$175,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 10, 2001
among
Terra Capital, Inc.
Terra Nitrogen (U.K.) Limited
Terra Nitrogen, Limited Partnership
as Borrowers
Terra Industries Inc.
as a Guarantor
and
The Lenders and Issuers Party Hereto
and
Citicorp USA, Inc.
as Administrative Agent and
Collateral Agent
Xxxxxxx Xxxxx Xxxxxx Inc.
as Lead Arranger and Sole Book Runner
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
TABLE OF CONTENTS
Page
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Article I Definitions, Interpretation And Accounting Terms .......................... 2
Section 1.1. Defined Terms .................................................. 2
Section 1.2. Computation of Time Periods .................................... 33
Section 1.3. Accounting Terms and Principles ................................ 33
Section 1.4. Certain Terms .................................................. 34
Article II The Revolving Credit Facility ............................................. 34
Section 2.1. The Revolving Credit Commitments ............................... 34
Section 2.2. Borrowing Procedures ........................................... 35
Section 2.3. Swing Loans .................................................... 36
Section 2.4. Letters of Credit .............................................. 38
Section 2.5. Reduction and Termination of the Revolving Credit Commitments... 42
Section 2.6. Repayment of Loans ............................................. 42
Section 2.7. Evidence of Debt, Obligations of Borrowers ..................... 42
Section 2.8. Optional Prepayments ........................................... 43
Section 2.9. Mandatory Prepayments .......................................... 43
Section 2.10. Interest ....................................................... 44
Section 2.11. Conversion/Continuation Option ................................. 45
Section 2.12. Fees ........................................................... 46
Section 2.13. Payments and Computations; Protective Advances ................. 47
Section 2.14. Special Provisions Governing Eurodollar Rate Loans ............. 49
Section 2.15. Capital Adequacy ............................................... 51
Section 2.16. Taxes .......................................................... 51
Section 2.17. Substitution of Lenders ........................................ 53
Article III Conditions To Effectiveness Of This Agreement ............................. 54
Section 3.1. Conditions Precedent to the Effectiveness of this Agreement .... 54
Section 3.2. Conditions Precedent to Each Loan and Letter of Credit ......... 58
Article IV Representations And Warranties ............................................ 59
Section 4.1. Corporate Existence; Compliance with Law ....................... 59
Section 4.2. Corporate Power; Authorization; Enforceable Obligations ........ 59
Section 4.3. Ownership of Subsidiaries ...................................... 60
Section 4.4. Financial Statements ........................................... 60
Section 4.5. Material Adverse Change ........................................ 61
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TABLE OF CONTENTS
(continued)
Page
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Section 4.6. Solvency ................................................. 61
Section 4.7. Litigation ............................................... 61
Section 4.8. Taxes .................................................... 62
Section 4.9. Full Disclosure .......................................... 62
Section 4.10. Margin Regulations ....................................... 62
Section 4.11. No Burdensome Restrictions; No Defaults .................. 63
Section 4.12. Investment Company Act; Public Utility Holding Company
Act ...................................................... 63
Section 4.13. Use of Proceeds .......................................... 63
Section 4.14. Insurance ................................................ 63
Section 4.15. Labor Matters ............................................ 63
Section 4.16. ERISA .................................................... 64
Section 4.17. Environmental Matters .................................... 64
Section 4.18. Intellectual Property .................................... 65
Section 4.19. Title; Real Property ..................................... 66
Section 4.20. Pari Passu Obligations ................................... 67
Section 4.21. No Immunity .............................................. 67
Section 4.22. Canadian and English Requirements ........................ 67
Article V Financial Covenants .............................................. 68
Section 5.1. Minimum Cash Flow ........................................ 68
Section 5.2. Capital Expenditures and Joint Venture Investments ....... 69
Section 5.3. Minimum Liquidity ........................................ 69
Article VI Reporting Covenants .............................................. 69
Section 6.1. Financial Statements ..................................... 69
Section 6.2. Default Notices .......................................... 71
Section 6.3. Litigation ............................................... 71
Section 6.4. Asset Sales .............................................. 71
Section 6.5. SEC Filings; Press Releases .............................. 71
Section 6.6. Labor Relations .......................................... 72
Section 6.7. Tax Returns .............................................. 72
Section 6.8. Insurance ................................................ 72
Section 6.9. ERISA Matters ............................................ 72
Section 6.10. Environmental Matters .................................... 72
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TABLE OF CONTENTS
(continued)
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Section 6.11. Borrowing Base Determination ................................... 74
Section 6.12. Other Information .............................................. 74
Section 6.13. Material Documents ............................................. 74
Section 6.14. Foreign Benefit Plans .......................................... 74
Article VII Affirmative Covenants ................................................. 75
Section 7.1. Preservation of Corporate Existence, Etc ....................... 75
Section 7.2. Compliance with Laws, Etc ...................................... 75
Section 7.3. Conduct of Business ............................................ 75
Section 7.4. Payment of Taxes, Etc .......................................... 75
Section 7.5. Maintenance of Insurance ....................................... 75
Section 7.6. Access ......................................................... 76
Section 7.7. Keeping of Books ............................................... 76
Section 7.8. Maintenance of Properties, Etc ................................. 76
Section 7.9. Application of Proceeds ........................................ 76
Section 7.10. Environmental .................................................. 76
Section 7.11. Additional Collateral and Guaranties; Further Assurances ....... 77
Section 7.12. Cash Collateral Accounts and Cash Management System ............ 78
Section 7.13. Real Estate .................................................... 81
Section 7.14. Hedging Contracts .............................................. 81
Article VIII Negative Covenants .................................................... 81
Section 8.1. Indebtedness ................................................... 81
Section 8.2. Liens, Etc ..................................................... 82
Section 8.3. Investments .................................................... 83
Section 8.4. Sale of Assets ................................................. 86
Section 8.5. Restricted Payments ............................................ 87
Section 8.6. Restriction on Fundamental Changes ............................. 88
Section 8.7. Change in Nature of Business ................................... 88
Section 8.8. Transactions with Affiliates ................................... 88
Section 8.9. Restrictions on Subsidiary Distributions; No New Negative
Pledge ......................................................... 89
Section 8.10. Modification of Constituent Documents .......................... 89
Section 8.11. Modification of Material Documents ............................. 89
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TABLE OF CONTENTS
(continued)
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Section 8.12. Long-Term Indebtedness ..................................... 89
Section 8.13. Accounting Changes; Fiscal Year ............................ 90
Section 8.14. Margin Regulations ......................................... 91
Section 8.15. Operating Leases; Sale/Leasebacks .......................... 91
Section 8.16. Cancellation of Indebtedness Owed .......................... 91
Section 8.17. No Speculative Transactions ................................ 91
Section 8.18. Compliance with ERISA and Foreign Plans .................... 91
Section 8.19. Environmental .............................................. 91
Section 8.20. Payments to Minority Interests ............................. 91
Article IX Events Of Default ................................................ 92
Section 9.1. Events of Default .......................................... 92
Section 9.2. Remedies ................................................... 94
Section 9.3. Actions in Respect of Letters of Credit .................... 94
Section 9.4. Rescission ................................................. 95
Article X The Administrative Agent; The Other Agents ....................... 95
Section 10.1. Authorization and Action ................................... 95
Section 10.2. Administrative Agent's Reliance, Etc ....................... 96
Section 10.3. The Administrative Agent Individually ...................... 96
Section 10.4. Lender Credit Decision ..................................... 96
Section 10.5. Indemnification ............................................ 97
Section 10.6. Successor Administrative Agent ............................. 97
Section 10.7. Concerning the Collateral and the Collateral Documents ..... 98
Section 10.8. Collateral Matters Relating to Related Obligations ......... 99
Section 10.9. Other Agents ............................................... 100
Article XI Miscellaneous .................................................... 100
Section 11.1. Amendments, Waivers, Etc ................................... 100
Section 11.2. Assignments and Participations ............................. 101
Section 11.3. Costs and Expenses ......................................... 104
Section 11.4. Indemnities ................................................ 105
Section 11.5. Limitation of Liability .................................... 106
Section 11.6. Right of Set-off ........................................... 106
Section 11.7. Sharing of Payments, Etc ................................... 106
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TABLE OF CONTENTS
(continued)
Page
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Section 11.8. Notices, Etc ............................................... 107
Section 11.9. No Waiver; Remedies ........................................ 108
Section 11.10. Binding Effect ............................................. 108
Section 11.11. Governing Law .............................................. 109
Section 11.12. Submission to Jurisdiction; Service of Process ............. 109
Section 11.13. Waiver of Jury Trial ....................................... 110
Section 11.14. No Immunity ................................................ 110
Section 11.15. Judgment Currency .......................................... 110
Section 11.16. Marshaling; Payments Set Aside ............................. 111
Section 11.17. Section Titles ............................................. 111
Section 11.18. Execution in Counterparts .................................. 111
Section 11.19. Entire Agreement ........................................... 111
Section 11.20. Confidentiality ............................................ 111
Section 11.21. Refund of Tax Credits ...................................... 112
Schedules
Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule III - Projections
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.4 - Pro Forma Balance Sheet
Schedule 4.7 - Litigation
Schedule 4.8 - Taxes
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 7.12 - Accounts
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Exhibits
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Letter of Credit Request
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TABLE OF CONTENTS
(continued)
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G -1/-2/-3 - Form of Opinions of Counsel for the Loan Parties
Exhibit H - Form of Guaranty
Exhibit I - Form of Pledge and Security Agreement
Exhibit J - Form of Junior TNLP and TNCLP Pledge and Security
Agreement
Exhibit K - Form of Junior TNCLP Guaranty
Exhibit L - Form of Senior Secured Note Intercreditor Agreement
Exhibit M - Form of Loan Purchase Agreement
Exhibit N - Form of UK Debenture
Exhibit O - Form of Terra Canada Security Agreement
vi
This Amended and Restated Revolving Credit Agreement, dated as of
October 10, 2001 (as amended, supplemented or otherwise modified from time to
time, this "Agreement"), among Terra Capital, Inc., Delaware corporation ("Terra
Capital"), Terra Nitrogen (U.K.), Limited, a company incorporated in England and
Wales ("Terra UK") and Terra Nitrogen, Limited Partnership, a Delaware limited
partnership ("TNLP") (Terra Capital, Terra UK and TNLP each a "Borrower" and,
collectively, the "Borrowers"), Terra Industries Inc., a Maryland corporation
("Terra Industries"), the Lenders (as defined below), the Issuers (as defined
below) and Citicorp USA, Inc. ("CUSA"), as administrative agent and collateral
agent for the Lenders and the Issuers (in such capacities, the "Administrative
Agent"), amends and restates in its entirety the Existing Credit Agreement (as
defined below).
W i t n e s s e t h:
Whereas, the Borrowers, Terra Industries, the Existing Lenders (as
defined below) and Citibank, N.A. ("Citibank"), as administrative agent and
collateral agent (respectively in each capacity, the "Existing Administrative
Agent" and the "Existing Collateral Agent"), are a party to a Credit Agreement
dated as of April 7, 2000 (as amended through the date hereof, the "Existing
Credit Agreement"); and
Whereas, the Existing Administrative Agent, Existing Collateral
Agent, the Administrative Agent and the Borrowers have entered into the
Assignment and Release Agreement dated as of October 10, 2001 (the "Assignment
and Release Agreement") pursuant to which each of the Existing Administrative
Agent and the Existing Collateral Agent has resigned as agent and has assigned
all its rights, title and interest in, to and under the Existing Credit
Agreement and the "Loan Documents" (as defined in the Existing Credit Agreement)
and delegated all its obligations thereunder with respect thereto to the
Administrative Agent, and the Administrative Agent has accepted such assignment
and delegation;
Whereas, on October 10, 2001 Terra Capital issued $200,000,000 of
Senior Secured Notes, the net proceeds of which were applied, in part, by the
Borrowers in prepayment in full of the Term Loan under the Existing Credit
Agreement and the Canadian Term Loan under the Terra Canada Credit Agreement;
and
Whereas, the Borrowers have requested, among other things, that the
Lenders (i) increase the Revolving Credit Commitments from $115,625,000 to
$175,000,000 and (ii) extend the Scheduled Termination Date from January 2, 2003
to June 30, 2005; and
Whereas, in order to accommodate the amendments to the Existing
Credit Agreement requested by the Borrowers and necessitated by the issuance of
the Senior Secured Notes, the parties hereto have agreed to amend and restate
the Existing Credit Agreement on the terms set forth in this Agreement, which
Agreement shall become effective upon satisfaction of certain conditions
precedent set forth herein; and
Whereas, it is the intent of the parties hereto that this Agreement
does not constitute a novation of the rights, obligations and liabilities of the
respective parties (including the Obligations) existing under the Existing
Credit Agreement or evidence payment of all or any of such obligations and
liabilities (other than the repayment in full of the Term Loan and the Canadian
Term Loan referred to above) and such rights, obligations and liabilities shall
continue and remain outstanding, and that this Agreement amends and restates in
its entirety the Existing Credit Agreement;
Now, Therefore, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
Definitions, Interpretation And Accounting Terms
Section 1.1. Defined Terms. As used in this Agreement, the following
-------------
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Account" has the meaning specified in the Pledge and Security
Agreement.
"Account Debtor" has the meaning specified in the Pledge and
Security Agreement.
"Account Triggering Event" means with respect to Terra Canada or
Terra UK, the occurrence of (i) a Default (relating to the matters referred to
in Sections 9.1(f) or (g)), (ii) an Event of Default and (iii) additionally with
respect to Terra UK only, any of the events specified in Clause 5.3 of the
Debenture.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Advance Rate" means, at any time, (i) up to 85% in the case of
Eligible Receivables, (ii) up to the Seasonal Eligible Inventory Rate in the
case of Eligible Non-Spare Parts Inventory, and (iii) up to 5% in the case of
Eligible Spare Parts Inventory, in each case as such rates may be increased or
decreased from time to time with respect to any class of Eligible Receivables,
Eligible Non-Spare Parts Inventory or Eligible Spare Parts Inventory by the
Administrative Agent in its sole discretion, with any change in such rates to be
effective two (2) Business Days after written notice thereof from the
Administrative Agent to the Borrower; provided, however, that the Administrative
Agent shall not increase such rates above the rates set forth above as of the
Effective Date without the consent of the Lenders.
"Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
10% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning specified in the preamble to this
Agreement.
"Ammonium Nitrate Hedging Agreement" means an agreement dated
December 31, 1997 between ICI Chemicals and Polymers Limited and Terra Canada
pursuant to which Terra Canada agrees to pay certain amounts to ICI Chemicals
and Polymers Limited by reference to ammonium nitrate prices.
2
"Anglo American" means Anglo American plc, a company incorporated in
England and Wales with company number 03564138.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) during the period commencing on the
Effective Date and ending on the first Business Day after receipt by the
Administrative Agent of the Financial Statements required to be delivered by
Section 6.1(c) for the Fiscal Quarter ending December 31, 2001, with respect to
Loans maintained as (A) Base Rate Loans, a rate equal to 1.75% per annum and (B)
Eurodollar Rate Loans, a rate equal to 2.75% per annum and (b) thereafter as of
any date of determination, a per annum rate equal to the rate set forth below
opposite the applicable type of Loan and the then applicable Leverage Ratio
(determined for the twelve-month period ending on the last day of the most
recent Fiscal Quarter or Fiscal Year, as applicable, for which Financial
Statements have been delivered pursuant to Section 6.1) set forth below:
---------------------------------------------------------------------
Base Rate Eurodollar
Leverage Ratio Loans Rate Loans
---------------------------------------------------------------------
Greater than 5.5 to 1 2.25% 3.25%
---------------------------------------------------------------------
Less than or equal to 5.5 to 1 and
greater than 5.0 to 1 2.00% 3.00%
---------------------------------------------------------------------
Less than or equal to 5.0 to 1 and
greater than 4.0 to 1 1.75% 2.75%
---------------------------------------------------------------------
Less than or equal to 4.0 to 1 1.50% 2.50%
---------------------------------------------------------------------
Subsequent changes in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective as to all Revolving Loans on the first day
of the month beginning after delivery by the Borrowers to the Administrative
Agent of new consolidated financial statements pursuant to Section 6.1(b) for
each of the first three Fiscal Quarters of each Fiscal Year and Section 6.1(c)
for each Fiscal Year. Notwithstanding anything to the contrary set forth in this
Agreement (including the then effective Leverage Ratio), if the Borrowers shall
fail to deliver such financial statements within the time periods specified in
Section 6.1(b) or (c), as applicable, the Applicable Margin from and including
the 46th day after the end of such Fiscal Quarter or the 91st day after the end
of such Fiscal Year, as the case may be, to but not including the date the
Borrowers deliver to the Administrative Agent such financial statements shall
equal the highest Applicable Margin set forth above.
"Approved Deposit Account" means each bank account identified as an
"Approved Deposit Account" on Schedule 7.12 and such other receivables
collection accounts from time to time maintained by the Borrowers and Terra
Canada with a bank acceptable to the Administrative Agent and subject to a
Deposit Account Control Agreement.
3
"Approved Fund" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Arranger" means Xxxxxxx Xxxxx Barney Inc., in its capacity as Lead
Arranger and Sole Book Runner for the Revolving Credit Facility.
"Asset Sale" has the meaning specified in Section 8.4.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit A.
"Availability Reserve" means, with respect to any Borrower effective
as of two Business Days after the date of written notice of any determination
thereof to Terra Capital by the Administrative Agent, such amounts (without
duplication as to amounts included in the determination of any Eligibility
Reserve) as the Administrative Agent may from time to time establish against the
Available Credit of such Borrower, in the Administrative Agent's sole
discretion, in order either (a) to preserve the value of the Collateral or the
Administrative Agent's Lien thereon, or (b) to provide for the payment of
unanticipated liabilities of such Borrower or its Subsidiaries arising after the
Effective Date; provided, however, that the Administrative Agent shall apply
criteria in respect of the foregoing in accordance with its customary practice
with regard to similar credit facilities.
"Available Credit" means at any time in respect of (i) Terra
Capital, the Terra Capital Available Credit, (ii) Terra UK, the Terra UK
Available Credit, and (iii) TNLP, the TNLP Available Credit.
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent executed by any Person (other than a Loan Party) who is
in possession of Inventory on behalf of the Borrower pursuant to which such
Person acknowledges, among other things, the Administrative Agent's Lien with
respect thereto.
"Bankruptcy Code" means title 11, United States Code, as amended
from time to time.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum plus (ii)
the rate per annum obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United States
for three-month certificates of deposit of major United States money
market banks, such three-week moving average being determined weekly on
each Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve
4
Bank of New York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank from three
New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for
Citibank in respect of liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits in the
United States, plus (iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits in
the United States; and
(c) the sum of (i) 0.5% per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any Loan during any period in which it bears
interest based on the Base Rate.
"Beaumont Ammonia" means Beaumont Ammonia, Inc., a Delaware
corporation and Subsidiary of Terra UK Holdings.
"Beaumont Holdings" means Beaumont Holdings Corporation, a Delaware
corporation and wholly owned Subsidiary of BMCH.
"BMCH" means BMC Holdings, Inc., a Delaware corporation.
"Borrowing" means a borrowing consisting of Loans made on the same
day by the Lenders ratably according to their respective Revolving Credit
Commitments.
"Borrowing Base" means, with respect to any Borrower (a) the sum of
(i) the product of the Advance Rate then in effect for Eligible Receivables and
the face amount of all Eligible Receivables of such Borrower's Borrowing Base
Contributors (calculated net of all finance charges, late fees and other fees
which are unearned, sales, excise or similar taxes, and credits or allowances
granted at such time), (ii) the product of the Advance Rate then in effect for
each class of Eligible Non-Spare Parts Inventory and the Eligible Non-Spare
Parts Inventory (valued at the lower of cost and market on a first-in, first-out
basis) constituting such class at such time of such Borrower's Borrowing Base
Contributors, (iii) the product of the Advance Rate then in effect for Eligible
Spare Parts Inventory and the Eligible Spare Parts Inventory of such Borrower's
Borrowing Base Contributors and (iv) 100% of cash maintained by such Borrower in
a cash collateral account opened for such purpose with the Administrative Agent
(including the L/C Cash Collateral Account and any other Cash Collateral Account
referred to in Section 2.9 or Section 7.12(f)) on terms acceptable to, and
subject to a perfected first priority Lien in favor of, the Administrative Agent
less (b) any Eligibility Reserves applicable to such Borrower then in effect;
provided, however that, for the purposes of calculating any of the foregoing
amounts denominated in Sterling, Canadian Dollars or Euros, the Dollar
Equivalent of such Sterling, Canadian Dollar or Euro amount shall be used.
"Borrowing Base Certificate" means a certificate of the Borrowers
substantially in the form of Exhibit E.
5
"Borrowing Base Contributor" means (i) in respect of Terra Capital,
each of Terra Oklahoma, Port Xxxx, BMCH and Beaumont Ammonia, (ii) in respect of
Terra UK, Terra UK and Terra Canada and (iii) in respect of TNLP, TNLP only.
"Borrowing Base Deficiency" means, at any time with respect to any
Borrower, any time during which the Available Credit of such Borrower is less
than zero.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"Canadian Dollars" means the lawful money of Canada.
"Canadian Employee Benefit Plan" means any employee benefit,
pension, retirement or other equivalent or analogous plan or program established
or maintained by the Borrower or any of its Canadian Subsidiaries.
"Canadian Term Loan" means the Term Loan (as defined in the Terra
Canada Credit Agreement).
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cash Collateral Account" means each Approved Deposit Account
maintained at Citibank or an Affiliate of Citibank, each other bank account
identified as a "Cash Collateral Account" on Schedule 7.12 and each other
account maintained from time to time by any Loan Party with Citibank and
designated a "Cash Collateral Account" by the Administrative Agent.
"Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States government, the United Kingdom government or the
Canadian government or any agency thereof acceptable to the Administrative
Agent, (b) certificates of deposit, eurodollar time deposits, overnight bank
deposits and bankers' acceptances of any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) which, at the time of acquisition, are rated at least "A-1" by
Standard & Poor's Rating Services ("S&P") or "P-1" by Xxxxx'x Investors
Services, Inc. ("Moody's"), (c) commercial paper of an issuer rated at least
"A-1" by S&P or "P-1" by Moody's, (d) Canadian Dollar denominated banker's
acceptances of Canadian banks, and Canadian dollar-denominated commercial paper,
rated at
6
least R1-mid by Dominion Bond Rating Service and (e) shares of any money market
fund that (i) has at least 95% of its assets invested continuously in the types
of investments referred to in clauses (a) through (c) above, (ii) has net assets
of not less than $1,000,000,000 and (iii) is rated at least "A-1" by S&P or
"P-1" by Moody's; provided, however, that the maturities of all obligations of
the type specified in clauses (a) and (d) above shall not exceed 1 year and in
clauses (b) and (c) above shall not exceed 270 days.
"Cash Flow" means, with respect to Terra Industries and its
Subsidiaries for any period, an amount equal to EBITDA of Terra Industries and
its Subsidiaries for such period minus, to the extent not reflected in the
calculation of EBITDA, the sum of (i) TNCLP Minority Interest Payments and (ii)
provided such net cash amount is greater than zero, cash (net of cash in-flows
in respect thereof) used to finance obligations of discontinued operations of
Terra Industries and its Subsidiaries.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of a greater percentage of the issued and
outstanding Voting Stock of Terra Industries than that held directly or
indirectly by Anglo American; (b) Anglo American shall cease to own
beneficially, directly or indirectly, at least 20% of the issued and outstanding
Voting Stock of Terra Industries; (c) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period constituted the
board of directors of Terra Industries (together with any new directors whose
election by the board of directors of Terra Industries or whose nomination for
election by the stockholders of Terra Industries was approved by a vote of at
least two-thirds of the directors then still in office who either were directors
at the beginning of such period or whose elections or nomination for election
was previously so approved) cease for any reason other than death or disability
to constitute a majority of the directors then in office; provided, however,
that the appointment of any directors which are nominated by Anglo American in
replacement of then existing directors which were nominated by Anglo American
shall not itself constitute a Change of Control or (d) a "Change of Control" as
defined in any Indenture shall have occurred.
"Chattel Paper" has the meaning specified in the Pledge and Security
Agreement.
"Citibank" has the meaning specified in the recitals to this
Agreement.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents.
"Collateral Documents" means the Pledge and Security Agreement, the
Debenture, the Senior Secured Note Intercreditor Agreement, the Terra UK Share
Mortgage, the Terra Canada Collateral Documents, the Junior Collateral Documents
and any other document executed and delivered by a Loan Party granting a Lien on
any of its property to secure payment of the Obligations of such Loan Party.
7
"Common Unit Purchase" has the meaning specified in Section 8.3(h).
"Common Units" means the common units issued and outstanding under
the Agreement of Limited Partnership dated as of December 4, 1991 of TNCLP.
"Compliance Certificate" has the meaning specified in Section
6.1(d).
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP; provided, however,
that (a) the net income of any other Person in which such Person or one of its
Subsidiaries has a joint interest with a third party (which interest does not
cause the net income of such other Person to be consolidated into the net income
of such Person in accordance with GAAP) shall be included only to the extent of
the amount of dividends or distributions paid to such Person or Subsidiary, (b)
the net income of any Subsidiary of such Person that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or limitation,
and (c) any one-time increase or decrease to net income which is required to be
recorded because of the adoption of new accounting policies, practices or
standards required by GAAP shall be excluded.
"Constituent Documents" means, with respect to any Person, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (ii) the by-laws (or the equivalent governing
documents) of such Person and (iii) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding any Loan Document but including any
Material Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its properties is subject.
"CUSA" has the meaning specified in the preamble to this Agreement.
"Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:
(a) Liens with respect to the payment of taxes, customs duties,
assessments or governmental charges in all cases which are not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions
are being maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in
8
good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained to the
extent required by GAAP;
(c) deposits made in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other types of
social security benefits or to secure the performance of bids, tenders,
sales, contracts (other than for the repayment of borrowed money) and
surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the use
of real property which do not materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real property
which do not in the aggregate materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(f) financing statements of a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's
business;
(g) expired financing statements and financing statements filed for
precautionary purposes in respect of operating leases; and
(h) Liens in favor of banks which arise under Article 4 of the New
York UCC on items in collection and documents relating thereto and
proceeds thereof.
"Debenture" means the Amended and Restated English law Debenture
dated as of the Effective Date, in substantially the form of Exhibit N, executed
by Terra UK in favor of the Administrative Agent.
"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) and (b) of the definition of "Indebtedness" by Terra
Industries or any of its Subsidiaries.
"Default" means any event which with the passing of time or the
giving of notice or both would become an Event of Default.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement.
"Disbursement Accounts" means the bank accounts identified as such
on Schedule 7.12 and each other account maintained from time to time by the
Borrowers and Terra Canada with a bank acceptable to the Administrative Agent
for the purposes of paying disbursements.
"Document" has the meaning specified in the Pledge and Security
Agreement.
9
"Documentary Letter of Credit" means any letter of credit issued by
an Issuer pursuant to Section 2.4 for the account of the Borrower, which is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by the Borrower or any of its Subsidiaries in the ordinary course of
its business.
"Dollar Equivalent" means with respect to any amount denominated in
a currency other than Dollars, at the time of determination thereof, the
equivalent of such currency in Dollars determined by using the rate of exchange
quoted by Citibank or an Affiliate thereof in New York, New York at 11:00 a.m.
(New York time) on the date of determination to prime banks in New York for the
spot purchase in the New York foreign exchange market of such amount of Dollars
with such other currency.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender (or an Affiliate of such Lender) as
such Lender may from time to time specify to the Borrowers and the
Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of Terra Industries
organized under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any provision for income
taxes, (ii) interest expense including net costs under Interest Rate Contracts,
(iii) loss from extraordinary items, (iv) any aggregate net loss from the sale,
exchange or other disposition of capital assets by such Person, (v) any other
non-cash loss or other items, (vi) depreciation, depletion and amortization of
intangibles or financing or acquisition costs and (vii) income allocation to
minority interests minus (c) the sum of, in each case to the extent included in
the calculation of such Consolidated Net Income but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, (iv) any aggregate net gain from the sale, exchange or
other disposition of capital assets by such Person, (v) any other non-cash gains
or other items and (vi) loss allocation to minority interests.
"Effective Date" has the meaning specified in Section 3.1.
"Eligibility Reserves" means, with respect to any Borrower,
effective as of two Business Days after the date of written notice of any
determination thereof to Terra Capital by the Administrative Agent, such amounts
as the Administrative Agent, in its sole discretion, may from time to time
establish against the gross amounts of Eligible Receivables, Eligible Non-Spare
Parts Inventory and Eligible Spare Parts Inventory of such Borrower's Borrowing
Base Contributors to reflect risks or contingencies arising after the Effective
Date which may affect any one or class of such items and which have not already
been taken into account in the calculation of the Borrowing Base of such
Borrower (including in respect of (a) preferential debts which under applicable
law would be prior to the claims of the Secured Parties and (b) Inventory which
is subject to title retention claims of the suppliers thereof); provided,
however, that the
10
Administrative Agent shall apply criteria in respect of the foregoing in
accordance with its customary practice with regard to similar credit facilities.
"Eligible Assignee" means (a) a Lender or any Affiliate or Approved
Fund of such Lender; (b) a commercial bank having total assets in excess of
$5,000,000,000; (c) a finance company, insurance company, other financial
institution or fund reasonably acceptable to the Administrative Agent, which is
regularly engaged in making, purchasing or investing in loans including, with
respect to any proposed assignment of all or a portion of a Lender's Revolving
Credit Commitment, revolving loans, and having total assets in excess of
$250,000,000 or, to the extent assets are less than such amount, a finance
company, insurance company, other financial institution or fund, reasonably
acceptable to the Administrative Agent and the Borrowers; or (d) a savings and
loan association or savings bank organized under the laws of the United States
or any State thereof which has a net worth, determined in accordance with GAAP,
in excess of $250,000,000.
"Eligible Finished Products" means Inventory comprised of finished
products (which are classified, in accordance with past practice, as Eligible
Finished Products in the Borrowers' accounting systems) and is otherwise
Eligible Inventory.
"Eligible Inventory" means, in respect of any Borrowing Base
Contributor, the Inventory of such Borrowing Base Contributor (other than any
Inventory which has been consigned by such Borrowing Base Contributor),
including raw materials and finished goods (a) which is owned solely by such
Borrowing Base Contributor, (b) with respect to which the Administrative Agent
has a valid and perfected first priority Lien, (c) with respect to which no
warranty contained in any of the Loan Documents has been breached, (d) which is
not, in the Administrative Agent's sole discretion, obsolete or unmerchantable,
(e) with respect to which (in respect of any Inventory labeled with a brand name
or trademark and sold by such Borrowing Base Contributor pursuant to a trademark
owned by such Borrowing Base Contributor or a license granted to such Borrowing
Base Contributor) the Administrative Agent would have rights under such
trademark or license pursuant to the Pledge and Security Agreement or other
agreement satisfactory to the Administrative Agent to sell such Inventory in
connection with a liquidation thereof, and (f) which the Administrative Agent
deems to be Eligible Inventory based on such credit and collateral
considerations as the Administrative Agent may, in its sole discretion, deem
appropriate. No Inventory of such Borrowing Base Contributor shall be Eligible
Inventory if such Inventory is located, stored, used or held at the premises of
a third party or premises that have been mortgaged in favor of a third party
unless (i)(A) the Administrative Agent shall have received a Mortgagee Waiver
(to the extent the subject Inventory is not located, stored or held at premises
covered by the Senior Secured Note Intercreditor Agreement), Landlord Waiver or
Bailee's Letter or (B) in the case of Inventory located on a leased or mortgaged
premises, an Eligibility Reserve satisfactory to the Administrative Agent shall
have been established with respect thereto and (ii) an appropriate UCC-1
financing statement shall have been executed and properly filed in the United
States and equivalent filings, as applicable, shall have been made in England &
Wales and Canada, as applicable.
"Eligible Non-Spare Parts Inventory" means Inventory comprised of
Eligible Finished Products and Eligible Raw Materials.
"Eligible Raw Materials" means Inventory comprised of raw materials
(which are classified in accordance with past practice, as raw materials in the
Borrowers' accounting systems) and which is otherwise Eligible Inventory.
