Exhibit 4.5
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 12, 1995
among
TERRA CAPITAL, INC.
and
TERRA NITROGEN, LIMITED PARTNERSHIP,
as Borrowers
CERTAIN GUARANTORS
CERTAIN LENDERS
CERTAIN ISSUING BANKS
and
CITIBANK, N.A.,
as 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................................ 37
Section 1.03. Accounting Terms........................................... 38
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01. The Advances............................................... 38
Section 2.02. Making the Advances........................................ 42
Section 2.03. Repayment.................................................. 44
Section 2.04. Termination or Reduction of the Working
Capital Commitments....................................... 45
Section 2.05. Prepayments................................................ 46
Section 2.06. Interest................................................... 49
Section 2.07. Fees....................................................... 49
Section 2.08. Conversion and Continuation of Advances.................... 51
Section 2.09. Increased Costs, Illegality, Etc........................... 52
Section 2.10. Payments and Computations.................................. 54
Section 2.11. Taxes...................................................... 56
Section 2.12. Sharing of Payments, Etc................................... 59
Section 2.13. Letters of Credit.......................................... 60
Section 2.14. Replacement of Lender...................................... 65
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Amendment and
Restatement................................................ 67
Section 3.02. Conditions Precedent to Each Borrowing
and Issuance............................................... 70
Section 3.03. Determinations Under Section 3.01........................... 70
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the
Company.................................................... 70
Section 4.02. Representations and Warranties of each
Lender..................................................... 77
(i)
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ARTICLE V
COVENANTS OF TERRA
Section 5.01. Affirmative Covenants...................................... 77
Section 5.02. Negative Covenants......................................... 84
Section 5.03. Reporting Requirements..................................... 94
Section 5.04. Financial Covenants........................................ 98
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default.......................................... 100
Section 6.02. Actions in Respect of the Letters of
Credit Upon Default....................................... 104
ARTICLE VII
THE AGENT
Section 7.01. Authorization and Action................................... 104
Section 7.02. Agent's Reliance, Etc...................................... 105
Section 7.03. Citibank and Affiliates.................................... 106
Section 7.04. Lender Credit Decision..................................... 106
Section 7.05. Indemnification............................................ 106
Section 7.06. Collateral Duties.......................................... 107
Section 7.07. Successor Agent............................................ 107
ARTICLE VIII
THE GUARANTEE
Section 8.01. The Guarantee.............................................. 108
Section 8.02. Obligations Unconditional.................................. 109
Section 8.03. Reinstatement.............................................. 110
Section 8.04. Subrogation................................................ 111
Section 8.05. Remedies................................................... 111
Section 8.06. Instrument for the Payment of Money........................ 111
Section 8.07. Continuing Guarantee....................................... 112
Section 8.08. Rights of Contribution..................................... 112
Section 8.09. General Limitation on Guarantee
Obligations............................................... 113
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Consents, Etc.................................. 113
Section 9.02. Notices, Etc............................................... 114
Section 9.03. No Waiver; Remedies........................................ 115
Section 9.04. Costs, Expenses and Indemnification........................ 115
Section 9.05. Right of Setoff............................................ 117
Section 9.06. Governing Law; Submission to
Jurisdiction.............................................. 118
Section 9.07. Assignments and Participations............................. 118
(ii)
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Section 9.08. Execution in Counterparts.................................. 122
Section 9.09. No Liability of the Issuing Banks.......................... 122
Section 9.10. Confidentiality............................................ 123
Section 9.11. WAIVER OF JURY TRIAL....................................... 123
Section 9.12. Survival................................................... 123
Section 9.13. Captions................................................... 124
Section 9.14. Successors and Assigns..................................... 124
SCHEDULES
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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 5.01(o) Hedge Agreements
SCHEDULE 5.02(a)(iii) Existing Liens
SCHEDULE 5.02(b)(xii) Terms for 1995 Terra Debt
SCHEDULE 5.02(f) Existing Investments
EXHIBITS
--------
EXHIBIT A-1 Form of Terra Facility A Note
EXHIBIT A-2 Form of Terra Facility B Note
EXHIBIT A-3 Form of Terra Working Capital
Facility Note
EXHIBIT A-4 Form of TNLP Working Capital
Facility Note
EXHIBIT B-1 Form of Holdings Pledge Agreement
EXHIBIT B-2 Form of Terra Capital Pledge Agreement
EXHIBIT B-3 Form of Subsidiary Pledge and Security
Agreement
EXHIBIT B-4 Form of TNLP Pledge and Security
Agreement
EXHIBIT B-5 Form of Amendment to Security
Documents
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D Form of Opinion of Special Counsel
for the Obligors
EXHIBIT E-1 Form of Loan Purchase Agreement
EXHIBIT E-2 Form of Amendment to Loan Purchase Agreement
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Provisions Relating to Certain Investments
(iii)
CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 12, 1995 among:
(1) TERRA CAPITAL, INC., a Delaware corporation (the "Company");
(2) TERRA NITROGEN, LIMITED PARTNERSHIP, a Delaware limited partnership
formerly known as Agricultural Minerals, 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 "Agent") for the Lenders and the
Issuing Banks hereunder.
PRELIMINARY STATEMENTS:
(1) The Company, Terra, TNLP, certain Guarantors, the Initial Lenders,
the Issuing Banks and the Agent are parties to a Credit Agreement dated as of
October 20, 1994 (as heretofore amended to and in effect on the Restatement
Date, as hereinafter defined, the "Existing Credit Agreement") providing,
subject to the terms and conditions thereof, for the making of working capital
and term advances to, and the issuance of letters of credit for the account of,
the Company and for the making of working capital and term advances to, and the
issuance of letters of credit for the account of, TNLP.
(2) The parties hereto wish to amend the Existing Credit Agreement, among
other things, (a) to reflect the prepayment in full of the "AMLP Facility A
Advances" and the reduction of the "AMLP Facility B Commitments" outstanding
thereunder, (b) to reflect the prepayment in full of the "Terra Facility C
Advances" outstanding thereunder, (c) to combine the "Terra Facility A Advances"
and "Terra Facility D Advances" into one term credit facility hereunder, (d) to
permit certain reorganization transactions herein described, and (e) to make
certain other changes to the Existing Credit Agreement and the other Loan
Documents, all on the terms and conditions set forth herein, it being the
intention of the parties hereto that the advances and letters of credit
outstanding under the Existing
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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 in its
entirety as follows:
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):
"Acquisition Amount" means, for any fiscal year of Terra, $15,000,000;
provided, that the Acquisition Amount for any such fiscal year shall
automatically be increased to $50,000,000 from and after the Trigger Date.
"Advance" means any Terra Facility A Advance, Terra Facility B Advance
or Working Capital 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.
"Agent" has the meaning specified in the recital of parties to this
Agreement.
"Agent's Account" means the account of the Agent maintained by the
Agent at its office at 1 Court Square, Long Island City, New York 11120,
Account No. 368-52248, Attention: Larry Benison (or his successor), or such
other account maintained by the Agent as may be designated by the Agent in
a written notice to the Lenders, each Issuing Bank and the Borrowers.
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"Allowance for Projected Common Dividends" means, for purposes of the
definition of "Specified Payments", the following respective amounts for the
following respective fiscal years of Terra:
Fiscal Year Allowance
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1995 $10,000,000
1996 $13,000,000
1997 $17,000,000
1998 $20,000,000
1999 and each
fiscal year
thereafter $23,000,000
"Allowance for Working Capital Increases/Decreases" means, for purposes of
the definition of "Excess Cash Flow", the following respective amounts for the
following respective fiscal years of Terra:
Fiscal Year Allowance
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1995 $15,000,000
1996 $25,000,000
1997 $25,000,000
1998 and each
fiscal year
thereafter $30,000,000
"AMCI" means Agricultural Minerals and Chemicals Inc., a corporation merged
into Terra prior to the Restatement Date.
"AMCI Senior Note Indenture" means the Indenture dated as of October 15,
1993 between Terra (as successor to AMCI) and Society National Bank, as Trustee,
providing for the issuance of the AMCI Senior Notes, as from time to time
amended.
"AMCI Senior Notes" mean the 10-3/4% senior notes of Terra (as successor to
AMCI) due 2003 issued pursuant to the AMCI Senior Note Indenture.
"Applicable Commitment Fee Rate" means 0.50% per annum; provided, that, if
for any Rolling Period ending after the first anniversary of the Closing Date
the Debt to Cash Flow Ratio for such Rolling Period shall be less than or equal
to 2.50 to 1, then, subject to the delivery to the Agent of a certificate of the
Senior Financial Officer demonstrating the same prior to the end of the next
succeeding fiscal quarter, the "Applicable Commitment Fee Rate" shall be
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reduced to 0.375% per annum during the period commencing on the Quarterly Date
on or immediately following the date of the Agent's receipt of such certificate
until the next succeeding Quarterly Date thereafter.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Letter of Credit Fee Rate" means, at any time, a rate per annum
equal to the Applicable Margin for Eurodollar Rate Advances (other than Terra
Facility B Advances) in effect at such time.
"Applicable Margin" means, (a) (i) with respect to all Base Rate Advances
(other than Terra Facility B Advances), 1.00% per annum and (ii) with respect to
all Eurodollar Rate Advances (other than Terra Facility B Advances), 2.00% per
annum; provided, that the Applicable Margin with respect to all Base Rate
Advances and Eurodollar Rate Advances (in each case other than Terra Facility B
Advances) shall, from the Restatement Date until the Quarterly Date falling in
April, 1996, be 0.50% per annum (in the case of such Base Rate Advances) and
1.50% per annum (in the case of such Eurodollar Rate Advances); and provided,
further, that if for any Rolling Period ending after the first anniversary of
the Closing 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 Agent of a certificate of the Senior Financial Officer
demonstrating the same prior to the end of the next succeeding fiscal quarter,
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 Quarterly Date on or
immediately following the date of the Agent's receipt of such certificate 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 1.00% 2.00%
Less than or equal to
3.00 to 1 and greater
than 2.50 to 1 0.50% 1.50%
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Less than or equal to
2.50 to 1 and greater
than 2.00 to 1 0.25% 1.25%
Less than or equal to
2.00 to 1 0.00% 1.00%
(b) with respect to Terra Facility B Advances (i) that are Base Rate
Advances, 1.50% per annum and (ii) that are Eurodollar Rate Advances, 2.50% per
annum.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the 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).
"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 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
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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 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 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).
"BMCH" means BMC Holdings, Inc., a Delaware corporation and wholly owned
Subsidiary of the Company.
"BMLP" means Beaumont Methanol, Limited Partnership, a Delaware limited
partnership and wholly owned Subsidiary of the Company.
"BMLP Transaction Date" means December 30, 1994.
"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 any Facility, such reference shall be
deemed to refer (a) in the case of any Term Facility or the Terra Working
Capital Facility, to the Company, and (b) in the case of the TNLP Working
Capital 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 399 Park Avenue, New York,
New York 10043, Account No. 4065-6098, and (b) in the case of TNLP, the account
of TNLP maintained with Citibank at its office at 399 Park Avenue, New York, New
York 10043, 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 Agent.
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"Borrowing" means a Terra Facility A Borrowing, a Terra Facility B
Borrowing and a Working Capital Borrowing.
"Bridge Indebtedness" means any Debt incurred by the Company under Section
5.02(b)(xiii).
"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.
"Cash Interest Expense" means, with respect to Terra and its Subsidiaries
on a Consolidated basis, 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 Terra and its
Subsidiaries on a Consolidated basis 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
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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.
"Change in Non-Cash Working Capital" means, for any period, the non-cash
working capital of Terra and its Subsidiaries on a Consolidated basis as at the
last day of such period minus the non-cash working capital of Terra and its
Subsidiaries on a Consolidated basis as at the first day of such period (which
difference may be positive or negative), but excluding in each case customer
deposits and prepayments.
"Citibank" means Citibank, N.A., a national banking association.
"Closing Date" means October 20, 1994.
"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 Agent, the Lenders and the Issuing Banks.
"Confidential Information" means information identified as such that Terra
or any of its Subsidiaries furnishes to the Agent, any Issuing Bank or any
Lender, but does not include any such information once such information has
become generally available to the public or once such information has become
available to the 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 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.
Credit Agreement
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"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.
"Current Assets" of any Person means, on any date, all assets of such
Person on such date that would, in accordance with GAAP, be classified as
current assets of a company conducting a business the same as or similar to that
of such Person, after deducting adequate reserves in each case in which a
reserve is proper in accordance with GAAP.
