarterly Date in December, 1998
shall be not less than 0.375% per annum (in the case of Base Rate Advances)
and not less than 1.250% (in the case of Eurodollar Rate Advances);
(5) to reduce the aggregate Commitments to $350,000,000; and
(6) to reflect that the Retiring Lenders shall cease to be parties
hereto,
all on the terms and conditions set forth herein, it being the intention of the
parties hereto that the advances and letters of credit outstanding under the
Existing Credit Agreement on the Restatement Date shall continue and remain
outstanding and not be repaid on the Restatement Date.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that
the Existing Credit Agreement shall (subject to the satisfaction of the
conditions precedent specified in Section 3) be amended and restated to read as
set forth herein.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
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"Acquired Debt" means, without duplication:
(a) Debt of Subsidiaries of Terra acquired by Terra or any of
its Subsidiaries after the Restatement Date;
(b) Debt assumed by Terra (whether by operation of law or
contract or otherwise) in connection with mergers by Terra after the
Restatement Date consummated in accordance with Section
5.02(d)(ii)(y); and
(c) assumptions or Guarantees of other Acquired Debt by Terra or
one of its Subsidiaries.
"Adjusted Debt to Cash Flow Ratio" means, for any period, the ratio of
(i) Funded Debt of the Adjusted Terra Group on a Consolidated basis as at
the last day of such period to (ii) EBITDA of the Adjusted Terra Group on a
Consolidated basis for such period.
"Adjusted Interest Coverage Ratio" means, for any period, the ratio of
(i) EBITDA of the Adjusted Terra Group on a Consolidated basis for such
period to (ii) Cash Interest Expense of the Adjusted Terra Group on a
Consolidated basis for such period.
"Adjusted Net Worth" means, at any time, the sum of the following for
Terra and its Subsidiaries on a Consolidated basis:
(a) the Net Worth of Terra and its Subsidiaries on a
Consolidated basis; minus
(b) the Net Worth of Terra Canada and its Subsidiaries
(including, without limitation, Terra U.K. and its Subsidiaries) on a
Consolidated basis; minus
(c) from and after the BMLP Restructuring Time, the Net Worth of
BMLP and its Subsidiaries (including, without limitation, Terra U.K.
Holdings, BAI and their respective Subsidiaries) on a Consolidated
basis minus the BMLP Class A Capital Contribution Amount as at such
time (to the extent such amount was included in determining Net Worth
of BMLP and its Subsidiaries).
"Adjusted Terra Group" means, collectively, Terra and its Subsidiaries
(other than members of the Terra Canada Group and, from and after the BMLP
Restructuring Time, members of the BMLP Group).
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"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at its office
at ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Account No. 368-
52248, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ (or his successor), or such other account
maintained by the Administrative Agent as may be designated by the
Administrative Agent in a written notice to the Lenders, each Issuing Bank
and the Borrowers.
"Advance" means a Terra Advance or a TNLP Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
voting stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting stock, by contract or otherwise.
"AMCI Senior Note Indenture" means the Indenture dated as of October
15, 1993 between Terra and Society National Bank, as Trustee, providing for
the issuance of the AMCI Senior Notes, as from time to time amended.
"AMCI Senior Notes" means the 10-3/4% senior notes of Terra due 2003
issued pursuant to the AMCI Senior Note Indenture.
"Ammonia Loop" means the ammonia loop facility to be constructed as an
extension of BMLP's methanol plant pursuant to the Engineering, Procurement
and Construction Agreement dated as of October 20, 1997 between TNC and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA Corporation, as from time to time amended.
"Ammonium Nitrate Hedging Agreement" means an agreement between Terra
Canada and ICI pursuant to which Terra Canada agrees to pay certain amounts
to ICI in the event that the annual average price of ammonium nitrate
exceeds (Pounds)100 per tonne, as from time to time amended (without
prejudice to Section 5.02(l)).
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"Applicable Commitment Fee Rate" means 0.50% per annum; provided that:
(1) The Applicable Commitment Fee Rate shall, from the Restatement
Date until the Quarterly Date falling in March, 1998, be 0.375% per annum.
(2) Subject to clause (1) above and clause (3) below, if for any
Rolling Period ending on or after the Restatement Date the Debt to Cash
Flow Ratio for such Rolling Period shall be within any of the ranges
specified in the schedule below, then, subject to the delivery to the
Administrative Agent of a certificate of the Senior Financial Officer
demonstrating the same prior to the first Quarterly Date (the "relevant
Quarterly Date") occurring after the end of such Rolling Period, the
"Applicable Commitment Fee Rate" shall be changed to the percentage per
annum set forth opposite the reference to such range in such schedule
during the period commencing on the relevant Quarterly Date until the next
succeeding Quarterly Date thereafter:
Range of Debt Applicable Commitment
to Cash Flow Ratio Fee Rate
------------------ ---------------------
Greater than 3.00 to 1 0.500%
Less than or equal to
3.00 to 1 and greater
than 2.00 to 1 0.375%
Less than or equal to
2.00 to 1 and greater
than 1.25 to 1 0.250%
Less than or equal to
1.25 to 1 and greater
than 0.75 to 1 0.225%
Less than or equal to
0.75 to 1 0.200%
(3) Notwithstanding any reduction in the Applicable Commitment Fee
Rate below 0.375% per annum that would otherwise be made pursuant to clause
(2) above, the "Applicable Commitment Fee Rate" during the period from the
Restatement Date until the Quarterly Date in December, 1998 shall be not
less than 0.375% per annum.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of
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a Base Rate Advance and such Lender's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"Applicable Letter of Credit Fee Rate" means, at any time, a rate per
annum equal to the Applicable Margin for Eurodollar Rate Advances in effect
at such time.
"Applicable Margin" means, (a) with respect to all Base Rate Advances,
0.50% per annum and (b) with respect to all Eurodollar Rate Advances, 2.00%
per annum; provided that:
(1) The Applicable Margin with respect to all Base Rate Advances
and Eurodollar Rate Advances shall, from the Restatement Date until
the Quarterly Date falling in March, 1998, be 0.375% per annum (in the
case of such Base Rate Advances) and 1.250% per annum (in the case of
such Eurodollar Rate Advances).
(2) Subject to clause (1) above and clause (3) below, if for any
Rolling Period ending on or after the Restatement Date the Debt to
Cash Flow Ratio for such Rolling Period shall be within any of the
ranges specified in the schedule below, then, subject to the delivery
to the Administrative Agent of a certificate of the Senior Financial
Officer demonstrating the same prior to the first Quarterly Date (the
"relevant Quarterly Date") occurring after the end of such Rolling
Period, the "Applicable Margin" shall be changed to the percentage per
annum for the respective Type of Advance set forth opposite the
reference to such range in such schedule during the period commencing
on the relevant Quarterly Date until the next succeeding Quarterly
Date thereafter:
Applicable Margin (% p.a.)
----------------------------
Range of Debt Base Rate Eurodollar Rate
to Cash Flow Ratio Advances Advances
------------------ --------- ---------------
Greater than 3.00 to 1 0.500% 2.000%
Less than or equal to
3.00 to 1 and greater
than 2.00 to 1 0.375% 1.250%
Less than or equal to
2.00 to 1 and greater
than 1.25 to 1 0.250% 0.750%
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Less than or equal to
1.25 to 1 and greater
than 0.75 to 1 0.000% 0.625%
Less than or equal to
0.75 to 1 0.000% 0.500%
(3) Notwithstanding any reduction in the Applicable Margin below
0.375% per annum (in the case of Base Rate Advances) or 1.250% per annum
(in the case of Eurodollar Rate Advances) that would otherwise be made
pursuant to clause (2) above, the "Applicable Margin" during the period
from the Restatement Date until the Quarterly Date in December, 1998 shall
be not less than 0.375% per annum (in the case of Base Rate Advances) and
not less than 1.250% (in the case of Eurodollar Rate Advances).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit F.
"Available Amount" of any Letter of Credit means the maximum amount
available to be drawn under such Letter of Credit (assuming compliance with
all conditions to drawing specified therein).
"BAI" means Beaumont Ammonia, Inc., a Delaware corporation and
Subsidiary of Terra U.K. Holdings, the principal business of which shall be
the construction and operation of the Ammonia Loop.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) 0.50% per annum above the Federal Funds Rate; and
(c) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.50% per annum plus
(ii) the rate obtained by dividing (x) the latest three-week moving
average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major
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United States money center banks, such three-week moving average
(adjusted to the bases of a year of 360 days) being determined weekly
on each Monday (or, if such date is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank by (y) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month U.S. Dollar non-personal time deposits in the
United States plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment rate payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring U.S.
Dollar deposits of Citibank in the United States.
Each change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the time
of such change in the Base Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(i).
"Basic Documents" means the Loan Documents and the Intercreditor
Agreement.
"BFI" means ▇▇▇▇▇ Fertilizer, Inc., a California corporation.
"Blytheville Assets" means TI's Blytheville, Arkansas facility and
related assets having (in the reasonable judgment of TI's Board of
Directors) an aggregate fair market value not exceeding $5,000,000.
"BMCH" means BMC Holdings, Inc., a Delaware corporation.
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"BMLP" means Beaumont Methanol, Limited Partnership, a Delaware
limited partnership.
"BMLP Class A Capital Contribution Amount" means, at any time, the
aggregate amount of the BMLP Class A Limited Partner's capital
contributions to BMLP (net of redemptions thereof).
"BMLP Class A Limited Partner" means the holder from time to time of
the BMLP Class A Limited Partnership Interest.
"BMLP Class A Limited Partnership Interest" means a Class A limited
partnership interest in BMLP.
"BMLP Demand Loans" has the meaning assigned to such term in Section
5.02(b)(2)(ii).
"BMLP First Priority Distributions" means, for any period, the
aggregate amount of distributions (exclusive of redemptions) made by BMLP
in cash during such period in respect of the BMLP Class A Limited
Partnership Interest pursuant to the terms of the BMLP Partnership
Agreement.
"BMLP Group" means, collectively, BMLP and its Subsidiaries, and a
"member" of the BMLP Group means, individually, BMLP and each such
Subsidiary.
"BMLP Partners" means, collectively, TMC, BMCH and, from and after the
BMLP Restructuring Time, the BMLP Class A Limited Partner.
"BMLP Partnership Agreement" means the agreement of limited
partnership of BMLP, as amended and restated at the BMLP Restructuring Time
and as further amended from time to time (without prejudice to Section
5.02(j)).
"BMLP Restructuring" means the sale of the BMLP Class A Limited
Partnership Interest to a Person that is not an Affiliate of Terra,
provided that such sale, and the transactions related thereto, shall be
effected in accordance with the following terms (or on such other terms as
shall be reasonably satisfactory to the Required Lenders):
(A) both immediately prior to and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing;
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(B) the aggregate cash proceeds received by BMLP from the BMLP
Class A Limited Partner in connection with the issuance of the BMLP
Class A Limited Partnership Interest shall be not less than
$225,000,000; and
(C) the Company shall deliver to the Administrative Agent a
true, correct and complete copy of each of the principal documents
executed in connection with the BMLP Restructuring and shall certify
to the Administrative Agent and the Lenders that the same has been (or
is being) consummated in accordance with the terms and conditions set
forth herein.
"BMLP Restructuring Time" means the time as of which the BMLP
Restructuring shall have occurred in accordance with the terms set forth
herein and in the other Loan Documents.
"BMLP Support and Option Agreement" means a Support and Option
Agreement dated as of the date of the BMLP Restructuring among the Company,
the BMLP Class A Limited Partner and the holders of the BMLP Class A
Limited Partnership Interest, as from time to time amended.
"Borrower" means each of the Company and TNLP; provided that when
reference is made in this Agreement or in any other Loan Document to the
"relevant" Borrower in connection with either Facility, such reference
shall be deemed to refer (a) in the case of the Terra Facility, to the
Company, and (b) in the case of the TNLP Facility, to TNLP.
"Borrower's Account" means (a) in the case of the Company, the account
of the Company maintained with Citibank at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 4065-6098, and (b) in the case of
TNLP, the account of TNLP maintained with Citibank at its office at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 4065-6071; or, in either
case, such other account maintained by the relevant Borrower with Citibank
and designated by such Borrower in a written notice to the Administrative
Agent.
"Borrowing" means a Terra Borrowing or a TNLP Borrowing.
"▇▇▇▇▇ Documents" means the ▇▇▇▇▇ LLC Agreement and the ▇▇▇▇▇ ▇▇
Agreement.
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"▇▇▇▇▇ ▇▇ Agreement" means the Joint Venture Agreement among TI, BFI,
▇▇▇▇▇ LLC and certain other Persons pursuant to which TI will acquire
ownership interests in ▇▇▇▇▇ LLC, as amended from time to time.
"▇▇▇▇▇ LLC" means ▇▇▇▇▇ Fertilizer, L.L.C., a Delaware limited
liability company, as the same may be renamed from time to time.
"▇▇▇▇▇ LLC Agreement" means the limited liability company management
agreement for ▇▇▇▇▇ LLC, as the same may be in effect from time to time.
"Business Day" means a day on which banks are not required or
authorized to close in New York City and, if such Business Day relates to a
Eurodollar Rate Advance, on which dealings are carried on in the London
interbank market.
"Capital Expenditures" means, for any period with respect to any
Person, the sum of all expenditures during such period (whether paid in
cash or accrued as liabilities during such period) that, in conformity with
GAAP, are required to be included in or reflected on the balance sheet of
such Person in respect of equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, plus (without duplication) the amount of expenditures deemed to be
made in connection with equipment that is purchased simultaneously with the
trade-in of existing equipment owned by such Person to the extent the gross
amount of the purchase price of such purchased equipment exceeds the fair
market value (as determined in good faith by such Person) of the equipment
then being traded in, but excluding expenditures made in connection with
the replacement or restoration of assets to the extent such replacement or
restoration is financed from insurance proceeds paid on account of loss or
damage to the assets so replaced or restored.
"Capital Lease Obligations" means, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of
this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
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"Cash Interest Expense" means, for any Person for any period (without
duplication), interest expense net of interest income, whether paid or
accrued (including the interest component of Capital Lease Obligations), on
all Debt of such Person for such period, including, without limitation, (a)
interest expense in respect of the Advances, (b) commissions, discounts and
other fees and charges payable in connection with letters of credit
(including, without limitation, any Letter of Credit) and (c) the net
payment, if any, payable in connection with any Hedge Agreement; excluding,
in each case, interest not payable in cash (including, without limitation,
amortization of original issue discount and the interest portion of any
deferred payment obligation); all as determined in accordance with GAAP for
such period.
"Casualty Event" means, with respect to any property of any Person,
any loss of or damage to, or any condemnation or other taking of, such
property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or other
compensation.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Citibank" means Citibank, N.A., a national banking association.
"Collateral" means all "Collateral" referred to in the Security
Documents and all other property that is subject to any Lien created by any
Security Document in favor of the Collateral Agent.
"Collateral Agent" means Citibank, in its capacity as Collateral Agent
for the Secured Parties under and as defined in the Security Documents and
the Intercreditor Agreement, together with its successors in such capacity.
"Commitment" means a Terra Commitment or a TNLP Commitment.
"Commitment Termination Date" means the Terra Commitment Termination
Date or the TNLP Commitment Termination Date.
"Confidential Information" means information identified as such that
Terra or any of its Subsidiaries furnishes to the Administrative Agent, any
Issuing Bank or any Lender, but does not include any such information once
such
- 13 -
information has become generally available to the public or once such
information has become available to the Administrative Agent, any Issuing
Bank or any Lender from a source other than Terra and its Subsidiaries
(unless, in either case, such information becomes so available as a result
of the breach by the Administrative Agent, an Issuing Bank or a Lender of
its duty of confidentiality set forth in Section 9.10).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Group" means, collectively, Terra and its Consolidated
Subsidiaries, and a "member" of the Consolidated Group means Terra or any
such Subsidiary.
"Continuation", "Continue" and "Continued" each refers to a
continuation of Eurodollar Rate Advances from one Interest Period to the
next Interest Period pursuant to Section 2.08.
"Conversion", "Convert" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.08 or 2.09.
"Covered Transaction" means, collectively:
(1) the Transactions (as defined in the Original Credit Agreement) or
any part thereof, including, without limitation, the Initial Merger and the
Second Merger referred to therein and any of the other transactions
contemplated thereby;
(2) the SPU Redemption;
(3) the U.K. Nitrogen Acquisition;
(4) the BMLP Restructuring; and
(5) the construction of the Ammonia Loop.
"Cumulative Adjusted Net Income" means, for any period, the sum, for
each complete fiscal year of Terra (beginning with the fiscal year ending
December 31, 1995) during such period, of the Adjusted Net Income Amounts
for all such fiscal years. For purposes of this definition, "Adjusted Net
Income Amount" means, for any fiscal year of Terra, the greater of (x)
33-1/3% of the net income of Terra and its Subsidiaries on a Consolidated
basis during such fiscal year and (y) $20,000,000.
- 14 -
"Debt" of any Person means (without duplication): (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or services (other than
any trade payable having a tenor of not more than 365 days, or any like
item arising from the purchase of equipment or services having a tenor of
not more than 90 days, in each case incurred in the ordinary course of
business and on normal business terms and in each case not overdue by more
than 30 days, and other than any Obligations in respect of letters of
credit supporting any such trade payable or like item), (c) all Obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or
sale of such property), (e) all Capital Lease Obligations and Major
Operating Lease Obligations of such Person, (f) all Obligations, contingent
or otherwise, of such Person under acceptance, letter of credit or similar
facilities (other than Obligations in respect of letters of credit referred
to in clause (b) of this definition), (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Redeemable capital stock, which Obligations shall be valued at the
greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends, (h) all Obligations of such Person in respect of
Hedge Agreements, (i) all Debt of others referred to in clauses (a) through
(h) above guaranteed directly or indirectly in any manner by such Person,
or in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (j) all Debt referred to in clauses (a) through (i) above secured
by (or for which the holder of such Debt has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
- 15 -
though such Person has not assumed or become liable for the payment of such
Debt.
"Debt to Cash Flow Ratio" means, for any period, the ratio of:
(1) the sum of (x) Funded Debt of Terra and its Subsidiaries on
a Consolidated basis as of the last day of such period plus (y) from
and after the BMLP Restructuring Time, the BMLP Class A Capital
Contribution Amount as at the last day of such period to
(2) the sum of (x) EBITDA of Terra and its Subsidiaries on a
Consolidated basis for such period plus (y) from and after the BMLP
Restructuring Time, the aggregate amount of BMLP First Priority
Distributions made during such period (to the extent such
distributions were deducted in determining such EBITDA for such
period).
"Default" means any event that would constitute an Event of Default
but for the requirement that notice be given or time elapse or both.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by
Terra or any of its Subsidiaries, but excluding any sale, assignment,
transfer or other disposition of any property (i) sold or disposed of in
the ordinary course of business and on ordinary business terms, or (ii) by
any Obligor or a wholly owned Subsidiary of an Obligor to another Obligor
or to a wholly owned Subsidiary of an Obligor, or (iii) that consists of
outmoded or obsolete items, provided that the aggregate value of all such
excluded outmoded or obsolete items with a value of $1,000,000 or more each
shall not exceed $10,000,000.
"Dividend Payments" means dividends (in cash, property or obligations)
on, or other payments or distributions on account of, or the setting apart
of money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any shares of any class of
stock of the Company or of any warrants, options or other rights to acquire
the same (or to make any payment to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of Terra, the Company or any of their Subsidiaries,
other than any such payment made in the ordinary course of business of such
Person in connection
- 16 -
with an executive compensation plan approved by the Board of Directors of
such Person), but excluding dividends payable solely in shares of common
stock of the Company.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Administrative Agent.
"EBITDA" of any Person for any period means the following, determined
in accordance with GAAP: net income (or net loss) plus the sum of (a)
interest expense, (b) income tax expense and (c) depreciation expense,
amortization expense and other non-cash charges deducted in arriving at
such net income (or loss).
"Eligible Assignee" means (a) any other Lender or any affiliate of any
Lender; (b) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$1,000,000,000; (c) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and
having a net worth in excess of $100,000,000; (d) a commercial bank
organized under the laws of any other country that is a member of the OECD
or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having total assets in
excess of $1,000,000,000, so long as such bank is acting through a branch
or agency located in the country in which it is organized or another
country that is described in this clause (d); (e) the central bank of any
country that is a member of the OECD; (f) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $100,000,000; and (g) any
other Person (other than an Affiliate of the Company) approved by the
Administrative Agent and the Company, such approval of the Company not to
be unreasonably withheld or delayed.
"Environmental Action" means any administrative, regulatory or
judicial suit, demand, demand letter, claim, notice of non-compliance or
violation, consent order or consent agreement relating in any way to any
violation of or liability under any Environmental Law or any Environmental
- 17 -
Permit, including without limitation (a) any claim by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any Environmental Law, (b) any
claim by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to the
environment and (c) any notice by any governmental or regulatory authority
alleging that Terra or any of its Subsidiaries is or may be responsible
for, or is a potentially responsible party with respect to, any cleanup,
removal, response, remedial or other actions or damages pursuant to any
Environmental Law.
"Environmental Law" means any federal, state or local governmental
law, rule, regulation, order, writ, judgment, injunction or decree relating
to pollution or protection of the environment or the treatment, storage,
disposal, release, threatened release or handling of Hazardous Materials,
including, without limitation, CERCLA, the Resource Conservation and
Recovery Act, the Hazardous Materials Transportation Act, the Clean Water
Act, the Toxic Substances Control Act, the Clean Air Act, the Safe Drinking
Water Act, the Atomic Energy Act and the Federal Insecticide, Fungicide and
Rodenticide Act, in each case, as amended from time to time.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of
Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan of such Person or any of its ERISA Affiliates unless the 30-day
notice requirement with respect to such event has been waived pursuant to
regulations under Section 4043 of ERISA and excluding a reportable event
under Section 4043(c)(7) of ERISA; (b) the provision by the administrator
of any Plan of such Person or any of its ERISA Affiliates of a notice of
- 18 -
intent to terminate such Plan, pursuant to Section 4041(c) of ERISA as a
distress termination; (c) the cessation of operations at a facility of such
Person or any of its ERISA Affiliates in the circumstances described in
Section 4062(e) of ERISA; (d) the withdrawal by such Person or any of its
ERISA Affiliates from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the satisfaction of the conditions set forth in Sections 302(f)(1)(A)
and (B) of ERISA to the creation of a lien upon property or rights to
property of such Person or any ERISA Affiliate for failure to make a
required payment to a Plan; (f) the adoption of an amendment to a Plan of
such Person or any of its ERISA Affiliates requiring the provision of
security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person
or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the average
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if
such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank
market at approximately 5:00 P.M. (London time) two Business Days before
the first day of such Interest Period in an amount substantially equal to
such Reference Bank's Eurodollar Rate Advance comprising part of such
Borrowing (determined without giving effect to any assignments or
participations by such Reference Bank) and for a period equal to such
- 19 -
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar Rate for each
Interest Period for each Eurodollar Rate Advance comprising part of the
same Borrowing shall be determined by the Administrative Agent on the basis
of applicable rates furnished to and received by the Administrative Agent
from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.09.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing means the
reserve percentage (if any) applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with deposits
exceeding $1,000,000,000 with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Period" means, with respect to any additional amount payable
under Section 2.09 or 2.13, the period ending 120 days prior to the
applicable Lender's delivery of a certificate referenced in Section
2.09(a), 2.09(b) or 2.13(d), as applicable, with respect to such additional
amount.
"Excluded Transactions" means, collectively:
(1) Investments contemplated by the Port ▇▇▇▇ Transaction;
(2) Terra Stock Repurchases;
(3) the purchase, redemption or other acquisition of Senior
Preference Units pursuant to the SPU Redemption;
- 20 -
(4) capital contributions by TMC and BMCH to BMLP required to be made
pursuant to the terms of the BMLP Partnership Agreement or which, if not
made, would result in the occurrence of a "Notice Event" (as defined in the
BMLP Partnership Agreement);
(5) capital contributions by BMLP to its Subsidiaries and by
Subsidiaries of BMLP to their respective Subsidiaries;
(6) capital contributions to Subsidiaries of Terra (other than, from
and after the BMLP Restructuring Time, capital contributions to members of
the BMLP Group not referred to in clauses (4) and (5) above);
(7) the U.K. Nitrogen Acquisition; and
(8) the redemption of the BMLP Class A Limited Partnership Interest
pursuant to the BMLP Partnership Agreement and the BMLP Support and Option
Agreement, and the making of other payments under Article 2 of the BMLP
Support and Option Agreement.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements to this Agreement.
"Extraordinary Expenses" means, collectively, all expenses of BMLP in
excess of $500,000 for any single occurrence arising from any events,
developments or circumstances occurring after the BMLP Restructuring Time
relating to or in connection with or arising out of (a) any "Environmental
Law" or "Environmental Action", (b)(i) the occurrence of any "ERISA Event"
with respect to any "Plan" or any "Withdrawal Liability" to any
"Multiemployer Plan", (ii) the insolvency, reorganization or termination of
any "Multiemployer Plan", within the meaning of Title IV of ERISA, any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Internal Revenue Code), whether or not waived, with
respect to one or more of the "Plans", or any Lien on the property and
assets of BMLP or any of the "ERISA Affiliates" of BMLP in favor of PBGC or
any "Plan", (c) local, state or federal income tax in excess of 6% of
taxable income as computed for United States federal income tax purposes,
(d) liability in tort and (e) casualty and condemnation losses. Quoted
terms used in this definition have the meanings given to them in the BMLP
Partnership Agreement.
"Facility" means the Terra Facility or the TNLP Facility.