11
"Eligible Receivable" means, in respect of any Borrowing Base
Contributor, the gross outstanding balance of those Accounts of such Borrowing
Base Contributor which arise out of sales of merchandise, goods or services in
the ordinary course of business, which are made by such Borrowing Base
Contributor to a Person that is not an Affiliate of such Borrowing Base
Contributor, which are not in dispute, and which constitute Collateral in which
the Administrative Agent has a fully perfected first priority Lien; provided,
however, that an Account shall in no event be an Eligible Receivable if:
(a) such Account is outstanding more than 60 days past the
original due date thereof or more than 90 days from the invoice date
thereof; or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct
with respect to such Account; or
(c) the Account Debtor on such Account has disputed liability
or made any claim with respect to any other Account due from such Account
Debtor to such Borrowing Base Contributor but only to the extent of such
dispute or claim; or
(d) the Account Debtor on such Account has: (i) filed a
petition for bankruptcy or any other relief under the Bankruptcy Code or
any other law relating to bankruptcy, insolvency, reorganization or relief
of debtors; (ii) made an assignment for the benefit of creditors; (iii)
had filed against it any petition or other application for relief under
the Bankruptcy Code or any such other law; (iv) has failed, suspended
business operations, become insolvent, called a meeting of its creditors
for the purpose of obtaining any financial concession or accommodation; or
(v) had or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(e) the Account Debtor on such Account or any of its
Affiliates is also a supplier to or creditor of such Borrowing Base
Contributor unless, and to the extent that (in respect of such Account),
such supplier or creditor has executed a no-offset letter satisfactory to
the Administrative Agent, in its sole discretion; or
(f) the sale represented by such Account is to an Account
Debtor located outside England, Scotland or Wales in respect of Terra UK
or outside the United States or Canada in respect of any other Borrowing
Base Contributor, unless the sale is on letter of credit or acceptance
terms acceptable to the Administrative Agent, in its sole judgment; or
(g) the sale to such Account Debtor on such Account is on a
xxxx-on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
(h) such Account is subject to a Lien in favor of any Person
other than the Administrative Agent for the benefit of the Secured
Parties; or
(i) such Account is (but only to the extent that it is)
subject to any deduction, offset, counterclaim, return privilege or other
conditions other than volume sales discounts given in the ordinary course
of such Borrowing Base Contributor's business; or
12
(j) the Account Debtor on such Account is located, in respect
of the Borrowing Base Contributors of Terra Capital or TNLP, in New Jersey
or Minnesota, unless such Borrowing Base Contributor (i) has received a
certificate of authority to do business and is in good standing in such
state or (ii) has filed a Notice of Business Activities Report with the
appropriate office or agency of such state for the current year; or
(k) the Account Debtor on such Account is a Governmental
Authority, unless the Borrower has assigned its rights to payment of such
Account to the Administrative Agent pursuant to the Assignment of Claims
Act of 1940, as amended, in the case of a federal Governmental Authority,
and pursuant to applicable law, if any, in the case of any other
Governmental Authority, and such assignment has been accepted and
acknowledged by the appropriate government officers; or
(l) the Administrative Agent, in accordance with its customary
criteria, determines, in its sole discretion exercised reasonably, that
such Account may not be paid or otherwise is ineligible; or
(m) 50% or more of the outstanding Accounts of the Account
Debtor have become, or have been determined by the Administrative Agent,
in accordance with the provisions hereof, to be, ineligible; or
(n) the sale represented by such Account is denominated in a
currency other than (i) Dollars or Canadian Dollars in respect of Terra
Canada, TNLP or any Borrowing Base Contributor of Terra Capital or (ii)
Dollars, Sterling or Euros in respect of Terra UK; or
(o) such Account is not evidenced by an invoice or other
writing in form acceptable to the Administrative Agent, in its sole
discretion; or
(p) such Borrowing Base Contributor, in order to be entitled
to collect such Account, is required to perform any additional service
for, or perform or incur any additional obligation to, the Person to whom
or to which it was made.
"Eligible Spare Parts Inventory" means Inventory comprised of spare
parts (which are classified, in accordance with past practice, as spare parts in
the Borrowers' accounting system) and which is otherwise Eligible Inventory.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect, as amended or supplemented from time to time, relating to
pollution or the regulation or protection of occupational health and safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. (S)
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
(S) 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. (S) 136 et seq.); the Resource Conservation and Recovery Act,
as amended (42 U.S.C. (S) 6901 et seq.); the Toxic Substance Control Act, as
amended (42 U.S.C. (S) 7401 et seq.); the Clean Air Act, as amended (42 U.S.C.
(S) 740 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.
(S) 1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C.
(S) 651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. (S) 300f et
seq.); the Environmental Protection Act (Ontario); the Canadian Environmental
Protection Act; the Ontario
13
Water Resources Act; and their state and local counterparts or equivalents and
any transfer of ownership notification or approval statute, including the
Industrial Site Recovery Act (N.J. Stat. Xxx. (S) 13:1K-6 et seq.) and any
similar or equivalent Requirement of Law of any relevant jurisdiction.
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" has the meaning specified in the Pledge and Security
Agreement.
"Equity Issuance" means the issue or sale of any Stock of Terra
Industries, any Loan Party or any Subsidiary of any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Material Subsidiaries within the meaning of Section 414
(b), (c), (m) or (o) of the Code.
"ERISA Event" means (i) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan as to which the 30 day notice requirement
has not been waived under applicable regulations; (ii) the withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (iii) the
complete or partial withdrawal of the Borrower, any of its Subsidiaries or any
ERISA Affiliate from any Multiemployer Plan; (iv) notice of reorganization or
insolvency of a Multiemployer Plan; (v) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (vi) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (vii) the failure to make any
required contribution to a Title IV Plan or Multiemployer Plan; (viii) the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA on
the Borrower or any of its Subsidiaries or any ERISA Affiliate; or (ix) any
other event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA.
14
"Euro" means the single currency of the participating states of the
European Union.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Base Rate" means the rate determined by the
Administrative Agent to be the offered rate for deposits in Dollars for the
applicable Interest Period which appears on the Dow Xxxxx Markets Telerate Page
3750 as of 11:00 a.m., London time, on the second full Business Day next
preceding the first day of each Interest Period. In the event that such rate
does not appear on the Dow Xxxxx Markets Telerate Page 3750 (or otherwise on the
Dow Xxxxx Markets screen), the Eurodollar Base Rate for the purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent, or, in the absence of such availability, the Eurodollar
Base Rate shall be the rate of interest determined by the Administrative Agent
to be the rate per annum at which deposits in Dollars are offered by the
principal office of Citibank in London to major banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the Eurodollar Rate
Loan of Citibank for a period equal to such Interest Period.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender (or an Affiliate of such Lender) as such Lender may
from time to time specify to the Borrowers and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities which includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1.
"Existing Collateral Agent" has the meaning specified in the
recitals to this Agreement.
"Existing Credit Agreement" has the meaning specified in the
recitals to this Agreement.
"Existing Lender" means each Revolving Credit Lender (as defined in
the Existing Credit Agreement).
15
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the applicable Loan Party, or, if such asset shall have been the
subject of a relatively contemporaneous appraisal by an independent third party
appraiser, the basic assumptions underlying which have not materially changed
since its date, the value set forth in such appraisal, and (b) with respect to
any marketable Security at any date, the closing sale price of such Security on
the Business Day next preceding such date, as appearing in any published list of
any national securities exchange or the Nasdaq Stock Market or, if there is no
such closing sale price of such Security, the final price for the purchase of
such Security at face value quoted on such business day by a financial
institution of recognized standing which regularly deals in securities of such
type selected by the Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated as of the Effective Date,
addressed to Terra Industries from CUSA and the Arranger and accepted by Terra
Industries, with respect to certain fees to be paid from time to time to the
Lenders, CUSA and the Arranger, which letter shall supersede the Fee Letter (as
defined in the Existing Credit Agreement).
"Financial Statements" means the financial statements of Terra
Industries and its Subsidiaries delivered in accordance with Sections 4.4 and
6.1.
"Fiscal Quarter" means each of the three month periods ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Foreign Plan" means each Canadian Employee Benefit Plan and each
other retirement plan (including any statutory severance obligation requiring a
payment upon an employee's termination of employment for any reason other than
"cause" based on the employee's length of service) which is not subject to
reporting in accordance with GAAP and Financial Accounting Standard Bulletin No.
87 or 106, and as to which Terra Industries or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the
16
statements and pronouncements of the Financial Accounting Standards Board, or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"General Intangible" has the meaning specified in the Pledge and
Security Agreement.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means each of the Terra Capital Guarantors, the Terra
UK Guarantors, the TNLP Guarantors.
"Guaranty" means the Amended and Restated Guaranty dated as of
the Effective Date, in substantially the form of Exhibit H, among each of the
Guarantors and the Administrative Agent in respect of each Guarantor's guaranty
of certain of the Obligations.
"Guaranty Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any Guaranty
Obligation shall be equal to the amount of the Indebtedness so guaranteed or
otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in currency values or
commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds,
17
debentures or similar instruments or which bear interest, (c) all reimbursement
and all obligations with respect to letters of credit, bankers' acceptances,
surety bonds and performance bonds, whether or not matured, (d) all indebtedness
for the deferred purchase price of property or services, other than trade
payables and accrued expenses incurred in the ordinary course of business which
are not overdue, (e) all indebtedness of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (f) all Capital Lease Obligations and Major Operating
Lease Obligations of such Person, (g) all Guaranty Obligations of such Person,
(h) all obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any Stock or Stock Equivalents of such Person,
valued, in the case of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (i) all payments that such Person would have to make in the event of
an early termination on the date Indebtedness of such Person is being determined
in respect of Hedging Contracts of such Person and (j) all Indebtedness referred
to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including Accounts and General Intangibles) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness.
"Indemnitees" has the meaning specified in Section 11.4.
"Indentures" means (a) the Senior Note (2003) Indenture, (b) the
Senior Note (2005) Indenture and (c) the Senior Secured Note Indenture.
"Initial Closing Date" means the Closing Date (as defined in the
Existing Credit Agreement).
"Instrument" has the meaning specified in the Pledge and Security
Agreement.
"Intercompany Indebtedness" means Indebtedness owed by Terra
Industries or one of its Subsidiaries to Terra Industries or one of its
Subsidiaries.
"Interest Period" means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter, as selected by a
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to Section 2.2 or 2.11, and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to Section 2.11, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by a Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.11;
provided, however, that all of the foregoing provisions relating to Interest
Periods in respect of Eurodollar Rate Loans are subject to the following:
(i) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day, unless the result of such extension
would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately
preceding Business Day;
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(ii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iii) no Borrower may select any Interest Period that ends
after the date of a scheduled principal payment on the Loans as set
forth in Article II unless, after giving effect to such selection, the
aggregate unpaid principal amount of the Loans for which Interest
Periods end after such scheduled principal payment shall be equal to
or less than the principal amount to which the Loans are required to
be reduced after such scheduled principal payment is made; and
(iv) there shall be outstanding at any one time no more
than seven Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance.
"Inventory" has the meaning specified in the Pledge and Security
Agreement.
"Investment" means, with respect to any Person, (a) any purchase
or other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
(c) any loan, advance (other than prepaid expenses, accounts receivable and
similar items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business and (d) any
deposit with a financial institution.
"Investment Property" has the meaning specified in the Pledge and
Security Agreement.
"IRS" means the Internal Revenue Service of the United States or
any successor thereto.
"Issuer" means each Lender or Affiliate of a Lender that (a) is
listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes an
Issuer with the approval of the Administrative Agent and the Borrower by
agreeing pursuant to an agreement with and in form and substance satisfactory to
the Administrative Agent and the Borrowers to be bound by the terms hereof
applicable to Issuers.
"Junior Collateral Documents" means (i) in respect of TNLP's
obligations for the TNLP Debt, the Amended and Restated Junior TNLP and TNCLP
Pledge and Security Agreement, (ii) in respect of Terra UK's obligations for the
Terra UK Debt and the Terra UK Junior Guaranty, the debenture executed by Terra
UK in favor of Terra Capital and the related Assignment Agreement and
Subordination Agreement, each dated as of the Effective Date, among Terra
Capital, Terra UK and the Administrative Agent and (iii) in respect of the Terra
Canada Debt and the Terra Canada Junior Guaranty, respectively, the Junior
General Security Agreements and Assignments each dated as of the Effective Date,
executed by Terra Canada in
19
favor of Terra Capital and accepted and agreed to by the Administrative Agent,
each of the foregoing being assigned to the Administrative Agent.
"Junior Loan Documents" means (i) in respect of the TNLP Debt, an
amended and restated promissory note dated as of April 7, 2000, issued by TNLP
in favor of Terra Capital, (ii) in respect of the Terra UK Debt, the Terra UK
Debt Note and the Terra Canada Junior Guaranty and (iii) in respect of the Terra
Canada Debt, the Terra Canada Debt Note and the Terra UK Junior Guaranty.
"Junior TNLP and TNCLP Pledge and Security Agreement" means the
Amended and Restated Pledge and Security Agreement dated as of the Effective
Date, in substantially the form of Exhibit J, between TNLP, TNCLP, and Terra
Capital and accepted and agreed to by the Administrative Agent.
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent, executed by a landlord in respect of
Inventory of any Borrowing Base Contributor located at any leased premises of
such Borrowing Base Contributor pursuant to which such landlord, among other
things, waives or subordinates any Lien such landlord may have in respect of
such Inventory.
"L/C Cash Collateral Account" has the meaning specified in
Section 9.3.
"Leases" means, with respect to any Person, all of those
leasehold estates in real property of such Person, as lessee, as such may be
amended, supplemented or otherwise modified from time to time.
"Lender" means each financial institution or other entity that
(a) is listed on the signature pages hereof as a "Lender" or (b) from time to
time becomes a party hereto by execution of an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant
to Section 2.4.
"Letter of Credit Obligations" means, at any time, the aggregate
of all liabilities at such time of each Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning
specified in Section 2.4(e).
"Letter of Credit Request" has the meaning specified in Section
2.4(c).
"Letter of Credit Sublimit" has the meaning specified in Section
2.4(a)(iv).
"Letter of Credit Undrawn Amounts" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.
"Leverage Ratio" means, with respect to any Person for any
period, the ratio of (a) Indebtedness of the type specified in clauses (a), (b),
(d), (e), (f) and (h) of the definition of
20
"Indebtedness" of such Person as of the last day of such period to (b) Cash Flow
for such Person for such period.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease, any financing lease having substantially the same economic effect as any
of the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction naming the owner of the
asset to which such Lien relates as debtor but excluding any right of set-off.
"Loan" means any loan made by any Lender under this Agreement,
including each Revolving Loan and Swing Loan.
"Loan Documents" means, collectively, this Agreement, any Notes,
each Guaranty, the Fee Letter, each Letter of Credit Reimbursement Agreement,
each Hedging Contract to which a Lender or an Affiliate of a Lender is a party,
each agreement pursuant to which a Lender or an Affiliate of a Lender provides
cash management services to a Loan Party, the Loan Purchase Agreement, the
Collateral Documents, the Junior Loan Documents, and each Assignment and
Acceptance and each certificate, agreement or document executed by a Loan Party
and delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.
"Loan Party" means each Borrower, each Guarantor and each other
Subsidiary of Terra Industries that executes and delivers a Loan Document.
"Loan Purchase Agreement" means the Amended and Restated Loan
Purchase Agreement dated as of the Effective Date, in substantially the form of
Exhibit M, between the Administrative Agent and Terra Industries.
"Lockbox" has the meaning specified in each applicable Deposit
Account Control Agreement.
"Major Operating Lease Obligations" means, in respect of any
Person, all obligations of such Person under an operating lease to pay required
termination payments or like payments in an amount exceeding $7,000,000 and in
an amount at least equal to 75% of the original acquisition cost of the property
leased thereunder.
"Management Agreements" means each management agreement between
Terra Industries and/or any of its Subsidiaries and other Persons providing for
the performance by Terra Industries or any such Subsidiary of certain treasury,
purchasing, legal and/or other services for its Subsidiaries and such other
Persons, or such agreements as are in effect from time to time.
"Material Adverse Change" means a material adverse change in any
of (a) the business, condition (financial or otherwise), operations, performance
or properties of any Borrower, individually, or Terra Industries and its
Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of
any Loan Document, (c) the perfection or priority of the Liens granted pursuant
to the Collateral Documents (except as expressly permitted hereby or thereby),
21
(d) the ability of the Borrowers to repay the Obligations or of the Loan Parties
to perform their obligations under the Loan Documents, or (e) the rights and
remedies of the Administrative Agent or the Lenders under the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes, or could reasonably be expected to result in or cause a Material Adverse
Change.
"Material Documents" means the Management Agreements, the
Indentures and the Ammonium Nitrate Hedging Agreement.
"Material Subsidiary" means, at any time, each Borrower, each
Guarantor, TNCLP and any direct or indirect Subsidiary of Terra Industries
owning at least $500,000 of assets or generating at least $100,000 gross income
for the Fiscal Year most recently ended.
"Maximum Credit" means, at any time, (a) the lesser of (i) the
Revolving Credit Commitments in effect at such time and (ii) the sum of the
aggregate Borrowing Base of Terra Capital, Terra UK and TNLP at such time, minus
(b) the aggregate amount of Availability Reserves in effect at such time.
"Maximum Repurchase Amount" means (a) during the first Repurchase
Period ending after the Effective Date, an amount equal to the amount (if any)
by which the gross proceeds of the issuance of the Senior Secured Notes exceeds
$225,000,000 and (b) during each subsequent Repurchase Period an amount (to be
reset on the first day of each such Repurchase Period) equal to the excess (if
any) of (i) the daily average (for the preceding 30-day period) of (A) the
aggregate Borrowing Base of the Borrowers on each day during such preceding
period less (B) the aggregate amount of past due payables of the Borrowers and
the Guarantors on each such day over (ii) $125,000,000.
"Mortgage" means a mortgage, deed of trust, charge, debenture,
fixture filing or other real estate security document made or required to be
made under the Senior Secured Note Indenture by any Loan Party, pursuant to
which such Loan Party grants to the Senior Secured Note Trustee a first priority
Lien (subject only to Liens permitted by the applicable mortgage, deed of trust,
charge, debenture, fixture filing or other real estate security document) on
Real Property.
"Mortgage Releases" means the releases and terminations executed
by the Existing Collateral Agent releasing or terminating as appropriate the
mortgages, deeds of trust, charges, debentures, fixture filings and other Liens
it currently holds over Real Property that will be made subject to a Mortgage,
duly executed and delivered by the Existing Collateral Agent and acknowledged by
the relevant Loan Party mortgagor.
"Mortgagee Waiver" means a letter in form and substance
reasonably acceptable to the Administrative Agent, executed by a mortgagee in
respect of Inventory of any Borrowing Base Contributor located at any mortgaged
premises of such Borrowing Base Contributor.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which Terra Industries, any of its Subsidiaries
or any ERISA Affiliate has any obligation or liability, contingent or otherwise.
22
"Net Cash Proceeds" means (a) proceeds received by Terra
Industries or its Subsidiaries after the Effective Date in cash or Cash
Equivalents from any Asset Sale of property constituting Collateral, other than
Asset Sales permitted under clauses (a) through (e) of Section 8.4, net of (x)
the reasonable cash costs of sale, assignment or other disposition, (y) taxes
paid or payable within 22 months of the date of such Asset Sale as a result
thereof (provided, however, that any such taxes which are so payable shall be
deposited in a Cash Collateral Account acceptable to the Administrative Agent
pending payment) and (z) any amount required to be paid or prepaid on
Indebtedness (other than the Obligations) secured by the assets subject to such
Asset Sale; provided, however, that the evidence of each of (x), (y) and (z) are
provided to the Administrative Agent in form and substance satisfactory to it;
(b) proceeds of insurance covering property constituting Collateral (net of (i)
reasonable expenses incurred directly in the collection thereof and (ii) (to the
extent permitted hereby) contractually required payments of Indebtedness (other
than the Obligations) secured by a Lien on the insured property (that is prior
to any Lien granted under the Collateral Documents)) on account of the loss of
or damage to any such assets or property, and payments of compensation for any
such assets or property taken by expropriation, condemnation or eminent domain,
to the extent such proceeds or payments exceed $2,000,000 in the aggregate; and
(c) proceeds received after the Effective Date by Terra Industries or its
Subsidiaries in cash or Cash Equivalents from (i) any Equity Issuance (other
than any such issuance of common Stock of Terra Industries occurring in the
ordinary course of business to any director, member of the management or
employee of Terra Industries or its Subsidiaries and other than any such
issuance of Stock of TNCLP constituting Senior Secured Note Collateral), or (ii)
any Debt Issuance (except for Indebtedness permitted under clauses (c) through
(i) of Section 8.1), in each case net of brokers' and advisors' fees and other
costs incurred in connection with such transaction; provided, however, that
evidence of such costs is provided to the Administrative Agent.
"Non-Funding Lender" has the meaning specified in Section 2.2(d).
"Non-Material Real Property" means any parcel of Real Property
which has a Fair Market Value of less than $500,000 or (if leasehold) the lease
rental payments in respect thereof are less than $500,000 per annum.
"Non-U.S. Lender" means each Lender or Administrative Agent that
is not a United States person as defined in Section 7701(a)(30) of the Code.
"Note" means a promissory note of a Borrower (other than Terra
UK), substantially in the form of Exhibit B, payable to the order of any Lender
in a principal amount equal to the amount of such Lender's Revolving Credit
Commitment evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from the Revolving Loans owing to such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Notice of Conversion or Continuation" has the meaning specified
in Section 2.11.
"Obligations" means the Loans, the Letter of Credit Obligations
and all other advances, debts, liabilities, obligations, covenants and duties
owing by the Loan Parties to the Administrative Agent, any Lender, any Issuer,
any Affiliate of any of them or any Indemnitee, of every type and description,
present or future, arising under this Agreement or under any other
23
Loan Document or under or in respect of any credit cards issued for the account
of such Person by the Administrative Agent or any of its Affiliates, by reason
of an extension of credit, opening or amendment of a Letter of Credit or payment
of any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange
transaction, Hedging Contract, cash management service or otherwise, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising (including
arising after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or similar proceeding, regardless of whether the
same is allowable as a claim in such proceeding or by applicable law) and
however acquired and whether or not evidenced by any note, guaranty or other
instrument or for the payment of money. The term "Obligations" includes all
letter of credit, cash management and other fees and expenses and all interest,
charges, expenses, fees, attorneys' fees and disbursements and other sums
chargeable to the Loan Parties under this Agreement or any other Loan Document
and all obligations of the Loan Parties to cash collateralize Letter of Credit
Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Pledge and Security Agreement" means the Amended and Restated
Pledge and Security Agreement dated as of the Effective Date, in substantially
the form of Exhibit I, among Terra Industries, Terra Capital, TNLP, each
Guarantor that is a Domestic Subsidiary and the Administrative Agent.
"Port Xxxx" means Port Xxxx Corporation, a Delaware corporation.
"Pro Forma Balance Sheet" has the meaning specified in Section
4.4(d).
"Projections" means (i) up until the delivery of any update or
restatement thereof pursuant to Section 6.1(e), those financial projections
contained in Schedule III, covering the monthly financial projections through
December 31, 2002 and Fiscal Years ending in 2003 and 2004, or (ii) thereafter,
the most recent update or restatement of such projections delivered pursuant to
Section 6.1(e).
"Purchase Event" means the occurrence of any of the following:
(a) any Subsidiary of Terra Industries has any outstanding
Indebtedness owing to Terra Industries or any of its Subsidiaries, other
than Indebtedness permitted to be outstanding under Section 8.1 (except
clause (k) thereof); or
(b) Liens on or with respect to any property of any Subsidiary of
Terra Industries have been created in favor of Terra Industries or any of
its Subsidiaries, other than Liens permitted under Section 8.2 (except
clause (i) thereof); or
24
(c) any Subsidiary of Terra Industries has made any Investments in
Terra Industries or any of its Subsidiaries, other than Investments
permitted under Section 8.3 (except clause (m) thereof); or
(d) any Subsidiary of Terra Industries has sold, transferred or
otherwise disposed of any of its property to Terra Industries or any of
its Subsidiaries, other than sales, transfers or other dispositions
permitted under Section 8.4 (except clause (g) thereof); or
(e) Terra Industries or any of its Subsidiaries receive, declare,
order, pay, make or set apart any Restricted Payment other than Restricted
Payments permitted under Section 8.5 (except clause (g) thereof).
"Qualifying Lender" means:
(a) a bank as defined in (S) 840A for the purposes of (S) 349(3)(a)
of the UK Income and Corporation Taxes Act 1988 which is within the charge
to United Kingdom corporation tax in respect of payments of interest
received by it under this agreement and which is beneficially entitled to
such interest; or
(b) a bank, financial institution or corporation which is resident
in a country with which the United Kingdom has a double-taxation treaty
under which that bank, financial institution or corporation is entitled,
subject to completion of any necessary procedural formalities, to receive
principal, interest and fees under this agreement without withholding of
United Kingdom Income Tax.
"Ratable Portion" or "ratably" means, with respect to any Lender,
the percentage obtained by dividing (a) the Revolving Credit Commitment of such
Lender by (b) the aggregate Revolving Credit Commitments of all Lenders (or, at
any time after the Revolving Credit Termination Date, the percentage obtained by
dividing the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to such Lender by the aggregate outstanding principal balance
of the Revolving Credit Outstandings owing to all Lenders).
"Real Property" means all of those plots, pieces or parcels of land
now owned, leased or hereafter acquired or leased by any Loan Party or any of
its Subsidiaries (the "Land"), together with the right, title and interest of
such Loan Party or Subsidiary, if any, in and to the streets, the land lying in
the bed of any streets, roads or avenues, opened or proposed, in front of, the
air space and development rights pertaining to the Land and the right to use
such air space and development rights, all rights of way, privileges, liberties,
tenements, hereditaments and appurtenances belonging or in any way appertaining
thereto, all fixtures, all easements now or hereafter benefiting the Land and
all royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
"Redemption Notice Period" has the meaning specified in Section
3.1(c).
"Register" has the meaning specified in Section 11.2(c).
25
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the environment or
into or out of any property owned by such Person, including the movement of
Contaminants through or in the air, soil, surface water, ground water or
property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Release of any Contaminant in the
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the environment or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
"Repurchase Period" means each of the following periods during which
the Borrowers and the Guarantors may make open market purchases of Senior Notes
(2005) and Common Units, subject to the terms of Section 8.3(h) and Section
8.12: (a) the period beginning on the Effective Date and ending on June 30, 2002
and (b) each twelve month period beginning on July 15 of each year prior to the
Scheduled Termination Date and ending on July 14 of the following year beginning
on July 15, 2002.
"Requirement of Law" means, with respect to any Person, all federal,
provincial, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Requisite Lenders" means those Lenders having more than fifty
percent (50%) of the aggregate outstanding amount of the aggregate Revolving
Credit Commitments or, after the Revolving Credit Termination Date, the
aggregate Revolving Credit Outstandings. Prior to the Revolving Credit
Termination Date, a Non-Funding Lender shall not be included in the calculation
of "Requisite Lenders".
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person, but in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of Terra
Industries or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in Stock or Stock Equivalents or a dividend or
distribution payable solely to any Borrower and/or one or more Subsidiary
Guarantors, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Stock or
Stock Equivalents of Terra Industries or any of its Subsidiaries now or
hereafter outstanding other than one payable solely to Terra Industries and/or
one or more Subsidiary Guarantors or any cashless exercise of warrants or
options in respect of the foregoing, and (c) any payment or prepayment of
principal, premium (if any), interest, fees (including fees to obtain any waiver
or consent in connection with any Security) or other charges on, or redemption,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Subordinated Debt, other than any required redemptions,
26
retirement, purchases or other payments, in each case to the extent permitted to
be made by the terms of such Indebtedness after giving effect to any applicable
subordination provisions.
"Revolving Credit Commitment" means, with respect to each Lender,
the commitment of such Lender to make Revolving Loans and acquire interests in
other Revolving Credit Outstandings in the aggregate principal amount
outstanding not to exceed the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving Credit Commitment," as amended to
reflect each Assignment and Acceptance executed by such Lender and as such
amount may be reduced pursuant to this Agreement.
"Revolving Credit Facility" means the Revolving Credit Commitments
and the provisions herein related to the Revolving Loans, Swing Loans and
Letters of Credit.
"Revolving Credit Outstandings" means, at any particular time, the
sum of (a) the principal amount of the Revolving Loans outstanding at such time
plus (b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of (a)
the Scheduled Termination Date, (b) the date of termination of the Revolving
Credit Commitments pursuant to Section 2.5 and (c) the date on which the
Obligations become due and payable pursuant to Section 9.2.
"Revolving Loan" has the meaning specified in Section 2.1.
"Scheduled Termination Date" means June 30, 2005.
"Seasonal Eligible Inventory Rate" means, in any calendar month with
respect to each type of Eligible Non-Spare Parts Inventory set forth below, the
applicable percentage set forth opposite such month under such type of Eligible
Non-Spare Parts Inventory:
-----------------------------------------------------------------------------------------------
Calendar Ammonia/ Natural Precious
Month Ammonia UAN 28 Urea Methanol Gas Metals Other
Nitrate
-----------------------------------------------------------------------------------------------
January 71% 56% 58% 50% 56% 60% 64%
February 75% 59% 60% 53% 56% 60% 68%
March 75% 59% 60% 53% 56% 60% 68%
April 75% 59% 60% 53% 56% 60% 68%
May 75% 59% 60% 53% 56% 60% 68%
June 75% 59% 60% 53% 56% 60% 68%
July 75% 59% 60% 53% 56% 60% 68%
August 71% 56% 58% 50% 56% 60% 64%
September 71% 56% 58% 50% 56% 60% 64%
October 71% 56% 58% 50% 56% 60% 64%
November 71% 56% 58% 50% 56% 60% 64%
December 71% 56% 58% 50% 56% 60% 64%
-----------------------------------------------------------------------------------------------
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent and any other holder of any of the Obligations.
27
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Senior Note (2003) Indenture" means the 10-3/4% Senior Note
Indenture dated October 15, 1993 between Terra Industries (as successor to AMCI)
and Society National Bank.
"Senior Note (2005) Indenture" means the 10-1/2% Senior Note
Indenture dated June 22, 1995 between Terra Industries and First Trust National
Association.
"Senior Note (2005) Purchase" has the meaning specified in Section
8.12.
"Senior Notes (2003)" means the 10-3/4% Senior Notes due 2003 issued
pursuant to the Senior Note (2003) Indenture.
"Senior Notes (2005)" means the 10-1/2% Senior Notes due 2005 issued
pursuant to the Senior Note (2005) Indenture.
"Senior Secured Note Collateral" has the meaning specified in the
Senior Secured Note Intercreditor Agreement.
"Senior Secured Note Documents" has the meaning specified in the
Senior Secured Note Intercreditor Agreement, and includes the Senior Secured
Notes and the Senior Secured Note Indenture.
"Senior Secured Note Indenture" means the 12-7/8% Senior Note
Indenture dated October 10, 2001 between Terra Capital and the Senior Secured
Note Trustee.
"Senior Secured Note Intercreditor Agreement" means the Access, Use
and Intercreditor Agreement dated as of the Effective Date, in substantially the
form of Exhibit L, among the Borrowers and Guarantors, the Administrative Agent
and the Senior Secured Note Trustee.
"Senior Secured Note Trustee" means the trustee, together with its
successors and assigns in such capacity, appointed in accordance with the
provisions of the Senior Secured Note Indenture to act for the benefit of the
holders of the Senior Secured Notes.
"Senior Secured Notes" means the 12-7/8% Senior Secured Notes
(including the Initial Notes and the Exchange Notes, as such terms are defined
in the Senior Secured Note Indenture) due 2008 issued or to be issued by Terra
Capital pursuant to the Senior Secured Note Indenture.
"Shared Collateral" has the meaning specified in the Senior Secured
Note Intercreditor Agreement.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such
28
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means any letter of credit issued
pursuant to Section 2.4 which is not a Documentary Letter of Credit.
"Sterling" and "(pound)" means the lawful money of the United
Kingdom.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Debt" means all Indebtedness of Terra Industries and
its Subsidiaries which is subordinated in right of payment to the prior payment
in full of the Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity (a) of which an
aggregate of more than 50% of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person, or (b) the ordinary power to appoint the majority
of the members of the board of directors, managers, trustees or other
controlling Person of which is held by such Person and/or one or more
Subsidiaries of such Person.
"Subsidiary Guarantor" means, in respect of any Borrower, a
Subsidiary of such Borrower which has guaranteed all of such Borrower's
Obligations.
"Swing Loan" has the meaning specified in Section 2.3.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Swing Loan Lender" means CUSA.
"Swing Loan Request" has the meaning specified in Section 2.3(b).
"Syndication Agent" has the meaning specified at the beginning of
this Agreement.
"Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary Tax
Returns.
"Tax Return" has the meaning specified in Section 4.8(a).
29
"Taxes" has the meaning specified in Section 2.16(a).
"Term Loan" has the meaning specified in the Existing Credit
Agreement.
"Terra Canada" means Terra International (Canada) Inc., a
corporation governed by the laws of Ontario and an indirect wholly owned
Subsidiary of Terra Capital.
"Terra Canada Collateral Documents" means, collectively, the Terra
Canada Security Agreement and each security agreement or other grant of security
now or hereafter made by Terra Canada to secure any of its Obligations, and all
recordings, registrations and other filings required by this Agreement or any of
the foregoing to be filed with respect to the Liens created pursuant thereto.