"Current Liabilities" of any Person, on any date, means the following
(determined in accordance with GAAP): (a) all Debt (other than Funded Debt) of
such Person on such date, (b) all amounts of Funded Debt of such Person required
to be paid or prepaid within one year after such date and (c) all other items
(including taxes accrued as estimated) that in accordance with GAAP would be
classified as current liabilities of such Person on such date; provided, that
the term "Current Liabilities" shall not include Obligations under Hedge
Agreements.
"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
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Obligations, contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities (other than Obligations in respect of letters of
credit referred to in clause (b) of this definition), (g) all Obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Redeemable capital stock, which Obligations shall be valued at
the greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, (i) all Debt of others referred to in clauses (a) through (h) above
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to assure
a creditor against loss, and (j) all Debt referred to in clauses (a) through (i)
above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Debt.
"Debt to Capital Ratio" means, on any date, the ratio of (i) Funded Debt of
Terra and its Subsidiaries on a Consolidated basis on such date to (ii) Total
Capital of Terra and its Subsidiaries on a Consolidated basis on such date.
"Debt to Cash Flow Ratio" means, for any period, the ratio of (i) Funded
Debt of Terra and its Subsidiaries on a Consolidated basis as of the last day of
such period to (ii) EBITDA of Terra and its Subsidiaries on a Consolidated basis
for such period. For purposes of computing the Debt to Cash Flow Ratio for any
period ending on or prior to the first anniversary of the Closing Date, EBITDA
for such period shall be calculated giving pro forma effect to the merger of
AMCI with and into Terra as if such merger had occurred on the first day of such
period.
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"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 to another Obligor or by any
Obligor 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 Terra or of any warrants, options or other rights to acquire the same
(or to make any payment to any Person, such as "phantom stock" payments, where
the amount thereof is calculated with reference to the fair market or equity
value of Terra, the Company or any of their Subsidiaries, other than any such
payment made in the ordinary course of business of such Person in connection
with an executive compensation plan approved by the Board of Directors of such
Person), but excluding dividends payable solely in shares of common stock of
Terra or 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 Agent.
"EBITDA" means the following, determined in accordance with GAAP for Terra
and its Subsidiaries on a Consolidated basis, for any period: 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,
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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 Agent and the Company, such approval of the Company not to be
unreasonably withheld or delayed.
"Environmental Action" means any administrative, regulatory or judicial
suit, demand, demand letter, claim, notice of non-compliance or violation,
consent order or consent agreement relating in any way to any violation of or
liability under any Environmental Law or any Environmental Permit, including
without limitation (a) any claim by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any Environmental Law, (b) any claim by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to the environment and (c) any notice by any
governmental or regulatory authority alleging that Terra or any of its
Subsidiaries is or may be responsible for, or is a potentially responsible party
with respect to, any cleanup, removal, response, remedial or other actions or
damages pursuant to any Environmental Law.
"Environmental Law" means any federal, state or local governmental law,
rule, regulation, order, writ, judgment, injunction or decree relating to
pollution or protection of the environment or the treatment, storage, disposal,
release, threatened release or handling of Hazardous Materials, including,
without limitation, CERCLA, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
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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.
"Equity Issuance" means (a) any issuance or sale by Terra or any of its
Subsidiaries after the Closing Date of (i) any capital stock (including, without
limitation, New Terra Equity), (ii) any warrants or options exercisable in
respect of capital stock (other than any warrants or options issued to
directors, officers or employees of Terra or any of its Subsidiaries pursuant to
employee benefit plans established in the ordinary course of business and any
capital stock of Terra issued upon the exercise of such warrants or options) or
(iii) any other security or instrument representing an equity interest (or the
right to obtain any equity interest) in Terra or any of its Subsidiaries or (b)
the receipt by Terra or any of its Subsidiaries after the Closing Date of any
capital contribution (whether or not evidenced by any equity security issued by
the recipient of such contribution); provided, that the term "Equity Issuance"
shall not include (x) any such issuance or sale by any Subsidiary of Terra to
Terra or to any wholly owned Subsidiary of Terra or (y) any capital contribution
by Terra or any wholly owned Subsidiary of Terra to any Subsidiary of Terra.
"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(b)(7) of ERISA; (b) the provision by the administrator of any Plan of such
Person or any of its ERISA Affiliates of a notice of intent to terminate such
Plan, pursuant to Section 4041(c)
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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 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 Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
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The Eurodollar Rate for each Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing shall be determined by the Agent on the
basis of applicable rates furnished to and received by the 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.
"Excess Cash Flow" means, for any fiscal year of Terra, determined in
accordance with GAAP for Terra and its Subsidiaries on a Consolidated basis:
(a) EBITDA for such fiscal year, minus
(b) the sum of
(i) Cash Interest Expense plus
(ii) minority interest payments for such fiscal year (other than
any such payments constituting the purchase, redemption or other
acquisition of Senior Preference Units), plus
(iii) the aggregate amount of Capital Expenditures made by Terra
or any of its Subsidiaries during such fiscal year (but not exceeding
the amount permitted to be made in such
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fiscal year pursuant to Section 5.02(h)) plus (or, if negative, minus)
(iv) the Change in Non-Cash Working Capital (but not exceeding
the applicable Allowance for Working Capital Increase/Decreases) for
such fiscal year, plus
(v) the aggregate amount of Specified Payments in such fiscal
year plus
(vi) scheduled payments of principal of Debt of Terra and its
Subsidiaries in such fiscal year plus
(vii) cash taxes paid by Terra and its Subsidiaries in such
fiscal year plus
(viii) the aggregate amount of all optional prepayments of Term
Advances made pursuant to Section 2.05(a) during such fiscal year,
provided, that, unless the Required Lenders otherwise agree, each such
optional prepayment is applied to the Advances in the manner specified
in Section 2.05(c), plus
(ix) for purposes of determining Excess Cash Flow for the fiscal
year ending December 31, 1995, the aggregate amount of all optional
prepayments of "Terra Facility C Advances" and "AMLP Facility A
Advances" (each as defined in the Existing Credit Agreement) made
pursuant to Section 2.05(a) of the Existing Credit Agreement during
the fiscal year ending December 31, 1994 or the fiscal year ending
December 31, 1995.
"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.
"Existing Credit Agreement" has the meaning specified in the Preliminary
Statements to this Agreement.
"Facility" means Terra Facility A, Terra Facility B or a Working Capital
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day
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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 Agent from three Federal funds brokers of recognized standing selected by
it.
"Fee Letter" means the letter agreement dated April 28, 1995 between Terra
and Citibank.
"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 Working Capital Advances, plus
(c) the aggregate amount of all Letters of Credit to the extent of unreimbursed
drawings thereunder; provided, that 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
provided, further, that 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).
"Guaranteed Obligations" means the Terra Guaranteed Obligations and the
TNLP Guaranteed Obligations.
"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
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(c) any other substance exposure to which is regulated under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity future or option agreements and other
similar agreements designed to hedge against fluctuations in interest rates,
foreign exchange rates or commodity prices, including, without limitation, the
Methanol Hedging Agreement.
"Holdings Pledge Agreement" means a Pledge Agreement in the form of Exhibit
B-1 hereto between Terra Capital Holdings and the Agent, as from time to time
amended.
"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 valuation for such
Plan, calculated using the actuarial methods, factors and assumptions used in
such valuation.
"Interest Coverage Ratio" means, for any Rolling Period for which such
ratio is to be determined, the ratio of (i) EBITDA of Terra and its Subsidiaries
for the immediately preceding Rolling Period to (ii) Cash Interest Expense for
the Rolling Period for which such ratio is to be determined.
"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
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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 Agent not later than 10:00 A.M. (New
York City time) on the second Business Day prior to the first day of such
Interest Period, select; provided, that:
(a) the Company may not select any Interest Period that ends after
any Principal Payment Date for a Term Facility unless, after giving effect
to such selection, the aggregate principal amount of Base Rate Advances and
Eurodollar Rate Advances under such Facility having Interest Periods that
end on or prior to such Principal Payment Date shall be at least equal to
the principal amount of Advances under such Facility due and payable on or
prior to such Principal Payment Date;
(b) no Interest Period for any Working Capital Advance may end after
the relevant Working Capital Commitment Termination Date;
(c) Interest Periods commencing on the same date for Eurodollar Rate
Advances comprising part of the same Borrowing shall be of the same
duration;
(d) 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
(e) 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
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such Person or any other investment in such Person, including, without
limitation, (a) any arrangement pursuant to which the investor incurs Debt of
the types referred to in clauses (i) and (j) of the definition of "Debt" in
respect of such 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
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 outstanding Advances under such Facility
or, in the case of a Working Capital Facility, has a Working Capital Commitment
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, and
"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.
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"Loan Documents" means, collectively, this Agreement, the Notes, the
Security Documents and the Loan Purchase Agreement.
"Loan Purchase Agreement" means a Loan Purchase Agreement between the Agent
and Terra in the form of Exhibit E-1, as from time to time amended.
"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 entered
into after December 15, 1994 between the Company and certain of its Affiliates
providing for the performance by the Company of certain treasury, purchasing,
legal and/or other services for such Affiliates, 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 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;
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(B) each contract to which Terra or any of its Subsidiaries is a party
(a "Specified Party") that (a) provides for the provision of goods or
services by the Specified Party or the receipt of goods or services by the
Specified Party, (b) has a term of more than one year (unless such contract
may be cancelled at the sole option of another Person party to such
contract), (c) involves the payment or receipt by the Specified Party of
consideration having a fair market value in excess of $1,000,000 in any
fiscal year of Terra and (d) provides for either: (i) the provision of
goods or services to another Person that is obligated to purchase from the
Specified Party a specified quantity of such goods or services (but only to
the extent that, if such other Person did not purchase such quantity of
such goods or services, the Specified Party would not be readily able to
sell such goods or services at a price equal to or higher than the price
set in such contract) or (ii) the receipt of goods or services from another
Person that is obligated to supply to the Specified Party a specified
quantity of such goods or services (but only to the extent that, if such
other Person did not supply such quantity of such goods or services, the
Specified Party would not be readily able to purchase such goods or
services at a price less than or equal to the price set in such contract);
and
(C) each contract to which Terra or any of its Subsidiaries is a party
that, if such contract were to be terminated or the obligations of any
other Person party to such contract were to fail to be in full force and
effect, could reasonably be expected, either individually or in the
aggregate with any other such event, to have a Material Adverse Effect.
"Material Subsidiary" means any Subsidiary of Terra other than an
Immaterial Subsidiary.
"Merger Agreement" means the Merger Agreement dated as of August 8, 1994,
among Terra, AMCI Acquisition Corporation and AMCI, as from time to time
amended.
"Methanol Hedging Agreement" means the Methanol Hedging Agreement dated as
of the Closing Date between BMLP (as successor to Beaumont Methanol Corporation)
and Morgan Stanley Leveraged Equity Fund II, as Agent, as from time to time
amended.
"Minorco" means Minorco, a Luxembourg corporation, and its successors.
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"Minorco USA" means Minorco (U.S.A.) Inc., a Colorado corporation, 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, 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:
(i) in the case of any Disposition, the amount of Net Cash Payments
received in connection with such Disposition;
(ii) 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 Morgan Stanley
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 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 (x) the proceeds
of business interruption insurance shall not be deemed to be Net Available
Proceeds for purposes of this clause (ii) if and to the extent they are
otherwise included in the calculation of Excess Cash Flow for the relevant
period and (y) the proceeds of insurance received by Terra and its
Subsidiaries in connection with the December 13, 1994 Casualty Event at the
Port Neal Facility shall be deemed to be applied to the repair or
replacement of the Port Neal Facility if
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such proceeds are applied to the purchase of one or more Subsidiaries of
the Company, or any of their respective properties, as contemplated in the
definition of "Reorganization Transaction" in this Section 1.01;
(iii) in the case of any Equity Issuance, the aggregate amount of all
cash received by Terra and its Subsidiaries in respect of such Equity
Issuance net of reasonable expenses (including reasonable registration
fees, underwriting fees and discounts and similar expenses) incurred by
Terra and its Subsidiaries in connection therewith; and
(iv) in the case of any issuance of any New Terra Debt or 1995 Terra
Debt, the aggregate amount of all cash received by Terra and its
Subsidiaries in respect thereof net of reasonable expenses (including
reasonable registration fees, underwriting fees and discounts and exchange
offer expenses) incurred by Terra and its Subsidiaries in connection
therewith.