- 21 -
"Farmland JV" means a joint venture (which may be structured as a
partnership, limited liability company, corporation or other business form)
between TI and Farmland Industries, Inc. (or one of its Affiliates), in
which joint venture TI has at least a 50% ownership interest.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Funded Debt" of any Person means, on any date, the sum (determined
without duplication) of: (a) all Debt of such Person that would be listed
as long-term debt (including Capital Lease Obligations and Major Operating
Lease Obligations) of such Person on a balance sheet of such Person
prepared in accordance with GAAP (including, without limitation, the
current portion of such Debt), plus (b) the aggregate principal amount of
all outstanding Advances, plus (c) the aggregate amount of all Letters of
Credit to the extent of unreimbursed drawings thereunder; provided that:
(1) the term "Funded Debt" shall include letters of credit
issued in connection with the insurance program of Terra and its
Subsidiaries only to the extent of unreimbursed drawings thereunder;
and
(2) the term "Funded Debt" shall not include Obligations under
Hedge Agreements.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of, and used in, the
preparation of the audited financial statements referred to in Section
4.01(f).
"Guarantee" by any Person means any arrangement by which such Person
incurs Debt of the types referred to in clauses (i) and (j) of the
definition of "Debt" in respect of such Person.
"Guaranteed Obligations" means the Terra Guaranteed Obligations and
the TNLP Guaranteed Obligations.
- 22 -
"Guarantors" means the Terra Guarantors and the TNLP Guarantors.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become
friable, and radon gas, (b) any substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes",
"toxic substances", "toxic pollutants", "contaminants" or "pollutants", or
words of similar meaning and regulatory effect, under any Environmental Law
and (c) any other substance exposure to which is regulated under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity future or option agreements
and other similar agreements designed to hedge against fluctuations in
interest rates, foreign exchange rates or commodity prices, including,
without limitation, (a) the Methanol Hedging Agreement, (b) the Terra U.K.
Offtake Agreement, and (c) the Ammonium Nitrate Hedging Agreement.
"Holdings Pledge Agreement" means an Amended and Restated Pledge
Agreement in the form of Exhibit B-1 between Terra Capital Holdings and the
Collateral Agent, as from time to time amended.
"ICI" means, collectively, ICI Chemicals & Polymers Limited and
Imperial Chemical Industries Plc.
"Immaterial Subsidiary" means, as of any date of determination, any
Subsidiary of Terra with not more than $500,000 of assets on such date nor
more than $100,000 of gross income for the fiscal year of Terra ended on or
most recently ended prior to such date.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Initial Lenders" has the meaning specified in the recital of the
parties to this Agreement.
"Insufficiency" means, with respect to any Plan at any time, the
amount, if any, by which the "accumulated benefit obligation" (as defined
in Statement of Financial Accounting Standards 87) exceeds the fair market
value of the assets of such Plan as of the date of the most recent
actuarial
- 23 -
valuation for such Plan, calculated using the actuarial methods, factors
and assumptions used in such valuation.
"Intercompany Debt" means Debt owed by Terra or one of its
Subsidiaries to Terra or one of its Subsidiaries.
"Intercompany Receivables Facility" means a facility entered into by
the Company and/or any of its Subsidiaries, as sellers, and one or more
Receivables Subsidiaries, as purchasers, providing for the sale of
Receivables by said sellers to said purchasers.
"Intercreditor Agreement" means a Collateral Agency and Intercreditor
Agreement substantially in the form of Exhibit H among the Company, certain
of the other Obligors, the Collateral Agent, the Administrative Agent and
the other Secured Parties referred to therein (or representatives on their
behalf), as from time to time amended.
"Interest Coverage Ratio" means, for any period, the ratio of:
(1) the sum of (x) EBITDA of Terra and its Subsidiaries on a
Consolidated basis for such period plus (y) from and after the BMLP
Restructuring Time, the aggregate amount of BMLP First Priority
Distributions made during such period (to the extent such
distributions were deducted in determining such EBITDA for such
period) to
(2) the sum of (x) Cash Interest Expense of Terra and its
Subsidiaries on a Consolidated basis for such period plus (y) from and
after the BMLP Restructuring Time, the aggregate amount of BMLP First
Priority Distributions made during such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the relevant Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the relevant Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be one, three or six
months, as the relevant Borrower may, upon notice received by the
Administrative Agent not later than 10:00 A.M. (New York City time) on the
second Business Day
- 24 -
prior to the first day of such Interest Period, select; provided that:
(a) the Company may not select any Interest Period that ends
after any Terra Commitment Reduction Date unless, after giving effect
thereto, the aggregate principal amount of Terra Advances having
Interest Periods that end after such Terra Commitment Reduction Date
shall be equal to or less than the aggregate principal amount of Terra
Advances scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Terra Commitment
Reduction Date;
(b) no Interest Period for any Advance may end after the
relevant Commitment Termination Date;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided that, if such extension would cause the last
day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on the
last day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month), such Interest Period shall end on the last Business Day of the
appropriate subsequent calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person,
including, without limitation, (a) any arrangement pursuant to which the
investor Guarantees Debt of another Person, (b) the acquisition of all or
substantially all of the assets of such Person or of any division of such
Person, and (c) any merger of or consolidation with such Person; provided
that the purchase of equipment, fixed assets, real property or improvements
from such Person do not constitute
- 25 -
Investments in such Person to the extent the same constitute Capital
Expenditures.
"Issuing Bank" means each Lender specified on the signature pages
hereof as an "Issuing Bank", together with its successors in such capacity.
"L/C Cash Collateral Account" means the Terra L/C Cash Collateral
Account and the TNLP L/C Cash Collateral Account.
"L/C Related Documents" has the meaning specified in Section 2.13(e).
"Lenders" means the Initial Lenders listed on the signature pages
hereof and each Eligible Assignee that shall become a party hereto pursuant
to Section 9.07. When reference is made in this Agreement or any other
Loan Document to any "relevant" Lender in connection with any Facility,
such reference shall be deemed to refer to a Lender that has a Commitment
or outstanding Advances under such Facility.
"Letter of Credit Commitment" means the Terra Letter of Credit
Commitment or the TNLP Letter of Credit Commitment.
"Letter of Credit Liability" means a Terra Letter of Credit Liability
or a TNLP Letter of Credit Liability.
"Letter of Credit Sublimit" means the Terra Letter of Credit Sublimit
or the TNLP Letter of Credit Sublimit.
"Letters of Credit" has the meaning specified in Section 2.13(a).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Security Documents and the Loan Purchase Agreement.
"Loan Purchase Agreement" means an Amended and Restated Loan Purchase
Agreement in the form of Exhibit E between the Administrative Agent and
Terra, as from time to time amended.
- 26 -
"Major Operating Lease Obligations" means, for any Person, all
obligations of such Person under an operating lease to pay required
termination payments or like payments in an amount exceeding $7,000,000 and
in an amount at least equal to 75% of the original acquisition cost of the
leased property under such operating lease.
"Management Agreements" means one or more management agreements
between Terra and/or certain of its Subsidiaries and other Persons
providing for the performance by Terra or any of such Subsidiaries of
certain treasury, purchasing, legal and/or other services for such
Subsidiaries and such other Persons, as such agreements are in effect from
time to time.
"Margin Stock" has the meaning specified in Regulations G, U and X.
"Material Adverse Change" means, with respect to any Person, any
material adverse change in the business, assets, operations, properties or
financial condition of such Person and its Subsidiaries taken as a whole,
or any material adverse change in the contingent liabilities of such Person
which could reasonably be expected to result in any of the foregoing, other
than any of the foregoing resulting solely from a general economic change
in the industry of such Person and its Subsidiaries.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, properties or financial condition of Terra
and its Subsidiaries taken as a whole, or a material adverse effect on the
contingent liabilities of such Person which could reasonably be expected to
result in any of the foregoing, (b) the rights and remedies of the
Administrative Agent, any Issuing Bank or any Lender under any Loan
Document or (c) the ability of any Obligor to perform its Obligations under
any Loan Document to which it is or is to be a party.
"Material Contract" means:
(A) each Hedge Agreement;
(B) each contract to which Terra or any of its Subsidiaries is a
party (a "Specified Party") that (a) provides for the provision of
goods or services by the Specified Party or the receipt of goods or
services by the Specified Party, (b) has a term of more than one year
(unless such contract may be cancelled at the sole option of another
Person party to such contract),
- 27 -
(c) involves the payment or receipt by the Specified Party of
consideration having a fair market value in excess of $1,000,000 in
any fiscal year of Terra and (d) provides for either: (i) the
provision of goods or services to another Person that is obligated to
purchase from the Specified Party a specified quantity of such goods
or services (but only to the extent that, if such other Person did not
purchase such quantity of such goods or services, the Specified Party
would not be readily able to sell such goods or services at a price
equal to or higher than the price set in such contract) or (ii) the
receipt of goods or services from another Person that is obligated to
supply to the Specified Party a specified quantity of such goods or
services (but only to the extent that, if such other Person did not
supply such quantity of such goods or services, the Specified Party
would not be readily able to purchase such goods or services at a
price less than or equal to the price set in such contract); and
(C) each contract to which Terra or any of its Subsidiaries is a
party that, if such contract were to be terminated or the obligations
of any other Person party to such contract were to fail to be in full
force and effect, could reasonably be expected, either individually or
in the aggregate with any other such event, to have a Material Adverse
Effect.
"Material Subsidiary" means any Subsidiary of Terra other than an
Immaterial Subsidiary.
"Methanol Hedging Agreement" means the Methanol Hedging Agreement
dated as of October 24, 1994 between BMLP (as successor to Beaumont
Methanol Corporation) and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, as
Agent, as from time to time amended.
"Minorco" means Minorco, S.A., a Luxembourg societe anonyme, and its
successors.
"Minorco USA" means Minorco (U.S.A.) Inc., a Colorado corporation, and
its successors.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates is making or accruing an obligation to make contributions,
- 28 -
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one
Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates has or would have liability under Section 4064 or 4069 of ERISA
in the event such plan has been or were to be terminated.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the aggregate amount of all
cash payments, and the fair market value of any non-cash
consideration, received by Terra and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (i) such
Net Available Proceeds shall be net of (x) the amount of any legal,
title and recording tax expenses, commissions and other reasonable
fees and expenses (including reasonable expenses of preparing the
relevant property for sale) paid by Terra and its Subsidiaries in
connection with such Disposition and (y) any Federal, state and local
income or other taxes estimated in good faith to be payable by Terra
and its Subsidiaries as a result of such Disposition and (ii) such Net
Available Proceeds shall be net of any repayments by Terra or any of
its Subsidiaries of Debt to the extent that (x) such Debt is secured
by a Lien on the property that is the subject of such Disposition and
(y) the transferee of (or holder of a Lien on) such property requires
that such Debt be repaid as a condition to the purchase of such
property; and
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by Terra and its Subsidiaries (and, in the case of business
interruption insurance, not contractually required to be paid over to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, as agent, or its successors
or assigns) in respect of such Casualty Event net of (A) reasonable
expenses incurred by Terra and its Subsidiaries in connection
therewith, (B) contractually required repayments of Debt to the extent
secured by a Lien on the property suffering such Casualty Event and
any income and transfer taxes payable by Terra or any of its
Subsidiaries in respect
- 29 -
of such Casualty Event and (C) amounts promptly applied to or set
aside for the repair or replacement of the property suffering such
Casualty Event; provided that the proceeds of insurance received by
Terra and its Subsidiaries in connection with the December 13, 1994
Casualty Event at the Port ▇▇▇▇ Facility shall be deemed to be applied
to the repair or replacement of the Port ▇▇▇▇ Facility.
"Net Worth" means, for any Person at any time, the sum of the
following for such Person and its Subsidiaries on a Consolidated basis:
(a) the amount of capital stock; plus
(b) the amount of surplus and retained earnings (or, in the case
of a surplus or retained earnings deficit, minus the amount of such
deficit).
"1995 Terra Debt" means Debt incurred by Terra under the ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"1995 Terra Debt Indenture" means the Indenture dated as of June 22,
1995 between Terra and First Trust National Association, as Trustee,
providing for the issuance of Terra's 10.50% Senior Notes, as from time to
time amended.
"1996 Receivables Agreement" means the August 1996 Receivables
Purchase Agreement among Terra Funding Corporation, as Seller, the Company,
as initial servicer, the financial institutions party thereto, as
Purchasers, and Bank of America National Trust and Savings Association, as
Agent.
"Note" means a Terra Note or a TNLP Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.13(b)(i).
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such
Person on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable, secured
or unsecured, and whether or not such claim is discharged, stayed or
otherwise
- 30 -
affected by any proceeding referred to in Section 6.01(g). Without limiting
the generality of the foregoing, the Obligations of the Obligors under the
Loan Documents include (a) their respective obligations to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts payable under any
Loan Document and (b) their respective obligations to reimburse any amount
in respect of any of the foregoing that any Lender, in its sole discretion,
may elect to pay or advance on behalf of such Obligor.
"Obligors" means the Terra Obligors and the TNLP Obligors.
"OECD" means the Organization for Economic Cooperation and
Development.
"Original Credit Agreement" means the Credit Agreement dated as of
October 24, 1994 among the Company, Terra and TNLP, as Borrowers, certain
Guarantors, the "Lenders" and "Issuing Banks" referred to therein and
Citibank, as Agent.
"Other Distribution" means a Dividend Payment made with respect to the
capital stock of the Company except to the extent that the Company
determines, reasonably and in good faith, that such Dividend Payment (1) is
made to fund one or more of the items described in the definition of
"Specified Payments" in this Section 1.01 or (2) is made out of the then-
available amount of Cumulative Adjusted Net Income.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Outside Subsidiary" means any Subsidiary of Terra (other than Terra
Capital Holdings or any of its Subsidiaries).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Investments" means:
(a) direct obligations of the United States of America, or of any
agency thereof, or obligations guaranteed as to principal and interest by
the United States of America, or by any agency thereof, in either case
maturing not more than one year from the date of acquisition thereof;
(b) readily marketable direct obligations of the United States of
America, or of any agency thereof, or
- 31 -
readily marketable obligations guaranteed as to principal and interest by
the United States of America, or by any agency thereof, in either case
maturing not more than three years from the date of acquisition thereof
(provided that the aggregate amount of Permitted Investments outstanding at
any time under this paragraph (b) having maturities in excess of one year
from the date of determination shall not exceed $25,000,000 at any time);
(c) readily marketable direct obligations issued by any State of the
United States of America or any political subdivision thereof or of the
government of Canada or any agency thereof, in each case maturing not more
than one year from the date of acquisition thereof and having the highest
credit rating obtainable from either of Moody's or Standard & Poor's;
(d) money market mutual funds (including, without limitation, tax-
free money market mutual funds) with assets consisting solely of U.S.
Dollars and securities principally of the types described in paragraphs
(a), (b) and (c) in this definition;
(e) certificates of deposit issued by, repurchase and reverse
repurchase agreements with, banker's acceptances of, and eurodollar time
deposits with, any Initial Lender or any bank or trust company organized
under the laws of the United States of America or any state thereof, having
capital, surplus and undivided profits of at least $500,000,000 (or any
national or regional brokerage firm) and whose unsecured, unguaranteed
long-term senior debt obligations are rated at least A by Standard & Poor's
and at least A2 by Moody's, maturing not more than 270 days from the date
of acquisition thereof;
(f) obligations of not more than $100,000 in the aggregate at any one
time of any bank or bank holding company with a capital and surplus of less
than $500,000,000 or whose unsecured, unguaranteed long-term senior debt
obligations are rated less than A by Standard & Poor's or less than A2 by
Moody's;
(g) commercial paper and variable rate demand notes, in each case
rated at least A-1 by Standard & Poor's or at least P-1 by Moody's and
maturing not more than 270 days from the date of acquisition thereof;
(h) tax-exempt auction rate preferred stock and taxable and tax-
exempt auction rate securities, in each case rated at least AAA by Standard
& Poor's and Aaa by Moody's
- 32 -
and maturing not more than 60 days from the date of acquisition thereof;
(i) "Liquidity Optimized Guaranteed Investment Contracts" with
insurance companies having short-term debt ratings of at least A-1 by
Standard & Poor's and P-1 by Moody's and maturing not more than 30 days
from the date of acquisition thereof;
(j) Canadian dollar-denominated banker's acceptances of Canadian
banks rated at least R1-mid by Dominion Bond Rating Service ("Dominion")
and maturing not more than one year from the date of acquisition thereof;
and
(k) Canadian dollar-denominated commercial paper rated at least R1-
mid by Dominion and maturing not more than one year from the date of
acquisition thereof; and
(l) solely with respect to Terra U.K., (i) British government bonds
maturing not more than one year from the date of acquisition thereof; (ii)
money-market funds or composite funds with assets consisting solely of
Pounds Sterling, high-quality short-term corporate securities and
securities principally of the type described in clause (i) in this
paragraph (l); and (iii) funds held in corporate accounts at banks
organized under the laws of the United Kingdom having capital, surplus and
undivided profits not less than $350,000,000 or at branches of U.S. banks
located in the United Kingdom of the quality described in paragraph (e)
above.
"Permitted JV" means ▇▇▇▇▇ LLC and Farmland JV.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced (or, if such a proceeding has been commenced, such
proceeding is being contested in good faith by appropriate proceedings and
enforcement of any Lien has been and is stayed):
(a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b),
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens, statutory landlord's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more
- 33 -
than 30 days or which are being contested in good faith and by
appropriate proceedings,
(c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations,
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases (other than capital leases),
surety and appeal bonds, and performance bonds and other obligations
of a like nature incurred, in each case arising in the ordinary course
of business,
(e) as to any particular property at any time, such easements,
encroachments, covenants, rights of way, minor defects, irregularities
or encumbrances on title which do not materially impair the use of
such property for the purpose for which it is held by the owner
thereof,
(f) municipal and zoning ordinances that are not violated in any
material respect by the existing improvements and the present use made
by the owner thereof, and
(g) real estate taxes and assessments not yet delinquent.
"Permitted Receivables Facilities" means, collectively:
(a) the Receivables Purchase Agreement dated as of March 31,
1994 among TI, as Seller, the financial institutions party thereto, as
Purchasers, and Bank of America National Trust and Savings
Association, successor to Continental Bank N.A., as agent, as from
time to time amended, or any replacement or refinancing thereof; and
(b) the 1996 Receivables Agreement and one or more additional
facilities entered into by the Company and/or any of its Subsidiaries
(which may be effected by an amendment to the facility referred to in
clause (a) of this definition or otherwise) providing for the sale of
Receivables,
provided that the aggregate amount outstanding under all of the Permitted
Receivables Facilities (other than Intercompany Receivables Facilities),
taken together, may
- 34 -
not at any time exceed $150,000,000 plus reasonable reserves.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Port ▇▇▇▇ Facility" means TI's facility in Port ▇▇▇▇, Iowa.
"Port ▇▇▇▇ Transaction" means the "Proposed Transaction" under and as
defined in the Consent, Waiver and Amendment dated as of July 31, 1995
relating to the Existing Credit Agreement.
"Post-Default Rate" means a rate per annum equal to 2% plus the
Applicable Margin plus the Base Rate as in effect from time to time.
"Pounds Sterling" and "(Pounds)" means lawful money of the United
Kingdom.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Pro Rata Share" of any amount means, with respect to any Lender under
any Facility at any time, the product of (a) a fraction the numerator of
which is the amount of such Lender's Advances under such Facility (or, in
the case of a Facility prior to the Commitment Termination Date for such
Facility, the amount of such Lender's Commitment under such Facility), and
the denominator of which is the aggregate Advances or Commitments, as the
case may be, under such Facility at such time, multiplied by (b) such
amount.
"Purchase Event" means:
(1) that during any period commencing January 1, 1995, the
aggregate amount of Dividend Payments with respect to the capital
stock of the Company during such period exceeds the sum of:
- 35 -
(a) the aggregate amount of Specified Payments for such
period plus
(b) Cumulative Adjusted Net Income for such period plus
(c) the amounts available during such period for Restricted
Transactions under Section 5.02(h)(A) (provided that this clause
(c) shall be determined, with respect to all periods prior to the
Restatement Date, as provided in the Existing Credit Agreement)
to the extent not utilized for Restricted Transactions during
such period; or
(2) that:
(A) Liens on or with respect to any property of the Company or
any of its Subsidiaries have been created in favor of Terra or any of
its Subsidiaries, other than Liens permitted under any of clauses (i)
through (xix) of Section 5.02(a); or
(B) the Company or any of its Subsidiaries has any outstanding
Debt owing to Terra or any of its Subsidiaries, other than Debt
permitted to be outstanding under any of clauses (i) through (ix) of
Section 5.02(b)(2); or
(C) the Company or any of its Subsidiaries has sold, transferred
or otherwise disposed of any of its property to Terra or any of its
Subsidiaries, other than sales, transfers or other dispositions
permitted under any of clauses (i) through (xi) of Section 5.02(e); or
(D) the Company or any of its Subsidiaries has made any
Investments in Terra or any of its Subsidiaries, other than
Investments permitted under any of clauses (i) through (xxiii) of
Section 5.02(f).
"Quarterly Dates" means March 31, June 30, September 30 and December
31 in each year, the first of which shall be the first such day after the
Restatement Date, provided that, if any such day is not a Business Day, the
relevant Quarterly Date shall be the immediately preceding Business Day.
"Receivables" means accounts and notes receivable and, in each case,
related reserves.
- 36 -
"Receivables Subsidiary" means a Subsidiary of the Company that meets
both of the following criteria:
(1) such Subsidiary is formed solely for the purpose of, and is
engaged solely in the business of, (x) purchasing Receivables of the
Company and one or more of its Subsidiaries under an Intercompany
Receivables Facility and, at its option, selling all or a portion of
such Receivables under a Permitted Receivables Facility and/or (y)
owning the capital stock of, or other ownership interests in, one or
more Receivables Subsidiaries; and
(2) all of the capital stock of and/or other ownership interests
in, such Subsidiary (other than, in the case of a Subsidiary of the
Company that is an obligor or a seller under a Permitted Receivables
Facility, shares of preferred stock of such Subsidiary having a de
minimis liquidation value, which preferred shares may be held by one
or more financial institutions party to such Permitted Receivables
Facility or their designees, including one or more individuals, and
their successors) is owned beneficially and of record, directly or
indirectly, by Terra Capital Holdings, the Company and/or one or more
other Receivables Subsidiaries.
"Redeemable" means any capital stock, Debt or other right or
Obligation that (a) the issuer thereof has undertaken to redeem at a fixed
or determinable date or dates prior to the Terra Commitment Termination
Date hereunder, whether by operation of a sinking fund or otherwise, or
upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable on any date prior to the Terra Commitment
Termination Date at the option of the holder thereof. For purposes of this
Agreement, the BMLP Class A Limited Partnership Interest shall not be
deemed to be "Redeemable".
"Reference Banks" means Citibank, Bank of America National Trust and
Savings Association, NationsBank, N.A. and The Bank of Nova Scotia (or
their respective Applicable Lending Offices, as the case may be).
"Register" has the meaning specified in Section 9.07(c).
"Regulation G", "Regulation U" and "Regulation X" mean Regulations G,
U and X of the Board of Governors of the
- 37 -
Federal Reserve System, respectively, as in effect from time to time.
"Required Lenders" means at any time Lenders owed or holding in the
aggregate at least 51% of the sum of the then aggregate unpaid principal
amount of the Advances, the then aggregate Unused Commitments and the
aggregate Available Amount of all Letters of Credit. For purposes of this
definition, the Available Amount of each Letter of Credit shall be
considered to be owed to the relevant Lenders according to their respective
Pro Rata Shares of the Facility under which such Letter of Credit has been
issued.
"Restatement Date" has the meaning assigned to such term in Section
3.01.
"Restricted Transactions" means, collectively, Capital Expenditures
and Specified Acquisitions.
"Retiring Lender" means each "Lender" under the Existing Credit
Agreement identified under the caption "RETIRING LENDERS" on the signature
pages hereof.
"Rolling Period" means any period of four consecutive fiscal quarters
of Terra.
"Sale of Business Agreement" means the Sale of Business Agreement
relating to the ICI Fertilizer Business dated November 20, 1997 between
ICI, Terra U.K. and Terra providing for the U.K. Nitrogen Acquisition, as
from time to time amended (without prejudice to Section 5.02(l)).
"Second Restatement Date" means December 14, 1995.
"Security Documents" means the Holdings Pledge Agreement, the Terra
Capital Pledge Agreement, the Subsidiary Pledge and Security Agreement, the
TNLP Pledge and Security Agreement, each security agreement or other grant
of security now or hereafter made by any Obligor to secure any of the
Obligations hereunder and under the other Loan Documents, and all Uniform
Commercial Code financing statements required by this Agreement or any of
the foregoing to be filed with respect to the security interests in
personal property created pursuant thereto.
"Senior Financial Officer" means the Chief Financial Officer of Terra.
"Senior Preference Units" means, collectively, (a) the "Senior
Preference Units" issued and outstanding under, and
- 38 -
as defined in, the Agreement of Limited Partnership dated as of December 4,
1991 of TNCLP, as such Agreement of Limited Partnership is in effect on the
Restatement Date, and (b) the "Common Units" into which such Senior
Preference Units have been converted in accordance with Section 5.5 of such
Agreement of Limited Partnership.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that is subject to Title IV of
ERISA and that (a) is maintained for employees or former employees of such
Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which
such Person or any of its ERISA Affiliates has or would have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital.
"Specified Acquisitions" means Investments (including, without
limitation, Investments arising by reason of any merger or consolidation
permitted under Sections 5.02(d)(i)(y) and 5.02(d)(ii)(y), but excluding
the Excluded Transactions) consisting of acquisitions of ownership
interests in one or more entities engaged in the same or allied line or
lines of business as Terra and its Subsidiaries, taken as a whole. For
purposes hereof, the amount of Specified Acquisitions made during any
period shall include, without duplication, the aggregate amount of
Investments in Permitted JVs (other than Investments referred to in clauses
(xvi) and (xviii)(y) of Section 5.02(f)) made during such period and the
aggregate amount of payments made during such period by Terra and its
Subsidiaries in respect of the Obligations referred to in clauses (xiv),
(xv), (xvi) and (xvii) of Section 5.02(b)(1).
