EXHIBIT 5.1
[LETTERHEAD OF KIRKLAND & ELLIS]
, 2002
Terra Capital, Inc.
and each of the Guarantors
of the Exchange Notes
Terra Centre
600 Fourth Street, P.O. Box 6000
Sioux City, Iowa 51102
Re: Registration Statement on Form S-4, Registration No. 333-73198
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Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special legal
counsel to Terra Capital, Inc., a Delaware corporation (the "Issuer"), and each
of the other guarantors listed on Schedule A hereto (such guarantors are
hereinafter referred to as the "Guarantors" and the Guarantors, together with
the Issuer, are hereinafter referred to as the "Registrants"), in connection
with the proposed registration by the Issuer of $200,000,000 in aggregate
principal amount of the Issuer's 12 7/8% Senior Secured Notes due 2008, Series B
(the "Exchange Notes"), pursuant to a Registration Statement on Form S-4
(Registration No. 333-73198) originally filed with the Securities and Exchange
Commission (the "Commission") on November 13, 2001, under the Securities Act of
1933, as amended (the "Act") (such Registration Statement, as amended or
supplemented, is hereinafter referred to as the "Registration Statement"). The
obligations of the Issuer under the Exchange Notes will be guaranteed by the
Guarantors (the "Guarantees"). The Exchange Notes and the Guarantees are to be
issued pursuant to the Indenture (as amended and supplemented from time to time,
the "Indenture"), dated as of October 10, 2001, between the Issuer, the
Guarantors and US Bank Trust National Association, as trustee. The Exchange
Notes and the Guarantees are to be issued in exchange for and in replacement of
the Issuer's outstanding 12 7/8% Senior Secured Notes due 2008 (the "Old
Notes"), of which $200,000,000 in aggregate principal amount is outstanding.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the Articles of Incorporation and By-Laws of the
Registrants, (ii) minutes and records of the corporate proceedings of the
Registrants with respect to the issuance of the Exchange Notes and the
Guarantees, (iii) the Indenture, and (iv) the Registration Statement.
KIRKLAND & ELLIS
Terra Capital, Inc.
, 2002
Page 2
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of the
signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Registrants and the due authorization, execution
and delivery of all documents by the parties thereto other than the Registrants.
As to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Registrants and
others.
Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), and
(iii) public policy considerations which may limit the rights of parties to
obtain certain remedies.
Based upon and subject to the assumptions, qualifications, assumptions
and limitations and the further limitations set forth below, we are of the
opinion that when (i) the Registration Statement becomes effective, (ii) the
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended, and (iii) the Exchange Notes have been duly executed and authenticated
in accordance with the provisions of the Indenture and duly delivered to the
holders thereof in exchange for the Old Notes, the Exchange Notes and the
Guarantees will be validly issued and binding obligations of the Issuer and
Guarantors, respectively.
We hereby consent to the filing of this opinion with the commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of the State of New York, the General
Corporation Law of the State of Delaware and the Delaware case law decided
thereunder or the federal law of the United States, except that for purposes of
our opinion that the Exchange Notes and Guarantees will be validly issued and
binding obligations of the Issuer and the Guarantors, respectively, we have
concluded the Indenture has been duly authorized, executed and delivered and the
Exchange Notes and Guarantees have been duly
KIRKLAND & ELLIS
Terra Capital, Inc.
, 2002
Page 3
authorized by the Issuer and the Guarantors, respectively, based solely on a
review of the applicable state corporate statutes of the States of Iowa (with
respect to Terra Real Estate Corp.) and Maryland (with respect to Terra
Industries Inc.). We note that we are not admitted to practice in the States of
Iowa and Maryland and, as such, our conclusions as to due authorization,
execution and delivery are based solely on our review of the provisions of the
above referenced state corporate statutes as such statutes relate to the
Registrants without regard to regulations promulgated thereunder or any judicial
interpretations thereof.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the States of New York or Delaware or the federal law of the United
States be changed by legislative action, judicial decision or otherwise.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Sincerely,
/s/ KIRKLAND & ELLIS
Kirkland & Ellis
KIRKLAND & ELLIS
Terra Capital, Inc.
, 2002
Page 4
SCHEDULE A
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Beaumont Ammonia Inc.
Beaumont Holdings Corporation
BMC Holdings Inc.
Port Neal Corporation
Terra (UK) Holdings Inc.
Terra Capital Holdings, Inc.
Terra Industries Inc.
Terra International (Oklahoma) Inc.
Terra International Inc.
Terra Methanol Corporation
Terra Nitrogen Corporation
Terra Real Estate Corp.