-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I8Kgt4840aMthYc2J766CuBQi0O902m4s84w2KDSIW7acpjM6h7+8OT/wWFXLgOC FuO0msukfgcNEokNzjq75g== 0000950131-02-000154.txt : 20020413 0000950131-02-000154.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950131-02-000154 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 32 FILED AS OF DATE: 20020116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA REAL ESTATE CORP CENTRAL INDEX KEY: 0001162137 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421178622 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-01 FILM NUMBER: 2510973 BUSINESS ADDRESS: STREET 1: 500 FOURTH ST STREET 2: POST OFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA CAPITAL INC CENTRAL INDEX KEY: 0001162139 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 421431905 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198 FILM NUMBER: 2510961 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEAUMONT AMMONIA INC CENTRAL INDEX KEY: 0001162141 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 391917518 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-12 FILM NUMBER: 2510962 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEAUMONT HOLDINGS CORP CENTRAL INDEX KEY: 0001162149 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421490788 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-11 FILM NUMBER: 2510963 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PORT NEAL CORP CENTRAL INDEX KEY: 0001162144 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421445999 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-09 FILM NUMBER: 2510965 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA UK HOLDINGS INC CENTRAL INDEX KEY: 0001162142 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 391917519 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-08 FILM NUMBER: 2510966 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA CAPITAL HOLDINGS INC CENTRAL INDEX KEY: 0001162140 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421431905 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-07 FILM NUMBER: 2510967 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA INTERNATIONAL OKLAHOMA INC CENTRAL INDEX KEY: 0001162148 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421321108 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-05 FILM NUMBER: 2510969 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA INTERNATIONAL INC CENTRAL INDEX KEY: 0001162147 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 362537046 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-04 FILM NUMBER: 2510970 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA METHANOL CORP CENTRAL INDEX KEY: 0001162146 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 421431904 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-03 FILM NUMBER: 2510971 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA NITROGEN CORP CENTRAL INDEX KEY: 0001162145 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 721159610 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-02 FILM NUMBER: 2510972 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: POST OFFFICE BOX 600 CITY: SIOUX CITY STATE: IA ZIP: 51102 BUSINESS PHONE: 712 277 1340 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BMC HOLDINGS INC CENTRAL INDEX KEY: 0000882483 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541889308 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-10 FILM NUMBER: 2510964 BUSINESS ADDRESS: STREET 1: C/O BRILL MEDIA CO STREET 2: P O BOX 2453 CITY: RICHMOND STATE: VA ZIP: 23201 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: C/O BRILL MEDIA CO STREET 2: P O BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA INDUSTRIES INC CENTRAL INDEX KEY: 0000722079 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 521145429 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73198-06 FILM NUMBER: 2510968 BUSINESS ADDRESS: STREET 1: TERRA CENTRE 600 4TH ST STREET 2: P.O. BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 BUSINESS PHONE: 7122771340 MAIL ADDRESS: STREET 1: TERRA CENTER STREET 2: 600 4TH ST P O BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 FORMER COMPANY: FORMER CONFORMED NAME: INSPIRATION RESOURCES CORP DATE OF NAME CHANGE: 19920517 S-4/A 1 ds4a.txt AMENDMENT NO.1 TO FORM S-4 As filed with the Securities and Exchange Commission on January 16, 2002. Registration No. 333-73198 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- PRE-EFFECTIVE AMENDMENT NO. 1 to FORM S-4 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 ----------------- TERRA CAPITAL, INC.* (Exact name of registrant as specified in its charter) Delaware 2870 42-1431650 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Number) Identification No.)
----------------- Terra Centre 600 Fourth Street, P.O. Box 600 Sioux City, Iowa 51102 Telephone: (712) 277-1340 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) ----------------- Copies to: Francis G. Meyer Carter W. Emerson, Esq. Terra Centre Kirkland & Ellis 600 Fourth Street, P.O. Box 600 200 E. Randolph Drive Sioux City, Iowa 51102 Chicago, Illinois 60601 Telephone: (712) 277-1340 Telephone: (312) 861-2000 ( Name, address, including zip code, and telephone number, including area code, of agent for service)
----------------- * The companies listed on the next page are also included in this Form S-4 Registration Statement as additional Registrants. Approximate date of commencement of proposed sale of the securities to the public: The exchange will commence as soon as practicable after the effective date of this Registration Statement. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Jurisdiction I.R.S. Employer Exact Name of Additional Registrants* of Formation Identification No. - ------------------------------------- ------------ ------------------ Beaumont Ammonia Inc................ Delaware 39-1917518 Beaumont Holdings Corporation....... Delaware 42-1490799 BMC Holdings Inc.................... Delaware 73-1394219 Port Neal Corporation............... Delaware 42-1443999 Terra (UK) Holdings Inc............. Delaware 39-1917519 Terra Capital Holdings, Inc......... Delaware 42-1431905 Terra Industries Inc................ Maryland 52-1145429 Terra International (Oklahoma) Inc.. Delaware 42-1321108 Terra International Inc............. Delaware 36-2537046 Terra Methanol Corporation.......... Delaware 42-1431904 Terra Nitrogen Corporation.......... Delaware 72-1159610 Terra Real Estate Corp.............. Iowa 42-1178622
- -------- * The address for each of the additional Registrants is c/o Terra Industries Inc., Terra Centre, 600 Fourth Street, P.O. Box 600, Sioux City, Iowa 51102, telephone: (712) 277-1340. The primary standard industrial classification number for each of the additional Registrants is 2870. This information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell nor is it an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JANUARY 16, 2002 PROSPECTUS [LOGO] TERRA CAPITAL, INC. Exchange Offer for $200,000,000 12.875% Senior Secured Notes due 2008 ----------------- We are offering to exchange: up to $200,000,000 of our new 12.875% Senior Secured Notes due 2008 for a like amount of our outstanding 12.875% Senior Secured Notes due 2008. Material Terms of Exchange Offer . The terms of the notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the transfer restrictions and registration rights relating to the outstanding notes will not apply to the exchange notes. . There is no existing public market for the outstanding notes or the exchange notes. We do not intend to list the exchange notes on any securities exchange or seek approval for quotation through any automated trading system. . Expires 5:00 p.m., New York City time, , 2001, unless extended. . The exchange of notes will not be a taxable event for U.S. federal income tax purposes. . The terms of the notes to be issued in the exchange offer . Not subject to any condition other than that the are substantially identical to the outstanding notes, exchange offer not violate applicable law or any except that the transfer restrictions and registration rights applicable interpretation of the Staff of the SEC. relating to the outstanding notes will not apply to the exchange notes. . We will not receive any proceeds from the exchange offer. . There is no existing public market for the outstanding notes or the exchange notes. We do not intend to list the . The notes to be issued in the exchange offer will be exchange notes on any securities exchange or seek fully and unconditionally guaranteed, on a joint and approval for quotation through any automated trading several basis, by Terra Industries Inc., our parent system. company, and its wholly-owned U.S. subsidiaries. The notes and guarantees will be secured by a first priority . Expires 5:00 p.m., New York City time, , 2001, security interest in our ownership and leasehold unless extended. interest in substantially all of the real property, machinery and equipment owned or leased by Terra . The exchange of notes will not be a taxable event for Capital and the guarantors and specified other assets. U.S. federal income tax purposes.
----------------- For a discussion of certain factors that you should consider before participating in this exchange offer, see "Risk Factors" beginning on page 9 of this prospectus. Neither the SEC nor any state securities commission has approved the notes to be distributed in the exchange offer, nor have any of these organizations determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ----------------- , 2002 Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date and ending on the close of business 180 days after the expiration date of the exchange offer, we will make this prospectus available, as amended or supplemented, to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." You should rely only on the information contained, or incorporated by reference, in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus. ----------------- TABLE OF CONTENTS
Page ---- PROSPECTUS SUMMARY....................................................... 1 RISK FACTORS............................................................. 9 DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS.......................... 17 USE OF PROCEEDS.......................................................... 17 SELECTED HISTORICAL FINANCIAL DATA....................................... 18 THE EXCHANGE OFFER....................................................... 20 DESCRIPTION OF NOTES..................................................... 28 BOOK-ENTRY; DELIVERY AND FORM............................................ 78 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES............................ 82 PLAN OF DISTRIBUTION..................................................... 86 VALIDITY OF THE NEW SECURITIES........................................... 86 EXPERTS.................................................................. 87 WHERE YOU CAN FIND MORE INFORMATION...................................... 87 DOCUMENTS INCORPORATED BY REFERENCE...................................... 87
----------------- THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT US WHICH IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. SEE "WHERE YOU CAN FIND MORE INFORMATION" AND "DOCUMENTS INCORPORATED BY REFERENCE." THIS INFORMATION, EXCLUDING EXHIBITS TO THE INFORMATION UNLESS THE EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION, IS AVAILABLE WITHOUT CHARGE TO ANY HOLDER OR BENEFICIAL OWNER OF OUTSTANDING NOTES UPON WRITTEN OR ORAL REQUEST TO MARK A. KALAFUT, VICE PRESIDENT AND GENERAL COUNSEL, TERRA INDUSTRIES INC., 600 FOURTH STREET, P.O BOX 6000, SIOUX CITY, IOWA 51102-6000, TELEPHONE NUMBER (712) 277-1340. TO OBTAIN TIMELY DELIVERY OF THIS INFORMATION, YOU MUST REQUEST THIS INFORMATION NO LATER THAN FIVE BUSINESS DAYS BEFORE THE EXPIRATION OF THE EXCHANGE OFFER. THEREFORE, YOU MUST REQUEST INFORMATION ON OR BEFORE , 2002. ----------------- ADDITIONAL INFORMATION In this prospectus, unless the context requires otherwise, "Terra Industries," the "company," "we," "us" and "our" each refers to Terra Industries Inc. and its subsidiaries, including Terra Capital, Inc. "Terra Capital" refers to Terra Capital, Inc., the issuer of the notes. Substantially all the consolidated assets of Terra Industries are held by Terra Capital and its subsidiaries. ii SUMMARY The following summary is qualified in its entirety by reference to the more detailed information and consolidated information appearing elsewhere in or incorporated by reference into this prospectus. The Company We are a leading North American and U.K. producer and marketer of nitrogen products serving both agricultural and industrial end use markets. We are one of the largest North American producers of ammonia, the basic building block of nitrogen fertilizers. We upgrade a significant portion of the ammonia we produce into higher value products, which are easier for agricultural end-users to transport, store and apply to crops than ammonia. In addition, we are the largest U.S. producer of methanol. We own eight manufacturing facilities in North America and the U.K. that produce nitrogen products, two of which also produce methanol. Our principal products are the following: . Anhydrous ammonia (often referred to simply as "ammonia"), the simplest and least expensive form of nitrogen fertilizer. Ammonia is the primary feedstock used in the production of most other nitrogen fertilizers, including UAN, AN and urea. . Urea, which is produced by reacting ammonia and carbon dioxide. We produce both a granulated form of solid urea, generally for the fertilizer market, and urea liquor (liquid) for animal feed supplements and industrial applications. . Ammonium nitrate ("AN"), a solid fertilizer product most commonly used by British farmers. AN is produced by combining nitric acid and ammonia into a liquid form which is then converted to a solid granular form. . Urea ammonium nitrate ("UAN"), a liquid fertilizer produced by combining liquid urea, liquid ammonium nitrate and water. UAN, unlike ammonia, is odorless and does not require refrigeration or pressurization for transportation and storage. . Methanol, a liquid made primarily from natural gas. Methanol is used primarily as a feedstock in the production of other chemical products such as formaldehyde, acetic acid, methyl tertiary butyl ether ("MTBE"), an oxygenate and octane enhancer currently used as an additive in reformulated gasolines, and other chemical intermediates. Our principal executive offices are located at Terra Centre, 600 Fourth Street, P.O. Box 6000, Sioux City, Iowa 51102-6000 and our telephone number is (712) 277-1340. Purpose of the Exchange Offer On October 10, 2001, we sold through a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), $200,000,000 of our 12.875% Senior Secured Notes Due 2008 (the "outstanding notes"). We used the net proceeds from the sale of the notes, as well as initial borrowings under our revolving credit facilities entered into concurrently with the closing of the offering of the notes (the "revolving credit facilities"), to repay our senior secured term loan facilities, to repay our 10.75% senior notes due September 30, 2003, and to pay related fees and expenses. Simultaneously with the private placement, we entered into a registration rights agreement for the notes, referred to as the "Registration Rights Agreement." Under the Registration Rights Agreement, we are required to use our reasonable best efforts to cause a registration statement for substantially identical notes, which will be issued in exchange for the notes, to become effective on or before March 9, 2002. We refer to the notes to be 1 registered under this exchange offer registration statement as "new notes" in this prospectus. You may exchange your outstanding notes for new notes in this exchange offer. You should read the discussion under the headings "--Summary of the Exchange Offer," and "The Exchange Offer" and "Description of Notes" for further information regarding the new notes. We did not register the outstanding notes under the Securities Act or any state securities laws, nor do we intend to after the exchange offer. As a result, the outstanding notes may only be transferred in limited circumstances under the securities laws. If the holders of the outstanding notes do not exchange their notes in the exchange offer, they lose their right to have the outstanding notes registered under the Securities Act, subject to certain limitations. Anyone who still holds outstanding notes after the exchange offer may be unable to resell their outstanding notes. 2 Summary of the Exchange Offer The Initial Offering of Outstanding Notes......... We sold the outstanding notes on October 10, 2001 to Salomon Smith Barney and Credit Suisse First Boston. We collectively refer to those parties in this prospectus as the "initial purchasers." The initial purchasers subsequently resold the outstanding notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons pursuant to Regulation S. Registration Rights Agreement Simultaneously with the initial sale of the outstanding notes, we entered into a Registration Rights Agreement for the exchange offer. In the Registration Rights Agreement, we agreed, among other things, to use our reasonable best efforts to file a registration statement with the SEC and to have this exchange offer become effective within 150 days of issuing the outstanding notes. The exchange offer is intended to satisfy your rights under the Registration Rights Agreement. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your outstanding notes. If we do not comply with, among other things, our obligation to use our reasonable best efforts to have this exchange offer become effective within 150 days of issuing the outstanding notes, we will pay liquidated damages in cash in an amount equal to 0.25% per annum of the aggregate principal amount of outstanding notes during the first 90 days, increasing by 0.25% per annum for each subsequent 90-day period, up to a maximum of 1.00% per annum, until we are in compliance. For more details, see "The Exchange Offer--Exchange Offer; Registration Rights." The Exchange Offer.......... We are offering to exchange the exchange notes, which have been registered under the Securities Act, for your outstanding notes, which were issued on October 10, 2001 in the initial offering. In order to be exchanged, an outstanding note must be properly tendered and accepted. All outstanding notes that are validly tendered and not validly withdrawn will be exchanged. We will issue exchange notes promptly after the expiration of the exchange offer. Resales..................... We believe that the exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: . the exchange notes are being acquired in the ordinary course of your business; . you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes issued to you in the exchange offer; and . you are not an affiliate of ours. 3 If any of these conditions are not satisfied and you transfer any exchange notes issued to you in the exchange offer without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes from these requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability. Each broker-dealer that is issued exchange notes in the exchange offer for its own account in exchange for outstanding notes that were acquired by that broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the exchange notes. A broker-dealer may use this prospectus for an offer to resell, resale or other retransfer of the exchange notes issued to it in the exchange offer. Record Date................. We mailed this prospectus and the related exchange offer documents to registered holders of outstanding notes on , 2002. Expiration Date............. The exchange offer will expire at 5:00 p.m., New York City time, 2002, unless we decide to extend the expiration date. Conditions to the Exchange Offer..................... The exchange offer will expire is not subject to any condition other than that the exchange offer not violate applicable law or any applicable interpretation of the staff of the SEC. Procedures for Tendering Outstanding Notes......... We issued the outstanding notes as global securities. When the outstanding notes were issued, we deposited the global notes representing the outstanding notes with U.S. Bank Trust National Association, as book-entry depositary. U.S. Bank Trust National Association issued a certificateless depositary interest in each global note we deposited with it, which represents a 100% interest in the notes, to The Depository Trust Company, known as DTC. Beneficial interests in the outstanding notes, which are held by direct or indirect participants in DTC through the certificateless depositary interest, are shown on records maintained in book-entry form by DTC You may tender your outstanding notes through book-entry transfer in accordance with DTC's Automated Tender Offer Program, known as ATOP. To tender your outstanding notes by a means other than book-entry transfer, a letter of transmittal must be completed and signed according to the instructions contained in the letter. The letter of transmittal and any other documents required by the letter of transmittal must be delivered to the exchange agent by mail, facsimile, hand delivery or overnight carrier. In addition, you must deliver the outstanding notes to the exchange agent or comply with the procedures for guaranteed delivery. See "The Exchange Offer--Procedures for Tendering Outstanding Notes" for more information. 4 Do not send letters of transmittal and certificates representing outstanding notes to us. Send these documents only to the exchange agent. See "The Exchange Offer--Exchange Agent" for more information. Special Procedures for Beneficial Owners......... If you are the beneficial owner of book-entry interests and your name does not appear on a security position listing of DTC as the holder of the book-entry interests or if you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the book-entry interest or outstanding notes in the exchange offer, you should contact the person in whose name your book-entry interests or outstanding notes are registered promptly and instruct that person to tender on your behalf. Withdrawal Rights........... You may withdraw the tender of your outstanding notes at any time prior to 5:00 p.m., New York City time on , 2002. Federal Income Tax Considerations............ The exchange of outstanding notes will not be a taxable event for United States federal income tax purposes. Use of Proceeds............. We will not receive any proceeds from the issuance of exchange notes pursuant to the exchange offer. We will pay all of our expenses incident to the exchange offer. Exchange Agent.............. U.S. Bank Trust National Association is serving as the exchange agent in connection with the exchange offer. Regulatory Issues........... We are not aware of any federal or state regulatory requirements or approvals other than the effectiveness of this Registration Statement that must be complied with or obtained in connection with the exchange offer. 5 Summary of Terms of the Exchange Notes The form and terms of the exchange notes are the same as the form and terms of the outstanding notes, except that the exchange notes will be registered under the Securities Act. As a result, the exchange notes will not bear legends restricting their transfer and will not contain the registration rights and liquidated damage provisions contained in the outstanding notes. The exchange notes represent the same debt as the outstanding notes. Both the outstanding notes and the exchange notes are governed by the same indentures. We use the term "notes" in this prospectus to collectively refer to the outstanding notes and the exchange notes. Issuer...................... Terra Capital, Inc., a Delaware corporation Securities.................. $200.0 million in principal amount of 12.875% Senior Secured Notes due 2008 Maturity.................... October 15, 2008 Interest.................... Annual rate: 12.875%. Payment frequency: every six months on April 15 and October 15. First payment: April 15, 2002. Ranking..................... The exchange notes will be entitled to be paid first out of the proceeds of the collateral securing the notes and the guarantees. Our revolving credit facility is secured by substantially all of the assets of Terra Industries and its subsidiaries (other than real property, machinery and equipment and other assets constituting collateral for the notes), including: . inventory, accounts receivable and cash and cash equivalents; . equity interests in our subsidiaries, other than the limited partnership interests in Terra Nitrogen Company, L.P., which secure the notes, and the general partnership interests in Terra Nitrogen Company, L.P. and Terra Nitrogen, Limited Partnership; and . certain intercompany notes issued to Terra Capital by Terra Nitrogen, Limited Partnership and Terra Nitrogen (U.K.) Ltd., secured by substantially all of the assets of Terra Nitrogen, Limited Partnership, Terra Nitrogen Company, L.P., Terra Nitrogen (U.K.) Ltd. and Terra International (Canada) Inc. (other than real property, machinery and equipment and other assets constituting collateral for the intercompany notes pledged to secure the notes). The lenders under our revolving credit facility are entitled to be paid first out of the proceeds of the collateral securing the revolving credit facility. At June 30, 2001, after giving effect to the sale of the outstanding notes and related transactions as described in "Use of Proceeds," we would have had $70.5 million outstanding under our revolving credit facility and the borrowers under our credit facility would have been able to borrow up to an additional $86.9 million in the aggregate, subject to our borrowing base limitation. 6 The notes and the guarantees rank equally with existing and future unsubordinated obligations of Terra Capital and the guarantors with respect to any assets that have not been pledged to any creditor. The notes and the guarantees are effectively subordinated to the debt and other obligations of any of our subsidiaries that are not guarantors, except to the extent that assets of such subsidiary secure the intercompany notes referred to above under "--Collateral." If Terra Capital or a guarantor incurs any debt in the future that expressly provides that it is subordinated to the notes or the guarantee of that guarantor, the notes or that guarantee, as applicable, will rank senior to that debt. Guarantees.................. The notes are guaranteed by Terra Industries Inc. and its wholly owned U.S. subsidiaries (other than Terra Capital). Terra Nitrogen, Limited Partnership, Terra Nitrogen Company, L.P. and our foreign subsidiaries do not guarantee the notes. Collateral.................. The notes and the guarantees are secured by a first priority security interest in the following: . our ownership or leasehold interest in substantially all real property, machinery and equipment owned or leased by Terra Capital and the guarantors; . limited partnership interests in Terra Nitrogen Company, L.P. owned by Terra Capital or any guarantor; and . certain intercompany notes issued to Terra Capital by Terra Nitrogen, Limited Partnership and Terra Nitrogen (U.K.) Ltd., secured by substantially all interests of Terra Nitrogen, Limited Partnership, Terra Nitrogen Company, L.P., Terra Nitrogen (U.K.) Ltd. and Terra International (Canada) Inc. in real property, machinery and equipment. Optional Redemption......... We have the option to redeem the notes at any time at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption, plus a "make-whole" premium. The "make-whole" premium is based on a discount rate equal to the yield on a comparable U.S. Treasury security plus 50 basis points. Mandatory Offer to Repurchase If we experience specific kinds of changes in control, holders of the notes have the right to require us to purchase their notes, in whole or in part, at a price equal to 101% of the principal amount, plus any accrued interest to the date of purchase. Covenants................... The indenture governing the notes contains certain covenants that limit, among other things, our ability and the ability of our restricted subsidiaries to: . incur additional debt; . pay dividends on common stock of Terra Industries Inc. or repurchase shares of such common stock; . make investments (other than in Terra Capital or any guarantor); 7 . use assets as security in other transactions; . sell any of our principal production facilities or sell other assets outside the ordinary course of business; . enter into transactions with affiliates; . limit dividends or other payments by our restricted subsidiaries to us; . enter into sale and leaseback transactions; . engage in other businesses; or . sell all or substantially all of our assets or merge with or into other companies These covenants are subject to a number of important exceptions and qualifications. For more details, see "Description of the Notes--Certain Covenants." You should refer to the section entitled "Risk Factors" for an explanation of certain risks of participating in the exchange offer. 8 RISK FACTORS You should carefully consider the following factors and the other information contained in, or incorporated by reference into, this prospectus. Risks Associated with the Exchange Offer Because there is no public market for the notes, you may not be able to resell your notes. The exchange notes will be registered under the Securities Act, but will constitute a new issue of securities with no established trading market, and if a liquid trading market in the exchange notes does not develop, then your ability to sell, and the price at which you will be able to sell, your notes may be impaired. If a trading market were to develop, the exchange notes might trade at higher or lower prices than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar debentures and our financial performance. We understand that the initial purchasers presently intend to make a market in the notes. However, they are not obligated to do so, and any market-making activity with respect to the notes may be discontinued at any time without notice. In addition, any market-making activity will be subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act"), and may be limited during the exchange offer or the pendency of an applicable shelf registration statement. If an active trading market for the notes does not develop or is illiquid, you may not be able to resell your notes. In addition, any outstanding note holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For a description of these requirements, see "Exchange Offer; Registration Rights." Your outstanding notes will not be accepted for exchange if you fail to follow the exchange offer procedures. We will issue new notes pursuant to this exchange offer only after a timely receipt of your outstanding notes, a properly completed and duly executed letter of transmittal and all other required documents. Delivery of outstanding notes may also be made by book-entry transfer in accordance with ATOP. Therefore, if you want to tender your outstanding notes, please allow sufficient time to ensure timely delivery. If we do not receive your outstanding notes, letter of transmittal and other required documents by the expiration date of the exchange offer, we will not accept your outstanding notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange. If there are defects or irregularities with respect to your tender of outstanding notes, we will not accept your outstanding notes for exchange. If you do not exchange your outstanding notes, your outstanding notes will continue to be subject to the existing transfer restrictions and you may be unable to sell your outstanding notes. We did not register the outstanding notes, nor do we intend to do so following the exchange offer. Outstanding notes that are not tendered will therefore continue to be subject to the existing transfer restrictions and may be transferred only in limited circumstances under the securities laws. If you do not exchange your outstanding notes, you will not have any further right to have your outstanding notes registered under the federal 9 securities laws. As a result if you hold outstanding notes after the exchange offer, you may be unable to sell your outstanding notes. Risks Relating to the Notes Our substantial indebtedness could impair our financial health and prevent us from fulfilling our obligations under the notes. We have a significant amount of debt. The following chart shows important credit statistics and is presented assuming we had completed the sale of the outstanding notes and the related transactions as described in "Use of Proceeds" on September 30, 2001 and applied the proceeds as described herein:
Pro Forma at September 30, 2001 ---------------------------- Terra Capital Terra Industries Consolidated Consolidated ------------- ---------------- (dollars in millions) Total debt............................................ $270.3 $470.3 Stockholder's/Stockholders' equity.................... $402.8 $539.8 Total debt to stockholder's/stockholders' equity ratio 0.67x 0.87x