- 39 -
"Specified Call Option" means a cash-settled call option with respect
to a U.S. Stock Index, which call option (a) has an expiration date not
later than March 31, 1998, (b) is entered into with a counterparty (or
designated guarantor) having (at the time of acquisition thereof) senior,
unsecured long-term debt rated at least BBB by Standard & Poor's and Baa2
by ▇▇▇▇▇'▇ and (c) is documented under an agreement that permits close-out
and netting of all call options thereunder.
"Specified Payments" means, for any period, (a) all interest due and
payable on the AMCI Senior Notes and on the 1995 Terra Debt during such
period, (b) all scheduled dividends payable during such period on
convertible Preferred Stock or other equity securities issued and applied
to prepay the Advances (to the extent the Commitments hereunder are reduced
simultaneously with such issuance), (c) ordinary and necessary expenses
incurred by Terra as a result of its operations as a publicly-held holding
company and (d) other payments in an aggregate amount up to $5,000,000 per
year to the extent required under pre-existing obligations.
"SPU Redemption" means the purchase, redemption or other acquisition
from time to time of all or a portion of the outstanding Senior Preference
Units by Terra and its Subsidiaries (or any of them):
(a) on such terms and conditions as could not reasonably be
expected to have a Material Adverse Effect; and
(b) in accordance in all material respects with the terms and
conditions hereof.
"SPU Redemption Time" means the time as of which all of the Senior
Preference Units shall have been purchased or otherwise redeemed pursuant
to the SPU Redemption.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Subordinated Indebtedness" means Debt of Terra or any of its
Subsidiaries the payment of which is subordinated in right of payment to
the prior payment in full of the Advances.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust
- 40 -
or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at
the time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or
by one or more of such Person's other Subsidiaries. For all purposes of
this Agreement and the other Loan Documents, BMLP and each of BMLP's
Subsidiaries shall be deemed to be Subsidiaries of the Company so long as
TMC or one of TMC's Subsidiaries is the sole general partner of BMLP.
"Subsidiary Guarantor" means, collectively, (x) TNC, BMCH, TMC and TI,
(y) prior to the BMLP Restructuring Time, BMLP and (z) from and after the
SPU Redemption Time, TNLP and its successors.
"Subsidiary Pledge and Security Agreement" means an Amended and
Restated Pledge and Security Agreement in the form of Exhibit B-3 between
certain of the Guarantors and the Collateral Agent, as from time to time
amended.
"Terra" means Terra Industries Inc., a Maryland corporation and an
indirect parent of the Company.
"Terra Advance" means an Advance made or outstanding pursuant to
Section 2.01(a).
"Terra Borrowing" means a borrowing consisting of simultaneous Terra
Advances of the same Type.
"Terra Canada" means Terra International (Canada) Inc., a corporation
governed by the laws of Ontario and an indirect wholly owned Subsidiary of
the Company.
"Terra Canada Credit Facility" means the Credit Agreement dated as of
December 31, 1997 among Terra Canada, the lenders party thereto and
Citibank, as administrative agent for said lenders, providing for term
loans to be made to Terra Canada in an aggregate principal amount equal to
$125,000,000 having a tenor of five years and one day, as from time to time
amended.
- ▇▇ -
"▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇" ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and its
Subsidiaries, and a "member" of the Terra Canada Group means, individually,
Terra Canada and each such Subsidiary.
"Terra Capital Holdings" means Terra Capital Holdings, Inc., a
Delaware corporation and the direct parent of the Company.
"Terra Capital Note" has the meaning assigned to such term in Section
5.02(b)(2)(iii).
"Terra Capital Pledge Agreement" means an Amended and Restated Pledge
Agreement in the form of Exhibit B-2 between the Company and the Collateral
Agent, as from time to time amended.
"Terra Commitment" has the meaning specified in Section 2.01(a).
"Terra Commitment Reduction Dates" shall mean the Quarterly Dates
falling on or nearest to December 31 of each year, commencing with December
31, 1998, through and including December 31, 2000.
"Terra Commitment Termination Date" means the earlier of (a) December
31, 2000 (provided that if such day is not a Business Day, the Terra
Commitment Termination Date shall be the immediately preceding Business
Day), and (b) the termination or cancellation of the Terra Commitments
pursuant to the terms of this Agreement.
"Terra Facility" means the revolving credit facility provided
hereunder in respect of the Terra Commitments.
"Terra Guaranteed Obligations" has the meaning specified in Section
8.01.
"Terra Guarantors" means, collectively, (x) Terra, Terra Capital
Holdings, TNC, TI, BMCH and TMC, (y) prior to the BMLP Restructuring Time,
BMLP and (z) from and after the SPU Redemption Time, TNLP and its
successors.
"Terra L/C Cash Collateral Account" means one or more cash collateral
accounts maintained by the Administrative Agent with Citibank for the
benefit of the Lenders and Issuing Banks.
"Terra Letter of Credit" means a letter of credit issued by an Issuing
Bank for account of the Company or any
- 42 -
of its Subsidiaries (other than, prior to the SPU Redemption Time, TNLP or
any of its Subsidiaries) pursuant to Section 2.13(a).
"Terra Letter of Credit Commitment" means, with respect to any Issuing
Bank at any time, the amount set forth opposite such Issuing Bank's name on
Schedule 2.01 under the caption "Terra Letter of Credit Commitment", as
such amount may be reduced pursuant to Section 2.04.
"Terra Letter of Credit Liability" means, as of any date of
determination, all of the liabilities of the Company to the Issuing Banks
in respect of Terra Letters of Credit, whether such liability is contingent
or fixed, and shall consist of the sum of (a) the aggregate Available
Amount of all Terra Letters of Credit then outstanding, plus (b) the
aggregate amount that has then been paid by, and has not been reimbursed
to, any Issuing Bank under Terra Letters of Credit.
"Terra Letter of Credit Sublimit" means (a) prior to the SPU
Redemption Time, $30,000,000 and (b) from and after the SPU Redemption
Time, $45,000,000.
"Terra Note" means a promissory note of the Company payable to the
order of a Lender, in substantially the form of Exhibit A-1, as from time
to time amended.
"Terra Obligors" means the Terra Guarantors and the Company.
"Terra Stock Repurchase" means the purchase, redemption, retirement or
other acquisition of shares of common stock of Terra.
"Terra U.K." means Terra Nitrogen (U.K.) Limited, a corporation formed
under the laws of England and a wholly owned Subsidiary of Terra Canada.
"Terra U.K. Holdings" means Terra (U.K.) Holdings, Inc., a Delaware
corporation and a direct Subsidiary of BMLP.
"Terra U.K. Loan" has the meaning specified in Section 5.02(b)(2)(iv).
"Terra U.K. Loan Agreement" means the credit agreement, loan
agreement, promissory note or other agreement providing for the Terra U.K.
Loan, as from time to time amended.
- 43 -
"Terra U.K. Offtake Agreement" means, collectively, one or more
nitrogen products offtake agreements between the Company and Terra U.K.
entered into in connection with the BMLP Restructuring, as from time to
time amended.
"TI" means Terra International, Inc., a Delaware corporation and a
wholly owned Subsidiary of the Company.
"TMC" means Terra Methanol Corporation, a Delaware corporation.
"TNC" means Terra Nitrogen Corporation, a Delaware corporation and a
wholly owned Subsidiary of the Company.
"TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited
partnership and a Subsidiary of the Company.
"TNLP Advance" means an Advance made or outstanding pursuant to
Section 2.01(b).
"TNLP Borrowing" means a borrowing consisting of simultaneous TNLP
Advances of the same Type.
"TNLP L/C Cash Collateral Account" means one or more cash collateral
accounts maintained by the Administrative Agent with Citibank for the
benefit of the Lenders and Issuing Banks.
"TNLP Commitment" has the meaning specified in Section 2.01(b).
"TNLP Commitment Termination Date" means the earliest of (a) December
31, 2000 (provided that if such day is not a Business Day, the TNLP
Commitment Termination Date shall be the immediately preceding Business
Day), (b) the termination or cancellation of the TNLP Commitments pursuant
to the terms of this Agreement, and (c) the date on which the SPU
Redemption Time occurs.
"TNLP Facility" means the revolving credit facility provided hereunder
in respect of the TNLP Commitments.
"TNLP Guaranteed Obligations" has the meaning specified in Section
8.01.
"TNLP Guarantors" means, collectively, (x) Terra, Terra Capital
Holdings, the Company, TNC, TI, TMC and BMCH and (y) prior to the BMLP
Restructuring Time, BMLP.
- 44 -
"TNLP Letter of Credit" means a letter of credit issued by an Issuing
Bank for account of TNLP or any of its Subsidiaries pursuant to Section
2.13(a).
"TNLP Letter of Credit Commitment" means, with respect to any Issuing
Bank at any time, the amount set forth opposite such Issuing Bank's name on
Schedule 2.01 under the caption "TNLP Letter of Credit Commitment", as such
amount may be reduced pursuant to Section 2.04.
"TNLP Letter of Credit Liability" means, as of any date of
determination, all of the liabilities of TNLP to the Issuing Banks in
respect of TNLP Letters of Credit, whether such liability is contingent or
fixed, and shall consist of the sum of (a) the aggregate Available Amount
of all TNLP Letters of Credit then outstanding, plus (b) the aggregate
amount that has then been paid by, and has not been reimbursed to, any
Issuing Bank under TNLP Letters of Credit.
"TNLP Letter of Credit Sublimit" means $15,000,000.
"TNLP Note" means a promissory note of TNLP payable to the order of a
Lender, in substantially the form of Exhibit A-2, as from time to time
amended.
"TNLP Obligors" means the TNLP Guarantors and TNLP.
"TNLP Pledge and Security Agreement" means an Amended and Restated
Pledge and Security Agreement in the form of Exhibit B-4 between TNLP and
the Collateral Agent, as from time to time amended.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"U.K. Nitrogen Acquisition" has the meaning specified in the
Preliminary Statements to this Agreement.
"U.K. Nitrogen Assets" means the "Assets", as defined in the Sale of
Business Agreement.
"U.K. Nitrogen MAC" means a deterioration in the aggregate value of
the U.K. Nitrogen Assets of 10% or more in the period from November 20,
1997 to the Restatement Date.
- 45 -
"Unused Commitment" means, at any time, the aggregate amount of all
Lenders' Unused Terra Commitments at such time and all Lenders' Unused TNLP
Commitments at such time.
"Unused Terra Commitment" means, with respect to any Lender at any
time, (a) such Lender's Terra Commitment at such time minus (without
duplication) (b) the sum of (i) the aggregate outstanding principal amount
of all Terra Advances made by such Lender and (ii) such Lender's Pro Rata
Share of the aggregate Available Amount of all Terra Letters of Credit
outstanding at such time and of all unreimbursed drawings thereunder.
"Unused TNLP Commitment" means, with respect to any Lender at any
time, (a) such Lender's TNLP Commitment at such time minus (without
duplication) (b) the sum of (i) the aggregate outstanding principal amount
of all TNLP Advances made by such Lender and (ii) such Lender's Pro Rata
Share of the aggregate Available Amount of all TNLP Letters of Credit
outstanding at such time and of all unreimbursed drawings thereunder.
"U.S. Dollars" and "$" means lawful money of the United States of
America.
"U.S. Stock Index" means a nationally-recognized diversified index of
equity securities (which may relate to a single industry) of companies that
are predominantly domiciled or doing business in the United States.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" mean
"to but excluding".
Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
- 46 -
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01. The Advances.
(a) Terra Facility.
(i) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances ("Terra Advances") to the Company
from time to time on any Business Day during the period from the
Restatement Date until the Terra Commitment Termination Date in an
aggregate amount at any one time outstanding not to exceed the amount set
forth opposite such Lender's name on Schedule 2.01 under the caption "Terra
Commitment" or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register as such Lender's
"Terra Commitment" (such amount being such Lender's "Terra Commitment"),
and, as to all Lenders, in an aggregate amount at any one time outstanding
not to exceed $350,000,000 (provided that at all times prior to the SPU
Redemption Time the aggregate amount of the Terra Commitments shall be
deemed to be reduced for all purposes hereof by the aggregate amount of the
TNLP Commitments as in effect from time to time).
On the Restatement Date, all outstanding "Terra Advances" of each
Lender under the Existing Credit Agreement shall automatically, without any
action on the part of any Person, be deemed to be Terra Advances hereunder;
and each Initial Lender (if any) whose relative proportion of the Terra
Commitments hereunder is increasing over the proportion of "Terra
Commitment" held by it under the Existing Credit Agreement shall, by
assignments from the other Initial Lenders (which shall be deemed to occur
automatically on the Restatement Date), acquire a portion of the Terra
Advances of the Initial Lenders so designated in such amounts (and the
Initial Lenders shall, through the Administrative Agent, make such
additional adjustments among themselves as shall be necessary) so that on
the Restatement Date, after giving effect to such assignments and
adjustments, the Initial Lenders shall hold the Terra Advances hereunder
ratably in accordance with their respective Terra Commitments. On the
Restatement Date, the Company will repay the "Terra Advances" held by each
Retiring Lender under (and as defined in) the Existing Credit Agreement and
all accrued fees and other amounts payable with respect thereto and, upon
such repayment, each
- 47 -
Retiring Lender shall cease to be a Lender for all purposes of this
Agreement and the other Basic Documents.
On the Restatement Date all Interest Periods under the Existing Credit
Agreement in respect of the "Terra Advances" under and as defined in the
Existing Credit Agreement shall automatically be terminated, and, subject
to the provisions of Section 2.01(c), the Company shall be permitted to
Continue such "Terra Advances" as Eurodollar Rate Advances hereunder, or to
Convert such "Terra Advances" into Base Rate Advances hereunder.
The aggregate principal amount of the Terra Advances of each Lender as
of the Restatement Date shall be the amount set forth opposite such
Lender's name on Schedule 2.01 under the caption "Terra Advances".
(ii) The Terra Advances shall be made by the Lenders ratably according
to their respective Terra Commitments.
(iii) Within the limits of each Lender's Terra Commitment in effect
from time to time, the Company may borrow under this Section 2.01(a) and/or
obtain the issuance of Letters of Credit under Section 2.13, prepay
pursuant to Section 2.05(a) and reborrow under this Section 2.01(a);
provided that the aggregate outstanding principal amount of Terra Advances
when added to the aggregate Terra Letter of Credit Liability may not at any
time exceed the aggregate amount of the Terra Commitments at such time.
(iv) The proceeds of the Terra Advances shall be used solely (A) for
general corporate purposes of the Company and its Subsidiaries (other than,
prior to the SPU Redemption Time, TNLP and its successors), including,
without limitation, to finance the ongoing working capital needs of, and to
refinance outstanding Debt of, such Persons, (B) to finance all or a
portion of the SPU Redemption (provided that proceeds of Terra Advances
used for such purpose shall not exceed $125,000,000 in the aggregate) and
(C) to finance the purchase, redemption, retirement or other acquisition of
shares of common stock of Terra.
(v) Notwithstanding the foregoing provisions of Section 2.01(a), the
Company agrees that, for a period of 30 consecutive days during each fiscal
year it will prepay the Terra Advances in such amounts as shall be
necessary so the aggregate outstanding principal amount of the Terra
Advances shall not exceed the Terra Cleanup Amount as in effect at such
time; provided that this Section 2.01(a)(v) shall not prevent the Company
from requesting the issuance of Terra
- 48 -
Letters of Credit during any such period pursuant to Section 2.13, or the
Lenders from making Terra Advances in respect thereof pursuant to Section
2.13(c), which Terra Advances (subject to the other terms and conditions of
this Agreement) may remain outstanding during such period. For purposes
hereof, "Terra Cleanup Amount" means, at any time during the periods set
forth in column (A) below, the respective amount set forth for such period
in column (B) below:
(A) (B)
Period Terra Cleanup Amount
--------------------- ---------------------
From January 1, 1998 to $90,000,000
December 31, 1998
From January 1, 1999 to $60,000,000
December 31, 1999
From and after January 1, 2000 $30,000,000
(b) TNLP Facility.
(i) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances ("TNLP Advances") to TNLP from time
to time on any Business Day during the period from the Restatement Date
until the TNLP Commitment Termination Date in an aggregate amount at any
one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.01 under the caption "TNLP Commitment" or, if
such Lender has entered into one or more Assignments and Acceptances, set
forth for such Lender in the Register as such Lender's "TNLP Commitment"
(such amount being such Lender's "TNLP Commitment"), and, as to all
Lenders, in an aggregate amount at any one time outstanding not to exceed
$25,000,000.
On the Restatement Date, all outstanding "TNLP Advances" of each
Lender under the Existing Credit Agreement shall automatically, without any
action on the part of any Person, be deemed to be TNLP Advances hereunder;
and each Initial Lender (if any) whose relative proportion of the TNLP
Commitments hereunder is increasing over the proportion of "TNLP
Commitment" held by it under the Existing Credit Agreement shall, by
assignments from the other Initial Lenders (which shall be deemed to occur
automatically on the Restatement Date), acquire a portion of the TNLP
Advances of the Initial Lenders so designated in such amounts (and the
Initial Lenders shall, through the Administrative Agent, make such
additional adjustments among themselves as shall
- 49 -
be necessary) so that on the Restatement Date, after giving effect to such
assignments and adjustments, the Initial Lenders shall hold the TNLP
Advances hereunder ratably in accordance with their respective TNLP
Commitments. On the Restatement Date, TNLP will repay the "TNLP Advances"
held by each Retiring Lender under (and as defined in) the Existing Credit
Agreement and all accrued fees and other amounts payable with respect
thereto and, upon such repayment, each Retiring Lender shall cease to be a
Lender for all purposes of this Agreement and the other Basic Documents.
On the Restatement Date all Interest Periods under the Existing Credit
Agreement in respect of the "TNLP Advances" under and as defined in the
Existing Credit Agreement shall automatically be terminated, and, subject
to the provisions of Section 2.01(c), TNLP shall be permitted to Continue
such "TNLP Advances" as Eurodollar Rate Advances hereunder, or to Convert
such "TNLP Advances" into Base Rate Advances hereunder.
The aggregate principal amount of the TNLP Advances of each Lender as
of the Restatement Date shall be the amount set forth opposite such
Lender's name on Schedule 2.01 under the caption "TNLP Advances".
(ii) The TNLP Advances shall be made by the Lenders ratably according
to their respective TNLP Commitments.
(iii) Within the limits of each Lender's TNLP Commitment in effect from
time to time, TNLP may borrow under this Section 2.01(b) and/or obtain the
issuance of Letters of Credit under Section 2.13, prepay pursuant to
Section 2.05(a) and reborrow under this Section 2.01(b); provided that the
aggregate outstanding principal amount of TNLP Advances when added to the
aggregate TNLP Letter of Credit Liability may not at any time exceed the
aggregate amount of the TNLP Commitments at such time.
(iv) The proceeds of the TNLP Advances shall be used solely (A) for
general corporate purposes of TNLP, including, without limitation, to
finance its ongoing working capital needs and to refinance outstanding Debt
and (B) to finance all or a portion of the SPU Redemption.
(c) Minimum Amounts. Each Borrowing shall be in an aggregate amount
at least equal to $3,000,000 or an integral multiple of $1,000,000 in excess
thereof.
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(d) No Responsibility to Third Parties. Neither the Administrative
Agent nor any Lender nor any Issuing Bank shall have any responsibility as to
the application or use of any of the proceeds of any Advance.
Section 2.02. Making the Advances.
(a) (i) Except as otherwise provided in Section 2.13, each Borrowing
shall be made on notice, given not later than 11:00 A.M. (New York City
time) on the Business Day of (or, with respect to a Borrowing of Eurodollar
Rate Advances, 10:00 A.M. (New York City time) on the second Business Day
prior to the date of) the proposed Borrowing, by the relevant Borrower to
the Administrative Agent, which shall give to each Lender prompt notice
thereof by telex, telecopier or cable. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telex, telecopier or cable, confirmed
immediately in writing, in substantially the form of Exhibit C, specifying
therein (1) the requested date of such Borrowing, (2) the Facility under
which such Borrowing is to be made, (3) the requested Type of Advances
comprising such Borrowing, (4) the requested aggregate amount of such
Borrowing and (5) in the case of a Borrowing consisting of Eurodollar Rate
Advances, the requested initial Interest Period for each such Advance.
(ii) In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall promptly notify each relevant
Lender of the applicable interest rate under Section 2.06(a)(ii).
(iii) Each Lender shall, before 1:00 P.M. (New York City time) on the
date of each Borrowing after the Restatement Date, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will transfer same day funds to the
relevant Borrower's Account; provided that (i) in the case of any Terra
Borrowing, the Administrative Agent shall first make a portion of such
funds equal to any unreimbursed drawing under any Terra Letter of Credit
available to each Issuing Bank having issued any such Letter of Credit for
reimbursement of such drawing, and (ii) in the case of any TNLP Borrowing,
the Administrative Agent shall first make a portion of such funds equal to
any unreimbursed drawing under any TNLP Letter of Credit available to each
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Issuing Bank having issued any such Letter of Credit for reimbursement of
such drawing.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) neither Borrower may select Eurodollar Rate Advances (y) for any
Borrowing if the aggregate amount of such Borrowing is less than $3,000,000
or (z) if the obligation of the relevant Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.08 or 2.09, and (ii)
Eurodollar Rate Advances may not be outstanding under more than 15 separate
Interest Periods under either Facility at any one time.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
relevant Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
relevant Borrower shall indemnify each relevant Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for
such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such
Advance, as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
relevant Lender prior to 12:00 Noon (New York City time) on the date of any
Borrowing that such Lender will not make available to the Administrative
Agent such Lender's ratable portion of such Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in accordance with
Section 2.02(a) and the Administrative Agent may, in reliance upon such
assumption, make available to the relevant Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have
so made such ratable portion available to the Administrative Agent and the
Administrative Agent shall have made available such corresponding amount to
the relevant Borrower, such Lender and the relevant 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 relevant Borrower until the date
such amount is repaid to the Administrative Agent, at (i) in the case of
the relevant Borrower, the interest rate applicable
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at such time under Section 2.06 to Advances comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
Section 2.03. Repayment.
(a) Terra Advances. The Company hereby promises to pay to the
Administrative Agent for the account of each Lender the full outstanding
principal amount of the Terra Advances of such Lender on the Terra Commitment
Termination Date. In addition, if following any Terra Commitment Reduction Date
the aggregate principal amount of the Terra Advances, together with the
aggregate amount of all Terra Letter of Credit Liabilities, shall exceed the
Terra Commitments, the Company shall, first, pay Advances and, second, provide
cover for Terra Letter of Credit Liabilities in the manner specified in Section
2.05(d)) in an aggregate amount equal to such excess.
(b) TNLP Advances. TNLP hereby promises to pay to the Administrative
Agent for the account of each Lender the full outstanding principal amount of
the TNLP Advances of such Lender on the TNLP Commitment Termination Date.
(c) All Advances. All repayments of principal under this Section
2.03 shall be made together with interest accrued to the date of such repayment
on the principal amount repaid.
Section 2.04. Termination or Reduction of the Commitments.
(a) Optional. The Borrowers may at any time or from time to time,
upon not less than two Business Days' notice to the Administrative Agent,
terminate in whole or reduce in part the Commitments under the relevant
Facility, provided that (i) each partial reduction of the Commitments under such
Facility shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof, and (ii) the aggregate amount of the
Commitments under either Facility shall not be reduced below the Letter of
Credit Commitment for such Facility.
- 53 -
(b) Mandatory -- Terra Commitments. The Terra Commitments shall be
automatically and permanently reduced to zero on the Terra Commitment
Termination Date. In addition, the aggregate amount of the Terra Commitments
shall be automatically reduced on each Terra Commitment Reduction Date set forth
in column (A) below to the amount set forth in column (B) below opposite such
Terra Commitment Reduction Date:
(A) (B)
Terra Terra
Commitment Reduction Commitments Reduced
Date Falling on or to the Following
Nearest to: Amounts ($)
-------------------- -------------------
December 31, 1998 $330,000,000
December 31, 1999 $310,000,000
(c) Mandatory -- TNLP Commitments. The TNLP Commitments shall be
automatically and permanently reduced to zero on the TNLP Commitment Termination
Date.
(d) Reductions Pro Rata. Each reduction of the Commitments under a
Facility shall be applied to the respective Commitments of the Lenders according
to their respective Pro Rata Shares of such Facility.
(e) General. Commitments once terminated or reduced may not be
reinstated.
Section 2.05. Prepayments, Etc.
(a) Optional Prepayments. (i) Either Borrower may, upon at least two
Business Days' notice (in the case of prepayment of Eurodollar Rate
Advances) or upon notice given on the date of prepayment (in the case of
prepayments of Base Rate Advances) to the Administrative Agent (which
notice shall state the Facilities to be prepaid and the proposed date and
aggregate principal amount of the prepayment), and if such notice is given
such Borrower shall, prepay the outstanding principal amount of the
Advances under the specified Facilities in the aggregate amount and on the
date specified in such notice, together with accrued interest to the date
of such prepayment on the principal amount prepaid; provided that (x) each
partial prepayment shall be in an aggregate principal amount of $3,000,000
or an integral multiple of $1,000,000 in excess thereof, (y) any such
prepayment of a Eurodollar Rate Advance other than on the last day of the
Interest Period therefor shall be accompanied by, and subject to, the
payment of any amount payable under Section 9.04(c) in
- 54 -
respect of such prepayment and (z) each such notice shall be made on the
relevant day not later than, in the case of prepayments of Eurodollar Rate
Advances, 10:00 A.M. (New York City time) and, in the case of prepayments
of Base Rate Advances, 12:00 Noon (New York City time).
(ii) Each prepayment of Advances under this Section 2.05(a) shall be
made for account of the relevant Lenders according to their respective Pro
Rata Shares of the principal amount of the Advances then outstanding under
the relevant Facility.
(b) Mandatory Prepayments; Commitment Reductions.