"Terra Canada Credit Agreement" means the Credit Agreement dated as
of December 31, 1997 and amended and restated as of March 31, 1998, as of June
25, 1999 and on April 7, 0000 xxxxx Xxxxx Xxxxxx, the lenders party thereto and
Citibank, as administrative agent for said lenders.
"Terra Canada Debt" means Intercompany Indebtedness, in an initial
principal amount of $47,301,147 outstanding as of the Effective Date, owed by
Terra Canada to Terra Capital.
"Terra Canada Debt Note" means the promissory note issued by Terra
Canada evidencing the Terra Canada Debt, dated as of the Effective Date.
"Terra Canada Junior Guaranty" means the Junior Guaranty dated as of
the Effective Date, executed by Terra Canada in favor of Terra Capital in
respect of the Terra UK Debt, and assigned to the Administrative Agent.
"Terra Canada Mortgage" means the collateral charge dated December
31, 1997 in favor of the Administrative Agent covering (inter alia) Terra
Canada's Courtright, Ontario manufacturing facility.
"Terra Canada Security Agreement" means the Amended and Restated
General Security Agreement dated as of the Effective Date, in substantially the
form of Exhibit O, executed by Terra Canada in favor of the Administrative
Agent.
"Terra Capital Available Credit" means, at any time, an amount equal
to (a) the lesser of (i) the then effective Revolving Credit Commitments and
(ii) the Borrowing Base of Terra Capital at such time minus (b) the sum of (i)
the aggregate Revolving Credit Outstandings owing by Terra Capital at such time
and (ii) any Availability Reserve applicable to Terra Capital in effect at such
time.
"Terra Capital Guarantors" means each of (i) Terra Industries, (ii)
the Borrowing Base Contributors of Terra Capital, (iii) Terra Capital Holdings,
(iv) TNC, (v) TI, (vi) BMCH, (vii) Beaumont Holdings, (viii) TMC, (ix) Terra UK
Holdings, (x) Terra Real Estate and (xi) any other Domestic Subsidiary (other
than TNCLP and its Subsidiaries) that becomes party to a Guaranty in respect of
the Obligations of Terra Capital.
30
"Terra Capital Holdings" means Terra Capital Holdings, Inc., a
Delaware corporation.
"Terra Oklahoma" means Terra International (Oklahoma) Inc., a
Delaware corporation and a wholly owned Subsidiary of TI.
"Terra Real Estate" means Terra Real Estate Corp., an Iowa
corporation and a wholly owned Subsidiary of TI.
"Terra UK Available Credit" means, at any time, an amount equal to
(a) the lesser of (i) the then effective Revolving Credit Commitments and (ii)
the Borrowing Base of Terra UK at such time minus (b) the sum of (i) the
aggregate Revolving Credit Outstandings owing by Terra UK at such time and (ii)
any Availability Reserve applicable to Terra UK in effect at such time.
"Terra UK Customer Debt" means Indebtedness for borrowed money of a
customer of Terra UK owing to Capital Bank Plc or another financial institution
in the United Kingdom, provided that:
(a) such customer uses the entire principal proceeds of such
Indebtedness to pay for goods and services purchased from Terra UK;
(b) such customer is required to repay such Indebtedness in full
within 12 months of the date on which such Indebtedness is incurred;
(c) in the reasonable opinion of Terra UK, such customer is
creditworthy; and
(d) it is a condition of the extension of credit by Capital Bank
Plc (or such other financial institution) to such customer that
Terra UK guarantee a portion of such Indebtedness.
"Terra UK Debt" means Intercompany Indebtedness, in an initial
principal amount of $49,161,408 outstanding as of the Effective Date, owed by
Terra UK to Terra Capital, and excluding the Terra UK Fixed Asset Secured Debt.
"Terra UK Debt Note" means the promissory note issued by Terra UK
evidencing the Terra UK Debt, dated as of the Effective Date.
"Terra UK Fixed Asset Secured Debt" means the Intercompany
Indebtedness owing from Terra UK to Terra UK Holdings in a maximum principal
amount of $100,000,000, the promissory note, guarantees, security interests and
other supporting obligations in respect of which constitute Senior Secured Note
Collateral.
"Terra UK Guarantors" means each of (i) Terra Capital, (ii) the
Terra Capital Guarantors and (iii) Terra Canada.
"Terra UK Holdings" means Terra (U.K.) Holdings, Inc., a Delaware
corporation and a direct Subsidiary of Beaumont Holdings and TMC.
31
"Terra UK Junior Guaranty" means the Junior Guaranty dated as of the
Effective Date, executed by Terra UK in favor of Terra Capital in respect of the
Terra Canada Debt, and assigned to the Administrative Agent.
"Terra UK Share Mortgage" means the share mortgage executed by Terra
Canada dated June 30, 1999 in respect of the Stock of Terra UK.
"TI" means Terra International, Inc., a Delaware corporation and a
wholly owned Subsidiary of Terra Industries.
"Title IV Plan" means a pension plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA to which the Borrower, any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).
"TMC" means Terra Methanol Corporation, a Delaware corporation.
"TNC" means Terra Nitrogen Corporation, a Delaware corporation and a
wholly owned Subsidiary of Terra Capital.
"TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited
partnership and a Subsidiary of Terra Capital.
"TNCLP Minority Interest Payments" means dividends and distributions
which are legally required to be paid to holders of Common Units (other than
Terra Industries and its Subsidiaries).
"TNLP Available Credit" means, at any time, an amount equal to (a)
the lesser of (i) the then effective Revolving Credit Commitments and (ii) the
Borrowing Base of TNLP at such time, minus (b) the sum of (i) the aggregate
Revolving Credit Outstandings owing by TNLP at such time and (ii) any
Availability Reserve applicable to TNLP in effect at such time.
"TNLP Debt" means Intercompany Indebtedness owing from time to time
by TNLP to Terra Capital, in an initial principal amount of $20,507,945 as of
the Effective Date, but excluding the TNLP Fixed Asset Secured Debt.
"TNLP Fixed Asset Secured Debt" means the Intercompany Indebtedness
owing from TNLP to Terra Capital in a maximum principal amount of $8,200,000,
the promissory note, guarantees, security interests and other supporting
obligations in respect of which constitute Senior Secured Note Collateral.
"TNLP Guarantors" means (i) Terra Capital, (ii) the Terra Capital
Guarantors, (iii) TNCLP and (iv) any subsidiary of TNLP that becomes a party to
a Guaranty in respect of the Obligations of TNLP.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP minus (a) any minority interest in non-wholly-owned
Subsidiaries that would be reflected on a consolidated balance sheet of such
person and its Subsidiaries at such date prepared in conformity with GAAP and
(b) any Securities issued by such Person held as treasury securities.
32
"Trustee (2003)" has the meaning specified in Section 3.1(c).
"UCC" has the meaning specified in the Pledge and Security
Agreement.
"Unfunded Pension Liability" means, with respect to the Borrower
at any time, the sum of (a) the amount, if any, by which the present value of
all accrued benefits under each Title IV Plan (other than any Title IV Plan
subject to Section 4063 of ERISA) exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, as determined as of the most recent valuation date for such Title IV Plan
using the actuarial assumptions in effect under such Title IV Plan, and (b) the
aggregate amount of withdrawal liability that could be assessed under Section
4063 with respect to each Title IV Plan subject to such Section, separately
calculated for each such Title IV Plan as of its most recent valuation date and
(c) for a period of five years following a transaction reasonably likely to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by the Borrower, any of its Subsidiaries or any ERISA Affiliate
as a result of such transaction.
"United Kingdom" and "UK" each means the territory known as the
United Kingdoms of England, Scotland, Wales and Northern Ireland.
"US Concentration Account" means the concentration account opened
with Citibank in New York, New York set forth on Schedule 7.12.
"Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
Section 1.2. Computation of Time Periods. In this Agreement, in
---------------------------
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding" and the word "through" means "to and including."
Section 1.3. Accounting Terms and Principles.
-------------------------------
(a) Except as set forth below, all accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or any successors thereto) and such change is
adopted by the Borrower with the agreement of its independent public accountants
and results in a change in the results of any of the calculations required by
Article V or Article VIII
33
which would not have occurred had such accounting change not occurred, the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change with the desired result that
the criteria for evaluating compliance with such covenants by the Borrower shall
be the same after such change as if such change had not been made; provided,
however, that no change in GAAP that would affect a calculation that measures
compliance with any covenant contained in Article V or Article VIII shall be
given effect until such provisions are amended to reflect such changes in GAAP.
Section 1.4. Certain Terms.
-------------
(a) The words "herein," "hereof" and "hereunder" and similar
words refer to this Agreement as a whole, and not to any particular Article,
Section, subsection or clause in, this Agreement.
(b) References in this Agreement to an Exhibit, Schedule,
Article, Section, subsection or clause refer to the appropriate Exhibit or
Schedule to, or Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders (or such other combination of Lenders as may be required
hereunder) is required hereunder for an amendment, restatement, supplement or
other modification to any such agreement and such consent is not obtained,
references in this Agreement to such agreement shall be to such agreement as so
amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender", "Issuer" and "Administrative Agent"
include their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.6, references to CUSA in Section 10.3 and to Citibank in
the definitions of Base Rate and Eurodollar Rate shall be deemed to refer to the
financial institution then acting as the Administrative Agent or one of its
Affiliates if it so designates.
ARTICLE II
The Revolving Credit Facility
Section 2.1. The Revolving Credit Commitments. On the terms and
--------------------------------
subject to the conditions contained in this Agreement, each Lender severally
agrees to make loans (each a "Revolving Loan") to each Borrower from time to
time on any Business Day during the period from the Effective Date until the
Revolving Credit Termination Date in an aggregate amount not to exceed at any
time outstanding for all such loans by such Lender such Lender's Revolving
Credit Commitment; provided, however, that at any time no Lender shall be
obligated to make a Revolving Loan to any Borrower (i) in excess of such
Lender's Ratable Portion of the
34
Available Credit of such Borrower at such time and (ii) to the extent that the
aggregate Revolving Credit Outstandings, after giving effect to such Revolving
Loans, would exceed the Maximum Credit in effect at such time. Within the limits
of each Lender's Revolving Credit Commitment, amounts of Revolving Loans repaid
may be reborrowed under this Section 2.1.
Section 2.2. Borrowing Procedures.
--------------------
(a) Each Borrowing shall be made on notice given by any Borrower
to the Administrative Agent not later than 11:00 A.M. (New York City time) (i)
one Business Day, in the case of a Borrowing of Base Rate Loans and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
date of the proposed Borrowing; provided, however, in respect of Revolving Loans
made on the Effective Date (x) the Notice of Borrowing (as defined below) in
respect thereof may be given by 11:00 A.M. (New York City time) on the Effective
Date and (y) such Revolving Loans shall be made as Base Rate Loans and
thereafter may be converted to Eurodollar Rate Loans pursuant to Section 2.11.
Each such notice shall be in substantially the form of Exhibit C (a "Notice of
Borrowing"), specifying (A) the proposed Borrower, (B) the date of such proposed
Borrowing, (C) the amount of such Borrower's Available Credit (in respect of
which the Borrowing Base component thereof may be calculated by reference to the
Borrowing Base Certificate most recently delivered to the Administrative Agent
hereunder), (D) the amount of the Revolving Loans then outstanding to each
Borrower, (E) the aggregate amount of such proposed Borrowing, (F) whether any
portion of the proposed Borrowing will be of Base Rate Loans or Eurodollar Rate
Loans and (G) the initial Interest Period or Periods for any such Eurodollar
Rate Loans, if applicable. The Revolving Loans shall be made as Base Rate Loans
unless (subject to Section 2.14) the Notice of Borrowing specifies that all or a
portion thereof shall be Eurodollar Rate Loans. Each Borrowing, or portion
thereof, which is a Eurodollar Rate Loan shall be in an aggregate amount of not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof. In
the event that a Borrower requests a Base Rate Loan in an amount of less than
$5,000,000 the Administrative Agent may (at its option) require such Borrowing,
or the relevant portion thereof, to be made as a Swing Loan; provided, however,
that to do so would not conflict with the provisions of Section 2.3.
(b) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to Section 2.14(a). Each Lender
shall, before 11:00 A.M. (New York City time) on the date of the proposed
Borrowing, make available to the Administrative Agent at its address referred to
in Section 11.8, in immediately available funds, such Lender's Ratable Portion
of such proposed Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Sections
3.1 and 3.2, the Administrative Agent will make such funds available to the
relevant Borrower in such Borrower's Disbursement Account.
(c) Unless the Administrative Agent shall have received notice
from any Lender prior to the date of any proposed Borrowing that such Lender
will not make available to the Administrative Agent such Lender's Ratable
Portion of such Borrowing, the Administrative Agent may assume that such Lender
has made such Ratable Portion available to the Administrative Agent on the date
of such Borrowing in accordance with this Section 2.2 and the Administrative
Agent may, in reliance upon such assumption, make available to the applicable
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the
35
applicable Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the applicable
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the applicable Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the interest
rate applicable at the time to the Loans comprising such Borrowing. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement. If the applicable Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have hereunder to such Borrower.
(d) The failure of any Lender to make a Revolving Loan or any
payment required by it on the date specified (a "Non-Funding Lender"), including
any payment in respect of its participation in Swing Loans and Letter of Credit
Obligations, shall not relieve any other Lender of its obligations to make such
Loan or payment on such date but no such other Lender shall be responsible for
the failure of any Non-Funding Lender to make a Revolving Loan or payment
required under this Agreement.
(e) On the Effective Date, (i) all Revolving Loans under the
Existing Credit Agreement shall be deemed to be Revolving Loans outstanding
under this Agreement, (ii) the Revolving Credit Commitments shall be increased
from $115,625,000 to $175,000,000, (iii) that portion of the Revolving Credit
Commitments of the Existing Lenders that are not party to this Agreement shall
be deemed to be assigned to the Lenders party to this Agreement, and each such
Existing Lender shall cease to be a party to this Agreement, (iv) the Revolving
Credit Commitment of each Lender party to the Existing Credit Agreement that is
a party to this Agreement shall be adjusted from such Lender's revolving credit
commitment under the Existing Credit Agreement to the amount set forth opposite
such Lender's name under the heading "Revolving Credit Commitment" on Schedule I
and (v) each Lender whose Ratable Portion of the Revolving Loans outstanding on
the Effective Date exceeds the amount of the Revolving Loans held by it on such
date shall purchase Revolving Loans from such other Lenders such that after
giving effect to such purchase, each Lender shall hold Revolving Loans equal to
its Ratable Portion of the Revolving Loans outstanding on such date.
Section 2.3. Swing Loans.
-----------
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans (each a
"Swing Loan") otherwise available to any Borrower under the Revolving Credit
Facility from time to time on any Business Day during the period from the
Effective Date until the Revolving Credit Termination Date in an aggregate
amount at any time outstanding at any time not to exceed the lesser of (i)
$15,000,000 and (ii) the Swing Loan Lender's Ratable Portion of the amount by
which the Maximum Credit exceeds the Revolving Credit Outstandings at such time;
provided, however, that no Swing Loan may be made that, after giving effect
thereto, would result in a Borrowing Base Deficiency. The Swing Loan Lender
shall be entitled to rely on the most recent Borrowing Base Certificate
delivered to the Administrative Agent. Each Swing Loan shall be a Base Rate Loan
and (subject to Sections 2.6 and 2.9) shall be repaid upon any Borrowing of a
Revolving Loan or from time to time at the discretion of the Swing Loan Lender
but in any event no later than the Scheduled
36
Termination Date. Within the limits set forth in the first sentence of this
Section 2.3(a), amounts of Swing Loans repaid may be reborrowed under this
Section 2.3(a).
(b) In order to request a Swing Loan, the relevant Borrower shall
telecopy to the Swing Loan Lender a duly completed request setting forth the
requested amount and date of the Swing Loan (a "Swing Loan Request"), to be
received by the Swing Loan Lender not later than 1:00 p.m. (New York City time)
on the day of the proposed Borrowing. Subject to the terms of this Agreement,
the Swing Loan Lender shall make its Swing Loan available to the Borrower on the
date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 shall not on such date be satisfied, and
ending when such conditions are satisfied. The Swing Loan Lender shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent set forth in Section 3.2 hereof have been satisfied in connection with
the making of any Swing Loan.
(c) The Swing Loan Lender may demand at any time that each Lender
pay to the Swing Loan Lender (for its account), in the manner provided in
subsection (d) below, such Lender's Ratable Portion of all or a portion of the
outstanding Swing Loans, which demand shall be in writing and shall specify the
outstanding principal amount of Swing Loans demanded to be paid.
(d) Each demand referred to in clause (c) above to each Lender
shall be accompanied by a statement prepared by the Swing Loan Lender specifying
the amount of each Lender's Ratable Portion of the aggregate principal amount of
the Swing Loans stated to be outstanding in such notice or demanded to be paid
pursuant to such demand, and, notwithstanding whether or not the conditions
precedent set forth in Section 3.2 shall have been satisfied (which conditions
precedent the Lenders for this purpose hereby irrevocably waive), each Lender
shall, before 11:00 a.m. (New York City time) on the Business Day next
succeeding the date of such Lender's receipt of such written statement, make
available to the Swing Loan Lender, in immediately available funds, for the
account of the Swing Loan Lender, the amount specified in such statement. Upon
such payment by a Lender, such Lender shall, except as provided in clause (f)
below, be deemed to have made a Revolving Loan to the applicable Borrower. The
Swing Loan Lender shall use such funds to repay the Swing Loans owing to it. To
the extent that any Lender fails to make such payment available to the Swing
Loan Lender, the applicable Borrower shall repay such Swing Loan on demand.
(e) Upon the occurrence of a Default under Section 9.1(g), each
Lender shall acquire, without recourse or warranty, an undivided participation
in each Swing Loan otherwise required to be repaid by such Lender pursuant to
clause (d) above, which participation shall be in a principal amount equal to
such Lender's Ratable Portion of such Swing Loan, by paying to the Swing Loan
Lender on the date on which such Lender would otherwise have been required to
make a payment in respect of such Swing Loan pursuant to clause (d) above, in
immediately available funds, an amount equal to such Lender's Ratable Portion of
such Swing Loan. If such amount is not in fact made available by such Lender to
the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled to
recover such amount on demand from such Lender together with interest accrued
from such date at the Federal Funds Rate for the first Business Day after such
payment was due and thereafter at the rate of interest then applicable to Base
Rate Loans.
37
(f) From and after the date on which any Lender is deemed to
have made a Revolving Loan pursuant to clause (d) above with respect to any
Swing Loan or purchases an undivided participation interest in a Swing Loan
pursuant to clause (e) above, the Swing Loan Lender shall promptly distribute to
such Lender such Lender's Ratable Portion of all payments of principal of and
interest received by the Swing Loan Lender on account of such Swing Loan other
than those received from a Lender pursuant to clause (d) or (e) above.
Section 2.4. Letters of Credit.
-----------------
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to issue one or more Letters of Credit at the
request of any Borrower for the account of such Borrower from time to time
during the period commencing on the Effective Date and ending on the earlier of
the Revolving Credit Termination Date and 30 days prior to the Scheduled
Termination Date; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuer from issuing such Letter of Credit or any
Requirement of Law applicable to such Issuer or any request or
directive (whether or not having the force of law but in relation with
which such Issuer customarily complies) from any Governmental
Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall
impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer
is not otherwise compensated) not in effect on the date of this
Agreement or result in any unreimbursed loss, cost or expense which
was not applicable, in effect or known to such Issuer as of the date
of this Agreement and which such Issuer in good xxxxx xxxxx material
to it;
(ii) such Issuer shall have received written notice from
the Administrative Agent, any Lender or the applicable Borrower, on or
prior to the requested date of issuance of such Letter of Credit, that
one or more of the applicable conditions contained in Sections 3.1 and
3.2 is not then satisfied;
(iii) after giving effect to the issuance of such Letter of
Credit, (A) the aggregate Revolving Credit Outstandings would exceed
the Maximum Credit in effect at such time or (B) a Borrowing Base
Deficiency would result with respect to any Borrower;
(iv) after giving effect to the issuance of such Letter of
Credit, the sum of (i) the Letter of Credit Undrawn Amounts at such
time and (ii) the Reimbursement Obligations at such time exceeds
$35,000,000 (the "Letter of Credit Sublimit"); or
(v) any fees due in connection with a requested issuance
have not been paid.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to issue any Letter of Credit.
38
(b) In no event shall the expiration date of any Letter of
Credit be more than one year after the date of issuance thereof; provided,
however, that (i) any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods and (ii) by not later than the
Revolving Credit Termination Date each Borrower shall provide cash collateral in
respect of any outstanding Letters of Credit issued for its account at such date
in accordance with Section 9.3.
(c) In connection with the issuance of each Letter of
Credit, the applicable Borrower shall give the relevant Issuer and the
Administrative Agent at least two Business Days' prior written notice (a "Letter
of Credit Request"), in substantially the form of Exhibit D (or in such other
written or electronic form as is acceptable to the Issuer), of the requested
issuance of such Letter of Credit. Such notice shall be irrevocable and shall
specify the applicable Borrower, the Issuer of such Letter of Credit, the stated
amount of the Letter of Credit requested, the date of issuance of such requested
Letter of Credit (which day shall be a Business Day), the date on which such
Letter of Credit is to expire (which date shall be a Business Day), and the
Person for whose benefit the requested Letter of Credit is to be issued. Such
notice, to be effective, must be received by the relevant Issuer and the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
second Business Day prior to the requested issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth
in this Section 2.4, the relevant Issuer shall, on the requested date, issue a
Letter of Credit on behalf of any Borrower in accordance with such Issuer's
usual and customary business practices. No Issuer shall issue any Letter of
Credit in the period commencing on the first Business Day after it receives
written notice from any Lender that one or more of the conditions precedent
contained in Section 3.2 shall not on such date be satisfied, and ending when
such conditions are satisfied. The relevant Issuer shall not otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 3.2 have been satisfied in connection with the issuance of any
Letter of Credit.
(e) If requested by the relevant Issuer, prior to the
issuance of each Letter of Credit by such Issuer, and as a condition of such
issuance and of the participation of each Lender in the Letter of Credit
Obligations arising with respect thereto, the applicable Borrower shall have
delivered to such Issuer a letter of credit reimbursement agreement, in such
form as the Issuer may employ in its ordinary course of business for its own
account (a "Letter of Credit Reimbursement Agreement"), signed by the applicable
Borrower, and such other documents or items as may be required pursuant to the
terms thereof. In the event of any conflict between the terms of any Letter of
Credit Reimbursement Agreement and this Agreement, the terms of this Agreement
shall govern.
(f) Each Issuer shall:
(i) give the Administrative Agent written notice (or
notice by telephone, confirmed promptly thereafter in writing, which
may be by telecopier) of the issuance or renewal of a Letter of Credit
issued by it, of all drawings under a Letter of Credit issued by it
and the payment (or the failure to pay when due) by the applicable
Borrower of any Reimbursement Obligation when due (which notice the
Administrative Agent shall promptly transmit by telecopy or similar
transmission to each Lender).
39
(ii) upon the request of any Lender, furnish to such
Lender copies of any Letter of Credit Reimbursement Agreement to which
such Issuer is a party and such other documentation as may reasonably
be requested by such Lender; and
(iii) no later than the first Business Day following the
last day of each calendar month, provide to the Administrative Agent
(and the Administrative Agent shall provide a copy to each Lender
requesting the same) and the Borrowers separate schedules for
Documentary and Standby Letters of Credit issued by it, in form and
substance reasonably satisfactory to the Administrative Agent, setting
forth the aggregate Letter of Credit Obligations outstanding at the
end of each month and any information requested by the Borrowers or
the Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of
Credit in accordance with the terms and conditions of this Agreement, such
Issuer shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender's Ratable Portion of the
Revolving Credit Commitments, in such Letter of Credit and the obligations of
the Borrowers with respect thereto (including all Letter of Credit Obligations
with respect thereto) and any security therefor and guaranty pertaining thereto.
(h) Each Borrower agrees to pay to the Issuer of any Letter of
Credit the amount of all Reimbursement Obligations owing to such Issuer under
any Letter of Credit issued for its account when such amounts are due and
payable, irrespective of any claim, set-off, defense or other right which such
Borrower may have at any time against such Issuer or any other Person. In the
event that any Issuer makes any payment under any Letter of Credit and such
Borrower shall not have repaid such amount to such Issuer pursuant to this
clause (h) above or such payment is rescinded or set aside for any reason, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from the date on which such Reimbursement Obligation arose to the date
of repayment in full at the rate of interest applicable to past due Revolving
Loans bearing interest at a rate based on the Base Rate during such period, and
such Issuer shall promptly notify the Administrative Agent, which shall promptly
notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuer
the amount of such Lender's Ratable Portion of such payment in Dollars and in
immediately available funds. If the Administrative Agent so notifies such Lender
prior to 11:00 A.M. (New York City time) on any Business Day, such Lender shall
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Upon such payment by a Lender, such Lender shall,
except during the continuance of a Default or Event of Default under Section
9.1(g) and notwithstanding whether or not the conditions precedent set forth in
Section 3.2 shall have been satisfied (which conditions precedent the Lenders
hereby irrevocably waive) be deemed to have made a Revolving Loan to the
applicable Borrower in the principal amount of such payment. Whenever any Issuer
receives from a Borrower a payment of a Reimbursement Obligation as to which the
Administrative Agent has received for the account of such Issuer any payment
from a Lender pursuant to this clause (h) above, such Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Lender, in immediately available funds, an amount equal to such Lender's Ratable
Portion of the amount of such payment adjusted, if necessary, to reflect the
respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
40
(i) Each Borrower's obligation to pay each Reimbursement
Obligation and the obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, including the occurrence of any Default or Event of
Default, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, set off, defense or other right
that any Borrower, any Loan Party, or other party guaranteeing, or
otherwise obligated with, such Borrower, any Subsidiary or other
Affiliate thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, Issuer, the Administrative
Agent or any Lender or any other Person, whether in connection with
this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with
the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuer, the Lenders, the Administrative Agent or any other Person
or any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of any Borrower's
obligations hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to any Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and any noncompliance in any immaterial respect of the
documents presented under such Letter
41
of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of the Issuer.
(j) If and to the extent such Lender shall not have so made its
Ratable Portion of the amount of the payment required by clause (i) above
available to the Administrative Agent for the account of such Issuer, such
Lender agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand such amount together with interest thereon, for the first
Business Day after payment was first due at the Federal Funds Rate, and
thereafter until such amount is repaid to the Administrative Agent for the
account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Revolving Credit Facility. The failure of any Lender to make available
to the Administrative Agent for the account of such Issuer its Ratable Portion
of any such payment shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of any payment on the date such payment is to be
made, but no Lender shall be responsible for the failure of any other Lender to
make available to the Administrative Agent for the account of the Issuer such
other Lender's Ratable Portion of any such payment.
Section 2.5. Reduction and Termination of the Revolving Credit
-------------------------------------------------
Commitments. The Borrowers may upon at least three Business Days' prior notice
-----------
to the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in the aggregate amount
of not less than $10,000,000 or an integral multiple of $5,000,000 in excess
thereof.
Section 2.6. Repayment of Loans. Each Borrower shall repay the
------------------
entire unpaid principal amount of its Revolving Loans on the Scheduled
Termination Date.
Section 2.7. Evidence of Debt, Obligations of Borrowers.
------------------------------------------
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing Indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(b) The Administrative Agent shall maintain accounts in
accordance with its usual practice in which it will record (i) the amount of
each Loan made and, if a Eurodollar Rate Loan, the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable by each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from each Borrower and each Lender's share
thereof, if applicable.
(c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrowers to repay the Loans in
accordance with their terms.
42
(d) Notwithstanding any other provision of the Agreement, in the event that
any Lender requests that any Borrower execute and deliver a promissory note or
notes payable to such Lender in order to evidence the Indebtedness owing to such
Lender by such Borrower hereunder, each such Borrower will promptly execute and
deliver a Note or Notes to such Lender evidencing any Revolving Loans of such
Lender, substantially in the form of Exhibit B, and the interests evidenced by
such note or notes shall at all times (including after assignment of all or part
of such interests) be evidenced by one or more Notes payable to the order of the
payee named therein; provided, however, that Terra UK shall not be required to
execute and deliver any promissory note or notes hereunder and that each
Existing Lender that was issued a Note previously shall be issued a new Note to
reflect the amendment and restatement of the Existing Credit Agreement and any
change in the Revolving Credit Commitments of such Existing Lender.
(e) Without affecting any guaranty or collateral obligation of any Borrower
or other Loan Party under any Loan Document, each Borrower is severally liable
in respect of its Obligations hereunder (in respect of principal and interest
only) and, as a Borrower, is not obligated in such capacity to repay any Loan
(or pay interest thereon) of another Borrower hereunder. All other Obligations
of the Borrowers hereunder are joint and several.
Section 2.8. Optional Prepayments. The Borrowers may (in addition to the
--------------------
obligations under Section 2.9(e)), upon, (i) in respect of Swing Loans, same day
notice, (ii) in respect of Base Rate Loans, at least one Business Day's prior
notice, and (iii) in respect of Eurodollar Rate Loans, at least four Business
Days' prior notice, to the Administrative Agent, stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Revolving Loans in whole or in part; provided, however, that if
any prepayment of any Eurodollar Rate Loan is made by any Borrower other than on
the last day of an Interest Period for such Loan, such Borrower shall also pay
any amounts owing pursuant to Section 2.14(e); and, provided, further, that each
partial prepayment (other than in respect of Swing Loans or as required under
Section 2.9) shall be in an aggregate principal amount not less than $5,000,000
or integral multiples of $1,000,000 in excess thereof. Upon the giving of such
notice of prepayment, the principal amount of Loans specified to be prepaid
shall become due and payable on the date specified for such prepayment.
Section 2.9. Mandatory Prepayments.
---------------------
(a) Upon receipt by Terra Industries, the Borrowers or any of their
respective Subsidiaries of Net Cash Proceeds arising (i) from an Asset Sale or a
Debt Issuance, each Borrower shall immediately prepay its Loans (or provide cash
collateral in respect of Letters of Credit) such that the aggregate amount of
all such payments is equal to 100% of such Net Cash Proceeds, (ii) from an
Equity Issuance each Borrower shall immediately prepay its Loans (or provide
cash collateral in respect of Letters of Credit) such that the aggregate amount
of all such payments is equal to 50% of such Net Cash Proceeds, or (iii) from an
insured loss or casualty event (being, other than proceeds in respect of
business interruption, "Insurance Proceeds"), each Borrower shall immediately
prepay its Loans (or provide cash collateral in respect of Letters of Credit)
such that the aggregate amount of all such payments is equal to 100% of such Net
Cash Proceeds; provided, however, any Insurance Proceeds (which do not exceed
$20,000,000 in respect of any single loss or event) may (provided, and for so
long as, no Default or Event of Default shall have occurred and be continuing),
at the request of the Borrowers, be applied in replacing or reinstating the
affected assets; provided further that (A) such Net Cash Proceeds are
43
so applied (or contractually committed to be so applied) within 360 days (the
"Reinstatement Date") following the occurrence of the event giving rise to such
Net Cash Proceeds, (B) such Net Cash Proceeds are deposited in a Cash Collateral
Account maintained with, and subject to a perfected first priority Lien in favor
of, the Administrative Agent (which cash collateral may be included in the
calculation of relevant Borrowing Base pending its application hereunder) and
(notwithstanding Section 11.1(a)(ix)) any Net Cash Proceeds deposited in such
account for such purpose may not subsequently be withdrawn without the approval
of the Administrative Agent and (C) any such Net Cash Proceeds or any portion
thereof not applied in replacement or reinstatement of the affected assets (x)
by the Reinstatement Date or (y) at any time during the continuance of a Default
or Event of Default at any time prior to the Reinstatement Date, shall be
applied as mandatory prepayment of the Loans (or as cash collateral in respect
of Letters of Credit) at such time. Any such mandatory prepayment shall be
applied in accordance with Section 2.9(c) below.
(b) Upon receipt by Terra Capital of any proceeds arising from the
redemption of Senior Notes (2003) purchased by Terra Capital pursuant to Section
8.12, Terra Capital shall immediately prepay its Loans (or provide cash
collateral in respect of Letters of Credit) by the amount of such proceeds. Any
such mandatory prepayment shall be applied in accordance with Section 2.9(c)
below.
(c) Any prepayments made by the Borrowers required to be applied in
accordance with this Section 2.9 shall be applied as follows: first, to repay
the outstanding principal balance of the Swing Loans until such Swing Loans
shall have been repaid in full; second, to repay the outstanding principal
balance of the Revolving Loans until such Revolving Loans shall have been paid
in full; and then, to provide cash collateral for any Letter of Credit
Obligations in the manner set forth in Section 9.3 until all such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
therein.