"Net Cash Payments" means, with respect to 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 (a) Net Cash Payments shall be
net of (i) 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 (ii) 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 (b) Net Cash Payments shall
be net of any repayments by Terra or any of its Subsidiaries of Debt to the
extent that (i) such Debt is secured by a Lien on the property that is the
subject of such Disposition and (ii) 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.
"Net Worth" means, at any time, the sum of the following for Terra 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).
Credit Agreement
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"New Terra Equity" means any convertible Preferred Stock or other equity
securities issued by Terra after the Closing Date, the proceeds of which are
used first to repay Bridge Indebtedness and, after payment in full of Bridge
Indebtedness, to prepay Term Advances pursuant to Section 2.05(b).
"1995 Terra Debt" means any Debt incurred by Terra under Section
5.02(b)(xii).
"Note" means a Terra Facility A Note, a Terra Facility B Note or a Working
Capital 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 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.
"Other Taxes" has the meaning specified in Section 2.11(b).
Credit Agreement
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"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 270 days from the date of acquisition
thereof, (b) certificates of deposit issued by, and repurchase and reverse
repurchase agreements 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 and whose
unsecured, unguaranteed long-term senior debt obligations are rated at least A
by Standard & Poor's Ratings Group and at least A2 by Moody's Investors Service,
Inc., maturing not more than 270 days from the date of acquisition thereof, (c)
commercial paper and variable rate demand notes, in each case rated A-1 or
better by Standard & Poor's Ratings Group and P-1 or better by Moody's Investors
Service, Inc. and maturing not more than 270 days from the date of acquisition
thereof, and
(d) 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 Ratings Group or less than A2 by
Moody's Investors Service, Inc.
"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 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,
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(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 Illinois,
successor to Continental Bank N.A., as agent, as from time to time amended, or
any replacement or refinancing thereof, and (b) 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, taken together, may not at any time exceed $150,000,000 plus
reasonable reserves.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock 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 Neal Facility" means TI's facility in Port Neal, Iowa.
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"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.
"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.
"Principal Payment Date" means any of the Terra Facility A Principal
Payment Dates and the Terra Facility B Principal Payment Dates.
"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
Working Capital Facility prior to the Working Capital Commitment Termination
Date for such Facility, the amount of such Lender's Working Capital Commitment
under such Facility), and the denominator of which is the aggregate Advances or
Working Capital Commitments, as the case may be, under such Facility at such
time, multiplied by (b) such amount.
"Purchase Event" means that for any fiscal year of Terra, the aggregate
amount of Dividend Payments with respect to the capital stock of the Company
exceeds the sum of (a) the aggregate amount of Specified Payments plus (b) 50%
of the portion of Excess Cash Flow for the prior fiscal year that is not
required to be applied to the prepayment of Advances.
"Quarterly Dates" means January 20, April 20, July 20 and October 20 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.
"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 final Principal Payment Date hereunder, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control
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of the issuer or (b) is redeemable on any date prior to said final Principal
Payment Date at the option of the holder thereof.
"Reference Banks" means Citibank, Bank of America Illinois and NationsBank
of Texas, N.A. (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 Federal Reserve System, respectively, as in
effect from time to time.
"Related Document" means the Merger Agreement and the Methanol Hedging
Agreement.
"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 Working Capital 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 Working Capital Facility under which such Letter of Credit has been issued.
"Reorganization Transaction" means a corporate reorganization of one or
more Subsidiaries of the Company consummated prior to March 31, 1997, pursuant
to which TI will acquire, directly or through one or more intermediate
transactions, not less than 80% of the equity interests in TNC or any of its
Subsidiaries (or any of their respective successors), which reorganization shall
be subject to each of the following conditions:
(a) after giving effect to and at all times during the Reorganization
Transaction, the Agent, for its benefit and the benefit of the Lenders and
Issuing Banks, will hold security interests in all Collateral so held by
the Agent immediately prior to the Reorganization Transaction;
(b) none of Terra Capital Holdings, TMC, BMCH or BMLP shall be party
to any part of the Reorganization Transaction (except that Terra Capital
Holdings may receive capital contributions from Terra, and may make capital
contributions to one or more of its
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Subsidiaries, in connection with the Reorganization Transaction);
(c) no Obligor shall, after giving effect to the Reorganization
Transaction, be subject to 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, in each
case other than any such arrangement binding upon such Person immediately
prior to the Reorganization Transaction;
(d) no part of the Reorganization Transaction shall consist of the
sale of ownership interests in any Subsidiary of the Company to any Person
other than the Company or a Subsidiary of the Company;
(e) no part of the Reorganization Transaction shall have a Material
Adverse Effect; and
(f) the Obligors shall have delivered to the Agent such agreements,
instruments and other documents (including, without limitation, charter
documents, proof of corporate and other authority, certificates of officers
of the Obligors, amendments and supplements to Security Documents, Uniform
Commercial Code financing statements, legal opinions and evidence of all
necessary government and third-party consents, authorizations and
approvals) as the Agent may reasonably request in connection with the
Reorganization Transaction.
"Restatement Date" has the meaning assigned to such term in Section 3.01.
"Rolling Period" means any period of four consecutive fiscal quarters of
Terra.
"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
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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 the "Senior Preference Units" issued and
outstanding under, and as defined in, the Agreement of Limited Partnership dated
as of December 4, 1991 of TNCLP, as such Agreement of Limited Partnership is in
effect on the Restatement Date.
"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 Paydown Date" means the earliest date as of which the aggregate
outstanding principal amount of the Term Advances does not exceed $238,750,000.
"Specified Payments" means, for any fiscal year of Terra, (a) all interest
due and payable on the AMCI Senior Notes and on the 1995 Terra Debt (if any)
during such fiscal year, (b) all dividends paid on shares of common stock of
Terra during such fiscal year, and all payments made by Terra in respect of the
purchase, redemption, retirement or other acquisition of shares of common stock
of Terra during such fiscal year, in an aggregate amount, as to all such
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dividends and payments, not exceeding the Allowance for Projected Common
Dividends for such fiscal year, (c) all scheduled dividends on New Terra Equity
payable during such fiscal year, (d) all scheduled dividends payable during such
fiscal year on convertible Preferred Stock or other equity securities (other
than New Terra Equity) issued and applied to prepay the Advances, (e) ordinary
and necessary expenses incurred by Terra as a result of its operations as a
publicly-held holding company and (f) 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.
"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, trust or estate of which (or in which) more than 50% of (a) the issued
and outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such partnership or joint venture 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.
"Subsidiary Guarantor" means TNC, BMCH, TMC and BMLP and (from and after
the SPU Redemption Time) TNLP and its successors.
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"Subsidiary Pledge and Security Agreement" means a Pledge and Security
Agreement in the form of Exhibit B-3 hereto between certain of the Guarantors
and the Agent, as from time to time amended.
"Term Advances" means each of the Terra Facility A Advances and the Terra
Facility B Advances and "Term Facility" means each of Terra Facility A and Terra
Facility B.
"Terra" means Terra Industries Inc., a Maryland corporation and an indirect
parent of the Company.
"Terra Advance" means a Terra Facility A Advance, a Terra Facility B
Advance and a Terra Working Capital Advance.
"Terra Capital Holdings" means Terra Capital Holdings, Inc., a Delaware
corporation and the direct parent of the Company.
"Terra Capital Pledge Agreement" means a Pledge Agreement in the form of
Exhibit B-2 hereto between the Company and the Agent, as from time to time
amended.
"Terra Facility A" means the term credit facility provided hereunder in
respect of the Terra Facility A Advances, "Terra Facility A Advance" has the
meaning specified in Section 2.01(a) and "Terra Facility A Borrowing" means a
borrowing consisting of simultaneous Terra Facility A Advances of the same Type.
"Terra Facility A 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 Facility A Principal Payment Dates" means the Quarterly Dates
falling on or nearest to April 20 and October 20 of each year, commencing with
October 20, 1995 through and including October 20, 1999.
"Terra Facility B" means the term credit facility provided hereunder in
respect of the Terra Facility B Advances, "Terra Facility B Advance" has the
meaning specified in Section 2.01(b) and "Terra Facility B Borrowing" means a
borrowing consisting of simultaneous Terra Facility B Advances of the same Type.
"Terra Facility B Note" means a promissory note of the Company payable to
the order of a Lender, in substantially
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the form of Exhibit A-2 hereto, as from time to time amended.
"Terra Facility B Principal Payment Dates" means the Quarterly Dates
falling on or nearest to April 20 and October 20 of each year, commencing with
October 20, 1995 through and including October 20, 2001.
"Terra Guaranteed Obligations" has the meaning specified in Section 8.01.
"Terra Guarantors" means Terra, Terra Capital Holdings, TNC, TMC, BMCH,
BMLP and (from and after the SPU Redemption Time) TNLP and its successors.
"Terra L/C Cash Collateral Account" means each of the "Terra L/C Cash
Collateral Account" under the Terra Capital Pledge Agreement and the "Terra L/C
Cash Collateral Account" under the Subsidiary Pledge and Security Agreement.
"Terra Letter of Credit" means a letter of credit issued by an Issuing Bank
for account of the Company or any 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 Obligors" means the Terra Guarantors and the Company.
"Terra Working Capital Advance" means an Advance made or outstanding
pursuant to Section 2.01(c), "Terra Working
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Capital Borrowing" means a borrowing consisting of simultaneous Terra Working
Capital Advances of the same Type and "Terra Working Capital Commitment" has the
meaning specified in Section 2.01(c).
"Terra Working Capital Commitment Termination Date" means the earlier of
(a) October 20, 1999 (provided, that if such day is not a Business Day, the
Terra Working Capital Commitment Termination Date shall be the immediately
preceding Business Day), and (b) the termination or cancellation of the Terra
Working Capital Commitments pursuant to the terms of this Agreement.
"Terra Working Capital Facility" means the revolving credit facility
provided hereunder in respect of the Terra Working Capital Commitments.
"Terra Working Capital Facility Note" means a promissory note of the
Company payable to the order of a Lender, in substantially the form of Exhibit
A-3, 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 and a wholly
owned Subsidiary of the Company.
"TNC" means Terra Nitrogen Corporation, a Delaware corporation formerly
known as Agricultural Minerals Corporation and a wholly owned Subsidiary of the
Company.
"TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited partnership
formerly known as Agricultural and Minerals Company, L.P. and a Subsidiary of
the Company.
"TNLP Guaranteed Obligations" has the meaning specified in Section 8.01.
"TNLP Guarantors" means Terra, Terra Capital Holdings, the Company, TNC,
TMC, BMCH and BMLP.
"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.
Credit Agreement
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"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 Obligors" means the TNLP Guarantors and TNLP.
"TNLP Pledge and Security Agreement" means a Pledge and Security Agreement
in the form of Exhibit B-4 between TNLP and the Agent, as from time to time
amended.
"TNLP Working Capital Advance" means an Advance made or outstanding
pursuant to Section 2.01(d), "TNLP Working Capital Borrowing" means a borrowing
consisting of simultaneous TNLP Working Capital Advances of the same Type and
"TNLP Working Capital Commitment" has the meaning specified in Section 2.01(d).
"TNLP Working Capital Commitment Termination Date" means the earliest of
(a) October 20, 1999 (provided, that if such day is not a Business Day, the TNLP
Working Capital Commitment Termination Date shall be the immediately preceding
Business Day), (b) the termination or cancellation of the TNLP Working Capital
Commitments pursuant to the terms of this Agreement, and (c) the date on which
the SPU Redemption Time occurs.
"TNLP Working Capital Facility" means the revolving credit facility
provided hereunder in respect of the TNLP Working Capital Commitments.
"TNLP Working Capital Facility Note" means a promissory note of TNLP
payable to the order of a Lender, in substantially the form of Exhibit A-4, as
from time to time amended.
"Total Capital" means, on any date, the sum of (i) Funded Debt of Terra and
its Subsidiaries on a Consolidated basis on such date plus (ii) Net Worth of
Terra and its Subsidiaries on a Consolidated basis on such date.
"Trigger Date" means the earliest date as of which each of the following is
true:
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(a) the aggregate outstanding principal amount of the Term Advances
does not exceed $150,000,000; and
(b) the Debt to Cash Flow Ratio for the most recently completed four
fiscal quarters of Terra ending on or most recently ended prior to the date
of determination does not exceed 2.50 to 1.