(i) Sale of Assets. Without limiting the obligation of the Company
to obtain the consent of the Required Lenders pursuant to Section 5.02(e)
to any Disposition not otherwise permitted hereunder, on the first
anniversary of each Disposition the Company shall prepay the Terra Advances
(and/or provide cover for Terra Letter of Credit Liabilities as specified
in Section 2.05(d)), and the Terra Commitments shall be subject to
automatic reduction, in an aggregate amount equal to (A) 75% of the Net
Available Proceeds of such Disposition minus (B) the amount of such Net
Available Proceeds theretofore invested or committed to be invested in the
business of the Company and its Subsidiaries; provided that (x) for
purposes of this clause (i) the aggregate Net Available Proceeds of all
such Dispositions in a fiscal year shall be deemed to be reduced by
$25,000,000 (but shall not be deemed to be less than zero) and (y) the
following shall not be deemed to be Dispositions for purposes of this
clause (i):
(1) the sale by the Company or any of its Subsidiaries of
Receivables under an Intercompany Receivables Facility or under a
Permitted Receivables Facility;
(2) the transfer of the Blytheville Assets in accordance with
Section 5.02(e)(viii);
(3) the BMLP Restructuring;
(4) the sale of any property by any member of the Terra Canada
Group;
(5) from and after the BMLP Restructuring Time, the sale of any
property by any member of the BMLP Group;
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(6) the transactions under the Terra U.K. Offtake Agreement;
(7) the transactions relating to the construction of the Ammonia
Loop; and
(8) the transactions under the Ammonium Nitrate Hedging
Agreement.
(ii) Casualty Events. Upon the date 360 days following the receipt
by Terra or any of its Subsidiaries (other than members of the Terra Canada
Group and, from and after the BMLP Restructuring Time, members of the BMLP
Group) of the proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event affecting any property of
Terra or any of its Subsidiaries, the Company shall prepay the Terra
Advances (and/or provide cover for Terra Letter of Credit Liabilities as
specified in Section 2.05(d)), and the Terra Commitments shall be subject
to automatic reduction, in an aggregate amount, if any, equal to (A) 75% of
the Net Available Proceeds of such Casualty Event not theretofore applied
to the repair or replacement of such property or set aside for such purpose
minus (B) the amount of such Net Available Proceeds theretofore invested or
committed to be invested in the business of the Company and its
Subsidiaries. Nothing in this clause (ii) shall be deemed to limit any
obligation of Terra or any of its Subsidiaries pursuant to any of the
Security Documents to remit to a collateral or similar account (including,
without limitation, a Collateral Account under and as defined in the
Security Documents) maintained by the Collateral Agent pursuant to any of
the Security Documents the proceeds of insurance, condemnation award or
other compensation received in respect of any Casualty Event.
(c) Application. On the dates specified in clauses (i) and (ii) of
Section 2.05(b), the Terra Commitments shall be reduced automatically in an
aggregate amount equal to the amount specified in such paragraphs (and to the
extent that, after giving effect to such reduction, the aggregate principal
amount of Terra Advances and Terra Letter of Credit Liabilities would exceed the
Terra Commitments, the Company shall, first, prepay Terra Advances and, second,
provide cover for Terra Letter of Credit Liabilities as specified in paragraph
(d) below, in an aggregate amount equal to such excess).
(d) Cover for Terra Letter of Credit Liabilities. In the event that
the Company shall be required pursuant to Section 2.03(a) or Section 2.05(b) to
provide cover for Terra
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Letter of Credit Liabilities, the Company shall effect the same by paying to the
Administrative Agent same day funds in an amount equal to the required amount,
which funds shall be deposited in the Terra L/C Cash Collateral Account until
such time as the Terra Letters of Credit shall have been terminated and all of
the Terra Letter of Credit Liabilities paid in full.
(e) Payments with Interest. All prepayments under this Section 2.05
shall be made together with accrued interest to the date of such prepayment on
the principal amount prepaid.
Section 2.06. Interest.
(a) Ordinary Interest. The Company shall pay interest on the unpaid
principal amount of each Terra Advance owing to each Lender from the date of
such Advance until such principal amount shall be paid in full, and TNLP shall
pay interest on the unpaid principal amount of each TNLP Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, in each case at the following rates per annum:
(i) Base Rate Advances. While such Advance is a Base Rate Advance, a
rate per annum equal at all times to the sum of (1) the Base Rate in effect
from time to time plus (2) the Applicable Margin in effect from time to
time, payable in arrears quarterly on each Quarterly Date and on the date
such Base Rate Advance shall be Converted (but only on the amount
Converted) or paid in full.
(ii) Eurodollar Rate Advances. While such Advance is a Eurodollar
Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of (1) the Eurodollar Rate for such
Interest Period for such Advance plus (2) the Applicable Margin in effect
from time to time, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each three-month anniversary of the first day of such Interest
Period occurring during such Interest Period.
(b) Post-Default Interest. If (a) any Obligor shall fail to pay when
due (by acceleration or otherwise) any amount payable under any Loan Document
after any applicable grace period provided in Section 6.01(a), or (b) (i) an
Event of Default shall have occurred and be continuing during any period and
(ii) the Administrative Agent or the Required Lenders, through the
Administrative Agent, shall have notified the Company thereof, each Borrower
shall, notwithstanding anything else in this Agreement to the contrary, pay to
the Administrative Agent for account of each Lender interest, during such
period, at the
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applicable Post-Default Rate on any principal of any Advance made by such Lender
to such Borrower, and on any other amount whatsoever then due and payable by
such Borrower hereunder or under the Notes held by such Lender to or for account
of such Lender, such interest to be payable from time to time on demand.
Section 2.07. Fees.
(a) Commitment Fee. Each Borrower hereby promises to pay to the
Administrative Agent for the account of each Lender a commitment fee (i) in the
case of the Company, on the average daily Unused Terra Commitment of such Lender
and (ii) in the case of TNLP, on the average daily Unused TNLP Commitment of
such Lender, in each case for the period from the Restatement Date (or from the
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender other than the Initial Lenders)
until the Commitment Termination Date for the relevant Facility at the
Applicable Commitment Fee Rate, payable in arrears (x) quarterly after the
Restatement Date on each Quarterly Date and (y) on the Commitment Termination
Date for the relevant Facility.
(b) Letter of Credit Commission, Etc.
(i) The Company hereby promises to pay to the Administrative Agent
(A) for the account of each Issuing Bank a non-refundable fronting fee of
1/4% per annum of the face amount of each Terra Letter of Credit issued by
it for the period from the date of issuance thereof until such Letter of
Credit has been drawn in full, expires or is terminated and (B) for the
account of each Lender a non-refundable commission on such Lender's Pro
Rata Share of the average daily aggregate Available Amount of all Terra
Letters of Credit then outstanding at the Applicable Letter of Credit Fee
Rate, such fees to be payable in arrears on each Quarterly Date and on the
Terra Commitment Termination Date and calculated, for any day, after giving
effect to any payments made under such Letter of Credit on such day.
(ii) TNLP hereby promises to pay to the Administrative Agent (A) for
the account of each Issuing Bank a non-refundable fronting fee of 1/4% per
annum of the face amount of each TNLP Letter of Credit issued by it for the
period from the date of issuance thereof until such Letter of Credit has
been drawn in full, expires or is terminated and (B) for the account of
each Lender a non-refundable commission on such Lender's Pro Rata Share of
the average daily aggregate Available Amount of all TNLP Letters of Credit
then outstanding at the Applicable Letter of Credit Fee Rate, such fees to
be payable quarterly in arrears on
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each Quarterly Date and on the TNLP Commitment Termination Date and
calculated, for any day, after giving effect to any payments made under
such Letter of Credit on such day.
(c) Letter of Credit Expenses. Each Borrower shall pay to each
Issuing Bank, for its own account, such commission, issuance fees, transfer fees
and other fees and charges in connection with the issuance or administration of
the Letters of Credit issued by it as such Borrower and such Issuing Bank shall
agree; provided that all fees and other charges payable pursuant to this Section
2.07(c) shall be the customary amounts charged by such Issuing Bank in
connection with the issuance or administration of similar letters of credit and
the amounts so determined shall be adjusted as necessary to avoid a duplicative
payment hereunder.
Section 2.08. Conversion and Continuation of Advances.
(a) Optional Conversion. Each Borrower may on any Business Day, upon
notice given to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the second Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.09 and 2.10, Convert all
or any portion of the Advances of one Type outstanding under any Facility (and,
in the case of Eurodollar Rate Advances, having the same Interest Period);
provided that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b)(i) and no Conversion of any Advances shall result in a greater
number of separate Interest Periods in respect of Eurodollar Rate Advances under
any Facility than permitted under Section 2.02(b)(ii). Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the aggregate amount, Type and Facility of the Advances
(and, in the case of Eurodollar Rate Advances, the Interest Period therefor) to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the relevant Borrower.
(b) Certain Mandatory Conversions.
(i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $3,000,000 such Advances
shall automatically Convert into Base Rate Advances.
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(ii) If a Borrower shall fail to select the duration of any Interest
Period for any outstanding Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01
and in clause (a) or (c) of this Section 2.08, the Administrative Agent
will forthwith so notify such Borrower and the relevant Lenders, whereupon
each such Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default and upon notice from the Administrative Agent to the Borrowers at
the request of the Required Lenders, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (y) the obligation of the
Lenders to make, or to Convert Advances into, or to Continue, Eurodollar
Rate Advances shall be suspended.
(c) Continuations. Each Borrower may, on any Business Day, upon
notice given to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the second Business Day prior to the date of the proposed
Continuation and subject to the provisions of Sections 2.09, Continue all or any
portion of the Eurodollar Rate Advances outstanding under a relevant Facility
having the same Interest Period as such Eurodollar Rate Advances; provided that
any such Continuation shall be made only on the last day of an Interest Period
for such Eurodollar Rate Advances, any Continuation of Eurodollar Rate Advances
shall be in an amount not less than the minimum Borrowing amount specified in
Section 2.02(b)(i) and no Continuation of any Eurodollar Rate Advances shall
result in a greater number of separate Interest Periods in respect of Eurodollar
Rate Advances under any Facility than permitted under Section 2.02(b)(ii). Each
such notice of Continuation shall, within the restrictions specified above,
specify (i) the date of such Continuation, (ii) the aggregate amount and
Facility of, and the Interest Period for, the Advances being Continued and (iii)
the duration of the initial Interest Period for the Eurodollar Rate Advances
subject to such Continuation. Each notice of Continuation shall be irrevocable
and binding on the relevant Borrower.
Section 2.09. Increased Costs, Illegality, Etc.
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of (to the extent any such introduction or change occurs
after the date hereof) any law or regulation or (ii) the compliance with any
guideline or request
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from any central bank or other governmental authority adopted or made after the
date hereof (whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances under any Facility, then the relevant
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost; provided that, before making any such demand,
each Lender agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the relevant
Borrower by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines in good faith that compliance with any
law or regulation enacted or introduced after the date hereof or any guideline
or request from any central bank or other governmental authority adopted or made
after the date hereof (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type or the issuance of the
Letters of Credit (or similar contingent obligations), then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), each Borrower
shall pay to the Administrative Agent for the account of such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder or to the issuance or maintenance
of any Letters of Credit. A certificate as to such amounts submitted to the
relevant Borrower by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, (i) the
Required Lenders reasonably determine and notify the Administrative Agent that
the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such Interest Period,
or (ii) if fewer than two Reference Banks furnish timely information
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to the Administrative Agent for determining the Eurodollar Rate for any
Eurodollar Rate Advances, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon (x) each Eurodollar Rate Advance will
automatically, on the last day of any then existing Interest Period therefor,
Convert to a Base Rate Advance, and (y) the obligation of the Lenders to make,
or to Convert Advances into, or to Continue, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrowers and such
Lenders that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of (to the extent any
such introduction or change occurs after the date hereof) any law or regulation
shall make it unlawful, or any central bank or other governmental authority
having appropriate jurisdiction shall assert in writing that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its obligations hereunder
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrowers through the Administrative Agent, (i) each Eurodollar
Rate Advance of such Lender will automatically, upon such demand, Convert to a
Base Rate Advance and (ii) the obligation of such Lender to make, or to Convert
Advances into, or to Continue, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided that, before making any such demand, such Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(e) Neither Borrower shall be obligated to pay any additional
amounts arising pursuant to clauses (a) and (b) of this Section 2.09 that are
attributable to the Excluded Period with respect to such additional amount;
provided that if an applicable law, rule, regulation, guideline or request shall
be adopted or made on any date and shall be applicable to the period (a
"Retroactive Period") prior to the date on which such law, rule, regulation,
guideline or request is adopted or made, the limitation on the Borrowers'
obligations to pay such additional amounts hereunder shall not apply to the
additional amounts payable in respect of such Retroactive Period.
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Section 2.10. Payments and Computations.
-------------------------
(a) Each Borrower shall make each payment hereunder and under the
Notes not later than 12:00 Noon (New York City time) on the day when due in U.S.
Dollars to the Administrative Agent at the Administrative Agent's Account in
same day funds and, except as expressly set forth herein, without deduction,
set-off or counterclaim. The Administrative Agent will promptly thereafter cause
to be distributed like funds relating to the payment of principal or interest or
commitment fees under or in respect of a particular Facility ratably (other than
amounts payable pursuant to Section 2.09(a), 2.09(b), 2.11, 2.13(d) or 9.04(c),
or amounts payable to an Issuing Bank in respect of Letters of Credit) to the
relevant Lenders for the account of their Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 9.07(d), from and after the effective date
of such Assignment and Acceptance, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Basic Documents under circumstances for which the Basic
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, and neither Borrower has otherwise directed
how such funds are to be applied (which direction is consistent with the terms
of the Basic Documents), the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
outstanding Advances and the Available Amount of all Letters of Credit then
outstanding, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender, and for application to such principal
installments, as the Administrative Agent shall direct.
(c) Each Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under any Note
held by such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender any amount so due (with notice to the
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Administrative Agent and the relevant Borrower promptly following such charge).
(d) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for the purpose of determining any such interest rate,
the Administrative Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks.
(e) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder made in accordance with the
provisions of this Agreement shall be conclusive and binding for all purposes,
absent manifest error.
(f) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided that, if such extension would cause payment of interest on
or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the immediately preceding Business
Day.
(g) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to any Lender hereunder
that such Borrower will not make such payment in full, the Administrative Agent
may assume that such Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each such Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent
such Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.
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Section 2.11. Taxes.
-----
(a) Any and all payments by each Obligor hereunder or under the
relevant Notes shall be made, in accordance with Section 2.10, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Issuing Bank, each Lender and the Administrative
Agent, net income taxes that are imposed by the United States and franchise
taxes and net income taxes that are imposed on such Issuing Bank, such Lender or
the Administrative Agent by the state or foreign jurisdiction under the laws of
which such Issuing Bank, such Lender or the Administrative Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of
such Issuing Bank and each Lender, franchise taxes and net income taxes that are
imposed on it by the state or foreign jurisdiction of such Issuing Bank's or
such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If an Obligor shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Issuing Bank, any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Issuing Bank, such Lender
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Obligor
shall make such deductions and (iii) such Obligor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, each Obligor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made by it hereunder or under the
Notes or from the execution, delivery or registration of this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
(c) Each Obligor will indemnify each Issuing Bank, each Lender and
the Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.11) paid by such Issuing Bank, such Lender
or the Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from such
date such Issuing Bank,
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such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, each
Obligor will furnish to the Administrative Agent, at its address referred to in
Section 9.02, appropriate evidence of payment thereof. If such Obligor shall
make a payment hereunder or under the Notes through an account or branch outside
the United States, or a payment is made on behalf of such Obligor by a payor
that is not a United States Person, such Obligor will, if no taxes are payable
in respect of such payment, furnish, or will cause such payor to furnish, to the
Administrative Agent, at such address, a certificate from the appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the
Administrative Agent, in either case stating that such payment is exempt from or
not subject to Taxes. For purposes of this subsection (d) and subsection (e),
the terms "United States" and "United States Person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement (in the case of each Initial Lender) and on the date of the
Assignment and Acceptance pursuant to which it became a Lender (in the case of
each other Lender), and from time to time thereafter if requested in writing by
either Borrower or the Administrative Agent (but only so long as such Lender
remains lawfully able to do so after the date such Lender becomes a Lender
hereunder), provide the Administrative Agent and the Borrowers with either (i)
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
and the Notes or certifying that the income receivable pursuant to this
Agreement and the Notes is effectively connected with the conduct of a trade or
business in the United States or (ii) Internal Revenue Service form W-8, upon
which each Borrower is entitled to rely, from a Lender that has not at the time
such Lender becomes a Lender hereunder been named in any notice issued by the
Secretary of the Treasury (or such Secretary's authorized delegate) pursuant to
Sections 881(c)(2)(B) or 871(h)(5) of the Internal Revenue Code, or any
successor form or statement prescribed by the Internal Revenue Service in order
to establish that such Lender is entitled to treat the interest payments under
this Agreement and the Notes as portfolio interest that is exempt from
withholding tax under the Internal Revenue Code, together with a certificate
stating that such Lender is not described in Section 881(c)(3) of the Internal
Revenue Code. If the form
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provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero (or if the Lender cannot provide at such time such form because it is not
entitled to reduced withholding under a treaty, the payments are not effectively
connected income and the payments do not qualify as portfolio interest),
withholding tax at such rate (or at the then existing U.S. statutory rate if the
Lender cannot provide the form) shall be excluded from Taxes unless and until
such Lender provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be excluded from Taxes
for periods governed by such form; provided that, if at the date of the
Assignment and Acceptance pursuant to which a Lender assignee becomes a party to
this Agreement, the Lender assignor was entitled to payments under subsection
(a) in respect of United States withholding tax with respect to interest paid at
such date, then, to the extent such tax results in liability for such payments,
the term Taxes shall include (in addition to withholding taxes that may be
imposed in the future or other amounts otherwise includable in Taxes) United
States interest withholding tax, if any, applicable with respect to the Lender
assignee on such date.
(f) For any period with respect to which a Lender has failed to
provide the Borrowers and the Administrative Agent with the appropriate form
described in Section 2.11(e) (other than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection (e)), such
Lender shall not be entitled to indemnification under subsection (a) or (c) with
respect to Taxes imposed by the United States.
(g) Any Lender or any Issuing Bank claiming any additional amounts
payable pursuant to this Section 2.11 shall use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office(s) if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender or Issuing Bank, be otherwise disadvantageous to such Lender or Issuing
Bank.
(h) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.11 shall survive the payment in full of principal and interest
hereunder and under the Notes.
Section 2.12. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through
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the exercise of any right of set-off, or otherwise) on account of the Advances
owing to it under any Facility (other than pursuant to Section 2.09(a), 2.09(b),
2.11, 2.13(d) or 9.04(c), or payments to an Issuing Bank in respect of Letters
of Credit) in excess of its ratable share of payments on account of the Advances
under such Facility obtained by all the relevant Lenders, such Lender shall
forthwith purchase from the other relevant Lenders such participations in the
Advances under such Facility owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each relevant Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
such Borrower in the amount of such participation.
Section 2.13. Letters of Credit.
-----------------
(a) Issuance of Letters of Credit, Etc. Each Borrower may request
one or more Issuing Banks to issue, on the terms and conditions hereinafter set
forth, letters of credit for the account of such Borrower under its respective
Facility (letters of credit so issued under the Terra Facility being herein
called "Terra Letters of Credit" and letters of credit so issued under the TNLP
Facility being herein called "TNLP Letters of Credit"; the Terra Letters of
Credit and the TNLP Letters of Credit being collectively called the "Letters of
Credit") from time to time on any Business Day during the period from the
Restatement Date until the date 90 days prior to the Commitment Termination Date
under the relevant Facility; provided that:
(i) the Terra Commitments shall be utilized under this Section 2.13
solely for the issuance of Terra Letters of Credit for the account of the
Company and, to the extent specified by the Company, any of its
Subsidiaries (other than, prior to the SPU Redemption Time, TNLP or any of
its Subsidiaries);
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(ii) the TNLP Commitments shall be utilized under this Section 2.13
solely for the issuance of TNLP Letters of Credit for the account of TNLP
and, to the extent specified by TNLP, any of its Subsidiaries;
(iii) the aggregate Available Amount of all Letters of Credit issued by
all Issuing Banks under either Facility shall not exceed at any time the
Letter of Credit Sublimit for such Facility, and the aggregate outstanding
principal amount of all Advances under such Facility when added to the
aggregate amount of Letter of Credit Liabilities under such Facility shall
not exceed the aggregate Commitments of the relevant Lenders under such
Facility on such Business Day;
(iv) the aggregate amount of all Letter of Credit Liabilities under
Letters of Credit issued by any Issuing Bank under either Facility shall
not exceed at any time the Letter of Credit Commitment of such Issuing Bank
for such Facility; and
(v) no Letter of Credit shall have an expiration date later than, or
shall permit the account party or the beneficiary to require the renewal
thereof to a date beyond, the date 30 days prior to the Commitment
Termination Date for the relevant Facility.
On the Restatement Date, all outstanding "Terra Letters of Credit" outstanding
under the Existing Credit Agreement (the "Existing Terra Letters of Credit")
shall automatically, without any action on the part of any Person, be deemed to
be Terra Letters of Credit hereunder for all purposes of this Agreement. On the
Restatement Date, all outstanding "TNLP Letters of Credit" outstanding under the
Existing Credit Agreement (the "Existing TNLP Letters of Credit") shall
automatically, without any action on the part of any Person, be deemed to be
TNLP Letters of Credit hereunder for all purposes of this Agreement. At the SPU
Redemption Time, all outstanding TNLP Letters of Credit shall automatically,
without any action on the part of any Person, be deemed to be Terra Letters of
Credit hereunder for all purposes of this Agreement. On each day during the
period commencing with the issuance by an Issuing Bank of any Terra Letter of
Credit (or, in the case of any Existing Terra Letter of Credit, during the
period commencing with the Restatement Date) and until such Letter of Credit
shall have been drawn in full or expired or been terminated, the Terra
Commitment of each Lender shall be deemed to be utilized for all purposes of
this Agreement in an amount equal to such Lender's Pro Rata Share of the then
undrawn amount of such Letter of Credit. On each day during the period
commencing with the issuance by an Issuing Bank of any TNLP
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Letter of Credit (or, in the case of any Existing TNLP Letter of Credit, during
the period commencing with the Restatement Date) and until such Letter of Credit
shall have been drawn in full or expired or been terminated, the TNLP Commitment
of each Lender shall be deemed to be utilized for all purposes of this Agreement
in an amount equal to such Lender's Pro Rata Share of the then undrawn amount of
such Letter of Credit.
(b) Request for Issuance.
--------------------
(i) Each Letter of Credit shall be issued upon notice, given not
later than 1:00 P.M. (New York City time) two Business Days prior to the
date of the proposed issuance of such Letter of Credit, by the relevant
Borrower to the relevant Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "Notice
of Issuance") shall be by telex or telecopier, confirmed promptly in
writing, specifying therein (A) the requested date of such issuance (which
shall be a Business Day), (B) the Available Amount requested for such
Letter of Credit, (C) the expiration date of such Letter of Credit, (D) the
account party or parties for such Letter of Credit, (E) the name and
address of the issuer and the beneficiary of such Letter of Credit, and (F)
the form of such Letter of Credit, together with a description of the
nature of the transactions or obligations proposed to be supported thereby.
If the requested form of such Letter of Credit is acceptable to such
Issuing Bank in its discretion, such Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of
Credit available to the relevant Borrower at its office referred to in
Section 9.02 or as otherwise agreed with such Borrower in connection with
such issuance.
(ii) Each Issuing Bank shall furnish (A) to the Administrative Agent
on the first Business Day of each week a written report summarizing the
issuance and expiration dates of Letters of Credit issued by such Issuing
Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank, (B) to each Lender and to
the relevant Borrower on the first Business Day of each month, a written
report summarizing the issuance and expiration dates of the Letters of
Credit issued by such Issuing Bank under the relevant Facility during the
preceding month and drawings during such month under all Letters of Credit
under such Facility issued by the Issuing Bank and (C) to the
Administrative Agent and each Lender on the first Business Day of each
calendar quarter, a written report setting forth the average daily
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aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit issued by such Issuing Bank under the relevant Facility.
(c) Drawing and Reimbursement.
-------------------------
(i) The payment by an Issuing Bank of a draft drawn under any Letter
of Credit shall constitute for all purposes of this Agreement the making by
such Issuing Bank of an advance to the relevant Borrower in the amount of
such payment, which the relevant Borrower agrees to repay on demand and, if
not paid on demand, shall bear interest, from the date demanded to the date
paid in full (and which interest shall be payable on demand), (x) from and
including the date of demand to but not including the second Business Day
thereafter at the Base Rate in effect for each such day plus the Applicable
Margin in effect for each such day, and (y) from and including said second
Business Day thereafter at the Post-Default Rate. Without limiting the
obligations of such Borrower hereunder, upon demand by such Issuing Bank
through the Administrative Agent, each Lender having a Commitment under the
relevant Facility shall make Advances under such Facility in an aggregate
amount equal to the amount of such Lender's Pro Rata Share of such advance
by making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of such Issuing Bank, by deposit to
the Administrative Agent's Account, in same day funds, an amount equal to
the sum of (A) its Pro Rata Share of the outstanding principal amount of
such advance plus (B) interest accrued and unpaid to and as of such date on
the outstanding principal amount of such advance.
(ii) Each Lender agrees to make such Advances on the Business Day on
which demand therefor is made by the relevant Issuing Bank through the
Administrative Agent (provided that notice of such demand is given not
later than 12:00 Noon (New York City time) on such Business Day) or (if
notice of such demand is given after such time) the first Business Day next
succeeding such demand.
(iii) If and to the extent that any relevant Lender shall not have so
made the amount of such Advance available to the Administrative Agent for
account of such Issuing Bank, such Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the relevant Issuing Bank
until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate.
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(iv) The Advances provided for in this Section 2.13 shall be made by
the Lenders irrespective of whether there has occurred and is continuing
any Default or Event of Default or of whether any other condition precedent
specified in Article III has not been satisfied, and the obligation of each
Lender under each relevant Facility to make such Advances is absolute and
unconditional.
(d) Increased Costs.