(d) If at any time, either (i) the aggregate principal amount of Revolving
Credit Outstandings exceeds the Maximum Credit at such time or (ii) a Borrowing
Base Deficiency exists in respect of any Borrower, each Borrower shall forthwith
(or if such Borrowing Base Deficiency has occurred through Accounts which were
previously classified as Eligible Receivables being reclassified as ineligible,
in which case upon the expiration of two Business Days during which such
Borrowing Base Deficiency remains continuing) prepay its Swing Loans first and
then its Revolving Loans then outstanding such that the aggregate amount of all
such payments is equal to such excess or otherwise sufficient to eliminate such
deficiency. If any such excess or deficiency remains after repayment in full of
the aggregate outstanding Swing Loans and Revolving Loans, each Borrower shall
provide cash collateral for its Letter of Credit Obligations in the manner set
forth in Section 9.3 to the extent required to eliminate such excess or
deficiency.
(e) Each Borrower agrees that all available funds (others than those funds
representing Net Cash Proceeds which are to be otherwise applied pursuant to
this Section 2.9) in a Cash Collateral Account of such Borrower shall (subject,
in the case of Terra UK, to Section 7.12(d)(iii)) be applied on a daily basis;
first to repay the outstanding principal amount of its Swing Loans until its
Swing Loans shall have been repaid in full; second to repay the outstanding
principal balance of its Revolving Loans until its Revolving Loans shall have
been repaid in full; and third to any other Obligations then due and payable. If
there are no Loans outstanding and no other Obligations are then due and
payable, then the funds in such Cash Collateral Account shall be retained in
such Cash Collateral Account, or (if required by the
44
Administrative Agent) transferred to the L/C Cash Collateral Account, to cash
collateralize the Letter of Credit Obligations then outstanding and any
contingent obligations which such Borrower may have under any Guaranty);
provided, however, that (subject to the consent of the Administrative Agent in
accordance with Section 7.12(d)(iii) in respect of Terra UK) if on any Business
Day after giving effect to the foregoing applications any funds are on deposit
in its Cash Collateral Account and no Default or Event of Default shall have
occurred and be continuing, the applicable Borrower may direct the
Administrative Agent to (and the Administrative Agent shall) disburse such funds
to such Borrower's Disbursement Account.
Section 2.10. Interest.
--------
(a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in Section
2.10(c), as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate as in effect from time to time,
plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Interest
Period, plus (B) the Applicable Margin in effect from time to time during
such Eurodollar Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(including Swing Loans) shall be payable in arrears (A) on the first day of each
calendar month, commencing on the first such day following the making of such
Base Rate Loan, and (B) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Base Rate Loan; (ii) interest accrued on each
Eurodollar Rate Loan shall be payable in arrears (A) on the last day of each
Interest Period applicable to such Loan and, in respect of any Interest Period
of six months' duration, on the day which is three months following commencement
of such Interest Period and also on the last day of such Interest Period, (B)
upon the payment or prepayment thereof in full or in part, and (C) if not
previously paid in full, at maturity (whether by acceleration or otherwise) of
such Eurodollar Rate Loan; and (iii) interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such Obligation,
becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest specified
in Section 2.10(a) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations shall bear interest at a rate which is two percent per
annum in excess of the rate of interest applicable to such Obligations from time
to time.
Section 2.11. Conversion/Continuation Option.
------------------------------
(a) The Borrowers may elect (i) at any time to convert Base Rate
Loans (other than Swing Loans) or any portion thereof to Eurodollar Rate Loans,
or (ii) at the end of any applicable Interest Period, to convert Eurodollar Rate
Loans or any portion thereof into Base Rate
45
Loans or to continue such Eurodollar Rate Loans or any portion thereof for an
additional Interest Period; provided, however, that the aggregate amount of the
Eurodollar Loans for each Interest Period complies with the provisions of
Section 2.2(a). Each conversion or continuation shall be allocated among the
Loans of each Lender in accordance with its Ratable Portion. Each such election
shall be in substantially the form of Exhibit F hereto (a "Notice of Conversion
or Continuation") and shall be made by giving the Administrative Agent at least
three Business Days' prior written notice specifying (A) the amount and type of
Loan being converted or continued, (B) in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the applicable Interest Period, and (C)
in the case of a conversion, the date of conversion (which date shall be a
Business Day and, if a conversion from Eurodollar Rate Loans, shall also be the
last day of the applicable Interest Period).
(b) The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein. Notwithstanding the foregoing, no conversion in whole or in part of
Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in
part of Eurodollar Rate Loans upon the expiration of any applicable Interest
Period, shall be permitted at any time at which (i) a Default or an Event of
Default shall have occurred and be continuing or (ii) the continuation of, or
conversion into, would violate any of the provisions of Section 2.14. If, within
the time period required under the terms of this Section 2.11, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from any Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans, then,
upon the expiration of the applicable Interest Period, such Loans will be
automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
Section 2.12. Fees.
----
(a) Unused Commitment Fee. The Borrowers agree to pay to each Lender
a commitment fee on the actual amount by which the Revolving Credit Commitment
of such Lender exceeds the sum of (i) such Lender's Ratable Portion of the
outstanding Revolving Loans and outstanding Letter of Credit Obligations and
(ii) the outstanding portion of any Swing Loans made by such Lender (the "Unused
Commitment Fee") on each day from the date hereof until the Revolving Credit
Termination Date equal to 0.50% per annum, payable in arrears (x) on the first
day of each calendar month, commencing on the first such day following the date
of this Agreement and (y) on the Revolving Credit Termination Date.
(b) Letter of Credit Fees. The Borrowers agree to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each Issuer
of a Letter of Credit, with respect to each Letter of Credit issued by such
Issuer, an issuance fee equal to 0.50% per annum of the maximum amount
available from time to time to be drawn under such Letter of Credit,
payable in arrears (A) on the first day of each calendar month, commencing
on the first such day following the issuance of such Letter of Credit and
(B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Letter of Credit, a fee accruing at a rate
per annum equal to the Applicable Margin for Revolving Loans that are
Eurodollar Rate Loans of the maximum amount available from time to time to
be drawn under such Letter of Credit,
46
payable in arrears (A) on the first day of each calendar month
commencing on the first such day following the issuance of such Letter
of Credit and (B) on the Revolving Credit Termination Date; provided,
however that during the continuance of an Event of Default, such fee
shall be increased by two percent per annum and shall be payable on
demand; and
(iii) to the Issuer of any Letter of Credit, with respect to
the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in
accordance with such Issuer's standard schedule for such charges in
effect at the time of issuance, amendment, transfer or drawing, as the
case may be.
(c) Additional Fees. The Borrowers have agreed to pay to the
Lenders, the Administrative Agent and the Arranger additional fees, the
amount and dates of payment of which are embodied in the Fee Letter. Any
cash management fees payable by or on behalf of any Loan Party shall be
payable irrespective of whether accounts are opened in the name of any Loan
Party or by the Administrative Agent or any of its Affiliates in its name
in respect of any Loan Party.
Section 2.13. Payments and Computations; Protective Advances.
----------------------------------------------
(a) The Borrowers shall make each payment hereunder (including
fees and expenses) not later than 11:00 A.M. (New York City time) (provided,
however, that repayments of Swing Loans shall be made not later than 4:00 P.M.
(New York City time)) on the day when due, in Dollars, to the Administrative
Agent at its address referred to in Section 11.8 in immediately available funds
without set-off or counterclaim. The Administrative Agent will promptly
thereafter cause to be distributed immediately available funds relating to the
payment of principal or interest or fees to the Lenders, in accordance with the
application of payments set forth in clauses (e) and (f) of this Section 2.13,
as applicable, for the account of their respective Applicable Lending Offices;
provided, however, that amounts payable pursuant to Section 2.14(c), 2.14(e),
2.15 or 2.16 shall be paid only to the affected Lender or Lenders and amounts
payable with respect to Swing Loans shall be paid only to the Swing Loan Lender.
Payments received by the Administrative Agent after 11:00 A.M. (New York City
time) shall be deemed to be received on the next Business Day.
(b) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. All
repayments of any Revolving Loans shall be applied first to repay such Loans
outstanding as Base Rate Loans and then to repay such Loans outstanding as
Eurodollar Rate Loans with those Eurodollar Rate Loans
47
which have earlier expiring Eurodollar Interest Periods being repaid prior to
those which have later expiring Eurodollar Interest Periods.
(d) Unless the Administrative Agent shall have received notice from
the Borrowers to the Lenders prior to the date on which any payment is due
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
(e) Subject to the provisions of clause (f) of this Section 2.13 and
(except as otherwise provided in Section 2.9), all payments and any other
amounts received by the Administrative Agent from or for the benefit of any
Borrower shall be applied first, to pay principal of and interest on any portion
of the Loans which the Administrative Agent may have advanced to such Borrower
pursuant to the express provisions of this Agreement on behalf of any Lender,
for which the Administrative Agent has not then been reimbursed by such Lender
or such Borrower; second, to pay all other Obligations owing by such Borrower
then due and payable; and third, as such Borrower so designate. Payments in
respect of Swing Loans received by the Administrative Agent shall be distributed
to the Swing Loan Lender; payments in respect of Revolving Loans received by the
Administrative Agent shall be distributed to each Lender in accordance with such
Lender's Ratable Portion of the Revolving Credit Commitments; and all payments
of fees and all other payments in respect of any other Obligation shall be
allocated among such of the Lenders and Issuers as are entitled thereto, and, if
to the Lenders, in proportion to their respective Ratable Portions.
(f) After the occurrence and during the continuance of an Event of
Default, each Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations owing by such
Borrower and any proceeds of Collateral of such Borrower, and agrees that the
Administrative Agent may, and shall upon either (A) the written direction of the
Requisite Lenders or (B) the acceleration of the Obligations pursuant to Section
9.2, apply all payments in respect of any Obligations and all funds on deposit
in any Cash Collateral Account (including all proceeds arising in connection
with a Reinstatement Date that are held in the Cash Collateral Account pending
application of such proceeds as specified in Section 2.9(a)) and all other
proceeds of Collateral in the following order:
(i) first, to pay interest on and then principal of any portion
of the Revolving Loans which the Administrative Agent may have advanced on
behalf of any Lender for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrowers;
(ii) second, to pay interest on and then principal of any Swing
Loan;
(iii) third, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative Agent;
48
(iv) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers;
(v) fifth, to pay Obligations in respect of any fees then due
to the Administrative Agent, the Lenders and the Issuers;
(vi) sixth, to pay interest then due and payable in respect of
the Revolving Loans and Reimbursement Obligations;
(vii) seventh, to pay or prepay principal payments on the
Revolving Loans and Reimbursement Obligations and to provide cash
collateral for outstanding Letter of Credit Undrawn Amounts in the manner
described in Section 9.3, and to pay Obligations owing to the
Administrative Agent with respect to cash management services in connection
with Approved Deposit Accounts, Cash Collateral Accounts, and any other
collection, disbursement or payroll account, ratably to the aggregate
principal amount of such Revolving Loans, Reimbursement Obligations and
Letter of Credit Undrawn Amounts and amounts due in respect of such cash
management services;
(viii) eighth, to the ratable payment of all Obligations owing to
any Lender or any Affiliate of a Lender with respect to Hedging Contracts;
and
(ix) ninth, to the ratable payment of all other Obligations;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses first through eighth, the available funds being applied with
respect to any such Obligations (unless otherwise specified in such clause)
shall be allocated to the payment of such Obligations ratably, based on the
proportion of the Administrative Agent's and each Lender's or Issuer's interest
in the aggregate outstanding Obligations described in such clauses. The order of
priority set forth in clauses first through eighth of this Section 2.13(f) may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party that is not a Lender or Issuer, or any other Person.
The order of priority set forth in clauses first through fifth of this Section
2.13(f) may be changed only with the prior written consent of the Administrative
Agent in addition to the Requisite Lenders.
(g) All payments of Reimbursement Obligations, interest, fees,
expenses and other sums due and payable in respect of the Loans of any Borrower
and all expenses, disbursements and advances incurred by the Administrative
Agent pursuant to the Loan Documents after the occurrence and during the
continuance of an Event of Default which the Administrative Agent, in its sole
discretion, deems necessary or desirable to preserve or protect the Collateral
of such Borrower or any portion thereof or to enhance the likelihood or maximize
the amount of repayment of the Obligations owing by such Borrower may, at the
option of the Administrative Agent, be paid from the proceeds of Swing Loans or
Revolving Loans. Each Borrower hereby authorizes the Swing Loan Lender to make
Swing Loans pursuant to Section 2.3(a) and the Lenders to make Revolving Loans
pursuant to Section 2.2(a), from time to time in the Swing Loan Lender's or such
Lender's discretion, which are in the amounts of any and all principal payable
with respect to the interest, fees, expenses and other sums payable in respect
of the Loans of such Borrower, and further authorizes the Administrative Agent
to give the Lenders notice of any Borrowing with respect to such Loans and to
distribute the proceeds of such Loans to pay such amounts. Each Borrower agrees
that all such Loans so made shall be
deemed to have been requested by it, as applicable, (irrespective of the
satisfaction of the conditions in Section 3.2, which conditions the Lenders
irrevocably waive) and directs that all proceeds thereof shall be used to pay
such amounts.
Section 2.14. Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
(a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"Eurodollar Rate." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrowers.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that: (i) the Administrative Agent reasonably determines that adequate and
fair means do not exist for ascertaining the applicable interest rates by
reference to which the Eurodollar Rate then being determined is to be fixed; or
(ii) the Requisite Lenders notify the Administrative Agent that the Eurodollar
Rate for any Interest Period will not adequately reflect the cost to the Lenders
of making or maintaining such Loans for such Interest Period, the Administrative
Agent shall forthwith so notify the Borrowers and the Lenders, whereupon each
Eurodollar Loan will automatically, on the last day of the current Interest
Period for such Loan, convert into a Base Rate Loan and the obligations of the
Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended until the Administrative Agent shall
notify the Borrowers that the Requisite Lenders have determined that the
circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall reasonably
determine that the introduction of or any change (where such introduction or
change occurs after the date of this Agreement) in or in the interpretation of
any law, treaty or governmental rule, regulation or order (other than any change
by way of imposition or increase of reserve requirements included in determining
the Eurodollar Rate Reserve Percentage and other than any change in the rate of
tax on, or determined by reference to, the net income or profits of such Lender
(including franchise taxes) or capital of such Lender) or the compliance by such
Lender with any guideline, request or directive (where such guideline, request
or directive is issued after the date of this Agreement) from any central bank
or other Governmental Authority (whether or not having the force of law but in
relation to which such Lender customarily complies), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any Eurodollar Rate Loans made to any Borrower, then such Borrower shall from
time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the applicable Borrower and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of or any change in or
in the interpretation of any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and
demand therefor by such
50
Lender to the Borrowers through the Administrative Agent, (i) the obligation of
such Lender to make or to continue Eurodollar Rate Loans and to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender
shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar
Rate Loans and (ii) if the affected Eurodollar Rate Loans are then outstanding,
each applicable Borrower shall immediately (or, if lawful to do so, on the last
day of the current Interest Period relating thereto) convert each such Loan into
a Base Rate Loan. If at any time after a Lender gives notice under this Section
2.14(d) such Lender determines that it may lawfully make Eurodollar Rate Loans,
such Lender shall promptly give notice of that determination to the applicable
Borrower and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender. Each Borrower's right to
request, and such Lender's obligation, if any, to make Eurodollar Rate Loans
shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 2.10, each Borrower shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including
any loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to such Borrower but excluding any loss of the
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason (other than under Section 2.14(b)) a proposed Borrowing,
conversion into or continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice of Conversion or
Continuation given by such Borrower or in a telephonic request by it for
borrowing or conversion or continuation or a successive Interest Period does not
commence after notice therefor is given pursuant to Section 2.11, (ii) if for
any reason any Eurodollar Rate Loan is prepaid (including mandatorily pursuant
to Section 2.9) on a date which is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in Section
2.14(d), or (iv) as a consequence of any failure by a Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the applicable Borrower
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
(f) Excluded Period. No Lender or Issuer shall be entitled to
make a claim under Clauses 2.14(c), 2.15 or 2.16 unless it has notified the
Administrative Agent of its intention to make such claim within 180 days of such
Lender or Issuer becoming aware of the circumstances giving rise to such claim.
Section 2.15. Capital Adequacy. If at any time any Lender
----------------
reasonably determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order, or (c) compliance with any
guideline or request or directive issued after the date hereof from any central
bank or other Governmental Authority (whether or not having the force of law)
shall have the effect of reducing the rate of return on such Lender's (or any
corporation controlling such Lender's) capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change, compliance or interpretation, then, upon demand from time
to time by such Lender (with a copy of such demand to the Administrative Agent),
the applicable Borrower shall pay to the Administrative Agent for the account of
such Lender, from time to time as specified by
51
such Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to such amounts submitted to the applicable Borrower
and the Administrative Agent by such Lender shall be conclusive and binding for
all purposes absent manifest error.
Section 2.16. Taxes.
-----
(a) Subject to Section 2.16(f) below, any and all payments by the
Borrowers under each Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
in the case of each Lender and the Administrative Agent (A) taxes imposed on or
measured by its net income, and franchise taxes imposed on it, by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or in which
it maintains any office or operations and (B) any United States withholding
taxes payable with respect to payments under the Loan Documents under laws
(including any statute, treaty or regulation) in effect on the Initial Closing
Date (or, in the case of an Eligible Assignee, the date of the Assignment and
Acceptance) applicable to such Lender or the Administrative Agent, as the case
may be, but not excluding any United States withholding payable as a result of
any change in such laws occurring after the Initial Closing Date (or the date of
such Assignment and Acceptance) (but excluding taxes set forth in clause (A)
above) and (ii) in the case of each Lender, taxes imposed on or measured by its
net income, and franchise taxes imposed on it, by the jurisdiction in which such
Lender's Applicable Lending Office is located (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Taxes shall be required by law to be
deducted from or in respect of any sum payable by any Borrower under any Loan
Document to any Lender or the Administrative Agent (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.16) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the
full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) such Borrower shall deliver to the
Administrative Agent evidence of such payment.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction, and all liabilities with respect thereto,
which arise from any payment made by such Borrower or any of its Subsidiaries
under any Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, any Loan Document (collectively, "Other Taxes").
(c) Each Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.16) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
52
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the applicable Borrower will furnish to the Administrative Agent,
at its address referred to in Section 11.8, the original or a certified copy of
a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.16 shall survive the payment in full of the
Obligations.
(f) On the date of the Assignment and Acceptance pursuant to
which any Non-U.S. Lender becomes a Lender after the Initial Closing Date, if
requested by the Borrowers or the Administrative Agent, each Non-U.S. Lender
that is entitled at such time to an exemption from United States withholding tax
shall provide the Administrative Agent and the Borrowers with two completed
copies of IRS Form W-8 (Ben or ECI as appropriate including any required
certifications) or other applicable form, certificate or document prescribed by
the IRS certifying as to such Non-U.S. Lender's entitlement to such exemption
from United States withholding tax with respect to all payments to be made to
such Non-U.S. Lender under the Loan Documents. Unless the Borrowers and the
Administrative Agent have received forms or other documents satisfactory to them
indicating that payments under any Loan Document to or for a Non-U.S. Lender are
not subject to United States withholding tax, the Borrowers or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate.
(g) Any Lender claiming any additional amounts payable pursuant
to this Section 2.16 shall use its reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which would be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender. If
any Lender is not, with reasonable efforts, able to change the jurisdiction of
its Applicable Lending Office in accordance with this Section 2.16(g), then such
Lender shall use its reasonable efforts to complete such tax forms and make such
filings as would avoid the need for, or reduce the amount of, any such
additional amounts which would be payable or may thereafter accrue; provided,
however, that completion of such forms and making of such filings would not in
the sole discretion of such Lender be disadvantageous to it.
(h) (i) As at the date of this Agreement, the Administrative
Agent and each Lender represents and warrants to the Loan Parties that (to the
extent that any payments are to be made to it hereunder by Terra UK) it is a
Qualifying Lender, (ii) if a Lender ceases to be a Qualifying Lender (except as
a result of the introduction of, change in, or change in the interpretation,
administration or application of, any law or regulation or any practice or
concession of the United Kingdom Inland Revenue occurring after the date of this
Agreement) or any transfer, sale, negotiation or assignment is made pursuant to
Section 11.2 to a non-Qualifying Lender, then the Loan Parties shall not be
liable to pay any amount under Section 2.16(a) in excess of the amount which it
would have been obliged to pay if that Lender had remained a Qualifying Lender.
Each Lender shall notify the Administrative Agent who in turn shall notify Terra
Capital as soon as reasonably practicable after it becomes aware that it has
ceased to be a Qualifying Lender.
Section 2.17. Substitution of Lenders. In the event that (a) (i)
-----------------------
any Lender makes a claim under Section 2.14 (c) or Section 2.15, or (ii) it
becomes illegal for any Lender to
53
continue to fund or make any Eurodollar Rate Loan and such Lender notifies the
Borrowers pursuant to Section 2.14(d), or (iii) the Borrowers are required to
make any payment pursuant to Section 2.16 that is attributable to any Lender, or
(iv) any Lender is a Non-Funding Lender, (b) in the case of clause (a)(i) above,
as a consequence of increased costs in respect of which such claim is made, the
effective rate of interest payable to such Lender under this Agreement with
respect to its Loans materially exceeds the effective average annual rate of
interest payable to the Requisite Lenders under this Agreement and (c) Lenders
holding at least 75% of the Revolving Credit Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrowers may substitute another financial institution
for such Affected Lender hereunder, upon reasonable prior written notice (which
written notice must be given within 90 days following the occurrence of any of
the events described in clauses (a)(i), (ii), (iii) or (iv)) by the Borrowers to
the Administrative Agent and the Affected Lender that the Borrowers intend to
make such substitution, which substitute financial institution must be an
Eligible Assignee and, if not a Lender, reasonably acceptable to the
Administrative Agent; provided, however, that if more than one Lender claims
increased costs, illegality or right to payment arising from the same act or
condition and such claims are received by the Borrowers within 30 days of each
other then the Borrowers may substitute all, but not (except to the extent the
Borrowers have already substituted one of such Affected Lenders before the
Borrowers' receipt of the other Affected Lenders' claim) less than all, Lenders
making such claims. In the event that the proposed substitute financial
institution or other entity is reasonably acceptable to the Administrative Agent
and the written notice was properly issued under this Section 2.17, the Affected
Lender shall sell and the substitute financial institution or other entity shall
purchase, pursuant to an Assignment and Acceptance, all rights and claims of
such Affected Lender under the Loan Documents and the substitute financial
institution or other entity shall assume and the Affected Lender shall be
relieved of its Revolving Credit Commitments and all other prior unperformed
obligations of the Affected Lender under the Loan Documents (other than in
respect of any damages (other than exemplary or punitive damages, to the extent
permitted by applicable law) in respect of any such unperformed obligations).
Upon the effectiveness of such sale, purchase and assumption (which, in any
event shall be conditioned upon the payment in full by the Borrowers to the
Affected Lender in cash of all fees, unreimbursed costs and expenses and
indemnities accrued and unpaid through such effective date), the substitute
financial institution or other entity shall become a "Lender" hereunder for all
purposes of this Agreement having a Revolving Credit Commitment (if applicable)
in the amount of such Affected Lender's Revolving Credit Commitment assumed by
it and such Revolving Credit Commitment (if applicable) of the Affected Lender
shall be terminated, provided that all indemnities under the Loan Documents
shall continue in favor of such Affected Lender.
ARTICLE III
Conditions To Effectiveness Of This Agreement
Section 3.1. Conditions Precedent to the Effectiveness of this
-------------------------------------------------
Agreement. This Agreement shall become effective on the date (the "Effective
---------
Date") on which all of the following conditions precedent have been first
satisfied (unless waived by the Requisite Lenders or the time for satisfaction
thereof has been extended by the Administrative Agent):
(a) Certain Documents. The Administrative Agent shall have
received on the Effective Date each of the following, each dated the Effective
Date unless otherwise
54
indicated or agreed to by the Administrative Agent, in form and substance
satisfactory to the Administrative Agent and in sufficient originally executed
copies for each Lender:
(i) this Agreement, duly executed and delivered by the
Borrowers, Terra Industries, the Administrative Agent and each Lender;
(ii) the Senior Secured Note Intercreditor Agreement, duly
executed and delivered by the Borrowers, Guarantors, the Senior
Secured Note Trustee and the Administrative Agent;
(iii) the Guaranty, duly executed and delivered by the
Guarantors and the Administrative Agent;
(iv) the Pledge and Security Agreement, duly executed and
delivered by Terra Industries, Terra Capital, TNLP, each Guarantor
that is a Domestic Subsidiary and the Administrative Agent;
(v) the Loan Purchase Agreement, duly executed and
delivered by Terra Industries and the Administrative Agent;
(vi) the Terra UK Debt Note, duly executed and delivered
byTerra UK and Terra Capital;
(vii) the Terra Canada Debt Note, duly executed and
delivered by Terra Canada and Terra Capital;
(viii) the Terra UK Junior Guaranty, duly executed and
delivered by Terra UK in favor of Terra Capital;
(ix) the Terra Canada Junior Guaranty, duly executed and
delivered by Terra Canada in favor of Terra Capital;
(x) appropriate amendments or additions to the Terra
Canada Collateral Documents, the Debenture and the Junior Collateral
Documents (A) to provide for the release of that portion of the
collateral described therein that constitutes Senior Secured Note
Collateral and (B) to provide collateral security for Terra UK's and
Terra Canada's obligations under the Terra UK Debt Note and the Terra
UK Junior Guaranty and the Terra Canada Debt Note and the Terra Canada
Junior Guaranty, duly executed and delivered by Terra UK or Terra
Canada, as the case may be, in favor of the Administrative Agent;
(xi) the Mortgage Releases, duly executed and delivered by
the Existing Collateral Agent and acknowledged by the relevant Loan
Party mortgagor, with respect to (A) each relevant Real Property
located in the United States, (B) the Terra Canada Mortgage and (C)
the Real Property located in England covered by the Debenture;
(xii) such documents duly executed by each Loan Party, to
the extent such Loan Party's signature is required under Requirements
of Law, as the Administrative Agent may request with respect to the
perfection of its security interests,
55
including for the purposes of maintaining and/or continuing the
priority thereof, in the Collateral (including (A) "in lieu" financing
statements, (B) amending financing statements to name the
Administrative Agent as the secured party thereunder and to release
that portion of the collateral described therein that constitutes
Senior Secured Note Collateral and (C) new financing statements, each
under the UCC, with respect to the perfection of Liens created by the
Pledge and Security Agreement);
(xiii) a satisfactory appraisal report of the Inventory of
the Borrowing Base Contributors;
(xiv) a favorable opinion of (A) Xxxxxxxx & Xxxxx, counsel
to each of the Loan Parties, in substantially the form of Exhibit G-1
and (B) counsel to the Loan Parties in England and Canada, in
substantially the form of Exhibit G-2 and Exhibit G-3, respectively,
addressed to the Administrative Agent and the Lenders and Issuer;
(xv) certified copies of each of the Senior Secured Note
Documents and each other document and instrument executed and
delivered in connection therewith, duly executed by the parties
thereto and each in form and substance reasonably satisfactory to the
Administrative Agent, together with a certificate of the Secretary or
an Assistant Secretary of Terra Capital that, as at the Effective
Date, such Senior Secured Note Documents and other documents and
instruments of which are attached thereto (A) are true and complete
copies of the originals thereof and (B) are in full force and effect
and have not been modified or amended from such attached copies;
(xvi) a certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying and attaching (A) the names
and true signatures of each officer of such Loan Party authorized to
execute and deliver any Loan Document or other document required
hereunder to be executed and delivered by or on behalf of such Loan
Party, (B) the resolutions of such Loan Party's Board of Directors (or
equivalent governing body) approving and authorizing the execution,
delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the transactions contemplated by
this Agreement, (C) the due incorporation and good standing or valid
existence of such Loan Party as a corporation organized under the laws
of the jurisdiction of its formation, and the absence of any
proceeding for the dissolution or liquidation of such Loan Party,
together with a certificate, as of recent date, of the Secretary of
State of the jurisdiction of its formation and of each jurisdiction in
which such Loan Party conducts business, attesting to the good
standing of each such Loan Party in each such jurisdiction and (D) a
copy of the Constituent Documents of each Loan Party, certified as of
a recent date by the Secretary of State of the state or jurisdiction
of formation of such Loan Party or by another Person acceptable to the
Administrative Agent, to the extent the Secretary or the Assistant
Secretary is unable to certify that the Constituent Documents of such
Loan Party have not been amended, revised or modified in any way since
the Initial Closing Date;
(xvii) a certificate of the Chief Financial Officer of each
Borrower, stating that such Borrower is Solvent after giving effect to
transactions contemplated in this Agreement, including the issuance of
the Senior Secured Notes and the application of the proceeds thereof
to the repayment of the Term Loan and the Canadian Term Loan and the
payment of all estimated legal, accounting and other fees related
hereto and thereto;
56
(xviii) a certificate of a Responsible Officer to the effect
that (A) the condition set forth in Section 3.2(b) has been satisfied,
(B) no litigation not listed on Schedule 4.7 shall have been commenced
against any Loan Party or any of its Subsidiaries which is reasonably
likely to be adversely determined and, if adversely determined, would
have a Material Adverse Effect and (C) no Material Adverse Change has
occurred since December 31, 2000;
(xix) evidence satisfactory to the Administrative Agent
and the Lenders that the insurance policies required by Section 7.5
and any Collateral Documents are in full force and effect, together
with (A) in the case where such insurance policies cover property
constituting solely Collateral, endorsements naming the Administrative
Agent, on behalf of the Secured Parties, (B) in the case where such
insurance policies cover property constituting both Collateral and
Senior Secured Note Collateral, endorsements naming both the
Administrative Agent and the Senior Secured Note Trustee as their
respective interests may appear and (C) in the case where such
insurance policies cover property constituting solely Senior Secured
Note Collateral, endorsements naming the Senior Secured Note Trustee,
in each case, as additional insured and/or loss payee under the
subject insurance policies to be maintained with respect to the
properties of Terra Industries, the Borrowers and each of their
Subsidiaries; and
(xx) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Issuance of Senior Secured Notes. The Administrative Agent
shall have received evidence that Terra Capital has received from the issuance
of the Senior Secured Notes at least (i) $200,000,000 in principal and (ii)
gross proceeds, after deducting the applicable initial discount and underwriting
commission, of at least $192,860,000.
(c) Refinancing of Senior Notes (2003). The Administrative Agent
shall have received (A) a copy of the irrevocable redemption notice delivered by
the Loan Parties to the trustee under the Senior Note (2003) Indenture (the
"Trustee (2003)") in respect of the Loan Parties' intention to use proceeds of
the issuance of Senior Secured Notes to repurchase, exchange, repay or otherwise
refinance the Senior Notes (2003) following the end of the redemption notice
period required by the Senior Note (2003) Indenture for both the noteholders and
the Trustee (2003), provided that, with respect to the redemption notice period
applicable to the Trustee (2003), the redemption notice period shall be such
shorter period as consented to by the Trustee (2003), and in any event shall not
be later than November 26, 2001 (the "Redemption Notice Period"), and (B)
evidence that sufficient proceeds of the issuance of Senior Secured Notes (and,
to the extent proceeds of the issuance of Senior Secured Notes are insufficient
after accounting for the repayments set forth in clauses (d) and (e) of this
Section 3.1, proceeds of the Loans) have been irrevocably deposited with the
Trustee (2003) on terms satisfactory to the Administrative Agent to repurchase,
exchange, repay or otherwise refinance all of the Senior Notes (2003) on the
redemption date.
(d) Repayment of Canadian Term Loan. The Administrative Agent
shall have received notice of prepayment of the Canadian Term Loan executed by
Terra Canada, together with evidence showing that the Canadian Term Loan and
other outstanding obligations (including, without limitation, interest, fees and
breakage costs (if any)) which are attributable to
57
the Terra Canada Credit Agreement have been fully paid from proceeds of the
issuance of the Senior Secured Notes.
(e) Repayment of Term Loan. The Administrative Agent shall have
received notice of prepayment of the Term Loan executed by Terra UK and TNLP,
together with evidence showing that the Term Loan and other outstanding
obligations (including, without limitation, interest, fees and breakage costs
(if any) which are attributable to the Term Loan have been fully paid from
proceeds of the issuance of the Senior Secured Notes.
(f) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, and the
Lenders, as applicable, all fees due and payable on or before the Effective Date
(including all such fees described in the Fee Letter), and all expenses due and
payable on or before the Effective Date.
(g) Consents, Etc. Each Loan Party shall have received all
consents and authorizations required pursuant to any material Contractual
Obligation with any other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Loan Parties lawfully (A) to execute, deliver and perform, in all material
respects, their respective obligations hereunder, the Loan Documents and Senior
Secured Note Documents to which each of them, respectively, is, or shall be, a
party and each other agreement or instrument to be executed and delivered by
each of them, respectively, pursuant thereto or in connection therewith, and (B)
to create and perfect the Liens on the Collateral to be owned by each of them in
the manner and for the purpose contemplated by the Loan Documents and the Senior
Secured Note Documents.