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Terra Working Capital Commitment" means, with respect to any Lender
at any time, (a) such Lender's Terra Working Capital Commitment at such time
minus (without duplication) (b) the sum of (i) the aggregate outstanding
principal amount of all Terra Working Capital Advances made by such Lender and
(ii) such Lender's Pro Rata Share of the aggregate Available Amount of all Terra
Letters of Credit outstanding at such time and of all unreimbursed drawings
thereunder.
"Unused TNLP Working Capital Commitment" means, with respect to any Lender
at any time, (a) such Lender's TNLP Working Capital Commitment at such time
minus (without duplication) (b) the sum of (i) the aggregate outstanding
principal amount of all TNLP Working Capital Advances made by such Lender and
(ii) such Lender's Pro Rata Share of the aggregate Available Amount of all TNLP
Letters of Credit outstanding at such time and of all unreimbursed drawings
thereunder.
"U.S. Dollars" and "$" means lawful money of the United States of America.
"Working Capital Advance" means a Terra Working Capital Advance or a TNLP
Working Capital Advance, "Working Capital Borrowing" means a Terra Working
Capital Borrowing or a TNLP Working Capital Borrowing, "Working Capital
Commitment" means a Terra Working Capital Commitment or TNLP Working Capital
Commitment, "Working Capital Commitment Termination Date" means the Terra
Working Capital Commitment Termination Date or the TNLP Working Capital
Commitment Termination Date, and "Working Capital Facility" means the Terra
Working Capital Facility or the TNLP Working Capital Facility.
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".
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Section 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01. The Advances.
(a) Terra Facility A.
(i) On the Restatement Date, the "Terra Facility A Advance" and
"Terra Facility D Advance" of each Lender under the Existing Credit
Agreement shall automatically, without any action on the part of any
Person, be consolidated into one advance to the Company and shall be deemed
to be a Terra Facility A Advance hereunder for all purposes of this
Agreement (each, a "Terra Facility A Advance"). The principal amount of the
Terra Facility A Advance 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 Facility A Advances" and the aggregate principal amount
thereof as of the Restatement Date shall be $209,285,714.22.
(ii) The amount of any Terra Facility A Advance that is repaid or
prepaid may not be reborrowed.
(b) Terra Facility B.
(i) On the Restatement Date, the "Terra Facility B Advance" of each
Lender under the Existing Credit Agreement shall automatically, without any
action on the part of any Person, be deemed to be a Terra Facility B
Advance hereunder for all purposes of this Agreement (each, a "Terra
Facility B Advance"). The principal amount of the Terra Facility B Advance
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
Facility B Advances" and the aggregate principal amount thereof as of the
Restatement Date shall be $79,500,000.00.
(ii) The amount of any Terra Facility B Advance that is repaid or
prepaid may not be reborrowed.
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(c) Terra Working Capital Facility.
(i) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances ("Terra Working Capital Advances")
to the Company from time to time on any Business Day during the period from
the Restatement Date until the Terra Working Capital 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 Working Capital 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 Working Capital Commitment" (such
amount being such Lender's "Terra Working Capital Commitment"), and, as to
all Lenders, in an aggregate amount at any one time outstanding not to
exceed $200,000,000 (provided, that at all times prior to the SPU
Redemption Time the aggregate amount of the Terra Working Capital
Commitments shall be deemed to be reduced for all purposes hereof by the
aggregate amount of the TNLP Working Capital Commitments as in effect from
time to time). On the Restatement Date, all outstanding "Terra Facility E
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 Working Capital Advances hereunder. The aggregate principal amount
of the Terra Working Capital 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 Working Capital Advances".
(ii) The Terra Working Capital Advances shall be made by the Lenders
ratably according to their respective Terra Working Capital Commitments.
(iii) Within the limits of each Lender's Terra Working Capital
Commitment in effect from time to time, the Company may borrow under this
Section 2.01(c) 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(c); provided, that the aggregate outstanding principal amount
of Terra Working Capital Advances when added to the aggregate Terra Letter
of Credit Liability may not at any time exceed the aggregate amount of the
Terra Working Capital Commitments at such time.
(iv) The proceeds of the Terra Working Capital Advances shall be used
solely to finance the ongoing working capital needs of the Company and its
Subsidiaries (other than, prior to the SPU Redemption Time, TNLP and its
successors); provided, that:
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(x) if all or any portion of the proceeds of the issuance (if
any) of the 1995 Terra Debt not applied to the repayment of Bridge
Indebtedness shall be applied to repay Terra Working Capital Advances
under Section 2.05(a) during the fiscal year of Terra ending December
31, 1995 (the aggregate amount so applied to repay the Terra Working
Capital Advances being the "Application Amount"), proceeds of
subsequent Borrowings under the Terra Working Capital Facility
shall also be permitted to be used either (1) to finance the SPU
Redemption during such fiscal year or (2) to finance the prepayment of
Advances pursuant to Section 2.05(b)(v), in either case in an
aggregate amount not exceeding the Application Amount; and
(y) proceeds of Terra Working Capital Advances in an aggregate
amount not exceeding $40,000,000 (in addition to Terra Working Capital
Advances referred to in clause (x) above) may be used to finance the
SPU Redemption during the fiscal year of Terra ending December 31,
1995.
(v) Notwithstanding the foregoing provisions of Section 2.01(c), the
Company agrees that, for a period of 30 consecutive days during each period
of 12 consecutive months commencing on the date of the initial Terra
Working Capital Borrowing or the last day of the previous such 12-month
period and ending one year thereafter, no Terra Working Capital Borrowings
may be made or outstanding under this Section 2.01(c); provided, that this
Section 2.01(c)(v) shall not prevent the Company from requesting the
issuance of Terra Letters of Credit during any such period pursuant to
Section 2.13, or the Lenders from making Terra Working Capital Advances in
respect thereof pursuant to Section 2.13(c), which Terra Working Capital
Advances (subject to the other terms and conditions of this Agreement) may
remain outstanding during such period.
(d) TNLP Working Capital Facility.
(i) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances ("TNLP Working Capital Advances")
to TNLP from time to time on any Business Day during the period from the
Restatement Date until the TNLP Working Capital 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 Working Capital 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 Working Capital
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Commitment" (such amount being such Lender's "TNLP Working Capital
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 "AMLP Facility B 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 Working Capital Advances hereunder. The
aggregate principal amount of the TNLP Working Capital 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 Working Capital
Advances".
(ii) The TNLP Working Capital Advances shall be made by the Lenders
ratably according to their respective TNLP Working Capital Commitments.
(iii) Within the limits of each Lender's TNLP Working Capital
Commitment in effect from time to time, TNLP may borrow under this Section
2.01(d) 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(d);
provided, that the aggregate outstanding principal amount of TNLP Working
Capital Advances when added to the aggregate TNLP Letter of Credit
Liability may not at any time exceed the aggregate amount of the TNLP
Working Capital Commitments at such time.
(iv) The proceeds of the TNLP Working Capital Advances shall be used
solely to finance the ongoing working capital needs of TNLP.
(v) Notwithstanding the foregoing provisions of Section 2.01(d), TNLP
agrees that, for a period of 30 consecutive days during each period of 12
consecutive months commencing on the date of the initial TNLP Working
Capital Borrowing or the last day of the previous such 12-month period and
ending one year thereafter, no TNLP Working Capital Borrowings may be made
or outstanding under this Section 2.01(d); provided, that this Section
2.01(d)(v) shall not prevent TNLP from requesting the issuance of TNLP
Letters of Credit during any such period pursuant to Section 2.13, or the
Lenders from making TNLP Working Capital Advances in respect thereof
pursuant to Section 2.13(c), which TNLP Working Capital Advances (subject
to the other terms and conditions of this Agreement) may remain outstanding
during such period.
Credit Agreement
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(e) Minimum Amounts. Each Working Capital 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.
(f) No Responsibility to Third Parties. Neither the 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 Working
Capital 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 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 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 Working Capital Borrowing after the Restatement Date, make
available for the account of its Applicable Lending Office to the Agent at
the Agent's Account, in same day funds, such Lender's ratable portion of
such Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Agent will transfer same day funds to the relevant Borrower's Account;
provided, that (i) in the case of any Terra Working Capital Borrowing, the
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 Working Capital Borrowing, the Agent shall
first make a portion of such funds equal to any unreimbursed drawing
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under any TNLP Letter of Credit available to each Issuing Bank having
issued any such Letter of Credit for reimbursement of such drawing.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) 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 (x) 15
separate Interest Periods under either Working Capital Facility at any one
time and (y) three separate Interest Periods under either Term 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 Agent shall have received notice from a relevant
Lender prior to 12:00 Noon (New York City time) on the date of any Working
Capital Borrowing that such Lender will not make available to the Agent
such Lender's ratable portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of
such Borrowing in accordance with Section 2.02(a) and the 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 Agent and the
Agent shall have made available such corresponding amount to the relevant
Borrower, such Lender and the relevant Borrower severally agree to repay to
the 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 Agent,
at (i) in the case of the relevant Borrower, the interest rate applicable
at
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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 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 Working Capital 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) Term Advances. The Company hereby promises to pay to the Agent
for the account of each Lender the full outstanding principal amount of such
Lender's Advances under each Term Facility as follows:
(i) in the case of the Terra Facility A Advances, in nine consecutive
semi-annual installments, one such installment to be payable on each Terra
Facility A Principal Payment Date set forth below in a principal amount
equal to the amount set forth below opposite such Terra Facility A
Principal Payment Date:
Terra Facility A
Principal Payment Date
Falling on or
Nearest To Amount
----------------------- --------------
October 20, 1995 $23,253,968.25
April 20, 1996 23,253,968.25
October 20, 1996 23,253,968.25
April 20, 1997 23,253,968.25
October 20, 1997 23,253,968.25
April 20, 1998 23,253,968.25
October 20, 1998 23,253,968.25
April 20, 1999 23,253,968.25
October 20, 1999 23,253,968.22
(ii) in the case of the Terra Facility B Advances, in 13 consecutive semi-
annual installments, one such installment to be payable on each Terra Facility B
Principal Payment Date set forth below in a principal amount equal to the amount
set forth below opposite such Terra Facility B Principal Payment Date:
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Terra Facility B
Principal Payment Date
Falling on or
Nearest To Amount
------------------------ --------------
October 20, 1995 $ 500,000.00
April 20, 1996 500,000.00
October 20, 1996 500,000.00
April 20, 1997 500,000.00
October 20, 1997 500,000.00
April 20, 1998 500,000.00
October 20, 1998 500,000.00
April 20, 1999 500,000.00
October 20, 1999 15,100,000.00
April 20, 2000 15,100,000.00
October 20, 2000 15,100,000.00
April 20, 2001 15,100,000.00
October 20, 2001 15,100,000.00
(b) Terra Working Capital Advances. The Company hereby promises to
pay to the Agent for the account of each Lender the full outstanding principal
amount of the Terra Working Capital Advances of such Lender on the Terra Working
Capital Commitment Termination Date.
(c) TNLP Working Capital Advances. TNLP hereby promises to pay to
the Agent for the account of each Lender the full outstanding principal amount
of the TNLP Working Capital Advances of such Lender on the TNLP Working Capital
Commitment Termination Date.
(d) All Advances.
(i) 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.
(ii) If any Principal Payment Date falls on a day that is not a
Business Day, such Principal Payment Date shall be the immediately
preceding Business Day.
Section 2.04. Termination or Reduction of the Working Capital
Commitments.
(a) Optional. The Borrowers may at any time or from time to time,
upon not less than two Business Days' notice to the Agent, terminate in whole or
reduce in part the Working Capital Commitments under the relevant Working
Capital Facility, provided, that (i) each partial reduction of the Working
Capital Commitments under such Facility shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess
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thereof, and (ii) the aggregate amount of the Working Capital Commitments under
either Working Capital Facility shall not be reduced below the Letter of Credit
Commitment for such Facility.
(b) Mandatory. The Terra Working Capital Commitments shall be
automatically and permanently reduced to zero on the Terra Working Capital
Commitment Termination Date. The TNLP Working Capital Commitments shall be
automatically and permanently reduced to zero on the TNLP Working Capital
Commitment Termination Date.
(c) Reductions Pro Rata. Each reduction of the Working Capital
Commitments under a Working Capital Facility shall be applied to the respective
Working Capital Commitments of the Lenders according to their respective Pro
Rata Shares of such Working Capital Facility.
(d) General. Working Capital Commitments once terminated or reduced
may not be reinstated.
Section 2.05. Prepayments.
(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 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 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
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principal amount of the Advances then outstanding under the relevant
Facility.
(b) Mandatory Prepayments.