---------------
(i) If any change in any law or regulation or in the interpretation
thereof (to the extent any such change occurs after the date hereof) by any
court or administrative or governmental authority charged with the
administration thereof shall either (x) impose, modify or deem applicable
any reserve, special deposit or similar requirement against letters of
credit or guarantees issued by, or assets held by, or deposits in or for
the account of, any Issuing Bank or any Lender or (y) impose on any Issuing
Bank or any Lender any other condition regarding this Agreement or such
Issuing Bank or such Lender or any Letter of Credit, and the result of any
event referred to in the preceding clause (x) or (y) shall be to increase
the cost to such Issuing Bank or Lender of issuing or maintaining any
Letter of Credit or any commitment hereunder in respect of Letters of
Credit, then, upon demand by such Issuing Bank or such Lender, the
Borrowers shall immediately pay to such Issuing Bank or such Lender, from
time to time as specified by such Issuing Bank or such Lender, additional
amounts that shall be sufficient to compensate such Issuing Bank or such
Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrowers by such Issuing Bank or such
Lender shall be conclusive and binding for all purposes, absent manifest
error.
(ii) Neither Borrower shall be obligated to pay any additional amounts
arising pursuant to this Section 2.13(d) that are attributable to the
Excluded Period with respect to such additional amounts; provided that if
an applicable law, rule, regulation, guideline or request shall be adopted
or made on any date and shall be applicable to the period (a "Retroactive
Period") prior to the date on which such law, rule, regulation, guideline
or request is adopted or made, the limitation on either Borrower's
obligation to pay such additional amounts hereunder shall not apply to the
additional amounts payable in respect of such Retroactive Period.
(e) Obligations Absolute. The Obligations of each Borrower under
this Agreement and any other agreement or
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instrument relating to any Letter of Credit (as hereafter amended, supplemented
or otherwise modified from time to time, collectively, the "L/C Related
Documents") shall, to the extent permitted by law, be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of such L/C
Related Document under all circumstances, including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of any one or more of such
other documents and agreements, including, but not limited to, the L/C
Related Documents;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of such Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right that
such Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by an Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of such Letter of Credit, except to the extent that such payment resulted
from such Issuing Bank's willful misconduct or gross negligence in
determining whether such draft or certificate complies on its face with the
terms of such Letter of Credit;
(vi) any exchange, release or nonperfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of such
Borrower in respect of the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might
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otherwise constitute a defense available to, or a discharge of, such
Borrower or a guarantor.
Section 2.14. Replacement of Lender.
(a) Subject to clause (c) below, in the event that any Lender
requests compensation pursuant to Section 2.09(a), 2.09(b) or 2.13(d), or the
obligation of any Lender to make, or to Convert Base Rate Advances into, or to
Continue, Eurodollar Rate Advances shall be suspended pursuant to Section
2.09(c) or 2.09(d) (such Lender being herein called an "Affected Lender"), then,
so long as such condition exists, the Borrowers may, after the date 30 days
after the date of such request or suspension, either:
(i) (x) designate an Eligible Assignee acceptable to the
Administrative Agent and each Issuing Bank (which acceptance will not be
unreasonably withheld) that is not an Affiliate of the Borrowers (such
Eligible Assignee being herein called a "Replacement Lender") to assume the
Affected Lender's Commitments and other obligations hereunder and to
purchase the Affected Lender's Advances and other rights under the Loan
Documents (all without recourse to or representation or warranty by, or
expense to, the Affected Lender) for a purchase price equal to the
aggregate principal amount of the outstanding Advances held by the Affected
Lender plus all accrued but unpaid interest on such Advances and accrued
but unpaid fees owing to the Affected Lender (and upon such assumption,
purchase and substitution, and subject to the execution and delivery to the
Administrative Agent by the Replacement Lender of documentation
satisfactory to the Administrative Agent and compliance with the
requirements of Section 9.07(c), the Replacement Lender shall succeed to
the rights and obligations of the Affected Lender hereunder and the other
Loan Documents), and (y) pay to the Affected Lender all amounts payable to
such Affected Lender under Section 9.04(c), calculated as if the purchase
by the Replacement Lender constituted a mandatory prepayment of Advances by
the Borrowers, and (z) pay to the Administrative Agent the processing and
recordation fee specified in Section 9.07(a)(vi) with respect to such
assignment; or
(ii) (x) terminate the Commitments of the Affected Lender and (y)
pay to the Affected Lender the aggregate principal amount of the
outstanding Advances held by the Affected Lender plus all accrued but
unpaid interest on such Advances and accrued but unpaid fees owing to the
Affected Lender plus all amounts payable to the Affected Lender under
Section 9.04(c) as a result of such prepayment.
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In the event that the Borrowers exercise their rights under the preceding
sentence, the Affected Lender shall no longer be a party hereto or have any
rights or obligations hereunder or under the other Loan Documents; provided that
the obligations of the Borrowers to the Affected Lender under Sections 2.09,
2.11 and 9.04 with respect to events occurring or obligations arising before or
as a result of such replacement shall survive such exercise.
(b) If the Borrowers exercise their rights under clause (a)(ii)
above, the Borrowers may, not later than the date 60 days after such exercise,
designate an Eligible Assignee acceptable to the Administrative Agent and each
Issuing Bank (which acceptance will not be unreasonably withheld) that is not an
Affiliate of the Borrowers (such Eligible Assignee being herein called a
"Substitute Lender") to assume Commitments hereunder and to make Advances
hereunder in an amount equal to the respective Commitments and Advances of the
Affected Lender under each of the Facilities and, subject to (x) the execution
and delivery to the Administrative Agent by the Substitute Lender of
documentation satisfactory to the Administrative Agent, (y) the payment by the
Borrowers to the Administrative Agent of the processing and recordation fee
specified in Section 9.07(a)(vi) with respect to such assignment, and (z)
compliance with Section 9.07(c), the Substitute Lender shall succeed to the
rights and obligations of the Affected Lender hereunder and under the other Loan
Documents. Upon the Substitute Lender so becoming a party hereto, the Borrowers
shall borrow Advances from the Substitute Lender and/or prepay the principal of
the Advances of the other Lenders in such manner as will result in the
outstanding principal amount of the Advances under each Facility being held by
the Lenders according to their respective Pro Rata Shares of the relevant
Facilities.
(c) The Borrowers may not exercise their rights under this Section
2.14:
(i) with respect to any Affected Lender unless the Borrowers
simultaneously exercise such rights with respect to all Affected Lenders,
(ii) if a Default or an Event of Default has occurred and is then
continuing, or
(iii) with respect to any exercise of rights under clause (b) above,
if, at the time of such exercise, the aggregate amount of the Commitments
that shall have been terminated pursuant to said clause (b) (including the
Commitments then proposed to be terminated) shall exceed 30%
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of the aggregate amount of the Commitments in effect on the Restatement
Date.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Amendment and Restatement. The
Existing Credit Agreement shall be amended and restated to read in full as set
forth herein on the date (the "Restatement Date") on which the Administrative
Agent shall notify the Company that the Administrative Agent shall have received
the following in form and substance satisfactory to it:
(a) The Notes, duly executed by each Borrower.
(b) The following documents, each dated the Restatement Date (unless
otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and in sufficient copies
for the Administrative Agent, each Lender and each Issuing Bank:
(i) for TI, a copy of the charter, as amended and in effect, of
TI certified (as of a date reasonably close to the Restatement Date)
by the Secretary of State of the State of Delaware and a certificate
from such Secretary of State dated as of a date reasonably close to
the Restatement Date as to the good standing of and charter documents
filed by TI;
(ii) for TI, a certificate of the Secretary or an Assistant
Secretary of TI, dated the Restatement Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of TI as
amended and in effect at all times from the date on which the
resolutions referred to in clause (B) were adopted to and including
the date of such certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of
TI authorizing the execution, delivery and performance of such of the
Loan Documents to which TI is or is intended to be a party and the
extensions of credit hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the charter of TI has not been amended since the date of the
certification thereto furnished pursuant to clause (i) above, and (D)
as to the incumbency and specimen signature of each officer of TI
executing such of the Loan Documents to which TI
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is intended to be a party and each other document to be delivered by
TI from time to time in connection therewith (and the Administrative
Agent and each Lender may conclusively rely on such certificate until
it receives notice in writing from TI);
(iii) for TI, a certificate of another officer of TI, dated the
Restatement Date, as to the incumbency and specimen signature of the
Secretary or Assistant Secretary, as the case may be, of TI;
(iv) a copy of each amendment to the charter or articles of
incorporation or articles of limited partnership, as the case may be,
of each Obligor (other than TI) that has become effective since the
Second Restatement Date, certified (as of a date reasonably near the
Restatement Date) by the Secretary of State of the state of its
incorporation or organization, and a certificate from such Secretary
of State dated as of a date reasonably close to the Restatement Date
as to the good standing of and charter documents filed by such
Obligor; and
(v) a certificate of each Obligor (other than TI), signed on its
behalf by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the Restatement Date (the statements made
in which certificate shall be true on and as of the Restatement Date),
certifying as to (A) the absence, except to the extent provided in
said certificate, of any amendments to the charter or articles of
incorporation or organization of such Obligor since the Second
Restatement Date, (B) the absence, except to the extent provided in
said certificate, of any amendments to the bylaws of such Obligor
subsequent to the Second Restatement Date, and (C) the due
incorporation or organization and good standing of such Obligor as a
corporation or limited partnership, as the case may be, organized
under the laws of its state of incorporation or organization, and the
absence of any proceeding for the dissolution or liquidation of such
Obligor.
(c) The Holdings Pledge Agreement, the Terra Capital Pledge
Agreement, the Subsidiary Pledge and Security Agreement and the TNLP Pledge
and Security Agreement, in substantially the forms of Exhibits ▇-▇, ▇-▇, B-
3 and B-4, respectively, duly executed by each of the intended parties
thereto, together with:
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(i) such appropriately completed and duly executed copies of
Uniform Commercial Code financing statements and financing statement
amendments as the Collateral Agent or any Secured Party thereunder
shall have requested in order to continue the perfection and
protection of the Liens created by the Security Documents and covering
the Collateral described therein, and
(ii) executed and delivered documents for recordation and filing
of or with respect to such Security Documents that the Collateral
Agent or any Secured Party thereunder may deem necessary or desirable
in order to continue the perfection and protection of the Liens
created thereby.
(d) The Intercreditor Agreement, duly executed by each of the
intended parties thereto.
(e) The Loan Purchase Agreement, duly executed and delivered by Terra
and the Administrative Agent.
(f) A favorable opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for the
Obligors, in form and substance satisfactory to the Administrative Agent
and the Lenders.
(g) A favorable opinion of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
New York counsel for Citibank, in form and substance satisfactory to
Citibank.
(h) A certificate of the Senior Financial Officer to the effect that:
(x) the representations and warranties contained in each Loan
Document are correct on and as of the Restatement Date, before and
after giving effect to the amendment and restatement provided for
hereby, as though made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date); and
(y) no event has occurred and is continuing that constitutes a
Default or an Event of Default.
(i) Evidence of payment of (1) all accrued fees and expenses of the
Administrative Agent (including the reasonable and documented fees and
expenses of counsel to Citibank in connection with this Agreement to the
extent that statements for such fees and expenses have been
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delivered to the Borrowers at least one Business Day prior to the
Restatement Date); (2) all interest accrued through the Restatement Date on
the "Advances" outstanding under and as defined in the Existing Credit
Agreement, all accrued commitment fees, all accrued letter of credit fees
and all other expenses payable thereunder; and (3) all "Advances" under and
as defined in the Existing Credit Agreement owing to the Retiring Lenders
and all other amounts owing to the Retiring Lenders under the Existing
Credit Agreement.
(j) Evidence of the existence of all insurance required to be
maintained by Terra hereunder.
(k) Evidence of receipt of all governmental and third party consents
and approvals necessary in connection with this Agreement and the U.K.
Nitrogen Acquisition (without the imposition of any conditions except those
that are acceptable to the Lenders) and that the same remain in effect.
(l) Evidence that, since December 31, 1996, there has been no
Material Adverse Change; and that no U.K. Nitrogen MAC has occurred.
(m) Evidence that (1) all conditions to the U.K. Nitrogen
Acquisition by Terra U.K. set forth in the Sale of Business Agreement have
been (or shall simultaneously be) satisfied in all material respects
without modification or waiver not consented to by the Lenders; and (2) the
U.K. Nitrogen Acquisition has occurred or is contemporaneously occurring.
(n) Evidence that the Terra Canada Credit Facility shall be in full
force and effect.
(o) Such other approvals, opinions and documents relating to this
Agreement and the transactions contemplated hereby as any Lender or any
Issuing Bank may, through the Administrative Agent, reasonably request.
Section 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Lender to make an Advance on the occasion of each
Borrowing (excluding, however, the making of any Advance pursuant to Section
2.13), and the right of each Borrower to request the issuance of Letters of
Credit under either Facility, shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing or Notice of Issuance and the acceptance by the relevant Borrower of
the proceeds of such
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Borrowing or of such Letter of Credit shall constitute a representation and
warranty by such Borrower that on the date of such Borrowing or issuance such
statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, as though made on and as of such
date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default.
Section 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the
Restatement Date specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Company. The
Company represents and warrants as follows:
(a) Each Obligor (i) is a corporation (or, in the case of TNLP or
BMLP, a limited partnership) duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified and in good standing as a foreign corporation (or limited
partnership, as the case may be) in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires it
to so qualify or be licensed and where, in each case, failure so to qualify
and be in good standing could reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite power (corporate or other) and
authority to own or lease and operate its
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properties and to carry on its business as now conducted and as proposed to
be conducted.
(b) Set forth on Schedule 4.01(b) is a complete and accurate list of
all Material Subsidiaries of each Obligor as of the Restatement Date (and
after giving effect to the U.K. Nitrogen Acquisition), showing as of such
date (as to each such Subsidiary) the jurisdiction of its organization, the
number of shares of each class of capital stock or partnership interests
authorized, and the number outstanding and the percentage of the
outstanding shares or interests of each such class owned (directly or
indirectly) by such Obligor and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights. All of the outstanding capital stock or partnership interests of
all of such Subsidiaries has been validly issued, is fully paid and non-
assessable and is owned by such Obligor or one or more of its Subsidiaries
free and clear of all Liens, except those created by the Security
Documents. Each Material Subsidiary (i) is a corporation (or, in the case
of TNLP or BMLP, a limited partnership) duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing as a foreign
corporation or limited partnership, as the case may be, in each other
jurisdiction in which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed and where, in each
case, failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite
power (corporate or other) and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted.
(c) The execution, delivery and performance by each Obligor of this
Agreement, the Notes and each other Loan Document to which it is or is
intended to be a party, and the consummation of the credit transactions
between Borrowers and Lenders contemplated hereby, are within such
Obligor's powers (corporate or other), have been (or will, prior to the
Restatement Date, be) duly authorized by all necessary corporate or other
action, and do not (i) contravene such Obligor's charter, by-laws or, in
the case of TNLP or BMLP, its agreement of limited partnership, (ii)
violate any applicable law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation U and
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Regulation X), order, writ, judgment, injunction, decree, determination or
award (except for any such violation, by action or inaction of any Obligor,
that could not reasonably be expected to have a Material Adverse Effect and
that could not result in any liability of any Lender), (iii) except as set
forth on Schedule 4.01(c), conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Obligor, any of its Subsidiaries or any of their properties (except for
any such conflict, breach or default, caused by action or inaction of any
Obligor, that could not reasonably be expected to have a Material Adverse
Effect and that could not result in any liability of any Lender) or (iv)
except for the Liens created by the Security Documents, result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties of any Obligor or any of its Subsidiaries. No Obligor or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably expected to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Obligor of this Agreement, the Notes or any
other Loan Document to which it is or is to be a party, or for the
consummation of the credit transactions between Borrowers and Lenders
contemplated hereby, (ii) the grant by any Obligor of the Liens granted by
it pursuant to the Security Documents, (iii) the perfection or maintenance
of the Liens created by the Security Documents (except for the filings
required to be made pursuant to Section 3.01(c)) or (iv) the exercise by
the Collateral Agent, the Administrative Agent, any Lender or Issuing Bank
or any other Secured Party (as defined in the Security Documents) of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Security Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d), all of which have been duly obtained, taken, given or made and are
in full force and effect.
(e) This Agreement has been, and each of the Notes and each other
Loan Document when delivered will have been, duly executed and delivered by
each Obligor that is intended to
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be a party thereto. This Agreement is, and each of the Notes and each other
Loan Document when delivered will be, the legal, valid and binding
obligation of each Obligor that is intended to be a party thereto,
enforceable against such Obligor in accordance with its terms.
(f) The balance sheet of Terra as at December 31, 1996 and the
related statements of income and cash flows of Terra for the twelve months
then ended, accompanied by an opinion of Deloitte & Touche, independent
public accountants, and the balance sheet of Terra as at September 30, 1997
and the related statements of income and cash flows of Terra for the nine
months then ended, duly certified by the chief financial officer of Terra,
copies of which have been furnished to each Lender, present fairly, in all
material respects, subject, in the case of said balance sheet as at
September 30, 1997, and said statements of income and cash flows for the
nine months then ended, to year-end audit adjustments, the financial
condition of Terra as at such dates and the results of the operations of
Terra for the periods ended on such dates, all in accordance with generally
accepted accounting principles applied on a consistent basis. Since
December 31, 1996, there has been no Material Adverse Change with respect
to Terra. Prior to the consummation of the U.K. Nitrogen Acquisition, there
has been no U.K. Nitrogen MAC.
(g) (A) No written information, exhibit or report (as at the
Restatement Date) furnished by any officer of Terra to the Administrative
Agent, any Issuing Bank or any Lender in connection with the negotiation of
the Loan Documents (when taken together) contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements made therein not misleading and (B) none of the information,
exhibits or reports furnished by any Obligor to the Administrative Agent,
any Issuing Bank or any Lender pursuant to Section 5.03 contained (on the
date of delivery thereof) any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements made
therein not misleading; provided that the representations made in this
Section 4.01(g) with respect to the U.K. Nitrogen Assets with respect to
any time prior to the Restatement Date are made to the best of Terra's
knowledge after due inquiry.
(h) There is no action, suit, litigation or proceeding against any
Obligor or any of its Subsidiaries or any of their respective property,
including any Environmental Action, pending before any court, governmental
agency or arbitrator, or (to the knowledge of any Obligor) threatened,
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nor (to the knowledge of any Obligor) is there any investigation pending in
respect of any Obligor, that:
(1) could reasonably be expected to have a Material Adverse
Effect;
(2) on the Restatement Date could reasonably be expected to
affect the legality, validity or enforceability of this Agreement, any
Note, any other Loan Document or the consummation of the transactions
contemplated hereby; or
(3) on the Restatement Date has resulted in a U.K. Nitrogen MAC.
(i) No Obligor is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance will be used for any purpose which violates the provisions of the
regulations of the Board of Governors of the Federal Reserve System. After
applying the proceeds of each Advance, not more than 25% of the value of
the assets of either Borrower and such Borrower's Subsidiaries (as
determined in good faith by such Borrower) that are subject to Section
5.02(a) or Section 5.02(e) will consist of or be represented by Margin
Stock. If requested by any Lender or the Administrative Agent, each
Borrower will furnish to the Administrative Agent and each Lender a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U, the statements made in which shall be such, in
the opinion of each Lender, as to permit the transactions contemplated
hereby in accordance with Regulation U.
(j) Set forth on Schedule 4.01(j) is a complete and accurate list, as
of the Restatement Date, of each Plan that is subject to Title IV of ERISA
and each Multiemployer Plan with respect to any employees or former
employees of any Obligor or any of its ERISA Affiliates.
(k) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of any Obligor or any of its ERISA Affiliates that
could reasonably be expected to have a Material Adverse Effect.
(l) Since the date of the Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan of any Obligor
or any of its ERISA Affiliates, there has been no change in the funding
status of any such Plan except to the extent that such change is not
reasonably expected to have a Material Adverse Effect.
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(m) Neither any Obligor nor any of its ERISA Affiliates has incurred
or is reasonably expected to incur any withdrawal liability to any
Multiemployer Plan except to the extent such withdrawal liability is not
reasonably expected to have a Material Adverse Effect.
(n) Neither any Obligor nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA.
(o) As of the Restatement Date, the aggregate annualized cost on a
pay-as-you-go basis (including, without limitation, the cost of insurance
premiums) with respect to post-retirement benefits under welfare plans
(other than post-retirement benefits required to be provided by Section
4980B of the Code or applicable state law) for which Terra and its
Subsidiaries is liable does not exceed $1,000,000.
(p) Neither the business nor the properties of any Obligor or any of
its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that could reasonably be expected to have a Material Adverse
Effect.
(q) Except as set forth on Part I of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, the operations and properties of each Obligor and
each of its Subsidiaries comply in all material respects with all
Environmental Laws, all necessary Environmental Permits have been obtained
and are in effect for the operations and properties of each Obligor and its
Subsidiaries, each Obligor and its Subsidiaries are in compliance in all
material respects with all such Environmental Permits, and no circumstances
exist that could (i) form the basis of an Environmental Action against any
Obligor or any of its Subsidiaries or (ii) cause any such property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(r) Except as set forth on Part II of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, as of the Restatement Date none of the properties
of any
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Obligor or any of its Subsidiaries is listed or proposed for listing on the
National Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list of sites
requiring investigation or cleanup, and no underground storage tanks, as
such term is defined in 42 U.S.C. 6901, are located on any property of any
Obligor or any of its Subsidiaries.
(s) Except as set forth on Part III of Schedule 4.01(q) and except to
the extent any of the following could not reasonably be expected to have a
Material Adverse Effect, as of the Restatement Date neither any Obligor nor
any of its Subsidiaries has been notified in writing by any federal, state
or local governmental agency or any other Person that any Obligor or any of
its Subsidiaries is potentially liable for the remedial or other costs with
respect to treatment, storage, disposal, release, arrangement for disposal
or transportation of any Hazardous Substance generated by any Obligor or
any of its Subsidiaries, and Hazardous Materials have not been generated,
used, treated, handled, stored or disposed of on, or released or
transported to or from, any property of such Obligor (or, to its knowledge,
any adjoining property) except in compliance in all material respects with
all Environmental Laws and Environmental Permits, and all other wastes
generated at any such properties by any Obligor or any of its Subsidiaries
(and their respective agents, employees and contractors) have been disposed
of in compliance with all Environmental Laws and Environmental Permits.
(t) Each Obligor and each of its Subsidiaries has filed, has caused
to be filed or has been included in, all federal and state income tax
returns and all other material tax returns (federal, state, local and
foreign) required to be filed and has paid (or is contesting in good faith
by appropriate proceedings) all taxes shown thereon to be owing, together
with applicable interest and penalties.
(u) Set forth on Schedule 4.01(u) is a complete and accurate list, as
of the date hereof, of each taxable year of Terra for which federal income
tax returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "Open Year").
(v) As of the Restatement Date, there are no adjustments to the
federal income tax liability of Terra
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proposed by the Internal Revenue Service with respect to Open Years. No
issues have been raised by the Internal Revenue Service in respect of Open
Years that, in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(w) Neither any Obligor nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither any Obligor nor any of
its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Neither the making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment thereof by the
Borrowers, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation or
order of the Securities and Exchange Commission thereunder.
(x) Each of Terra and the Company (both individually and collectively
with their respective Subsidiaries) is Solvent.
(y) Set forth on Part I of Schedule 4.01(y) is a complete and
accurate list, as of the Restatement Date, of all existing Debt of each
Obligor, showing as of the Restatement Date (i) the principal amount
outstanding thereunder, (ii) whether such Debt is secured by any Lien and
(iii) the aggregate principal amount of such Debt scheduled to be paid
during each fiscal year of Terra to and including the fiscal year of Terra
in which the Terra Commitment Termination Date is scheduled to occur.
Section 4.02. Representations and Warranties of each Lender. Each
Lender hereby represents and warrants that such Lender, in good faith, has not
relied upon Margin Stock as collateral for the Obligations of the Obligors
hereunder and under the other Loan Documents.
ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants. So long as any principal of or
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, any Letter of
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Credit shall be outstanding or any Lender shall have any Commitment hereunder,
Terra will, and will cause each of the Obligors to:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with
ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970 (except to the extent that non-
compliance with any thereof could not reasonably be expected to have a
Material Adverse Effect).
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; provided that neither such Obligor
nor any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained to the extent required by GAAP, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons occupying its properties
to comply, with all Environmental Laws and Environmental Permits applicable
to its operations and properties; obtain and renew, and cause each of its
Subsidiaries to obtain and renew, all Environmental Permits necessary for
its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary to
remove and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; provided that
(i) neither such Obligor nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to the extent
that its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves to the extent required by GAAP are
being maintained with respect to such circumstances and (ii) no such
compliance with laws and permits, obligation to obtain or renew permits or
obligation to undertake any such investigation, study, sampling, testing,
removal, remedial or other action shall be required hereunder to the extent
no
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Material Adverse Effect could reasonably be expected to result from any
failure to so comply, obtain, renew or undertake, either individually or in
the aggregate.
(d) Maintenance of Insurance. Maintain, and cause each of its
Material Subsidiaries to maintain, with responsible and reputable insurance
companies or associations, insurance, including business interruption
insurance with respect to each manufacturing plant, in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses.
(e) Preservation of Corporate Existence, Etc. Subject to Section
5.02(d) and (e), preserve and maintain, and cause each of its Material
Subsidiaries to preserve and maintain, its corporate or partnership
existence, rights (charter and statutory) and franchises; provided that:
(1) from and after the BMLP Restructuring Time, BMLP may be
dissolved on the terms and conditions set forth in the BMLP
Partnership Agreement as in effect at the BMLP Restructuring Time; and
(2) neither any Obligor nor any of its Subsidiaries shall be
required to preserve any right or franchise if the Board of Directors
of such Obligor or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of such Obligor or such Subsidiary, as the case may be, and
that the loss thereof will not have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and as may be
reasonably requested from time to time, permit the Administrative Agent,
any Issuing Bank or any of the Lenders or any agents or representatives
thereof to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, such Obligor and any of
its Subsidiaries (in the presence of an appropriate officer or
representative of the relevant Obligor), and to discuss the affairs
(including, but not limited to, the compliance by such Obligor and its
Subsidiaries with all Environmental Laws), finances and accounts of such
Obligor and any of its Subsidiaries with any of their officers or directors
and with their independent certified public accountants.