(h) Funds Flow Statement. Terra Capital shall have provided to
the Administrative Agent a statement showing the proposed sources and
applications of funds on the Effective Date arising from the issuance of the
Senior Secured Notes and the other transactions contemplated under this
Agreement.
Section 3.2. Conditions Precedent to Each Loan and Letter of
-----------------------------------------------
Credit. The obligation of each Lender on any date (including the Effective Date)
------
to make any Loan and of each Issuer on any date (including the Effective Date)
to issue any Letter of Credit is subject to the satisfaction of all of the
following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing or, in the case of Swing Loans, a duly executed
Swing Loan Request and with respect to any Letter of Credit, the Administrative
Agent and the Issuer shall have received a duly executed Letter of Credit
Request.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or issuance, both before and
after giving effect thereto and to the application of the proceeds from any such
Loan and to such issuance:
(i) The representations and warranties set forth in Article
IV and in the other Loan Documents shall be true and correct on and as
of the Effective Date and shall be true and correct in all material
respects on and as of any such date after the
58
Effective Date with the same effect as though made on and as of such
date, except to the extent such representations and warranties
expressly relate to an earlier date;
(ii) no Default or Event of Default has occurred and is
continuing;
(iii) there shall have occurred no Material Adverse Change
or any event or circumstances which would have a Material Adverse
Effect; and
(iv) the applicable Borrower shall have delivered the
Borrowing Base Certificate required by Section 6.11(a).
(c) Borrowing Base. After giving effect to the Revolving Loans or
Letters of Credit requested to be made or issued on any such date and the use of
proceeds thereof, (i) no Borrowing Base Deficiency shall exist, (ii) the
Revolving Credit Outstandings on such date shall not exceed the Maximum Credit
in effect on such date and (iii) the aggregate Available Credit of the Borrowers
shall not be less than $30,000,000.
(d) No Legal Impediments. The making of the Loans or the issuance
of such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance and is not enjoined,
temporarily, preliminarily or permanently.
Each submission by a Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by such Borrower of the
proceeds of each Loan requested therein, and each submission by a Borrower to an
Issuer of a Letter of Credit Request and the issuance of each Letter of Credit
requested therein, shall be deemed to constitute a representation and warranty
by such Borrower as to the matters specified in Section 3.2(b) on the date of
the making of such Loan or the issuance of such Letter of Credit.
ARTICLE IV
Representations And Warranties
To induce the Lenders, the Issuers and the Administrative Agent
to enter into this Agreement, Terra Industries and each of the Borrowers
represent and warrant to the Lenders, the Issuers and the Administrative Agent
that, on and as of the Effective Date, after giving effect to the making, or the
continuation, of the Loans and other financial accommodations on the Effective
Date and on and as of each date as required by Section 3.2(b)(i):
Section 4.1. Corporate Existence; Compliance with Law. Each Loan
----------------------------------------
Party (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction
where such qualification is necessary, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect; (c) has
all requisite power and authority and the legal right to own, pledge, mortgage
and operate its properties, to lease the property it operates under lease and to
conduct its business as now or currently proposed to be conducted; (d) is in
compliance with its Constituent Documents; (e) is in compliance with all
applicable Requirements of Law except where the failure to be in compliance
would not in the aggregate have a Material Adverse Effect; and (f) has all
necessary licenses, permits, consents or approvals from or by, has made all
necessary filings with, and has given all necessary notices to,
59
each Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings which can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not in the aggregate have a Material Adverse Effect.
Section 4.2. Corporate Power; Authorization; Enforceable Obligations
-------------------------------------------------------
(a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation of the transactions
contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been duly authorized by all necessary corporate
action, including the consent of shareholders where required;
(iii) do not and will not (A) contravene any Loan Party's or any
of its Subsidiaries' respective Constituent Documents, (B) violate any
other applicable Requirement of Law applicable to any Loan Party
(including Regulations U and X of the Federal Reserve Board), or any
order or decree of any Governmental Authority or arbitrator applicable
to any Loan Party, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any Contractual Obligation of any Loan Party or any of
its Subsidiaries, or (D) result in the creation of imposition of any
Lien upon any of the property of any Loan Party or any of its
Subsidiaries, other than those in favor of the Secured Parties pursuant
to the Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental
Authority or any other Person, other than those list Schedule 4.2 and
which have been obtained or made, copies of which have been or will be
delivered to the Administrative Agent pursuant to Section 3.1, and each
of which on the Effective Date will be in full force and effect and,
with respect to the Collateral, filings required to perfect the Liens
created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party thereto. This Agreement is, and
the other Loan Documents will be, when delivered hereunder, the legal, valid
and binding obligation of each Loan Party thereto, enforceable against such Loan
Party in accordance with its terms.
Section 4.3. Ownership of Subsidiaries.
-------------------------
Set forth on Part I of Schedule 4.3 hereto is a complete and accurate
list showing, as of the Effective Date, all Material Subsidiaries of Terra
Industries and, as to each such Subsidiary, the jurisdiction of its
incorporation, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Effective Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by Terra Industries. No Stock of any Subsidiary of Terra Industries
is subject to any outstanding option, warrant, right of conversion or purchase
or any similar right (except in respect of the Common
60
Units). All of the outstanding Stock of each Subsidiary of Terra Industries
owned (directly or indirectly) by Terra Industries has been validly issued, is
fully paid and non-assessable and is owned by Terra Industries or a Subsidiary
of Terra Industries, free and clear of all Liens (other than the Lien in favor
of the Secured Parties created pursuant to the Collateral Documents and, with
respect to the Common Units, other than the Liens securing the Senior Secured
Notes created pursuant to the Senior Secured Note Documents). Except as set
forth in Schedule 4.3, neither Terra Industries nor any such Subsidiary is a
party to, or has knowledge of, any agreement binding on it which restricts the
transfer or hypothecation of any Stock of any such Subsidiary, other than the
Loan Documents. Terra Industries does not own or hold, directly or indirectly,
any Stock of any Person other than such Subsidiaries and Investments permitted
by Section 8.3.
Section 4.4. Financial Statements.
--------------------
(a) The consolidated balance sheet of Terra Industries and its Subsidiaries
as at December 31, 2000, and the related consolidated statements of income,
retained earnings and cash flows of Terra Industries and its Subsidiaries for
the fiscal year then ended, certified by Deloitte & Touche LLP, and the
consolidated balance sheets of Terra Industries and its Subsidiaries as at June
30, 2001, and the related consolidated statements of income, retained earnings
and cash flows of Terra Industries and its Subsidiaries for the six months then
ended, copies of which have been furnished to each Lender, fairly present (in
all material respects), subject, in the case of said balance sheets as at June
30, 2001, and said statements of income, retained earnings and cash flows for
six months then ended, to the absence of footnote disclosure and normal
recurring year-end audit adjustments, the consolidated financial condition of
Terra Industries and its Subsidiaries as at such dates and the consolidated
results of the operations of Terra Industries and its Subsidiaries for the
period ended on such dates, all in conformity with GAAP.
(b) Neither Terra Industries nor any of its Subsidiaries has any material
obligation, contingent liability or liability for taxes, long-term leases or
unusual forward or long-term commitment which is not either (i) reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto or
(ii) permitted by this Agreement.
(c) The Projections have been prepared by Terra Industries in light of the
past operations of its business, and reflect projections for the fiscal periods
covered thereby on a month by month basis for the first year and on a year by
year basis thereafter. The Projections are based upon estimates and assumptions
stated therein, all of which Terra Industries believes to be reasonable and fair
in light of current conditions and current facts known to Terra Industries and
at the time such Projections were prepared and reflect Terra Industries' good
faith and reasonable estimates of the future financial performance of Terra
Industries and its Subsidiaries and of the other information projected therein
for the periods set forth therein (it being understood that no representation is
made that such Projections will be realized).
(d) The unaudited pro forma consolidated and consolidating balance sheet of
Terra Industries and its Subsidiaries (the "Pro Forma Balance Sheet") contained
in Schedule 4.4, has been prepared as of June 30, 2001, reflects as of such
date, on a pro forma basis, the consolidated financial condition of Terra
Industries and its Subsidiaries, and the assumptions expressed therein were
reasonable based on the information available to Terra Industries at the time so
prepared and on the Effective Date.
61
Section 4.5. Material Adverse Change. Since December 31, 2000, there has
-----------------------
been no Material Adverse Change and there have been no events or developments
that in the aggregate have had a Material Adverse Effect.
Section 4.6. Solvency. Both before and after giving effect to (a) the Loans
--------
and Letter of Credit Obligations to be made or extended on the Effective Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or extended, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of the Borrower, and the consummation of the other
financing transactions contemplated hereby and (c) the payment and accrual of
all transaction costs in connection with the foregoing, each Loan Party is
Solvent.
Section 4.7. Litigation. There are no pending or, to the knowledge of Terra
----------
Industries or any Borrower, threatened actions, investigations or proceedings
affecting Terra Industries or any of its Material Subsidiaries before any court,
Governmental Authority or arbitrator which would reasonably be expected to be
adversely determined and which, if adversely determined, would have a Material
Adverse Effect. The performance of any action by any Loan Party required or
contemplated by any of the Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently). Schedule 4.7 lists all litigation
pending against any Loan Party at the date hereof which, if adversely
determined, would have a Material Adverse Effect.
Section 4.8. Taxes.
-----
(a) All federal, state, provincial, local and foreign income and franchise
and other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by Terra Industries and each of its Subsidiaries
and its Tax Affiliates have been filed with the appropriate Governmental
Authorities in all jurisdictions in which such Tax Returns are required to be
filed, all such Tax Returns are true and correct in all material respects, and
all material taxes, charges and other impositions reflected therein or otherwise
due and payable have been paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof
except where contested in good faith and by appropriate proceedings if adequate
reserves therefor have been established on the books of Terra Industries and
each of its Subsidiaries or such Tax Affiliate in conformity with GAAP. Except
as set forth on Schedule 4.8 (or as otherwise notified from time to time after
the Effective Date in writing to the Administrative Agent) no Tax Return is
under audit or examination by any Governmental Authority and no notice of such
an audit or examination or any assertion of any claim for Taxes has been given
or made by any Governmental Authority. Proper and accurate amounts have been
withheld by each Loan Party and each of its Tax Affiliates from their respective
employees for all periods in compliance (in all material respects) with the tax,
social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.
(b) Neither Terra Industries, any of its Subsidiaries or any of its Tax
Affiliates has (i) except as set forth on Schedule 4.8 (or as otherwise notified
from time to time after the Effective Date in writing to the Administrative
Agent) executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for the filing of any Tax Return or the assessment or collection of any
charges; (ii) any obligation under any tax sharing agreement or arrangement
other than that to which the Administrative Agent has a copy prior to the date
hereof; or (iii) been a member of an
62
affiliated, combined or unitary group other than the group of which Terra
Industries is the common parent.
Section 4.9. Full Disclosure.
---------------
The written information prepared or furnished by the Loan Parties or on
their behalf (by their officers or advisors (including legal, environmental and
financial advisors and consultants)) in connection with this Agreement or the
consummation of the financing when taken as a whole does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading.
Section 4.10. Margin Regulations. Neither Terra Industries nor its
------------------
Material Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Borrowing will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock in contravention of
Regulation U or X of the Federal Reserve Board.
Section 4.11. No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) Neither Terra Industries nor any of its Subsidiaries (i) is a
party to any Contractual Obligation the compliance with which would have a
Material Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, will result in the creation
of a Lien (other than a Lien permitted under Section 8.2) on the property or
assets of any thereof or (ii) is subject to any charter or corporate restriction
which would have a Material Adverse Effect.
(b) Neither Terra Industries nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of Terra Industries and the Borrowers, no other party is in default
under or with respect to any Contractual Obligation owed to Terra Industries or
its Subsidiaries, other than, in either case, those defaults which in the
aggregate would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of Terra Industries and the Borrowers, there
is no Requirement of Law applicable to any Loan Party the compliance with which
by such Loan Party would have a Material Adverse Effect.
Section 4.12. Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
Neither Terra Industries nor any of its Subsidiaries is (a) an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended or (b) a "holding company," or an "affiliate" or
a "holding company" or a "subsidiary company" of a "holding company," as each
such term is defined and used in the Public Utility Holding Act of 1935, as
amended.
Section 4.13. Use of Proceeds. The proceeds of the Loans and the Letters
---------------
of Credit are being used by the Borrowers solely to refinance existing
Indebtedness of the Borrowers
63
and their Subsidiaries, and for the payment of related transaction costs, fees
and expenses; and for their working capital and general corporate purposes.
Section 4.14. Insurance. All policies of insurance of any kind or nature of
---------
Terra Industries or any of its Subsidiaries, including policies of life, fire,
theft, product liability, public liability, property damage, other casualty,
employee fidelity, workers' compensation and employee health and welfare
insurance, are in full force and effect and are of a nature and provide such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of such Person. None of Terra Industries or any of its
Subsidiaries has been refused insurance for any material coverage for which it
had applied or had any policy of insurance terminated (other than at its
request).
Section 4.15. Labor Matters.
-------------
(a) There are no strikes, work stoppages, slowdowns or lockouts pending or
threatened against or involving Terra Industries or any of its Subsidiaries,
other than those which in the aggregate would not have a Material Adverse
Effect.
(b) There are no unfair labor practices, grievances or complaints pending,
or, to the Borrowers' knowledge, threatened against or involving Terra
Industries or any of its Subsidiaries, nor are there any arbitrations or
grievances threatened involving Terra Industries or any of its Subsidiaries,
other than those which, in the aggregate, if resolved adversely to Terra
Industries or such Subsidiary, would not have a Material Adverse Effect.
(c) Except as set forth on Schedule 4.15, as of the Effective Date, there
is no collective bargaining agreement covering any of the employees of Terra
Industries or its Subsidiaries.
(d) Schedule 4.15 sets forth as of the date hereof, all material consulting
agreements, executive employment agreements, executive compensation plans,
deferred compensation agreements, employee stock purchase and stock option plans
and severance plans of Terra Industries and any of its Subsidiaries.
Section 4.16. ERISA.
-----
(a) Schedule 4.16 separately identifies as of the date hereof all Title IV
Plans, all Multiemployer Plans and all Foreign Plans.
(b) Each employee benefit plan of Terra Industries or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code does so
qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where all such failures would not
have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur, any ERISA
Event which would have a Material Adverse Effect.
64
(e) Except to the extent set forth on Schedule 4.16, none of Terra
Industries, any of its Subsidiaries or any ERISA Affiliate would have any
Withdrawal Liability as a result of a complete withdrawal as of the date hereof
from any Multiemployer Plan.
(f) The accrued and vested liability under each Foreign Plan and under all
Foreign Plans in the aggregate does not exceed the amount of such liability
reflected in the Financial Statements by an amount which could reasonably be
expected to have a Material Adverse Effect, after taking into account the
availability of any assets of such Foreign Plan or otherwise specifically
allocable to such liability.
Section 4.17. Environmental Matters.
---------------------
(a) Except as set forth on Schedule 4.17, the operations of Terra
Industries and each of its Subsidiaries have been and are in compliance with all
Environmental Laws, including obtaining and complying in all material respects
with all Permits required by Environmental Laws ("Environmental Permits"), other
than non-compliances that in the aggregate would not have a reasonable
likelihood of Terra Industries and its Subsidiaries incurring Environmental
Liabilities and Costs in excess of $1,000,000.
(b) Except as set forth on Schedule 4.17, Terra Industries and its
Subsidiaries have obtained and currently possess all Environmental Permits
necessary for their operations, all such Permits are in good standing and Terra
Industries and each of its Subsidiaries is in compliance with the terms and
conditions of such Permits except for failures that in the aggregate would not
have a reasonable likelihood of Terra Industries and its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $1,000,000.
(c) Except as set forth on Schedule 4.17, none of Terra Industries or any
of its Subsidiaries or any Real Property currently or, to its knowledge,
previously owned, operated or leased by or for Terra Industries or any of its
Subsidiaries is subject to any pending or, to its knowledge threatened, written
claim, order, agreement, notice of violation, notice of potential liability or
other allegation or is the subject of any pending or, to its knowledge,
threatened proceeding or governmental investigation under or pursuant to
Environmental Laws other than those that in the aggregate would not have a
reasonable likelihood of Terra Industries and its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $1,000,000.
(d) Except as set forth on Schedule 4.17, none of Terra Industries or any
of its Subsidiaries is a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C.(S).6901 et
seq., the regulations thereunder or any state analog.
(e) Except as set forth on Schedule 4.17, there are no facts, circumstances
or conditions arising out of or relating to the operations or ownership of Real
Property owned or operated by Terra Industries or any of its Subsidiaries that
could reasonably be expected to give rise to Environmental Liabilities and Costs
which are not specifically included in the financial information furnished to
the Lenders other than those that in the aggregate would not have a reasonable
likelihood of resulting in Terra Industries or any of its Subsidiaries incurring
Environmental Liabilities and Costs in excess of $1,000,000.
(f) Except as set forth on Schedule 4.17, as of the date hereof, no
Environmental Lien has attached to any property of Terra Industries or any of
its Subsidiaries and
65
to its knowledge no facts, circumstances or conditions exist that could
reasonably be expected to result in any such lien attaching to any such
property.
(g) Except as set forth on Schedule 4.17, Terra Industries and each of its
Subsidiaries has provided the Administrative Agent with copies of all material
environmental, health or safety audits, studies, assessments, inspections,
investigations or other environmental health and safety reports relating to the
operations of Terra Industries and its Subsidiaries or their Real Property that
are in the possession, custody or control of Terra Industries or any of its
Subsidiaries.
Section 4.18. Intellectual Property. Terra Industries and its Subsidiaries
---------------------
own or license or otherwise have the right to use all licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises, authorizations and
other intellectual property rights (including all Intellectual Property as
defined in the Pledge and Security Agreement) that are necessary and material to
the operations of their respective businesses, without infringement upon or
conflict with the rights of any other Person with respect thereto, including all
trade names associated with any material private label brands of Terra
Industries or any of its Subsidiaries. To the Borrowers' and Terra Industries'
knowledge, no slogan or other advertising device, product, process, method,
substance, part or component, or other material now employed, or now
contemplated to be employed, by Terra Industries or any of its Subsidiaries
infringes upon or conflicts in any material respect with any rights owned by any
other Person, and no claim or litigation regarding any of the foregoing is
pending or threatened.
Section 4.19. Title; Real Property.
--------------------
(a) Schedule 4.19 sets forth all the Real Property (other than Non-Material
Real Property) owned by Terra Industries and its Material Subsidiaries at the
date hereof and each of Terra Industries and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all such Real Property and
good title to all personal property purported to be owned by it, including those
reflected on the most recent Financial Statements delivered by the Borrowers,
and none of such properties and assets is subject to any Lien, except Liens
permitted under Section 8.2. Terra Industries and its Subsidiaries have received
all deeds, assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and have duly effected
all recordings, filings and other actions necessary to establish, protect and
perfect in all material respects Terra Industries' and its Material
Subsidiaries' right, title and interest in and to all such property.
(b) Set forth on Schedule 4.19 hereto is a complete and accurate list of
all Real Property (other than Non-Material Real Property) owned and leased by
Terra Industries and its Material Subsidiaries showing as of the Effective Date
the street address, county or other relevant jurisdiction, state, and record
owner. Each Loan Party has good, indefeasible and marketable fee simple (or,
where relevant, leasehold) title to all Real Property purported to be owned by
it, which ownership is free and clear of all Liens other than Liens created or
permitted by the Loan Documents.
(c) Except as set forth on Schedule 4.19 (or otherwise notified in writing
to the Administrative Agent in respect of Real Property acquired after the
Closing Date), neither Terra Industries nor any of its Subsidiaries owns or
holds, or is obligated under or a party to, any
66
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any Real Property (other than Non-Material Real
Property) owned or leased by Terra Industries or any of its Subsidiaries except
as permitted by the Loan Documents.
(d) All material components of all improvements included within the Real
Property owned or leased by Terra Industries or any of its Subsidiaries
(collectively, "Improvements"), including the roofs and structural elements
thereof and the heating, ventilation, air conditioning, plumbing, electrical,
mechanical, sewer, waste water, storm water, paving and parking equipment,
systems and facilities included therein, are in working order and repair to the
extent necessary for the effective and orderly conduct of the business,
operations and activities of Terra Industries and its Subsidiaries in all
material respects (but in any event to a standard not lower than that generally
maintained by Terra Industries and its Subsidiaries during the two year period
preceding the date hereof). All water, gas, electrical, steam, compressed air,
telecommunication, sanitary and storm sewage lines and systems and other similar
systems serving the Real Property owned or leased by Terra Industries or any of
its Subsidiaries are installed and operating and are sufficient to enable the
Real Property owned or leased by Terra Industries or its Subsidiaries to
continue to be used and operated in the manner currently being used and
operated, and neither Terra Industries nor any of its Subsidiaries has any
knowledge of any factor or condition that could result in the termination or
material impairment of the furnishing thereof. No Improvement or portion thereof
is dependent for its access, operation or utility on any land, building or other
Improvement not included in the Real Property owned or leased by Terra
Industries or any of its Subsidiaries or over which it has a right of way or
easement.
(e) No portion of any Real Property owned or leased by Terra Industries
or any of its Subsidiaries has suffered any material damage by fire or other
casualty loss which has not heretofore been substantially repaired and restored
to its original condition except with respect to which repair has been commenced
(as set forth on Schedule 4.19 (or otherwise notified in writing to the
Administrative Agent after the Effective Date)) and is being diligently
progressed. Except as set forth on Schedule 4.19 (or otherwise notified in
writing to the Administrative Agent after the Effective Date), no portion of any
Real Property owned or leased by Terra Industries or any of its Subsidiaries is
located in a special flood hazard area as designated by any federal Governmental
Authority.
(f) All Permits required to have been issued or appropriate to enable all
Real Property owned or leased by Terra Industries or any of its Subsidiaries to
be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, other than those which in the aggregate would not have a Material
Adverse Effect.
(g) None of Terra Industries or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property owned or leased by Terra
Industries or any of its Subsidiaries or any part thereof, except those which,
in the aggregate, would not have a Material Adverse Effect.
Section 4.20. Pari Passu Obligations. This Agreement and the other Loan
----------------------
Documents and the obligations evidenced hereby and thereby are and will at all
times be direct and unconditional general obligations of the Borrowers, and
rank and will at all times rank in
67
right of payment and otherwise at least pari passu with all unsecured
Indebtedness of the Borrowers, whether now existing or hereafter outstanding,
subject to statutory priority and the effect of bankruptcy and insolvency law.
Section 4.21. No Immunity. Terra UK is subject to civil and commercial law
-----------
with respect to its obligations under this Agreement and each of the other Loan
Documents. The execution, delivery and performance by Terra UK of this Agreement
and each of the other Loan Documents constitute private and commercial acts
rather than public or governmental acts. Neither Terra UK nor any of its
properties or revenues is entitled to any right of immunity in any jurisdiction
from suit, court jurisdiction, judgment, attachment (whether before or after
judgment), set-off or execution of a judgment or from any other legal process or
remedy relating to the obligations of Terra UK, as the case may be, under this
Agreement or any of the other Loan Documents.
Section 4.22. Canadian and English Requirements. This Agreement and each of
---------------------------------
the other Loan Documents are in proper legal form under the laws of Canada and
England for the enforcement thereof against Terra Canada and Terra UK
respectively under such laws, and if each of the Loan Documents were stated to
be governed by such law, they would constitute legal, valid and binding
obligations of Terra Canada and Terra UK, as the case may be, thereunder,
enforceable in accordance with their respective terms. All formalities (if any)
required under the laws of Canada and England in respect of Terra Canada and
Terra UK, for the validity and enforceability of each of the Loan Documents
(including, without limitation, any necessary registration, recording or filing
with any court or other authority therein), except as otherwise expressly
provided herein, have been accomplished, and no Taxes are required to be paid
and no notarization is required, for the validity and enforceability thereof.
ARTICLE V
Financial Covenants
As long as any of the Obligations (in respect of Revolving
Credit Outstandings, interest or fees thereon and expenses related thereto) or
the Revolving Credit Commitments remain outstanding, unless the Requisite
Lenders otherwise consent in writing, Terra Industries agrees with the Lenders
and the Administrative Agent that:
Section 5.1. Minimum Cash Flow. Terra Industries will have, as of the last
-----------------
day of each Fiscal Quarter set forth below, Cash Flow for the number of Fiscal
Quarters indicated below ending on such day of not less than the following:
68
------------------------------------------------------------------------
Fiscal Quarters Minimum Cash Flow
------------------------------------------------------------------------
4 Fiscal Quarters ended September 30, 2001, $40,000,000
December 31, 2001 and March 31, 2002
------------------------------------------------------------------------
4 Fiscal Quarters ended June 30, 2002 $60,000,000
------------------------------------------------------------------------
4 Fiscal Quarters ended September 30, 2002 $75,000,000
------------------------------------------------------------------------
4 Fiscal Quarters ended December 31, 2002 and each $90,000,000
4 Fiscal Quarter period thereafter
------------------------------------------------------------------------
Section 5.2. Capital Expenditures and Joint Venture Investments.
--------------------------------------------------
Terra Industries will not permit (a) Capital Expenditures (excluding any Capital
Expenditures financed by insurance proceeds to the extent permitted hereunder)
to be made or incurred during each period set forth below and (b) the cash
Investments in joint ventures made during such period permitted under Section
8.3(l) (i) in the case of clause (a) only, to be less than the minimum amount
set forth below and (ii) in the case of clauses (a) and (b) in aggregate to be
in excess of the maximum amount set forth below, for such period:
------------------------------------------------------------------------------------------------------
Fiscal Year Maximum Amount Minimum Amount
------------------------------------------------------------------------------------------------------
Fiscal Year ended December 31, 2001 $50,000,000 $15,000,000
------------------------------------------------------------------------------------------------------
Fiscal Year ended December 31, 2002 $50,000,000 $15,000,000
------------------------------------------------------------------------------------------------------
Fiscal Year ended December 31, 2003 $50,000,000 $15,000,000
------------------------------------------------------------------------------------------------------
Fiscal Year ended December 31, 2004 $50,000,000 $15,000,000
------------------------------------------------------------------------------------------------------
2 Fiscal Quarters ended June 30, 2005 $30,000,000 $ 5,000,000
------------------------------------------------------------------------------------------------------
Section 5.3. Minimum Liquidity. The Borrowers shall not permit the
-----------------
aggregate Available Credit of the Borrowers to be less than $30,000,000 for more
than three consecutive Business Days.
ARTICLE VI
Reporting Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, interest or fees thereon and expenses related thereto) or the
Revolving Credit Commitments
69
remain outstanding, unless the Requisite Lenders (except as provided in Section
11.1) otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
Section 6.1. Financial Statements. Terra Industries shall furnish to
--------------------
the Lenders the following Financial Statements:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month (other than March, June and September) in each Fiscal Year, financial
information regarding Terra Industries and its Subsidiaries consisting of
consolidated and consolidating unaudited balance sheets as of the close of such
month and the related statements of income and cash flow for such month and that
portion of the current Fiscal Year ending as of the close of such month, setting
forth in comparative form the figures for the corresponding period in the prior
year and the figures contained in the Projections, in each case certified by a
Responsible Officer of Terra Industries as fairly presenting the consolidated
and consolidating financial position of Terra Industries and its Subsidiaries as
at the dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
(b) Quarterly Reports. Within 45 days after the end of each Fiscal
Quarter (other than a Fiscal Quarter ending December 31) in each Fiscal Year,
financial information regarding Terra Industries and its Subsidiaries consisting
of consolidated and consolidating unaudited balance sheets as of the close of
such quarter and the related statements of income and cash flow for such quarter
and that portion of the Fiscal Year ending as of the close of such quarter,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections, in each case
certified by a Responsible Officer of Terra Industries as fairly presenting the
consolidated and consolidating financial position of Terra Industries and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
(c) Annual Reports. Within 90 days after the end of each Fiscal
Year, financial information regarding Terra Industries and its Subsidiaries
consisting of consolidated and consolidating balance sheets of Terra Industries
and its Subsidiaries as of the end of such year and related statements of income
and cash flows of Terra Industries and its Subsidiaries for such Fiscal Year,
all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit by Deloitte & Touche LLP or other independent public accountants
acceptable to the Administrative Agent, together with the report of such
accounting firm stating that (i) such financial statements fairly present the
consolidated financial position of Terra Industries and its Subsidiaries as at
the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which such independent certified public
accountants shall concur and which shall have been disclosed in the notes to the
financial statements), and (ii) the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and accompanied by a
certificate stating that in the course of the regular audit of the business of
Terra Industries and its Subsidiaries such accounting firm has obtained no
knowledge that a Default or Event of Default in respect of the financial
covenants contained in Article V has occurred and is continuing, or, if in the
opinion of such accounting firm, a Default
70
or Event of Default has occurred and is continuing in respect of such financial
covenants, a statement as to the nature thereof.
(d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clauses (b) and (c) of this Section 6.1, a
certificate of a Responsible Officer of a Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
determining the Leverage Ratio (for purposes of determining the Applicable
Margin) and demonstrating compliance with each of the financial covenants
contained in Article V which is tested on a quarterly basis and (ii) stating
that, to the best of such Responsible Officer's knowledge, no Default or Event
of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, stating the nature thereof and the
action which the Borrower proposes to take with respect thereto.
(e) Business Plan. Not later than 60 days after the end of each
Fiscal Year, and containing substantially the types of financial information
contained in the Projections delivered pursuant to clause (i) of the definition
of such term in Section 1.1, (i) the annual business plan of Terra Industries
for the next succeeding Fiscal Year approved by the Board of Directors of Terra
Industries, (ii) forecasts prepared by management of Terra Industries for each
fiscal month in the next succeeding Fiscal Year, and (iii) forecasts prepared by
management of Terra Industries for each of the succeeding Fiscal Years through
Fiscal Year 2005, including, in each instance described in clause (ii) and
clause (iii) above, (A) a projected year-end consolidated balance sheet and
income statement and statement of cash flows and (B) a statement of all of the
material assumptions on which such forecasts are based.
(f) Management Letters, Etc. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from its independent
certified public accountants;
(g) Loans and Intercompany Loan Balances. Together with each
delivery of any financial statement pursuant to clauses (b) or (c) of this
Section 6.1, a summary of the outstanding Loans and the outstanding balance of
all Intercompany Indebtedness as of the last day of the fiscal quarter covered
by such financial statement (or more frequently as may be required by the
Administrative Agent), certified by a Responsible Officer.
(h) Additional Information. Promptly, from time to time, such other
information regarding the operations, including information regarding specific
product categories and lines of business of Terra Industries and its
Subsidiaries, business affairs and financial condition of Terra Industries or
any of its Subsidiaries, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.
Section 6.2. Default Notices. As soon as practicable, and in any
---------------
event within five Business Days after a Responsible Officer of any Loan Party
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect or which has any reasonable
likelihood of causing or resulting in a Material Adverse Change, the Borrowers
shall give the Administrative Agent notice specifying the nature of such Default
or Event of Default or other event, including the anticipated effect thereof,
which notice, if given by telephone, shall be promptly confirmed in writing on
the next Business Day.
Section 6.3. Litigation. Promptly after the commencement thereof,
----------
the Borrowers shall give the Administrative Agent written notice of the
commencement of all
71
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting Terra Industries or any of its Subsidiaries
and known to a Responsible Officer, which in the reasonable judgment of Terra
Industries or such Subsidiary, could reasonably be expected to expose Terra
Industries or such Subsidiary to liability in an amount aggregating $500,000 or
more or which, if adversely determined, would have a Material Adverse Effect.
Section 6.4. Asset Sales. Prior to any Asset Sale anticipated to
-----------
generate in excess of $10,000,000 (or its Dollar Equivalent) in Net Cash
Proceeds, Terra Industries shall send the Administrative Agent a notice (a)
describing such Asset Sale or the nature and material terms and conditions of
such transaction and (b) stating the estimated Net Cash Proceeds anticipated to
be received by Terra Industries or any of its Subsidiaries.
Section 6.5. SEC Filings; Press Releases. Promptly after the sending
---------------------------
or filing thereof, the Borrowers shall send the Administrative Agent copies of
(a) all reports which Terra Industries or any of its Material Subsidiaries sends
to its security holders generally, (b) all reports and registration statements
which Terra Industries or any of its Subsidiaries files with the Securities and
Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc., (c) all press releases and (d)
all other statements concerning material changes or developments in the business
of such Loan Party made available by any Loan Party to the public.
Section 6.6. Labor Relations. Promptly after a Responsible Officer
---------------
becomes aware of the same, the Borrowers shall give the Administrative Agent
written notice of (a) any material labor dispute to which Terra Industries or
any of its Material Subsidiaries is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person's plants and
other facilities, and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other
facility of any of such Person.