On a pro forma basis, Terra Capital's ratio of earnings to fixed charges for the year ended December 31, 2000 would have been 1.20x. On a pro forma basis, Terra Industries' earnings for the year ended December 31, 2000 would have been insufficient to cover fixed charges by $14.3 million. On a pro forma basis, Terra Capital's and Terra Industries' earnings for the nine months ended September 30, 2001 would have been insufficient to cover fixed charges by $62.5 million and $80.0 million, respectively. Our high level of debt and our debt service obligations could: . make it more difficult for us to satisfy our obligations with respect to the notes; . reduce the amount of money available to finance our operations, capital expenditures and other activities; . increase our vulnerability to economic downturns and industry conditions; . limit our flexibility in responding to changing business and economic conditions, including increased competition and demand for new products and services; . place us at a disadvantage when compared to our competitors that have less debt; and . limit our ability to borrow additional funds. We may incur substantial additional debt in the future, and we may do so in order to finance future acquisitions and investments. The terms of the indenture governing the notes permit us and our subsidiaries to incur such debt. Adding more debt to our current debt levels could intensify risks related to leverage that we now face. The indenture also permits us to incur certain additional debt that may be secured by our assets to the extent such assets do not constitute collateral for the notes. The ability of the trustee to foreclose on secured property may be limited. Bankruptcy law could prevent the trustee from possessing and disposing of the collateral upon the occurrence of an event of default under the indenture governing the notes if a bankruptcy proceeding is commenced by or against us or the guarantors before the trustee possesses and disposes of the collateral. Under bankruptcy law, secured creditors such as the holders of the notes are prohibited from possessing their security from a debtor in a bankruptcy case, or from disposing of security possessed from such debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use the collateral (and the proceeds, products, rents or profits of such collateral) so long as the secured creditor is given 10 "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral. The court may find "adequate protection" if the debtor pays cash or grants additional security for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term "adequate protection" and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the notes could be delayed following commencement of a bankruptcy case, whether or when the trustee could repossess or dispose of the collateral or whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of "adequate protection." In addition, the trustee may need to evaluate the impact of potential liabilities before determining to foreclose on secured property because lenders that hold a security interest in real property may be held liable under environmental laws for the costs of remediating or preventing releases or threatened releases of hazardous substances at the secured property. In this regard, the trustee may decline to foreclose on secured property or exercise remedies available if it does not receive indemnification to its satisfaction from the holders of the notes. Finally, the trustee's ability to foreclose on the collateral on your behalf may be subject to perfection issues, the consent of third parties, prior liens and practical problems associated with the realization of the trustee's security interest in the collateral. Proceeds from any sale of the collateral upon foreclosure may be insufficient to repay the notes in full. Our obligation to make payments on the notes is secured only by the collateral described in this prospectus. The net proceeds from a sale of the collateral securing the notes may not be sufficient to repay all of the notes following a foreclosure upon such collateral or a liquidation of our assets. If the net proceeds received from the sale of the collateral (after payment of any expenses relating to the sale thereof) were insufficient to pay all amounts due with respect to the notes, you would, to the extent of such insufficiency, have only an unsecured claim against our remaining assets. Federal and state statutes allow courts, under specific circumstances, to void subsidiary guarantees of the notes. The issuance of the subsidiary guarantees of the notes may be subject to review under U.S. federal bankruptcy law and comparable provisions of state or foreign fraudulent conveyance laws if a bankruptcy or reorganization case or lawsuit is commenced by or on behalf of a subsidiary guarantor's unpaid creditors. Generally speaking and depending upon the specific law applicable to the situation, if a court were to find in such a bankruptcy or reorganization case or lawsuit that, at the time the subsidiary guarantor issued the guarantee of the notes: . it issued the guarantee to delay, hinder or defraud present or future creditors; or . it received less than reasonably equivalent value or fair consideration for issuing the guarantee and at the time it issued the guarantee: --it was insolvent or rendered insolvent by reason of issuing the guarantee, or --it was engaged, or about to engage, in a business or transaction for which its assets, after giving effect to its potential liability under the guarantee, constituted unreasonably small capital to carry on its business, or --it intended to incur, or believed that it would incur, debts beyond its ability to pay as they mature, then the court could void the obligations under the guarantee of the notes, subordinate the guarantee of the notes to that subsidiary guarantor's other obligations or take other action detrimental to holders of the notes. If that occurs, the notes could become structurally subordinated to other obligations of the subsidiary guarantor. 11 The measures of insolvency for purposes of fraudulent conveyance laws vary depending upon the law of the jurisdiction that is being applied in any proceeding to determine whether a fraudulent conveyance had occurred. Generally, however, a person would be considered insolvent if, at the time it incurred the debt: . the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or . it could not pay its debts as they become due. We cannot be certain what standard a court would use to determine whether a subsidiary guarantor was solvent at the relevant time, or, regardless of the standard that the court uses, that the issuance of the guarantee of the notes would not be voided or the guarantee of the notes would not be subordinated to a subsidiary guarantor's other debt. If such a case were to occur, a guarantee could also be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the subsidiary guarantor, the guarantee was incurred for less than fair consideration. A significant change in ownership may not trigger an offer to purchase requirement under the change of control provisions of the indenture, and even if it did, we may not be able to effect such purchase. Under the indenture governing the notes, a change of control is deemed to have occurred when, among other things, a person or group becomes the beneficial owner of 50% or more of the common stock of Terra Industries. Our principal stockholder, Anglo American plc, currently owns 49.5% of the common stock of Terra Industries, but has publicly announced its intention to dispose of its interest. Such disposition, even to a single person or group, would not by itself trigger the change of control provisions of the indenture. If we do undergo a change of control as defined in the indenture, we will be required to offer to purchase the notes for a price equal to 101% of their principal amount, plus accrued interest to the purchase date. In addition, a change of control as defined in the Indenture would constitute an event of default under our revolving credit facility, giving rise to a right of acceleration by the lenders thereunder. Our revolving credit facility and any future debt that we incur may also contain restrictions on repurchases in the event of a change of control or similar event. For example,under our current revolving credit facility, we are not permitted 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 notes except for regularly scheduled payments of principal and interest in respect thereof required pursuant to the Indenture. If a change of control were to occur, we may not have sufficient funds to pay our senior creditors and the purchase price of the outstanding notes tendered, and we expect that we would require third-party financing to do so. However, we may not be able to obtain such financing on favorable terms, or at all. The change of control provisions may not protect you in a transaction in which we incur a large amount of debt, including a reorganization, restructuring, merger or other similar transaction, if the transaction does not involve a shift in voting power or beneficial ownership large enough to trigger a change of control as defined in the indenture governing the notes. See "Description of the Notes--Change of Control." An active liquid trading market for the notes may not develop. Prior to the offering, there has been no public market for the notes. The notes are a new class of securities which have never been traded. Each initial purchaser has informed us that it intends to make a market in the notes. However, no initial purchaser is obligated to do so, and may discontinue such market making at any time without notice. Moreover, the initial purchasers' market making activities will be subject to limits imposed by the Securities Act or the Exchange Act during the pendency of any exchange offer described under "Exchange Offer; Registration Rights." If an active trading market for the notes does not develop or is not sustained, you may not be able to sell your notes. 12 Historically, the market for non-investment grade debt has been highly volatile in terms of price. It is possible that the market for the notes and the exchange notes will also be volatile. This volatility in price may affect your ability to resell your notes or exchange notes or the timing of their sale. Risks Relating to Our Business A substantial portion of our operating expense is related to the cost of natural gas, and an increase in such cost, that is either unexpected or not accompanied by increases in selling prices of our products, could result in reduced profit margins and lower production of our products. The principal raw material used to produce nitrogen products and methanol is natural gas. Natural gas costs in 2000 comprised about 49% of total costs and expenses for our North American nitrogen products business, 23% of total costs and expenses for our U.K. nitrogen products business and 66% of total costs and expenses for our methanol business. A significant increase in the price of natural gas that is not hedged or recovered through an increase in the price of our related nitrogen and methanol products could result in reduced profit margins and lower production of our products. In particular, price volatility in North American natural gas markets prompted industry-wide curtailment of both nitrogen fertilizer and methanol production in 2000. During 2000, we produced only 89% and 76% of our total ammonia and methanol capacity, respectively, because of plant shutdowns due to high natural gas costs. Declines in the prices of our products may reduce our profit margins. Prices for nitrogen products are influenced by the global supply and demand conditions for ammonia and other nitrogen-based products. Long-term demand is affected by population growth and rising living standards that determine food consumption. Short-term demand is affected by world economic conditions and international trade decisions. Supply is affected by increasing worldwide capacity and the increasing availability of nitrogen product exports from major producing regions such as the former Soviet Union, Canada, the Middle East, Trinidad and Venezuela. A substantial amount of new ammonia capacity is expected to be added abroad in the foreseeable future. If industry oversupply occurs, as is common in commodity businesses, the price at which we sell our nitrogen products may decline, which could result in reduced profit margins and lower production of our products. For example, as a result of adverse price and cost conditions, we suspended production of ammonia and urea at our Blytheville, Arkansas facility in June 2001. We reopened our Blytheville, Arkansas facility on September 28, 2001, and resumed full production on September 30, 2001. In addition, in early January 2001, due to unprecedented natural gas prices of nearly $10.00/MMBtu, we idled most of our North American production for most of that month. Also in response to natural gas costs, we idled our Blytheville, Arkansas and Beaumont, Texas plants and parts of our Verdigris, Oklahoma plant for the month of December 2000 and our Blytheville, Arkansas plant from June through mid-August 2000. In response to low methanol prices, we idled our Beaumont, Texas facility for two months during the first quarter of 1999. Fluctuations in the selling price and production cost of methanol may reduce our profit margins. Methanol is used as a raw material in the production of formaldehyde, MTBE, acetic acid and numerous other chemical derivatives. The price of methanol is influenced by the supply and demand for each of these products. Environmental initiatives to ban or reduce the use of MTBE as a fuel additive, such as those currently underway in California, could significantly affect demand for methanol. If demand for methanol decreases, our revenues derived from methanol sales may decrease, which could have a material adverse effect on our business, financial condition and results of operations. Recent reductions to methanol production in North America due to increasing natural gas costs, have resulted in higher methanol prices, but those price increases have not always covered and may not in the future cover the costs of production (including the cost of natural gas). Methanol prices may be adversely affected by two new significant plants--one in Equatorial Guinea, which has recently started production, and one in Argentina, which is expected to begin production before the end of 2002. Our products are subject to price volatility resulting from periodic imbalances of supply and demand, which may cause the results of our operations to fluctuate. Historically, prices for our products have reflected frequent changes in supply and demand conditions. Changes in supply result from capacity additions or reductions and from changes in inventory levels. Demand for 13 these products is dependent, in part, on demand for crop nutrients by the global agricultural industry. Periods of high demand, high capacity utilization and increasing operating margins tend to result in new plant investment and increased production until supply exceeds demand, followed by periods of declining prices and declining capacity utilization until the cycle is repeated. In addition, markets for our products are affected by general economic conditions. As a result of periodic imbalances of supply and demand, product prices have been volatile, with significant price changes from one growing season to the next. Fertilizer products are global commodities and can be subject to intense price competition from both domestic and foreign sources. During periods of oversupply, the price at which we sell our products may be depressed and this could have a material adverse effect on our business, financial condition and results of operations. Our products are global commodities and we face intense competition from other fertilizer producers. Fertilizers are global commodities, and customers, including end-users, dealers and other crop nutrients producers and distributors, base their purchasing decisions principally on the delivered price and availability of the product. We compete with a number of U.S. producers and producers in other countries, including state-owned and government-subsidized entities. In particular, supply from the former Soviet Union countries tends to be lower-priced than our products, creating downward pressure on prices. Some of our principal competitors may have greater total resources and may be less dependent on earnings from fertilizer sales than we are. Our inability to compete successfully could result in the loss of customers, which could adversely affect our sales and profitability. Our business is subject to risks related to weather conditions. Adverse weather conditions may have a significant effect on demand for our nitrogen products. Weather conditions that delay or intermittently disrupt field work during the planting and growing season may cause agricultural customers to use different forms of nitrogen fertilizer, which may adversely affect demand for the forms that we sell. Weather conditions following harvest may delay or eliminate opportunities to apply fertilizer in the fall. Weather can also have an adverse effect on crop yields, which lowers the income of growers and could impair their ability to pay for our products. Due to the seasonality of our nitrogen business, our inability to accurately predict future demand could result in lower sales revenue relating to under supply of inventory or higher costs and lower sales prices relating to excess inventory. The nitrogen business is seasonal, with more nitrogen products used during the second quarter in conjunction with spring planting activity than in any other quarter. Due to the seasonality of the business and the relatively brief periods during which products can be used by customers, we and/or our customers generally build inventories during the second half of the year in order to ensure timely product availability during the peak sales season. This increases our working capital needs during this period as we fund these inventory increases and support customer credit terms. If we underestimate future demand, our profitability will be negatively impacted and our customers may acquire products from our competitors. If we overestimate future demand, we will be left with excess inventory that will have to be stored (and our results of operations will be negatively impacted by any related storage costs) and/or we may liquidate such additional inventory and/or products at sales prices below our costs. We are substantially dependent on our manufacturing facilities and any disruption in their operation could result in a reduction of our production capacity and could cause us to incur substantial expenditures. Our manufacturing operations may be subject to significant interruption if one or more of our facilities were to experience a major accident or were damaged by severe weather or other natural disaster. An explosion at our Port Neal, Iowa facility in 1994 required us to completely rebuild that facility. Also, a mechanical outage at our Courtright, Ontario facility in April 2001 required us to shut down that facility for approximately two months. 14 We may be adversely affected by environmental regulations to which we are subject. Our operations are subject to various federal, state and local environmental, safety and health laws and regulations, including laws relating to air quality, hazardous and solid wastes and water quality. Our operations in Canada are subject to various federal and provincial regulations regarding such matters, including the Canadian Environmental Protection Act administered by Environment Canada, and the Ontario Environmental Protection Act administered by the Ontario Ministry of the Environment. Our U.K. operations are subject to similar regulations under a variety of acts governing hazardous chemicals, transportation and worker health and safety. We are also involved in the manufacture, handling, transportation, storage and disposal of materials that are or may be classified as hazardous or toxic by federal, state, provincial or other regulatory agencies. If such materials have been or are disposed of at sites that are targeted for investigation and/or remediation by regulatory agencies, we may be responsible under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") or analogous laws for all or part of the costs of such investigation and/or remediation, and damages to natural resources. We have received notices from regulatory agencies that we are a potentially responsible party at certain sites under CERCLA or other environmental cleanup laws. We have also been subject to related claims by private parties alleging property damage and possible personal injury arising from contamination relating to discontinued operations. We may receive such notices or claims in the future. Some of these sites may require us to expend significant amounts for investigation and/or cleanup or other costs. We may be required to install additional air and water quality control equipment, such as low nitrous oxide burners, scrubbers, ammonia sensors and continuous emission monitors at certain of our facilities in order to maintain compliance with applicable environmental requirements. Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at ongoing operations, which will be charged against income from future operations. Present and future environmental laws and regulations applicable to our operations, more vigorous enforcement policies and discovery of unknown conditions may require substantial expenditures. Government regulation and agricultural policy may reduce the demand for our products. Existing and future government regulations and laws may greatly influence the demand for our products. Existing and future agricultural and/or environmental laws and regulations may impact the amounts and locations of fertilizer application and may lead to decreases in the quantity of fertilizer applied to crops. Any such decrease in the demand for fertilizer products could result in lower unit sales and lower selling prices for our fertilizer products. U.S. governmental policies affecting the number of acres planted, the level of grain inventories, the mix of crops planted and crop prices could also affect the demand and selling prices of our products. We are subject to risks associated with our international operations. During 2000, we derived approximately 30% of our net sales from outside of the United States. In particular, revenues from the United Kingdom accounted for more than 85% of our international sales. International sales are subject to numerous risks and uncertainties, including: difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations; unexpected changes in regulatory environments; currency fluctuations; tax rates that may exceed those in the U.S. and earnings that may be subject to withholding requirements; and the imposition of tariffs, exchange controls or other restrictions. Our success will be dependent, in part, on our ability to anticipate and effectively manage these and other risks that we face. 15 Because a stockholder owns 49.5% of our common stock, it or its transferee may be able to determine the outcome of actions by Terra Industries that are risky to noteholders. Anglo American plc currently owns 49.5% of the common stock of Terra Industries. It has publicly announced its intent to dispose of its interest. Anglo American, or a transferee of all or a substantial portion of its interest, may have the ability to determine the outcome of actions requiring the approval of the stockholders of Terra Industries, including the election of directors. The interests of Anglo American, or any such transferee, as an equityholder, may be in conflict with your interests as a noteholder. In addition, Anglo American, or such transferee, may have an interest in pursuing acquisitions, divestitures or other transactions that it believes enhances the value of its equity investment, although such transactions may involve risks to you as a holder of notes. 16 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS You should carefully review the information contained in this prospectus. In this prospectus, we state our beliefs of future events and of our future financial performance. In some cases, you can identify those so-called "forward-looking statements" by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of those words and other comparable words. You should be aware that those statements are only our predictions. Actual events or results may differ materially. In evaluating those statements, you should specifically consider various factors, including the following risks discussed elsewhere in this prospectus: . the cost of natural gas; . other factors outside of our control that determine the cost and price of our products; . risks associated with weather and seasonality; . the competitive and cyclical nature of our business; . environmental and other government regulation; . risks associated with international operations; . political and macroeconomic risks; and . the possibility of goodwill write-offs. These and other factors may cause our actual results to differ materially from any of our forward-looking statements. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement. USE OF PROCEEDS This exchange offer is intended to satisfy certain of our obligations under the Registration Rights Agreement. We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes contemplated in this prospectus, we will receive outstanding notes in like principal amount, the form and terms of which are the same as the form and terms of the new notes, except as otherwise described in this prospectus. The outstanding notes surrendered in exchange for new notes will be retired and canceled. Accordingly, no additional debt will result from the exchange. We have agreed to bear the expenses of the exchange offer. The net proceeds from the sale of the outstanding notes, before deducting estimated expenses and the initial purchaser's discount were approximately $198.9. We used the net proceeds, as well as initial borrowings under our revolving credit facility and existing cash balances, to repay $99.4 million on our secured term loan facilities due January 2, 2003, to repay $158.8 million on Terra Industries' 10.75% senior notes due September 30, 2003, and to pay $11.0 million for related fees and expenses. Concurrent with issuance of the outstanding notes, we amended our revolving credit facility to, among other things, increase the facility to $175 million and extend its term to June 30, 2005. The amended revolving credit facility requires us to generate operating cash flows (as defined) for the most recent twelve month period of $40 million at December 31, 2001 and March 31, 2002; $60 million due at June 30, 2002; $75 million at September 30, 2002 and $90 million at December 31, 2002 and at each quarter end thereafter. The amended revolving credit facility also allows us to prepay our senior notes due 2005, or purchase outstanding minority interests in Terra Nitrogen Company, L.P., subject to liquidity restrictions and minimum earnings levels. The liquidity restrictions require us to have an available borrowing base under the revolving credit facility of $125 million following any such prepayment or purchase. Minimum earnings levels require that twelve month cash flows (as defined in the credit agreement) at the most recent quarter end exceed $125 million when the prepayment or purchase occurs. Annual prepayments or purchases are limited to the amount our average available borrowing base exceeds $125 million from June 15 through July 15 of each year, or $75 million, whichever is less. No prepayment or purchases are permitted until after July 15, 2002. At September 30, 2001, our available borrowing base was approximately $60 million, adjusted for the effects of the issuance of the outstanding notes and the amended revolving credit facility. 17 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following consolidated selected financial and operating data should be read in conjunction with the consolidated financial statements and related notes of Terra Industries included elsewhere in this prospectus and/or incorporated herein by reference. The consolidated selected financial data as of December 31, 1996, 1997, 1998, 1999 and 2000 and for the years then ended were derived from the audited consolidated financial statements and notes thereto of Terra Industries. The consolidated selected financial data as of and for each of the nine months ended September 30, 2001 and 2000 were derived from the unaudited condensed consolidated financial statements of Terra Industries, which contain all adjustments necessary, in the opinion of management, to summarize the financial position and results of operations for the periods presented. You should not regard the results of operations for the nine months ended September 30, 2001 to be indicative of the results that may be expected for the full year.
Nine Months Ended Year Ended December 31, September 30, ------------------------------------------------------ -------------------- 1996 1997 1998 1999(1) 2000 2000 2001 --------- --------- --------- --------- ---------- --------- --------- (dollars in thousands except per share amounts) Consolidated Statement of Operations Data: Revenues: Nitrogen products............................. $ 714,839 $ 686,553 $ 816,014 $ 745,901 $ 916,959 $ 688,174 $ 661,065 Methanol...................................... 132,533 180,646 96,547 85,178 136,781 96,995 141,011 Other......................................... (5,568) (4,409) (2,593) 2,364 9,270 5,960 1,001 --------- --------- --------- --------- ---------- --------- --------- Total revenues............................. 841,804 862,790 909,968 833,443 1,063,010 791,129 803,077 Costs and expenses: Cost of sales: Nitrogen...................................... 432,603 514,792 744,474 752,960 846,725 636,401 659,266 Methanol...................................... 110,247 113,384 101,681 96,629 119,486 85,174 144,384 Other......................................... (9,460) (13,216) (9,369) (8,528) 5,502 5,562 (586) --------- --------- --------- --------- ---------- --------- --------- 533,390 614,960 836,786 841,061 971,713 727,137 803,064 Selling, general and administrative expenses(2): Nitrogen...................................... 26,973 21,491 32,211 36,850 41,595 32,455 22,952 Methanol...................................... 3,766 3,600 2,757 3,759 4,900 2,260 2,709 Other......................................... 23,860 25,964 28,000 14,815 1,995 (392) 593 --------- --------- --------- --------- ---------- --------- --------- 54,599 51,055 62,968 55,424 48,490 34,323 26,254 Product claim costs(3)........................ -- -- -- -- -- -- 14,023 --------- --------- --------- --------- ---------- --------- --------- Total costs and expenses................... 587,989 666,015 899,754 896,485 1,020,203 761,460 843,341 Income (loss) from operations: Nitrogen products, net(4)..................... 255,263 150,270 39,329 (43,909) 28,639 19,318 (35,176) Methanol...................................... 18,520 63,662 (7,891) (15,210) 12,395 9,561 (6,082) Other......................................... (19,968) (17,157) (21,224) (3,923) 1,773 790 994 --------- --------- --------- --------- ---------- --------- --------- Total income (loss) from operations........ 253,815 196,775 10,214 (63,042) 42,807 29,669 (40,264) Income (loss) from continuing operations......... 113,022 179,515 (43,331) (70,098) (10,182) (14,251) (50,961) Basic earnings (loss) per share from continuing operations...................................... $ 1.47 $ 2.43 $ (0.58) $ (0.94) $ (0.14) $ (0.19) $ (0.68) Diluted earnings (loss) per share from continuing operations...................................... 1.45 2.39 (0.58) (0.94) (0.14) (0.19) (0.68) Dividends per share.............................. .15 .18 .20 .07 -- -- -- Selected Financial Data: EBITDA(5): Nitrogen...................................... $258,468 $178,138 $ 111,629 $ 32,261 $ 113,121 $ 72,157 $ 25,721 Methanol...................................... 31,386 76,689 (12,947) (11,938) 25,352 19,547 3,387 Other......................................... (15,439) (13,371) (14,925) 9,882 13,856 18,752 31,989 --------- --------- --------- --------- ---------- --------- --------- Total...................................... 274,415 241,456 83,757 30,205 152,329 110,456 61,097 Depreciation and amortization.................... 65,085 72,314 101,053 101,588 114,901 86,187 84,870 Capital expenditures............................. 158,339 48,417 55,327 51,899 12,219 11,019 11,136 Ratio of earnings to fixed charges(6)............ 2.5x 4.1x (5) (5) (5) (5) (5)
18
December 31, September 30, ------------------------------------------------------ ---------------------- 1996 1997 1998 1999(1) 2000 2000 2001 ---------- ---------- ---------- ---------- ---------- ----------- ---------- (dollars in thousands) Condensed Balance Sheet Data: Cash and short-term investments... $ 100,742 $ 180,062 $ 141,643 $ 9,790 $ 101,425 $ 101,916 $ 44,132 Working capital(7)................ 187,157 302,724 262,283 152,959 199,008 185,072 165,835 Property, plant and equipment, net 740,622 1,032,958 1,017,885 997,801 902,801 919,258 849,188 Excess of cost over net assets of acquired businesses(8)........... 277,815 284,197 272,553 253,162 231,372 235,924 211,098 Total assets...................... 1,740,547 2,177,157 2,037,768 1,601,445 1,512,552 1,547,616 1,398,365 Long term debt.................... 407,312 506,568 497,030 480,461 473,354 475,069 459,029 Total debt........................ 523,644 506,568 497,030 486,461 473,354 475,069 459,029 Total stockholders' equity........ 606,092 790,329 747,852 657,002 610,797 605,840 541,560
- -------- (1) On June 30, 1999, we sold our distribution business segment for $485 million. Net sales proceeds were used to redeem outstanding minority interests in one of our subsidiaries, fund termination of our accounts receivable securitization program and repay outstanding borrowings under our revolving credit facility. (2) Selling, general and administrative expenses are allocated to business segments based on an approach that assigns expenses directly to a segment whenever possible. Most expenses, however, are assigned based on individual cost causative factors or on a general allocation formula that is based equally on sales volumes, headcount and asset values for each segment. General overhead expenses that had been assigned to our Distribution business segment prior to its sale in June 1999, are included as a component of selling, general and administrative expenses assigned to the other business segment. (3) Product claim costs relate to a $14.0 million pretax charge in the second quarter of 2001 to reflect the estimated value of claims, plus interest and attorneys' fees, associated with recalls of beverages containing carbon dioxide tainted with benzene. See ''Management's Discussion and Analysis of Financial Condition and Results of Operations.'' (4) The nine months ended September 30, 2001, reflects $14.0 million of product claim costs. (5) EBITDA is defined as net income (loss) from continuing operations before extraordinary items, excluding interest expense and income, income tax benefit or expense, depreciation, amortization, insurance settlement gains and costs and product claim costs. Insurance settlements relate to $6.0 million of legal and other professional fees we incurred in 2000, and a recovery of $163.4 million we received in 1997, in connection with insurance proceeds and a lawsuit to recover costs from the 1994 explosion at our Port Neal, Iowa facility. EBITDA is not a measure of performance under generally accepted accounting principles and should not be used in isolation or as a substitute for net income, cash flows from operating activities or other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. EBITDA information is included because we believe that certain investors may use it as supplemental information to evaluate a company's ability to service debt. The definition of EBITDA used in this offering memorandum may not be comparable to the definition of EBITDA used by other companies. (6) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as income (loss) from continuing operations before income taxes, minority interest in consolidated subsidiaries and income or loss from equity investments plus fixed charges and distributed income of equity investments, less preference security dividends of Terra Nitrogen Company, L.P. to minority interests. Fixed charges mean interest expense plus amortization of debt expense, one-third of rental expense on operating leases (representing that portion of rental expense deemed to be attributed to interest) and preference security dividends of Terra Nitrogen Company, L.P. to minority interests. Earnings were insufficient to cover fixed charges by $57.8 million, $107.6 million, $12.0 million, $13.0 million and $77.8 million for the years ended December 31, 1998, 1999 and 2000, and the nine months ended September 30, 2000 and 2001, respectively. (7) Current assets minus current liabilities. (8) Statement of Financial Accounting Statements No. 142, ''Goodwill and Other Intangible Assets,'' requires that goodwill and other intangible assets with indefinite lives not be amortized but rather be tested for impairment on an annual basis. We will adopt SFAS No. 142 in the first quarter of 2002. The historical impact of SFAS No. 142 would have been to decrease net loss for the nine months ended September 30, 2001 and 2000 by $9.9 million and $11.6 million. We have not quantified the impact that the adoption of the standard will have for our future reporting periods. Such adoption could result in the write-off in the first quarter of 2002 of a substantial portion of the goodwill on our balance sheet, currently classified as ''Excess of cost over net assets of acquired businesses.'' 19 THE EXCHANGE OFFER Exchange Offer; Registration Rights We entered into the Registration Rights Agreement pursuant to which we agreed, for the benefit of the holders of the notes: (1) to file with the SEC, within 60 days following the time of delivery of the outstanding notes (the "Closing"), a registration statement (the "Exchange Offer Registration Statement") under the Securities Act relating to an exchange offer (the "exchange offer") pursuant to which notes substantially identical to the notes (except that such notes will not contain terms with respect to liquidated damages described below or transfer restrictions), the exchange notes, would be offered in exchange for the then outstanding notes tendered at the option of the holders thereof; (2) to use our reasonable best efforts to cause the exchange offer Registration Statement to become effective within 120 days following the Closing; and (3) to use our reasonable best efforts to effect the exchange offer within 150 days after the Closing. We further agreed to commence the exchange offer promptly after the Exchange Offer Registration Statement has become effective, hold the offer open for at least 20 business days, and exchange the exchange notes for all outstanding notes validly tendered and not withdrawn before the expiration of the offer. Under existing SEC interpretations, the exchange notes would in general be freely transferable after the exchange offer without further registration under the Securities Act, except that broker-dealers ("Participating Broker-Dealers") receiving exchange notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of those exchange notes. The SEC has taken the position that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the exchange notes (other than a resale of an unsold allotment from the original sale of the notes) by delivery of the prospectus contained in the Exchange Offer Registration Statement. Under the Registration Rights Agreement, we are required to allow Participating Broker-Dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the Exchange Offer Registration Statement in connection with the resale of such exchange notes. The Exchange Offer Registration Statement will be kept effective as long as necessary after the exchange offer has been consummated in order to permit resales of exchange notes acquired by broker-dealers in after-market transactions. Each holder of outstanding notes that wishes to exchange such notes for exchange notes in the exchange offer will be required to represent that any exchange notes to be received by it will be acquired in the ordinary course of its business, that at the time of the commencement of the exchange offer it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes and that it is not us or an affiliate of ours. However, if: (1) the existing SEC interpretations are changed such that we cannot effect the exchange offer or the exchange offer is not for any reasons consummated within 150 days following the Closing; or (2) an initial purchaser so requests under certain circumstances; or (3) the exchange offer is not available to any holder of the notes; or (4) an initial purchaser does not receive freely tradeable exchange notes in exchange for notes that are part of an unsold allotment, we will, in lieu of (or, in the case of clause (2), in addition to) effecting registration of exchange notes, use our reasonable best efforts to cause a registration statement under the Securities Act relating to a shelf registration of the notes for resale by holders or, in the case of clause (2), of the notes held by such initial purchaser for resale by such initial purchaser (the "Resale Registration") to become effective and to remain effective until two years following the effective date of such registration statement or such shorter period that will terminate when all the securities covered by the shelf registration statement have been sold pursuant to the shelf registration statement. 20 We will, in the event of the Resale Registration, provide to the holder or holders of the applicable notes copies of the prospectus that is a part of the registration statement filed in connection with the Resale Registration, notify such holder or holders when the Resale Registration for the applicable notes has become effective and take certain other actions as are required to permit unrestricted resales of the applicable notes. A holder of notes that sells such notes pursuant to the Resale Registration generally would be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification obligations). Although we intend to file the registration statement previously described, we cannot assure you that the registration statement will be filed or, if filed, that it will become effective. In the event that: (1) we have not filed the registration statement relating to the exchange offer (or, if applicable, the Resale Registration) within 60 days following the Closing; or (2) such registration statement has not become effective within 120 days following the Closing; or (3) the exchange offer has not been consummated within 150 days after the Closing; or (4) any registration statement required by the Registration Rights Agreement is filed and declared effective but shall thereafter cease to be effective (except as specifically permitted therein) without being succeeded immediately by an additional registration statement filed and declared effective (any such event referred to in clauses (1) through (4), the "Registration Default"), then we will pay liquidated damages in cash in an amount equal to 0.25% per annum of the aggregate principal amount of notes for the period from the occurrence of the Registration Default until such time as no Registration Default is in effect, which rate shall increase by 0.25% per annum for each subsequent 90-day period during which such Registration Default continues up to a maximum of 1.00% per annum ("Liquidated Damages"). The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to all the provisions of the Registration Rights Agreement, a copy of which will be available upon request to us. The outstanding notes and the exchange notes are considered collectively to be a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and Offers to Purchase, and for purposes of the provisions described under the caption "Description of the Notes" all references therein to "notes" shall be deemed to refer collectively to outstanding notes and any exchange notes, unless the context otherwise requires. Terms of the Exchange Offer Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes accepted in the exchange offer. Any holder may tender some or all of its outstanding notes pursuant to the exchange offer. However, outstanding notes may be tendered only in integral multiples of $1,000. The form and terms of the exchange notes are the same as the form and terms of the outstanding notes except that: (1) the exchange notes bear a Series B designation and a different CUSIP Number from the outstanding notes; 21 (2) the exchange notes have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof; and (3) the holders of the exchange notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the outstanding notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated. The exchange notes will evidence the same debt as the outstanding notes and will be entitled to the benefits of the indenture. As of the date of this prospectus, $200,000,000 aggregate principal amount of the outstanding notes were outstanding. We have fixed the close of business on , 2002 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Holders of outstanding notes do not have any appraisal or dissenters' rights under the General Corporation Law of Delaware, or the indenture relating to the notes in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder. We will be deemed to have accepted validly tendered outstanding notes when, as and if we have given oral or written notice thereof to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us. If any tendered outstanding notes are not accepted for exchange because of an invalid tender, the occurrence of specified other events set forth in this prospectus or otherwise, the certificates for any unaccepted outstanding notes will be returned, without expense, to the tendering holder thereof promptly after the expiration date of the exchange offer. Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See "--Fees and Expenses." Expiration Date; Extensions; Amendments The term "expiration date" will mean 5:00 p.m., New York City time, on , 2002, unless we, in our sole discretion, extend the exchange offer, in which case the term "expiration date" will mean the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice and will mail to the registered holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We reserve the right, in our sole discretion, (1) to delay accepting any outstanding notes, to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under "--Conditions" have not been satisfied, by giving oral or written notice of any delay, extension or termination to the exchange agent or (2) to amend the terms of the exchange offer in any manner. Any delay in acceptance, extension, termination or amendment will be followed promptly by oral or written notice thereof to the registered holders. Interest on the Exchange Notes The exchange notes will bear interest from their date of issuance. Holders of outstanding notes that are accepted for exchange will receive, in cash, accrued interest thereon to, but not including, the date of issuance of 22 the exchange notes. Such interest will be paid with the first interest payment on the exchange notes on April 15, 2002. Interest on the outstanding notes accepted for exchange will cease to accrue upon issuance of the exchange notes. Interest on the exchange notes is payable semi-annually on each April 15 and October 15, commencing on April 15, 2002. Procedures for Tendering Only a holder of outstanding notes may tender outstanding notes in the exchange offer. To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the letter of transmittal or transmit an agent's message in connection with a book-entry transfer, and mail or otherwise deliver the letter of transmittal or the facsimile, together with the outstanding notes and any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. To be tendered effectively, the outstanding notes, letter of transmittal or an agent's message and other required documents must be completed and received by the exchange agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Delivery of the outstanding notes may be made by book-entry transfer in accordance with the procedures described below. Confirmation of the book-entry transfer must be received by the exchange agent prior to the expiration date. The term "agent's message" means a message, transmitted by a book-entry transfer facility to, and received by, the exchange agent forming a part of a confirmation of a book entry, which states that the book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the outstanding notes that the participant has received and agrees: (1) to participate in ATOP; (2) to be bound by the terms of the letter of transmittal; and (3) that we may enforce the agreement against the participant. By executing the letter of transmittal or sending an agent's message, each holder will make to us the representations set forth above in the third paragraph under the heading "--Exchange Offer; Registration Rights." The tender by a holder and our acceptance thereof will constitute agreement between the holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal or agent's message. The method of delivery of outstanding notes and the letter of transmittal or agent's message and all other required documents to the exchange agent is at the election and sole risk of the holder. As an alternative to delivery by mail, holders may wish to consider overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No letter of transmittal or old Notes should be sent to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions for them. Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner's behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member of the Medallion System unless the outstanding notes tendered pursuant to the letter of transmittal are tendered (1) by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal or (2) for the account of a member firm of the Medallion System. In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by a member firm of the Medallion System. 23 If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed in this prospectus, the outstanding notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as the registered holder's name appears on the outstanding notes with the signature thereon guaranteed by a member firm of the Medallion System. If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, offices of corporations or others acting in a fiduciary or representative capacity, the person signing should so indicate when signing, and evidence satisfactory to us of its authority to so act must be submitted with the letter of transmittal. We understand that the exchange agent will make a request promptly after the date of this prospectus to establish accounts with respect to the outstanding notes at DTC for the purpose of facilitating the exchange offer, and subject to the establishment thereof, any financial institution that is a participant in DTC's system may make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent's account with respect to the outstanding notes in accordance with DTC's procedures for the transfer. Although delivery of the outstanding notes may be effected through book-entry transfer into the exchange agent's account at DTC, unless an agent's message is received by the exchange agent in compliance with ATOP, an appropriate letter of transmittal properly completed and duly executed with any required signature guarantee and all other required documents must in each case be transmitted to and received or confirmed by the exchange agent at its address set forth below on or prior to the expiration date, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under the procedures. Delivery of documents to DTC does not constitute delivery to the exchange agent. All questions as to the validity, form, eligibility, including time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all outstanding notes not properly tendered or any outstanding notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right in our sole discretion to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within the time we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent nor any other person will incur any liability for failure to give the notification. Tenders of outstanding notes will not be deemed to have been made until the defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, promptly following the expiration date. Guaranteed Delivery Procedures Holders who wish to tender their outstanding notes and (1) whose outstanding notes are not immediately available, (2) who cannot deliver their outstanding notes, the letter of transmittal or any other required documents to the exchange agent or (3) who cannot complete the procedures for book-entry transfer, prior to the expiration date, may effect a tender if: (A) the tender is made through a member firm of the Medallion System; (B) prior to the expiration date, the exchange agent receives from a member firm of the Medallion System a properly completed and duly executed Notice of Guaranteed Delivery by facsimile transmission, mail or hand delivery setting forth the name and address of the holder, the certificate number(s) of the outstanding notes and the principal amount of outstanding notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after 24 the expiration date, the letter of transmittal or facsimile thereof together with the certificate(s) representing the outstanding notes or a confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC, and any other documents required by the letter of transmittal will be deposited by the member firm of the Medallion System with the exchange agent; and (C) the properly completed and executed letter of transmittal of facsimile thereof, as well as the certificate(s) representing all tendered outstanding notes in proper form for transfer or a confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC, and all other documents required by the letter of transmittal are received by the exchange agent within five New York Stock Exchange trading days after the expiration date. Upon request to the exchange agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above. Withdrawal of Tenders Except as otherwise provided in this prospectus, tenders of outstanding notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw a tender of outstanding notes in the exchange offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in this prospectus prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. Any notice of withdrawal must: (1) specify the name of the person having deposited the outstanding notes to be withdrawn; (2) identify the outstanding notes to be withdrawn, including the certificate number(s) and principal amount of the outstanding notes, or, in the case of outstanding notes transferred by book-entry transfer, the name and number of the account at DTC to be credited; (3) be signed by the holder in the same manner as the original signature on the letter of transmittal by which the outstanding notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the outstanding notes register the transfer of the outstanding notes into the name of the person withdrawing the tender; and (4) specify the name in which any outstanding notes are to be registered, if different from that of the person depositing the outstanding notes to be withdrawn. All questions as to the validity, form and eligibility, including time of receipt, of the notices will be determined by us, whose determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no exchange notes will be issued with respect thereto unless the outstanding notes so withdrawn are validly retendered. Any outstanding notes which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to the holder promptly after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following one of the procedures described above under "--Procedures for Tendering" at any time prior to the expiration date. Conditions Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange notes for, any outstanding notes, and may terminate or amend the exchange offer as provided in this prospectus before the expiration date, if: (1) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our reasonable judgment, might materially impair 25 our ability to proceed with the exchange offer or any material adverse development has occurred in any existing action or proceeding with respect to us or any of our subsidiaries; or (2) any law, statute, rule, regulation or interpretation by the Staff of the SEC is proposed, adopted or enacted, which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us; or (3) any governmental approval has not been obtained, which approval we will, in our reasonable discretion, deem necessary for the consummation of the exchange offer as contemplated by this prospectus. If we determine in our reasonable discretion that any of the conditions are not satisfied prior to the expiration date, we may (1) refuse to accept any outstanding notes and return all tendered outstanding notes to the tendering holders, (2) extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders to withdraw the outstanding notes (see "--Withdrawal of Tenders") or (3) waive the unsatisfied conditions with respect to the exchange offer and accept all properly tendered outstanding notes which have not been withdrawn. Exchange Agent U.S. Bank Trust National Association has been appointed as exchange agent for the exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for Notice of Guaranteed Delivery should be directed to the exchange agent addressed as follows: By Registered or Certified Mail: Overnight Courier and By Hand Delivery after 4:30 p.m., New York City time, on the expiration date:
U.S. Bank Trust National Association U.S. Bank Trust National Association 180 East Fifth Street 180 East Fifth Street St. Paul, MN 55101 St. Paul, MN 55101 Attention: Specialized Finance Department--4th Floor Attention: Specialized Finance Department--4th Floor By Hand Prior to 4:30 p.m., New York City time: Facsimile Transmission: U.S. Bank Trust National Association (651) 244-1537 180 East Fifth Street Attention: Specialized Finance Department St. Paul, MN 55101 Attention: Specialized Finance Department--4th Floor For Information Telephone: (800) 934-6802
Delivery to an address other than set forth above will not constitute a valid delivery. Fees and Expenses We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by our and our affiliates' officers and regular employees. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses incurred in connection with these services. 26 We will pay the cash expenses to be incurred in connection with the exchange offer. Such expenses include fees and expenses of the exchange agent and trustee, accounting and legal fees and printing costs, among others. Accounting Treatment The exchange notes will be recorded at the same carrying value as the outstanding notes as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. The expenses of the exchange offer will be deferred and charged to expense over the term of the exchange notes. Consequences of Failure to Exchange The outstanding notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, the outstanding notes may be resold only: (1) to us upon redemption thereof or otherwise; (2) so long as the outstanding notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act, which other exemption is based upon an opinion of counsel reasonably acceptable to us; (3) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act; or (4) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Resale of the Exchange Notes With respect to resales of exchange notes, based on interpretations by the Staff of the SEC set forth in no-action letters issued to third parties, we believe that a holder or other person who receives exchange notes, whether or not the person is the holder, other than a person that is our affiliate within the meaning of Rule 405 under the Securities Act, in exchange for outstanding notes in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the exchange notes, will be allowed to resell the exchange notes to the public without further registration under the Securities Act and without delivering to the purchasers of the exchange notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. However, if any holder acquires exchange notes in the exchange offer for the purpose of distributing or participating in a distribution of the exchange notes, the holder cannot rely on the position of the Staff of the SEC expressed in the no-action letters or any similar interpretive letters, and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. 27 DESCRIPTION OF THE NOTES General The 12.875% Senior Secured Notes due 2008 (the "Notes") were issued under an indenture dated as of October 10, 2001 (the "Indenture"), among Terra Capital, Inc., as issuer ("Issuer"), Terra Industries Inc., as parent guarantor ("Parent"), certain subsidiaries of Parent as additional guarantors and U.S. Bank Trust National Association, as trustee (the "Trustee"). As used below in this "Description of the Notes" section, "Issuer" refers to Terra Capital, Inc. only. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Security Documents referred to under the caption "--Collateral" define the terms of the security interests that secure the Notes. The following description is a summary of the material provisions of the Indenture. It does not restate the Indenture and the Security Documents in their entirety. We urge you to read the Indenture and the Security Documents because they, and not this description, define your rights as holders of the Notes. Copies of the Indenture and the Security Documents are available upon written request to Issuer as described below under "Where You Can Find More Information." Definitions of certain terms are set forth under "--Certain Definitions." Principal of the Notes is payable, and the Notes may be exchanged or transferred, at the office or agency of Issuer in the Borough of Manhattan, City of New York, which, unless otherwise provided by Issuer, will be the offices of the Trustee. Payment of interest will be made by check mailed to the addresses of the noteholders as such addresses appear in the Note register or, at the election of any noteholder in the manner prescribed by the Indenture, by wire transfer of immediately available funds. The Notes have been issued only in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000. Terms of the Notes The Notes are limited to $200.0 million aggregate principal amount and mature on October 15, 2008. The Notes bear interest at the rate per annum shown on the cover page of this prospectus from the Issue Date, or from the most recent date to which interest has been paid or provided for, payable semi-annually on April 15 and October 15 of each year, commencing April 15, 2002, to holders of record at the close of business on the immediately preceding April 1 and October 1, respectively. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. Ranking The Notes are senior secured obligations and are entitled to be paid first out of the proceeds, if any, of the Collateral. The lenders under the Credit Facility are entitled to be paid first out of the proceeds, if any, of the collateral securing the Credit Facility. The Credit Facility is secured by the following assets (the "Excluded Assets"), as well as the Second Lien Collateral: (1) all inventory, accounts and cash and cash equivalents (other than cash and cash equivalents constituting Collateral) of Parent and its Subsidiaries; (2) an intercompany note issued to Issuer by TNLP under which approximately $15.4 million was outstanding on the Issue Date, an intercompany note issued to Issuer by Terra Canada under which 28 approximately $40.0 million was outstanding on the Issue Date, and an intercompany note issued to Issuer by Terra UK under which approximately $35.0 million was outstanding on the Issue Date; and (3) all other assets of Parent or any of its Subsidiaries other than . the partnership interests in TNCLP and the general partnership interest in TNLP, in each case, so long as TNCLP is not a Wholly Owned Subsidiary; . any item or type of asset constituting Collateral; and . any Fixed Assets of Parent or any Restricted Subsidiary. At June 30, 2001 after giving effect to the sale of the outstanding notes and related transactions, there would have been $70.5 million outstanding under the Credit Facility and the borrowers under the Credit Facility would have been able to borrow up to an additional $86.9 million in the aggregate, subject to the borrowing base limitation therein. The Notes and the Guarantees rank equally with existing and future unsubordinated obligations of Issuer and the Guarantors with respect to any assets that have not been pledged to any creditor. The Notes and the Guarantees are effectively subordinated to the obligations of any Subsidiary of Parent that is not a Guarantor except to the extent that assets of such Subsidiary secure a Fixed Asset Intercompany Note, as described below under "--Collateral--Fixed Asset Intercompany Notes." If Issuer or a Guarantor incurs any Indebtedness in the future that provides by its terms that it is subordinated to the Notes or the Guarantee of that Guarantor, the Notes or that Guarantee, as applicable, will rank senior to that Indebtedness. Optional Redemption The Notes are redeemable, in whole at any time or in part from time to time, at the option of Issuer, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to the sum of: . 100% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, plus . the Make Whole Amount, if any. If less than all the Notes issued under the Indenture are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption. Guarantees Parent and each of its Wholly Owned Subsidiaries that is a Domestic Subsidiary delivered a Guarantee on the Issue Date. Pursuant to the Guarantees, the Guarantors fully and unconditionally guarantee, on a senior secured basis, all Obligations of Issuer under the Indenture and the Notes. Newly formed or acquired Domestic Subsidiaries are required to become Guarantors, as described under "--Certain Covenants--Additional Guarantees." 29 Each Guarantee (other than the Guarantee by Parent and each other parent company of Issuer) is limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering such Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Guarantor that makes a payment or distribution under a Guarantee is entitled to a contribution from each other Guarantor in an amount pro rata, based on the net assets of each Guarantor. See "Risk Factors--Federal and state statutes allow courts, under specific circumstances, to void subsidiary guarantees of the notes." The following Subsidiaries of Parent are not Guarantors: . Terra Canada and Terra UK, which are Foreign Subsidiaries, and . TNCLP and TNLP, so long as TNCLP is not a Wholly Owned Subsidiary. However, the Fixed Assets of these Subsidiaries has been pledged to secure their respective obligations under the Terra UK Intercompany Note and the TNLP Intercompany Note, which was assigned to the Trustee as Collateral, as described below. The Guarantee of any Restricted Subsidiary will be automatically and unconditionally released and discharged upon either of the following: . any sale, exchange or transfer by Parent or any Restricted Subsidiary to any Person that is not an affiliate of Parent of all of the Capital Stock of, or all or substantially all the assets of, such Restricted Subsidiary, which sale, exchange or transfer is made in accordance with the provisions of the Indenture; or . the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the provisions of the Indenture; provided, in each such case, Parent has delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent provided for in the Indenture relating to such transactions have been complied with and that such release is authorized and permitted under the Indenture. Collateral Description of Collateral The Notes and the Guarantees are secured by a first priority Lien (subject to exceptions specified in the applicable Security Documents or the Indenture) on the following items or types of assets, in each case, whether now owned or hereafter acquired: (1) all right, title and interest (including, without limitation, fee and leasehold estates) of Issuer or any Guarantor in and to any and all material parcels of real property, together with all easements, hereditaments and appurtenances relating thereto, and all other improvements, accessions, alterations, replacements and repairs thereto and all leases and rents and other income, issues or profits derived from the foregoing interests; (2) all right, title and interest of Issuer or any Guarantor in and to any and all equipment, machinery, furniture, furnishings and fixtures, together with all additions, accessions, improvements, alterations, replacements and repairs thereto; (3) all intellectual property (including, without limitation, any trademarks, service marks, patents, copyrights, trade secrets and other proprietary information) material to the development, construction, maintenance, ownership, use or operation of any or all of the foregoing; (4) all general intangibles to the extent relating primarily to the development, construction, maintenance, ownership, use or operation of any or all of the foregoing, including, without limitation, all material contract rights, agreements, licenses and permits entered into by, or granted to, Issuer or any 30 Guarantor in connection with the development, construction, maintenance, ownership, use or operation of any or all of the foregoing; (5) all of the limited partnership interests issued by TNCLP and owned by Issuer or any Guarantor and all general intangibles to the extent relating primarily to such interests; (6) the Terra UK Intercompany Note and the guarantee thereof by Terra Canada, the TNLP Intercompany Note and the guarantee thereof by TNCLP, all other Fixed Asset Intercompany Notes issued and outstanding pursuant to the first bullet under clause (8) of the definition of "Permitted Investments," all security interests securing any or all of the foregoing and all other supporting obligations relating thereto, in each case, together with all general intangibles to the extent relating primarily thereto; (7) all instruments, documents, deposit accounts (including, without limitation, the Collateral Account) and all cash and cash equivalents deposited therein, investment property, letters of credit, letter-of-credit rights and chattel paper, in each case, to the extent that (x) any amounts payable under or in connection with any and all of the items or types of assets described in clauses (1) through (6) of this paragraph are evidenced by the items or types of assets described in this clause (7) or (y) the items or types of assets described in this clause (7) constitute proceeds of any and all of the items or types of assets described in clauses (1) through (6) of this paragraph; (8) all books and records to the extent relating primarily to any or all of the foregoing; and (9) all proceeds and products of any or all of the foregoing, including, without limitation, proceeds of insurance, condemnation awards, tax refunds and other similar property or claims with respect to any or all of the foregoing. In addition, the Notes and the Guarantees are secured by a second priority Lien on the following items or types of assets, in each case, whether now owned or hereafter acquired: (1) all promissory notes issued pursuant to the second bullet under clause (8) of the definition of "Permitted Investments," and all supporting obligations relating thereto, in each case, together with all general intangibles to the extent relating primarily thereto; (2) all instruments, documents, deposit accounts and all cash and cash equivalents deposited therein, investment property, letters of credit, letter of credit rights and chattel paper, in each case, to the extent that (x) any amounts payable under or in connection with any of the items or types of assets described in clause (1) of this paragraph are evidenced by the items or types of assets described in this clause (2) or (y) the items or types of assets described in this clause (2) constitute proceeds of any items or types of assets described in clause (1) of this paragraph; (3) all books and records to the extent relating primarily to any and all of the foregoing; and (4) all proceeds and products of any or all of the foregoing. The Collateral does not include the Excluded Assets. Fixed Asset Intercompany Notes Issuer, through a wholly owned U.S. subsidiary, has outstanding a $100.0 million loan to Terra UK. This intercompany loan is evidenced by the Terra UK Intercompany Note and fully and unconditionally guaranteed, on a senior secured basis, by Terra Canada. The Terra UK Intercompany Note and the guarantee thereof are secured by the Fixed Assets of Terra UK and Terra Canada, respectively. Issuer used a portion of the proceeds of the sale of the outstanding notes to fund an intercompany loan of $8.2 million to TNLP. Proceeds of the intercompany loan were used to repay existing debt of TNLP. This intercompany loan is evidenced by the TNLP Intercompany Note and fully and unconditionally guaranteed, on a 31 senior secured basis, by TNCLP. The TNLP Intercompany Note and the guarantee thereof are secured by the Fixed Assets of TNLP and any Fixed Assets of TNCLP, respectively. As a result of the pledge of the Terra UK Intercompany Note and the related guarantee described above, the Notes are indirectly secured by the Fixed Assets of Terra UK and Terra Canada, but only to the extent of the amount of the Terra UK Intercompany Note. After the Terra UK Intercompany Note and the related guarantee are repaid, the Fixed Assets of Terra UK and Terra Canada will be available to satisfy their other obligations, including their obligations under the Credit Facility. As a result of the pledge of the TNLP Intercompany Note and the related guarantee described above, unless the circumstances described below under "--TNCLP and TNLP" occur, the Notes are indirectly secured by the Fixed Assets of TNLP and TNCLP, if any, but only to the extent of the amount of the TNLP Intercompany Note. After the TNLP Intercompany Note and the related guarantee are repaid, the Fixed Assets of TNLP and any Fixed Assets of TNCLP will be available to satisfy their other obligations, including their obligations under the Credit Facility. In addition, any Subsidiary that is not a Guarantor may issue a Fixed Asset Intercompany Note under the circumstances specified under the first bullet under clause (8) of the definition of "Permitted Investments." TNCLP and TNLP If TNCLP becomes a Wholly Owned Subsidiary: . the limited partnership interests of TNCLP will cease to constitute Collateral under the Indenture, and will instead be pledged to the Bank Collateral Agent under the Credit Facility; . TNCLP and TNLP will become Guarantors and grant a first priority Lien on all their Fixed Assets, which will become Collateral under the Indenture and the applicable Security Documents; and . the TNLP Intercompany Note may be repaid. General The Collateral and the Second Lien Collateral were pledged to the Trustee for the benefit of the Trustee and the noteholders pursuant to the Security Documents. If the Notes become due and payable prior to the Stated Maturity of the Notes for any reason or are not paid in full at the Stated Maturity of the Notes and after any applicable grace period has expired, the Trustee will have the right to foreclose upon the Collateral in accordance with instructions from the holders of a majority in aggregate principal amount of the Notes or, in the absence of such instructions, in such manner as the Trustee deems appropriate in its absolute discretion. Proceeds from the sale of Collateral will be applied by the Trustee first to pay the expenses of any foreclosure and fees and other amounts then payable to the Trustee under the Indenture and the Security Documents and, thereafter, to pay all amounts owing to the holders under the Indenture and the Notes (with any remaining proceeds to be payable to Issuer or as may otherwise be required by law). The Trustee will not have the right to foreclose upon the Second Lien Collateral and proceeds from the sale thereof will be available to the Trustee only after all Obligations under the Credit Facility have been paid in full. There can be no assurance that the proceeds, if any, from the sale of the Collateral and Second Lien Collateral would be sufficient to satisfy payments due on the Notes. By its nature, some or all of the Collateral and Second Lien Collateral will be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral or Second Lien Collateral can be sold in a short period of time, if salable. 32 The collateral release provisions of the Indenture and the Security Documents may permit the release of certain of the Collateral without substitution of collateral of equal value under certain circumstances. See "--Possession, Use and Release of Collateral." To the extent that third parties enjoy Liens permitted by the Security Documents and the Indenture, such third parties will have rights and remedies with respect to the asset subject to such Liens that, if exercised, could adversely affect the value of the Collateral and the ability of the Trustee or the noteholders to realize or foreclose on the Collateral. In addition, the ability of the Holders to realize upon the Collateral may be subject to certain bankruptcy law limitations in the event of a bankruptcy. See "--Certain Bankruptcy Limitations." Intercreditor Arrangements The Trustee and the Bank Collateral Agent under the Credit Facility entered into an access, use and intercreditor agreement (the "Intercreditor Agreement"). The Intercreditor Agreement provides, among other things, that (1) the Trustee and the Bank Collateral Agent under the Credit Facility will provide notices to each other with respect to the occurrence of an event of default under the Indenture or the Credit Facility, as the case may be; (2) for a period of up to 45 days following the date of receipt by the Bank Collateral Agent under the Credit Facility of written notice from the Trustee directing the removal by the Bank Collateral Agent of the collateral securing the Credit Facility, the Bank Collateral Agent may enter and use the properties on which the Trustee has Liens and the equipment located on those properties constituting Collateral to the extent necessary to complete the manufacture of inventory, collect accounts and repossess, remove, sell or otherwise dispose of collateral securing the Credit Facility; and (3) in general, the Trustee will have no rights with respect to the Second Lien Collateral except to receive the proceeds therefrom after all Obligations under the Credit Facility have been paid. Certain Bankruptcy Limitations Bankruptcy law could significantly impair the right of the Trustee to repossess and dispose of, or otherwise exercise remedies in respect of, the Collateral upon the occurrence of an Event of Default if a bankruptcy proceeding is commenced by or against Issuer before the Trustee repossesses and disposes of, or otherwise exercises remedies in respect of, the Collateral. Under the Bankruptcy Code, a secured creditor such as the Trustee or noteholders is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, so long as the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances. In view of the lack of a precise definition of the term "adequate protection" and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments with respect to the Notes could be delayed following commencement of a bankruptcy case, whether or when the Trustee could repossess or dispose of the Collateral or whether or to what extent holders of the Notes would be compensated for any delay in payment or loss of value of the Collateral. Change of Control If a Change of Control occurs, each noteholder will have the right to require Issuer to purchase all or a portion (equal to $1,000 or an integral multiple thereof) of such holder's Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the date fixed for redemption), in accordance with the provisions of the next paragraph. 33 Within 30 days following any Change of Control, Issuer shall mail a notice to each noteholder, with a copy to the Trustee, stating: . that a Change of Control has occurred and that such noteholder has the right to require Issuer to purchase such holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest on an interest payment date that is on or prior to the date fixed for purchase); . the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and . the instructions as determined by Issuer, consistent with the covenant described hereunder, that a noteholder must follow in order to have its Notes purchased. Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to the Indenture. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, Issuer shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the covenant of the Indenture by virtue of this compliance. The occurrence of a Change of Control would constitute a default under the Credit Facility. In addition, Issuer's ability to purchase the Notes for cash may be limited by Issuer's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any purchases required in connection with a Change of Control. Issuer's failure to purchase the Notes in connection with a Change of Control would result in a default under the Indenture, which would, in turn, constitute a default under the Credit Facility. The definition of Change of Control includes a phrase relating to the sale, assignment, transfer, lease, conveyance or other disposition of "all or substantially all" of the properties or assets of Terra Industries and certain subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a noteholder to require us to repurchase its notes as a result of a sale, assignment, transfer, lease, conveyance or other disposition of less than all of the assets of Terra Industries and certain subsidiaries taken as a whole to another person or group may be uncertain. Certain Covenants The Indenture contains certain covenants, including, among others, the following: Limitation on Incurrence of Indebtedness Parent will not, and will not permit any Restricted Subsidiary to, incur, directly or indirectly, any Indebtedness; provided that Issuer or any Guarantor may incur Indebtedness if, immediately after giving effect to such incurrence, the Consolidated Coverage Ratio is at least 2.0 to 1.0 (this proviso, the "Coverage Ratio Exception"). The foregoing paragraph will not prohibit incurrence of the following Indebtedness (collectively, "Permitted Indebtedness"): (1) the Notes issued on the Issue Date and any Guarantees; (2) Indebtedness of Parent or any Restricted Subsidiary to the extent outstanding on the Issue Date (other than Indebtedness under the Credit Facility); (3) Indebtedness of Parent or any Restricted Subsidiary under the Credit Facility in an aggregate amount at any time outstanding pursuant to this clause (3) (including amounts outstanding on the date of the Indenture) not to exceed the greater of . $225.0 million; and . the sum of (x) 70% of the net book value of the inventory of Parent and the Restricted Subsidiaries and (y) 85% of the net book value of the accounts receivable of Parent and the Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP; 34 (4) Refinancing Indebtedness in respect of Indebtedness incurred pursuant to the Coverage Ratio Exception, clause (1) of this paragraph (including the Exchange Notes and any Guarantees thereof), clause (2) of this paragraph (other than any Indebtedness owed to Parent or any of its Subsidiaries) or this clause (4); (5) Indebtedness owed by Parent or any Restricted Subsidiary to Parent or any Restricted Subsidiary; provided that . any such Indebtedness owed by Issuer shall be subordinated by its terms to the prior payment in full in cash of all Obligations with respect to the Notes, and any such Indebtedness owed by any Guarantor (other than to Issuer or any other Guarantor) shall be subordinated by its terms to the prior payment in full in cash of all Obligations with respect to the Guarantee of such Guarantor; and . if such Indebtedness is held by a Person other than Parent or any Restricted Subsidiary, Parent or such Restricted Subsidiary shall be deemed to have incurred Indebtedness not permitted by this clause (5); (6) (x) the guarantee by Issuer or any Guarantor of Indebtedness of Issuer or a Guarantor and (y) the guarantee by any Restricted Subsidiary that is not a Guarantor of Indebtedness of any other Restricted Subsidiary that is not a Guarantor; provided that, in each case, the Indebtedness being guaranteed is incurred pursuant to the Coverage Ratio Exception or is Permitted Indebtedness; (7) Hedging Obligations; (8) industrial revenue bonds or similar tax-exempt Indebtedness, Purchase Money Indebtedness and Capital Lease Obligations of Parent or any Restricted Subsidiary incurred to finance the acquisition, construction or improvement of any assets (including capital expenditures of Parent or any Restricted Subsidiary), and Refinancings thereof, in an aggregate amount not to exceed $15.0 million at any time outstanding; (9) Indebtedness of any Foreign Subsidiary in an aggregate amount not to exceed $15.0 million at any time outstanding; (10) Indebtedness represented by letters of credit in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements of Parent or any Restricted Subsidiary in the ordinary course of business; (11) customary indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the acquisition or disposition of any assets of Parent or any Restricted Subsidiary (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); (12) obligations in respect of performance bonds and completion, guarantee, surety and similar bonds in the ordinary course of business; (13) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds; provided that such Indebtedness is extinguished within five business days of incurrence; (14) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (15) Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business; (16) Indebtedness the net proceeds of which are used solely to pay Federal, state or local taxes arising as a result of any recharacterization of TNCLP or TNLP as an association taxable as a corporation as a result of changes after the Issue Date in law, regulation or the interpretation thereof by governmental authorities; 35 (17) guarantees by Terra UK of Terra UK Customer Debt; provided that . the aggregate principal amount of the Indebtedness 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 . the aggregate principal amount of Terra UK Customer Debt guaranteed by Terra UK at any time during any fiscal year shall not exceed (x) (Pounds)15,000,000 minus (y) the aggregate amount of payments made by Terra UK under all such guarantees during such fiscal year; and (18) additional Indebtedness in an aggregate amount not to exceed $30.0 million at any time outstanding. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (18) above or is entitled to be incurred pursuant to the Coverage Ratio Exception, Issuer shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described (except that Indebtedness outstanding under the Credit Facility on the Issue Date shall be deemed to have been incurred under clause (3) above) and may later reclassify such item into any one or more of the categories of Permitted Indebtedness described in clauses (3) through (18) above (provided that at the time of reclassification it meets the criteria in such category or categories). The maximum amount of Indebtedness that Parent or any Restricted Subsidiary may incur pursuant to this covenant will not be deemed to be exceeded solely as the result of fluctuations in the exchange rates of currencies. In determining the amount of Indebtedness outstanding under one of the clauses above, the outstanding principal amount of any particular Indebtedness of any Person shall be counted only once and any obligation of such Person or any other Person arising under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded so long as it is permitted to be incurred by the Person or Persons incurring such obligation. Notwithstanding the foregoing, Parent will not, and will not permit Issuer or any other Guarantor to, incur any Indebtedness that purports to be by its terms (or by the terms of any agreement or instrument governing such Indebtedness) subordinated to any other Indebtedness of Parent, Issuer or of such other Guarantor, as the case may be, unless such Indebtedness is also by its terms made subordinated to the Notes or the Guarantee of such Guarantor, as applicable, to at least the same extent as such Indebtedness is subordinated to such other Indebtedness of Issuer or such Guarantor, as the case may be. Limitation on Restricted Payments Parent will not, and will not permit any Restricted Subsidiary to, directly or indirectly, declare or make a Restricted Payment if (1) a Default has occurred and is continuing or would result therefrom; (2) Issuer could not incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; or (3) the aggregate amount of such Restricted Payment together with all other Restricted Payments (the amount of any Restricted Payments made in assets other than cash to be valued at its Fair Market Value) declared or made since the Issue Date (other than any Restricted Payment described in clause (2), (3), (4), (5), (6) or (8) of the next paragraph) would exceed the sum (the "Basket") of: (a) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from October 1, 2001 to the end of the most recent fiscal quarter prior to the date of such Restricted Payment for which internal financial statements are available (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus (b) the aggregate Net Cash Proceeds received by Parent from the issuance and sale (other than to a Subsidiary of Parent) of Qualified Stock subsequent to the Issue Date; plus 36 (c) the amount by which Indebtedness or Disqualified Stock incurred or issued subsequent to the Issue Date is reduced on Parent's consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of Parent) into Qualified Stock (less the amount of any cash, or the Fair Market Value of any other asset, distributed by Parent or any Restricted Subsidiary upon such conversion or exchange); provided that such amount shall not exceed the aggregate Net Cash Proceeds received by Parent or any Restricted Subsidiary from the issuance and sale (other than to a Subsidiary of Parent) of such Indebtedness or Disqualified Stock; plus (d) to the extent not included in the calculation of the Consolidated Net Income referred to in (a), an amount equal to, without duplication: . 100% of the aggregate net proceeds (including the Fair Market Value of assets other than cash) received by Parent or any Restricted Subsidiary upon the sale or other disposition of any Investment (other than a Permitted Investment) made by Parent or any Restricted Subsidiary since the Issue Date; plus . the net reduction in Investments (other than Permitted Investments) in any Person resulting from dividends, repayments of loans or advances or other Transfers of assets subsequent to the Issue Date, in each case to Parent or any Restricted Subsidiary from such Person; plus . to the extent that the Basket was reduced as the result of the designation of an Unrestricted Subsidiary, the portion (proportionate to Parent's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is redesignated, or liquidated or merged into, a Restricted Subsidiary; provided that the foregoing shall not exceed, in the aggregate, the amount of all Investments which previously reduced the Basket. The provisions of the foregoing paragraph shall not prohibit the following: (1) dividends paid within 90 days after the date of declaration thereof if at such date of declaration such dividend would have been permitted under the Indenture; (2) any repurchase, redemption, retirement or other acquisition of Capital Stock or Subordinated Obligations made in exchange for, or out of the proceeds of the substantially concurrent issuance and sale (other than to a Subsidiary of Parent) of, Qualified Stock or, with respect to any such Subordinated Obligations, in exchange for or out of the proceeds of the substantially concurrent incurrence and sale (other than to a Subsidiary of Parent) of Refinancing Indebtedness thereof; provided that (x) no such exchange or issuance and sale shall increase the Basket and (y) no Default has occurred and is continuing or would occur as a consequence thereof; (3) the purchase, redemption, acquisition, cancellation or other retirement for a nominal value per right of any rights granted to all the holders of Common Stock of Parent pursuant to any shareholders' rights plan adopted for the purpose of protecting shareholders from unfair takeover tactics; provided that any such purchase, redemption, acquisition, cancellation or other retirement of such rights shall not be for the purpose of evading the limitations of this covenant (all as determined in good faith by the Board of Directors); (4) payments by Parent or any Restricted Subsidiary in respect of Indebtedness of Parent or any Restricted Subsidiary owed to Parent or another Restricted Subsidiary; (5) repurchases of Capital Stock deemed to occur upon the exercise of stock options or warrants if such Capital Stock represents a portion of the exercise price thereof and repurchases of Capital Stock deemed to occur upon the withholding of a portion of the Capital Stock granted or awarded to an employee to pay for the taxes payable by such employee upon such grant or award; (6) if no Default has occurred and is continuing or would occur as a consequence thereof, the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other 37 than Disqualified Stock) issued after the Issue Date; provided that, at the time of the issuance of such Designated Preferred Stock and after giving pro forma effect thereto, Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; (7) purchases of the Capital Stock, or contributions to the equity, of any Foreign Subsidiary to the extent that Investments in the form of Indebtedness advanced to such Foreign Subsidiary would, or are likely to, result in (x) any then existing Indebtedness owing by such Foreign Subsidiary to Parent or any Restricted Subsidiary being characterized as equity under the "thin capitalization" rules of the Code or under any other applicable law or (y) any similar consequences; or (8) Restricted Payments of up to $15.0 million in the aggregate since the Issue Date. Limitation on Liens Parent will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Lien of any kind on any asset of Parent or any Restricted Subsidiary (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except: (1) in the case of any asset that does not constitute Collateral or a Fixed Asset or Second Lien Collateral, Permitted Liens, unless the Notes and the Guarantees are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien; (2) in the case of any asset that constitutes Collateral or a Fixed Asset, Collateral Permitted Liens; and (3) in the case of any asset that constitutes Second Lien Collateral, Liens of the type permitted thereon to the extent and for so long as such Liens secure or are permitted to be incurred under the Credit Facility. In the case of clause (1), if the obligations so secured are subordinated by their terms to the Notes or a Guarantee, the Lien securing such obligations will also be so subordinated by its terms at least to the same extent. Limitation on Transactions with Affiliates Parent will not, and will not permit any Restricted Subsidiary to, directly or indirectly, in one transaction or series of related transactions, Transfer any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any affiliate of Parent (an "Affiliate Transaction"), unless the terms thereof are no less favorable to Parent or such Restricted Subsidiary than those that could be obtained at the time of such transaction in arm's-length dealings with a Person that is not such an affiliate. The Board of Directors must approve each Affiliate Transaction that involves aggregate payments or other assets or services with a Fair Market Value in excess of $5.0 million. This approval must be evidenced by a board resolution that states that such board has determined that the transaction complies with the foregoing provisions. If Parent or any Restricted Subsidiary enters into an Affiliate Transaction that involves aggregate payments or other assets or services with a Fair Market Value in excess of $15.0 million, then prior to the consummation of that Affiliate Transaction, Parent must obtain a favorable opinion from an Independent Financial Advisor that it has determined such Affiliate Transaction to be fair, from a financial point of view, to the noteholders, and deliver that opinion to the Trustee. The provisions of the three foregoing paragraphs will not prohibit the following: (1) transactions exclusively between or among (a) Parent and one or more Restricted Subsidiaries or (b) Restricted Subsidiaries; provided, in each case, that no affiliate of Parent (other than another Restricted Subsidiary) owns Capital Stock in any such Restricted Subsidiary; 38 (2) customary director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements, in each case approved by the Board of Directors; (3) the entering into of a tax sharing agreement, or payments pursuant thereto, between Parent and/or one or more Subsidiaries, on the one hand, and any other Person with which Parent or such Subsidiaries are required or permitted to file a consolidated tax return or with which Parent or such Subsidiaries are part of a consolidated group for tax purposes, on the other hand, which payments by Parent and the Restricted Subsidiaries are not in excess of the tax liabilities that would have been payable by them on a stand-alone basis; (4) loans and advances permitted by clause (6) of the definition of "Permitted Investments;" (5) Restricted Payments of the type described in clause (1), (2) or (3) of the definition of "Restricted Payment" and which are made in accordance with the covenant described under "--Limitation on Restricted Payments;" (6) any transaction with an affiliate where the only consideration paid by Parent or any Restricted Subsidiary is Qualified Stock; (7) the provision of management, financial and operational services by Parent and its Subsidiaries to affiliates of Parent in which Parent or any Restricted Subsidiary has an Investment and the payment of compensation for such services; provided that the Board of Directors has determined that the provision of such services is in the best interests of Parent and the Restricted Subsidiaries; (8) transactions between Parent or any Subsidiary and any Securitization Entity in connection with a Qualified Securitization Transaction, in each case provided that such transactions are not otherwise prohibited by the Indenture; (9) transactions with a Person that is an affiliate solely because Parent or any Restricted Subsidiary owns Capital Stock in such Person; provided that no affiliate of Parent (other than a Restricted Subsidiary) owns Capital Stock in such Person; or (10) purchases and sales of raw materials or inventory in the ordinary course of business on market terms. Limitation on Asset Sales This covenant does not apply to the Sale of Principal Properties, which is covered by the covenant described under "--Limitation on Sale of Principal Properties." Parent will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless: (i) Parent or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale; (ii) at least 85% of the total consideration received in such Asset Sale consists of cash, Temporary Cash Investments, assets referred to in clause (1) below (in the case of a Transfer of Collateral) or clause (2)(c) below (in the case of a Transfer of assets other than Collateral), in each case, valued at the Fair Market Value thereof, or a combination of the foregoing; and (iii) if such Asset Sale involves the Transfer of Collateral, (x) it complies with the provisions described under "--Possession, Use and Release of Collateral" and "--Asset Sale Release," (y) all consideration received in the form of cash or Temporary Cash Investments is paid directly by the purchaser of such Collateral to the Trustee for deposit into the Collateral Account, and (z) all consideration received in any other form is made subject to the Lien of the Indenture and the applicable Security Documents. 39 For purposes of clause (ii) above, the following shall be deemed to be cash: . the amount (without duplication) of any Indebtedness (other than Subordinated Obligations) of Parent or such Restricted Subsidiary that is expressly assumed by the Transferee in such Asset Sale and with respect to which Parent or such Restricted Subsidiary, as the case may be, is unconditionally released by the holder of such Indebtedness; and . the amount of any obligations received from such Transferee that are within 60 days repaid, converted into or sold or otherwise disposed of for cash or Temporary Cash Investments (to the extent of the cash or Temporary Cash Investments actually so received). If at any time any non-cash consideration received by Parent or any Restricted Subsidiary in connection with any Asset Sale is repaid, converted into or sold or otherwise disposed of for cash or Temporary Cash Investments (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion, sale or other disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this covenant. If Parent or any Restricted Subsidiary engages in an Asset Sale, Parent or a Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply an amount equal to all or any of the Net Available Proceeds therefrom as follows: (1) in the case of any Transfer of Collateral: (a) to make an investment in or expenditure for Fixed Assets that replace the assets that were the subject of the Asset Sale or in Fixed Assets that will be used in the Permitted Business, in each case, which shall be made subject to the Lien of the Indenture and the applicable Security Documents; and/or (b) to make an investment in Capital Stock of any Person that owns Fixed Assets that replace the assets that were the subject of the Asset Sale or in Fixed Assets that will be used in the Permitted Business, in each case, which Fixed Assets shall be made subject to the Lien of the Indenture and the applicable Security Documents; provided that such Person is or becomes a Guarantor and the Fair Market Value of the Fixed Assets owned by such Person is at least equal to the Fair Market Value of the Collateral Transferred; and (2) in all other cases: (a) to repay amounts owing under the Credit Facility in accordance with the Credit Facility; (b) to redeem, purchase or repay Parent's 10 1/2% senior notes due 2005 that are outstanding on the Issue Date; and/or (c) to make an investment in or expenditure for assets (including Capital Stock of any Person) that replace the assets that were the subject of the Asset Sale or in assets (including Capital Stock of any Person) that will be used in the Permitted Business. The amount of Net Available Proceeds not applied or invested as provided in this paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds equals or exceeds $15.0 million, Issuer will be required to make an offer to purchase from all noteholders an aggregate principal amount of Notes equal to the amount of such Excess Proceeds (a "Net Proceeds Offer") in accordance with the procedures set forth in the Indenture. The offer price for the Notes will be payable in cash and will be equal to 100% of the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest thereon, if any, to the date such Net Proceeds Offer is consummated (the "Offered Price"). If the aggregate Offered Price of Notes validly tendered and not withdrawn by noteholders thereof exceeds the amount of Excess Proceeds, Notes to be 40 purchased will be selected on a pro rata basis. Upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds shall be reduced to zero. To the extent that the aggregate Offered Price of Notes tendered pursuant to a Net Proceeds Offer is less than the Excess Proceeds (such shortfall constituting a "Net Proceeds Deficiency"), Issuer may use the Net Proceeds Deficiency, or a portion thereof, for general corporate purposes; provided that to the extent that all or a portion of the Net Proceeds Deficiency is comprised of proceeds from the Transfer of Collateral, such proceeds shall remain subject to the Lien of the Indenture and the applicable Security Documents. In the event of the Transfer of substantially all (but not all) of the assets of Parent and the Restricted Subsidiaries as an entirety to a Person in a transaction covered by and effected in accordance with the covenant described under "--Merger, Consolidation and Sale of Assets," the Transferee shall be deemed to have sold for cash at Fair Market Value the assets of Parent and the Restricted Subsidiaries not so Transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale (with such Fair Market Value being deemed to be Net Available Proceeds for such purpose). Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with any purchase of Notes pursuant to the Indenture. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, Issuer shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of this compliance. Limitation on Sale of Principal Properties Parent will not, and will not permit any Restricted Subsidiary (including each Principal Property Subsidiary) to, directly or indirectly, Transfer any Principal Property or any material part thereof or Transfer or issue any Capital Stock of any Principal Property Subsidiary (each, a "Sale of a Principal Property") unless: (i) Parent or such Restricted Subsidiary receives consideration at the time of such Sale of a Principal Property at least equal to the Fair Market Value of the assets included in such Sale of a Principal Property; (ii) all consideration received in the form of cash or Temporary Cash Investments is paid directly by the purchaser of such Collateral to the Trustee for deposit into the Collateral Account, and all consideration in the form of Replacement Principal Property (as defined below) is made subject to the Lien of the Indenture and the applicable Security Documents; and (iii) prior to consummating such transaction, either: (a) Parent delivers to the Trustee an officers' certificate and an opinion from a nationally recognized firm of independent accountants that the Net Available Proceeds from such proposed transaction will be sufficient at the proposed purchase date to purchase all of the outstanding Notes at the Make Whole Amount plus accrued and unpaid interest thereon to the proposed purchase date, using the Special Adjusted Treasury Rate in effect on the business day prior to the date of delivery of such certificate and opinion; or (b) 100% of the total consideration received in such Sale of a Principal Property consists of cash, Temporary Cash Investments, Replacement Principal Property (valued at the Fair Market Value thereof) or a combination of the foregoing, and Issuer delivers an opinion to the Trustee from an Independent Financial Advisor that it has determined the transaction to be fair, from a financial point of view, to the noteholders. For purposes of clause (iii) above, the following shall be deemed to be cash: . the amount (without duplication) of any Indebtedness (other than Subordinated Obligations) of Parent or such Restricted Subsidiary that is expressly assumed by the Transferee in such Sale of a Principal 41 Property and with respect to which Parent or such Restricted Subsidiary, as the case may be, is unconditionally released by the holder of such Indebtedness; and . the amount of any obligations received from such Transferee that are within 60 days repaid, converted into or sold or otherwise disposed of for cash or Temporary Cash Investments (to the extent of the cash or Temporary Cash Investments actually so received). The preceding paragraph shall not apply to any of the following: (1) any such Transfer or issuance to Issuer or any Guarantor; provided that . all Principal Property so Transferred shall remain subject to the Lien of the Indenture and the applicable Security Documents; . the Issuer or the applicable Guarantor shall expressly assume, pursuant to documentation in form and substance satisfactory to the Trustee, the performance of every obligation under the applicable Security Documents to be performed or observed by the applicable Transferor; and . the Issuer and applicable Guarantor shall cause such amendments, supplements or other instruments to be executed, filed and/or recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by or Transferred to such Person, together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the UCC; (2) any such Transfer or issuance by a Foreign Subsidiary to a Foreign Subsidiary; provided that . all Principal Property so Transferred shall remain subject to the Lien of the security documents securing the applicable Fixed Asset Intercompany Notes; . the applicable Foreign Subsidiary shall expressly assume, pursuant to documentation satisfactory to the Trustee, the performance of every obligation under the applicable Fixed Asset Intercompany Note or the guarantee thereof, as the case may be, and the security documents and other supporting documents to be performed or observed by the applicable Transferor; and . such Foreign Subsidiaries shall cause such amendments, supplements or other instruments to be filed, executed and/or recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the security documents on the collateral owned by or Transferred to such Person, together with such financing statements as may be required to perfect any security interests in such collateral; or (3) any such Transfer of Capital Stock of any Foreign Subsidiary to a Foreign Subsidiary. If at any time any non-cash consideration received by Parent or any Restricted Subsidiary in connection with any Sale of a Principal Property is repaid, converted into or sold or otherwise disposed of for cash or Temporary Cash Investments (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion, sale or other disposition shall be deemed to constitute the date of a Sale of a Principal Property hereunder and the Net Available Proceeds thereof shall be applied in accordance with this covenant. If Parent or any Restricted Subsidiary engages in a Sale of a Principal Property, Parent or a Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply an amount equal to all of the Net Available Proceeds therefrom as follows: (1) to purchase or otherwise acquire a facility of the general nature and type as the Principal Properties in existence on the Issue Date, which shall be made subject to the Lien of the Indenture and the applicable Security Documents as a "Principal Property" (a "Replacement Principal Property"); and/or 42 (2) to make an offer to purchase Notes from all holders with the amount of the Net Available Proceeds not used to purchase or otherwise acquire Replacement Principal Property. The offer price for the Notes will be payable in cash and will be equal to 100% of the principal amount of the Notes tendered pursuant to the offer, plus accrued and unpaid interest thereon, if any, to the date such offer is consummated, plus the Make Whole Amount, if any. If the aggregate price of Notes validly tendered and not withdrawn by holders thereof exceeds the amount of Net Available Proceeds not used to purchase or otherwise acquire Replacement Principal Property, Notes to be purchased will be selected on a pro rata basis. Parent or any Restricted Subsidiary may Transfer any part of a Principal Property (1) which is damaged, worn-out or obsolete or (2) no longer used or useful in the business of Parent and its Subsidiaries, which shall not constitute a Sale of Principal Property; provided that (x) in each case, such Transfer is consistent with past practice and does not significantly reduce the value or usefulness of any Principal Property and (y) in the case of clause (2) only, such Transfer shall be subject to compliance with the covenant described under "--Limitation on Asset Sales." With respect to any Sale of a Principal Property, an amount equal to any Net Available Proceeds from such Sale of a Principal Property shall, concurrently with the closing of such sale, be delivered to the Trustee for deposit into the Collateral Account pending its application to acquire a Replacement Principal Property or purchase the Notes. To the extent that funds remain after repayment of all obligations in connection with the purchase of the Notes, such excess amounts and any interest thereon shall remain subject to the Lien of Indenture and the applicable Security Documents. Pending such application of such amounts, the Trustee shall invest such amount at Issuer's direction in Temporary Cash Investments; provided that the maturity of those investments is prior to the proposed purchase date of the Notes. Limitation on Dividend and Other Restrictions Affecting Restricted Subsidiaries Parent will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to: (a) pay dividends or make any other distributions on its Capital Stock to Parent or any other Restricted Subsidiary or pay any Indebtedness owed to Parent or any other Restricted Subsidiary, (b) make any loans or advances to, or guarantee any Indebtedness of, Parent or any other Restricted Subsidiary, or (c) Transfer any of its assets to Parent or any other Restricted Subsidiary, except: (1) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date (including the Indenture and the Credit Facility), as such encumbrance or restriction is in effect on the Issue Date; (2) restrictions on the Transfer of assets subject to any Lien permitted under the Indenture imposed by the holder of such Lien; (3) restrictions on the Transfer of assets imposed under any agreement to sell such assets permitted under the Indenture pending the closing of such sale; (4) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the assets of any Person, other than the Person or the assets of the Person so acquired; (5) customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the Transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person; 43 (6) Purchase Money Indebtedness and Capital Lease Obligations incurred pursuant to clause (8) of the definition of "Permitted Indebtedness" that impose restrictions of the nature described in clause (c) above on the assets acquired; (7) any encumbrances or restrictions imposed by any amendments or Refinancings of the contracts, instruments or obligations referred to in clause (1), (4) or (6) above; provided that such amendments or Refinancings are, in the good faith judgment of the Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment or Refinancing; (8) covenants to maintain net worth, total assets or liquidity and similar financial responsibility covenants under contracts with customers or suppliers in the ordinary course of business; (9) any such encumbrance or restriction consisting of customary provisions in leases governing leasehold interests to the extent such provisions restrict the Transfer of the lease or the property leased thereunder; and (10) any restriction imposed by applicable law. Limitation on Sale and Leaseback Transactions Parent will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction; provided that Parent or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction not involving any Collateral if: (1) Parent or such Restricted Subsidiary could have . incurred Indebtedness in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction pursuant to the covenant described under "--Limitation on Incurrence of Indebtedness," and . incurred a Lien to secure such Indebtedness pursuant to the covenant described under "--Limitation on Liens"; (2) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and (3) the Transfer of the asset in such Sale and Leaseback Transaction is permitted by, and Issuer applies the proceeds of such transaction in compliance with, the covenant described under "--Limitation on Asset Sales." Additional Guarantees If Parent or any Restricted Subsidiary Transfers, acquires or creates another Restricted Subsidiary (other than any Foreign Subsidiary) after the date of the Indenture, then that newly acquired or created Restricted Subsidiary shall, within ten business days of the date on which it was acquired or created, execute and deliver to the Trustee (1) a supplemental indenture in form reasonably satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall fully and unconditionally guarantee all of Issuer's obligations under the Notes and the Indenture on the terms set forth in the Indenture and (2) Security Documents in form and substance reasonably satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall grant to the Trustee a first priority security interest in and Lien on its Fixed Assets. Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture until released in accordance with the terms of the Indenture as described under "--Guarantees." If TNCLP becomes a Wholly Owned Subsidiary, TNCLP and TNLP shall, concurrently with the release of the limited partnership interests in TNCLP from the Lien of the Indenture and the Security Documents, execute 44 and deliver to the Trustee (1) a supplemental indenture in form reasonably satisfactory to the Trustee pursuant to which TNCLP and TNLP shall fully and unconditionally guarantee all of Issuer's obligations under the Notes and the Indenture on the terms set forth in the Indenture and (2) Security Documents in form and substance reasonably satisfactory to the Trustee pursuant to which each of TNCLP and TNLP shall grant to the Trustee a first priority security interest in and Lien on its Fixed Assets. Thereafter, each of TNCLP and TNLP shall be a Guarantor for all purposes of the Indenture until released in accordance with the Indenture as described under "--Guarantees." Maintenance of Insurance Parent will, and will cause its Subsidiaries to, maintain property and casualty, business interruption, workers' compensation and such other insurance against such risks and in such amounts as are customarily carried by similar businesses with deductibles, retentions, self-insured amounts and coinsurance customarily carried by similar businesses of similar size; provided that, with respect to the Collateral, Parent will, and will cause the Restricted Subsidiaries to, maintain such insurance against such risks and in such amounts as shall be required pursuant to the Indenture and the applicable Security Documents. All insurance under this provision will name the Trustee as an additional insured or, in the case of Collateral, sole loss payee, as applicable, to the extent of the interest of the Trustee in any assets covered by such insurance. All such insurance will be issued by carriers having an A.M. Best & Company, Inc. rating of A or higher, or if such carrier is not rated by A.M. Best & Company, Inc., having the financial stability and size deemed appropriate by Parent after consultation with a reputable insurance broker. Merger, Consolidation and Sale of Assets (A) Parent will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or Transfer (or cause or permit any Restricted Subsidiary of Parent to Transfer) all or substantially all of Parent's assets (determined on a consolidated basis for Parent and its Subsidiaries) whether as an entirety or substantially as an entirety to any Person, unless (1) either (a) Parent is the surviving or continuing corporation; or (b) the Person (if other than Parent) formed by such consolidation or into which Parent is merged or the Transferee of such assets (the "Parent Surviving Entity"): (x) is a corporation or limited liability company organized and validly existing under the laws of the United States or any State thereof or the District of Columbia; and (y) expressly assumes, by supplemental indenture and Security Documents (in each case, in form and substance satisfactory to the Trustee) executed and delivered to the Trustee, all of the Obligations of Parent under its Guarantee and the performance of every covenant under Parent's Guarantee, the Indenture, the Exchange and Registration Rights Agreement and the Security Documents on the part of Parent to be performed or observed; and (2) each of the conditions specified in paragraph (D) below is satisfied. For purposes of the foregoing, the Transfer in a single transaction or series of related transactions of all or substantially all of the assets of one or more Restricted Subsidiaries of Parent, the Capital Stock of which constitutes all or substantially all of the assets of Parent (determined on a consolidated basis for Parent and its Subsidiaries), shall be deemed to be the Transfer of all or substantially all of the assets of Parent. The Indenture provides that upon any consolidation or merger in which Parent is not the continuing corporation, or any Transfer of all or substantially all of the assets of Parent in accordance with the foregoing, the 45 Parent Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, Parent under its Guarantee, the Indenture, the Exchange and Registration Rights Agreement and the Security Documents with the same effect as if such Parent Surviving Entity had been named as such. (B) Issuer will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or Transfer (or cause or permit any Restricted Subsidiary of Issuer to Transfer) all or substantially all of Issuer's assets (determined on a consolidated basis for Issuer and its Subsidiaries) whether as an entirety or substantially as an entirety to any Person, unless (1) either (a) Issuer is the surviving or continuing corporation; or (b) the Person (if other than Issuer) formed by such consolidation or into which Issuer is merged or the Transferee of such assets (the "Issuer Surviving Entity"): (x) is a corporation or limited liability company organized and validly existing under the laws of the United States or any State thereof or the District of Columbia; and (y) expressly assumes, by supplemental indenture and Security Documents (in each case, in form and substance satisfactory to the Trustee) executed and delivered to the Trustee, the due and punctual payment of the principal of and premium, if any, and interest on all of the Notes and the performance of every covenant under the Notes, the Indenture, the Exchange and Registration Rights Agreement and the Security Documents on the part of Issuer to be performed or observed; and (2) each of the conditions specified in paragraph (D) below is satisfied. For purposes of the foregoing, the Transfer in a single transaction or series of related transactions of all or substantially all of the assets of one or more Restricted Subsidiaries of Issuer, the Capital Stock of which constitutes all or substantially all of the assets of Issuer (determined on a consolidated basis for Issuer and its Subsidiaries), shall be deemed to be the Transfer of all or substantially all of the assets of Issuer. The Indenture provides that upon any consolidation or merger in which Issuer is not the continuing corporation or any Transfer of all or substantially all of the assets of Issuer in accordance with the foregoing, the Issuer Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, Issuer under the Notes, the Indenture, the Exchange and Registration Rights Agreement and the Security Documents with the same effect as if such Issuer Surviving Entity had been named as such. (C) No Guarantor (other than Parent) will, and Parent will not cause or permit any such Guarantor to, consolidate with or merge with or into any Person unless (1) either (a) such Guarantor shall be the surviving or continuing corporation; or (b) the Person (if other than such Guarantor) formed by such consolidation or into which such Guarantor is merged shall expressly assume, by supplemental indenture and Security Documents (in each case, in form and substance satisfactory to the Trustee) executed and delivered to the Trustee, all of the obligations of such Guarantor under its Guarantee and the performance of every covenant under such Guarantor's Guarantee, the Indenture, the Exchange and Registration Rights Agreement and the Security Documents on the part of such Guarantor to be performed or observed; and (2) each of the conditions specified in paragraph (D) below (other than clause (1) thereof) is satisfied. The requirements of this paragraph (C) shall not apply to (x) a consolidation or merger of any Guarantor with and into Issuer or any other Guarantor, so long as Issuer or a Guarantor survives such consolidation or merger, or 46 (y) a Transfer of any Guarantor that complies with the covenant described under "--Limitation on Asset Sales" or "--Limitation on Sale of Principal Properties." (D) The following additional conditions shall apply to each transaction described in paragraph (A), (B) or (C), except that clause (1) below shall not apply to a transaction described in paragraph (C): (1) immediately after giving effect to such transaction and the assumption contemplated above (including giving effect to any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), Parent (or the Parent Surviving Entity, if applicable) (x) could incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; and (y) has a Consolidated Net Worth not less than the Consolidated Net Worth of Parent immediately before the transaction; (2) immediately before and immediately after giving effect to such transaction and the assumption contemplated above (including giving effect to any Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default has occurred and is continuing; (3) Parent, Issuer, such Guarantor or the relevant surviving entity, as applicable, shall cause such amendments, supplements or other instruments to be filed, executed and/or recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by or Transferred to such Person, together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the UCC of the relevant states; (4) the Collateral owned by or Transferred to Parent, Issuer, such Guarantor or the relevant surviving entity, as applicable, shall (a) continue to constitute Collateral under the Indenture and the Security Documents, (b) be subject to the Lien in favor of the Trustee for the benefit of the noteholders, and (c) not be subject to any Lien other than Liens permitted by the Security Documents; (5) the assets of the Person which is merged or consolidated with or into the relevant surviving entity, to the extent that they are assets of the types which would constitute Collateral under the Security Documents, shall be treated as after acquired property and such surviving entity shall take such action as may be reasonably necessary to cause such assets to be made subject to the Lien of the Security Documents in the manner and to the extent required in the Indenture; and (6) Parent shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that such transaction and, if a supplemental indenture or supplemental Security Documents are required in connection with such transaction, such supplemental indenture and Security Documents comply with the applicable provisions of the Indenture, that all conditions precedent in the Indenture relating to such transaction have been satisfied and that supplemental indenture and Security Documents are enforceable. Impairment of Security Interest Parent will not, and will not permit any Restricted Subsidiary to, take, or knowingly omit to take, any action, which action or omission might or would have the result of materially impairing the security interest in favor of the Trustee on behalf of the noteholders with respect to the Collateral, and neither Parent nor any Restricted Subsidiary shall grant to any Person (other than the Trustee on behalf of the noteholders) any interest whatsoever in the Collateral (other than as permitted by the Security Documents). 47 SEC Reports Whether or not Issuer and the Guarantors are then subject to Section 13(a) or 15(d) of the Exchange Act, Issuer and the Guarantors will electronically file with the Commission, so long as the Notes are outstanding, the annual reports, quarterly reports and other periodic reports that Issuer and the Guarantors would be required to file with the Commission pursuant to Section 13(a) or 15(d) if Issuer and the Guarantors were so subject, and such documents will be filed with the Commission on or prior to the respective dates (the "Required Filing Dates") by which Issuer and the Guarantors would be required so to file such documents if Issuer and the Guarantors were so subject, unless, in any case, if such filings are not then permitted by the Commission. If such filings with Commission are not then permitted by the Commission, or such filings are not generally available on the Internet free of charge, Issuer and the Guarantors will, within 15 days of each Required Filing Date, transmit by mail to noteholders, as their names and addresses appear in the Note register, without cost to such noteholders, and file with the Trustee copies of the annual reports, quarterly reports and other periodic reports that Issuer and the Guarantors would be required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if Issuer and the Guarantors were subject to such Section 13(a) or 15(d), and promptly upon written request, supply copies of such documents to any prospective holder or beneficial owner at Issuer's cost. Conduct of Business Parent will not, and will not permit any Restricted Subsidiary to, engage in any business other than the Permitted Business. Events of Default Any of the following shall constitute an Event of Default: (1) default for 30 days in the payment when due of interest on any Note; (2) default in the payment when due of principal on any Note, whether upon maturity, acceleration, optional redemption, required repurchase or otherwise; (3) failure to perform or comply with the covenant described under "--Change of Control" or "--Certain Covenants--Limitation on Sale of Principal Properties"; (4) failure to perform or comply with any covenant, agreement or warranty in the Indenture (other than any specified in clause (1), (2) or (3) above) which failure continues for 60 days after written notice thereof has been given to Issuer by the Trustee or to Issuer and the Trustee by the holders of at least 25% in aggregate principal amount of the then outstanding Notes; (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Parent or any Restricted Subsidiary, whether such Indebtedness now exists or is created after the Issue Date, which: . is caused by a failure to pay such Indebtedness at Stated Maturity (after giving effect to any grace period related thereto) (a "Payment Default"); or . results in the acceleration of such Indebtedness prior to its Stated Maturity; and in each case, the principal amount of any such Indebtedness as to which a Payment Default or acceleration shall have occurred, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (6) one or more final and non-appealable judgments, orders or decrees for the payment of money of $15.0 million or more, individually or in the aggregate, shall be entered against Parent or any Restricted Subsidiary or any of their respective properties and which final and non-appealable judgments, orders or 48 decrees are not covered by third party indemnities or insurance as to which coverage has not been disclaimed and are not paid, discharged, bonded or stayed within 60 days after their entry; (7) a court having jurisdiction in the premises enters (x) a decree or order for relief in respect of Issuer, Parent or any of its Significant Subsidiaries in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (y) a decree or order adjudging Issuer, Parent or any of its Significant Subsidiaries a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Issuer, Parent or any of its Significant Subsidiaries under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of Issuer, Parent or any of its Significant Subsidiaries or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period 60 consecutive days; (8) Issuer, Parent or any of its Significant Subsidiaries: . commences a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or any other case or proceeding to be adjudicated a bankrupt or insolvent; or . consents to the entry of a decree or order for relief in respect of Issuer, Parent or any of its Significant Subsidiaries in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against Issuer, Parent or any of its Significant Subsidiaries; or . files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law; or . consents to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of Issuer, Parent or any of its Significant Subsidiaries or of any substantial part of its property; or . makes an assignment for the benefit of creditors; or . admits in writing its inability to pay its debts generally as they become due; or . takes corporate action in furtherance of any such action; (9) the Guarantee of Parent or any Guarantor that is a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Guarantee and the Indenture) or is declared null and void and unenforceable or is found invalid or any Guarantor denies its liability under its Guarantee (other than by reason of release of a Guarantor from its Guarantee in accordance with the terms of the Indenture and the Guarantee); or (10) default by Issuer or any Guarantor in the performance of any of the Security Documents which adversely affects the enforceability or the validity of the Trustee's Lien on the Collateral or which adversely affects the condition or value of the Collateral, taken as a whole, in any material respect, repudiation or disaffirmation by Issuer or any Guarantor of its obligations under any of the Security Documents or the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against Issuer or any Guarantor for any reason; If an Event of Default occurs and is continuing (other than an Event of Default described in clause (7) or (8) above with respect to Issuer, Parent or any Guarantor that is a Significant Subsidiary), the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default described in clause (7) or (8) above occurs with respect to 49 Issuer, Parent or any Guarantor that is a Significant Subsidiary, the principal of and interest on all the Notes will immediately become due and payable without any declaration or other act on the part of the Trustee or any holders of the Notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. Except to enforce the right to receive payment of principal or interest when due, no noteholder may pursue any remedy with respect to the Indenture or the Notes unless: . such holder has previously given the Trustee notice that an Event of Default is continuing; . holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy; . such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense; . the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and . the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. The Indenture provides that if a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each noteholder notice of the Default within 90 days after it occurs. Notwithstanding the foregoing, except in the case of a Default in the payment of principal of or interest on any Note, the Trustee may withhold notice if and so long as a committee of its trust officers determines that withholding notice is in the interest of the noteholders. In addition, Issuer is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. Issuer also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Issuer is taking or proposes to take in respect thereof. Amendments and Waivers Except as provided below, the Notes, the Indenture and the Security Documents may be amended with the consent of the holders of a majority of the aggregate principal amount of Notes then outstanding (including consents obtained in connection with a tender offer or exchange for the Notes) and any past default or compliance with any provisions may also be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding. Without the consent of each holder of an outstanding Note affected thereby, no amendment or waiver may: . reduce the principal of or change the fixed maturity of any Note; . alter the provisions with respect to the redemption or purchase provisions of any Note or the Indenture in a manner adverse to the holders of the Notes (other than the provisions of the Indenture relating to any offer to purchase required under the covenants described under "--Change of Control" or "--Certain Covenants--Limitation on Sale of Principal Properties"); . waive a redemption or purchase payment due with respect to any Note; 50 . reduce the rate of or change the time for payment of interest on any Note; . waive a Default in the payment of principal or interest on the Notes (except that holders of at least a majority in aggregate principal amount of the then outstanding Notes may (x) rescind an acceleration of the Notes that resulted from a non-payment default and (y) waive the payment default that resulted from such acceleration); . make the principal of or interest on any Note payable in money other than United States Dollars; . make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of or interest on the Notes; . release from the Lien of the Indenture and the Security Documents all or substantially all of the Collateral; . make the Notes or any Guarantee subordinated by their or its terms in right of payment to any other Indebtedness; . release any Guarantor that is a Significant Subsidiary from its Guarantee except in compliance with the Indenture; or . make any change in the amendment and waiver provisions of the Indenture; provided further that no such amendment or waiver may, without the consent of the holders of two-thirds of the aggregate principal amount of Notes then outstanding: . amend or waive any of the provisions (including the definitions thereto) relating to the covenants described under "--Change of Control" or "--Certain Covenants--Limitation on Sale of Principal Properties" in a manner materially adverse to the noteholders; or . release from the Lien of the Indenture and the Security Documents any Principal Property other than in accordance with the covenant described under "--Certain Covenants--Limitation on Sale of Principal Properties." Without the consent of any noteholder, Issuer and the Trustee may amend Notes, the Indenture and the Security Documents: . to cure any ambiguity, defect or inconsistency; . to provide for the assumption by a successor Person of the obligations of Issuer or any Guarantor under the Indenture in accordance with the covenant described under "--Certain Covenants--Merger, Consolidation and Sale of Assets"; . to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code); . to add a Guarantor; . to release a Guarantor from its Guarantee and the Security Documents when permitted by the Indenture; . to add any additional asset as Collateral; . to release Collateral from the Lien of the Indenture and the Security Documents when permitted or required by the Indenture; . to add to the covenants of Parent or Issuer for the benefit of the noteholders or to surrender any right or power conferred upon Parent or Issuer; . to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act; or 51 . to make any other change that does not materially adversely affect the rights of any noteholder. The consent of the noteholders is not necessary under the Indenture to approve the particular form of any proposed amendment or waiver. It is sufficient if such consent approves the substance of the proposed amendment or waiver. After an amendment or waiver under the Indenture becomes effective, Issuer is required to mail to noteholders a notice briefly describing such amendment or waiver. However, the failure to give such notice to all noteholders, or any defect therein, will not impair or affect the validity of the amendment or waiver. Transfer Notes were issued in registered form and are transferable only upon the surrender of the Notes being transferred for registration of transfer. No service charge will be made for any registration of transfer or exchange of Notes, but Issuer may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. Discharge of Indenture and Defeasance The Indenture will, subject to certain surviving provisions, cease to be of further effect when: (1) Issuer delivers to the Trustee all outstanding Notes (other than Notes replaced because of mutilation, loss, destruction or wrongful taking) for cancellation; or (2) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption as described above, and Issuer irrevocably deposits with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes, including interest thereon, and if in either case Issuer pays all other sums payable under the Indenture by Issuer. The Trustee will acknowledge satisfaction and discharge of the Indenture on demand of Issuer accompanied by an officers' certificate and an opinion of counsel and at the cost and expense of Issuer. Subject to the conditions to defeasance described below and in the Indenture and the survival of certain provisions, Issuer at any time may terminate: (1) all its obligations under the Notes and the Indenture ("legal defeasance option"); or (2) its obligations under certain restrictive covenants and the related Events of Default ("covenant defeasance option"). Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If Issuer exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default. If Issuer exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default referred to in clause (2) of the immediately preceding paragraph. In order to exercise either defeasance option, Issuer must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an opinion of counsel to the effect that holders of the Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income 52 tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such opinion of counsel must be based on a ruling of the Internal Revenue Service or change in applicable federal income tax law). Asset Sale Release Issuer has the right to obtain a release of items of Collateral (the "Released Interest") subject to an Asset Sale upon compliance with the condition that Issuer deliver to the Trustee the following: (1) a notice from Issuer requesting the release of the Released Interest: . describing the proposed Released Interest; . specifying the fair market value of such Released Interest on a date within 60 days of such notice (the "Valuation Date"); . stating that the purchase price received is at least equal to the Fair Market Value of the Released Interest; and . in the event that any assets other than cash or Temporary Cash Investments comprise a portion of the consideration received in such Asset Sale, specifically describing such assets; (2) an officers' certificate stating that: . such Asset Sale complies with the terms and conditions of the Indenture with respect to Asset Sale; . the release of such Released Interest will not interfere with the Trustee's ability to realize the value of the remaining Collateral and will not impair the maintenance and operation of the remaining Collateral; . all Net Available Proceeds from the sale of any of the Released Interests will be applied pursuant to the provisions of the Indenture in respect of Asset Sale; . there is no Default in effect or continuing on the date thereof, the Valuation Date or the date of such Asset Sale; . the release of the Collateral will not result in a Default; and . all conditions precedent in the Indenture relating to the release in question have been complied with; (3) the Net Available Proceeds and other non-cash consideration from the Asset Sale required to be delivered to the Trustee pursuant to the Indenture; (4) all documentation necessary or reasonably requested by the Trustee to grant to the Trustee a first priority security interest in and Lien on all assets (other than cash or Temporary Cash Investments) comprising a portion of the consideration received in such Asset Sale, if any; and (5) all documentation required by the Trust Indenture Act prior to the release of Collateral by the Trustee. Possession, Use and Release of Collateral The Indenture provides that, unless an Event of Default has occurred and is continuing, Issuer or the applicable Guarantor has the right to remain in possession and retain exclusive control of the Collateral (other than any cash, securities, obligations and Temporary Cash Investments constituting part of the Collateral and deposited with the Trustee and other than as set forth in the Security Documents), to freely operate the Collateral and to collect, invest and dispose of any income thereon. Upon compliance by Issuer with (1) the conditions set forth under the heading "--Asset Sale Release" or (2) the conditions set forth above with respect to discharge of the Indenture, and upon delivery by Issuer to the 53 Trustee of an opinion of counsel to the effect that such conditions have been met, the Trustee will, with respect to clause (1) above, release the Released Interest and, with respect to clause (2) above, release all of the Collateral, in each case from the Lien of the Indenture and the Security Documents and reconvey the Released Interest to Issuer. Under the circumstances described under "--Collateral--TNCLP and TNLP" and concurrently with the compliance with the covenant described under "--Certain Covenants--Additional Guarantees," the Trustee will release the limited partnership interests of TNCLP from the Lien of the Indenture and the Security Documents. The Indenture provides that Issuer or the applicable Guarantor shall be entitled, subject to compliance with the conditions set forth therein, to obtain the release of Collateral which has been taken by eminent domain, condemnation or in similar circumstances. Disposition of Collateral Without Release Notwithstanding the provisions of "--Possession, Use and Release of Collateral" above, so long as no Default has occurred and is continuing or would result therefrom, Issuer and the Guarantors may, among other things, without any release or consent by the Trustee, conduct ordinary course of business activities with respect to the Collateral in accordance with the provisions of the Indenture, including: . selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien of the Security Documents which has become worn out or obsolete and which either has an aggregate fair market value of $100,000 or less, or which is replaced by property of substantially equivalent or greater value which becomes subject to the Lien of the Security Documents as after acquired property; . abandoning, terminating, canceling, releasing or making alterations in or substitutions of any leases or contracts subject to the Lien of the Indenture or any of the Security Documents; . surrendering or modifying any franchise, license or permit subject to the Lien of the Indenture or any of the Security Documents which it may own or under which it may be operating; . altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances; . demolishing, dismantling, tearing down, scrapping or abandoning any Collateral if, in the good faith opinion of the Board of Directors, such demolition, dismantling, tearing down, scrapping or abandonment is in the best interest of Issuer; . granting a nonexclusive license of any intellectual property; and . abandoning intellectual property which has become obsolete and not used in the business. Use of Trust Monies All Trust Monies (including, without limitation, all Net Available Proceeds under the covenant described under "--Certain Covenants--Limitation on Asset Sales"or "--Certain Covenants--Limitation on Sale of Principal Properties" and Net Insurance Proceeds required to be deposited with the Trustee) shall be held by the Trustee as a part of the Collateral securing the Notes and, so long as no Event of Default has occurred and is continuing, may either: (1) be released as contemplated by "--Certain Covenants--Limitation on Asset Sales" if such Trust Monies represent Net Available Proceeds in respect of an Asset Sale or in respect of a Sale of a Principal Property; or 54 (2) at the direction of Issuer be applied by the Trustee from time to time to the payment of the principal of and interest on any Notes at maturity or upon redemption or retirement, or to the purchase of Notes upon tender or in the open market or otherwise, in each case in compliance with the Indenture. Issuer may also withdraw Trust Monies constituting Net Insurance Proceeds to repair or replace the relevant Collateral (or reimburse Parent or any Restricted Subsidiary for any such repair or replacement), subject to certain conditions set forth in the Indenture. The Trustee shall be entitled to apply any Trust Monies to cure any Event of Default. Trust Monies deposited with the Trustee shall be invested in Temporary Cash Investments pursuant to the direction of Issuer and, so long as no Default has occurred and is continuing, Issuer shall be entitled to any interest or dividends accrued, earned or paid on such Temporary Cash Investments. Concerning the Trustee U.S. Bank Trust National Association is the Trustee under the Indenture and the Security Documents and has been appointed by Issuer as Registrar and Paying Agent with regard to the Notes. The holders of a majority in principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that if an Event of Default occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of such person's own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any noteholder, unless such noteholder shall have offered to the Trustee reasonable security or indemnity reasonably acceptable to it against any cost, expense and liabilities which might be incurred by it in compliance with such request. Governing Law The Indenture provides that it and the Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. Certain Definitions "Acquired Indebtedness" means (1) with respect to any Person that becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (2) with respect to Parent or any Restricted Subsidiary, any Indebtedness of a Person (other than Parent or a Restricted Subsidiary) existing at the time such Person is merged with or into Parent or a Restricted Subsidiary, or Indebtedness expressly assumed by Parent or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition. "affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 55 "Asset Sale" means any Transfer by Parent or any Restricted Subsidiary of: . any shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares and, to the extent required by local ownership laws in foreign countries, shares owned by foreign shareholders); . all or substantially all the assets of any division, business segment or comparable line of business of Parent or any Restricted Subsidiary; or . any other assets of Parent or any Restricted Subsidiary outside of the ordinary course of business of Parent or such Restricted Subsidiary. Notwithstanding the foregoing, the term "Asset Sale" shall not include: (1) for purposes of the covenant described under "--Certain Covenants--Limitation on Asset Sales," a Transfer (a) that constitutes a Permitted Investment or a Restricted Payment permitted by the covenant described under "--Certain Covenants--Limitation on Restricted Payments" or (b) consummated in compliance with the covenant described under "--Certain Covenants--Limitation on Sale of Principal Properties" or "--Certain Covenants--Merger, Consolidation and Sale of Assets"; (2) sales of accounts receivable of the type specified in the definition of "Qualified Securitization Transaction" to a Securitization Entity for the Fair Market Value thereof; (3) sales or grants of non-exclusive licenses to use the patents, trade secrets, know-how and other intellectual property of Parent or any Restricted Subsidiary to the extent that such licenses are granted in the ordinary course of business, and do not prohibit Parent or any Restricted Subsidiary from using the technologies licensed and do not require Parent or any Restricted Subsidiary to pay any fees for any such use; (4) a Transfer pursuant to any foreclosure of assets or other remedy provided by applicable law by a creditor of Parent or any Restricted Subsidiary with a Lien on such assets, if such Lien is permitted under the Indenture; (5) a Transfer involving only Temporary Cash Investments or inventory in the ordinary course of business; (6) any Transfer of damaged, worn-out or obsolete equipment in the ordinary course of business; (7) the lease or sublease of any real or personal property in the ordinary course of business; provided that, to the extent such property constitutes Collateral, such lease or sublease shall comply with the provisions of the applicable Security Documents; (8) the sale at cost of equipment pursuant to a program in which participants agree to purchase or construct and maintain specific spare parts necessary to operate production facilities in the Permitted Business; or (9) a Transfer of assets having a Fair Market Value and a sale price of less than $1.0 million. "Attributable Debt" in respect of a Sale and Leaseback Transaction means, as at the time of determination, the present value (discounted at the implied interest rate in such transaction) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended). "Bank Collateral Agent" means the Person designated as such under the Credit Facility or a Person otherwise performing the duties typical of a collateral agent under a credit facility like the Credit Facility. "Basket" has the meaning set forth under "--Certain Covenants--Limitation on Restricted Payments." 56 "Capital Lease Obligations" means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP. The amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Change of Control" means the occurrence of any of the following events: (1) Issuer ceases to be a Wholly Owned Subsidiary of Parent; (2) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have "beneficial ownership" of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of Parent; (3) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election to the Board of Directors or whose nomination for election by the shareholders of Parent was approved by a vote of 66 2/3% of the directors of Parent then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; (4) Parent consolidates with or merges with or into another Person or another Person merges with or into Parent, or all or substantially all the assets of Parent and the Restricted Subsidiaries, taken as a whole, are Transferred to another Person (other than to a Person that is controlled by the Permitted Holders), and, in the case of any such merger or consolidation, the securities of Parent that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of Parent are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving Person that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person; or (5) Parent or Issuer liquidates or dissolves or the stockholders of Parent adopt a plan of liquidation or dissolution. "Code" means the Internal Revenue Code of 1986, as amended. "Collateral" means, collectively, all of the assets listed in the first paragraph under "--Collateral-- Description of Collateral" and all other assets that are from time to time subject to or are required to be subject to the Lien of the Indenture and the Security Documents other than the Second Lien Collateral. "Collateral Account" means the collateral account established pursuant to the Indenture. 57 Collateral Permitted Liens means: (1) Liens securing obligations under the Indenture, the Notes, the Guarantees and the Security Documents in favor of the Trustee; (2) Liens in favor of Issuer or any Guarantor; provided that such Liens do not secure obligations that are assigned to any Person other than the Trustee pursuant to the Security Documents; (3) Liens on assets of a Person at the time such Person becomes a Subsidiary; provided that (a) such Lien was not incurred in anticipation of or in connection with the transaction or series of related transactions pursuant to which such Person became a Subsidiary and (b) such Lien does not extend to or cover any assets of Parent or any other Restricted Subsidiary; (4) Liens existing on the Issue Date to the extent permitted by the applicable Security Document; (5) Liens imposed by law that are incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers', warehousemen's, mechanics', landlords', materialmen's, employees', laborers', employers', suppliers', banks', repairmen's and other like Liens, in each case, for sums not yet due or that (a) are being contested in good faith by appropriate proceedings and that are appropriately reserved for in accordance with GAAP if required by GAAP and (b) satisfy the Contested Collateral Lien Conditions; (6) Liens for taxes, assessments and governmental charges not yet due or payable or subject to penalties for non-payment or that (a) are being contested in good faith by appropriate proceedings and that are appropriately reserved for in accordance with GAAP if required by GAAP and (b) satisfy the Contested Collateral Lien Conditions; (7) Liens on assets acquired or constructed after the Issue Date securing Purchase Money Indebtedness and Capital Lease Obligations; provided that such Liens shall in no event extend to or cover any assets other the such assets acquired or constructed after the Issue Date with the proceeds of such Purchase Money Indebtedness of Capital Lease Obligations; (8) zoning restrictions, easements, rights-of-way, restrictions on the use of real property, other similar encumbrances on real property incurred in the ordinary course of business and minor irregularities of title to real property that do not (a) secure Indebtedness, (b) individually or in the aggregate materially impair the value or marketability of the real property affected thereby or the occupation, use and enjoyment in the ordinary course of business of Parent and the Restricted Subsidiaries at such real property; (9) terminable or short-term leases or permits for occupancy, which leases or permits (a) expressly grant to Parent or any Restricted Subsidiary the right to terminate them at any time on not more than six months' notice, (b) do not individually or in the aggregate interfere with the operation of the business of Parent or any Restricted Subsidiary or individually or in the aggregate impair the use (for its intended purpose) or the value of the property subject thereto and (c) are subordinated to the Liens granted and evidenced by the Security Documents in accordance with the provisions thereof; (10) Liens resulting from operation of law with respect to any judgments, awards or orders to the extent that such judgments, awards or orders do not cause or constitute an Event of Default; provided that any such Liens shall be paid, discharged, bonded or stayed prior to the sale or forfeiture of any portion of the Collateral on account of such Liens; (11) bankers' Liens, rights of setoff and other similar Liens existing solely with respect to cash and cash equivalents on deposit in one or more accounts maintained by Parent or any Restricted Subsidiary in accordance with the provisions of the Indenture or applicable Security Documents, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; and 58 (12) Liens securing Refinancing Indebtedness relating to Collateral Permitted Liens of the type described in clauses (3) and (7) of this definition; provided that such Liens extend only to the assets securing the Indebtedness being Refinanced; and (13) other Liens securing obligations (not constituting indebtedness for money borrowed) in an aggregate amount, together with the aggregate amount of any obligations secured pursuant to clause (10) of the definition of "Permitted Liens," not to exceed $2.0 million at any time outstanding; provided that such Liens shall in no event extend to or cover any assets constituting Principal Properties encumbered by a mortgage, deed of trust or foreign equivalent thereof in favor of the Trustee except to the extent permitted thereby. Comparable Treasury Issue means the United States Treasury security selected by a Reference Treasury Dealer as having a maturity comparable to the Stated Maturity of the principal of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining life of the Notes. "Comparable Treasury Price" means, with respect to any date of redemption or purchase: . the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such date of redemption or purchase, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities"; or . if such release (or any successor release) is not published or does not contain such prices on such business day, the average of the Reference Treasury Dealer Quotations. "Consolidated Coverage Ratio" as of any date of determination means the ratio of (a) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which internal financial statements are available to (b) Consolidated Fixed Charges for such four fiscal quarters; provided that: (1) if Parent or any Restricted Subsidiary has incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an incurrence of Indebtedness, or both, EBITDA and Consolidated Fixed Charges for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period (except that, in the case of Indebtedness used to finance working capital needs incurred under a revolving credit or similar arrangement, the amount thereof shall be deemed to be the average daily balance of such Indebtedness during such four-fiscal-quarter period); (2) if since the beginning of such period Parent or any Restricted Subsidiary shall have Transferred any assets outside the ordinary course of business, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets which are the subject of such Transfer for such period, or increased by an amount equal to the EBITDA (if negative) directly attributable thereto for such period, and Consolidated Fixed Charges for such period shall be reduced by an amount equal to the Consolidated Fixed Charges directly attributable to any Indebtedness of Parent or any Restricted Subsidiary repaid, repurchased, defeased, assumed by a third person (to the extent Parent and its Restricted Subsidiaries are no longer liable for such Indebtedness) or otherwise discharged with respect to Parent and its continuing Restricted Subsidiaries in connection with such Transfer for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Fixed Charges for such period directly 59 attributable to the Indebtedness of such Restricted Subsidiary to the extent Parent and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale); (3) if since the beginning of such period Parent or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an acquisition of assets, which acquisition constitutes all or substantially all of an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction requiring a calculation to be made hereunder, EBITDA and Consolidated Fixed Charges for such period shall be calculated after giving pro forma effect thereto (including the incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and (4) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into Parent or any Restricted Subsidiary since the beginning of such period) shall have made any Transfer of assets outside the ordinary course of business, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (2) or clause (3) above if made by Parent or a Restricted Subsidiary during such period, EBITDA and Consolidated Fixed Charges for such period shall be calculated after giving pro forma effect thereto as if such Transfer, Investment or acquisition occurred on the first day of such period; For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income, earnings or expense relating thereto and the amount of Consolidated Fixed Charges associated with any Indebtedness incurred in connection therewith, the pro forma calculations shall be prepared in accordance with Regulation S-X promulgated by the Commission and after giving effect to any Pro Forma Cost Savings. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest of such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). "Consolidated Fixed Charges" means, with respect to any period, the sum (without duplication) of: (1) the interest expense of Parent and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP consistently applied, including, without limitation: . amortization of debt issuance costs and debt discount; . the net payments, if any, under Interest Rate Agreements (including amortization of discounts); . the interest portion of any deferred payment obligation; . accrued interest; and . commissions, discounts and other fees and charges incurred in respect of letters of credit or bankers| acceptance financings; (2) the interest component of the Capital Lease Obligations paid or accrued during such period; (3) all interest capitalized during such period; (4) interest accrued during such period on Indebtedness of the type described in clause (6) or (7) of the definition of "Indebtedness"; and (5) the product of . the amount of all dividends on any series of Preferred Stock of Parent and the Restricted Subsidiaries (other than dividends paid in Qualified Stock and other than dividends paid to Parent or to a Restricted Subsidiary) paid, accrued or scheduled to be paid or accrued during such period times; . a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated Federal, state and local tax rate of Parent, expressed as a decimal; 60 excluding, however, any amount of such interest of any Restricted Subsidiary if the net income (or loss) of such Restricted Subsidiary is excluded in the calculation of Consolidated Net Income pursuant to clause (3) of the proviso in the definition of "Consolidated Net Income" (but only in the same proportion as the net income (or loss) of such Restricted Subsidiary is so excluded from the calculation of Consolidated Net Income). "Consolidated Net Income" means, for any period, the net income (or loss) of Parent and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP consistently applied; provided that there shall not be included in such Consolidated Net Income: (1) any extraordinary gains or extraordinary losses; (2) any net income or loss of any Person if such Person is not a Restricted Subsidiary, except that the equity of Parent or any Restricted Subsidiary in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to Parent or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (3) below); (3) the net income of any Restricted Subsidiary to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted, directly or indirectly, without prior approval (that has not been obtained), pursuant to the terms of its charter or any agreement, instrument and governmental regulation applicable to such Restricted Subsidiary or its stockholders; (4) any gain or loss realized upon the sale or other disposition of (x) any assets (including pursuant to Sale and Leaseback Transactions) which is not sold or otherwise disposed of in the ordinary course of business or (y) any Capital Stock of any Person; and (5) the cumulative effect of a change in accounting principles; provided further that Consolidated Net Income shall be reduced by the product of (x) the amount of all dividends on Designated Preferred Stock (other than dividends paid in Qualified Stock and other than dividends paid to Parent or to a Restricted Subsidiary) paid, accrued or scheduled to be paid or accrued during such period times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated Federal, state and local tax rate of Parent, expressed as a decimal. "Consolidated Net Worth" means with respect to any Person on any date, the equity of the common and preferred stockholders of such Person and its Restricted Subsidiaries as of such date, determined on a consolidated basis in accordance with GAAP consistently applied, less any amount attributable to Unrestricted Subsidiaries. "Contested Collateral Lien Conditions" shall mean, with respect to any Collateral Permitted Lien of the type described in clauses (5) and (6) of the definition of "Collateral Permitted Liens", the following conditions: (1) any proceeding instituted contesting such Lien shall conclusively operate to stay the sale or forfeiture of any portion of the Collateral on account of such Lien; (2) in the event the amount of any such Lien shall exceed $250,000, at the option and upon request of the Trustee, Parent or the applicable Restricted Subsidiary shall maintain cash reserves in an amount sufficient to pay and discharge such Lien and the Trustee|s reasonable estimate of all interest and penalties related thereto; and (3) such Lien shall in all respects be subject and subordinated in priority to the Lien and security interest created and evidenced by the Security Documents, except if and to the extent that the law or regulation creating, permitting or authorizing such Lien provides that such Lien is or must be superior to the Lien and security interest created and evidenced by the Security Documents. 61 "Coverage Ratio Exception" has the meaning set forth in the proviso in the first paragraph of the covenant described under "--Certain Covenants--Limitation on Incurrence of Indebtedness." "Credit Facility" means one or more unsubordinated credit agreements, including the Amended and Restated Revolving Credit Agreement dated on or about the Issue Date among Issuer, Terra UK, TNLP, the guarantors party thereto, the lenders party thereto and Citicorp USA, Inc., as administrative agent, including any notes, guarantees, collateral and security documents (including mortgages, pledge agreements and other security arrangements), instruments and agreements executed in connection therewith, and in each case as amended or Refinanced from time to time, including any agreement or agreements extending the maturity of, or Refinancing (including increasing the amount of borrowings or other Indebtedness outstanding or available to be borrowed thereunder), all or any portion of the Indebtedness under such agreement, and any successor or replacement agreement or agreements with the same or any other agents, creditor, lender or group of creditors or lenders. "Currency Agreement" means, with respect to any Person, any foreign exchange contract, currency swap agreement or other similar agreement to which such Person is a party or a beneficiary. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Designated Preferred Stock" means preferred stock of Parent that is designated as Designated Preferred Stock pursuant to an officers' certificate executed by the principal executive officer and the principal financial officer of Parent on the issuance date thereof, the Net Cash Proceeds of which do not increase the Basket and are not used for purposes of clause (2) of the second paragraph of the covenant described under "--Certain Covenants--Limitation on Restricted Payments." "Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event: (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise; or (2) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the date that is 91 days after the Stated Maturity of the Notes; provided that any class of Capital Stock of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Qualified Stock, and that is not convertible, puttable or exchangeable for Disqualified Stock or Indebtedness, will not be deemed to be Disqualified Stock so long as such Person satisfies its obligations with respect thereto solely by the delivery of Qualified Stock; provided further that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right to require Parent or any Restricted Subsidiary to redeem or purchase such Capital Stock upon the occurrence of a change in control occurring prior to the final maturity date of the Notes shall not constitute Disqualified Stock if the change in control provisions applicable to such Capital Stock are no more favorable to such holders than the provisions described under the caption "--Change of Control" and such Capital Stock specifically provides that Parent or such Restricted Subsidiary will not redeem or purchase any such Capital Stock pursuant to such provisions prior to Issuer|s purchase of the Notes as required pursuant to the provisions described under the caption "--Change of Control." "Domestic Subsidiary" means a Restricted Subsidiary of Parent that is not a Foreign Subsidiary. "EBITDA" for any period means the sum of Consolidated Net Income for such period plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income: 62 (1) Consolidated Fixed Charges; (2) income tax expense determined on a consolidated basis in accordance with GAAP; (3) depreciation expense determined on a consolidated basis in accordance with GAAP; (4) amortization expense determined on a consolidated basis in accordance with GAAP; (5) minority interest; and (6) all other non-cash items reducing such Consolidated Net Income (excluding (x) any non-cash item to the extent that it represents an accrual of, or reserve for, cash disbursements to be made in any subsequent period and (y) the amount attributable to minority interests) for such period; provided that EBITDA shall be reduced by the following: (a) all non-cash items increasing such Consolidated Net Income (excluding (x) any non-cash item to the extent that it represents an accrual of cash receipts to be received in a subsequent period and (y) the amount attributable to minority interests); and (b) amounts paid as dividends or distributions to any Person other than Parent or any Restricted Subsidiary. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization of, a Subsidiary of Parent shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended or otherwise distributed to Parent by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments and governmental regulations applicable to such Subsidiary or its stockholders. "Exchange and Registration Rights Agreement" has the meaning set forth under "Exchange Offer; Registration Rights." "Exchange Notes" has the meaning set forth under "Exchange Offer; Registration Rights." "Excluded Assets" has the meaning set forth under "--Ranking." "Fair Market Value" means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) that would be negotiated in an arm's-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5.0 million shall be determined by the Board of Directors acting reasonably and in good faith and shall be evidenced by a Board Resolution delivered to the Trustee. Fair Market Value (other than of any asset with a public trading market) in excess of $15.0 million shall be determined by an Independent Financial Advisor, which determination shall be evidenced by an opinion delivered to the Trustee. "Fixed Asset Intercompany Note" means an unsubordinated promissory note substantially in the form attached to the Indenture; provided that (1) each such note shall be secured by the Fixed Assets of the obligor thereof and assigned to the Trustee as Collateral under the Indenture; (2) the Stated Maturity of, and interest payment dates on, each such note shall be the same as those for the Notes; 63 (3) the interest rate on each such note shall be equal to the weighted average interest rate of borrowings under the Credit Facility; and (4) any such note outstanding on the Issue Date will not be permitted to be prepaid below the amount outstanding on the Issue Date, except that (x) any such note will be permitted to be prepaid at any time to the extent that, after giving effect to the prepayment, the aggregate principal amount of all Fixed Asset Intercompany Notes then outstanding exceeds the aggregate principal amount of Notes then outstanding and (y) the TNLP Intercompany Note may be repaid under the conditions described under "--Collateral-- TNCLP and TNLP." "Fixed Assets" means assets of the type constituting Collateral other than the limited partnership interests issued by TNCLP and any Fixed Asset Intercompany Note. "Foreign Subsidiary" means a Restricted Subsidiary that is incorporated in a jurisdiction other than the United States or a State thereof or the District of Columbia and with respect to which a majority of its sales (determined on a consolidated basis in accordance with GAAP) is generated from or derived from operations outside the United States of America and a majority of its assets is located outside the United States of America. "GAAP" means generally accepted accounting principles in the United States of America as in effect on the date of the Indenture, except that Statement of Financial Accounting Statements No. 142, "Goodwill and Other Intangible Assets," shall be given effect when adopted by Parent and its Subsidiaries. "guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person: to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "guarantee" used as a verb has a corresponding meaning. The term "guarantor" shall mean any Person guaranteeing any obligation. "Guarantee" means a full and unconditional senior guarantee of the Notes pursuant to the Indenture, secured pursuant to the Security Documents. "Guarantor" means (1) each of the following: . Beaumont Ammonia Inc., a Delaware corporation; . Beaumont Holdings Corporation, a Delaware corporation; . BMC Holdings Inc., a Delaware corporation; . Port Neal Corporation, a Delaware corporation; . Terra (UK) Holdings Inc., a Delaware corporation; . Terra Capital Holdings, Inc., a Delaware corporation; . Terra Industries Inc., a Maryland corporation; 64 . Terra International (Oklahoma) Inc., a Delaware corporation; . Terra International Inc., a Delaware corporation; . Terra Methanol Corporation, a Delaware corporation; . Terra Nitrogen Corporation, a Delaware corporation; and . Terra Real Estate Corp., an Iowa corporation; and (2) any other Restricted Subsidiary of Parent that issues a Guarantee of the Notes, in each case, until such Person is released from its Guarantee in accordance with the Indenture. "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement entered into in the ordinary course of business and not for speculative purposes. "incur" means issue, create, assume, guarantee, incur or otherwise become liable for; provided that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be incurred by such Subsidiary at the time it becomes a Restricted Subsidiary. Neither the accrual of interest nor the accretion of original issue discount shall be deemed to be an incurrence of Indebtedness. The term "incurrence" when used as a noun shall have a correlative meaning. "Indebtedness" means, with respect to any Person, without duplication, and whether or not contingent: (1) all indebtedness of such Person for borrowed money or for the deferred purchase price of assets or services or which is evidenced by a note, bond, debenture or similar instrument, to the extent it would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP; (2) all Capital Lease Obligations of such Person; (3) all obligations of such Person in respect of letters of credit or bankers' acceptances issued or created for the account of such Person; (4) net obligations of such Person under Interest Rate Agreements or Currency Agreements; (5) all Disqualified Stock issued by such Person and all preferred stock issued by any Subsidiary of such Person, in each case, valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends thereon; (6) to the extent not otherwise included, any guarantee by such Person of any other Person's indebtedness or other obligations described in clauses (1) through (5) above; and (7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of such Indebtedness shall be the lesser of (x) the Fair Market Value of such asset at such date of determination and (y) the amount of such Indebtedness. For the avoidance of doubt, "Indebtedness" shall not include: . current trade payables incurred in the ordinary course of business and payable in accordance with customary practices; . deferred tax obligations; . minority interest; 65 . uncapitalized interest; . non-interest bearing installment obligations and accrued liabilities incurred in the ordinary course of business; and . obligations of Parent or any Restricted Subsidiary pursuant to contracts for, or options, puts or similar arrangements relating to, the purchase of raw materials or the sale of inventory at a time in the future entered into in the ordinary course of business. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by the Fair Market Value of, such Disqualified Stock, such Fair Market Value is to be determined in good faith by the board of directors of the issuer of such Disqualified Stock. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations as described above at such date; provided that the amount outstanding at any time of any Indebtedness issued with original issue discount shall be deemed to be the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. "Independent Financial Advisor" means a firm: . which does not, and whose directors, officers or affiliates do not, have a material financial interest in Parent or any of its Subsidiaries; and . which, in the judgment of the Board of Directors, is otherwise independent and qualified to perform the task for which it is to be engaged. "interest" means, with respect to the Notes, the sum of any interest and any Liquidated Damages on the Notes. "Interest Rate Agreement" means any interest rate swap agreement, interest rate cap agreement or other similar financial agreement or arrangement. "Investment" in any Person means any direct or indirect advance, loan or other extension of credit (including by way of guarantee or similar arrangement) or capital contribution to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. "Investment" excludes (a) any Restricted Payment of the type described in clause (2) of the definition "Restricted Payment" and (b) any purchase or acquisition of Indebtedness of Parent or any of its Subsidiaries. For purposes of the definition of "Unrestricted Subsidiary," the definition of "Restricted Payment" and the covenant described under "Certain Covenants--Limitation on Restricted Payments": (1) "Investment" shall include the portion (proportionate to Parent's direct and indirect equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; (2) any asset Transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such Transfer; and (3) if Parent or any Restricted Subsidiary Transfers any Capital Stock of any direct or indirect Restricted Subsidiary, or any Restricted Subsidiary issues Capital Stock, such that, after giving effect to any such Transfer or issuance, such Person is no longer a Restricted Subsidiary, Parent shall be deemed to have made an Investment on the date of any such Transfer or issuance equal to the Fair Market Value of the Capital Stock of such Person held by Parent or such Restricted Subsidiary immediately following any such Transfer or issuance. 66 "Issue Date" means the date on which the Notes are originally issued. "Issuer Surviving Entity" has the meaning set forth under "--Certain Covenants--Merger, Consolidation and Sale of Assets." "Lien" means, with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, debenture, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in any asset and any filing of, or agreement to give, any financing statement under the UCC or equivalent statutes) of any jurisdiction other than to evidence a lease. "Liquidated Damages" has the meaning set forth in the Indenture. "Make Whole Amount" means the excess, if any, of (1) an amount equal to the sum of the present values of the remaining scheduled payments of principal of the Notes to be redeemed or purchased and the scheduled payment of interest thereon to originally scheduled maturity, discounted to the redemption or purchase date (assuming a 360-day year consisting of twelve 30-day months) at the Special Adjusted Treasury Rate from the respective dates on which such principal and interest would have been payable over (2) the principal amount of the Notes being redeemed or purchased. "Net Available Proceeds" from an Asset Sale or a Sale of a Principal Property means the aggregate cash proceeds received by such Person and/or its affiliates in respect of such transaction, which amount is equal to the excess, if any, of: (1) the cash received by such Person and/or its affiliates (including any cash payments received by way of deferred payment pursuant to, or monetization of, a note or installment receivable or otherwise, but only as and when received) in connection with such transaction, over (2) the sum of (a) the amount of any Indebtedness that is secured by such asset and which is required to be repaid by such person in connection with such transaction, plus (b) all fees, commissions, and other expenses incurred by such Person in connection with such transaction, plus (c) provision for taxes, including income taxes, attributable to the transaction or attributable to required prepayments or repayments of Indebtedness with the proceeds of such transaction, plus (d) a reasonable reserve for the after-tax cost of any indemnification payments (fixed or contingent) attributable to seller|s indemnities to purchaser in respect of such transaction undertaken by Parent or any of its Restricted Subsidiaries in connection with such transaction, plus (e) if such Person is a Restricted Subsidiary, any dividends or distributions payable to holders of minority interests in such Restricted Subsidiary from the proceeds of such transaction. "Net Cash Proceeds," with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof. "Net Insurance Proceeds" means the insurance proceeds (excluding liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it) actually received by Parent or any Restricted Subsidiary as a result of damage to, or the loss, destruction or condemnation of, all or any portion of the Collateral, less collection costs, including fees and expenses of attorneys and insurance adjusters paid by Parent or any Restricted Subsidiary. For the avoidance of doubt, Net Insurance Proceeds do not include proceeds from business interruption insurance. 67 "Obligations" means, with respect to any Indebtedness, any principal, interest, penalties, fees, indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing such Indebtedness. "Parent Surviving Entity" has the meaning set forth under "--Certain Covenants--Merger, Consolidation and Sale of Assets." "Permitted Business" means (1) the same or a similar line of business as Parent and the Restricted Subsidiaries are engaged in on the date of the Indenture as described in this prospectus and (2) such business activities as are complementary, incidental, ancillary or related to, or are reasonable extensions of, the foregoing. "Permitted Holders" means Anglo American plc, an English public limited company, and its affiliates. "Permitted Indebtedness" has the meaning set forth in the second paragraph under "--Certain Covenants--Limitation on Incurrence of Indebtedness." "Permitted Investment" means: (1) any Investment in Temporary Cash Investments or the Notes or the Exchange Notes; (2) any Investment in Issuer or any Guarantor; (3) any Investment by Parent or any Restricted Subsidiary in a Person, if as a result of such Investment: . such Person becomes a Guarantor; or . such Person is merged or consolidated with or into, or Transfers or conveys all or substantially all of its assets to, or is liquidated into, Issuer or a Guarantor; (4) any Investment by any Foreign Subsidiary in: . any other Foreign Subsidiary; or . any Person, if as a result of such Investment, (x) such Person becomes a Foreign Subsidiary, or (y) such Person is merged or consolidated with or into, or Transfers or conveys all or substantially all of its assets to, or is liquidated into, any Foreign Subsidiary; (5) receivables owing to Parent or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided that such trade terms may include such concessionary trade terms as Parent or any such Restricted Subsidiary deems reasonable under the circumstances; (6) loans or advances to employees of Parent or any Restricted Subsidiary that are made in the ordinary course of business consistent with past practices of Parent or such Restricted Subsidiary; (7) Investments in any Person to the extent such Investment represents the non-cash portion of the consideration received in an Asset Sale or Sale of a Principal Property as permitted pursuant to the covenant described under "--Certain Covenants--Limitation on Asset Sales" or "--Certain Covenants--Limitation on Sale of Principal Properties;" (8) Investments of cash or Temporary Cash Investments in any Restricted Subsidiary that is not a Guarantor in the form of Indebtedness that is not subordinated by its terms to any other obligations; provided that . any such Investment made with proceeds from the Transfer of Fixed Assets shall be evidenced by a Fixed Asset Intercompany Note issued by such Restricted Subsidiary to the Person that makes such Investment; and 68 . to the extent that the aggregate amount of Indebtedness owed to Issuer or any Guarantor by such Restricted Subsidiary (other than those evidenced by a Fixed Asset Intercompany Note) after giving effect to such Investment is greater than the aggregate amount of such Indebtedness outstanding on the Issue Date, such Investment shall be evidenced by an unsecured promissory note issued by such Restricted Subsidiary to the Person that makes such Investment, on which note the Bank Collateral Agent under the Credit Facility shall have a first priority Lien and the Trustee shall have a second priority Lien (which priorities shall be governed by the Intercreditor Agreement); (9) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers; (10) Hedging Obligations incurred pursuant to clause (7) of the definition of "Permitted Indebtedness"; (11) Investments in joint ventures not to exceed $10.0 million at any time outstanding; provided that each such joint venture is engaged only in a Permitted Business; (12) any Investment by Parent or a Wholly Owned Subsidiary of Parent in a Securitization Entity; provided that such Investment is in the form of a Purchase Money Note or an equity interest or interests in accounts receivable generated by Parent or any of its Subsidiaries; (13) any Indebtedness of Parent to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by Parent from any such Subsidiary which assets are subsequently conveyed by Parent to a Securitization Entity in a Qualified Securitization Transaction; (14) any guarantees of Indebtedness permitted by clause (6) or (17) of the definition of "Permitted Indebtedness"; (15) any Investment by TNCLP or TNLP in the other; and (16) additional Investments in an aggregate amount not to exceed $10.0 million at any time outstanding. The amount of any Investments outstanding for purposes of clause (11) or (16) above and the amount of Investments deemed made since the Issue Date for purposes of clause (8) of "--Certain Covenants-Limitation on Restricted Payments" shall be equal to the aggregate amount of Investments made pursuant to such clause reduced (but not below zero) by the following (to the extent not included in the calculation of Consolidated Net Income for purposes of determining the Basket and without duplication): . the aggregate net proceeds (including the Fair Market Value of assets other than cash) received by Parent or any Restricted Subsidiary upon the sale or other disposition of any Investment made pursuant to such clause; . the net reduction in Investments made pursuant to such clause resulting from dividends, repayments of loans or advances or other Transfers of assets to Parent or any Restricted Subsidiary; . to the extent that the amount available for Investments under such clause was reduced as the result of the designation of an Unrestricted Subsidiary, the portion (proportionate to Parent|s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is redesignated, or liquidated or merged into, a Restricted Subsidiary; and . the net reduction in Investments made pursuant to such clause resulting from repayment of letters of credit or the expiration of letters of credit undrawn. "Permitted Liens" means: (1) Liens of the type described in the definition of "Collateral Permitted Liens" (other than clause (2) thereof), without giving effect to any requirement of compliance with the Contested Collateral Lien Conditions; 69 (2) Liens encumbering the Excluded Assets and the Second Lien Collateral securing the Credit Facility; (3) Liens securing Hedging Obligations of the type described in clause (7) of the definition of "Permitted Indebtedness"; (4) Liens securing Indebtedness of Foreign Subsidiaries (other than Principal Property Subsidiaries); (5) Liens in favor of Issuer or any Guarantor; provided that such Liens do not secure obligations that are assigned to any Person other than the Trustee pursuant to the Security Documents or the Bank Collateral Agent pursuant to the Credit Facility; (6) Liens on assets or shares of stock of a Person at the time such Person becomes a Subsidiary; provided that such Lien was not incurred in anticipation of or in connection with the transaction or series of related transactions pursuant to which such Person became a Subsidiary; (7) pledges of or Liens on raw materials or on manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such raw materials or manufactured products; (8) Liens in favor of banks that arise under Article 4 of the UCC on items in collection and documents relating thereto and proceeds thereof and Liens arising under Section 2-711 of the UCC; (9) Liens arising or that may be deemed to arise in favor of a Securitization Entity arising in connection with a Qualified Securitization Transaction; (10) other Liens securing obligations in an aggregate amount, together with the aggregate amount of any obligations secured pursuant to clause (13) of the definition of "Collateral Permitted Liens," not to exceed $2.0 million at any time outstanding; (11) pledges or deposits by such Person under workers' compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent or deposits as security for the payment of insurance-related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto), in each case incurred in the ordinary course of business; (12) Liens in favor of issuers of surety, performance, judgment, appeal and like bonds or letters of credit issued in the ordinary course of business; (13) Liens occurring solely by the filing of a UCC statement, which filing has not been consented to by Parent or any Restricted Subsidiary; (14) any obligations or duties affecting any property of Parent or any Restricted Subsidiary to any municipality or public authority with respect to any franchise, grant, license or permit that do not materially impair the use of such property for the purposes for which it is held; (15) Liens on any property in favor of domestic or foreign governmental bodies to secure partial, progress, advance or other payments pursuant to any contract or statute, not yet due and payable; (16) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements; and (17) deposits, pledges or other Liens to secure obligations under purchase or sale agreements. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. 70 "Preferred Stock," as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. "principal" of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time. "Principal Properties" means (1) each of the facilities at or near the following locations, as described in this prospectus: . Beaumont, Texas; . Billingham, U.K.; . Blytheville, Arkansas; . Courtright, Ontario; . Port Neal, Iowa; . Severnside, U.K.; . Verdigris, Oklahoma; and . Woodward, Oklahoma; and (2) each other real property of Parent or any Subsidiary required, pursuant to the Indenture and the Security Documents, to be pledged to the Trustee as a "Principal Property." "Principal Property Subsidiaries" means (1) each of the following Subsidiaries of Parent: . Beaumont Ammonia Inc., a Delaware corporation; . BMC Holdings Inc., a Delaware corporation; . Port Neal Corporation, a Delaware corporation; . Terra International (Canada) Inc., an Ontario corporation; . Terra International (Oklahoma) Inc., a Delaware corporation; . Terra Nitrogen (U.K.) Ltd., an English company; . Terra Nitrogen Company, L.P., a Delaware limited partnership; . Terra Nitrogen, Limited Partnership, a Delaware limited partnership; and . Terra Real Estate Corp., a Delaware corporation; and (2) any other Subsidiary that owns any Principal Property. "Pro Forma Cost Savings" means, with respect to any period, the reduction in costs that occurred during the period that were (1) directly attributable to an acquisition and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act as in effect on the date of the Indenture or (2) implemented by the business that was the subject of any such acquisition within one year of the date of the acquisition and that are supportable and quantifiable by the underlying accounting records of such business, as if, in the case of each of clauses (1) and (2), all such reductions in costs had been effected as of the beginning of such period, decreased by any incremental expenses (except to the extent capitalized on Parent's consolidated balance sheet) incurred or to be incurred for the period in order to achieve such reduction in costs. 