(g) Preparation of Environmental Reports. Upon either (i) the
acquisition of any real property by such Obligor or any of its Subsidiaries
the purchase price of which exceeds
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$1,000,000 or (ii) the occurrence and during the continuance of a Default
or Event of Default arising under Section 5.01(c), and in each case at the
written request of the Administrative Agent, such Obligor shall provide to
the Administrative Agent within a reasonable time after such acquisition or
request, as the case may be, at the expense of such Obligor, an
environmental site assessment report for the acquired property (in the case
of an acquisition as described in clause (i)) or for any properties of such
Obligor which are the subject of any such Default or Event of Default (in
the case of an event as described in clause (ii)) prepared by an
environmental consulting firm reasonably acceptable to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in connection
with any Hazardous Materials on such properties (provided that if such
Obligor, in the exercise of its reasonable judgment, determines not to have
such an environmental site assessment report prepared, such Obligor shall
instead deliver to the Administrative Agent a copy of such Obligor's
internal site assessment report relating to relevant property). Without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report
will not be provided within a reasonable time following such request, the
Administrative Agent may retain an environmental consulting firm to prepare
such report at the expense of such Obligor, such Obligor and each of its
Subsidiaries hereby granting to the Administrative Agent, such firm and any
agents or representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto its properties to undertake
such an assessment.
(h) Keeping of Books. Keep, and cause each of its Material
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of such Obligor and each such Subsidiary in accordance with
GAAP.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Material Subsidiaries to maintain and preserve, except to the
extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
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(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, except to the extent any such lease is no longer
used or useful in the conduct of its business or which, in the exercise of
the reasonable judgment of the relevant Obligor, is to be refinanced and
except to the extent failure to comply with the foregoing would not have a
Material Adverse Effect, and cause each of its Material Subsidiaries to do
so.
(k) Performance of Sale of Business Agreement, Etc. Perform and
observe in all material respects all of the terms and provisions of the
Sale of Business Agreement (and each document relating thereto) to be
performed or observed by it, maintain the Sale of Business Agreement (and
each such other document) in full force and effect and enforce in all
material respects the Sale of Business Agreement (and each such other
document) in accordance with its terms.
(l) Performance and Compliance with Material Contracts. Perform and
observe, and cause each of its Subsidiaries to perform and observe, all the
terms and provisions of each Material Contract to be performed or observed
by it, maintain each such Material Contract in full force and effect and
enforce each such Material Contract in accordance with its terms, except to
the extent the failure to do any of the foregoing could not reasonably be
expected to have a Material Adverse Effect.
(m) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of its Affiliates on terms that are fair and
reasonable and no less favorable to such Obligor or such Subsidiary than
would obtain in a comparable arm's-length transaction with a Person that is
not an Affiliate; provided that this Section 5.01(m) shall not be
applicable to:
(i) transactions between such Obligor and wholly owned
Subsidiaries of Terra or between wholly owned Subsidiaries of Terra
unless otherwise prohibited by this Agreement;
(ii) compensation paid for services rendered by any director or
officer of such Obligor or any director or officer of a Subsidiary of
such Obligor serving at the direction or request of such Obligor to
the extent
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such compensation is determined in the good faith exercise of business
judgment by the Board of Directors of such Obligor to be reasonable
and appropriate to the functions of such office;
(iii) transactions under Intercompany Receivables Facilities;
(iv) Investments in Permitted JVs to the extent permitted
hereunder and general and administrative and purchasing services for
Permitted JVs (including inventory purchasing arrangements, whether
for inventory manufactured and/or produced by Terra or any of its
Subsidiaries or purchased from third parties, vendors or suppliers and
including leasing and subleasing of furnishings, fixtures and
equipment);
(v) transactions among members of the BMLP Group;
(vi) transactions under the Management Agreements; and
(vii) transactions under the Terra U.K. Offtake Agreement.
(n) Further Assurances. (i) Promptly upon reasonable request by the
Administrative Agent or any Lender or Issuing Bank through the
Administrative Agent, correct, and cause each Subsidiary promptly to
correct, any material defect or error that may be discovered in any Loan
Document, which material defect or error is the result of any untrue
statement of material fact under any Loan Document or the omission to state
a material fact necessary to make the statements made therein not
misleading, or in the execution, acknowledgment or recordation of any Loan
Document, and (ii) promptly upon reasonable request by the Collateral
Agent, the Administrative Agent or any Lender or Issuing Bank through the
Administrative Agent do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register, and cause any such Subsidiary
promptly to do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all such further acts, deeds,
conveyances, pledge agreements, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Collateral
Agent, the Administrative Agent or any Lender or Issuing Bank through the
Administrative Agent may reasonably require from time to time in order to
(A) subject to the Liens created by any of
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the Security Documents any of such Obligor's and its Subsidiaries'
properties, rights or interests covered or now or hereafter intended to be
covered by any of the Security Documents, (B) perfect and maintain the
validity, effectiveness and priority of any of the Security Documents and
the Liens intended to be created thereby and (C) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto the
Collateral Agent the rights granted or now or hereafter intended to be
granted to it under any Security Document or under any other instrument
executed in connection with any Security Document to which such Obligor,
any other Obligor or any of their respective Subsidiaries is or may become
a party.
(o) Ownership of the Obligors. Take, and will cause each of its
Subsidiaries to take, such action from time to time as shall be necessary
to ensure that:
(i) Terra will at all times own, beneficially and of record,
all of the issued and outstanding capital stock (other than directors'
qualifying shares) of Terra Capital Holdings;
(ii) Terra Capital Holdings will at all times own,
beneficially and of record, all of the issued and outstanding capital
stock (other than directors' qualifying shares) of the Company, and
will own no other property (other than (x) cash, (y) other property
incidental to its business as a holding company and (z) capital stock
of, or other ownership interests in, Receivables Subsidiaries);
(iii) the Company will at all times own:
(1) beneficially and of record, all of the issued and
outstanding capital stock (other than directors' qualifying
shares) of TI, BMCH, TMC and TNC and
(2) no other property, other than:
(A) cash and Permitted Investments,
(B) Receivables of one or more of its Subsidiaries
transferred to it, and capital stock of, or other ownership
interests in, Receivables Subsidiaries,
(C) Senior Preference Units purchased pursuant to the
SPU Redemption, and capital
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stock of a wholly owned Subsidiary of the Company organized
for the purpose of holding such Senior Preference Units,
(D) other property incidental to its business as a
holding company,
(E) other property used solely in connection with its
performance of services pursuant to the terms of the
Management Agreements and
(F) other Investments permitted to be held by the
Company pursuant to Section 5.02(f) (to the extent such
Investments, in the case of those made under clauses (iv),
(v) and (vi) of said Section 5.02(f), are subject to the
Lien of the Security Documents);
(iv) except to the extent necessary to give effect to the BMLP
Restructuring, BMCH will at all times own, beneficially and of record,
a 99% limited partnership interest in BMLP; and at all times BMCH will
own no other property (other than cash and other property incidental
to its business as a holding company);
(v) except to the extent necessary to give effect to the BMLP
Restructuring, TMC will at all times own, beneficially and of record,
a 1% general partnership interest in BMLP; and at all times TMC will
own no other property (other than cash and other property incidental
to its business as a holding company);
(vi) without limiting clauses (iv) and (v) above, TMC and BMCH
will at all times own, beneficially and of record, all of the
partnership interests in BMLP other than the BMLP Class A Limited
Partnership Interest;
(vii) Terra Canada will at all times own, beneficially and of
record, all of the capital stock of Terra U.K.;
(viii) TNC will own no property other than cash and:
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(v) ownership interests of TNCLP and its successors and a
general partnership interest in TNLP and its successors;
(w) capital stock of a wholly owned Subsidiary of TNC
organized for the purpose of holding Senior Preference Units;
(x) equipment and other property principally used in
connection with TNC's performance of general and administrative
services (including, without limitation, property related to
incentive compensation plans, deferred compensation plans and
other funded benefit plans) for Terra and its Subsidiaries;
(y) raw materials and other property used in the
manufacture, storage, sale and distribution of nitrogen and
methanol products by Terra and its Subsidiaries in the ordinary
course of business, provided that the aggregate book value of all
tangible property of TNC referred to in this paragraph (y) shall
not at any time exceed $10,000,000; and
(z) other property incidental to its business as a holding
company and a general partner; and
(ix) TNCLP will at all times own no property other than
ownership interests of TNLP and its successors (other than cash,
Senior Preference Units purchased pursuant to the SPU Redemption and
other property incidental to its business as a holding company).
In the event that any such additional shares of stock or other ownership
interests shall be issued to an Obligor by any Subsidiary thereof, the
respective Obligor agrees forthwith to deliver to the Collateral Agent
pursuant to the Security Documents the certificates (if any) evidencing
such ownership interests accompanied by undated powers executed in blank
and to take such other action as the Collateral Agent or the Administrative
Agent shall request to perfect the security interest created therein
pursuant to the Security Documents. Without limiting the foregoing, neither
TNCLP nor TNLP shall convert to a corporate form except pursuant to the SPU
Redemption.
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(p) Delivery of Management Agreements. On or prior to the date of
execution of each Management Agreement, notify the Administrative Agent
thereof (and the Administrative Agent shall notify the Lenders thereof
promptly) and shall deliver to the Administrative Agent a certified copy
thereof (each such Management Agreement to be in form and substance
reasonably satisfactory to the Administrative Agent). Promptly following
each amendment, waiver and consent relating to a Management Agreement (but
subject to Section 5.02(p)), Terra shall give the Administrative Agent
notice thereof (and the Administrative Agent shall notify the Lenders
thereof promptly), and shall deliver to the Administrative Agent a
certified or conformed copy of each such amendment, waiver and consent.
Section 5.02. Negative Covenants. So long as any principal of or
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, Terra will not, and will not permit any of its
Material Subsidiaries to:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Material Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file, or permit any of its Subsidiaries to
sign or file, under the Uniform Commercial Code of any jurisdiction, a
financing statement that names such Obligor or any of its Subsidiaries as
debtor, or sign, or permit any of its Subsidiaries to sign, any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding from the operation of
the foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens; Liens in favor of banks which arise
under Article 4 of the Uniform Commercial Code on items in collection
and documents relating thereto and proceeds thereof; and Liens in
favor of customs and revenue authorities arising as a matter of law to
secure customs duties in connection with the importation of goods;
(iii) Liens existing on the Restatement Date and described on
Schedule 5.02(a)(iii);
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(iv) Liens on cash (in an aggregate amount, for Terra and its
Subsidiaries taken as a whole, not exceeding $15,000,000 at any time)
to secure the Obligations in respect of letters of credit permitted
under Section 5.02(b)(1)(iv);
(v) Liens on Receivables and incidental property of the
Company or any of its Subsidiaries to secure such Person's Obligations
under the Intercompany Receivables Facilities and/or under the
Permitted Receivables Facilities;
(vi) Purchase money Liens upon or in property acquired or held
by Terra or such Subsidiary in the ordinary course of business to
secure the purchase price of such property or to secure Debt
(including, without limitation, commercial letters of credit) incurred
solely for the purpose of financing the acquisition, construction or
improvement of any such property to be subject to such Liens, or Liens
existing on any such property at the time of acquisition (and not
created in anticipation thereof), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount;
provided that (x) no such Lien shall extend to or cover any property
other than the property being acquired, constructed or improved, and
no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced; and (y) the Debt secured by any such Lien shall at no
time exceed 100% of the fair market value (as determined in good faith
by the Senior Financial Officer) of such property at the time it was
acquired;
(vii) Any Lien arising after the Restatement Date in favor of
any state of the United States of America or any agency, political
subdivision or instrumentality thereof, upon any pollution abatement
or control facilities being financed in compliance with Section
103(c)(4)(F) of the Internal Revenue Code of 1986, as in effect on the
date of this Agreement (or any successor statute which is similar in
all substantive respects), the interest payable in respect of which
financing is excluded from gross income under said Section 103,
provided that (x) the Debt secured by such Lien is not prohibited by
clause (b)(1) of this Section 5.02, and (y) such Lien does not cover
any other property at any time owned by Terra or any Material
Subsidiary;
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(viii) Liens on property that is the subject of a capital lease to
secure the performance of the Capital Lease Obligations relating
thereto;
(ix) Liens upon property of a Person that becomes a Subsidiary of
Terra after the Restatement Date, each of which Liens existed on such
property before the time such Person became a Subsidiary of Terra and
was not created in anticipation thereof; provided that no such Lien
shall extend to or cover any property of Terra or any of its
Subsidiaries other than the property subject to such Liens at the time
such Person became a Subsidiary of Terra and improvements thereon;
(x) Leases or subleases, and licenses or sublicenses, granted to
third Persons not interfering in any material respect with the
business of Terra or such Subsidiary;
(xi) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Terra or such Subsidiary;
(xii) Liens arising from Uniform Commercial Code financing
statements regarding operating leases permitted by this Agreement;
(xiii) Any interest or title of a lessor or sublessor or licensor
under any lease or license permitted or not prohibited by this
Agreement;
(xiv) Additional Liens upon property created after the Restatement
Date, provided that the aggregate Debt secured thereby and incurred on
and after the Restatement Date shall not exceed $10,000,000 in the
aggregate at any one time outstanding;
(xv) Liens on property constituting all or part of the Ammonia
Loop incurred in connection with the construction thereof;
(xvi) The replacement, extension or renewal of any Lien permitted
by clauses (iii), (iv), (v), (ix), (xiv) and (xv) above upon or in the
same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the principal amount or
change in any direct or contingent obligor) of the Debt secured
thereby;
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(xvii) Liens on property of Terra Canada to secure the Terra Canada
Credit Facility;
(xviii) Liens on property of Terra U.K. to secure the Terra U.K.
Loan;
(xix) Liens securing obligations of the Company and its
Subsidiaries under Hedge Agreements permitted by Section 5.02(c); and
(xx) Liens on property of Terra and its Subsidiaries (other than
(1) property subject to the Liens under the Security Documents and (2)
property subject to any Liens securing Debt of Terra or such
Subsidiaries) in favor of Terra or any of its Subsidiaries to secure
Debt owing to Terra or any of its Subsidiaries.
(b) Debt.
(1) Generally. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) Debt under the Loan Documents;
(ii) Debt in respect of Hedge Agreements permitted by Section
5.02(c);
(iii) Debt in respect of unsecured trade payables (and Obligations
in respect of letters of credit supporting such trade payables);
(iv) Debt (including, without limitation, Obligations in respect
of letters of credit) not secured by any Lien (other than Liens
permitted by Section 5.02(a)(iv)), so long as, on the date of the
incurrence thereof, the aggregate principal amount (or the U.S. Dollar
equivalent of the aggregate principal amount) of all Debt of Terra and
its Subsidiaries on a Consolidated basis (as reasonably determined by
the Senior Financial Officer on and as of the date of such incurrence)
then outstanding under this clause (iv) (including, without
limitation, the Debt proposed to be incurred on such date) does not
exceed $50,000,000;
(v) Obligations of the Company and its Subsidiaries under the
Intercompany Receivables Facilities and under the Permitted
Receivables Facilities;
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(vi) Debt securities of Terra issued in a public offering
pursuant to an effective registration statement the terms of which
(including, without limitation, as to interest rates, amortization
(provided that in any event no payments of principal, redemptions,
sinking fund payments or the like shall be scheduled to be made before
the Terra Commitment Termination Date), redemption, average life to
maturity, covenants, events of default and other terms) are reasonably
satisfactory to the Required Lenders;
(vii) Debt outstanding (or committed to be made available) as at
September 30, 1997 and set forth on Schedule 4.01(y);
(viii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(ix) Intercompany Debt permitted under Section 5.02(b)(2);
(x) Debt secured by Liens permitted under Section 5.02(a)(vi);
purchase money Debt secured by Liens permitted under 5.02(a)(ix); and
Debt in an aggregate principal amount not exceeding $10,000,000 at any
one time outstanding secured by Liens permitted under Section
5.02(a)(xiv);
(xi) Acquired Debt in an aggregate principal amount not exceeding
$50,000,000 at any one time outstanding;
(xii) 1995 Terra Debt (and Debt of Terra evidenced by instruments
issued in exchange for such Debt), and renewals, refinancings and
replacements thereof (without increase in the principal amount or
change in any direct or contingent obligor, and on such other terms
and conditions as shall be no less favorable to Terra and its
Subsidiaries than the Debt being so renewed, refinanced or replaced);
(xiii) renewals, refinancings and replacements of the Debt
permitted under clauses (vi), (vii), (x) and (xi) above and clause
(xviii) below (without increase in the principal amount or change in
any direct or contingent obligor and not including any Debt to be paid
or prepaid with the proceeds of Advances);
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(xiv) if at any time ▇▇▇▇▇ LLC is a Subsidiary of Terra, Capital
Lease Obligations owing by ▇▇▇▇▇ LLC to BFI with respect to fixtures,
furniture, equipment and other Property in an aggregate principal
amount presently contemplated to be approximately $25,400,000 but in
no event exceeding $30,000,000, and (regardless of whether ▇▇▇▇▇ LLC
is a Subsidiary of Terra) the Guarantee of such Obligations by Terra
or one or more of its Subsidiaries;
(xv) Debt of Terra (or one or more of its Subsidiaries) in a
principal amount (contemplated to be approximately $20,000,000,
subject to adjustment in increases or decreases in BFI's capital
account in ▇▇▇▇▇ LLC) as required under the put/call provisions of the
▇▇▇▇▇ ▇▇ Agreement, but in any event not exceeding $30,000,000, owing
under one or more promissory notes payable by Terra or one or more of
its Subsidiaries to BFI and/or one or more of BFI's Affiliates as
consideration for the transfer by BFI to TI or one or more of its
Subsidiaries of the membership interests in ▇▇▇▇▇ LLC not theretofore
held by TI and its Subsidiaries, and the Guarantee of such Debt by
Terra or one or more of its Subsidiaries;
(xvi) Obligations of TI in a maximum amount not exceeding
$5,000,000 owing to BFI and/or one or more of BFI's Affiliates under
one or more consulting or service agreements, and the Guarantee of
such Obligations by Terra or one or more of its Subsidiaries;
(xvii) Debt of Terra to former shareholders of ▇▇▇▇▇▇▇▇ Elevator
Company in an aggregate principal amount not exceeding $7,000,000;
(xviii) Debt of Terra Canada under the Terra Canada Credit Facility
in an aggregate principal amount not at any time exceeding
$125,000,000, and Guarantees thereof by Terra and one or more of its
Subsidiaries;
(xix) [intentionally omitted];
(xx) unsecured Debt of Terra U.K. in an aggregate principal
amount not at any time exceeding (Pounds)7,000,000; and
(xxi) unsecured Debt of Terra Canada in an aggregate principal
amount not at any time exceeding
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$10,000,000 (or its equivalent in Canadian Dollars at the time of
borrowing thereof).
(2) Intercompany Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Intercompany Debt other than:
(i) Intercompany Debt outstanding on December 31, 1997;
(ii) Debt of the Company to BMLP, and Debt of one or more of the
Company's Subsidiaries to BMLP that is Guaranteed by the Company
(collectively, "BMLP Demand Loans"), provided that, if the aggregate
principal amount of BMLP Demand Loans outstanding as at the end of any
month ending on or after the BMLP Restructuring Time exceeds
$145,000,000, the Company shall repay (or cause to be repaid) BMLP
Demand Loans in an aggregate amount equal to such excess as soon as
reasonably possible and in any event within 30 days after the end of
such month;
(iii) from and after the BMLP Restructuring Time, Debt of the
Company to BMLP in an aggregate principal amount not at any time
exceeding $5,000,000 evidenced by a single promissory note payable to
BMLP (such note, as from time to time amended, the "Terra Capital
Note"), provided that such Debt reevidences an equivalent principal
amount of accounts receivables owing by the Company to BMLP at the
BMLP Restructuring Time;
(iv) Debt of Terra U.K. to Terra U.K. Holdings in an aggregate
principal amount not at any time exceeding $175,000,000 (the "Terra
U.K. Loan"), provided that the proceeds of such Debt are used solely
to finance part of the purchase price of the U.K. Nitrogen
Acquisition;
(v) Obligations under the U.K. Offtake Agreement;
(vi) additional Intercompany Debt (other than Debt of members of
the Terra Canada Group and, from and after the BMLP Restructuring
Time, Debt of members of the BMLP Group);
(vii) Intercompany Debt owing by members of the BMLP Group to
other members of the BMLP Group;
- 102 -
(viii) Intercompany Debt owing by members of the Terra Canada Group
to other members of the Terra Canada Group;
(ix) additional Intercompany Debt of Terra Canada and Terra U.K.
in an aggregate principal amount not at any time exceeding (1) during
the period ending on December 31, 1998, $60,000,000, and (2)
thereafter, $50,000,000; and
(x) additional Intercompany Debt.
(c) Hedge Agreements. Enter into or permit to be outstanding, or
permit any of its Subsidiaries to enter into or permit to be outstanding,
any Hedge Agreement other than:
(1) Hedge Agreements entered into prior to the Restatement Date
and identified on Schedule 5.02(c);
(2) the Methanol Hedging Agreement;
(3) the Terra U.K. Offtake Agreement;
(4) the Ammonium Nitrate Hedging Agreement; and
(5) other Hedge Agreements entered into in the ordinary course
of business and in a reasonably prudent manner and not for speculative
purposes, in each case in order to protect against the fluctuation in
interest rates, foreign exchange rates or commodity prices.
(d) Mergers, Etc. Merge with or into or consolidate with or into any
Person, or permit any of its Material Subsidiaries to do so, except that:
(i) if no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (x) any Subsidiary of the
Company may be merged or consolidated with or into the Company
(provided that the Company shall be the continuing or surviving
corporation) or any other wholly owned Subsidiary of the Company and
(y) the Company or any of its Subsidiaries may merge or consolidate
with any other Person; provided that (1) in the case of a merger or
consolidation of the Company, the Company is the continuing or
surviving corporation, and (2) in any other case, the continuing or
surviving corporation is a wholly owned Subsidiary of the Company;
- 103 -
(ii) if no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (x) any Outside Subsidiary may
be merged or consolidated with or into Terra (provided that Terra
shall be the continuing or surviving corporation) or any other wholly
owned Outside Subsidiary of Terra and (y) Terra or any of its Outside
Subsidiaries may merge or consolidate with any other Person (other
than Terra Capital Holdings or any of its Subsidiaries); provided that
(1) in the case of a merger or consolidation of Terra, Terra is the
continuing or surviving corporation, and (2) in any other case, the
continuing or surviving corporation is a wholly owned Outside
Subsidiary of Terra; and
(iii) nothing in this Section 5.02(d) shall be deemed to prohibit
the U.K. Nitrogen Acquisition.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of (including, without limitation, in a sale-leaseback
transaction), or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of (including, without limitation, in a sale-leaseback
transaction), any of its assets, including (without limitation) any
manufacturing plant or substantially all assets constituting the business
of a division, branch or other unit operation, except:
(i) sales of inventory in the ordinary course of its business;
(ii) sales or other dispositions of obsolete or worn-out
equipment no longer used or useful in its business;
(iii) dispositions of assets by one member of the Specified Group
to another member of the Specified Group (where "Specified Group"
means, collectively, the Company and each of its wholly owned
Subsidiaries);
(iv) (X) to the extent not permitted pursuant to clause (iii)
above, dispositions of assets by one Obligor to another and by an
Obligor to one of its or any other Obligor's wholly owned
Subsidiaries, (Y) other Dispositions to the extent the Net Available
Proceeds thereof are invested or committed to be invested in the
business of the Company and its Subsidiaries within one year from the
date of the relevant Disposition, and (Z) other Dispositions in an
aggregate amount not to exceed $50,000,000 in any
- 104 -
period of 12 consecutive months; provided that, in the case of all
Dispositions under this clause (iv) (A) each such asset is sold for an
amount not less than its fair market value, (B) no such asset may be
sold to the extent that it is, individually or when considered with
any other asset or assets sold or expected to be sold in such period
(but taking into account property acquired in exchange for, or to be
acquired substantially contemporaneously with the disposition of, the
assets so sold or expected to be sold), material to the business,
assets, operations, properties or financial condition of Terra and its
Subsidiaries taken as a whole, and (C) the Net Available Proceeds of
such Disposition are applied in accordance with and to the extent
required by Section 2.05(b), and to the extent the assets subject to
the Disposition constituted part of the Collateral, all other cash and
non-cash proceeds of such Disposition become subject to the Lien
created by the Security Documents in accordance with the terms
thereof;
(v) nothing in this Section 5.02(e) shall prohibit the Company
or any of its Subsidiaries from selling Receivables (x) under any
Permitted Receivables Facility (subject to the restrictions specified
in the definition of said term) or (y) under any Intercompany
Receivables Facility;
(vi) sales, transfers and other dispositions of assets to ▇▇▇▇▇
LLC so long as such transactions are (if at the time ▇▇▇▇▇ LLC is not
a wholly owned Subsidiary of the Company) in the ordinary course of
business and on ordinary business terms;
(vii) transfers of assets by Terra or one of the Outside
Subsidiaries, directly or indirectly, to a wholly owned Subsidiary of
Terra (a "Recipient") so long as the consideration paid by such
Recipient (if any) for all such assets does not exceed the fair market
value of such property;
(viii) transfers by TI of the Blytheville Assets to Farmland JV in
accordance with Section 5.02(f)(xviii)(x);
(ix) from and after the BMLP Restructuring Time, transfers of
assets by BMLP or any of its wholly owned Subsidiaries to BMLP or any
of its wholly owned Subsidiaries;
- 105 -
(x) from and after the BMLP Restructuring Time, (A) transfers of
assets by Terra or one of its wholly owned Subsidiaries to BMLP or a
Subsidiary thereof so long as the consideration paid to Terra and its
wholly owned Subsidiaries for all such assets is not less than the
fair market value of such property; and (B) transfers of assets by
BMLP or a Subsidiary thereof to Terra or one of its wholly owned
Subsidiaries so long as the consideration paid by Terra and its wholly
owned Subsidiaries for all such assets does not exceed the fair market
value of such property;
(xi) nothing in this Section 5.02(e) shall prohibit the BMLP
Restructuring; and
(xii) additional sales, leases, transfers and other dispositions
of property by Terra and its Subsidiaries (other than (1) property
subject to the Liens under the Security Documents and (2) property
subject to any Liens securing Debt of Terra or such Subsidiary) to
Terra or any of its Subsidiaries.