(i) Excess Cash Flow. Not later than the date 90 days after the end of
each fiscal year of the Company commencing with the fiscal year ending
December 31, 1995, the Company shall prepay the Advances in an aggregate
amount equal to (x) 75% of Excess Cash Flow for such fiscal year minus (y)
in the case of the prepayment made with respect to Excess Cash Flow for the
fiscal year ending December 31, 1995, the Excess SPU Amount (as defined
below), if any; provided, that once an aggregate amount of $20,000,000 or
more has been prepaid pursuant to this clause (i), the figure 75% set forth
above shall automatically be deemed to be reduced to 50%. For purposes of
this clause (i), "Excess SPU Amount" means the excess, if any, of the
aggregate consideration paid by Terra and its Subsidiaries to purchase,
redeem or otherwise acquire Senior Preference Units pursuant to the SPU
Redemption over the aggregate amount of Debt (other than Terra Working
Capital Advances) incurred by Terra and its Subsidiaries to finance such
purchase, redemption or other acquisition.
(ii) 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, upon the occurrence of
any Disposition, the Company shall prepay the Advances in an aggregate
amount equal to 100% of the Net Available Proceeds of such Disposition;
provided, that (x) for purposes of this clause (ii) the aggregate Net
Available Proceeds of all such Dispositions in such Fiscal Year shall be
deemed to be reduced by $10,000,000 (but shall not be deemed to be less
than zero); (y) the sale by the Company or any of its Subsidiaries of
Receivables under a Permitted Receivables Facility shall not be deemed to
be a Disposition for purposes of this clause (ii); and (z) upon the
Specified Paydown Date, the figure 100% set forth above shall automatically
be deemed to be reduced to 75%.
(iii) Equity Issuance, Etc. Upon the making of any Equity Issuance or
any other public issuance of securities (including without limitation the
New Terra Equity but excluding the issuance (if any) of the 1995 Terra
Debt), the Company shall prepay the Advances in an aggregate amount equal
to the excess, if any of (x) 100% of the Net Available Proceeds thereof
over (y) the aggregate amount of Bridge Indebtedness contractually required
to be repaid by the Company in connection with such issuance; provided,
that
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this clause (iii) shall cease to apply upon the Specified Paydown Date.
(iv) Casualty Events. Upon the date 90 days following the receipt by
Terra or any of its Subsidiaries of the proceeds of insurance, condemnation
award or other compensation in respect of any Casualty Event affecting any
property of Terra or any of its Subsidiaries (or upon such earlier date as
Terra or such Subsidiary, as the case may be, shall have determined not to
repair or replace the property affected by such Casualty Event), the
Company shall prepay the Advances in an aggregate amount, if any, equal to
100% 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 (provided, that funds so set aside are applied to the repair or
replacement of such property as soon as reasonably practicable under the
circumstances); provided, that upon the Specified Paydown Date, the figure
100% set forth above shall automatically be deemed to be reduced to 75%.
Nothing in this clause (iv) 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 Agent pursuant to any of the Security Documents the
proceeds of insurance, condemnation award or other compensation received in
respect of any Casualty Event.
(v) Non-Redemption of Senior Preference Units, Etc. On December 31,
1995, the Company shall prepay the Advances in an aggregate amount equal to
the excess, if any, of (x) 100% of the net proceeds received by Terra and
its Subsidiaries from the issuance (if any) of the 1995 Terra Debt to the
extent such proceeds (or proceeds of Terra Working Capital Advances, if
such use is permitted pursuant to Section 2.01(c)(iv)) have not theretofore
been applied to the redemption of Senior Preference Units pursuant to the
SPU Redemption over (y) the aggregate amount of Bridge Indebtedness
contractually required to be repaid by the Company in connection with such
issuance.
(c) Application. Prepayments described in Section 2.05(b) shall be
applied to the prepayment of the Term Advances ratably according to the
respective aggregate outstanding principal amounts thereof and to the respective
installments thereof ratably.
(d) 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.
Credit Agreement
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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 Working Capital 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 Agent or the Required Lenders, through the Agent, shall have notified
the Company thereof, each Borrower shall, notwithstanding anything else in this
Agreement to the contrary, pay to the Agent for account of each Lender interest,
during such period, at the 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
Agent for the account of each Lender a commitment fee (i) in the case of the
Company, on the average daily unused
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portion of such Lender's Terra Working Capital Commitment and (ii) in the case
of TNLP, on the average daily unused portion of such Lender's TNLP Working
Capital Commitment, 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 Working Capital 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 Working Capital
Commitment Termination Date for the relevant Facility. Notwithstanding anything
to the contrary contained herein or in the Existing Credit Agreement, commitment
fee accrued under Section 2.07(a) of the Existing Credit Agreement for the
period prior to the Restatement Date shall be payable on the first Quarterly
Date hereunder following the Restatement Date.
(b) Letter of Credit Commission, Etc.
(i) The Company hereby promises to pay to the 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 Working
Capital 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 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 each Quarterly Date and on the TNLP Working
Capital 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,
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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.
(d) Other Fees. Terra shall, on the Restatement Date, pay to the
Agent the fees payable pursuant to the Fee Letter.
Section 2.08. Conversion and Continuation of Advances.
(a) Optional Conversion. Each Borrower may on any Business Day, upon
notice given to the 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.
(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
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definition of "Interest Period" in Section 1.01 and in clause (a) or (c) of
this Section 2.08, the 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 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 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 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
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of such demand to the Agent), pay to the 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 Agent), each Borrower shall pay to the
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 Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Required Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, or (ii) if fewer than two
Reference Banks furnish timely information to the Agent for determining the
Eurodollar Rate for any Eurodollar Rate Advances, the 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
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the 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 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 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.
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 Agent at the Agent's Account in same day funds and, except as
expressly set forth herein, without deduction, set-off or counterclaim. The
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or commitment
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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 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 Agent receives funds for application to the Obligations
under the Loan Documents under circumstances for which the Loan 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
Loan Documents), the 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 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 Agent
and the relevant Borrower promptly following such charge).
(d) Each Reference Bank agrees to furnish to the 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
Agent for the purpose of determining any such interest rate, the 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 Agent on the basis of a year of 360 days, in
each case for the actual number of days
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(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
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 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 Agent may assume that such
Borrower has made such payment in full to the Agent on such date and the 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 Agent, each such Lender shall repay to the 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 Agent, at the Federal Funds Rate.
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 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 Agent by
the state or foreign jurisdiction under the laws of which such Issuing Bank,
such Lender or the 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
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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 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 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 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
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from such date such Issuing Bank,
such Lender or the 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 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 Agent, at
such address, a certificate from the appropriate taxing authority or
authorities, or an opinion of counsel acceptable to the 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
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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
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 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 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 Agent with the
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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 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.
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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
Working Capital Facility (letters of credit so issued under the Terra Working
Capital Facility being herein called "Terra Letters of Credit" and letters of
credit so issued under the TNLP Working Capital 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 Closing Date until the date 90 days
prior to the Working Capital Commitment Termination Date under the relevant
Facility; provided, that:
(i) the Terra Working Capital 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);
(ii) the TNLP Working Capital 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 Working Capital Facility shall not exceed at
any time the Letter of Credit Sublimit for such Facility, and the aggregate
outstanding principal amount of all Working Capital Advances under such
Facility when added to the aggregate amount of Letter of Credit Liabilities
under such Facility shall not exceed the aggregate Working Capital
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 Working Capital
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 the require renewal
thereof to a date beyond, the date 30 days prior to the Working Capital
Commitment Termination Date for the relevant Facility.
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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 "AMLP Letters of Credit" outstanding under the
Existing Credit Agreement (the "Existing AMLP 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 Working
Capital 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 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 Working Capital
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 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
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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 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 Agent and
each Lender on the first Business Day of each calendar quarter, a written
report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such
Issuing Bank 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 Agent, each Lender having a Working Capital Commitment under
the relevant Facility shall make Working Capital 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 Agent for the account of such Issuing
Bank, by deposit to the 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
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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 Working Capital Advances on the
Business Day on which demand therefor is made by the relevant Issuing Bank
through the 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 Working Capital Advance available to the Agent for
account of such Issuing Bank, such Lender agrees to pay to the 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 Agent, at the Federal Funds Rate.
(iv) The Working Capital 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
Working Capital 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
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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 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,
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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 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 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 Working
Capital 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 Agent by the
Replacement Lender of documentation satisfactory to the
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Agent, and, in the case of an Affected Lender that has made a Terra
Facility B Advance, 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 Agent the processing and recordation fee specified in Section
9.07(a)(vi) with respect to such assignment; or
(ii) (x) terminate the Working Capital 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.
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 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 Working Capital Commitments hereunder and to make Advances hereunder
in an amount equal to the respective Working Capital Commitments and Advances of
the Affected Lender under each of the Facilities and, subject to (x) the
execution and delivery to the Agent by the Substitute Lender of documentation
satisfactory to the Agent and (y) the payment by the Borrowers to the Agent of
the processing and recordation fee specified in Section 9.07(a)(vi) with respect
to such assignment, and (z) in the case of a Substitute Lender that will acquire
Terra Facility B Advances, 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
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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 Working
Capital Commitments that shall have been terminated pursuant to said clause
(b) (including the Working Capital Commitments then proposed to be
terminated) shall exceed 30% of the aggregate amount of the Working Capital
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 Agent shall
notify the Company that the 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 Agent
(unless otherwise specified) and in sufficient copies for the Agent, each
Lender and each Issuing Bank:
(i) 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 made subsequent to the Closing Date (or, in the case
of BMLP and TMC, subsequent to BMLP Transaction Date), certified (as
of a date reasonably near the Restatement Date) by the Secretary of
State of the state of its
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incorporation or organization as being a true and correct copy
thereof; and
(ii) a certificate of each Obligor, 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 Closing Date
(or, in the case of BMLP and TMC, subsequent to BMLP Transaction
Date), (B) the absence, except to the extent provided in said
certificate, of any amendments to the bylaws of such Obligor
subsequent to the Closing Date (or, in the case of BMLP and TMC,
subsequent to BMLP Transaction 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) An amendment to each of 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 form of
Exhibit B-5, duly executed by each of the intended parties thereto,
together with:
(i) such appropriately completed and duly executed copies of
Uniform Commercial Code financing statements and financing statement
amendments as the Agent 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 Agent may deem
necessary or desirable in order to continue the perfection and
protection of the Liens created thereby.
(d) An amendment to the Loan Purchase Agreement, in substantially the
form of Exhibit E-2, duly executed by Terra and the Agent.
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(e) A true and correct copy of the materials (if any) distributed
generally to the holders of the Senior Preference Units in connection with
the SPU Redemption.
(f) A favorable opinion of Kirkland & Ellis, special counsel for the
Obligors, in substantially the form of Exhibit D and as to such other
matters as the Agent, any Issuing Bank or any Lender through the Agent may
reasonably request.
(g) A favorable opinion of Milbank, Tweed, Hadley & McCloy, special
New York counsel for the Agent, in form and substance satisfactory to the
Agent.
(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 by Terra of all accrued fees and expenses of
the Agent (including the reasonable and documented fees and expenses of
counsel to the Agent in connection with this Agreement to the extent that
statements for such fees and expenses have been delivered to the Borrowers
at least one Business Day prior to the Restatement Date).
(j) Evidence that TNLP shall have repaid in full all of the "AMLP
Facility A Advances" outstanding under the Existing Credit Agreement.
(k) Evidence of receipt of all governmental and third party consents
and approvals necessary in connection with this Agreement (without the
imposition of any conditions except those that are acceptable to the
Lenders) and that the same remain in effect.
(l) 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 Agent, reasonably request.