71 "Purchase Money Indebtedness" mean Indebtedness: . consisting of the deferred purchase price of assets, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds or similar Indebtedness, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed; and . incurred to finance the acquisition by Parent or a Restricted Subsidiary of such asset, including additions and improvements; provided that any Lien arising in connection with any such Indebtedness shall be limited to the specified asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property on which such asset is attached; provided further that such Indebtedness is incurred within 120 days after such acquisition of, or the completion of construction of, such asset by Parent or Restricted Subsidiary. "Purchase Money Note" means a promissory note evidencing a line of credit, which may be irrevocable, from, or evidencing other Indebtedness owed to, Parent or any of its Subsidiaries in connection with a Qualified Securitization Transaction, which note shall be repaid from cash available to the maker of such note, other than amounts required to be established as reserves pursuant to agreements, amounts paid to investors in respect of interest, principal and other amounts owing to such investors and amounts paid in connection with the purchase of newly generated receivables. "Qualified Securitization Transaction" means any transaction or series of transactions that may be entered into by Parent, any Restricted Subsidiary or a Securitization Entity pursuant to which Parent or such Restricted Subsidiary or that Securitization Entity may, pursuant to customary terms, sell, convey or otherwise transfer to, or grant a security interest in for the benefit of, (1) a Securitization Entity or Parent or any Restricted Subsidiary which subsequently transfers to a Securitization Entity (in the case of a transfer by Parent or such Restricted Subsidiary) and (2) any other Person (in the case of transfer by a Securitization Entity), any accounts receivable (whether now existing or arising or acquired in the future) of Parent or any Restricted Subsidiary which arose in the ordinary course of business of Parent or such Restricted Subsidiary, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable. "Qualified Stock" means any Capital Stock of Parent other than Disqualified Stock. "Reference Treasury Dealer" means each of (1) Salomon Smith Barney Inc. or any successor; provided that if the foregoing shall not be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), Issuer shall substitute therefor another Primary Treasury Dealer and (2) any Primary Treasury Dealer selected by Issuer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer on any date of redemption, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such date of redemption. "Refinance" means, in respect of any Indebtedness, to refinance, extend, increase, replace, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings. "Refinancing Indebtedness" means, with respect to any Indebtedness, Indebtedness incurred to Refinance such Indebtedness that does not: 72 (1) result in an increase in the aggregate principal amount of Indebtedness being Refinanced as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable expenses incurred in connection with such Refinancing) or (2) create Indebtedness with (a) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or (b) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if the Indebtedness being Refinanced is subordinated by its terms to the Notes or a Guarantee, then such Refinancing Indebtedness shall be subordinated by its terms to the Notes or such Guarantee at least to the same extent and in the same manner as the Indebtedness being Refinanced and (y) the obligor(s) on the Refinancing Indebtedness shall not include any Person that is not the Issuer or a Guarantor or a Person that is an obligor on the Indebtedness being Refinanced. "Released Interest" has the meaning set forth under "--Asset Sale Release." "Restricted Payment" means, with respect to any Person: (1) any dividend or other distribution declared or paid on any Capital Stock of Parent (other than dividends or distributions payable solely in Qualified Stock); (2) any payment to purchase, redeem or otherwise acquire or retire for value any Capital Stock of Parent or any affiliate of Parent (other than any Restricted Subsidiary); (3) any payment to purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Obligations prior to the Stated Maturity thereof (other than any Purchase Money Indebtedness incurred after the Issue Date upon the sale of the related asset); or (4) the making of an Investment (other than a Permitted Investment), including any Investment in an Unrestricted Subsidiary (including by the designation of any Subsidiary of Parent as an Unrestricted Subsidiary). "Restricted Subsidiary" means Issuer, each Principal Property Subsidiary and each other Subsidiary of Parent that is not an Unrestricted Subsidiary. "Sale and Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby Parent or a Restricted Subsidiary Transfers such property to a Person and Parent or a Restricted Subsidiary leases it from such Person. "Second Lien Collateral" means all of the assets listed in the second paragraph under "--Collateral--Description of Collateral." "Securitization Entity" means a Wholly Owned Subsidiary of Parent (or another Person in which Parent or any Subsidiary of Parent makes an Investment and to which Parent or any Subsidiary of Parent Transfers accounts receivable) (1) which is designated by the Board of Directors (as provided below) as a Securitization Entity and engages in no activities other than in connection with the financing of accounts receivable; (2) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (a) is guaranteed by Parent or any of its Subsidiaries (other than the Securitization Entity) (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings), (b) is recourse to or obligates Parent or any of its Subsidiaries (other than the Securitization Entity) in any way other than pursuant to Standard Securitization Undertakings or (c) subjects 73 any asset of Parent or any of its Subsidiaries (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets) retained or acquired by Parent or any of its Subsidiaries; (3) with which neither Parent nor any of its Subsidiaries has any material contract, agreement, arrangement or understanding other than on terms no less favorable to Parent or such Subsidiary than those that might be obtained at the time from Persons that are not affiliates of Parent, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity; and (4) to which neither Parent nor any of its Subsidiaries has any obligation to maintain or preserve such entity|s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution giving effect to such designation and an officers' certificate certifying that such designation complied with the foregoing conditions. "Security Documents" means, collectively, (1) the Security Agreement among Issuer, the Guarantors and the Trustee, as collateral agent, and (2) all security agreements, mortgages, deeds of trust, pledges, collateral assignments, charges, debentures and other agreements or instruments evidencing or creating any security in favor of the Trustee on behalf of itself and the noteholders in any or all of the Collateral, in each case as amended from time to time in accordance with their terms. "Significant Subsidiary" means (1) any Restricted Subsidiary that is a "significant subsidiary" of Parent on a consolidated basis within the meaning of Regulation S-X promulgated by the SEC or (2) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in clause (7), (8) or (9) under "--Events of Default" has occurred and is continuing, would constitute a Significant Subsidiary under clause (1) of this definition. "Special Adjusted Treasury Rate" means, with respect to any date of redemption or purchase, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price equal to the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such date of redemption or purchase, plus 0.50%. "Standard Securitization Undertakings" means representations, warranties, covenants and indemnities entered into by Parent or any of its Subsidiaries which are reasonably customary in an accounts receivable securitization transaction. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred). "Subordinated Obligation" means any Indebtedness of Issuer or a Guarantor (whether outstanding on the Issue Date or thereafter incurred) which is subordinated by its terms in right of payment to the Notes or the Guarantee of such Guarantor. "Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which Voting Stock representing more than 50% of the total voting power of all outstanding Voting Stock of such Person is at the time owned, directly or indirectly, by: . such Person; 74 . such Person and one or more Subsidiaries of such Person; or . one or more Subsidiaries of such Person. "Temporary Cash Investments" means any of the following: (1) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof; (2) investments in time or demand deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is rated "A-2" or higher by Moody|s Investors Service, Inc. ("Moody's"), "A" or higher by Standard & Poor|s Ratings Group ("S&P") or the equivalent rating by any other nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor; (3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above; (4) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an affiliate of Issuer) organized and in existence under the laws of the United States of America, any State thereof or the District of Columbia or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is "P-2" or higher from Moody's, "A-2" or higher from S&P or the equivalent rating by any other nationally recognized statistical rating organization (as defined above); (5) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by Moody's or "A" by S&P; and (6) shares of any money market mutual fund rated at least AAA or the equivalent thereof by S&P, at least Aaa or the equivalent thereof by Moody's or any other mutual fund at least 95% of whose assets consist of the type specified in clauses (1) through (5) above. "Terra Canada" means Terra International (Canada) Inc., an Ontario corporation. "Terra UK" means Terra Nitrogen (U.K.) Ltd., an English company. "Terra UK Customer Debt" means Indebtedness for borrowed money of a customer of Terra UK owing to a financial institution in the United Kingdom; provided that: . such customer uses the entire principal proceeds of such Indebtedness to pay for goods and services purchased from Terra UK; . such customer is required to repay such Indebtedness in full within 12 months of the date on which such Indebtedness is incurred; . in the reasonable opinion of Terra UK, such customer is creditworthy; and . it is a condition of the extension of credit by such financial institution to such customer that Terra UK guarantee a portion of such Indebtedness. "Terra UK Intercompany Note" means the Fixed Asset Intercompany Note issued by Terra UK to Terra (UK) Holdings Inc. 75 "TNCLP" means Terra Nitrogen Company, L.P., a Delaware limited partnership. "TNLP" means Terra Nitrogen, Limited Partnership, a Delaware limited partnership. "TNLP Intercompany Note" means the Fixed Asset Intercompany Note issued by TNLP to Issuer. "Transfer" means to sell, assign, transfer, lease (other than pursuant to an operating lease entered into in the ordinary course of business), convey or otherwise dispose of, including by Sale and Leaseback Transaction, consolidation, merger or otherwise, in one transaction or a series of transactions. "Transferred," "Transferor" and "Transferee" have correlative meanings. "Trust Monies" means all cash and Temporary Cash Investments received by the Trustee: (1) upon the release of Collateral from the Lien of the Indenture or the Security Documents, including all Net Available Proceeds and all moneys received in respect of the principal of all purchase money, governmental and other obligations; (2) as compensation for or proceeds of the sale of all or any part of the Collateral taken by eminent domain or purchased by or sold pursuant to any order of a governmental authority or otherwise disposed of; (3) as Net Insurance Proceeds; (4) pursuant to the Security Documents; (5) as proceeds of any Transfer of all or any part of the Collateral by or on behalf of the Trustee or any collection, recovery, receipt, appropriation or other realization of or from all or any part of the Collateral pursuant to the Indenture or any of the Security Documents or otherwise; or (6) for application as provided in the relevant provisions of the Indenture or any Security Document or which disposition is not otherwise specifically provided for in the Indenture or in any Security Document; provided that Trust Monies shall in no event include any property deposited with the Trustee for any redemption, legal defeasance or covenant defeasance of Notes, for the satisfaction and discharge of the Indenture or to pay the purchase price of Notes pursuant to Net Proceeds Offer or offer to purchase Notes required under "--Change of Control" or "--Certain Covenants--Limitation on Sale of Principal Properties." "UCC " means the Uniform Commercial Code in effect in the applicable jurisdiction. "Unrestricted Subsidiary" means: . any Subsidiary of Parent that at the time of determination shall have been designated an Unrestricted Subsidiary by the Board of Directors; and . any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of Parent (including any newly acquired or newly formed Subsidiary but excluding any Principal Property Subsidiary and any parent company of any Principal Property Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any assets of, Issuer or any other Subsidiary of Parent that is not a Subsidiary of the Subsidiary to be so designated; provided that . no Default has occurred and is continuing or would occur as a consequence thereof; . Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception; and . either (x) the Subsidiary to be so designated has total assets of $1,000 or less or (y) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described under 76 "--Certain Covenants--Limitation on Restricted Payments" (treating the Fair Market Value of Issuer's proportionate interest in the net worth of such Subsidiary on such date calculated in accordance with GAAP as the amount of the Investment). The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that: . no Default has occurred and is continuing; and . Indebtedness of such Unrestricted Subsidiary and all Liens on any asset of such Unrestricted Subsidiary outstanding immediately following such redesignation would, if incurred at such time, be permitted to be incurred under the Indenture. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. "Valuation Date" has the meaning set forth under "--Asset Sale Release." "Voting Stock" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (1) the then outstanding aggregate principal amount of such Indebtedness into (2) the sum of the total of the products obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment. "Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital Stock of which (other than directors' qualifying shares) is owned by Parent and/or one or more Wholly Owned Subsidiaries. 77 BOOK-ENTRY; DELIVERY AND FORM The notes were offered and sold in connection with the initial offering thereof solely to "qualified institutional buyers," as defined in Rule 144A under the Securities Act ("QIBs"), pursuant to Rule 144A and in offshore transactions to persons other than "U.S. persons," as defined in Regulation S under the Securities Act ("Non-U.S. Persons"), in reliance on Regulation S. Following the initial offering of the notes, the notes may be sold to QIBs pursuant to Rule 144A, Non-U.S. Persons in reliance on Regulation S and pursuant to other exemptions from, or in transactions not subject to, the registration requirements of the Securities Act, as described under "Transfer Restrictions," including sales to institutional "accredited investors," as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act ("Institutional Accredited Investors"), that are not QIBs. The Global Notes Rule 144A Global Note. Notes offered and sold to QIBs pursuant to Rule 144A were issued in the form of one or more registered notes in global form, without interest coupons (collectively, the "Rule 144A Global Note"). The Rule 144A Global Note remain in the custody of the Trustee pursuant to the FAST Balance Certificate Agreement between The Depository Trust Company ("DTC") and the Trustee. Interests in the Rule 144A Global Note will be available for purchase only by QIBs. Regulation S Global Notes. Notes offered and sold in offshore transactions to Non-U.S. Persons in reliance on Regulation S were initially issued in the form of one or more registered notes in global form, without interest coupons (collectively, the "Regulation S Global Note"). Each Regulation S Global Note was deposited upon issuance with, or on behalf of, a custodian for DTC in the manner described in the preceding paragraph for credit to the respective accounts of the Euroclear System ("Euroclear"), or Clearstream Banking, S.A. of Luxembourg ("Clearstream, Luxembourg"). Prior to the 40th day after the later of the commencement of the offering of the notes and the Issue Date (such period through and including such 40th day, the "Distribution Compliance Period"), interests in the Regulation S Global Note were held only through Euroclear or Clearstream, Luxembourg (as indirect participants in DTC) unless exchanged for interests in the Rule 144A Global Note or the Institutional Accredited Investor Global Note (as defined below) in accordance with the transfer and certification requirements described herein. Investors may hold their interests in the Regulation S Global Note directly through Euroclear or Clearstream, Luxembourg, if they are participants in such systems, or indirectly through organizations which are participants in such systems. After the expiration of the Distribution Compliance Period (but not earlier), investors may also hold such interests through organizations other than Euroclear or Clearstream, Luxembourg that are participants in the DTC system. Euroclear and Clearstream, Luxembourg will hold such interests in the Regulation S Global Note on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositories. Such depositories, in turn, will hold such interests in the Regulation S Global Note in customers' securities accounts in the depositories' names on the books of DTC. Institutional Accredited Investor Global Note. In connection with the sale of notes to an Institutional Accredited Investor, beneficial interests in any of the Global Notes (as defined below) may be exchanged for interests in a separate note in registered form, without interest coupons (the "Institutional Accredited Investor Global Note"), which was deposited on the issue date with, or on behalf of, a custodian for DTC in the manner described in the preceding paragraphs. Except as set forth below, the Rule 144A Global Note, the Regulation S Global Notes and the Institutional Accredited Investor Global Note (collectively, the "Global Notes") may be transferred, in whole and not in part, solely to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in physical, certificated form ("Certificated Notes") except in the limited circumstances described below. The notes are subject to certain restrictions on transfer and bear a restrictive legend as set forth under "Transfer Restrictions." 78 All interests in the Global Notes, including those held through Euroclear or Clearstream, Luxembourg, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream, Luxembourg may also be subject to the procedures and requirements of such systems. Exchanges Among the Global Notes Prior to the expiration of the Distribution Compliance Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note or the Institutional Accredited Investor Global Note were made only in accordance with applicable procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided in the Indenture to the effect that such transfer is being made to (1) a person whom the transferor reasonably believes is a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an Institutional Accredited Investor purchasing for its own account, or for the account of such an Institutional Accredited Investor, in a minimum principal amount of the notes of $250,000. Such written certification is no longer required because the Distribution Compliance Period has expired. In addition, in the case of a transfer pursuant to clause (2) above, whether before or after the expiration of the Distribution Compliance Period, the transferor may be required to deliver to the Trustee a letter from the transferee substantially in the form set forth in the Indenture, which shall provide, among other things, that the transferee is an Institutional Accredited Investor that is acquiring such notes not for distribution in violation of the Securities Act. Transfers by an owner of a beneficial interest in the Rule 144A Global Note or the Institutional Accredited Investor Global Note to a transferee who takes delivery of such interest through the Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, will be made only upon receipt by the Trustee of a certification from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Distribution Compliance Period, the interest transferred was held immediately thereafter through Euroclear or Clearstream, Luxembourg. Any beneficial interest in one of the Global Notes that is transferred to a person who takes delivery in the form of an interest in another Global Note will, upon transfer, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest. Certain Book-Entry Procedures for the Global Notes The descriptions of the operations and procedures of DTC, Euroclear and Clearstream, Luxembourg set forth below are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to change by them from time to time. Neither the issuer nor any initial purchaser takes any responsibility for these operations or procedures, and investors are urged to contact the relevant system or its participants directly to discuss these matters. DTC has advised the issuer that it is: . a limited purpose trust company organized under the laws of the State of New York; . a "banking organization" within the meaning of the New York Banking Law; . a member of the Federal Reserve System; . a "clearing corporation" within the meaning of the Uniform Commercial Code, as amended; and . a "clearing agency" registered pursuant to Section 17A of the Exchange Act. 79 DTC was created to hold securities for its participants (collectively, the "Participants") and facilitates the clearance and settlement of securities transactions between Participants through electronic book-entry changes to the accounts of its Participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC's Participants include securities brokers and dealers (including the initial purchasers), banks and trust companies, clearing corporations and certain other organizations. Indirect access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Investors who are not Participants may beneficially own securities held by or on behalf of DTC only through Participants or Indirect Participants. The issuer believes that pursuant to procedures established by DTC (1) upon deposit of each Global Note, DTC credited the accounts of Participants designated by the initial purchasers with an interest in the Global Note and (2) ownership of the notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the interests of Participants) and the records of Participants and the Indirect Participants (with respect to the interests of persons other than Participants). The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Accordingly, the ability to transfer interests in the notes represented by a Global Note to such persons may be limited. In addition, because DTC can act only on behalf of its Participants, who in turn act on behalf of persons who hold interests through Participants, the ability of a person having an interest in notes represented by a Global Note to pledge or transfer such interest to persons or entities that do not participate in DTC's system, or to otherwise take actions in respect of such interest, may be affected by the lack of a physical definitive security in respect of such interest. So long as DTC or its nominee is the registered owner of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by the Global Note for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of Certificated Notes, and will not be considered the owners or holders thereof under the Indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the Trustee thereunder. Accordingly, each holder owning a beneficial interest in a Global Note must rely on the procedures of DTC and, if such holder is not a Participant or an Indirect Participant, on the procedures of the Participant through which such holder owns its interest, to exercise any rights of a holder of notes under the Indenture or such Global Note. The issuer understands that under existing industry practice, in the event that the issuer requests any action of holders of notes, or a holder that is an owner of a beneficial interest in a Global Note desires to take any action that DTC, as the holder of such Global Note, is entitled to take, DTC would authorize the Participants to take such action and the Participants would authorize holders owning through such Participants to take such action or would otherwise act upon the instruction of such holders. Neither the issuer nor the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to such notes. Payments with respect to the principal of, and premium, if any, Liquidated Damages, if any, and interest on, any notes represented by a Global Note registered in the name of DTC or its nominee on the applicable record date will be payable by the Trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the Global Note representing such notes under the Indenture. Under the terms of the Indenture, the issuer and the Trustee may treat the persons in whose names the notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving payment thereon and for any and all other purposes whatsoever. Accordingly, neither the issuer nor the Trustee has or will have any responsibility or liability for the payment of such amounts to owners of beneficial interests in a Global Note (including principal, premium, if any, Liquidated Damages, if any, and interest). Payments by the Participants and the Indirect Participants to the owners of beneficial interests in a Global Note will be governed by standing instructions and customary industry practice and will be the responsibility of the Participants or the Indirect Participants and DTC. 80 Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream, Luxembourg will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the notes, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream, Luxembourg participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, Luxembourg, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, Luxembourg, as the case may be, by the counterparts in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, Luxembourg, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Notes in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream, Luxembourg participants may not deliver instructions directly to the depositories for Euroclear or Clearstream, Luxembourg. Because of time zone differences, the securities account of a Euroclear or Clearstream, Luxembourg participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream, Luxembourg participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream, Luxembourg) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream, Luxembourg as a result of sales of interest in a Global Security by or through a Euroclear or Clearstream, Luxembourg participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream, Luxembourg cash account only as of the business day for Euroclear or Clearstream, Luxembourg following DTC's settlement date. Although DTC, Euroclear and Clearstream, Luxembourg have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, Luxembourg, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither the issuer nor the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream, Luxembourg or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations. Certificated Notes If: . the issuer notifies the Trustee in writing that DTC is no longer willing or able to act as a depositary or DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days of such notice or cessation; or . the issuer, at their option, notifies the Trustee in writing that it elects to cause the issuance of notes in definitive form under the indenture governing the notes; or . upon the occurrence of certain other events as provided in the indenture governing the notes, then, upon surrender by DTC of the Global Notes, Certificated Notes will be issued to each person that DTC identifies as the beneficial owner of the notes represented by the Global Notes. Upon any such issuance, the Trustee is required to register such Certificated Notes in the name of such person or persons (or the nominee of any thereof) and cause the same to be delivered thereto. Neither the issuer nor the Trustee shall be liable for any delay by DTC or any Participant or Indirect Participant in identifying the beneficial owners of the related notes and each such person may conclusively rely on, and shall be protected in relying on, instructions from DTC for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the notes to be issued). 81 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the material federal income tax consequences of ownership of the new notes. This discussion deals only with new notes held as capital assets and does not deal with the consequences to special classes of holders of the new notes, such as dealers in notes or currencies, life insurance companies, tax exempt entities, financial institutions, persons with a functional currency other than the U.S. dollar, U.S. expatriates or investors in pass-through entities such as partnerships. It does not deal with the effects of any arrangement entered into by a holder of the new notes that partially or completely hedges the new notes, or otherwise holds the new notes as part of a synthetic security or other integrated investment. In general, this discussion assumes that a holder acquires new notes at original issue. The discussion is based upon the Internal Revenue Code of 1986, as amended (the "Code"), and the related regulations, rulings, and judicial decisions as of the date of this prospectus, any of which may be repealed or modified in a manner resulting in federal income tax consequences that differ from those described below. This discussion does not address the tax considerations arising under the laws of any foreign, state or local jurisdiction. Holders of the notes should consult their own tax advisors concerning U.S. federal income tax consequences resulting from their particular situations, and state, local, franchise, gift and estate tax consequences, or other consequences under the laws of any other taxing jurisdiction. U.S. Holders The following discussion addresses the U.S. federal income tax consequences to a U.S. holder of a new note. For purposes of this discussion, a "U.S. holder" is a note holder that is (1) a citizen or resident of the United States for United States federal income tax purposes, including an alien individual who is a lawful permanent resident of the United States or meets the "substantial presence" test prescribed under the Code, (2) a corporation, partnership, or other entity organized under the laws of the United States or any political subdivision of the United States, (3) an estate taxed by the United States without regard to its source of income or (4) a trust if the trust has validly elected to be treated as a United States person for U.S. federal income tax purposes of if (a) a court within the United States can exercise primary supervision over its administration and (b) one or more United States persons have authority to control all of its substantial decisions. Exchange Offer in Connection with Registration of the New Notes The exchange of the outstanding notes for the new notes, which have substantially identical terms, in connection with the registration of the new notes will not be a taxable event for federal income tax purposes. Consequently, no gain or loss will be recognized by U.S. holders and non-U.S. holders of the outstanding notes upon receipt of the new notes and ownership of the new notes will be considered a continuation of ownership of the outstanding notes. For purposes of determining gain or loss upon the subsequent sale or exchange of the new notes, a holder will have the same tax basis and holding period in the new notes that the holder had in the outstanding notes. The U.S. federal income tax consequences of holding and disposing of the new notes will be the same as those of holding and disposing of the outstanding notes. Interest and Original Issue Discount Payments of stated interest on a new note will be taxable as ordinary interest income at the time it is received or accrued, depending upon the method of accounting applicable to the holder of the new note. With respect to original issue discount ("OID"), we intend to take the position (which generally will be binding on holders) that the new notes are not issued with OID. Accordingly, the U.S. holders will include stated interest in gross income in accordance with their methods of accounting for tax purposes. This position is based 82 in part upon our conclusion that, as of the date of this prospectus, the likelihood of paying additional amounts as described under "Description of Notes" should be "remote" within the meaning of applicable Treasury regulations. We intend to treat any such payments as additional interest payable on the new notes which should be taxable to U.S. holders at the time is accrues or is received in accordance with such holder's regular method of accounting. The Internal Revenue Service may or may not agree with this conclusion. Additional Interest The interest rate on the new notes may be increased if the new notes are not registered with the SEC within the prescribed time period or if we do not commence the exchange offer within the prescribed time period. We believe that the possibility that any additional interest will be paid is "remote and incidental" under applicable Treasury Regulations and, therefore, that any additional interest will be taxable to U.S. holders at the time that it accrues or is received in accordance with each U.S. holder's method of accounting. The Internal Revenue Service may take a different position, which could affect the time when the additional interest, if any, would be taxable to a U.S. holder. Sale, Exchange or Retirement of the New Notes Upon the sale, exchange or retirement of the new notes, a U.S. holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange or retirement, less a portion allocable to any accrued and unpaid interest, which will be taxable as ordinary income, and the U.S. holder's adjusted tax basis in the new notes. A U.S. holder's adjusted tax basis in the new notes generally will be the U.S. holders cost of the new notes, less any principal payments received by the holder. Gain or loss recognized by a U.S. holder on the sale, exchange or retirement of the new notes will be capital gain or loss. The gain or loss will be long-term capital gain or loss if the new notes have been held by the U.S. holder for more than twelve months. In the case of a noncorporate U.S. holder, long-term capital gain is subject to a maximum U.S. Federal tax rate of 20%. The deductibility of capital losses by U.S. holders is subject to certain limitations. Market Discount Any gain or loss on a disposition of a new note would generally be a capital gain or loss. However, a subsequent purchaser of a new note who did not acquire the new note at its original issue, and who acquires the new note at a price that is less than the stated redemption price of the new note at its maturity (i.e., the face amount of the new note if it is issued at par), may be required to treat the new note as a "market discount bond." Any recognized gain on a disposition of the new note would then be treated as ordinary income to the extent that it does not exceed the "accrued market discount" on the new note. In general, accrued market discount is that amount that bears the same ratio to the excess of the stated redemption price of the new note over the purchaser's basis in the new note immediately after its acquisition, as the number of days the purchaser holds the new note bears to the number of days after the date the purchaser acquired the new note up to and including the date of its maturity. In addition, there are rules deferring the deduction of all or part of the interest expense on indebtedness incurred or continued to purchase or carry the new notes and permitting a purchaser to elect to include accrued market discount in income on a current basis. Information Reporting and Backup Withholding A U.S. holder of a new note may be subject to "backup withholding" at a rate of 30.5% (30% for payments made after December 31, 2001) with respect to certain "reportable payments," including payments of interest and, under certain circumstances, principal payments on the new note. These backup withholding rules apply if the U.S. holder, among other things, (1) fails to furnish us with his or its social security number or other taxpayer identification number ("TIN"), certified under penalties of perjury, within a reasonable time after the request 83 therefore, (2) furnishes an incorrect TIN, (3) fails to properly report the receipt of interest, or (4) under certain circumstances, fails to provide a certified statement, signed under penalties of perjury, that the TIN furnished is the correct number and that such holder is not subject to backup withholding. Any amount withheld from a payment to a U.S. holder under the backup withholding rules is creditable against the U.S. holder's U.S. federal income tax liability, provided that the required information is furnished to the Internal Revenue Service. Backup withholding will not apply, however, with respect to payments made to certain holders (including corporations and tax-exempt organizations), provided their exemptions from backup withholding are properly established. A U.S. holder who does not provide us with its correct TIN also may be subject to penalties imposed by the Internal Revenue Service. Non-U.S. Holders The following discussion is limited to the U.S. federal income tax consequences relevant to a Non-U.S. holder and certain U.S. federal estate tax consequences of a nonresident alien individual (for U.S. federal estate tax purposes). As used herein, a "Non-U.S. holder" is any holder other than a U.S. holder. Under present United States federal income and estate tax law, assuming certain certification requirements are satisfied (which include identification of the beneficial owner of the instrument), and subject to the discussion of backup withholding below: 1. payments of interest on the new notes to any Non-U.S. holder will not be subject to United States federal income or withholding tax, provided that (a) (i) the Non-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote, (ii) the Non-U.S. holder is not (A) a bank receiving interest pursuant to a loan agreement entered into in the ordinary course of its trade or business or (B) a controlled foreign corporation that is related to us through stock ownership and (iii) those interest payments are not effectively connected with the conduct of a United States trade or business of the Non-U.S. holder (the "Portfolio Interest Exemption") or (b) the Non-U.S. holder is entitled to the benefits of an income tax treaty under which interest on the new notes is exempt from U.S. federal withholding tax and provides a properly executed IRS Form W-8BEN claiming the exemption (a "Treaty Exemption"); 2. a holder of the new notes who is a Non-U.S. holder will not be subject to the United States federal income tax on gain realized on the sale, exchange or other disposition of the new notes, unless (a) that holder is an individual who is present in the United States for 183 days or more during the taxable year and certain other requirements are met or (b) the gain is effectively connected with the conduct of a United States trade or business of the holder; and 3. if interest on the new notes is exempt from withholding of United States federal income tax under the Portfolio Interest Exemption (without regard to the certification requirement), the new notes will not be included in the estate of a deceased Non-U.S. holder for United States federal estate tax purposes. The certification referred to above may be made on an Internal Revenue Service Form W-8BEN or a substantially similar substitute form. Information Reporting and Backup Withholding We will, where required, report to the holders of the new notes and the Internal Revenue Service the amount of any interest paid on the new notes in each calendar year and the amounts of federal tax withheld, if any, with respect to payments. A noncorporate U.S. holder may be subject to information reporting and to backup withholding at a rate of 30.5% (30% after December 31, 2001) with respect to payments of principal and interest made on the new notes, or on proceeds of the disposition of the new notes before maturity, unless that U.S. holder provides a correct taxpayer identification number or proof of an applicable exemption, and otherwise complies with applicable requirements of the information reporting and backup withholding rules. 