(f) Investments. Make or hold, or permit any of its Subsidiaries to
make or hold, any Investment, other than:
(i) Investments by Terra and its Subsidiaries in cash and
Permitted Investments;
(ii) Investments constituting (A) operating deposit accounts with
banks and (B) Receivables arising in the ordinary course of business
on ordinary business terms, in each case in accordance with, and
subject to the terms of, the Security Documents;
(iii) Investments described in Schedule 5.02(f);
(iv) Investments arising solely by reason of any merger or
consolidation expressly permitted by Section 5.02(d)(i)(x) or
5.02(d)(ii)(x);
(v) Subject to the terms set forth on Exhibit G, Specified
Acquisitions to the extent permitted to be made under Section 5.02(h);
(vi) Investments consisting of acquisitions of property
(including, without limitation, ownership interests in any Person) by
Terra or any of its Subsidiaries so long as (x) the aggregate fair
market value of all such property acquired in any fiscal year of Terra
shall not exceed $50,000,000, and (y) the
- 106 -
consideration paid by Terra and its Subsidiaries for each such
acquisition consists solely of equity securities issued by Terra;
(vii) Investments in respect of Hedge Agreements permitted by
Section 5.02(c);
(viii) Investments in ▇▇▇▇ Seeds, Inc. in an aggregate amount not
exceeding $4,000,000;
(ix) Investments in Agro-Terra Internacional, S.A. de C.V., a
joint venture between TI and Grupo Acerero del Norte, S.A. de C.V., in
an aggregate amount not exceeding $5,000,000;
(x) Investments made pursuant to Terra's Supplemental Deferred
Compensation Plan and its Excess Benefit Plan, each as in effect from
time to time;
(xi) Investments by Terra consisting of Terra Stock Repurchases;
(xii) Investments by Terra and its Subsidiaries consisting of the
purchase, redemption or other acquisition of Senior Preference Units
pursuant to the SPU Redemption;
(xiii) Debt (including Guarantees of Debt) constituting
Investments, to the extent such Debt is permitted under Section
5.02(b);
(xiv) Investments by the Company and its Subsidiaries in members
of the Terra Canada Group, and Investments by the Company and its
Subsidiaries in members of the BMLP Group, in each case outstanding on
the Restatement Date;
(xv) capital contributions to Receivables Subsidiaries;
(xvi) (x) working capital advances or loans made by Terra or one
or more of its Subsidiaries to ▇▇▇▇▇ LLC from time to time to the
extent required or permitted pursuant to the terms of the ▇▇▇▇▇
Documents; and (y) loans, advances and capital contributions made by
Terra or one or more of its Subsidiaries to ▇▇▇▇▇ LLC from time to
time to finance the purchase by ▇▇▇▇▇ LLC of furnishings, fixtures and
equipment, real estate and/or equity interests in entities engaged in
the same or allied lines of business in an aggregate principal
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amount not to exceed $10,000,000 at any one time outstanding;
(xvii) the purchase and sale by Terra of one or more Specified Call
Options (each relating to the same U.S. Stock Index and entered into
with the same counterparty) having an aggregate net cost to Terra and
its Subsidiaries of not more than $20,000,000, which purchases and
sales when taken together are (in the reasonable determination of
Terra) reasonably prudent investments to be made for an appropriate
business purpose; and
(xviii) Investments by TI in Farmland JV constituting (x) the
acquisition of not less than 50% of the ownership interests of
Farmland JV in exchange for the contribution of the Blytheville Assets
to Farmland JV; and (y) loans and net capital contributions made by
Terra or one or more of its Subsidiaries to Farmland JV from time to
time, in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding, to finance working capital needs of Farmland
JV and the purchase by Farmland JV of furnishings, fixtures and
equipment, real estate and/or equity interests in entities engaged in
the same or allied lines of business;
(xix) Investments by Terra Canada and its Subsidiaries in
Subsidiaries of Terra Canada;
(xx) Investments by BMLP and its Subsidiaries in Subsidiaries of
BMLP;
(xxi) Investments by Terra and its Subsidiaries in members of the
BMLP Group (including, without limitation, capital contributions by
the Company, TMC and BMCH to BMLP in respect of Extraordinary Expenses
pursuant to the terms of the BMLP Partnership Agreement) in an
aggregate amount not exceeding $30,000,000; provided that:
(1) not more than $25,000,000 of such amount may be capital
contributions made by the Company, TMC and BMCH to BMLP in
respect of such Extraordinary Expenses; and
(2) the aggregate amount of insurance, indemnification,
guarantee and other similar third-party arrangements resulting
from or relating to Extraordinary Expenses received by
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BMLP and returned to the Company or any of its Subsidiaries
(other than members of the BMLP Group) shall be deemed to reduce,
pro tanto, the amount of capital contributions made by the
Company and such Subsidiaries in respect of Extraordinary
Expenses;
(xxii) additional Investments by Terra and its Subsidiaries in
members of the Terra Canada Group in an aggregate amount not exceeding
$10,000,000;
(xxiii) additional Investments by Terra and its Subsidiaries in
Subsidiaries of Terra (other than in members of the Terra Canada Group
and members of the BMLP Group);
(xxiv) additional Investments by Terra and its Subsidiaries in
Terra or any of its Subsidiaries.
(g) Payments to Minority Interests. Pay or cause to be paid, or
permit any of its Subsidiaries to pay or cause to be paid, to any holder of
a minority interest any amount with respect to such minority interest in
excess of the amount to which such holder is legally entitled, unless Terra
or such Subsidiary simultaneously receives payment in an amount equal to or
greater than its ratable share of the amount of the related distribution
(determined in accordance with the respective interests then held by Terra
and such Subsidiary, on the one hand, and such holder, on the other),
provided that the following will not constitute a breach of this Section
5.02(g):
(1) the SPU Redemption;
(2) the redemption in whole, but not in part, of the BMLP Class
A Limited Partnership Interest in accordance with the terms of the
BMLP Partnership Agreement and the BMLP Support and Option Agreement;
and
(3) payments permitted to be made pursuant to the terms of the
BMLP Partnership Agreement and the BMLP Support and Option Agreement.
(h) Restricted Transactions. Make any Capital Expenditures or
Specified Acquisitions, except for:
(A) Restricted Transactions for Terra and its Subsidiaries on a
Consolidated basis, in any fiscal year (the "Subject Fiscal Year") in
an aggregate amount
- 109 -
not exceeding the sum of (i) $150,000,000 plus (ii) for fiscal years
beginning January 1, 1996 and thereafter, the lesser of:
(x) an amount equal to the unused portion (if any) of the
amount available for Restricted Transactions pursuant to
paragraph (i) of this Section 5.02(h)(A) for the prior fiscal
year (provided that this clause (x) shall be determined, with
respect to all periods prior to the Restatement Date, as provided
in the Existing Credit Agreement); and
(y) $100,000,000;
provided that, at the time of each Other Distribution, the amount of
such Other Distribution shall reduce (but not below zero) the amount
remaining available for Restricted Transactions pursuant to this
clause (A) for the then-current fiscal year by the amount of such
Other Distribution; and
(B) Capital Expenditures in connection with the construction of
the Ammonia Loop in an aggregate amount not exceeding $60,000,000.
(i) Change in Nature of Business. Make, or permit any of its
Material Subsidiaries to make, any material change in the nature of the
business of Terra and its Subsidiaries taken as a whole as carried on at
the Restatement Date.
(j) Charter Amendments. Amend, or permit any of its Material
Subsidiaries to amend, its articles of incorporation or bylaws, or amend
any partnership agreement to which it or any of its Subsidiaries is a party
(except for (1) amendments to authorize the issuance of preferred or common
stock and (2) in the case of BMLP, the amendment and restatement of its
agreement of limited partnership at the BMLP Restructuring Time), in each
case to the extent any such amendment could reasonably be expected to have
a Material Adverse Effect.
(k) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles in effect in the United States; provided that in the
event of any change in generally accepted accounting principles from the
date of the financial statements referred to in Section 4.01(f) and upon
delivery of any
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financial statement and accompanying certificate of compliance required to
be furnished under subsections (b) and (c) of Section 5.03, Terra shall
deliver to the Lenders a statement of reconciliation conforming any
information contained in such financial statement and a certificate of
compliance required to be furnished pursuant to subsections (b) and (c) of
Section 5.03 with GAAP (it being understood that compliance with financial
covenants herein shall be measured and determined on the basis of GAAP).
(l) Amendment of Sale of Business Agreement, Etc. Consent to or
accept any cancellation or termination of the Sale of Business Agreement or
the Ammonium Nitrate Hedging Agreement, amend, modify or change in any
manner any material term or condition thereof, waive any default under or
any breach of any material term or condition thereof, agree in any manner
to any other amendment, modification or change of any material term or
condition thereof, or cancel or terminate the Sale of Business Agreement,
in each case without the prior consent of the Lenders.
(m) Certain Obligations Respecting Subsidiaries. Enter into, or
permit any of its Subsidiaries (other than a Receivables Subsidiary) to
enter into, after the Restatement Date, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the declaration or payment of dividends
or the making of loans or advances to or Investments in or the sale,
assignment, transfer or other disposition of property to Terra or any
Subsidiary thereof (other than a Receivable Subsidiary); provided that:
(1) Terra and its Subsidiaries (whether or not Receivables
Subsidiaries) may include in Permitted Receivables Facilities
provisions substantially to the effect of those attached as Exhibit A
to Consent and Amendment No. 2 to the Existing Credit Agreement, dated
as of July 31, 1996;
(2) the BMLP Partnership Agreement (and the certificates of
incorporation of Subsidiaries of BMLP) may restrict such actions by
BMLP and its Subsidiaries;
(3) the Terra Canada Credit Facility may restrict such actions
by Terra Canada and its Subsidiaries; and
(4) the Terra U.K. Loan Agreement may restrict such actions by
Terra U.K. and its Subsidiaries.
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(n) Subordinated Indebtedness. Purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness (other than Intercompany Debt) (and such Obligor
will not permit any of its Subsidiaries to do any of the foregoing), in
each case except for regularly scheduled payments of principal and interest
in respect thereof required pursuant to the instruments evidencing such
Subordinated Indebtedness, or amend the documentation creating or
evidencing such Subordinated Indebtedness.
(o) Transactions with Affiliates. Except to the extent otherwise
expressly permitted hereunder, enter into any transaction with any
Affiliate on terms less favorable than would pertain in a transaction
entered into with a third party on an arm's-length basis.
(p) Amendments to Management Agreements. Without the consent of the
Administrative Agent, amend, modify or change in any material respect the
terms or conditions of any Management Agreement.
(q) Margin Stock. Permit more than 25%, after applying the proceeds
of each Advance, of the value of the assets of either Borrower and such
Borrower's Subsidiaries (as determined in good faith by such Borrower) that
are subject to Section 5.02(a) or Section 5.02(e) to consist of or be
represented by Margin Stock.
(r) BMLP Purchase Option. Permit the Company to transfer or
otherwise assign (other than to Minorco or one of its Affiliates):
(x) any of its rights under Section 2.1 of the BMLP Support and
Option Agreement to purchase the Class A Limited Partnership Interest;
or
(y) any of its rights under Section 2.2 of the BMLP Support and
Option Agreement to purchase the "Nova Interests" referred to therein;
or
permit any Person other than the Company, Minorco or any of Minorco's
Affiliates to be the "Class A Purchaser" or "Nova Purchaser" pursuant to
Section 2.1 or 2.2, respectively, of the BMLP Support and Option Agreement.
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Section 5.03. Reporting Requirements. So long as any principal of or
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder:
(a) Default Notice. Each Obligor will furnish to the Administrative
Agent, as soon as possible and in any event within five Business Days after
such Obligor knows or has reason to believe that a Default or Event of
Default has occurred (which Default or Event of Default is continuing on
the date of the following statement), a statement of the Senior Financial
Officer setting forth details of such Default or Event of Default and the
action that such Obligor has taken and proposes to take with respect
thereto.
(b) Quarterly Financials. As soon as available and in any event
within 60 days after the end of each of the first three quarters of each
fiscal year of Terra, Terra will furnish to the Administrative Agent, with
sufficient copies for each Lender and each Issuing Bank, a Consolidated
balance sheet of Terra and its Subsidiaries as of the end of such quarter
and Consolidated statements of income and cash flows of Terra and its
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period of
the preceding fiscal year in reasonable detail and duly certified (subject
to year-end audit adjustments) by the Senior Financial Officer as having
been prepared in accordance with GAAP, together with (i) a certificate of
said officer (A) stating that no Default or Event of Default has occurred
and is continuing or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action that Terra
has taken and proposes to take with respect thereto, (B) stating that since
December 31, 1996, there has been no Material Adverse Change with respect
to Terra and (C) providing a comparison between the financial position and
results of operations set forth in such financial statements with the
comparable information set forth in the financial projections and budget
most recently delivered pursuant Section 5.03(l) of the Existing Credit
Agreement or Section 5.03(l) and (ii) a schedule in form satisfactory to
the Administrative Agent of the computations used by Terra in determining
compliance with the covenants contained in Section 5.04.
(c) Annual Financials. As soon as available and in any event within
110 days after the end of each fiscal year
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of Terra, Terra will furnish to the Administrative Agent, with sufficient
copies for each Lender and each Issuing Bank, a copy of the annual audit
report for such year for Terra and its Subsidiaries, including therein a
Consolidated balance sheet of Terra and its Subsidiaries as of the end of
such fiscal year and Consolidated statements of income and cash flows of
Terra and its Subsidiaries for such fiscal year, setting forth in each case
in comparative form the corresponding figures for the preceding fiscal year
accompanied by an unqualified opinion of Deloitte & Touche or other
independent public accountants of nationally recognized standing stating
that, except as expressly disclosed therein, said Consolidated financial
statements present fairly, in all material respects, the Consolidated
financial position and results of operations of Terra and its Consolidated
Subsidiaries as of the last day of, and for, such fiscal year, together
with (i) a certificate of such accounting firm to the Lenders stating that
in the course of the regular audit of the business of Terra and its
Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default or Event of Default has occurred
and is continuing, or if, in the opinion of such accounting firm, a Default
or Event of Default has occurred and is continuing, a statement as to the
nature thereof (it being understood that said accountants shall have no
liability to the Administrative Agent, the Lenders or the Issuing Banks for
failure to obtain knowledge of any Default or Event of Default), (ii) a
schedule in form satisfactory to the Administrative Agent of the
computations used by such accountants in determining, as of the end of such
fiscal year, compliance with the covenants contained in Section 5.04 and
(iii) a certificate of the Senior Financial Officer (A) stating that no
Default or Event of Default has occurred and is continuing or, if a Default
or Event of Default has occurred and is continuing, a statement as to the
nature thereof and the action that Terra has taken and proposes to take
with respect thereto, (B) stating that since December 31, 1996, there has
been no Material Adverse Change with respect to Terra and (C) providing a
comparison between the financial position and results of operations set
forth in such financial statements with the comparable information set
forth in the financial projections and budget most recently delivered
pursuant to Section 5.03(l) of the Existing Credit Agreement or Section
5.03(l).
(d) ERISA Events. Promptly and in any event within 10 Business Days
after any Obligor knows or has reason to know that any ERISA Event
(including, for this purpose, a
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reportable event listed in Section 4043(c)(7) of ERISA) with respect to any
Obligor or any of its ERISA Affiliates has occurred, Terra will furnish to
the Administrative Agent a statement of the Senior Financial Officer
describing such ERISA Event and the action, if any, that such Obligor or
such ERISA Affiliate has taken and proposes to take with respect thereto.
(e) Plan Terminations. Promptly and in any event within 10 Business
Days after receipt thereof by any Obligor or any of its ERISA Affiliates,
such Obligor will furnish to the Administrative Agent copies of each notice
from the PBGC stating its intention to terminate any Plan of any Obligor or
any of its ERISA Affiliates or to have a trustee appointed to administer
any such Plan.
(f) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, each Obligor
will furnish to the Administrative Agent copies of such Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of each Obligor or any of its ERISA Affiliates that is
then being maintained for employees or former employees of such Person.
(g) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Obligor or any of its ERISA
Affiliates from the sponsor of a Multiemployer Plan of any Obligor or any
of its ERISA Affiliates, such Obligor will furnish to the Administrative
Agent copies of each notice concerning (i) the imposition of withdrawal
liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan or (iii) the amount of liability incurred, or that is
reasonably expected to be incurred, by such Obligor or any of its ERISA
Affiliates in connection with any event described in clause (i) or (ii).
(h) Litigation. Promptly after the commencement thereof, Terra will
furnish to the Administrative Agent notice of all actions, suits,
investigations, litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, affecting any Obligor or any of its Subsidiaries of the type
described in Section 4.01(h).
(i) Environmental Conditions. Promptly after receiving notice
thereof, Terra will furnish to the Administrative Agent notice of any
condition or occurrence
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on any property of any Obligor that results in a material noncompliance by
any Obligor or any of its Subsidiaries with any Environmental Law or
Environmental Permit which noncompliance could reasonably be expected to
have a Material Adverse Effect, or could (i) form the basis of an
Environmental Action against any Obligor or any of its Subsidiaries or such
property that could reasonably be expected to have a Material Adverse
Effect or (ii) cause any such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law
that could reasonably be expected to have Material Adverse Effect.
(j) Public Filings. Terra shall, promptly upon their becoming
available, deliver to the Administrative Agent, each Issuing Bank and each
Lender copies of all registration statements and regular periodic reports,
if any, that Terra, the Company or TNCLP shall have filed with the
Securities and Exchange Commission (or any governmental agency substituted
therefor) or any national securities exchange.
(k) Shareholder Reports, Etc. Terra shall deliver to the
Administrative Agent, each Issuing Bank and each Lender promptly upon the
mailing thereof to the shareholders of Terra or TNCLP generally or to
holders of Subordinated Indebtedness or 1995 Terra Debt generally, copies
of all financial statements and proxy statements so mailed.
(l) Financial Projections and Budget. As soon as available and in
any event within 110 days after the first day of each fiscal year of Terra,
Terra will furnish to the Administrative Agent, with sufficient copies for
each Lender and each Issuing Bank, financial projections and a budget for
such fiscal year and each subsequent fiscal year of Terra to and including
the fiscal year in which the Terra Commitment Termination Date is scheduled
to occur, in each case in form and detail similar to the financial
projections and budget delivered under Section 5.03(l) of the Existing
Credit Agreement.
(m) Other Information. Each Obligor shall furnish to the Lenders
through the Administrative Agent such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Obligor or any of its Subsidiaries as the
Administrative Agent, any Issuing Bank or any Lender may from time to time
reasonably request.
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Section 5.04. Financial Covenants. So long as any principal of or
interest on any Advance or any other amount payable under this Agreement shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, Terra will:
(a) Debt to Cash Flow Ratio. Maintain the Debt to Cash Flow Ratio at
not more than the ratio set forth below for each Rolling Period ending in
the respective periods set forth below:
Each
Rolling Period
Ending In Ratio
-------------- -----
March and December 3.00 to 1.00
of each fiscal year
June and September 3.50 to 1.00
of each fiscal year
(b) Adjusted Debt to Cash Flow Ratio. Maintain the Adjusted Debt to
Cash Flow Ratio at not more than the ratio set forth below for each Rolling
Period ending in the respective periods set forth below:
Each
Rolling Period
Ending In Ratio
-------------- -----
March and December 3.00 to 1.00
of each fiscal year
June and September 3.50 to 1.00
of each fiscal year
(c) Interest Coverage Ratio. Maintain the Interest Coverage Ratio
for each Rolling Period at not less than 3.50 to 1.00.
(d) Adjusted Interest Coverage Ratio. Maintain the Adjusted Interest
Coverage Ratio for each Rolling Period at not less than 3.50 to 1.00.
(e) Net Worth. Maintain the Net Worth of Terra on each day of not
less than (i) $550,000,000 plus (ii) the aggregate increase in the amount
of capital stock and additional paid-in capital of Terra subsequent to the
Restatement Date plus (iii) 50% of net income of Terra and its Subsidiaries
on a Consolidated basis (if positive) for
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each fiscal year of Terra ending on or after December 31, 1997.
(f) Adjusted Net Worth. Maintain Adjusted Net Worth on each day of
not less than (i) $250,000,000 plus (ii) the aggregate increase in the
amount of capital stock and additional paid-in capital of Terra subsequent
to the Restatement Date plus (iii) 50% of net income (if positive) of the
Adjusted Terra Group on a Consolidated basis for each fiscal year of Terra
ending on or after December 31, 1997.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) either Borrower (i) shall fail to pay when due any principal of
any Advance made to it or (ii) shall fail for three Business Days to pay
when due any interest on any Advance made to it or any other amount payable
by it under any Loan Document; or
(b) any representation or warranty made by any Obligor (or any of its
officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) any Obligor shall fail to perform or observe any term, covenant
or agreement contained in clause (o) of Section 5.01, or clause (a), (b),
(c), (d), (e), (g), (i), (q) or (r) of Section 5.02, or clause (a), (e) or
(i) of Section 5.03, or Section 5.04; or
(d) Terra shall fail to pay and perform its obligations under the
Loan Purchase Agreement; or
(e) any Obligor shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for a period of 30 days;
or
(f) any Obligor or any of its Material Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal or notional amount
of at least $10,000,000 in the aggregate (but excluding Debt outstanding
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hereunder) of such Obligor or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder or
holders (or an agent or trustee on its or their behalf) thereof to cause,
such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; or
(g) any Obligor or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Obligor or any of its Material Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Obligor or any of its Material Subsidiaries
shall take any corporate or partnership action to authorize any of the
actions set forth above in this subsection (g); or
(h) any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any Obligor
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or any of its Material Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, unless such judgment or order shall have
been vacated, satisfied or dismissed or bonded pending appeal; or
(i) any non-monetary judgment or order shall be rendered against any
Obligor or any of its Subsidiaries that could be reasonably likely to have
a Material Adverse Effect, and there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect unless such
judgment or order shall have been vacated, satisfied, discharged or bonded
pending appeal; or
(j) any Security Document shall for any reason (other than pursuant
to the terms hereof and thereof) cease to create a valid and perfected
first priority Lien (subject only to Permitted Liens) on the Collateral
purported to be covered thereby; or
(k) Minorco ceases to own, directly or indirectly, at least 20% of
the issued and outstanding shares of voting capital stock of Terra; or
Minorco ceases to hold, directly or indirectly, a plurality of the issued
and outstanding shares of capital stock of Terra; or
(l) any ERISA Event shall have occurred with respect to a Plan of any
Obligor or any of its ERISA Affiliates and the amount (determined as of the
date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the Insufficiency of any and all other Plans of the Obligors and their
ERISA Affiliates with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Obligors and their ERISA Affiliates
related to such ERISA Event) could reasonably be expected to have a
Material Adverse Effect; provided that with respect to any Multiple
Employer Plan, such Insufficiency shall include only the portion thereof
attributable to such Obligor or its ERISA Affiliates; or
(m) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that it has incurred withdrawal liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Obligors
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and their ERISA Affiliates as withdrawal liability (determined as of the
date of such notification), could reasonably be expected to have a Material
Adverse Effect; or
(n) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate annual
contributions of the Obligors and their ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount that could reasonably be expected to have a
Material Adverse Effect; or
(o) there shall have been asserted against Terra or any of its
Subsidiaries an Environmental Claim that, in the judgment of the Required
Lenders, is reasonably likely to be determined adversely to Terra or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by Terra or any of its Subsidiaries but after
deducting any portion thereof that is reasonably expected to be paid by
other creditworthy Persons); or
(p) any Notice Event (other than the Notice Event set forth in clause
(a) of the definition thereof) shall occur under the BMLP Partnership
Agreement and such Notice Event shall not be cured (or deemed cured) or
waived within 30 days (with the term "Notice Event" having the meaning
assigned to such term in the BMLP Partnership Agreement);
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the obligation of each Lender to make Advances and of each Issuing Bank
to issue Letters of Credit to be terminated, whereupon the same shall forthwith
terminate (and this clause (i) shall also be applicable if there shall occur a
Purchase Event), and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrowers, declare the Advances and the
Notes, all interest thereon and all other amounts payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon the
Advances and the Notes, all such interest and all such amounts shall become and
be forthwith due and payable,
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without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrowers; provided that in the event of an
actual or deemed entry of an order for relief with respect to any Obligor or any
of its Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of
each Lender to make Advances and of any Issuing Bank to issue Letters of Credit
shall automatically be terminated and (y) the Advances and the Notes, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrowers.
Section 6.02. Actions in Respect of the Letters of Credit Upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, irrespective of whether it is taking any of the
actions described in Section 6.01 or otherwise, make demand upon the Borrowers
to, and forthwith upon such demand the Borrowers will, pay to the Administrative
Agent on behalf of the Lenders in same day funds at the Administrative Agent's
Office, for deposit in the relevant L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding,
which funds shall be retained by the Administrative Agent in the relevant L/C
Collateral Account as collateral security for the Letter of Credit Liabilities
until such time as the Letters of Credit shall have been terminated and all of
such Letter of Credit Liabilities paid in full.