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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 Working Capital Advance
pursuant to Section 2.13), and the right of each Borrower to request the
issuance of Letters of Credit under either Working Capital 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 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 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
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partnership, as the case may be) in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires it
to so qualify or be licensed and where, in each case, failure so to qualify
and be in good standing could reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite power (corporate or other) and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) is a complete and accurate list of
all Material Subsidiaries of each Obligor as of the Restatement Date,
showing as of such date (as to each such Subsidiary) the jurisdiction of
its organization, the number of shares of each class of capital stock or
partnership interests authorized, and the number outstanding and the
percentage of the outstanding shares or interests of each such class owned
(directly or indirectly) by such Obligor and the number of shares covered
by all outstanding options, warrants, rights of conversion or purchase and
similar rights. All of the outstanding capital stock or partnership
interests of all of such Subsidiaries has been validly issued, is fully
paid and non-assessable and is owned by such Obligor or one or more of its
Subsidiaries free and clear of all Liens, except those created by the
Security Documents. Each Material Subsidiary (i) is a corporation (or, in
the 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 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
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applicable law (including, without limitation, the Securities Exchange Act
of 1934 and the Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation U and Regulation X), order, writ, judgment,
injunction, decree, determination or award (except for any such violation,
by action or inaction of any Obligor, that could not reasonably be expected
to have a Material Adverse Effect and that could not result in any
liability of any Lender), (iii) except as set forth on Schedule 4.01(c),
conflict with or result in the breach of, or constitute a default under,
any contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting any Obligor, any of its
Subsidiaries or any of their properties (except for any such conflict,
breach or default, caused by action or inaction of any Obligor, that could
not reasonably be expected to have a Material Adverse Effect and that could
not result in any liability of any Lender) or (iv) except for the Liens
created by the Security Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any
Obligor or any of its Subsidiaries. No Obligor or any of its Subsidiaries
is in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could be reasonably
expected to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Obligor of this Agreement, the Notes or any
other Loan Document to which it is or is to be a party, or for the
consummation of the credit transactions between 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 Agent or any Lender or Issuing Bank of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Security Documents, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d), all of which have been duly
obtained, taken, given or made and are in full force and effect.
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(e) This Agreement has been, and each of the Notes and each other
Loan Document when delivered will have been, duly executed and delivered by
each Obligor that is intended to be a party thereto. This Agreement is, and
each of the Notes and each other Loan Document when delivered will be, the
legal, valid and binding obligation of each Obligor that is intended to be
a party thereto, enforceable against such Obligor in accordance with its
terms.
(f) The balance sheet of Terra as at December 31, 1994 and the
related statements of income and cash flows of Terra for the twelve months
then ended, accompanied by an opinion of Deloitte & Touche, independent
public accountants, and the balance sheet of Terra as at March 31, 1995 and
the related statements of income and cash flows of Terra for the three
months then ended, duly certified by the chief financial officer of Terra,
copies of which have been furnished to each Lender, present fairly, in all
material respects, subject, in the case of said balance sheet as at March
31, 1995, and said statements of income and cash flows for the three months
then ended, to year-end audit adjustments, the financial condition of Terra
as at such dates and the results of the operations of Terra for the periods
ended on such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis. Since December 31, 1994, there
has been no Material Adverse Change with respect to Terra.
(g) (A) No written information, exhibit or report (as at the
Restatement Date) furnished by any officer of Terra to the 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 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.
(h) There is no action, suit, litigation or proceeding against any
Obligor or any of its Subsidiaries or any of their respective property,
including any Environmental Action, pending before any court, governmental
agency or arbitrator, or (to the knowledge of any Obligor) threatened, nor
(to the knowledge of any Obligor) is there any investigation pending in
respect of any Obligor, that (i) could reasonably be expected to have a
Material Adverse Effect, or (ii) on the Restatement Date could reasonably
be
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expected to affect the legality, validity or enforceability of this
Agreement, any Note, any other Loan Document or the consummation of the
transactions contemplated hereby.
(i) No Obligor is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock; except as expressly
permitted in Section 2.01(c)(iv), no proceeds of any Advance will be used
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock; 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 Agent, each Borrower will furnish
to the Agent and each Lender a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U, the
statements made in which shall be such, in the opinion of each Lender, as
to permit the transactions contemplated hereby in accordance with
Regulation U.
(j) Set forth on Schedule 4.01(j) is a complete and accurate list, as
of the Restatement Date, of each Plan that is subject to Title IV of ERISA
and each Multiemployer Plan with respect to any employees or former
employees of any Obligor or any of its ERISA Affiliates.
(k) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of any Obligor or any of its ERISA Affiliates that
could reasonably be expected to have a Material Adverse Effect.
(l) Since the date of the Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan of any Obligor
or any of its ERISA Affiliates, there has been no change in the funding
status of any such Plan except to the extent that such change is not
reasonably expected to have a Material Adverse Effect.
(m) Neither any Obligor nor any of its ERISA Affiliates has incurred
or is reasonably expected to incur any withdrawal liability to any
Multiemployer Plan except to the extent such withdrawal liability is not
reasonably expected to have a Material Adverse Effect.
(n) Neither any Obligor nor any of its ERISA Affiliates has been
notified by the sponsor of a
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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 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.
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(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 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
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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 Closing Date, of all existing Debt of each
Obligor, showing as of the Closing 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 final Principal Payment 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 Credit shall be outstanding or any Lender shall
have any Working Capital 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).
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(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 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
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each of its Material Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided, that
the Obligors may consummate the Reorganization Transaction, and that
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 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 $500,000 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 Agent, such
Obligor shall provide to the Agent, each Issuing Bank and each Lender
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 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.
Without limiting the generality of the foregoing, if the 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 Agent may
retain an environmental consulting firm to prepare such report at the
expense of such Obligor, such
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Obligor and each of its Subsidiaries hereby granting to the Agent, each
Issuing Bank, each Lender, such firm and any agents or representatives
thereof an irrevocable non-exclusive license, subject to the rights of
tenants, to enter onto its properties to undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Material
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of such Obligor and each such Subsidiary in accordance with
GAAP.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Material Subsidiaries to maintain and preserve, except to the
extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, except to the extent any such lease is no longer
used or useful in the conduct of its business or which, in the exercise of
the reasonable judgment of the relevant Obligor, is to be refinanced and
except to the extent failure to comply with the foregoing would not have a
Material Adverse Effect, and cause each of its Material Subsidiaries to do
so.
(k) Performance of Related Documents. Perform and observe all of the
terms and provisions of each Related Document to be performed or observed
by it, maintain each such Related Document in full force and effect and
enforce such Related Document in accordance with its terms, except to the
extent the failure to do any of the foregoing could not reasonably be
expected to have a Material Adverse Effect.
(l) 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
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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) the transactions expressly contemplated by the Related
Documents;
(ii) transactions between such Obligor and its wholly owned
Subsidiaries or between wholly owned Subsidiaries of such Obligor
unless otherwise prohibited by this Agreement;
(iii) compensation paid for services rendered by any director or
officer of such Obligor or any director or officer of a Subsidiary of
such Obligor serving at the direction or request of such Obligor to
the extent such compensation is determined in the good faith exercise
of business judgment by the Board of Directors of such Obligor to be
reasonable and appropriate to the functions of such office; and
(iv) the Reorganization Transaction.
(n) Further Assurances. (i) Promptly upon reasonable request by the
Agent or any Lender or Issuing Bank through the 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
Agent or any Lender or Issuing Bank through the 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 Agent or any Lender
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or Issuing Bank through the Agent may reasonably require from time to time
in order to (A) subject to the Liens created by any of the Security
Documents any of such Obligor's and its Subsidiaries' properties, rights or
interests covered or now or hereafter intended to be covered by any of the
Security Documents, (B) perfect and maintain the validity, effectiveness
and priority of any of the Security Documents and the Liens intended to be
created thereby and (C) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Agent, the Lenders and any
Issuing Bank the rights granted or now or hereafter intended to be granted
to the Agent, the Lenders and the Issuing Banks 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) Interest Rate Hedging. Cause the Company to maintain in full
force and effect until December 31, 1997 one or more interest rate Hedge
Agreements with Persons acceptable to the Lenders in their reasonable
determination with respect to a notional amount equal to 80% of the amount
of the Relevant Debt providing effective protection against the Average
Rate exceeding a rate per annum equal to 10% during the hedging period.
For the purposes of this Section 5.01(o), the following terms have the
following respective meanings:
"Average Rate" means, on any date, the weighted average rate of
interest per annum payable on all Relevant Debt, excluding the
Applicable Margin.
"Relevant Debt" means Debt under Terra Facility A and Terra
Facility B in an aggregate amount, for any period, equal to the amount
set forth opposite such period on Schedule 5.01(o).
(p) 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, except to the extent necessary to give effect to the
Reorganization Transaction:
(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;
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(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 cash and other property incidental to its business as
a holding company);
(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 (v) cash, (w) Receivables of one or more of its
Subsidiaries transferred to it pursuant to the terms of the Permitted
Receivables Facilities, (x) Senior Preference Units purchased pursuant to
the SPU Redemption, and capital stock of a wholly owned Subsidiary of the
Company organized for the purpose of holding such Senior Preference Units,
(y) other property incidental to its business as a holding company and (z)
other property used solely in connection with its performance of services
pursuant to the terms of the Management Agreements);
(iv) 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) 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) TNC will own no property other than ownership interests of TNCLP
and its successors and a general partnership interest in TNLP and its
successors (other than (x) cash, (y) capital stock of a wholly owned
Subsidiary of TNC organized for the purpose of holding Senior Preference
Units and (z) other property incidental to its business as a holding
company); and
(vii) 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
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any Subsidiary, the respective Obligor agrees forthwith to deliver to the
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 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.
(q) Delivery of Management Agreements. On or prior to the date of
execution of each Management Agreement, notify the Agent thereof (and the
Agent shall notify the Lenders thereof promptly) and shall deliver to the
Agent, in sufficient quantities for each Lender and Issuing Bank, a
certified copy thereof (each such Management Agreement to be in form and
substance reasonably satisfactory to the Agent). Promptly following each
amendment, waiver and consent relating to a Management Agreement, Terra
shall give the Agent notice thereof (and the Agent shall notify the Lenders
thereof promptly), and shall deliver to the 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 Working Capital 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;
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(iii) Liens existing on the Closing Date and described on
Schedule 5.02(a)(iii);
(iv) Liens on cash (in an aggregate amount, for Terra and its
Subsidiaries taken as a whole, not exceeding $10,000,000 at any time)
to secure the Obligations in respect of letters of credit permitted
under Section 5.02(b)(iv);
(v) Liens on Receivables and incidental property of the Company
or any of its Subsidiaries to secure such Person's Obligations 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 80% of the fair market value (as determined in good faith
by the Senior Financial Officer) of such property at the time it was
acquired (provided, that upon the Specified Paydown Date, the figure
80% set forth above shall automatically be deemed to be increased to
90%);
(vii) Any Lien arising after the Closing 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, however, that (x) the Debt secured by such Lien is not
prohibited by clause (b) of this Section 5.02, and (y) such Lien does
not cover any
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other property at any time owned by Terra or any Material Subsidiary;
(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 Closing 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 Closing
Date, provided, that the aggregate Debt secured thereby and incurred
on and after the Closing Date shall not exceed $7,000,000 in the
aggregate at any one time outstanding; and
(xv) The replacement, extension or renewal of any Lien permitted
by clauses (iii), (iv), (v), (ix) and (xiv) above upon or in the same
property theretofore subject thereto or the replacement, extension or
renewal (without increase in the principal amount or change in any
direct or contingent obligor) of the Debt secured thereby.
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(b) Debt. 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 $35,000,000;
(v) Obligations of the Company and its Subsidiaries under the
Permitted Receivables Facilities;
(vi) Debt securities of Terra issued in a public offering
pursuant to an effective registration statement the terms of which
(including, without limitation, as to interest rates, amortization
(provided, that in any event no payments of principal, redemptions,
sinking fund payments or the like shall be scheduled to be made before
the final Principal Payment Date), redemption, average life to
maturity, covenants, events of default and other terms) are reasonably
satisfactory to the Required Lenders, the Net Available Proceeds of
which are used first to repay Bridge Indebtedness and, after payment
in full of Bridge Indebtedness, to repay Advances in the manner
specified in Section 2.05(c);
(vii) Debt outstanding (or committed to be made available) as at
June 30, 1994 and set forth on Schedule 4.01(y);
(viii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
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(ix) in the case of any of its Subsidiaries, Debt owed to Terra
or to a wholly owned Subsidiary of Terra;
(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 $7,000,000 at any
one time outstanding secured by Liens permitted under Section
5.02(a)(xiv);
(xi) Debt of Subsidiaries of Terra acquired by Terra or any of
its Subsidiaries after the Closing Date in an aggregate principal
amount not exceeding $15,000,000 at any one time outstanding
(provided, that after the Trigger Date the figure $15,000,000 set
forth above shall be deemed to be increased to $50,000,000);
(xii) Debt of Terra incurred during the period following the
Restatement Date and prior to the SPU Redemption Time in an aggregate
principal amount not exceeding $200,000,000 (and Debt of Terra
evidenced by instruments issued in exchange for such Debt), the terms
and conditions of which are in all material respects as contemplated
in Schedule 5.02(b)(xii), and the Net Available Proceeds of which are
used (1) first to repay Bridge Indebtedness and (2) after payment in
full of Bridge Indebtedness, for one or more of the following: (x) to
finance the SPU Redemption, (y) to repay Terra Working Capital
Advances in the manner specified in Section 2.01(c)(iv) and (z) to
repay Advances in the manner specified in Section 2.05(c);
(xiii) unsecured Debt of the Company to one or more of the
Lenders in an aggregate principal amount not exceeding $75,000,000
having a final maturity no later than the first anniversary of the
Restatement Date, the proceeds of which are used to finance in part
the SPU Redemption; and
(xiv) renewals, refinancings and replacements of the Debt
permitted under clauses (vi), (vii), (ix) and (xiii) above (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).