Section 6.7. Tax Returns. Upon the request of any Lender, through
-----------
the Administrative Agent, the Borrowers will provide copies of all federal,
state, material local and foreign tax returns and reports filed by Terra
Industries or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes).
Section 6.8. Insurance. As soon as is practicable and in any event
---------
within 90 days after the end of each Fiscal Year, the Borrowers will furnish the
Administrative Agent (in sufficient copies for each of the Lenders) with (a) a
report in form and substance reasonably satisfactory to the Administrative Agent
and the Lenders outlining all material insurance coverage maintained as of the
date of such report by Terra Industries and its Material Subsidiaries and the
duration of such coverage and (b) an insurance broker's statement that all
premiums then due and payable with respect to such coverage have been paid.
Section 6.9. ERISA Matters. The Borrowers shall furnish the
-------------
Administrative Agent (with sufficient copies for each of the Lenders):
(a) promptly and in any event within 30 days after a Responsible
Officer of Terra Industries, any of its Material Subsidiaries or any ERISA
Affiliate knows or has reason to know that any ERISA Event has occurred;
72
(b) promptly and in any event within 10 days after a Responsible
Officer of Terra Industries, any of its Material Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a written statement of a Responsible Officer of
Terra Industries describing such ERISA Event or waiver request and the action,
if any, which Terra Industries, its Subsidiaries and ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with the PBGC or the
IRS pertaining thereto;
(c) simultaneously with the date that Terra Industries, any of its
Material Subsidiaries or any ERISA Affiliate files a notice of intent to
terminate any Title IV Plan, if such termination would require material
additional contributions in order to be considered a standard termination within
the meaning of Section 4041(b) of ERISA, a copy of each notice.
Section 6.10. Environmental Matters. The Borrowers shall provide the
---------------------
Administrative Agent promptly and in any event within 10 days of a Responsible
Officer of Terra Industries or any Subsidiary learning of any of the following,
written notice of any of the following:
(a) that any Loan Party is or may be liable to any Person as a
result of a Release or threatened Release which could reasonably be expected to
subject such Loan Party to Environmental Liabilities and Costs of $1,000,000 or
more;
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is subject to any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition which could reasonably be expected to result in a violation of or
liability under any Environmental Law, except for violations and liabilities the
consequence of which in the aggregate would have no reasonable likelihood of
subjecting the Loan Parties collectively to Environmental Liabilities and Costs
of $1,000,000 or more;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
which in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $1,000,000 or more;
(e) any proposed acquisition of stock, assets or real estate, or any
proposed leasing of property, or any other action by any Loan Party or any of
its Subsidiaries the consequences of which in the aggregate have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $1,000,000 or more;
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws which in the aggregate have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that in each case in the aggregate
would cost $1,000,000 or more or subject the Loan Parties to additional
Environmental Liabilities and Costs of $1,000,000 or more; and
73
(g) upon written request by the Administrative Agent or by any Lender
through the Administrative Agent, following (i) the acquisition by a Loan Party
or its Subsidiary of a fee interest in any Real Property, (ii) the occurrence of
a Default or Event of Default pursuant to Section 7.10 or (iii) the occurrence
(or the reasonable belief by the Administrative Agent, following consultation
with the Borrowers, of the occurrence) of any of the matters to be notified by
the Borrowers under this Section 6.10, a report prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent providing, as
appropriate in the circumstances, an assessment of the status of any
Environmental Liabilities and Costs and other environmental, health or safety
compliance, hazard or liability issue arising in relation thereto, which
assessment shall be reasonable in scope in light of the circumstances, perceived
risks and the facts known at the time. Without limiting the foregoing, if the
Administrative Agent determines at any time that a material risk exists that any
such report will not be provided within a reasonable time following such request
the Administrative Agent may retain an environmental consulting firm to prepare
such report at the expense of the Borrowers.
Section 6.11. Borrowing Base Determination.
----------------------------
(a) The Borrowers shall furnish to the Administrative Agent no later
than Wednesday of each week or more frequently as may be requested by the
Administrative Agent, a Borrowing Base Certificate for each Borrower as of the
immediately preceding Friday (or the relevant third preceding Business Day if
requested more frequently) executed by a Responsible Officer of each Borrower
together with reasonably detailed supporting information and documentation
acceptable to the Administrative Agent. The Administrative Agent shall make
reasonable efforts to furnish to the Lenders a copy of each Borrowing Base
Certificate following receipt thereof from the Borrowers; provided, however,
that failure to furnish such a copy will not give rise to a claim or remedy by
the Lenders against the Administrative Agent.
(b) Each Borrower shall conduct, or shall cause to be conducted, at
its expense, and upon request of the Administrative Agent, and present to the
Administrative Agent for approval, such appraisals, investigations and reviews
as the Administrative Agent shall reasonably request for the purpose of
determining each Borrowing Base, all upon notice and at such times during normal
business hours and as often as may be reasonably requested. Each Borrower shall
furnish to the Administrative Agent any information which the Administrative
Agent may reasonably request regarding the determination and calculation of its
Borrowing Base including correct and complete copies of any invoices, underlying
agreements, instruments or other documents and the identity of all Account
Debtors in respect of Accounts referred to therein.
(c) The Borrowers shall notify the Administrative Agent in writing
promptly upon any Borrower receiving or otherwise gaining knowledge that the
Revolving Credit Outstandings in respect of such Borrower would result in a
Borrowing Base Deficiency.
(d) The Administrative Agent may, at the Borrowers' sole cost and
expense, make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that the Administrative Agent
considers advisable, and the Borrowers shall furnish all such assistance and
information as the Administrative Agent may reasonably require in connection
therewith.
74
Section 6.12. Other Information. The Borrowers will provide the
-----------------
Administrative Agent or any Lender with such other information respecting the
business, properties, condition, financial or otherwise, or operations of Terra
Industries or any of its Subsidiaries as any Lender through the Administrative
Agent may from time to time reasonably request.
Section 6.13. Material Documents. The Borrowers will provide to the
------------------
Administrative Agent on or before the date of execution, or amendment, waiver or
consent (which amendment, waiver or consent shall comply with Section 8.11) in
respect of each Material Document, notification thereof together with a
certified copy of such Material Document or amendment, waiver or consent as
applicable.
Section 6.14. Foreign Benefit Plans. The Borrower shall provide to the
---------------------
Administrative Agent (with sufficient copies for each Lender) copies of each
material report (including applicable schedules) with respect to each Foreign
Plan or any trust created thereunder as the Administrative Agent (or any Lender,
through the Administrative Agent) may reasonably request.
ARTICLE VII
Affirmative Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, interest or fees thereon and expenses related thereto) or the
Revolving Credit Commitments remain outstanding, unless the Requisite Lenders
(except as provided in Section 11.1) otherwise consent in writing, each Borrower
agrees with the Lenders and the Administrative Agent that:
Section 7.1. Preservation of Corporate Existence, Etc. Each of Terra
----------------------------------------
Industries and the Borrowers shall, and shall cause each of its Subsidiaries to,
preserve and maintain its corporate or partnership existence, rights (charter
and statutory) and franchises, except (i) as permitted by Sections 8.3 and 8.4
and (ii) the abandonment of such rights and franchises which are no longer
necessary or desirable to the conduct of the business of Terra Industries or its
Subsidiaries and which abandonment would not have a Material Adverse Effect.
Section 7.2. Compliance with Laws, Etc. Each of Terra Industries and
-------------------------
the Borrowers shall, and shall cause each of its Subsidiaries to, comply with
all applicable Requirements of Law, Contractual Obligations and Permits (and
maintain in full force and effect all contracts constituting such Contractual
Obligations and such Permits), except where the failure so to comply would not
in the aggregate have a Material Adverse Effect.
Section 7.3. Conduct of Business. Each of Terra Industries and the
-------------------
Borrowers shall, and shall cause each of its Subsidiaries to, (a) conduct its
business in the ordinary course and substantially in accordance with past
practice and (b) use its reasonable efforts, in the ordinary course and
substantially in accordance with past practice, to preserve its business and the
goodwill and business of the customers, advertisers, suppliers and others having
business relations with the Borrower or any of its Subsidiaries, except in each
case where the failure to comply with the covenants in each of clauses (a) and
(b) above would not in the aggregate have a Material Adverse Effect.
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Section 7.4. Payment of Taxes, Etc. Each of Terra Industries and the
---------------------
Borrowers shall, and shall cause each of its Material Subsidiaries to, pay and
discharge before the same shall become delinquent, all material lawful
governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings and adequate reserves therefor
have been established on the books of such Loan Party or the appropriate
Subsidiary in conformity with GAAP.
Section 7.5. Maintenance of Insurance. Each of Terra Industries and
------------------------
the Borrowers shall (i) maintain, and cause to be maintained for each other Loan
Party and each of its Material Subsidiaries insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which Terra Industries,
such Borrower or such Subsidiary operates, and such other insurance as may be
reasonably requested by the Requisite Lenders and the Administrative Agent (as a
result of any report delivered pursuant to Section 6.8 or the Lenders or
Administrative Agent becoming aware of any fact or circumstances following the
Initial Closing Date which would indicate that it would be prudent and
consistent with industry practice for such additional insurance to be obtained),
and, in any event, all insurance required by any Collateral Documents and (ii)
cause all such insurance to name the Administrative Agent on behalf of the
Secured Parties as additional insured or loss payee, as appropriate as set forth
in Section 3.1(a)(xix), and to provide that no cancellation, material addition
in amount or material change in coverage shall be effective until after 30 days'
written notice thereof to the Administrative Agent.
Section 7.6. Access. Each of Terra Industries and the Borrowers shall
------
from time to time, permit, and shall cause each of its Subsidiaries to permit,
the Administrative Agent and the Lenders, or any agents or representatives
thereof, within one Business Day after written notification of the same (except
that during the continuance of an Event of Default, no such notice shall be
required) to (a) examine and make copies of and abstracts from the records and
books of account of such Loan Party and each of its Subsidiaries, (b) visit the
properties of such Loan Party and each of its Subsidiaries, (c) discuss the
affairs, finances and accounts of such Loan Party and each of its Subsidiaries
with any of their respective officers or directors, and (d) communicate directly
with the Borrowers' independent certified public accountants; provided, however,
that the Borrowers may participate in such communication unless a Default or
Event of Default has occurred and is continuing). Each of Terra Industries and
the Borrowers shall authorize their independent certified public accountants to
disclose to the Administrative Agent or any Lender any and all financial
statements and other information of any kind, as the Administrative Agent or any
Lender reasonably requests from the Borrower, any other Loan Party or any of its
Subsidiaries and which such accountants may have with respect to the business,
financial condition, results of operations or other affairs of such Loan Party
or any of its Subsidiaries.
Section 7.7. Keeping of Books. Each of Terra Industries and the
----------------
Borrowers shall, and shall cause each other Loan Party and each of its
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of Terra Industries, the Borrowers and
each such Subsidiary.
Section 7.8. Maintenance of Properties, Etc. Each of Terra Industries
------------------------------
and the Borrowers shall, and shall cause each of its Subsidiaries to, maintain
and preserve, (a) all of
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its properties which are necessary in the conduct of its business in such
working order and condition to the extent necessary for the effective and
orderly conduct of the business, operations and activities of Terra Industries
and its Subsidiaries in all material respects (but in any event to a standard
not lower than that generally maintained by Terra Industries and its
Subsidiaries during the two year period preceding the date hereof), (b) all
rights, permits, licenses, approvals and privileges (including all Permits)
which are used or necessary in the conduct of its business, and (c) all
registered patents, trademarks, trade names, copyrights and service marks with
respect to its business; except where the failure to so maintain and preserve in
the aggregate would have no Material Adverse Effect.
Section 7.9. Application of Proceeds. The Borrowers shall use the
-----------------------
entire amount of the proceeds of the Loans as provided in Section 4.13.
Section 7.10. Environmental. Each of Terra Industries and the
-------------
Borrowers shall, and shall cause each of its Subsidiaries to comply in all
material respects with Environmental Laws and, without limiting the foregoing,
each of Terra Industries and the Borrowers shall, at their sole cost and
expense, upon receipt of a notification or otherwise obtaining knowledge of any
Release or other event that has a reasonable likelihood of Terra Industries and
its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000, (i) conduct or pay for consultants to conduct, tests or assessments
of environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (ii) take such Remedial
Action as required by Environmental Laws or as any Governmental Authority
lawfully requires or as is appropriate and consistent with good business
practice to address the Release or event; provided, however, that Terra
Industries and the Borrowers shall not be deemed to be in violation of this
Section 7.10 where a failure to comply with any provision hereof would not
reasonably be expected to result in Terra Industries and its Subsidiaries
incurring Environmental Liabilities and Costs in excess of $1,000,000.
Section 7.11. Additional Collateral and Guaranties; Further
---------------------------------------------
Assurances.
----------
(a) To the extent not delivered to the Administrative Agent on or
before the Effective Date or to the extent the delivery thereof would be covered
by clause (b) below, each of Terra Industries and the Borrowers agree promptly
to, or ensure that each of its Material Subsidiaries shall promptly (or, to the
extent legally restricted from doing so at the date hereof, promptly following
the removal of such restriction), (i) execute and deliver to the Administrative
Agent such further, and such amendments to the, Collateral Documents as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Stock and Stock Equivalents and other debt
Securities of any Material Subsidiary which are owned by Terra Industries or any
of its Subsidiaries and requested to be pledged by the Administrative Agent;
provided, however, (A) that such Stock, Stock Equivalents or other debt
Securities shall not include assets constituting Senior Secured Note Collateral
and (B) in no event shall any Loan Party or any of its Subsidiaries be required
to pledge in excess of 65% of the outstanding Stock of any first tier Material
Subsidiary that is not a Domestic Subsidiary or any of the outstanding stock of
any Subsidiary of such first tier Subsidiary (except to the extent that such
pledge is to secure the Obligations of Terra UK or the obligations under any
Guaranty of such Obligations), or (ii) deliver to the Administrative Agent the
certificates (if any) representing such Stock and Stock Equivalents and other
debt Securities, together with (A) in the case of such certificated Stock and
Stock Equivalents, undated stock powers endorsed in blank, and (B) in the case
of such
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certificated debt Securities, endorsed in blank, in each case executed and
delivered by a Responsible Officer of the Borrower or such Subsidiary, as the
case may be, (iii) cause such new Material Subsidiary (A) to become a party to a
Guaranty and the applicable Collateral Documents and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Secured Parties a perfected security interest in the Collateral described in
the Collateral Documents with respect to such new Material Subsidiary, including
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Collateral Documents or by law or as may be reasonably
requested by the Administrative Agent and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent; provided,
however, that such new Material Subsidiary, if not a Domestic Subsidiary, shall
only be required to guarantee and secure the Obligations of Terra UK.
(b) Promptly upon TNCLP becoming, directly or indirectly, a
wholly-owned Subsidiary of Terra Industries through the acquisition of Common
Units, TNCLP and its Subsidiaries shall execute and deliver to the
Administrative Agent (i) a pledge of the equity interests of TNCLP pledged as
security for Terra Capital's obligations under the Senior Secured Notes (upon
the release of its Lien thereon by the Senior Secured Note Trustee pursuant to
the terms of the Senior Secured Note Intercreditor Agreement) and (ii) such
additional documents as the Administrative Agent may reasonably request to
ensure that any Guaranty and Collateral provided by TNCLP or its Subsidiaries in
respect of the Obligations of TNLP shall extend to guaranty and secure all the
Obligations.
(c) Terra Industries and its Subsidiaries shall ensure that with
respect to the Ammonium Nitrate Hedging Agreement, any gas Hedging Contract and
any other Hedging Contract nominated by the Administrative Agent, all payments
to Terra Industries or its Subsidiaries thereunder by the applicable
counterparty thereto shall be made directly to a Cash Collateral Account or
Approved Deposit Account (approved for such purpose by the Administrative Agent)
and an irrevocable instruction (in form and substance satisfactory to the
Administrative Agent) shall have been given by Terra Industries or its relevant
Subsidiary to such counterparty to make payments thereunder to such Cash
Collateral Account or Approved Deposit Account.
(d) Promptly upon the reasonable request by the Administrative Agent,
each of Terra Industries and the Borrowers shall, and shall ensure that each of
its Subsidiaries shall, take such action as the Administrative Agent may request
(including the execution, amendment, delivery, filing and registration of any
Loan Document or other document, certificate, agreement or instrument) in order
to correct any material defect or error which may be discovered which impairs,
or may fail to provide, the intended legality, effectiveness, accuracy,
perfection or priority of any Loan Document.
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Section 7.12. Cash Collateral Accounts and Cash Management System. As
---------------------------------------------------
soon as reasonably practicable and in any event (i) in the case of Terra
Capital, TNLP and Terra Canada, not later than 30 days following the Effective
Date and (ii) in the case of Terra UK, not later than 10 Business Days following
the Effective Date (except that, in respect of Terra UK's bank account with
Barclays, if Terra UK notifies Barclays promptly following the Effective Date of
the need to enter into a Deposit Account Control Agreement and Barclays refuses
to execute such Deposit Account Control Agreement, such period may exceed 10
Business Days in the Administrative Agent's sole reasonable discretion in order
to allow Terra UK to transfer such banking arrangements to a Deposit Account
Bank (as defined in the Pledge and Security Agreement)), Terra Industries and
each Borrower shall ensure that the following accounts and cash management
systems shall be implemented and maintained:
(a) Terra Capital, TNLP, Terra UK and Terra Canada shall maintain Cash
Collateral Accounts and Approved Deposit Accounts and Terra Capital shall
maintain the US Concentration Account as set forth on Schedule 7.12 or as may
otherwise be approved by the Administrative Agent.
(b) The Administrative Agent shall (subject as provided below) have a
perfected first priority lien on the Cash Collateral Accounts and the US
Concentration Account. As long as any of the Obligations or any of the Revolving
Credit Commitments remain outstanding, no Loan Party nor any Person or entity
claiming by, through or under any Loan Party shall have any control over the use
of, or any right to effect a withdrawal from, any Cash Collateral Account or the
US Concentration Account; provided, however, that at such times as an Account
Triggering Event shall not have occurred and be continuing in respect of any
Loan Party, each of Terra UK and Terra Canada may by written notice instruct the
Administrative Agent to make payments from its Cash Collateral Account to its
Disbursement Account subject to and in accordance with the provisions of clauses
(d)(ii) and (iii) below. All amounts in the Cash Collateral Accounts of Terra
Capital, TNLP and (for Dollar denominated receivables) Terra Canada shall be
applied by the Administrative Agent as specified in clause(d)(i) below.
(c) Each Borrower and Terra Canada shall instruct its Account Debtors
in respect of the Collateral to mail their remittances to a Lockbox and such
Loan Party shall take all steps necessary or desirable, in the Administrative
Agent's sole discretion, to cause such Account Debtors to mail their remittances
to such Lockbox. Each Borrower and Terra Canada shall mail to its Lockbox any
remittances from such Account Debtors received directly by it as soon as
possible (but in any event no later than the Business Day immediately following
receipt).
(d) Notwithstanding Section 11.1(a)(ix), each Borrower shall, and
shall cause Terra Canada to, maintain a cash management system acceptable to the
Administrative Agent including one or more Lockboxes as follows:
(i) In the case of Terra Capital and TNLP, such cash management
system shall provide for (A) all funds received by each such Borrower
(other than funds constituting Senior Secured Note Collateral) to be
deposited in a Lockbox or Approved Deposit Account covered by a Deposit
Account Control Agreement, (B) daily deposit of remittances received in the
Lockbox to the Approved Deposit Account, (C) daily sweeping of the funds in
the Approved Deposit Account to the US Concentration Account and (D) upon
receipt of notice from Terra Capital (as provided in the following
sentence), allocation and transfer of such amounts in the US Concentration
Account to
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the appropriate Cash Collateral Account of Terra Capital, TNLP or, if
applicable (but subject to the last sentence of clause (d)(ii) below), the
Disbursement Account of Terra Canada. Terra Capital shall notify the
Administrative Agent within two Business Days of the deposit of any
proceeds of Collateral in the US Concentration Account which portion of
such proceeds is owned by Terra Capital, TNLP or, if applicable, Terra
Canada. All funds on deposit in the Cash Collateral Accounts in respect of
Terra Capital and TNLP shall be applied in the manner specified in Section
2.9(e) and in respect of Terra Canada shall be applied as specified in
clause (d)(ii)below.
(ii) In the case of Terra Canada, such cash management system shall
provide for (A) all funds received by it (other than funds constituting
Senior Secured Note Collateral) to be deposited in a Lockbox or Approved
Deposit Account covered by a Deposit Account Control Agreement located in
New York (in respect of US Dollar denominated account receivables) and in
Sarnia, Ontario (in respect of all other account receivables), (B) daily
deposit of remittances received in each Lockbox to each corresponding
Approved Deposit Account, (C) daily sweeping of the funds in the New York
Approved Deposit Account to the US Concentration Account and (D) upon
receipt of notice from Terra Capital (as provided in clause (d)(i) above,
but subject to the last sentence of this clause (d)(ii)), allocation and
transfer of such amounts owned by Terra Canada in the US Concentration
Account to a Disbursement Account of Terra Canada or as Terra Canada may
otherwise instruct the Administrative Agent. Terra Canada shall notify the
Administrative Agent within two Business Days of the deposit of any
proceeds of Collateral in either of the Approved Deposit Accounts. As long
as no Account Triggering Event in respect of Terra Canada has occurred and
is continuing, all funds on deposit in the Lockbox or in the Approved
Deposit Account of Terra Canada or in the US Concentration Account (to the
extent owned by it) shall, upon written notice from Terra Canada to the
Administrative Agent, be transferred to a Disbursement Account of Terra
Canada or as Terra Canada may otherwise direct. Upon and during the
continuance of an Account Triggering Event in respect of Terra Canada, no
amount in the Lockbox or Approved Deposit Account of Terra Canada or in the
US Concentration Account (to the extent owned by it) may be withdrawn
therefrom without the approval of the Administrative Agent.
(iii) In the case of Terra UK, such cash management system shall
provide for (A) all funds received by it (other than funds constituting
Senior Secured Note Collateral) to be deposited in a Lockbox or Approved
Deposit Account covered by a Deposit Account Control Agreement located in
London and (B) daily deposit of remittances received in each Lockbox to
each corresponding Approved Deposit Account. Terra UK shall notify the
Administrative Agent within two Business Days of the deposit of any
proceeds of Collateral in a Lockbox or in an Approved Deposit Account. All
or any funds on deposit in an Approved Deposit Account of Terra UK will (in
accordance with the request of Terra UK if no Account Triggering Event in
respect of Terra UK has occurred and is continuing or otherwise at the
discretion of the Administrative Agent), be either: (X) applied in the
manner specified in Section 2.9(e); (Y) retained in the Approved Deposit
Account or (Z) if the Administrative Agent consents (such consent not to be
unreasonably withheld) following a written request of Terra UK to the
Administrative Agent, be transferred to a Disbursement Account of Terra UK.
Upon and during the continuance of an Account Triggering Event in respect
of Terra UK, no amount may be withdrawn from Terra UK's Approved Deposit
Account without the
80
approval of the Administrative Agent and all funds on deposit therein shall
be applied in the manner specified in Section 2.9(e).
(e) Each Borrower and Terra Canada shall, not later than the Effective
Date (or such later date as shall be acceptable to the Administrative Agent in
its sole discretion), deliver to the Administrative Agent the Deposit Account
Control Agreements, covering such accounts (other than accounts constituting
Senior Secured Note Collateral) as the Administrative Agent shall direct, each
duly executed by each party thereto.
(f) Any Loan Party may deposit any cash and Cash Equivalents held by
it, which are not required to be applied in any other manner under the Loan
Documents or the Senior Secured Note Documents, into such collateral account as
may be approved by the Administrative Agent for the purpose of including such
cash or Cash Equivalents in the calculation of a Borrowing Base. The
Administrative Agent shall have a perfected first priority lien over any such
account and (notwithstanding Section 11.1(a)(ix)) any cash or Cash Equivalents
deposited in such account for such purpose may not subsequently be withdrawn by
a Loan Party without the approval of the Administrative Agent.
(g) The Administrative Agent may convert into Dollars any amount not
denominated in Dollars which is deposited in any Cash Collateral Account or
which is otherwise received by it from or for the account of any Loan Party
(which pursuant to the Loan Documents is to be applied to the payment of the
Obligations) and each Borrower hereby agrees to indemnify the Administrative
Agent and each other Indemnitee (as defined in Section 11.4(a)) from and against
any loss, liability, cost or expense incurred by it in connection with such
conversion and any Indemnitee entering into any currency exchange contract in
the ordinary course of business for such purpose.
(h) None of Terra Industries or its Subsidiaries shall, following and
during the continuance of an Account Triggering Event, a Default or Event of
Default, maintain cash or Cash Equivalents (other than in respect of those funds
referred to in Section 8.3(j)) in aggregate in excess of $3,000,000 outside of
those accounts which are Approved Deposit Accounts, the US Concentration
Account, Cash Collateral Accounts or accounts in which funds constituting Senior
Secured Note Collateral are deposited or maintained including, without
limitation, the Collateral Account (as defined in the Senior Secured Note
Indenture).
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Section 7.13. Real Estate. Each Borrower shall, and shall cause each
-----------
other Loan Party and each of its Subsidiaries to, use all commercially
reasonable efforts to, (i) comply in all material respects with all of their
respective obligations under all of their respective Leases now or hereafter
held respectively by them with respect to Real Property (other than Non-Material
Real Property), including the Leases set forth in Schedule 4.19; (ii) not
modify, amend, cancel, extend or otherwise change in any materially adverse
manner any of the terms, covenants or conditions of any such Leases; (iii) not
assign or sublet any other Lease if such assignment or sublet would have a
Material Adverse Effect; (iv) provide the Administrative Agent with a copy of
each notice of default under any Lease received by such Loan Party or any of its
Subsidiaries immediately upon receipt thereof and deliver to the Administrative
Agent a copy of each notice of default sent by such Loan Party or any of its
Subsidiaries under any Lease simultaneously with its delivery of such notice
under such Lease; and (v) notify the Administrative Agent at least 14 days prior
to the date the Borrower or any Subsidiary takes possession of, or becomes
liable under, any new leased premises or Lease, whichever is earlier.
Section 7.14. Hedging Contracts. Terra Industries and its Subsidiaries
-----------------
shall at all times maintain on terms and with counterparties reasonably
satisfactory to the Administrative Agent natural gas Hedging Contracts in
accordance with the hedging policy regarding natural gas which has been and will
continue to be adopted by the Board of Directors of Terra Industries and as in
effect from time to time, to provide protection to Terra Industries and its
Subsidiaries against fluctuations in natural gas prices.
ARTICLE VIII
Negative Covenants
As long as any of the Obligations (in respect of Revolving Credit
Outstandings, interest or fees thereon and expenses related thereto) or the
Revolving Credit Commitments remain outstanding, without the written consent of
(except as provided in Section 11.1) the Requisite Lenders, Terra Industries and
each Borrower agree with the Lenders and the Administrative Agent that:
Section 8.1. Indebtedness. Terra Industries will not, and will not
------------
permit any of its Subsidiaries to, directly or indirectly create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness except:
(a) the Obligations (but excluding Obligations in respect of Interest
Rate Contracts unless otherwise permitted in clause (g) below);
(b) Indebtedness existing on the date of this Agreement and disclosed
on Schedule 8.1; provided, however, that no Indebtedness in respect of Senior
Notes (2003) shall be outstanding following the end of the Redemption Notice
Period;
(c) Capital Lease Obligations and purchase money Indebtedness incurred
by Terra Industries or its Subsidiaries to finance the acquisition of Real
Property or Equipment in an aggregate outstanding principal amount not to exceed
$10,000,000 at any time; provided, however, that the Capital Expenditure related
thereto is otherwise permitted by Section 5.2;
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(d) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by clause (b) or (c) of this Section 8.1; provided, however, that any
such renewal extension, refinancing or refunding is in an aggregate principal
amount not greater than the principal amount of, and is on terms no less
favorable to Terra Industries or such Subsidiary, including as to weighted
average maturity, than the Indebtedness being renewed, extended, refinanced or
refunded;
(e) Intercompany Indebtedness which is a permitted Investment under
Section 8.3(e).
(f) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
(g) Obligations under Hedging Contracts required by Section 7.14 or as
permitted by Section 8.17;
(h) unsecured Indebtedness not otherwise permitted under this Section
8.1 in an aggregate outstanding principal amount not to exceed $5,000,000 at any
time;
(i) Indebtedness secured by Liens permitted under Section 8.2(h);
(j) Guarantees by Terra UK of Terra UK Customer Debt; provided that:
(i) the aggregate principal amount of such Debt so guaranteed by
Terra UK with respect to any customer at any time shall not exceed 50% of
the aggregate principal amount of the Terra UK Customer Debt of such
customer outstanding at such time; and
(ii) the aggregate principal amount of Terra UK Customer Debt
guaranteed by Terra UK at any time during any Fiscal Year shall not exceed
(x) (pound)15,000,000 minus (y) the aggregate amount of payments made by
Terra UK under all such guarantees during such Fiscal Year;
(k) any other Intercompany Indebtedness; and
(l) Indebtedness in respect of the Senior Secured Notes; provided,
however, that the aggregate principal amount of such Indebtedness shall not
exceed at any time $275,000,000.
Section 8.2. Liens, Etc. Terra Industries will not, and will not
----------
permit any of its Subsidiaries to, create or suffer to exist, any Lien upon or
with respect to any of its properties or assets, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 or expressly permitted by Section 8.3(e) or constituting cash
collateral for a letter of credit issued by Bank of America N.A. (formerly
Nationsbank, N.A.), as set forth on Schedule 8.1
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(the terms and amount of such cash collateral to be reasonably satisfactory to
the Requisite Lenders);
(c) Customary Permitted Liens of the Borrower and its Subsidiaries;
(d) purchase money Liens granted by the Borrower or any Subsidiary of
the Borrower (including the interest of a lessor under a Capital Lease and Liens
to which any property is subject at the time of the Borrower's or such
Subsidiary's acquisition thereof) securing Indebtedness permitted under Section
8.1(c) and limited in each case to the property purchased with the proceeds of
such purchase money Indebtedness or subject to such Capital Lease;
(e) any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by clause (d) of this Section
8.2 without any change in the assets subject to such Lien;
(f) Liens in favor of lessors, sublessors or licensors under any lease
or license otherwise permitted by this Agreement;
(g) Liens not otherwise permitted by the foregoing clauses of this
Section 8.2 securing obligations or other liabilities of any Loan Party;
provided, however, that the aggregate outstanding amount of such obligations and
liabilities secured by such Liens shall not exceed $1,000,000 at any time;
(h) Liens which are licenses and sub-licenses granted to Persons that
are not Affiliates of Terra Industries or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect with the
business and operations of Terra Industries or any of its Subsidiaries;
(i) Liens on property of any of Terra Industries and its Subsidiaries
(other than (i) property subject to Liens under the Collateral Documents and
(ii) Liens securing Indebtedness of Terra Industries or its Subsidiaries) in
favor of Terra Industries or any of its Subsidiaries to secure Intercompany
Indebtedness owing to Terra Industries or any of its Subsidiaries; and
(j) Liens on the Senior Secured Note Collateral and the Shared
Collateral as security for Terra Industries' and its Subsidiaries' obligations
in respect of the Senior Secured Notes.