If at any time the Administrative Agent determines that any funds held
in the relevant L/C Cash Collateral Account are subject to any right or claim of
any Person other than the Administrative Agent and the Lenders or that the total
amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrowers will, forthwith upon demand by the Administrative
Agent, pay to the Administrative Agent, as additional funds to be deposited and
held in the relevant L/C Cash Collateral Account, an amount equal to the excess
of (a) such aggregate Available Amount over (b) the total amount of funds, if
any, then held in such L/C Cash Collateral Account that the Administrative Agent
determines to be free and clear of any such right and claim.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action. Each Lender and each Issuing
Bank hereby appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Basic Documents as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for by the Basic Documents, including, without limitation, enforcement or
collection of the Notes, the Administrative Agent shall not be required to
exercise any discretion or take any action, and shall not be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) except upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of the Notes;
provided that the Administrative Agent shall not be required to take any action
that exposes it to personal liability or that is contrary to this Agreement or
applicable law. The Administrative Agent agrees to give to each Issuing Bank and
each Lender prompt notice of each notice given to it by the Borrowers or Terra
pursuant to the terms of this Agreement.
Each Lender and Issuing Bank:
(1) hereby authorizes the Administrative Agent to execute and deliver
the Intercreditor Agreement, and each Lender and Issuing Bank agrees that,
upon such execution and delivery, it will be bound thereby as if such
Lender or Issuing Bank, as the case may be, were a signatory thereto;
(2) hereby authorizes the Administrative Agent to execute and deliver
the Loan Purchase Agreement, and each Lender and Issuing Bank agrees that,
upon such execution and delivery, it will be bound thereby as if such
Lender or Issuing Bank, as the case may be, were a signatory thereto; and
(3) hereby authorizes the Collateral Agent to execute and deliver
each of the Security Documents and the Intercreditor Agreement.
Section 7.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Basic Documents, except for its or their
own
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gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent (i) may treat the payee of any Note as
the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
9.07; (ii) may consult with legal counsel (including counsel for any Obligor),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by them in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Issuing Bank or any Lender and shall not be
responsible to any of them for any statements, warranties or representations
made in or in connection with the Loan Documents; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of any Loan Document on the part of any Obligor
or to inspect the property (including the books and records) of any Obligor; (v)
shall not be responsible to any Issuing Bank or any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Basic Document or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of any Basic
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy, cable or telex) believed by it to
be genuine and signed or sent by the proper party or parties.
Section 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Citibank shall
have the same rights and powers under the Basic Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent or the
Collateral Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Citibank in its individual capacity. Citibank and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures for, accept investment banking engagements from and generally engage
in any kind of business with, any Obligor, any of its Subsidiaries, any of its
Affiliates and any Person who may do business with or own securities of any
Obligor or any such Subsidiary or Affiliate, all as if Citibank were not the
Administrative Agent and without any duty to account therefor to the Lenders or
any Issuing Bank.
Section 7.04. Lender Credit Decision. Each Lender and each Issuing
Bank acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any other Lender and based on the
financial statements referred to in Section 4.01 and such other documents and
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information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and each Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
Section 7.05. Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not promptly reimbursed by the Borrowers),
ratably according to the principal amounts of the Notes then held by each of
them (or if no Advances are at the time outstanding, ratably according to the
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against any of them in any way relating to or
arising out of the Basic Documents or any action taken or omitted by any of them
under the Basic Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent. Without limitation
of the foregoing, each Lender agrees to reimburse (x) the Administrative Agent
promptly upon demand for its ratable share of any costs and expenses payable by
the Borrowers under Section 9.04 of this Agreement and (y) the Collateral Agent
under the Security Documents, in each case to the extent that the Administrative
Agent or the Collateral Agent, as the case may be, is not promptly reimbursed
for such costs and expenses by the Borrowers.
Section 7.06. Collateral Duties.
-----------------
(a) Except for action expressly required of the Administrative Agent
hereunder and under the other Basic Documents, the Administrative Agent shall in
all cases be fully justified in refusing to act hereunder and thereunder unless
it shall be further indemnified to its satisfaction by the Lenders and the
Issuing Banks proportionately in accordance with the Obligations then due and
payable to each of them against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.
(b) Except as expressly provided herein, the Administrative Agent
shall have no duty to take any affirmative steps with respect to the collection
of amounts payable in
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respect of the Collateral. The Administrative Agent shall incur no liability as
a result of any private sale of the Collateral.
(c) The Lenders and the Issuing Banks hereby consent, and agree upon
written request by the Collateral Agent or the Administrative Agent to execute
and deliver such instruments and other documents as the Collateral Agent or
Administrative Agent may deem desirable to confirm such consent, to the release
of the Liens on any of the Collateral, including any release in connection with
any sale, transfer or other disposition of the Collateral or any part thereof in
accordance with the Basic Documents.
(d) The parties hereto acknowledge that each of the Collateral Agent
and the Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent or the Administrative Agent, as the case may be, accords its
own property, it being understood that none of the Collateral Agent, the
Administrative Agent, any Lender or any Issuing Bank shall have responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not the Collateral Agent, Administrative Agent, any Lender or any
Issuing Bank has or is deemed to have knowledge of such matters, or (b) taking
any necessary steps to preserve rights against any parties with respect to any
Collateral.
Section 7.07. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving written notice thereof to the Issuing
Banks, the Lenders and the Borrowers and may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint (subject, so long as no Default
or Event of Default has occurred and is continuing, to the consent of the
Borrowers, which consent shall not be unreasonably withheld) a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the Administrative Agent, as the
case may be, then the retiring Administrative Agent may, on behalf of the
Issuing Banks and the Lenders, appoint (subject, so long as no Default or Event
of Default has occurred and is continuing, to the consent of the Borrowers,
which consent shall not be unreasonably withheld) a successor Administrative
Agent, which shall be an Initial Lender or a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and
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surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Administrative
Agent, as the case may be, and such retiring Administrative Agent shall be
discharged from its duties and obligations under the Basic Documents. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to the
benefit of the Administrative Agent as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement and under the
Security Documents.
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee.
-------------
(a) The Terra Guarantors hereby jointly and severally guarantee to
each Lender, each Issuing Bank and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Terra Advances made by the Lenders to, and the Notes held by each Lender of, the
Company and all other amounts from time to time owing to the Lenders, each
Issuing Bank or the Administrative Agent by the Company under this Agreement and
under the Notes and by any Terra Obligor under any of the other Loan Documents,
in each case strictly in accordance with the terms thereof (such obligations
being herein collectively called the "Terra Guaranteed Obligations"). The Terra
Guarantors hereby further jointly and severally agree that if the Company shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Terra Guaranteed Obligations, the Terra Guarantors will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Terra
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
(b) The TNLP Guarantors hereby jointly and severally guarantee to
each Lender, each Issuing Bank and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on
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the TNLP Advances made by the Lenders to, and the Notes held by each Lender of,
TNLP and all other amounts from time to time owing to the Lenders, each Issuing
Bank or the Administrative Agent by TNLP under this Agreement and under the
Notes and by any TNLP Obligor under any of the other Loan Documents, in each
case strictly in accordance with the terms thereof (such obligations being
herein collectively called the "TNLP Guaranteed Obligations"). The TNLP
Guarantors hereby further jointly and severally agree that if TNLP shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the TNLP Guaranteed Obligations, the TNLP Guarantors will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the TNLP Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
Section 8.02. Obligations Unconditional.
-------------------------
(a) The obligations of the Terra Guarantors under Section 8.01 are
absolute and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Company under this Agreement, the Notes or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Terra Guaranteed Obligations, and,
to the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 8.02 that the obligations of the Terra Guarantors hereunder shall be
absolute and unconditional, joint and several, under any and all circumstances.
(b) The obligations of the TNLP Guarantors under Section 8.01 are
absolute and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of TNLP
under this Agreement, the Notes or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the TNLP Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 8.02 that the obligations of the TNLP Guarantors hereunder shall be
absolute and unconditional, joint and several, under any and all circumstances.
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(c) Without limiting the generality of the foregoing clauses (a) and
(b), it is agreed that the occurrence of any one or more of the following shall
not alter or impair the liability of the Guarantors hereunder which shall remain
absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent, any Issuing Bank or any Lender as security for any of
the Guaranteed Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent, any Issuing Bank or any Lender exhaust any right, power or remedy or
proceed against either Borrower under this Agreement or the Notes or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
Section 8.03. Reinstatement. The obligations of the Guarantors under
this Article VIII shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the relevant Borrower in respect
of the relevant Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the relevant Guaranteed Obligations, whether as
a result of any proceedings in bankruptcy or reorganization or otherwise, and
the relevant Guarantors jointly and severally agree that they will indemnify the
Administrative Agent, each Issuing Bank and each Lender on demand for all
reasonable costs and expenses (including, without
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limitation, fees of counsel) incurred by the Administrative Agent, such Issuing
Bank or such Lender in connection with such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
Section 8.04. Subrogation. To the extent that, as a result of this
Article VIII, any Lender or Issuing Bank would be subject to an extended
preference period under Section 547 of the Bankruptcy Code, each Guarantor
hereby waives all rights of subrogation, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Bankruptcy Code) or otherwise, by reason of any payment by it pursuant to
the provisions of this Article VIII and agrees with the relevant Borrower for
the benefit of each of its creditors (including, without limitation, each
Lender, each Issuing Bank and the Administrative Agent) that any such payment by
it shall constitute a contribution of capital by such Guarantor to the relevant
Borrower (or an investment in the equity capital of the relevant Borrower by
such Guarantor).
Section 8.05. Remedies. The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders and the Issuing Banks, the
obligations of the Borrowers under this Agreement and the Notes may be declared
to be forthwith due and payable as provided in Article VI (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Article VI) for purposes of Section 8.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the relevant Borrower
and that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or not due
and payable by the relevant Borrower) shall forthwith become due and payable by
the Guarantors for purposes of said Section 8.01.
Section 8.06. Instrument for the Payment of Money. Each Guarantor
hereby acknowledges that the guarantee in this Article VIII constitutes an
instrument for the payment of money, and consents and agrees that any Lender,
any Issuing Bank or the Administrative Agent, at its sole option, in the event
of a dispute by such Guarantor in the payment of any moneys due hereunder, shall
have the right to bring motion-action under New York CPLR Section 3213.
Section 8.07. Continuing Guarantee. The guarantee in this Article
VIII is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
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Section 8.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Portion (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 8.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Article VIII and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 8.08, (i) "Excess Funding Guarantor"
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Portion of such Guaranteed
Obligations, (ii) "Excess Payment" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Portion of such Guaranteed Obligations and (iii) "Pro Rata Portion" shall
mean, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x)
the amount by which the aggregate present fair saleable value of all properties
of such Subsidiary Guarantor (excluding any shares of stock of any other
Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of
such Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Restatement Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Restatement Date, then for purposes of this Section 8.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Restatement Date and the aggregate present fair saleable
value of the properties, and the amount of
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the debts and liabilities, of such Subsidiary Guarantor as of the Restatement
Date shall be deemed to be equal to such value and amount on the date such
Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
Section 8.09. General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 8.01
would otherwise, taking into account the provisions of Section 8.08, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under said
Section 8.01, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by such
Guarantor, any Lender, any Issuing Bank, the Administrative Agent or any other
Person, be automatically limited and reduced to the highest amount that is valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc.
(a) No amendment or waiver of any provision of this Agreement, the
Notes or the other Basic Documents, nor any consent to any departure by any
Obligor from any provision of this Agreement, the Notes or the other Basic
Documents, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that:
(i) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following:
(1) waive any of the conditions specified in Section 3.01;
(2) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number or percentage
of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder;
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(3) amend this Section 9.01;
(4) reduce the principal of, or interest on, the Notes or any
fees or other amounts payable hereunder;
(5) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder
or amend Section 2.03 or 2.05;
(6) release any Guarantor from its obligations under Article
VIII; or
(7) amend, modify or supplement the Intercreditor Agreement;
(ii) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each Lender that would be adversely
affected by such amendment, waiver or consent:
(1) increase the Commitment of such Lender or subject such
Lender to any additional obligations;
(2) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such
Lender;
(3) postpone any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender or
(4) change the order of application of any prepayment set forth
in Section 2.05 in any manner that materially affects such Lender; and
(iii) no amendment, waiver or consent shall, unless in writing and
(x) signed by the Administrative Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement, any Note or any other Basic
Document, and (y) signed by each Issuing Bank in addition to the Lenders
required to take such action, amend Section 2.07, 2.13 or 3.02, increase
the Letter of Credit Sublimit or otherwise affect the rights or obligations
of any Issuing Bank under this Agreement.
(b) Except as otherwise provided in the Security Documents or the
Intercreditor Agreement, the Administrative
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Agent shall not consent to release any Collateral or terminate any Lien under
any Security Document unless such release or termination shall be consented to
in writing by Lenders owed or holding in the aggregate at least 75% of the sum
of the then aggregate unpaid principal amount of the Advances, the then
aggregate Unused Commitments and the aggregate Available Amount of all Letters
of Credit (for which purposes the Available Amount of each Letter of Credit
shall be considered to be owed to the relevant Lenders according to their
respective Pro Rata Shares of the Facility under which such Letter of Credit has
been issued); provided that:
(1) the consent of all Lenders shall be required to release all or
substantially all of the Collateral, except upon the termination of the
Liens created by each of the Security Documents in accordance with the
terms thereof;
(2) no such consent shall be required to release any Lien covering
property that is the subject of a disposition of property permitted
hereunder (including, without limitation, dispositions of Receivables
pursuant to the Permitted Receivables Facilities) and, upon such a
permitted disposition, such property shall be deemed to be transferred free
and clear of the Lien of the Security Documents without any action on the
part of any party (and the Administrative Agent is hereby authorized to
execute such releases and other documents, and to take such other action,
as the Company may reasonably request to give effect thereto); and
(3) no such consent shall be required to release the Liens under the
Security Documents covering property of BMLP and its Subsidiaries upon the
occurrence of the BMLP Restructuring and, upon the BMLP Restructuring, all
property of BMLP shall be deemed to be released from the Lien of the
Security Documents without any action on the part of any party (and each of
the Collateral Agent and the Administrative Agent are hereby authorized to
execute such releases and other documents, and to take such other action,
as the Company may reasonably request to give effect thereto).
Section 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopy communication)
and mailed, telecopied or delivered:
(a) if to the Borrowers, care of Terra Industries Inc., ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice
President and Chief Financial
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Officer, telephone number (▇▇▇) ▇▇▇-▇▇▇▇; telecopier number (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to any Initial Lender, at its Domestic Lending Office
specified opposite its name on Schedule 2.01;
(c) if to any other Lender, at its Domestic Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender;
(d) if to any Issuing Bank, at its address beneath its signature
hereto;
(e) if to the Administrative Agent, at its address at ▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ (or his
successor), telephone number (▇▇▇) ▇▇▇-▇▇▇▇, telecopier number (302) 894-
6120;
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed or telecopied, be effective when deposited in the mails or
transmitted by telecopier, respectively, except that notices and communications
to the Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
Lender, any Issuing Bank or the Administrative Agent to exercise, and no delay
in exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Administrative Agent, any Issuing Bank or any Lender relating in any way to this
Agreement should be dismissed or stayed by reason, or pending the resolution, of
any action or proceeding commenced by any Obligor relating in any way to this
Agreement whether or not commenced earlier. To the fullest extent permitted by
applicable law, the Obligors shall take all measures necessary for any such
action or proceeding commenced by the Administrative Agent, any Issuing Bank or
any Lender to proceed to judgment prior to the entry of judgment in any such
action or proceeding commenced by any Obligor.
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Section 9.04. Costs, Expenses and Indemnification.
-----------------------------------
(a) Each Borrower agrees to pay on demand (i) all costs and expenses
of the Administrative Agent, the Issuing Banks and the Lenders in connection
with the preparation, execution, delivery, administration, modification and
amendment of the Basic Documents including, without limitation, (A) all due
diligence, syndication (including printing, distribution and bank meetings),
transportation, computer, duplication, appraisal, insurance, consultant, search,
filing and recording fees and expenses, ongoing audit expenses and all other
reasonable out-of-pocket expenses incurred by the Administrative Agent
(including the reasonable and documented fees and expenses of Milbank, Tweed,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel to Citibank, but not, under this clause (A) or
clause (B) below, of any other counsel) whether or not any of the transactions
contemplated by this Agreement are consummated, (B) the reasonable and
documented fees and expenses of counsel for the Administrative Agent with
respect thereto, with respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Basic Documents, and (C) with respect to
negotiations with any Obligor or with other creditors of any Obligor or any of
its Subsidiaries arising out of any Default or Event of Default or any events or
circumstances that may reasonably be expected to give rise to a Default or Event
of Default and with respect to presenting claims in or otherwise participating
in or monitoring any bankruptcy, insolvency or other similar proceeding
involving creditors' rights generally and any proceeding ancillary thereto) and
(ii) all costs and expenses of the Administrative Agent, the Issuing Banks and
the Lenders in connection with the enforcement of the Basic Documents, whether
in any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable and documented fees and expenses of counsel
for the Administrative Agent, each Issuing Bank and each Lender with respect
thereto).
(b) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Issuing Bank and each Lender and each of their
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with the Covered Transactions or the actual
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or alleged presence of Hazardous Materials on any property owned by an Obligor
or any Environmental Action relating in any way to any Obligor or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Obligor, its directors, shareholders or creditors
or an Indemnified Party or any Indemnified Party is otherwise a party thereto
and whether or not the Covered Transactions or the other transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. Each Borrower also agrees not to assert
any claim against the Administrative Agent, any Issuing Bank, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Covered Transactions or any part thereof or the other transactions contemplated
herein or in any other Basic Document or the actual or proposed use of the
proceeds of the Advances. For purposes of this Section 9.04(b), the term "non-
appealable" includes any judgment as to which all appeals have been taken or as
to which the time for taking an appeal shall have expired.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by a Borrower to or for the account of a relevant Lender
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.03, 2.05, 2.08(b)(i) or 2.09(d)
or as the result of acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, such Borrower shall, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) If any Obligor fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
reasonable and documented fees and expenses of counsel and indemnities, such
amount may be paid on behalf of such Obligor by the Administrative Agent or any
Lender, in its sole discretion.
Section 9.05. Right of Setoff. Upon (a) the occurrence and during
the continuance of any Event of Default and
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(b) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and otherwise apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of each
Borrower against any and all of the Obligations of such Borrower now or
hereafter existing under this Agreement and the Note held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the relevant Borrower after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that such Lender may have.
Section 9.06. Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the law of the State of New York. Each Obligor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Obligor irrevocably
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 9.07. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more banks or other entities all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing to
it and the Note or Notes held by it); provided that:
(i) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender or an affiliate of a Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitments of the assigning Lender being
assigned pursuant to each such assignment (determined as of
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the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (x) such Lender's Commitments
hereunder and (y) $5,000,000 or an integral multiple of $1,000,000 in
excess thereof (except as otherwise agreed by the relevant Borrower and the
Administrative Agent),
(ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender or an affiliate of a Lender, each
such assignment shall be made only upon the prior written approval of the
relevant Borrower, the Administrative Agent and each Issuing Bank, such
approval not to be unreasonably withheld,
(iii) each such assignment shall be to an Eligible Assignee,
(iv) each such assignment by a Lender of its Advances, Commitment or
Note under any Facility shall be made in such manner so that the same
portion of its Advances, Commitment and Note under such Facility is
assigned to the respective assignee,
(v) each such assignment by a Lender of its Advances, Commitments and
Notes shall be made in such a manner so that the same portion of its Terra
Advances, TNLP Advances, Terra Commitment, TNLP Commitment, Terra Note and
TNLP Note is assigned to the respective assignee, and
(vi) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to
such assignment and a processing and recordation fee of $3,000.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
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(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Obligor
or the performance or observance by the Obligors of any of their respective
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at its address referred to in Section 9.02 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Advances owing under each Facility
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
Borrowers, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. No assignment shall be effective until it is recorded in the
Register pursuant to this Section 9.07(c). The Register shall be available for
inspection
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by the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit F
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers. Within five Business Days after its receipt of such notice, the
relevant Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note or
Notes to the order of such assignee in an amount equal to the portion of the
Facilities assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a portion of such Facilities, a new Note or Notes
to the order of the assigning Lender in an amount equal to the portion so
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1 and
A-2, as the case may be.
(e) Each Lender may sell participations in or to all or a portion of
its rights and/or obligations under this Agreement (including, without
limitation, all or a portion of its Commitments or the Advances owing to it and
the Note or Notes held by it); provided that (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Obligors, the Administrative Agent, the Issuing Banks and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Basic Document, or any consent to any departure
by any Obligor therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to
- 141 -
such participation, or release all or substantially all of the Collateral.
(f) Any Issuing Bank may (subject to the prior written consent of
Terra, such consent not to be unreasonably withheld) assign all or any portion
of its rights and obligations under this Agreement to one or more successor
Issuing Banks that is a commercial bank organized under the laws of the United
States, or any state thereof, and having total assets in excess of
$1,000,000,000 and, upon the acceptance of such assignment, the respective
successor Issuing Banks shall succeed to such portion of such rights and
obligations and such assigning Issuing Bank shall be discharged from its duties
and obligations under this Agreement to such extent, including, without
limitation, such portion of its Letter of Credit Commitment.
(g) Any Issuing Bank and any Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.07, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree in writing to preserve the confidentiality of any Confidential
Information received by it from such Issuing Bank or Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
(i) Anything in this Section 9.07 to the contrary notwithstanding,
each Lender shall be permitted to pledge all or any part of its right, title and
interest in, to and under the Advances and Notes held by it to any trustee for
the benefit of the holders of such Lender's securities.
(j) Anything in this Section 9.07 to the contrary notwithstanding,
neither Terra nor any of its Subsidiaries or Affiliates may acquire (whether by
assignment, participation or otherwise), and no Lender or Issuing Bank shall
assign or participate to Terra or any of its Subsidiaries or Affiliates, any
interest in any Commitment, Advance or other amount owing hereunder without the
prior consent of each Lender; provided that the Lenders and the Issuing Banks
may assign all of their
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interests in the Commitments, Advances and such other amounts pursuant to the
Loan Purchase Agreement.
Section 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.09. No Liability of the Issuing Banks. Each Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
relevant Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
relevant Borrower shall have a claim against such Issuing Bank, and such Issuing
Bank shall be liable to such Borrower, to the extent of any direct, but not
consequential, damages suffered by such Borrower that such Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) such Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 9.10. Confidentiality. Neither the Administrative Agent, any
Issuing Bank nor any Lender shall disclose any Confidential Information to any
Person without the prior consent of the Company, other than (a) to the
Administrative Agent's, such Issuing Bank's or such Lender's Affiliates and
their officers, directors, employees, agents and
- 143 -
advisors (including independent auditors and counsel) and to actual or
prospective assignees and participants, and then only on a confidential basis,
(b) as required by any law, rule or regulation or judicial process, (c) as
requested or required by any state, federal or foreign authority or examiner
regulating or having authority over Lenders or the Lenders' respective
activities and (d) in connection with credit inquiries from suppliers of the
Borrowers and/or their Subsidiaries and other Persons who, from time to time,
inquire as to the creditworthiness of the Borrowers.
Section 9.11. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING BANKS HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY
OF THE BASIC DOCUMENTS, THE ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF
THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY ISSUING BANK IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 9.12. Survival. The obligations of the Borrowers under
Sections 2.09, 2.11 and 9.04, the obligations of each Guarantor under Section
8.03, and the obligations of the Lenders under Section 7.05, shall survive the
repayment of the Advances and the termination of the Commitments. In addition,
each representation and warranty made, or deemed to be made by a notice of any
extension of credit (whether by means of an Advance or a Letter of Credit),
herein or pursuant hereto shall survive the making of such representation and
warranty, and no Lender or Issuing Bank shall be deemed to have waived, by
reason of making any extension of credit hereunder (whether by means of an
Advance or a Letter of Credit), any Default or Event of Default that may arise
by reason of such representation or warranty proving to have been false or
misleading, notwithstanding that such Lender, such Issuing Bank or the
Administrative Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time such
extension of credit was made.
Section 9.13. Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
Section 9.14. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided that no Obligor may assign any of its
rights or obligations hereunder or under the other Basic Documents without
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the prior consent of all of the Lenders, the Issuing Banks and the
Administrative Agent.
Section 9.15. NationsBank Assignments. By its signature below,
NationsBank, N.A. hereby acknowledges and agrees that it has, as of the date
hereof (but prior to the amendment and restatement provided for hereby),
acquired all of the "Advances" and "Commitments" of ▇▇▇▇▇▇▇'▇ National Bank and
NationsBank of Texas, N.A. outstanding under the Existing Credit Agreement. By
their signatures below, the Company and the Administrative Agent hereby
acknowledge their consent to such assignment.
- 145 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWERS
-------------
TERRA CAPITAL, INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
TERRA NITROGEN, LIMITED PARTNERSHIP
By Terra Nitrogen Corporation, its General
Partner
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President
GUARANTORS
----------
TERRA INDUSTRIES INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Senior Vice President
TERRA CAPITAL HOLDINGS, INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
TERRA NITROGEN CORPORATION
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
- 146 -
TERRA METHANOL CORPORATION
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
BMC HOLDINGS, INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
TERRA INTERNATIONAL INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Senior Vice President
THE ADMINISTRATIVE AGENT
------------------------
CITIBANK, N.A.
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Managing Director
THE ISSUING BANKS
-----------------
CITIBANK, N.A.
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Managing Director
- 147 -
THE LENDERS
-----------
CITIBANK, N.A.
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Attorney-in-Fact
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/F.C.H. ▇▇▇▇▇
-----------------------------------
Title: Senior Manager Loan Operations
THE CHASE MANHATTAN BANK
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
ARAB BANKING CORPORATION
By /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Deputy General Manager
- 148 -
CREDIT AGRICOLE INDOSUEZ
By /s/W. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: First Vice President
By /s/▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: First Vice President,
Head of Corporate Banking
Chicago
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
By /s/W. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
CREDIT LYONNAIS CHICAGO BRANCH
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/Michiel V.M. van der Voort
----------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
- 149 -
FIRST BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
THE FUJI BANK, LIMITED
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Joint General Manager
NATIONSBANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Assistant Treasurer
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President Structured
Finance
BANQUE NATIONALE DE PARIS
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President and Manager
- 150 -
RETIRING LENDERS
----------------
MELLON BANK, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Banking Officer