(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 (x) Hedge Agreements entered into pursuant
to Section 5.01(o), (y) the Methanol Hedging Agreement, and (z) other Hedge
Agreements entered into in the ordinary
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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; and
(ii) nothing herein shall be deemed to prohibit the
Reorganization Transaction.
(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 other than, prior to the SPU Redemption Time, TNLP).
(iv) 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
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any other Obligor's wholly owned Subsidiaries, and other Dispositions
in an aggregate amount not to exceed $10,000,000 in any 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, material
to the business, assets, operations, properties or financial condition
of Terra and its Subsidiaries taken as a whole, and (C) the Net
Available Proceeds of such Disposition are applied in accordance with
and to the extent required by Section 2.05(b), and to the extent the
assets subject to the Disposition constituted part of the Collateral,
all other cash and non-cash proceeds of such Disposition become
subject to the Lien created by the Security Documents in accordance
with the terms thereof;
(v) nothing in this Section 5.02(e) shall prohibit the Company or
any of its Subsidiaries from selling Receivables under any Permitted
Receivables Facility (subject to the restrictions specified in the
definition of said term); and
(vi) nothing in this Section 5.02(e) shall prohibit the
Reorganization Transaction.
(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);
(v) Subject to the terms set forth on Exhibit G, Investments
(including, without limitation, Investments arising by reason of any
merger or consolidation permitted under Section 5.02(d)(i)(y)) in any
fiscal
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year of Terra 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, in an
aggregate amount not exceeding the sum of (x) the Acquisition Amount
for such fiscal year (to the extent not utilized to make Capital
Expenditures pursuant to Section 5.02(h)(i)) plus (y) 50% of the
unused Acquisition Amount for the prior fiscal year;
(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 $25,000,000 (provided, that after the Trigger Date
the figure $25,000,000 set forth above shall be deemed to be increased
to $50,000,000), and (y) the 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 Lynn 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 on
the Closing Date;
(xi) Investments by Terra consisting of the purchase, redemption,
retirement or other acquisition of shares of common stock of Terra,
and Investments by Terra and its Subsidiaries consisting of the
purchase, redemption or other acquisition of Senior Preference Units
pursuant to the SPU Redemption; and
(xii) other Investments contemplated by the Reorganization
Transaction.
(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
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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), it
being understood that the SPU Redemption will not constitute a breach of
this Section 5.02(g).
(h) Capital Expenditures.
--------------------
(i) Make Capital Expenditures (except as permitted under Section
5.02(h)(ii)) in any fiscal year in an aggregate amount, for Terra and
its Subsidiaries on a Consolidated basis, exceeding the sum of (x)
$40,000,000 plus (y) an amount equal to the portion (if any) of the
Acquisition Amount for such fiscal year not used to make Investments
pursuant to Section 5.02(f)(v), provided, that if the aggregate amount
of such Capital Expenditures made pursuant to this clause (i) in any
fiscal year shall be less than $40,000,000, then the shortfall shall
be added to the amount of Capital Expenditures permitted hereunder for
the immediately succeeding (but not any other) fiscal year; or
(ii) During the period from the Restatement Date to December 31,
1997, make Capital Expenditures in connection with the reconstruction
of the Port Neal Facility, in addition to Capital Expenditures allowed
under Section 5.02(h)(i), in an aggregate amount exceeding
$30,000,000.
(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 Closing
Date (but after giving effect to the transactions contemplated by the
Merger Agreement).
(j) Charter Amendments. Amend, or permit any of its Material
Subsidiaries to amend, its articles of incorporation or bylaws, or amend
any partnership agreement to which it or any of its Subsidiaries is a party
(except for amendments to authorize the issuance of preferred or common
stock), in each case to the extent any such amendment could reasonably be
expected to have a Material Adverse Effect.
(k) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as
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required or permitted by generally accepted accounting principles in effect
in the United States; provided, that in the event of any change in
generally accepted accounting principles from the date of the financial
statements referred to in Section 4.01(f) and upon delivery of any
financial statement and accompanying certificate of compliance required to
be furnished under subsections (b) and (c) of Section 5.03, Terra shall
deliver to the Lenders a statement of reconciliation conforming any
information contained in such financial statement and a certificate of
compliance required to be furnished pursuant to subsections (b) and (c) of
Section 5.03 with GAAP (it being understood that compliance with financial
covenants herein shall be measured and determined on the basis of GAAP).
(l) Amendment of Related Documents. Cancel or terminate any Related
Document or consent to or accept any cancellation or termination thereof,
amend, modify or change in any manner any term or condition of any Related
Document or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Related
Document or agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document to the extent any
of the foregoing could reasonably be expected to have a Material Adverse
Effect, or permit any of its Subsidiaries to do any of the foregoing.
(m) Certain Obligations Respecting Subsidiaries. Enter into, or permit
any of its Subsidiaries to enter into, after the date of this Agreement,
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.
(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 (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 Subordinated Indebtedness.
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(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
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.
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 Working Capital Commitment hereunder:
(a) Default Notice. Each Obligor will furnish to the 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
45 days after the end of each of the first three quarters of each fiscal
year of Terra, Terra will furnish to the 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, and statements of earnings by product
line, 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
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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, 1994, 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 5.03(m) of the
Existing Credit Agreement or Section 5.03(l) and (ii) a schedule in form
satisfactory to the 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 90
days after the end of each fiscal year of Terra, Terra will furnish to the
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, and statements of earnings by product line, 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 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 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
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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, 1994, 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(m) of the Existing Credit Agreement or Section
5.03(l).
(d) ERISA Events. Promptly and in any event within 10 Business Days
after any Obligor knows or has reason to know that any ERISA Event
(including, for this purpose, a reportable event listed in Section
4043(b)(7) of ERISA) with respect to any Obligor or any of its ERISA
Affiliates has occurred, Terra will furnish to the 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 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 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 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).
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(h) Litigation. Promptly after the commencement thereof, Terra will
furnish to the 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 Agent notice of any condition or occurrence on
any property of any Obligor that results in a material noncompliance by any
Obligor or any of its Subsidiaries with any Environmental Law or
Environmental Permit which noncompliance could reasonably be expected to
have a Material Adverse Effect, or could (i) form the basis of an
Environmental Action against any Obligor or any of its Subsidiaries or such
property that could reasonably be expected to have a Material Adverse
Effect or (ii) cause any such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law
that could reasonably be expected to have Material Adverse Effect.
(j) Public Filings. Terra shall, promptly upon their becoming
available, deliver to the Agent, each Issuing Bank and each Lender copies
of all registration statements and regular periodic reports, if any, that
Terra, the Company or TNLP 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 Agent, each
Issuing Bank and each Lender promptly upon the mailing thereof to the
shareholders of Terra or TNLP generally or to holders of Subordinated
Indebtedness, New Terra Debt 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 90 days after the first day of each fiscal year of Terra,
Terra will furnish to the 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 later of (i)
the fiscal year in which the final Principal Payment Date is scheduled to
occur and (ii) the fifth fiscal year ending after the date of
determination, in each case, in form and detail similar to the financial
projections and budget delivered under Section 5.03(m) of the Existing
Credit Agreement.
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(m) SPU Redemption. As soon as available, Terra will furnish to the
Agent, each Lender and each Issuing Bank true and correct copies of all
materials distributed generally to the holders of the Senior Preference
Units in connection with the SPU Redemption.
(n) Other Information. Each Obligor shall furnish to the Lenders
through the 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 Agent, any Issuing Bank or
any Lender may from time to time reasonably request.
Section 5.04. Financial Covenants. So long as any principal of or interest
on any Advance or any other amount payable under this Agreement shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender shall have any
Working Capital Commitment hereunder, Terra will:
(a) Debt to Cash Flow Ratio. Until the Specified Paydown Date,
maintain the Debt to Cash Flow Ratio at not more than the ratio set forth
below for each day during each Rolling Period ending in the respective
fiscal years of Terra set forth below:
Each
Rolling Period
Ending In Ratio
-------------- -----
1994 or 1995 3.75 to 1.00
1996 and each fiscal 3.00 to 1.00
year thereafter
(b) Debt to Capital Ratio. From and after the Specified Paydown
Date, maintain the Debt to Capital Ratio at not more than the ratio set
forth below for each day in the respective periods set forth below:
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Period Ratio
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From the Closing Date 0.65 to 1.00
to September 30, 1995
From October 1, 1995 0.625 to 1.00
to April 1, 1996
April 2, 1996 0.60 to 1.00
to September 30, 1996
From October 1, 1996 0.55 to 1.00
to September 30, 1997
From and after 0.50 to 1.00
October 1, 1997
(c) Current Ratio. Maintain the ratio of Consolidated Current Assets
of Terra and its Subsidiaries (determined in accordance with GAAP) to
Consolidated Current Liabilities of Terra and its Subsidiaries (determined
in accordance with GAAP) at not less than the ratio set forth below for
each day during each fiscal quarter occurring in the respective fiscal
years of Terra set forth below:
Each Fiscal
Quarter In Ratio
----------- -----
1994 1.25 to 1.00
1995 1.25 to 1.00
1996 1.25 to 1.00
1997 1.25 to 1.00
1998 and each fiscal 1.50 to 1.00
year thereafter
(d) Interest Coverage Ratio. Maintain the Interest Coverage Ratio at
not less than the ratio set forth below for each Rolling Period ending in
the respective fiscal years of Terra set forth below:
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Each
Rolling Period
Ending In Ratio
-------------- -----
1994 4.00 to 1.00
1995 4.00 to 1.00
1996 4.00 to 1.00
1997 4.00 to 1.00
1998 4.50 to 1.00
1999 4.50 to 1.00
2000 4.50 to 1.00
2001 5.00 to 1.00
(e) Net Worth. Maintain Net Worth on each day of not less than (i)
$375,000,000 plus (ii) the aggregate increase in the amount of capital
stock and additional paid-in capital of Terra subsequent to the Closing
Date, plus (iii) 50% of net income (if positive) for each fiscal year of
Terra ending on or after December 31, 1994.
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 two 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 (e), (o) or (p) of Section 5.01, or clause
(a), (b), (c), (d), (e), (g), (i) or (q) 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
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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 $5,000,000 in the aggregate (but excluding Debt outstanding
hereunder) of such Obligor or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder or
holders (or an agent or trustee on its or their behalf) thereof to cause,
such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; or
(g) any Obligor or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Obligor or any of its Material Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any
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Obligor or any of its Material Subsidiaries shall take any corporate 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 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 after delivery thereof pursuant to Section
3.01 of the Existing Credit Agreement 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) (i) prior to the Specified Paydown Date, Minorco ceases to own,
directly or indirectly, a majority of the issued and outstanding shares of
voting capital stock of Terra; or (ii) after the Specified Paydown Date,
(y) Minorco ceases to own, directly or indirectly, at least 20% of the
issued and outstanding shares of voting capital stock of Terra, or (z)
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
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portion thereof attributable to such Obligor or its ERISA Affiliates; or
(m) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that it has incurred withdrawal liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Obligors and
their ERISA Affiliates as withdrawal liability (determined as of the date
of such notification), could reasonably be expected to have a Material
Adverse Effect; or
(n) any Obligor or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Obligor or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate 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);
then, and in any such event, the 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 Working Capital 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
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payable, 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 Working Capital 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
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 Agent on behalf of the Lenders in
same day funds at the 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 Agent
in the relevant L/C Collateral Account (as provided therein 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 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 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 Agent, pay to the Agent, as
additional funds to be deposited and held in the relevant L/C Cash Collateral
Account, an amount equal to excess of (a) such aggregate Available Amount over
(b) total amount of funds, if any, then held in such L/C Cash Collateral Account
that the Agent determines to be free and clear of any such right and claim.