Section 8.3. Investments. Terra Industries will not, and will not
-----------
permit any of its Subsidiaries to, directly or indirectly make or maintain any
Investment except:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3;
(b) Investments in cash and Cash Equivalents, including those held in
bank accounts (but subject to Section 7.12(h)), and which (i) in respect of
Terra Industries and Terra Capital Holdings shall not together exceed in
aggregate $1,000,000 at any time (provided, however, for as long as no Event of
Default has occurred and is continuing, such amount shall be
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increased (but for a period of not more than three consecutive Business Days) to
the extent necessary to permit those Restricted Payments to be made that are due
and payable and are permitted to be made under Section 8.5(b)) and (ii) which
(at any time while Intercompany Indebtedness is outstanding which is owing to
Terra Industries or any of its Domestic Subsidiaries by any Subsidiary of Terra
Industries that is not a Domestic Subsidiary) shall not be held outside of the
United States in an aggregate amount which is in excess of $20,000,000 for more
than 5 consecutive Business Days;
(c) Investments in Accounts, contract rights and Chattel Paper, notes
receivable and similar items arising or acquired in the ordinary course of
business substantially in accordance with the past practice of Terra Industries
and its Subsidiaries;
(d) Investments received in settlement of amounts due to Terra
Industries or any of its Subsidiaries effected in the ordinary course of
business;
(e) Investments in Intercompany Indebtedness (i) owing by or to Terra
Capital or any of the Terra Capital Guarantors (which are wholly-owned
Subsidiaries of Terra Capital) to or from Terra Capital or any of the Terra
Capital Guarantors (which are wholly-owned Subsidiaries of Terra Capital), (ii)
owing by or to Terra Capital to or from TNLP (provided that, (A) if such
Intercompany Indebtedness (other than the TNLP Debt up to the principal amount
thereof outstanding on the Effective Date and any such Intercompany Indebtedness
constituting Senior Secured Note Collateral) is owing by TNLP to Terra Capital,
such Indebtedness is evidenced by an intercompany promissory note payable to the
order of Terra Capital on terms satisfactory to the Administrative Agent, which
note shall constitute Shared Collateral and (B) no such Intercompany
Indebtedness shall be permitted for the purpose of TNLP or TNCLP making
Restricted Payments), (iii) owing by Terra Capital to Terra UK, or by Terra UK
to Terra Capital which is incurred in the ordinary course of business (provided
that, if such Intercompany Indebtedness (other than the Terra UK Debt up to the
principal amount thereof outstanding on the Effective Date and any such
Intercompany Indebtedness constituting Senior Secured Note Collateral) is owing
by Terra UK to Terra Capital, such Indebtedness is evidenced by an intercompany
promissory note payable to the order of Terra Capital on terms satisfactory to
the Administrative Agent, which note shall constitute Shared Collateral), (iv)
owing by Terra Capital to Terra Canada, or by Terra Canada to Terra Capital
which is incurred in the ordinary course of business (provided that, if such
Intercompany Indebtedness (other than the Terra Canada Debt up to the principal
amount thereof outstanding on the Effective Date) is owing by Terra Canada to
Terra Capital, such Indebtedness is evidenced by an intercompany promissory note
payable to the order of Terra Capital on terms satisfactory to the
Administrative Agent, which note shall constitute Shared Collateral), or (v)
owing by or to Terra UK to or from Terra Canada;
(f) loans or advances to employees of any Borrower or any of its
Subsidiaries in the ordinary course of business (other than for the purposes of
acquiring Stock), which loans and advances shall not exceed the aggregate
outstanding principal amount of $500,000 at any time;
(g) Investments (other than Intercompany Indebtedness and Indebtedness
which is referred to in clause (f) above) not otherwise permitted hereby in an
aggregate outstanding amount not to exceed $1,000,000 at any time;
(h) Investments by Terra Capital and TNCLP in Common Units purchased,
in each case, after the Effective Date; provided, however, Terra Capital may
make open market
85
purchases of the Common Units not owned directly or indirectly by it and TNCLP
may make such purchases or calls of the Common Units (each a "Common Unit
Purchase") if, after giving effect to each Common Unit Purchase, the following
conditions are satisfied:
(i) the aggregate amount of such purchases, together with the
aggregate amount of Senior Note (2005) Purchases, (A) made during any
Repurchase Period does not exceed the Maximum Repurchase Amount
applicable to such period or (B) made during any calendar year does
not exceed $75,000,000;
(ii) the aggregate Available Credit of the Borrowers on the date
of each Common Unit Purchase, after giving effect to the Common Unit
Purchase (or any purchase of Senior Notes (2005)) to be made on such
date, shall be at least $125,000,000 with respect to any such
purchase;
(iii) Terra Industries has, as of the last day of the most recent
Fiscal Quarter or Fiscal Year for which Financial Statements have been
delivered to the Administrative Agent pursuant to Section 6.1(b)or
(c), Cash Flow for the four Fiscal Quarters ending on such day of at
least $125,000,000;
(iv) no Default or Event of Default shall have occurred and be
continuing, both before and after giving effect to the making of any
Common Unit Purchase;
(v) both before and after the making of any Common Unit
Purchase, the representations and warranties set forth in Article IV
and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Common Unit Purchase
with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an
earlier date;
(vi) in the case of any Common Unit Purchase made by TNCLP, such
Common Unit Purchases shall have been made pursuant to the terms of
Article XVII of the Agreement of Limited Partnership of TNCLP dated as
of December 4, 1991;
(vii) Terra Capital or TNCLP, as the case may be, shall have
delivered to the Administrative Agent a certificate executed by an
officer of Terra Capital or TNCLP, as the case may be, certifying that
the foregoing conditions have been met with respect to such Common
Unit Purchase within three Business Days following the making of such
purchase.
(i) Investments which are permitted Indebtedness under Sections
8.1(a), (b), (c), (d), (f), (g), (h), (i) or (j);
(j) Investments to match employee-directed funds under the Deferred
Supplemental Savings Plan;
(k) Equity Investments by (i) Terra Industries or any of its
wholly-owned Domestic Subsidiaries in any of its respective (directly)
wholly-owned Domestic Subsidiaries
86
which is a Terra Capital Guarantor, (ii) by TNCLP or any of its wholly-owned
Domestic Subsidiaries in any of its respective (directly) wholly-owned Domestic
Subsidiaries which is a Borrower or Guarantor in respect of the Obligations of
TNLP, (iii) by Terra Canada or any of its wholly-owned Subsidiaries (which is
incorporated in Canada) in any of its respective (directly) wholly-owned
Subsidiaries (which is incorporated in Canada) which is a Guarantor in respect
of the Obligations of Terra Canada or (iv) by Terra UK or any of its
wholly-owned Subsidiaries (which is incorporated in England and Wales) in any of
its respective (directly) wholly-owned Subsidiaries (which is incorporated in
England and Wales) which is a Guarantor in respect of the Obligations of Terra
UK;
(l) Investments by Terra Industries or its Subsidiaries in any joint
venture with any Person which (i) are cash Investments (to the extent permitted
under Section 5.2) and (ii) are not cash Investments (to the extent permitted
under Section 8.4(f));
(m) Investments by Terra Industries and its Subsidiaries in Terra
Industries or any of its Subsidiaries; and
(n) Investments in Senior Notes (2003) and Senior Notes (2005)
purchased by Terra Capital pursuant to Section 8.12; provided, however, that no
Investments in respect of Senior Notes (2003) shall be outstanding following the
end of the Redemption Notice Period.
Section 8.4. Sale of Assets. Terra Industries will not, and will not
--------------
permit any of its Subsidiaries to, sell, convey, transfer, lease or otherwise
dispose of, any of its assets or any interest therein (including the sale or
factoring at maturity or collection of any accounts) to any Person, or permit or
suffer any other Person to acquire any interest in any of its assets or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary's Stock or
Stock Equivalent (any such disposition being an "Asset Sale"), except:
(a) the sale or disposition in the ordinary course of business of
Inventory, Cash Equivalents and precious metals recovered from spent catalysts;
(b) the sale or disposition of Equipment which has become obsolete or
is replaced in the ordinary course of business; provided, however, that the
aggregate Fair Market Value of all such Equipment disposed of in any Fiscal Year
shall not exceed $10,000,000;
(c) the lease or sublease of Real Property or personal property which
does not constitute a sale and leaseback;
(d) assignments and licenses of intellectual property of the Borrower
and its Subsidiaries in the ordinary course of business;
(e) any sale or disposition of Inventory or Equipment (i) among Terra
Capital and any wholly-owned Domestic Subsidiary of Terra Capital which is a
Terra Capital Guarantor, (ii) among TNCLP, TNLP and any wholly-owned Domestic
Subsidiary of TNCLP which is a Guarantor in respect of the Obligations of TNLP,
(iii) among Terra UK and any wholly-owned Subsidiary of Terra UK (which is
incorporated in England and Wales) which is a Guarantor in respect of the
Obligations of Terra UK, (iv) among Terra Canada and any wholly-owned Subsidiary
of Terra Canada (which is incorporated in Canada) which is a Guarantor in
respect of the Obligations of Terra Canada, (v) by Terra Industries or one of
its wholly-owned Domestic Subsidiaries to TNCLP or one of its wholly-owned
Domestic Subsidiaries so long as
87
(in the case of this clause (v)) the consideration is paid in cash to such
transferor for all such assets in an amount not less than the Fair Market Value
thereof or (vi) by Terra Industries or its Subsidiaries (except TNCLP or any of
its Subsidiaries) to its Affiliates so long as (in the case of this clause (vi))
the consideration is paid in cash to such transferor for all such assets in an
amount not less than the Fair Market Value thereof;
(f) any other Asset Sales (including any disposition of assets to a
joint venture by Terra Industries or its Subsidiaries) the aggregate Fair Market
Value of which shall not at any time exceed $5,000,000; and
(g) additional Asset Sales by Terra Industries and its Subsidiaries
(other than in respect of (i) property subject to Liens under the Collateral
Documents and (ii) property subject to Liens securing Indebtedness of Terra
Industries or such Subsidiary) to Terra Industries or any of its Subsidiaries.
Section 8.5. Restricted Payments. Terra Industries will not and it
-------------------
will not permit any of its Subsidiaries to, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Payment except:
(a) Restricted Payments by any Subsidiary of a Borrower to such
Borrower or any Subsidiary of such Borrower;
(b) cash dividends on the Stock of Terra Capital to Terra Capital
Holdings and on the Stock of Terra Capital Holdings to Terra Industries, paid
and declared in any Fiscal Year solely for the purpose of funding the following:
(i) ordinary operating expenses and scheduled debt service of
Terra Industries (including in respect of the Indentures) not in excess of
$40,000,000 in any Fiscal Year and payments by Terra Industries of the
foregoing;
(ii) payments by Terra Industries in respect of foreign,
federal, state or local taxes owing by Terra Industries in respect of Terra
Capital and its Subsidiaries, but not greater than the amount that would be
payable by Terra Capital, on a consolidated basis, if Terra Capital were
the taxpayer; and
(iii) payments (net of cash in-flows) by Terra Industries to
finance discontinued operations not exceeding $5,000,000 in any Fiscal
year;
provided, however, that the Restricted Payments described in clause (b) above
shall not be permitted if either (A) an Event of Default or Default shall have
occurred and be continuing at the date of declaration or payment thereof or
would result therefrom or (B) such Restricted Payment is prohibited under the
terms of any Indebtedness (other than the Obligations) of the Loan Parties or
any of their respective Subsidiaries;
(c) TNCLP Minority Interest Payments; provided, however, that such
Restricted Payments shall not be permitted if (i) any Intercompany Indebtedness
is outstanding and owing by TNCLP or by TNLP, (ii) an Event of Default or
Default shall have occurred and be continuing at the date of declaration or
payment thereof or would result therefrom or (iii) such Restricted Payment is
prohibited under the terms of any Indebtedness (other than the Obligations) of
the Loan Parties or any of their respective Subsidiaries;
88
(d) (i) cash dividends to Terra Industries strictly for the purpose
of allowing Terra Industries to consummate Senior Note (2005) Purchases
permitted pursuant to Section 8.12 or (ii) dividends of Senior Notes (2005)
purchased by Terra Capital pursuant to Section 8.12, but only if such Senior
Notes (2005) are immediately cancelled upon receipt thereof by Terra Industries;
(e) Restricted Payments permitted under Section 8.3(h);
(f) cash dividends to Terra Industries of proceeds of the issuance of
the Senior Secured Notes strictly for the purpose of allowing Terra Industries
to irrevocably deposit said proceeds with the Trustee (2003) for the purpose of
redeeming or repaying the Senior Notes (2003) in accordance with Section 8.1(b);
and
(g) any other Restricted Payment to Terra Industries by any
Subsidiary of Terra Industries.
Section 8.6. Restriction on Fundamental Changes. Terra Industries will
----------------------------------
not, and will not permit any of its Material Subsidiaries to, (a) merge with any
Person, (b) consolidate with any Person, (c) acquire all or substantially all of
the Stock or Stock Equivalents of any Person, (d) acquire all or substantially
all of the assets of any Person or all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
Person, (e) except as permitted by Section 8.3(l), enter into any joint venture
or partnership with any Person or (f) acquire or (unless, after giving effect
thereto, Terra Industries and the Borrowers are in compliance with Sections 7.11
and 8.3(k)) create any Subsidiary; provided, however, that any Loan Party may
merge or be consolidated with any of its wholly-owned Subsidiaries but only if
(i) such Loan Party is the surviving entity and no Material Adverse Change,
Default or Event of Default would result from such merger or consolidation and
(ii) all such parties to such merger or consolidation are incorporated solely in
either the United States (or any state or subdivision thereof), Canada or
England and Wales (as the case may be).
Section 8.7. Change in Nature of Business. (a) Terra Industries will
----------------------------
not, and will not permit any of its Subsidiaries to, make any material change in
the nature or conduct of its business as carried on at the date hereof; (b) each
of Terra Industries and Terra Capital Holdings will at no time own any property
other than Investments in its Subsidiaries which are its Subsidiaries at the
date hereof, cash and Cash Equivalents (to the extent permitted under Section
8.3), other property incidental to its business as a holding company or
necessary to the performance of its obligations under the Management Agreements,
and (c) Terra Industries shall ensure that TNCLP will at no time own any
property other than ownership interests in TNLP, cash and other property
incidental to its business as a holding company.
Section 8.8. Transactions with Affiliates. Terra Industries will not,
----------------------------
and will not permit any of its Subsidiaries to, except as otherwise expressly
permitted herein, do any of the following: (a) make any Investment in any of its
Affiliates which is not its Subsidiary; (b) transfer, sell, lease, assign or
otherwise dispose of any asset to any of its Affiliates which is not its
Subsidiary; (c) merge into or consolidate with or purchase or acquire assets
from any of its Affiliates which is not its Subsidiary; (d) repay any
Indebtedness to any of its Affiliates which is not its Subsidiary; or (e) enter
into any other transaction directly or indirectly with or for the benefit of any
of its Affiliates which is not its Subsidiary (including guarantees and
assumptions of obligations of any such Affiliate), except for (i) transactions
in the ordinary course of business
89
on a basis no less favorable to it as would be obtained in a comparable arm's
length transaction with a Person not an Affiliate and (ii) salaries and other
employee compensation or fees to officers or directors of Terra Industries or
any of its Subsidiaries commensurate with current compensation levels.
Section 8.9. Restrictions on Subsidiary Distributions; No New
------------------------------------------------
Negative Pledge. Other than pursuant to the Loan Documents and any agreements
---------------
governing any purchase money Indebtedness or Capital Lease Obligations permitted
by clause (b), (c), or (d) of Section 8.1(in which latter case, any prohibition
or limitation shall only be effective against the assets financed thereby) or in
connection with an Asset Sale which is permitted under Section 8.4 (in respect
only of the assets subject thereto) or pursuant to customary anti-assignment
provisions contained in leases or licenses permitted under this Agreement or as
otherwise contained, at the date hereof, in the Indentures and the Senior
Secured Note Documents, Terra Industries will not, and will not permit any of
its Subsidiaries to, (a) agree to enter into or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of such Subsidiary to pay dividends or make any other distribution or transfer
of funds or assets or make loans or advances to or other Investments in, or pay
any Indebtedness owed to, Terra Industries or any other Subsidiary of Terra
Industries or (b) enter into or suffer to exist or become effective any
agreement which prohibits or limits the ability of the Borrowers or any
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, to secure
the Obligations, including any agreement which requires other Indebtedness or
Contractual Obligation to be equally and ratably secured with the Obligations.
Section 8.10. Modification of Constituent Documents. Terra Industries
-------------------------------------
will not, and will not permit any of its Subsidiaries to, change its capital
structure (including in the terms of its outstanding Stock) or otherwise amend
its Constituent Documents, except for changes and amendments which (i) do not
materially and adversely affect the rights and privileges of Terra Industries or
any of its Subsidiaries, or the interests of the Administrative Agent, the
Lenders and the Issuers under the Loan Documents or in the Collateral or (ii)
are compulsory under any applicable Requirement of Law or to comply with the
mandatory requirements of any stock exchange on which Terra Industries or any of
its Subsidiaries are listed.
Section 8.11. Modification of Material Documents. Terra Industries
----------------------------------
will not, and will not permit any of its Subsidiaries to, (a) alter, rescind,
terminate, amend, supplement, waive or otherwise modify any provision of any
Material Document (except for modifications which do not materially and
adversely affect the rights and privileges of Terra Industries or any of its
Subsidiaries under such Material Document, or the interests of the Secured
Parties under the Loan Documents or in the Collateral) or (b) permit any
material breach or default to exist under any Material Document or take or fail
to take any action thereunder, without the prior consent of the Requisite
Lenders, which consent shall not be unreasonably withheld.
Section 8.12. Long-Term Indebtedness. Terra Industries will not, and
----------------------
will not permit any of its Subsidiaries to purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make any voluntary payment or prepayment of the principal of or interest on,
or any other amount owing in respect of the (i) Senior Notes (2005), (ii) the
Senior Secured Notes, (iii) the Terra UK Debt or the Terra Canada Debt (below an
aggregate
90
outstanding principal amount of $66,000,000) or (iv) any other long-term
indebtedness of Terra Industries and its Subsidiaries (other than (A) the
redemption or repayment of the Senior Notes (2003) with proceeds of the issuance
of the Senior Secured Notes or other available funds and (B) Intercompany
Indebtedness, with the exception of the aforementioned Terra UK Debt, Terra
Canada Debt and TNLP Debt; provided, however, that no Intercompany Indebtedness
of any Loan Party constituting Collateral can be repaid or prepaid, including
the Terra UK Debt, Terra Canada Debt and TNLP Debt, unless the Intercompany
Indebtedness of such Loan Party constituting Shared Collateral has first been
paid in full), in each case except for regularly scheduled payments of principal
and interest in respect thereof required pursuant to the Indentures or other
instruments evidencing such long-term Indebtedness, or, except with respect to
the Indentures, amendments with respect to which are governed by Section 8.11,
amend in any manner materially adverse to the interests of the Lenders and the
Issuers the documentation creating or evidencing such long-term Indebtedness.
Notwithstanding the foregoing, Terra Capital may make open market purchases of
the (i) Senior Notes (2003) during the Redemption Notice Period, provided that,
upon receipt by Terra Capital of proceeds arising from the redemption of any
Senior Notes (2003) purchased pursuant to this Section 8.12, Terra Capital shall
by no later than the last day of the Redemption Notice Period prepay its Loans
as provided in Section 2.9(b), and (ii) Senior Notes (2005) (each a "Senior Note
(2005) Purchase") if, after giving effect to each Senior Note (2005) Purchase,
the following conditions are satisfied:
(A) the aggregate amount of such purchases, together with the
aggregate amount of Common Unit Purchases, (X) made during any
Repurchase Period does not exceed the Maximum Repurchase Amount
applicable to such period or (Y) made during any calendar year does not
exceed $75,000,000;
(B) the aggregate Available Credit of the Borrowers on the date
of each Senior Note (2005) Purchase, after giving effect to the Senior
Note (2005) Purchase (or any purchase of Common Units) to be made on
such date, shall be at least $125,000,000 with respect to any such
purchase;
(C) Terra Industries has, as of the last day of the most recent
Fiscal Quarter or Fiscal Year for which Financial Statements have been
delivered to the Administrative Agent pursuant to Section 6.1(b)or (c),
Cash Flow for the four Fiscal Quarters ending on such day of at least
$125,000,000;
(D) no Default or Event of Default shall have occurred and be
continuing, both before and after giving effect to the making of any
Senior Note (2005) Purchase;
(E) both before and after the making of any Senior Note (2005)
Purchase, the representations and warranties set forth in Article IV and
in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Senior Note (2005) Purchase with
the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an
earlier date; and
(F) Terra Capital shall have delivered to the Administrative
Agent a certificate executed by an officer of Terra Capital certifying
that the
91
foregoing conditions have been met with respect to such Senior Note
(2005) Purchase within three Business Days following the making of
such purchase.
Section 8.13. Accounting Changes; Fiscal Year. Terra Industries will
-------------------------------
not, and will not permit any of its Subsidiaries to, change its (a) accounting
treatment and reporting practices or tax reporting treatment, except as required
by GAAP or any Requirement of Law and disclosed to the Lenders and the
Administrative Agent or (b) Fiscal Year.
Section 8.14. Margin Regulations. The Borrowers will not, and will not
------------------
permit any of their Subsidiaries to, use all or any portion of the proceeds of
any credit extended hereunder to purchase or carry Margin Stock.
Section 8.15. Operating Leases; Sale/Leasebacks.
---------------------------------
(a) Terra Industries will not, and will not permit any of its Material
Subsidiaries to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless (i) the aggregate amount of all
rents paid or accrued under all such operating leases shall not exceed
$5,000,000 in any Fiscal Year or (ii) in respect of, or in replacement (upon
substantially equivalent terms) of, operating leases existing at the date of
this Agreement and disclosed in the consolidated financial statements (including
the footnotes thereto) of Terra Industries and its Subsidiaries for the Fiscal
Year ended December 31, 1999.
(b) Terra Industries will not, and will not permit any of its Material
Subsidiaries to, enter into any sale and leaseback transaction.
Section 8.16. Cancellation of Indebtedness Owed. Terra Industries will
---------------------------------
not, and will not permit any of its Subsidiaries to, cancel any claim or
Indebtedness owed to it except (i) in the ordinary course of business consistent
with past practice, (ii) Investments permitted by Section 8.3(d), or (iii) in an
aggregate amount not exceeding $1,000,000.
Section 8.17. No Speculative Transactions. Terra Industries will not
---------------------------
and will not permit any of its Material Subsidiaries to, engage in any
speculative transaction or in any transaction involving Hedging Contracts except
as required by Section 7.14 or for the sole purpose of hedging in the normal
course of business and consistent with industry practices.
Section 8.18. Compliance with ERISA and Foreign Plans. Terra
---------------------------------------
Industries will not, and will not permit any of its Material Subsidiaries to, or
cause or permit any ERISA Affiliate to, cause or permit to occur (a) an event
which could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or (b) an ERISA Event that would have a Material
Adverse Effect or (c) breach any Requirement of Law or obligations pertaining to
any Foreign Plan that would have a Material Adverse Effect.
Section 8.19. Environmental. Terra Industries will not, and will not
-------------
permit any of its Subsidiaries to, dispose of any Contaminant in violation of
any Environmental Law; provided, however, that the Loan Parties shall not be
deemed in violation of this Section 8.19 if, as the consequence of all such
disposals, such Loan Party could not reasonably be expected to incur
Environmental Liabilities and Costs in excess of $1,000,000.
92
Section 8.20. Payments to Minority Interests. Terra Industries shall
------------------------------
not pay or cause to be paid, or permit any of its Subsidiaries to pay or cause
to be paid, to any holder of a minority interest any amount (including any TNCLP
Minority Interest Payment) with respect to such minority interest in excess of
the amount to which such holder is legally entitled, unless Terra Industries or
such Subsidiary simultaneously receives payment in an amount equal to or greater
than its ratable share of the amount of the related distribution (determined in
accordance with the respective interests then held by Terra Industries and such
Subsidiary, on the one hand, and such holder, on the other); provided, however,
that a purchase of Common Units permitted by Section 8.3(h) will not constitute
a breach of this Section 8.20.
ARTICLE IX
Events Of Default
Section 9.1. Events of Default. Each of the following events shall be
-----------------
an Event of Default:
(a) Any Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation (other than in connection with a Borrowing Base
Deficiency) when the same becomes due and payable; or
(b) Any Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of five
Business Days after the due date therefor;
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made;
(d) Terra Industries shall fail to pay or perform its obligations
under the Loan Purchase Agreement; or
(e) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Sections 6.1(a) through (e) and
(g), 6.2, 7.1, 7.6, 7.11 or 7.12 or Article VIII (except Section 8.19) or (ii)
any other term, covenant or agreement contained in this Agreement or in any
other Loan Document if such failure under this clause (ii) shall remain
unremedied for 30 days after the earlier of the date on which (A) a Responsible
Officer of a Borrower becomes aware of such failure or (B) written notice
thereof shall have been given to a Borrower by the Administrative Agent or any
Lender; or
(f) (i) Terra Industries or any of its Subsidiaries shall fail to
make any payment on any Indebtedness (other than the Obligations) of Terra
Industries or any such Subsidiary (or any Guaranty Obligation in respect of
Indebtedness of any other Person) having a principal amount of $10,000,000 or
more, when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise); or (ii) any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or (iii) any such Indebtedness shall become or be declared
93
to be due and payable, or required to be prepaid or repurchased (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or
(g) Terra Industries or any of its Material Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or against
Terra Industries or any of its Material Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts or
any similar relief under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a custodian, receiver, trustee, administrative receiver,
liquidator, provisional liquidator, administrator, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceedings instituted against Terra Industries or any of its Material
Subsidiaries (but not instituted by it), either such proceedings shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceedings shall occur; or Terra Industries or any of its Material
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (g); or
(h) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$10,000,000 (in the case of a money judgment), or which would have a Material
Adverse Effect (in the case of a non-money judgment) to the extent not covered
by insurance shall be rendered against one or more of Terra Industries and its
Subsidiaries and shall remain unpaid and either (i) enforcement proceedings
shall have been commenced and be continuing by any creditor upon such judgment
or order or (ii) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect (unless during such period such judgment or
order shall have been vacated, satisfied, discharged or bonded pending appeal);
or
(i) an ERISA Event shall occur or there shall be asserted against
the Borrower or any of its Subsidiaries any claim or liability in respect of any
Foreign Plan which is reasonably likely to have a Material Adverse Effect or the
amount of all liabilities and deficiencies resulting therefrom, whether or not
assessed, exceeds $1,000,000 in the aggregate; or
(j) any material provision (as determined by the Administrative
Agent) of any Collateral Document or any Guaranty after delivery thereof
pursuant to this Agreement or any other Loan Document shall for any reason cease
to be valid and binding, or enforceable against, on any Loan Party thereto, or
Pany Loan arty shall so state in writing; or
(k) any Collateral Document shall for any reason cease to create a
valid Lien on any of the Collateral purported to be covered thereby or except as
permitted by the Loan Documents, such Lien shall cease to be a perfected and
first priority Lien or any Loan Party shall so state in writing; or
(l) there shall occur any Change of Control; or
(m) there shall occur a Borrowing Base Deficiency for two or more
consecutive Business Days; or
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(n) at any time on or after March 31, 2005, there shall be
outstanding Senior Notes (2005) in an aggregate principal amount of $15,000,000
or more; or
(o) there shall have been asserted (in any action, suit, proceeding
or investigation) against Terra Industries or any of its Subsidiaries any
violation or liability under any Environmental Law that, in the judgment of the
Requisite Lenders, is reasonably likely to be determined adversely to Terra
Industries or any of its Subsidiaries, and (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (after taking
into account any contribution in respect thereof that is reasonably expected to
be paid by other creditworthy Persons); or
(p) one or more of Terra Industries and its Subsidiaries shall have
entered into one or more consent or settlement decrees or agreements or similar
arrangements with a Governmental Authority or one or more judgments, orders,
decrees or similar actions shall have been entered against one or more of Terra
Industries and its Subsidiaries based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, Terra Industries and its Subsidiaries are likely to incur
Environmental Liabilities and Costs in excess of $1,000,000 in the aggregate
(unless the foregoing is reasonably being appealed by Terra Industries or its
Subsidiaries and has been bonded pending appeal).
Section 9.2. Remedies. During the continuance of any Event of Default,
--------
the Administrative Agent (i) may, and shall at the request of the Requisite
Lenders, by notice to the Borrowers declare that all or any portion of the
Revolving Credit Commitments be terminated, whereupon the obligation of each
Lender to make any Loan and each Issuer to issue any Letter of Credit shall
immediately terminate, and/or (ii) may and shall at the request of the Requisite
Lenders, by notice to the Borrowers, declare the Loans, all interest thereon and
all other amounts and Obligations payable under this Agreement to be forthwith
due and payable, whereupon the Loans, all such interest and all such amounts and
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that upon the occurrence of the Event
of Default specified in Section 9.1(g) above (except to the extent that such
Event of Default has occurred in respect of Terra Industries and/or Terra
Capital Holdings), (A) the Revolving Credit Commitments of each Lender to make
Revolving Loans and of each Lender and Issuer to issue or participate in Letters
of Credit shall automatically be terminated and (B) the Loans, all such interest
and all such amounts and Obligations shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers. In addition to the remedies
set forth above, the Administrative Agent may instruct the Administrative Agent,
on behalf of the Secured Parties, to exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable law.
Section 9.3. Actions in Respect of Letters of Credit. Upon the
---------------------------------------
Revolving Credit Termination Date or as required by Section 2.9, the Borrowers
shall pay to the Administrative Agent in immediately available funds at the
Administrative Agent's office referred to in Section 11.8, for deposit in a cash
collateral account (the "L/C Cash Collateral Account") to be maintained with and
in the name of the Administrative Agent on behalf of the Lenders at such place
as shall be designated by the Administrative Agent, an amount equal to (a) 110%
of the sum of all outstanding Letter of Credit Obligations which are denominated
in
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Dollars and (b) 125% of the sum of all outstanding Letter of Credit Obligations
(if any) which are denominated in currencies other than Dollars. The
Administrative Agent may, from time to time after funds are deposited in the L/C
Cash Collateral Account, apply funds then held in the L/C Cash Collateral
Account to the payment of any amounts, in accordance with Section 2.13(f), as
shall have become or shall become due and payable by the Borrowers to the
Issuers or the Lenders in respect of the Letter of Credit Obligations. The
Administrative Agent shall promptly give written notice of any such application;
provided, however, that the failure to give such written notice shall not
invalidate any such application. Neither the Borrowers nor any Person claiming
on behalf of or through the Borrowers shall have any right to withdraw any of
the funds held in the L/C Cash Collateral Account at any time prior to the
termination of all outstanding Letters of Credit and the payment in full of all
then outstanding and payable monetary Obligations.
Section 9.4. Rescission. If at any time after termination of the
----------
Revolving Credit Commitments and/or acceleration of the maturity of the Loans,
the Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified herein) and all
Events of Default and Defaults (other than non-payment of principal of and
accrued interest on the Loans due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 11.1, then upon the written
consent of the Requisite Lenders and written notice to the Borrowers, the
termination of the Revolving Credit Commitments and/or the acceleration and
their consequences may be rescinded and annulled; but such action shall not
affect any subsequent Event of Default or Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended merely
to bind the Lenders and the Issuers to a decision which may be made at the
election of the Requisite Lenders; they are not intended to benefit the
Borrowers and do not give the Borrowers the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
ARTICLE X
The Administrative Agent; The Other Agents
Section 10.1. Authorization and Action.
------------------------
(a) Each Lender and each Issuer hereby appoints CUSA as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limitation of the foregoing, each
Lender and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under each of the Loan Documents to
which the Administrative Agent is a party and to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents and
recognizes that under the Collateral Documents the Administrative Agent is
acting as agent for the Secured Parties.
(b) As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain
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from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Requisite Lenders, and such instructions
shall be binding upon all Lenders and each Issuer; provided, however, that the
Administrative Agent shall not be required to take any action which (i) the
Administrative Agent in good faith believes exposes it to personal liability
unless the Administrative Agent receives an indemnification satisfactory to it
from the Lenders and the Issuers with respect to such action or (ii) is contrary
to this Agreement or applicable law. The Administrative Agent agrees to give to
each Lender and each Issuer prompt notice of each notice given to it by any Loan
Party pursuant to the terms of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers and its duties are entirely administrative in nature.
The Administrative Agent does not assume and shall not be deemed to have assumed
any obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or for
any Lender, Issuer or holder of any other Obligation. The Administrative Agent
may perform any of its duties under any of the Loan Documents by or through its
agents or employees.
Section 10.2. Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any such
Affiliate shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement or the other Loan
Documents, except for its, his, her or their own gross negligence or willful
misconduct. Without limiting the foregoing, the Administrative Agent (a) may
treat the payee of any Note as its holder until such Note has been assigned in
accordance with Section 11.2; (b) may rely on the Register to the extent set
forth in Section 11.2(c); (c) may consult with legal counsel (including counsel
to the Borrowers or any other Loan Party), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (d) makes no warranty or representation to any
Lender or Issuer and shall not be responsible to any Lender or Issuer for any
statements, warranties or representations made by or on behalf of Terra
Industries or any of its Subsidiaries in or in connection with this Agreement or
any of the other Loan Documents; (e) shall not have any duty to ascertain or to
inquire either as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any of the other Loan Documents or
the financial condition of any Loan Party, or the existence or possible
existence of any Default or Event of Default; (f) shall not be responsible to
any Lender or Issuer for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; and (g) shall incur no liability under or in respect of this Agreement
or any of the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy) or any
telephone message believed by it to be genuine and signed or sent by the proper
party or parties.
Section 10.3. The Administrative Agent Individually. With respect to
-------------------------------------
its Ratable Portion, CUSA shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders," or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity as a
Lender or as one of the Requisite Lenders. CUSA and its Affiliates may accept
deposits from,
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lend money to, and generally engage in any kind of banking, trust or other
business with any Loan Party as if it were not acting as the Administrative
Agent.
Section 10.4. Lender Credit Decision. Each Lender and each Issuer
----------------------
acknowledges that it shall, independently and without reliance upon the
Administrative Agent or its Affiliates or any other Lender conduct its own
independent investigation of the financial condition and affairs of the Borrower
and each other Loan Party in connection with the making and continuance of the
Loans and with the issuance of the Letters of Credit. Each Lender and each
Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or its Affiliates or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and other Loan Documents.
Section 10.5. Indemnification. Each Lender agrees to indemnify the
---------------
Administrative Agent and each of its Affiliates, and each of their respective
directors, officers, employees, agents and advisors (to the extent not
reimbursed by the Borrowers), from and against such Lender's aggregate Ratable
Portion of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Administrative Agent or any of
its Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Affiliate's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees and disbursements of legal counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrowers or another Loan Party.
Section 10.6. Successor Administrative Agent. (a) Subject to clause
------------------------------
(b) below, the Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent selected from among the Lenders. Each such
appointment shall be subject to the prior written approval of the Borrowers
(which approval may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default); (b)
Notwithstanding clause (a) above, the Administrative Agent may at any time
appoint any Affiliate (or Affiliates) of the Administrative Agent each as (i) a
successor Administrative Agent in the event that the Administrative Agent wishes
to retire as Administrative Agent or (ii) (in connection with the performance
and exercise of its rights and obligations under the Loan Documents) as
co-Administrative Agent, which appointment and (if relevant) resignation shall
be
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effective upon the Administrative Agent giving written notice thereof to the
Lenders and the Borrowers. Any such appointment and/or resignation under this
clause (b) shall not require the consent of any Lender or Borrower. (c) Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent or co-Administrative Agent pursuant to clauses (a) or (b)
above, each such successor Administrative Agent shall succeed to, and each such
co-Administrative Agent shall accede to, and become vested with all the rights,
powers, privileges and duties of the retiring or remaining Administrative Agent,
and in the case of a retiring Administrative Agent, such Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall
continue to have the benefit of this Article X as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement
and the other Loan Documents.
Section 10.7. Concerning the Collateral and the Collateral Documents.
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(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater or different proportion or combination of the
Lenders) in accordance with the provisions of this Agreement or of the other
Loan Documents, and the exercise by the Administrative Agent or the Requisite
Lenders (or, where so required, such greater or different proportion or
combination) of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders, Issuers and other Secured Parties. Without limiting the
generality of the foregoing, the Administrative Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuers with respect to all payments and collections
arising in connection herewith and with the Collateral Documents; (ii) execute
and deliver the Senior Secured Note Intercreditor Agreement and each Loan
Document and accept delivery of each such agreement delivered by Terra
Industries or any of its Subsidiaries; (iii) manage, supervise and otherwise
deal with the Collateral; (iv) take such action as is necessary or desirable to
maintain the perfection and priority of the security interests and Liens created
or purported to be created by the Collateral Documents; and (v) except as may be
otherwise specifically restricted by the terms hereof or of the Senior Secured
Note Intercreditor Agreement, or of any other Loan Document, exercise all
remedies given to the Administrative Agent, the Lenders, the Issuers and the
other Secured Parties and direct the Administrative Agent in accordance with the
terms hereof and of the Senior Secured Note Intercreditor Agreement with respect
to the Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(b) The Administrative Agent hereby appoints, authorizes and directs
each Lender and Issuer to act as collateral sub-agent for the Administrative
Agent, the Lenders and the Issuers for purposes of the perfection of all
security interests and Liens with respect to Terra Industries' and its
Subsidiaries' respective deposit accounts maintained with, and cash and Cash
Equivalents held by, such Lender or such Issuer.
(c) Each of the Lenders and the Issuers hereby directs, in
accordance with the terms hereof, the Administrative Agent to release or
instruct the Administrative Agent to release (or, in the case of clause (ii)
below, release or subordinate) any Lien held by the Administrative Agent for the
benefit of the Lenders and the Issuers:
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(i) against all of the Collateral, upon termination of the
Revolving Credit Commitments and payment and satisfaction in full of all
Loans, Reimbursement Obligations and all other Obligations which have
matured and which the Administrative Agent has been notified in writing are
then due and payable (and, in respect of contingent Letter of Credit
Obligations, with respect to which cash collateral has been deposited or a
back-up letter of credit has been issued, in either case on terms
satisfactory to the Administrative Agent and the applicable Issuers);
(ii) against any assets that are subject to a Lien permitted
by Section 8.2(d) or (e);
(iii) against any part of the Collateral sold or disposed of
by a Loan Party if such sale or disposition is permitted by this Agreement
(or permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement) or, if not pursuant to such sale or
disposition, if such release is consented to by (A) all of the Lenders, if
the Collateral subject to such release is a substantial portion of all the
Collateral, or (B) the Requisite Lenders, in all other cases;
(iv) against any cash collateral to the extent permitted
under Section 7.12 or Section 2.9; and
(v) as of the Effective Date, against any collateral, but
only to the extent such collateral constitutes Senior Secured Note
Collateral.
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
instruct the Administrative Agent to execute and deliver or file such
termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 10.7 promptly
upon the effectiveness of any such release.
Section 10.8. Collateral Matters Relating to Related Obligations. The
--------------------------------------------------
benefit of the Loan Documents and of the provisions of this Agreement relating
to the Collateral shall extend to and be available in respect of any Obligation
which arises under any Hedging Contract or which is otherwise owed to Persons
other than the Administrative Agent, the Arranger, the Lenders and the Issuers
(collectively, "Related Obligations") solely on the condition and understanding,
as among the Administrative Agent and all Secured Parties, that (i) the Related
Obligations shall be entitled to the benefit of the Loan Documents and the
Collateral to the extent expressly set forth in this Agreement and the other
Loan Documents and to such extent the Administrative Agent shall hold, and have
the right and power to act with respect to, the Guaranty and the Collateral on
behalf of and as agent for the holders of the Related Obligations but the
Administrative Agent is otherwise acting solely as agent for the Lenders and the
Issuers and shall have no fiduciary duty, duty of loyalty, duty of care, duty of
disclosure or other obligation whatsoever to any holder of Related Obligations;
(ii) all matters, acts and omissions relating in any manner to the Guaranty, the
Collateral, or the omission, creation, perfection, priority, abandonment or
release of any Lien, shall be governed solely by the provisions of this
Agreement, the Senior Secured Note Intercreditor Agreement and the other Loan
Documents and no separate Lien, right, power or remedy shall arise or exist in
favor of any Secured Party under any separate instrument or agreement or in
respect of any Related Obligation; and (iii) each Secured Party shall be bound
by all actions taken or omitted, in accordance with the provisions of this
Agreement, the Senior Secured Note Intercreditor Agreement and the other Loan
Documents, by the Administrative Agent and the Requisite
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Lenders (or, where required by the express terms of this Agreement, a greater or
different proportion or combination of the Lenders), each of whom shall be
entitled to act at its sole discretion and exclusively in its own interest given
its own Revolving Credit Commitments and its own interest in the Loans, Letter
of Credit Obligations and other Obligations to it arising under this Agreement
or the other Loan Documents, without any duty or liability to any other Secured
Party or as to any Related Obligation and without regard to whether any Related
Obligation remains outstanding or is deprived of the benefit of the Collateral
or becomes unsecured or is otherwise affected or put in jeopardy thereby; and
(iv) no holder of Related Obligations and no other Secured Party (except the
Administrative Agent, the Arranger, the Lenders and the Issuers, to the extent
set forth in this Agreement) shall have any right to be notified of, or to
direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under this Agreement, the Senior Secured Note
Intercreditor Agreement or the Loan Documents; and (v) no holder of any Related
Obligation shall exercise any right of setoff, banker's lien or similar right
except as expressly provided in Section 11.6.
Section 10.9. Other Agents. Each party acknowledges that the Person
------------
(except in its capacity as a Lender or Issuer) designated as the Arranger shall
have no liability hereunder.
ARTICLE XI
Miscellaneous
Section 11.1. Amendments, Waivers, Etc.
------------------------
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by the relevant Lenders referred to below, in addition to the
Requisite Lenders, do any of the following:
(i) waive any of the conditions specified in Section 3.1
(without the consent of all Lenders) or 3.2 (without the consent of all
Lenders) except with respect to a condition based upon another provision
hereof, the waiver of which requires only the concurrence of the Requisite
Lenders;
(ii) increase the Revolving Credit Commitment of any Lender or
subject any Lender to any additional obligations (without the consent of
each such Lender);
(iii) extend the scheduled final maturity of any Loan owing to
any Lender, or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal of any such Loan (it being understood
that Section 2.9 does not provide for scheduled dates fixed for payment) or
for the reduction of the Revolving Credit Commitment of such Lender
(without the consent of such Lender);
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(iv) reduce the principal amount of any Loan or Reimbursement
Obligation owing to any Lender (other than by the payment or prepayment
thereof) (without the consent of such Lender);
(v) reduce the rate of interest on any Loan or Reimbursement
Obligations owing to any Lender or any fee payable hereunder to such Lender
(without the consent of such Lender);
(vi) postpone any scheduled date fixed for payment of such
interest or fees to such Lender (without the consent of such Lender);
(vii) change the percentage of aggregate Revolving Credit
Commitments or unpaid principal amount of the Loans or the number or
percentage of Lenders which shall be required for the Lenders or any of
them to take any action hereunder (without the consent of each Lender);
(viii) increase the Advance Rates above the rates set forth in
the definition thereof (without the consent of each Lender);
(ix) (without limiting Section 7.12) release a substantial
portion of Collateral except as otherwise provided in Section 10.7(c) or
release any Borrower or Guarantor from its obligations under this Agreement
or its Guaranty, as applicable, except in connection with sale or other
disposition permitted by this Agreement (or permitted pursuant to a waiver
or consent of a transaction otherwise prohibited by this Agreement)
(without the consent of each Lender);
(x) amend Section 10.7(c) or this Section 11.1 or the
definition of the terms "Requisite Lenders" or "Ratable Portion" (without
the consent of each Lender affected thereby);
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrowers in any case shall entitle
the Borrowers to any other or further notice or demand in similar or other
circumstances.
(c) In connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change") requiring the consent of all Lenders in
addition to the Requisite Lenders, the consent of Requisite Lenders is obtained,
but the consent of other Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained as described in this Section 11.1
being referred to as a "Non-Consenting Lender"), then, so long as the Lender
that is acting as the Administrative Agent is not a Non-Consenting Lender, at
the Borrower's request, the Administrative Agent or an Eligible Assignee that is
acceptable to the Administrative Agent shall have the right with the
Administrative Agent's consent and in the
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Administrative Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees
that it shall, upon the Administrative Agent's request, sell and assign to the
Lender that is acting as the Administrative Agent or such Eligible Assignee, all
of the Revolving Credit Commitments and Revolving Credit Outstandings of such
Non-Consenting Lender for an amount equal to the principal balance of all
Revolving Loans held by the Non-Consenting Lender and all accrued interest and
fees with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment and Acceptance.
Section 11.2. Assignments and Participations.
------------------------------
(a) Each Lender may sell, transfer, negotiate or assign to one or
more Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Loans, the Swing Loans and the Letters of Credit); provided, however, that (i)
if any such assignment shall be of the assigning Lender's Revolving Credit
Outstandings and Revolving Credit Commitment, such assignment shall cover the
same percentage of such Lender's Revolving Credit Outstandings and Revolving
Credit Commitment and (ii) the aggregate amount being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor's
entire interest) be less than (in the case of (in aggregate) the Revolving
Credit Outstandings (and/or the Revolving Credit Commitments)) $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, except, in either case, (A)
with the consent of Terra Capital and the Administrative Agent or (B) if such
assignment is being made to a Lender or an Affiliate or Approved Fund of such
Lender, and (iii) if such Eligible Assignee is not, prior to the date of such
assignment, a Lender or an Affiliate or Approved Fund of a Lender, such
assignment shall be subject to the prior consent of the Administrative Agent and
Terra Capital (which consent shall not be unreasonably withheld or delayed);
provided, however, that, notwithstanding any other provision of this Section
11.2, the consent of the Borrowers shall not be required for any assignment
which occurs when any Event of Default shall have occurred and be continuing.
(b) The parties to each assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with any Note (if the assigning Lender's Loans are
evidenced by a Note) subject to such assignment. Upon such execution, delivery,
acceptance and recording and the receipt by the Administrative Agent from the
assignee of an assignment fee in the amount of $3,500 from and after the
effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender, and if such Lender were an Issuer, of such Issuer hereunder and
thereunder, and (ii) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the
payment in full of the Obligations) and be released from its obligations to the
extent corresponding thereto under the Loan Documents, other than those relating
to events or circumstances occurring prior to such assignment (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto).
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(c) The Administrative Agent shall maintain at its addressreferred
to in Section 11.8 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recording of the names and addresses of
the Lenders and the Revolving Credit Commitments of and principal amount of the
Loans and Letter of Credit Obligations owing to each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Loan Parties, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower, the Administrative
Agent or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers. Within five Business Days
after its receipt of such notice, the Borrowers, at their own expense, shall, if
requested by such assignee, execute and deliver to the Administrative Agent, new
Notes to the order of such assignee in an amount equal to the Revolving Credit
Commitments assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has surrendered any Note for exchange in connection with the
assignment and has retained Revolving Credit Commitments hereunder, new Notes to
the order of the assigning Lender in an amount equal to the Revolving Credit
Commitments retained by it hereunder. Such new Notes shall be dated the same
date as the surrendered Notes and be in substantially the form of Exhibit B.
(e) In addition to the other assignment rights provided in this
Section 11.2, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (i) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrowers or
the Administrative Agent and (ii) any trustee for the benefit of the holders of
such Lender's Securities; provided, however, that no such assignment shall
release the assigning Lender from any of its obligations hereunder.
(f) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including the right to enforce the obligations of the
Loan Parties), except if any such amendment, waiver or other modification or
consent would (i) reduce the amount, or postpone any date fixed for, any amount
(whether of principal, interest or fees) payable to such participant under the
Loan Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with Section 10.7(c). In the event of the
sale of any participation by any Lender, (A) such Lender's obligations under the
Loan Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties for the performance of such obligations, (C)
such Lender shall remain the holder of such Obligations for all purposes of this
Agreement, and (D) the Borrower, the Administrative
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Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Each participant shall be entitled to the benefits of Sections
2.14(c), 2.14(e), 2.15 and 2.16 as if it were a Lender; provided, however, that
anything herein to the contrary notwithstanding, the Borrower shall not, at any
time, be obligated to pay to any participant of any interest of any Lender,
under Section 2.14(c), 2.14(e), 2.15 or 2.16, any sum in excess of the sum which
the Borrowers would have been obligated to pay to such Lender in respect of such
interest had such participation not been sold.
(g) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrowers, the Administrative Agent, such Issuer and such
Lender. If any Issuer ceases to be a Lender hereunder by virtue of any
assignment made pursuant to this Section 11.2, then, as of the effective date of
such cessation, such Issuer's obligations to issue Letters of Credit pursuant to
Section 2.4 shall terminate and such Issuer shall be an Issuer hereunder only
with respect to outstanding Letters of Credit issued prior to such date.
Section 11.3. Costs and Expenses.
------------------
(a) Each Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable and
documented out-of-pocket costs and expenses of every type and nature (including,
without limitation, the reasonable and documented fees, expenses and
disbursements of the Administrative Agent's New York and English counsel, Weil,
Gotshal & Xxxxxx LLP and additional local legal counsel, auditors, accountants,
appraisers, printers, insurance and environmental advisers, and other
consultants and agents) reasonably incurred by the Administrative Agent in
connection with (i) the Administrative Agent's audit and investigation of Terra
Industries and its Subsidiaries in connection with the preparation, negotiation
and execution of the Loan Documents and the Administrative Agent's periodic
audits of Terra Industries and its Subsidiaries, as the case may be; (ii) the
preparation, negotiation, execution and interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article III), the Loan Documents and any
proposal letter or commitment letter issued in connection therewith and the
making of the Loans hereunder; (iii) the creation, perfection or protection of
the Liens under the Loan Documents (including, without limitation, any
reasonable and documented fees and expenses for local counsel in various
jurisdictions); (iv) the ongoing administration of this Agreement and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent's rights and responsibilities hereunder and under
the other Loan Documents; (v) the protection, collection or enforcement of any
of the Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, any Loan Party, any of Terra Industries' Subsidiaries,
this Agreement or any of the other Loan Documents; (vii) the response to, and
preparation for, any subpoena or request for document production with which the
Administrative Agent is served or deposition or other proceeding in which the
Administrative Agent is called to testify, in each case, relating in any way to
the Obligations, any Loan Party, any of Terra Industries' Subsidiaries, this
Agreement or any of the other Loan Documents; and (viii) any amendments,
consents, waivers, assignments, restatements, or supplements to any of the Loan
Documents and the preparation, negotiation, and execution of the same.
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(b) Each Borrower further agrees to pay or reimburse the
Administrative Agent and each of the Lenders and Issuers upon demand for all
reasonable and documented out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' fees (including allocated costs of internal
counsel and costs of settlement), incurred by the Administrative Agent, such
Lenders or Issuers (i) in enforcing any Loan Document or Obligation or any
security therefor or exercising or enforcing any other right or remedy available
by reason of an Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of Terra Industries' Subsidiaries and related
to or arising out of the transactions contemplated hereby or by any of the other
Loan Documents; and (iv) in taking any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) described in clauses (i) through
(iii) above.
Section 11.4. Indemnities.
-----------
(a) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and each Issuer and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representatives, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III) (each
such Person being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including reasonable and
documented fees and disbursements of counsel to any such Indemnitee, but
excluding taxes (other than those covenanted to be paid by the Borrowers under
this Agreement) imposed on or measured by the Indemnitee's net income and
franchise taxes, imposed on it, by the jurisdiction (or any political
subdivision thereof) under the laws of which such Indemnitee is organized or in
which its principal office or Applicable Lending Office is located) which may be
imposed on, incurred by or asserted against any such Indemnitee in connection
with or arising out of any investigation, litigation or proceeding, whether or
not any such Indemnitee is a party thereto, whether direct, indirect, or
consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or in contract, tort or otherwise, relating to or
arising out of this Agreement, any other Loan Document, any Obligation, any
Letter of Credit, or any act, event or transaction related or attendant to any
thereof, or the use or intended use of the proceeds of the Loans or Letters of
Credit or in connection with any investigation of any potential matter covered
hereby (collectively, the "Indemnified Matters"). Without limiting the
foregoing, Indemnified Matters include (i) all Environmental Liabilities and
Costs arising from or connected with the past, present or future operations of
Terra Industries or any of its Subsidiaries involving any property subject to a
Collateral Document, or damage to real or personal property or natural resources
or harm or injury alleged to have resulted from any Release of Contaminants on,
upon or into such property or any contiguous real estate; (ii) any costs or
liabilities incurred in connection with any Remedial Action concerning Terra
Industries or any of its Subsidiaries; (iii) any costs or liabilities incurred
in connection with any Environmental Lien in respect of any assets or properties
of Terra Industries and its Subsidiaries; (iv) any costs or liabilities incurred
in connection with any other matter (concerning Terra Industries or any of its
Subsidiaries) under any Environmental Law, including CERCLA and applicable state
property transfer laws, whether, with respect to any of such matters, such
Indemnitee is a mortgagee pursuant to any leasehold
106
mortgage, a mortgagee in possession, the successor in interest to Terra
Industries or any of its Subsidiaries, or the owner, lessee or operator of any
property of Terra Industries or any of its Subsidiaries by virtue of
foreclosure, except, with respect to those matters referred to in clauses (i),
(ii), (iii) and (iv) above, to the extent incurred following (A) foreclosure by
the Administrative Agent, any Lender or any Issuer, or the Administrative Agent,
any Lender or any Issuer having become the successor in interest to Terra
Industries or any of its Subsidiaries, and (B) attributable solely to acts of
the Administrative Agent, such Lender or such Issuer or any agent on behalf of
the Administrative Agent, such Lender or such Issuer; provided, however, that
the Borrowers shall not have any obligation under this Section 11.4 to an
Indemnitee with respect to any Indemnified Matter caused by or resulting from
the gross negligence or willful misconduct of that Indemnitee, as determined by
a court of competent jurisdiction in a final non-appealable judgment or order.
(b) Each Borrower shall indemnify the Administrative Agent, the
Lenders and each Issuer for, and hold the Administrative Agent, the Lenders and
each Issuer harmless from and against, any and all claims for brokerage
commissions, fees and other compensation made against the Administrative Agent,
the Lenders and the Issuers for any broker, finder or consultant with respect to
any agreement, arrangement or understanding made by or on behalf of any Loan
Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.
(c) Each Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 11.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.
Section 11.5. Limitation of Liability. Each Borrower agrees that
-----------------------
no Indemnitee shall (except for breach by such Indemnitee of its obligations
under this Agreement and the other Loan Documents) have any liability (whether
direct or indirect, in contract, tort or otherwise) to any Loan Party or any of
their respective Subsidiaries or any of their equity holders or creditors for or
in connection with the transactions contemplated hereby and in the other Loan
Documents, except to the extent such liability is found in a final judgment by a
court of competent jurisdiction to have resulted from such Indemnitee's gross
negligence or willful misconduct. In no event, however, shall any Indemnitee be
liable on any theory of liability for any special, indirect, consequential or
punitive damages and each of Terra Industries and each Borrower hereby waives,
releases and agrees (for itself and on behalf of its Subsidiaries) not to xxx
upon any such claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
Section 11.6. Right of Set-off. Upon the occurrence and during
----------------
the continuance of any Event of Default each Lender and each Affiliate of a
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or its Affiliates to or for the
credit or the account of any Borrower against any and all of the Obligations now
or hereafter existing whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such Obligations
may be unmatured. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender or its
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Affiliates; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section 11.6 are in addition to the other rights and remedies
(including other rights of set-off) which such Lender may have.
Section 11.7. Sharing of Payments, Etc.
-------------------------
(a) 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 Revolving Loans made by it (other than pursuant to Section 2.14,
2.15 or 2.16) in excess of its Ratable Portion under the Revolving Credit
Facility, in respect of payments obtained by the Lenders, on account of such
Obligations, such Lender (a "Purchasing Lender") shall forthwith purchase from
the other Lenders (each, a "Selling Lender") such participations in their Loans
or other Obligations as shall be necessary to cause such Purchasing Lender to
share the excess payment ratably with each of them.
(b) If all or any portion of any payment received by a
Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling Lender
shall repay to the Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender's ratable share
(according to the proportion of (i) the amount of such Selling Lender's required
repayment to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.
(c) Each Borrower agrees that any Purchasing Lender so
purchasing a participation from a Selling Lender pursuant to this Section 11.7
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 11.8. Notices, Etc. All notices, demands, requests and
-------------
other communications provided for in this Agreement shall be given in writing,
by any telecommunication device capable of creating a written record or by
electronic mail through the internet, and addressed to the party to be notified
as follows:
(a) if to any Loan Party:
c/o Terra Industries, Inc.
000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
Telecopy no: (000) 000-0000
email address: xxxxxx@xxxxxxxxxxxxxxx.xxx
(b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II or on the signature page of any applicable
Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name
on the signature page hereof; and
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(d) if to the Administrative Agent:
(i) (for collateral and administrative matters)
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telecopy No: (000) 000-0000
email address: xxxxx.xxxxx@xxxx.xxx
with a copy to (for collateral monitoring matters):
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No: (000) 000-0000
email address: xxxx.xxxxxx@xxxx.xxx
And
(ii) (for advances)
Citicorp USA, Inc.
0 Xxxxx Xxx
Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxx
Telecopy No: (000) 000-0000
email address: xxxxxxxxx.xxxxx@xxxx.xxx
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy no: (000) 000-0000
email address: xxxxxx.xxxxx@xxxx.xxx
or at such other address as shall be notified in writing (i) in the case of the
Loan Parties and the Administrative Agent, to the other parties and (ii) in the
case of all other parties, to the Borrower and the Administrative Agent. All
such notices and communications shall be effective upon personal delivery (if
delivered by hand, including any overnight courier service), when deposited in
the mails (if sent by mail), or when properly transmitted (if sent by a
telecommunications device or by electronic mail); provided, however, that
notices and communications to the
109
Administrative Agent pursuant to Article II or X shall not be effective until
received by the Administrative Agent.
Section 11.9. No Waiver; Remedies. No failure on the part of
-------------------
any Lender, Issuer or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11.10. Binding Effect. This Agreement shall become
--------------
effective on the Effective Date and thereafter this Agreement shall be binding
upon and inure to the benefit of the Borrowers, the Administrative Agent and
each Lender and their respective successors and assigns, except that the
Borrowers shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders. On the
Effective Date, the Existing Credit Agreement shall be amended and restated in
its entirety by this Agreement and the Existing Credit Agreement shall
thereafter be of no further force and effect except as to evidence the
incurrence by the Borrowers' of the Obligations thereunder, as to evidence the
representations and warranties made by the Borrowers prior to the Effective Date
and as to evidence any failure to comply with the covenants contained in such
Existing Credit Agreement occurring prior to the Effective Date. The terms and
conditions of this Agreement and the Administrative Agent's, the Lenders' and
the Issuers' rights and remedies under this Agreement and the other Loan
Documents, shall apply to all of the Obligations incurred under the Existing
Credit Agreement and the Notes issued as of April 7, 2000. It is expressly
understood and agreed by the parties hereto that this Agreement is in no way
intended to constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or evidence payment of all or any of such
obligations and liabilities. Other than with respect to Liens on the assets of
the Loan Parties constituting Senior Secured Note Collateral, each Borrower
party to the Existing Credit Agreement reaffirms the Liens granted to the
Administrative Agent for the benefit of the Lenders and the Issuers pursuant to
each of the Loan Documents executed by such Borrower, which Liens shall continue
in full force and effect during the term of this Agreement and any renewals
thereof and shall continue to secure the Obligations identified in such Loan
Documents. All references to the Existing Credit Agreement (or to any amendment
or any amendment and restatement thereof) in the Loan Documents shall be deemed
to refer to this Agreement.
Section 11.11. Governing Law. This Agreement and the rights and
-------------
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 11.12. Submission to Jurisdiction; Service of Process.
----------------------------------------------
(a) Any legal action or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, each Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
110
(b) Terra UK hereby irrevocably designates, appoints and empowers
Terra Industries (the "Process Agent"), in the case of any suit, action or
proceeding brought in the United States of America as its designee, appointee
and agent to receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process, summons, notices
and documents that may be served in any action or proceeding arising out of or
in connection with this Agreement or any Loan Document. Such service may be made
by mailing (by registered or certified mail, postage prepaid) or delivering a
copy of such process to Terra UK in care of the Process Agent at the Process
Agent's above address, and Terra UK hereby irrevocably authorizes and directs
the Process Agent to accept such service on its behalf. As an alternative method
of service, Terra UK irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing (by registered or certified
mail, postage prepaid) of copies of such process to the Process Agent or Terra
UK at its address specified in Section 11.8. The Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of Terra Capital and TNLP hereby irrevocably consents to
the service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising out
of or in connection with this Agreement or any of the other Loan Documents by
the mailing (by registered or certified mail, postage prepaid) or delivering of
a copy of such process to such Borrower at its address specified in Section
11.8. Each such Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Nothing contained in this Section 11.12 shall affect the
right of the Administrative Agent or any Lender to serve process in any other
manner permitted by law or commence legal proceedings or otherwise proceed
against the Borrower or any other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
Section 11.13. Waiver of Jury Trial. Each of the Administrative
--------------------
Agent, the Lenders, the Issuers and the Borrower irrevocably waives trial by
jury in any action or proceeding with respect to this Agreement or any other
Loan Document.
Section 11.14. No Immunity. To the extent that Terra UK may be or
-----------
become entitled, in any jurisdiction in which judicial proceedings may at any
time be commenced with respect to this Agreement or any other Loan Document, to
claim for itself or its properties or revenues any immunity from suit, court
jurisdiction, attachment prior to judgment, attachment in aid of execution of a
judgment, execution of a judgment or from any other legal process or remedy
relating to its respective obligations under this Agreement or any other Loan
Document, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether
111
or not claimed), Terra UK hereby irrevocably agrees not to claim and hereby
irrevocably waives such immunity to the fullest extent permitted by the laws of
such jurisdiction.
Section 11.15. Judgment Currency. This is an international loan
-----------------
transaction in which the specification of Dollars is of the essence, and Dollars
shall in each instance be the currency of account and payment in all instances.
A payment obligation in Dollars hereunder shall not be discharged by an amount
paid in another currency (the "Other Currency"), whether pursuant to any
judgment expressed in or converted into any Other Currency or in another place
except to the extent that such tender or recovery results in the effective
receipt by the Lenders of the full amount of Dollars payable to the
Administrative Agent and the Lenders under this Agreement. If for the purpose of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in Dollars into the Other Currency, the rate of exchange that shall be applied
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase U.S. Dollars in New York, New York with the
Other Currency on the Business Day next preceding the day on which such judgment
is rendered. The obligation of Terra UK in respect of any such sum due from it
to the Administrative Agent and the Lenders hereunder or under any other Loan
Document shall, notwithstanding the rate of exchange actually applied in
rendering such judgment, be discharged only to the extent that on the Business
Day following receipt by the Administrative Agent or any Lender of any sum
adjudged to be due hereunder in the Other Currency the Administrative Agent may
in accordance with normal banking procedures purchase Dollars with the amount of
the judgment currency so adjudged to be due; and the Borrower hereby, as a
separate obligation and notwithstanding any such judgment, agrees to indemnify
the Administrative Agent and the Lenders against, and to pay the Administrative
Agent and Lenders on demand, in Dollars, the amount (if any) by which the sum
originally due to the Administrative Agent and the Lenders in Dollars hereunder
exceeds the amount of the Other Currency so purchased.
Section 11.16. Marshaling; Payments Set Aside. None of the
------------------------------
Administrative Agent, any Lender or any Issuer shall be under any obligation to
marshal any assets in favor of the Borrowers or any other party or any other
Lender which does not have an equivalent interest in the Revolving Credit
Facility or against or in payment of any or all of the Obligations. To the
extent that the Borrowers make a payment or payments to the Administrative
Agent, the Lenders or the Issuers or any of such Persons receives payment from
the proceeds of the Collateral or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Section 11.17. Section Titles. The Section titles contained in
--------------
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
Section 11.18. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate
112
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document.
Section 11.19. Entire Agreement. This Agreement, together with
----------------
all of the other Loan Documents and all certificates and documents delivered
hereunder or thereunder, embodies the entire agreement of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
Section 11.20. Confidentiality. Each Lender and the
---------------
Administrative Agent (a) agrees to keep information obtained by it pursuant
hereto and the other Loan Documents confidential in accordance with such
Lender's or the Administrative Agent's, as the case may be, customary practices
and (b) agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (i) to such Lender's or the Administrative Agent's, as
the case may be, employees, representatives and agents who are or are expected
to be involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender or the Administrative
Agent, as the case may be, on a non-confidential basis from a source other than
the Borrowers, (iii) to the extent disclosure is required by law, regulation or
judicial order or requested or required by bank regulators or auditors, or (iv)
to assignees or participants or potential assignees or participants who agree to
be bound by the provisions of this Section 11.20.
Section 11.21. Refund of Tax Credits. If:
---------------------
(a) Terra UK makes a payment under Section 2.16(a) (a "Tax
Payment") in respect of a payment to a Lender or the Administrative Agent under
this agreement; and
(b) that Lender or the Administrative Agent determines in its
discretion that it has obtained a refund of tax or obtained and used a credit
against tax on its overall net income (a "Tax Credit") which that Lender or as
appropriate the Administrative Agent in its discretion is able to identify as
attributable to that Tax Payment,
then if it can do so without any adverse consequences for that Lender or if
applicable the Administrative Agent, that Lender or if applicable the
Administrative Agent shall reimburse Terra UK such amount as that Lender or if
applicable the Administrative Agent determines to be such proportion of that Tax
Credit as will leave that Lender or if applicable the Administrative Agent
(after that reimbursement) in no better or worse position in respect of its
overall tax liabilities than it would have been in if no Tax Payment had been
required. A Lender or where applicable the Administrative Agent shall have an
absolute discretion as to whether to claim any Tax Credit (and, if it does
claim, the extent order and manner in which it does so). Neither the Lender nor
the Administrative Agent should be obliged to disclose any of its tax affairs or
computations to Terra UK or any other Loan Party.
[Signature Pages Follow]
113
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
Borrowers
---------
Terra Capital, Inc.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Terra Nitrogen (U.K.), Limited
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Terra Nitrogen, Limited Partnership
By: Terra Nitrogen Corporation,
its General Partner
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Guarantor
---------
Terra Industries Inc.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Administrative Agent
--------------------
Citicorp USA, Inc.
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
Issuer
------
Citibank, N.A.
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
Lenders
-------
Citicorp USA, Inc.
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
Foothill Capital Corporation
By: /s/ Xxxx Xxxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Vice President
LaSalle Bank National Association
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
PNC Business Credit
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Congress Financial Corp.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
Xxxxxx Financial, Inc.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
The Provident Bank
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
[Signature Page to Amended and Restated Credit Agreement]