ARTICLE VII
THE AGENT
Section 7.01. Authorization and Action. Each Lender and each Issuing
Bank hereby appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to the Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for
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by the Loan Documents, including, without limitation, enforcement or collection
of the Notes, the 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 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 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 hereby authorizes the Agent (i) to execute and deliver each of the
Security Documents and (ii) 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 by the Loan Purchase Agreement as if such Lender or Issuing
Bank, as the case may be, were a signatory thereto). Chemical Bank as Co-
Arranger shall, in such capacity, have no duties, responsibilities or
liabilities whatsoever under this Agreement or any other Loan Document.
Section 7.02. Agent's Reliance, Etc. Neither the 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 Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent (i)
may treat the payee of any Note as the holder thereof until the 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 Loan Document or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of any Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable
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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 Working
Capital Commitments, the Advances made by it and the Notes issued to it,
Citibank shall have the same rights and powers under the Loan Documents as any
other Lender and may exercise the same as though it were not the 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 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
Agent, any Issuing Bank or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender and each Issuing Bank also acknowledges that
it will, independently and without reliance upon the 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
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 Working Capital 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 Loan Documents or any action taken or omitted by any of them
under the Loan 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 Agent. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs and expenses payable by the Borrowers under
Section 9.04 of this Agreement, under the Holdings Pledge Agreement, under the
Terra Capital
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Pledge Agreement, under the Subsidiary Pledge and Security Agreement and under
the TNLP Pledge and Security Agreement, to the extent that the Agent 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 Agent hereunder and
under the Security Documents, the 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 Agent shall have no duty
to take any affirmative steps with respect to the collection of amounts payable
in respect of the Collateral. The 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 Agent to execute and deliver such instruments and other
documents as the 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 Loan Documents.
(d) The 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 Agent
accords its own property, it being understood that none of the 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 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 Agent. The 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
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Borrowers, which consent shall not be unreasonably withheld) a successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the Agent,
as the case may be, then the retiring 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 Agent, which shall be an Initial
Lender or a commercial bank organized under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent such successor Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the retiring Agent, as
the case may be, and such retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII shall inure to
the benefit of the Agent as to any actions taken or omitted to be taken by it
while it was 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 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 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
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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 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 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 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
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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.
(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
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 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 Section 8 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
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reorganization or otherwise, and the relevant Guarantors jointly and severally
agree that they will indemnify the Agent, each Issuing Bank and each Lender on
demand for all reasonable costs and expenses (including, without limitation,
fees of counsel) incurred by the 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 Section 8 and agrees with the relevant Borrower for the
benefit of each of its creditors (including, without limitation, each Lender,
each Issuing Bank and the 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 Section 6 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 6) 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 Section 8 constitutes an
instrument for the payment of money, and consents and agrees that any Lender,
any Issuing Bank or the 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.
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Section 8.07. Continuing Guarantee. The guarantee in this Section 8
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 8.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Portion (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 8.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Section 8 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
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this Section 8.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a
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Subsidiary Guarantor as of the Closing Date and the aggregate present fair
saleable value of the properties, and the amount of the debts and liabilities,
of such Subsidiary Guarantor as of the Closing 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 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 Loan Documents, nor any consent to any departure by any
Obligor from any provision of this Agreement, the Notes or the other Loan
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
Working Capital Commitments or of the aggregate unpaid principal amount of the
Advances, or the number or percentage of Lenders, that shall be required for the
Lenders or any of them to take any action hereunder, (3) amend this Section
9.01, (4) reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (5) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder or amend Section 2.03 or 2.05, or (6) release any Guarantor from its
obligations under Article VIII and (ii) no amendment, waiver or
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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 Working Capital 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 provided, further, that no amendment, waiver or consent shall,
unless in writing and (x) signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement, any Note or any other Loan 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, the Agent
shall not consent to release any Collateral (except as contemplated by the
Security Documents) 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 Working Capital
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 Working Capital Facility under which such Letter of Credit has been
issued); provided, that 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.
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., 600 Fourth
Street, Sioux City, Iowa 51102, Attention: Francis G. Meyer, Vice President
and Chief Financial Officer, telephone number (712) 279-8790; telecopier
number (712) 279-8703;
(b) if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule 2.01;
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(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 Agent, at its address at 1 Court Square, Long Island
City, New York 11120, Attention: Larry Benison (or his successor),
telephone number (718) 248-4504, telecopier number (718) 248-4844;
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 Agent pursuant to Article II, III or VII shall not be effective until
received by the Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
Lender, any Issuing Bank or the 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 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 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.
Section 9.04. Costs, Expenses and Indemnification.
(a) Each Borrower agrees to pay on demand (i) all costs and expenses
of the Agent, the Issuing Banks and the Lenders in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan 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,
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ongoing audit expenses and all other reasonable out-of-pocket expenses incurred
by the Agent (including the reasonable and documented fees and expenses of
Milbank, Tweed, Hadley & McCloy, special counsel to the Agent, 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 Agent with
respect thereto, with respect to advising the Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan 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 Agent, the Issuing Banks and the Lenders in connection
with the enforcement of the Loan 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 Agent, each
Issuing Bank and each Lender with respect thereto).
(b) Each Borrower agrees to indemnify and hold harmless the 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 (i) the
Reorganization Transaction or any part thereof, (ii) the SPU Redemption or any
part thereof, (iii) the Transactions (as defined in the Existing 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 (collectively, the "Merger Transactions") or
(iv) the actual or alleged presence of Hazardous Materials on any property owned
by an Obligor or any Environmental Action relating in any way to any Obligor or
any of its Subsidiaries, in each case whether or not such investigation,
litigation or proceeding is brought by any Obligor, its directors, shareholders
or creditors or an Indemnified Party or any Indemnified Party is otherwise a
party thereto and whether or not the Reorganization Transaction, the SPU
Redemption or the other transactions
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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 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 Reorganization
Transaction or any part thereof, the SPU Redemption or any part thereof, the
Merger Transactions or any part thereof or the other transactions contemplated
herein or in any other Loan 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 Agent), pay to the 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 Agent or any Lender, in its
sole discretion.
Section 9.05. Right of Setoff. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the 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
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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 Working Capital 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 Working Capital Commitments of the assigning
Lender being assigned pursuant to each such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (x) such Lender's Working
Capital 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 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
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Borrower, the 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 or Note under
any Facility (or, in the case of a Working Capital Facility, its related
Working Capital Commitment) shall be made in such manner so that the same
portion of its Advances and Note under such Facility (and, in the case of a
Working Capital Facility, its related Working Capital Commitment) is
assigned to the respective assignee,
(v) each such assignment by a Lender of its Terra Facility A
Advances, Terra Facility A Notes, Working Capital Advances, Working Capital
Notes or Working Capital Commitment shall be made in such manner so that
the same portion of its Terra Facility A Advances, Terra Facility A Notes,
Working Capital Advances, Working Capital Notes and Working Capital
Commitment is assigned to the respective assignee, and
(vi) the parties to each such assignment shall execute and deliver to
the 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).
(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
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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 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 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 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 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 Working Capital
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 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 of any Terra Facility B Advance shall be effective
until it is recorded in the Register pursuant to this Section 9.07(c). The
Register shall be available for inspection 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 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
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execute and deliver to the 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, A-2, A-3 or A-4, as the case may be.
(e) Each Lender may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Working Capital Commitments, 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 Working Capital
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 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 Loan Document, or any consent to
any departure by any Obligor therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(f) Any Issuing Bank may (subject to the prior written consent of
Terra, such consent not to be unreasonably withheld) assign all or any portion
of its rights and obligations under this Agreement to one or more successor
Issuing Banks that is a commercial bank organized under the laws of the United
States, or any state thereof, and having total assets in excess of
$1,000,000,000 and, upon the acceptance of such assignment, the respective
successor Issuing Banks shall succeed to such portion of such rights and
obligations and such assigning 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.
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(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 Terra Facility B 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 Working Capital Commitment, Advance or other amount owing
hereunder without the prior consent of each Lender; provided, that the Lenders
and the Issuing Banks may assign all of their interests in the Working Capital
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
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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 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 Agent's, such Issuing
Bank's or such Lender's Affiliates and their officers, directors, employees,
agents and advisors (including independent auditors and counsel) and to actual
or prospective assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process, (c)
as requested or required by any state, federal or foreign authority or examiner
regulating or having authority over Lenders or the Lenders' respective
activities and (d) in connection with credit inquiries from suppliers of the
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 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 LOAN DOCUMENTS, THE
ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF THE 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
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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 Working Capital 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 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 Loan Documents without
the prior consent of all of the Lenders, the Issuing Banks and the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWERS
-------------
TERRA CAPITAL, INC.
By /s/ Robert E. Thompson
---------------------------
Title: Vice President
TERRA NITROGEN, LIMITED PARTNERSHIP
By Terra Nitrogen Corporation,
its General Partner
By /s/ Vaughn M. Klopfenstein
---------------------------
Title: Vice President
GUARANTORS
----------
TERRA INDUSTRIES INC.
By /s/ Robert E. Thompson
---------------------------
Title: Vice President
TERRA NITROGEN CORPORATION
By /s/ Vaughn M. Klopfenstein
---------------------------
Title: Vice President
BEAUMONT METHANOL, LIMITED
PARTNERSHIP
By Terra Methanol Corporation,
its General Partner
By /s/ George H. Valentine
---------------------------
Title: Vice President
TERRA METHANOL CORPORATION
By /s/ George H. Valentine
---------------------------
Title: Vice President
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BMC HOLDINGS, INC.
By /s/ George H. Valentine
---------------------------
Title: Vice President
TERRA CAPITAL HOLDINGS, INC.
By /s/ George H. Valentine
---------------------------
Title: Vice President
THE AGENT
---------
CITIBANK, N.A.
By /s/ Judith C. Fishlow
---------------------------
Title: Attorney-in-fact
CO-ARRANGER
-----------
CHEMICAL BANK
By /s/ Judith C. Fishlow
---------------------------
Title: Attorney-in-fact
THE ISSUING BANKS
-----------------
CITIBANK, N.A.
By /s/ Ronald Potter
---------------------------
Title: Managing Director
THE LENDERS
-----------
CITIBANK, N.A.
By /s/ Judith C. Fishlow
---------------------------
Title: Attorney-in-fact
CHEMICAL BANK
By /s/ Ronald Potter
---------------------------
Title: Managing Director
Credit Agreement
----------------
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ARAB BANKING CORPORATION
By /s/ Grant E. McDonald
---------------------------
Title: Vice President
BANK OF AMERICA ILLINOIS
By /s/ M.H. Claggett
---------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
---------------------------
Title: Senior Manager Loan
Operations
CAISSE NATIONAL DE CREDIT AGRICOLE
By /s/ W. Leroy Startz
-------------------------------
Title: First Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
By /s/ Lawrence W. Sidwell
-------------------------------
Title: Vice President
By /s/ Ian Reece
-------------------------------
Title: Vice President & Manager
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Sandra E. Horwitz
-------------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Sandra E. Horwitz
-------------------------------
Title: Authorized Signatory
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DRESDNER BANK AG, CHICAGO AND GRAND
CAYMAN BRANCHES
By /s/ John Schaus/Graham Lewis
---------------------------------
Title: FVP/AVP
FIRST BANK NATIONAL ASSOCIATION
By /s/ Jeffrey R. Torrison
---------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By /s/ Hidehiko Ide
---------------------------------
Title: General Manager
By N/A
---------------------------------
Title:
MELLON BANK, N.A.
By /s/ George B. Davis
---------------------------------
Title: Vice President
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset
Management, L.P., as
investment advisor
By /s/ John W. Fraser
---------------------------
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By /s/ John W. Fraser
----------------------------
Title: Authorized Signatory
NATIONSBANK OF TEXAS, N.A.
By /s/ Perry B. Stephenson
----------------------------
Title: Senior Vice President
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PROTECTIVE LIFE INSURANCE COMPANY
By /s/ Mark K. Okada
----------------------------
Title: Principal Protective
Asset Management Co.
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By Chancellor Senior Secured
Management, Inc., its
Portfolio Advisor
By /s/ Gregory L. Smith
-----------------------
Title: Vice President
STICHTING RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS 2 (ROSA2)
By Chancellor Senior Secured
Management, Inc., its
Portfolio Advisor
By /s/ Gregory L. Smith
-----------------------
Title: Vice President
UNION BANK OF SWITZERLAND, CHICAGO
BRANCH
By /s/ J. Timothy Shortly
----------------------------
Title: Managing Director and
Branch Manager
By /s/ Denis J. Campbell IV
----------------------------
Title: Vice President
Credit Agreement
----------------