84 Backup withholding and information reporting will not apply to payments made by us or any agent of ours (in its capacity as such) to a Non-U.S. holder of new notes if such Non-U.S. holder has provided the required certification that it is not a U.S. person on the form W-8BEN or has otherwise established an exemption (provided that neither we nor our agent have actual knowledge that such holder is a U.S. person or that the conditions of any exemption are not in fact satisfied). Payments of the proceeds from the sale of new notes to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except if the broker is (1) a U.S. person, (2) a "controlled foreign corporation," (3) a foreign person 50% of more of whose gross income for certain periods is effectively connected with a United States trade or business or (4) a foreign partnership, if at any time during its taxable year, one or more of its partners are United States persons who in the aggregate hold more than 50% of the income or capital interest in the partnership or if, at any time during its taxable year, the foreign partnership is engaged in a United States trade or business, unless the Non-U.S. holder establishes an exception as specified in the Final Regulations regarding backup withholding and information reporting, as applicable. Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules will be refunded or credited against the Non-U.S. holder's United States Federal income tax liability, provided that the required information is furnished to the Internal Revenue Service. The preceding discussion of material U.S. federal income and estate tax consequences does not constitute tax advice. Accordingly, each holder should consult its own tax advisor as to the particular tax consequences to it of purchasing, holding, or disposing of the new notes, including the applicability and effect of any U.S. federal, state, local or foreign tax laws, as well as any possible changes in the tax laws. 85 PLAN OF DISTRIBUTION Each participating broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any participating broker-dealer for use in connection with any such resale. We will not receive any proceeds from any sales of the exchange notes by participating broker-dealers. Exchange notes received by participating broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such participating broker-dealer and/or the purchasers of any such exchange notes. Any participating broker-dealer that resells the exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any participating broker-dealer that requests such documents in the letter of transmittal. Prior to the exchange offer, there has not been any public market for the outstanding notes. The outstanding notes have not been registered under the Securities Act and will be subject to restrictions on transferability to the extent that they are not exchanged for exchange notes by holders who are entitled to participate in this exchange offer. The holders of outstanding notes, other than any holder that is our affiliate within the meaning of Rule 405 under the Securities Act, who are not eligible to participate in the exchange offer are entitled to certain registration rights, and we are required to file a shelf registration statement with respect to the outstanding notes. The exchange notes will constitute a new issue of securities with no established trading market. We do not intend to list the exchange notes on any national securities exchange or to seek the admission thereof to trading in the National Association of Securities Dealers Automated Quotation System. The initial purchasers have advised us that they currently intend to make a market in the exchange notes. In addition, such market making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the exchange offer and the pendency of the shelf registration statements. Accordingly, no assurance can be given that an active public or other market will develop for the exchange notes or as to the liquidity of the trading market for the exchange notes. If a trading market does not develop or is not maintained, holders of the exchange notes may experience difficulty in reselling the exchange notes or may be unable to sell them at all. If a market for the exchange notes develops, any such market may be discontinued at any time. VALIDITY OF THE NEW SECURITIES The validity of the exchange notes and the guarantees and other legal matters will be passed upon on our behalf by Kirkland & Ellis, a partnership that includes professional corporations, Chicago, Illinois. 86 EXPERTS The financial statements and related financial statement schedules of Terra Industries as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, included and incorporated by reference in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated by reference herein, and have been so included and incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The financial statements incorporated in this prospectus by reference from Terra Nitrogen Company, L.P.'s Annual Report on Form 10-K for 2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION Terra Industries files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public over the Internet at the SEC's web site at http://www.sec.gov. Terra Industries' common stock is listed on the New York Stock Exchange, and you may inspect our SEC filings at the offices of The New York Stock Exchange, 20 Broad Street, New York, New York 10005. INCORPORATION OF DOCUMENTS BY REFERENCE The SEC allows us to incorporate by reference the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information in this prospectus. Accordingly, we incorporate by reference the following documents filed by us: (1) Terra Industries' Annual Report on Form 10-K for the year ended December 31, 2000 (excluding the Consolidated Statements of Financial Position, Consolidated Statements of Operations, Consolidated Statements of Cash Flows, Consolidated Statements of Changes in Stockholders' Equity, Notes to the Consolidated Financial Statements and Independent Auditors' Report in Exhibit 13), (2) Amendment No. 1 to Terra Industries' Annual Report on Form 10-K/A for the year ended December 31, 2000, (3) Terra Industries' Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, (4) Terra Industries' Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, (5) Terra Industries' Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, (6) Terra Industries' Current Report on Form 8-K filed on October 17, 2001, (7) TNCLP's Annual Report on Form 10-K for the year ended December 31, 2000, (8) Amendment No. 1 to TNCLP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000, (9) TNCLP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, (10) TNCLP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, and (11) TNCLP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001. 87 In addition, all reports and other documents we subsequently filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act on or after the date of this prospectus shall be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the date of the filing of such reports and documents. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated in this prospectus by reference shall be deemed to be modified or superseded for the purposes of this prospectus to the extent that a statement contained in any subsequently filed document which is or is deemed to be incorporated by reference in this prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You may obtain, without charge, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to those documents that are not specifically incorporated by reference into those documents, by writing or telephoning Terra Industries Inc., Attn: Corporate Secretary, Terra Centre, 600 Fourth Street, P.O. Box 6000, Sioux City, Iowa 51102, (712) 277-1340. 88 TERRA INDUSTRIES INC. INDEX TO FINANCIAL STATEMENTS
Page ---- Audited Consolidated Financial Statements: Independent Auditors' Report...................................................................... F-2 Consolidated Statements of Financial Position as of December 31, 1999 and 2000.................... F-3 Consolidated Statements of Operations for the years ended December 31, 1998, 1999 and 2000........ F-4 Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000........ F-5 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1998, 1999 and 2000................................................................................... F-6 Notes to Consolidated Financial Statements for the years ended December 31, 1998, 1999 and 2000........................................................................................ F-7
F-1 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Terra Industries Inc.: We have audited the accompanying consolidated statements of financial position of Terra Industries Inc. and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of operations, cash flows and changes in stockholders' equity for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of Terra's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Terra Industries Inc. and subsidiaries at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Omaha, Nebraska January 25, 2001 F-2 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
At December 31, ---------------------- 1999 2000 ---------- ---------- (in thousands) Assets Cash and short-term investments........................................... $ 9,790 $ 101,425 Accounts receivable, less allowance for doubtful accounts of $491 and $889 102,776 107,299 Inventories............................................................... 133,634 101,526 Other current assets...................................................... 47,482 17,448 ---------- ---------- Total current assets............................................... 293,682 327,698 ---------- ---------- Property, plant and equipment, net........................................ 997,801 902,801 Excess of cost over net assets of acquired businesses..................... 253,162 231,372 Other assets.............................................................. 56,800 50,681 ---------- ---------- Total assets....................................................... $1,601,445 $1,512,552 ========== ========== Liabilities Debt due within one year.................................................. $ 17,152 $ 5,546 Accounts payable.......................................................... 88,413 62,820 Accrued and other liabilities............................................. 35,158 60,324 ---------- ---------- Total current liabilities.......................................... 140,723 128,690 ---------- ---------- Long-term debt............................................................ 469,309 467,808 Deferred income taxes..................................................... 163,733 156,475 Other liabilities......................................................... 67,409 43,508 Minority interest......................................................... 103,269 105,274 Commitments and contingencies (Note 11)................................... ---------- ---------- Total liabilities.................................................. 944,443 901,755 ---------- ---------- Stockholders' Equity Capital stock Common Shares, authorized 133,500 shares; 75,309 and 75,885 shares outstanding.......................................................... 127,890 128,283 Paid-in capital........................................................... 552,903 554,750 Accumulated other comprehensive loss...................................... (9,852) (48,115) Retained deficit.......................................................... (13,939) (24,121) ---------- ---------- Total stockholders' equity......................................... 657,002 610,797 ---------- ---------- Total liabilities and stockholders' equity......................... $1,601,445 $1,512,552 ========== ==========
See accompanying Notes to the Consolidated Financial Statements. F-3 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31, --------------------------------------- 1998 1999 2000 -------- --------- ---------- (in thousands, except per-share amounts Revenues Net sales........................................................... $904,926 $ 824,992 $1,053,452 Other income, net................................................... 5,042 8,451 9,558 -------- --------- ---------- 909,968 833,443 1,063,010 -------- --------- ---------- Cost and Expenses Cost of sales....................................................... 836,786 841,061 971,713 Selling, general and administrative expense......................... 62,968 55,424 48,490 -------- --------- ---------- 899,754 896,485 1,020,203 -------- --------- ---------- Income (loss) from operations....................................... 10,214 (63,042) 42,807 Insurance settlement costs.......................................... -- -- (5,968) Interest income..................................................... 326 8,361 3,869 Interest expense.................................................... (51,122) (53,076) (51,511) Minority interest................................................... (27,510) (8,341) (5,379) -------- --------- ---------- Loss from continuing operations before income taxes................. (68,092) (116,098) (16,182) Income tax benefit.................................................. (24,761) (46,000) (6,000) -------- --------- ---------- Loss from continuing operations..................................... (43,331) (70,098) (10,182) Loss from discontinued operations: Income (loss) from operations, net of income taxes.............. 17,082 (5,800) -- Loss on disposition, net of income taxes........................ -- (4,724) -- Extraordinary loss on early retirement of debt, net of income taxes. -- (9,265) -- -------- --------- ---------- Net Loss............................................................... $(26,249) $ (89,887) $ (10,182) ======== ========= ========== Basic and Diluted Earnings (Loss) Per Share: Continuing operations............................................... $ (0.58) $ (0.94) $ (0.14) Discontinued operations............................................. 0.23 (0.14) -- Extraordinary loss on early retirement of debt...................... -- (0.12) -- -------- --------- ---------- Net Loss Per Share..................................................... $ (0.35) $ (1.20) $ (0.14) ======== ========= ==========
See accompanying Notes to the Consolidated Financial Statements. F-4 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, ----------------------------- 1998 1999 2000 -------- --------- -------- (in thousands) Operating Activities Net loss...................................................................... $(26,249) $ (89,887) $(10,182) Adjustments to reconcile net loss to net cash flows from operating activities: (Income) loss from discontinued operations................................. (17,082) 10,524 -- Extraordinary loss on early retirement of debt............................. -- 9,265 -- Depreciation and amortization.............................................. 101,053 101,588 114,901 Deferred income taxes...................................................... 11,319 2,805 1,881 Minority interest in earnings.............................................. 27,510 8,341 5,379 Other non-cash items....................................................... (2,197) -- -- Change in current assets and liabilities, excluding working capital purchased: Accounts receivable........................................................ (22,937) (5,663) (7,644) Account receivable securitization.......................................... (14,000) (136,000) -- Inventories................................................................ (37,460) 11,454 28,388 Other current assets....................................................... 4,044 1,329 13,981 Accounts payable........................................................... (32,017) (9,669) (22,978) Accrued and other liabilities.............................................. (6,368) (62,520) 11,078 Other......................................................................... 7,299 4,573 (1,975) -------- --------- -------- Net Cash Flows From Operating Activities...................................... (7,085) (153,860) 132,829 -------- --------- -------- Investing Activities Purchase of property, plant and equipment.................................. (55,327) (51,899) (12,219) Discontinued operations.................................................... 96,766 335,129 -- Other...................................................................... 3,371 (4,531) (4,962) -------- --------- -------- Net Cash Flows From Investing Activities...................................... 44,810 278,699 (17,181) -------- --------- -------- Financing Activities Net short-term borrowings (repayments)..................................... -- 6,000 (6,000) Principal payments on long-term debt....................................... (9,538) (16,569) (7,107) Stock issuance--net........................................................ 286 13 7 Distributions to minority interests........................................ (35,052) (9,429) (1,119) Repurchase of TNCLP common units........................................... (16,523) (5,994) (2,414) Deferred financing costs................................................... -- -- (6,697) Redemption of minority interest in subsidiary.............................. -- (225,000) -- Dividends.................................................................. (14,986) (5,281) -- -------- --------- -------- Net Cash Flows From Financing Activities...................................... (75,813) (256,260) (23,330) -------- --------- -------- Effect of Exchange Rate Changes on Cash....................................... (331) (432) (683) -------- --------- -------- Increase (Decrease) in Cash and Short-Term Investments........................ (38,419) (131,853) 91,635 Cash and Short-Term Investments at Beginning of Year.......................... 180,062 141,643 9,790 -------- --------- -------- Cash and Short-Term Investments at End of Year................................ $141,643 $ 9,790 $101,425 ======== ========= ======== Interest Paid................................................................. $ 61,907 $ 55,379 $ 50,851 ======== ========= ======== Income Taxes Received......................................................... $ (7,085) $ (20,285) $(14,058) ======== ========= ========
See accompanying Notes to the Consolidated Financial Statements. F-5 TERRA INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Accumulated Capital Stock Other Retained Comprehensive ---------------- Paid-In Comprehensive Earnings Income (Loss) Shares Amount Capital Loss (Deficit) Total ------------- ------ -------- -------- ------------- --------- -------- (in thousands) January 1, 1998................ 74,977 $127,581 $548,772 $ (8,488) $122,464 $790,329 ====== ======== ======== ======== ======== ======== Comprehensive Income Net loss..................... $(26,249) -- -- -- -- (26,249) (26,249) Foreign currency translation adjustments..... (5,669) -- -- -- (5,669) -- (5,669) -------- Total....................... $(31,918) ======== Exercise of stock options, net. 43 43 243 -- -- 286 Stock Incentive Plan........... 445 263 3,878 -- -- 4,141 Dividends...................... -- -- -- -- (14,986) (14,986) ------ -------- -------- -------- -------- -------- December 31, 1998.............. 75,465 $127,887 $552,893 $(14,157) $ 81,229 $747,852 ====== ======== ======== ======== ======== ======== Comprehensive Income Net loss...................... $(89,887) -- -- -- -- (89,887) (89,887) Foreign currency translation adjustments................. 4,305 -- -- -- 4,305 -- 4,305 -------- Total....................... $(85,582) ======== Exercise of stock options, net. 3 3 10 -- -- 13 Stock Incentive Plan........... (159) -- -- -- -- -- Dividends...................... -- -- -- -- (5,281) (5,281) ------ -------- -------- -------- -------- -------- December 31, 1999.............. 75,309 $127,890 $552,903 $ (9,852) $(13,939) $657,002 ====== ======== ======== ======== ======== ======== Comprehensive Income Net loss..................... $(10,182) -- -- -- -- (10,182) (10,182) Foreign currency translation adjustments................. (38,263) -- -- -- (38,263) -- (38,263) -------- Total....................... $(48,445) ======== Exercise of stock options, net. 5 5 2 -- -- 7 Stock Incentive Plan........... 571 388 1,845 -- -- 2,233 ====== ======== ======== ======== ======== ======== December 31, 2000.............. 75,885 $128,283 $554,750 $(48,115) $(24,121) $610,797 ====== ======== ======== ======== ======== ========
See accompanying Notes to the Consolidated Financial Statements. F-6 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Basis of presentation: The Consolidated Financial Statements include the accounts of Terra Industries Inc. and all majority owned subsidiaries (Terra). All significant intercompany accounts and transactions have been eliminated. Minority interest in earnings and ownership has been recorded for the percentage of limited partnership common units not owned by Terra Industries Inc. for each respective period presented. Description of business: Terra produces nitrogen products for agricultural dealers and industrial users, and methanol for industrial users. Foreign exchange: Results of operations for the foreign subsidiaries are translated using average currency exchange rates during the period; assets and liabilities are translated using current rates. Resulting translation adjustments are recorded as foreign currency translation adjustments in accumulated other comprehensive income in stockholders' equity. These translation adjustments are the only component of accumulated other comprehensive income. Cash and short-term investments: Terra considers short-term investments with an original maturity of three months or less to be cash equivalents which are reflected at their approximate fair value. Inventories: Inventories are stated at the lower of average cost or estimated net realizable value. The cost of average inventories is determined using the first-in, first-out method. Property, plant and equipment: Expenditures for plant and equipment additions, replacements and major improvements are capitalized. Related depreciation is charged to expense on a straight-line basis over estimated useful lives ranging from 15 to 20 years for buildings and 3 to 18 years for plant and equipment. Maintenance and repair costs are expensed as incurred. Plant turnaround costs: Costs related to the periodic scheduled major maintenance of continuous process production facilities (plant turnarounds) are deferred and charged to product costs on a straight-line basis during the period until the next scheduled turnaround, generally two years. Excess of costs over net assets of acquired businesses: Terra amortizes costs in excess of fair value of net assets of businesses acquired using the straight-line method over periods ranging from 15 to 18 years. Management periodically evaluates the recoverability of this asset through an assessment of expected cash flows from future operations. F-7 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Impairment of long-lived assets: In accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of ", the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future cash flows expected to result from the use of the asset (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized based on the difference between the carrying amount and the fair value of the asset. To date, no such impairment has occurred. Revenue recognition: Revenue is recognized when title to finished product passes to the customer. Revenue is recognized as the net amount to be received after deducting estimated amounts for discounts and trade allowances. Cost of sales and hedging transactions: Realized gains and losses from hedging activities and premiums paid for option contracts are deferred and recognized in the month to which the hedged transactions relate (see Note 12--Derivative Financial Instruments). Costs associated with settlement of natural gas purchase contracts are included in cost of sales. Stock-based compensation: The Company accounts for its employee stock-based compensation plans in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations, which utilizes the intrinsic value method. The Company follows the disclosure provisions and accounts for non-employee stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications: The company reclassified freight costs previously reported as a reduction of revenues to cost of sales in accordance with the Financial Accounting Standards Board's Emerging Issues Task Force No. 00-10, "Accounting for Shipping and Handling Fees and Costs". As a result, revenues and cost of sales increased by $64.4 million in 1998, $59.1 million in 1999 and $61.9 million in 2000, respectively. Certain other reclassifications have been made to prior years' financial statements to conform with current year presentation. Per-share results: Basic earnings per share data are based on the weighted-average number of Common Shares outstanding during the period. Diluted earnings per share data are based on the weighted-average number of Common F-8 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Shares outstanding and the effect of all dilutive potential common shares including stock options, restricted shares and contingent shares. Recently issued accounting standards: In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138, requires that all derivative instruments be recorded in the balance sheet at fair value. Changes in the fair value of derivatives are recorded in earnings or other comprehensive income, based on whether the instrument is designated as part of a hedge transaction and, if so, the type of hedge transaction. On January 1, 2001, Terra adopted this statement which resulted in a $23.3 million increase in current assets to recognize the value of open natural gas contracts, a $9.2 million reduction in current liabilities to reclassify deferred gains on closed contracts relating to future periods, a $1.1 million increase in long-term debt related to interest rate hedges and a $31.4 million increase to stockholders' equity as a reduction in accumulated other comprehensive losses. Management does not expect the adoption of SFAS 133 to have a material impact on Terra's results of operations or cash flows. 2. Discontinued Operations On June 30, 1999, Terra sold its Distribution business segment to Cenex/Land O' Lakes Agronomy Company ("Buyer") for $335.1 million, net of seasonal working capital increases from December 31, 1998, and closing costs. In the sales transaction, the Buyer acquired all rights to the Distribution business' earnings from April 1, 1999 forward. Included in the sale were Terra's approximately 400 retail farm service centers in the U.S. and Canada, and its 50% ownership position in the Omnium chemical formulation plants. The accompanying consolidated statements of operations, financial position and cash flows have been restated for prior periods to segregate results of operations and net assets associated with the discontinued Distribution business segment. The Buyer and Terra have also entered into a three-year nitrogen fertilizer supply agreement through which the Buyer will purchase approximately the quantity that Terra's Nitrogen Products segment supplied to both the Distribution business and the Buyer. F-9 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 3. Earnings Per Share The following table provides a reconciliation between Basic and Diluted Loss Per Share.
1998 1999 2000 -------- -------- -------- (in thousands, except per-share data) Basic and diluted loss per share computation:......... Loss from continuing operations....................... $(43,331) $(70,098) $(10,182) Earnings (loss) from discontinued operations.......... 17,082 (10,524) -- -------- -------- -------- Loss available before extraordinary item.............. (26,249) (80,622) (10,182) Extraordinary loss on debt retirement................. -- (9,265) -- -------- -------- -------- Loss available to common shareholders................. $(26,249) $(89,887) $(10,182) ======== ======== ======== Basic and diluted weighted average shares outstanding. 73,954 74,703 74,707 ======== ======== ======== Loss per share from continuing operations............. $ (0.58) $ (0.94) $ (0.14) Earnings (loss) per share from discontinued operations 0.23 (0.14) -- -------- -------- -------- Loss per share before extraordinary item.............. (0.35) (1.08) (0.14) -------- -------- -------- Extraordinary loss per share.......................... -- (0.12) -- -------- -------- -------- Basic and diluted loss per share...................... $ (0.35) $ (1.20) $ (0.14) ======== ======== ========
4. Inventories Inventories consisted of the following at December 31:
1999 2000 -------- -------- (in thousands) Raw materials................ $ 37,437 $ 24,085 Supplies..................... 20,335 20,918 Finished goods............... 75,862 56,523 -------- -------- Total..................... $133,634 $101,526 ======== ========
5. Other Current Assets Other current assets consisted of the following at December 31:
1999 2000 ------- ------- (in thousands) Deferred tax asset--current................................................ $ 5,238 $ -- Income taxes recoverable................................................... 10,278 -- Accounts receivable of discontinued operations, less allowance for doubtful accounts of $12,533 and $6,358........................................... 6,238 1,240 Other current assets....................................................... 25,728 16,208 ------- ------- Total................................................................... $47,482 $17,448 ======= =======
F-10 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 6. Property, Plant and Equipment, Net Property, plant and equipment, net consisted of the following at December 31:
1999 2000 ---------- ---------- (in thousands) Land and buildings............................ $ 53,875 $ 69,136 Plant and equipment........................... 1,170,541 1,216,066 Construction in progress...................... 98,406 11,378 ---------- ---------- 1,322,822 1,296,580 Less accumulated depreciation and amortization (325,021) (393,779) ---------- ---------- Total...................................... $ 997,801 $ 902,801 ========== ==========
7. Insurance Settlement Costs During 2000, Terra incurred $6.0 million of legal and other professional fees in connection with a lawsuit to recover losses related to a 1994 explosion at Terra's Port Neal facility. These costs were related to an insurance recovery gain reported in Terra's 1997 financial statements which was excluded from the determination of operating income. 8. Debt Due Within One Year Debt due within one year consisted of the following at December 31:
1999 2000 ------- ------ (in thousands) Short-term borrowings................. $ 6,000 $ -- Current maturities of long-term debt.. 11,152 5,546 ------- ------ Total................................. $17,152 $5,546 ======= ====== Weighted average short-term borrowings $10,699 $ 536 ======= ====== Weighted average interest rate........ 10.00% 10.75% ======= ======
In April 2000, Terra entered into a $175 million revolving credit facility, which expires in January 2003 and replaced a $62 million revolving credit facility. Borrowings available under the facility are reduced by the amount of the Bank Term Notes (described in Note 10), currently $59.4 million, and further limited based on consolidated working capital levels and outstanding letters of credit issued under the facility. At December 31, 2000, there were $21.3 million of outstanding letters of credit under the facility for recorded liabilities. Interest on borrowings is charged at current market rates. A commitment fee is charged on the unused portion of the facility under the credit agreement, currently 0.5 percent. The credit agreement is secured by substantially all assets. The agreement requires Terra to adhere to certain limitations on additional debt, capital expenditures, acquisitions, liens, asset sales, investments, prepayments of subordinated indebtedness, changes in lines of business and transactions with affiliates. In addition, Terra is required to maintain minimum levels of earnings before interest, income taxes, depreciation and amortization (as defined in the credit agreement) computed on a quarterly basis. F-11 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 9. Accrued and Other Liabilities Accrued and other liabilities consisted of the following at December 31:
1999 2000 ------- ------- (in thousands) Customer deposits................ $10,346 $ 5,821 Payroll and benefit costs........ 3,220 12,359 Deferred natural gas hedging gain 3 9,207 Income taxes--state.............. 1,360 -- Other............................ 20,229 32,937 ------- ------- Total......................... $35,158 $60,324 ======= =======
10. Long-Term Debt Long-term debt consisted of the following at December 31:
1999 2000 -------- -------- (in thousands) Senior Notes, 10.5%, due 2005............................................ $200,000 $200,000 Senior Notes, 10.75%, due 2003........................................... 158,755 158,755 Bank Term Notes, due 2003................................................ 109,375 59,375 Asset based Term Facility, due 2003...................................... -- 46,250 Industrial Development Revenue Bonds bearing interest at an average 6.85% with increasing payments from 2000 to 2011............................. 8,130 7,820 Other.................................................................... 4,201 1,154 -------- -------- 480,461 473,354 Less current maturities.................................................. 11,152 5,546 -------- -------- Total................................................................. $469,309 $467,808 ======== ========
Scheduled principal payments for each of the five years 2001 through 2005 are $5.5 million, $4.4 million, $256.8 million, $0.5 million and $200.6 million, respectively. The 10.5% unsecured Senior Notes are redeemable at the option of Terra, in whole or part, at any time at 105.250% of their principal amount, plus accrued interest, declining to 102.625% on or after June 15, 2001, and declining to 100% on or after June 15, 2002. The 10.5% unsecured Senior Notes Indenture contains certain restrictions, including the issuance of additional debt, payment of dividends, issuance of capital stock, certain transactions with affiliates, incurrence of liens, sale of assets, and sale-leaseback transactions. The 10.75% unsecured Senior Notes are redeemable at par at the option of Terra, in whole or part. The 10.75% Senior Notes Indenture contains restrictions similar to those in the 10.5% Senior Notes Indenture. The Bank Term Notes are secured by substantially all assets of Terra Canada, a beneficially owned subsidiary of Terra. The Notes are due in full on January 2, 2003. The Notes bear interest at a rate based on current market rates, 9.89% at December 31, 2000. The Notes include covenants similar to the credit agreement described in Note 8--Debt Due Within One Year. The Asset Based Term Facility is secured by substantially all assets. The facility requires quarterly payments of $1.25 million through September 2002, with the balance due at maturity. The facility bears interest F-12 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) at a rate based on current market rates, currently 10.64%. The facility has covenants similar to those described in Note 8--Debt Due Within One Year. The Industrial Development Revenue Bonds due in 2011 are secured by a letter of credit guaranteed by Terra and, along with certain other long-term debt due in 2003, by Terra's headquarters building located in Sioux City, Iowa. 11. Commitments and Contingencies Terra and its subsidiaries are committed to various non-cancelable operating leases for equipment, railcars and production, office and storage facilities expiring on various dates through 2017. Total minimum rental payments are as follows:
(in thousands) 2001............... $15,445 2002............... 11,514 2003............... 9,838 2004............... 7,041 2005 and thereafter 16,396 ------- Total........... $60,234 =======
Total rental expense for continuing operations under all leases, including short-term cancelable operating leases, was approximately $20.8 million, $20.6 million and $18.0 million for the years ended December 31, 1998, 1999 and 2000, respectively. Terra is liable for retiree medical benefits of employees of coal mining operations sold in 1993, under the Coal Industry Retiree Health Benefit Act of 1992, which mandated certain retiree medical benefits for union coal miners. Terra has provided reserves adequate to cover the estimated present value of these liabilities at December 31, 2000. Four lawsuits by U.K. soft drink producers and distributors have been filed against Terra and other defendants seeking in excess of (Pounds)13.3 million in damages, plus costs and interest. The lawsuits seek to recover damages following a product recall the plaintiffs initiated in reaction to trace amounts of benzene allegedly found in carbon dioxide used as an ingredient in the recalled products. Terra produced the carbon dioxide at one of its U.K. plants. A fifth lawsuit seeking (Pounds)12.5 million and a sixth lawsuit seeking (Pounds)0.6 million in damages were settled by Terra's insurer in January 2000 and February 2001, respectively, with Terra making no contribution toward the settlements. In addition to the filed lawsuits, certain other soft drink producers have indicated their intention to file claims in unspecified amounts. Terra has denied liability for these lawsuits and claims and intends to vigorously defend its position. Terra believes it has insurance coverage for any damages. Its insurer is paying Terra's defense costs in all cases, has funded the January 2000 and February 2001 settlements, and has extended full coverage in the single case now before the court (wherein damages of (Pounds)9 million are sought), but currently continues to reserve the right to deny coverage in whole or in part for any adverse judgments in the remaining cases. While it is not feasible to predict with certainty the final outcome of these proceedings, management does not believe this matter will have a material adverse effect on Terra's results of operations, financial position or net cash flows. Terra is involved in various legal actions and claims, including environmental matters, arising from the normal course of business. It is the opinion of management that the ultimate resolution of these matters will not have a material adverse effect on the results of operations, financial position or net cash flows of Terra. F-13 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Terra will be required to make a payment for each year through 2002 if average ammonium nitrate prices exceed certain thresholds during any year, subject to maximum payments of (Pounds)58 million ($95.7 million USD at the time of signing) over the term of the agreement. As a result of making any such payments, Terra will not benefit fully from the U.K. price of ammonium nitrate of certain thresholds during the term of this agreement. No payments were due under this agreement in 1998, 1999 or 2000. 12. Derivative Financial Instruments Terra manages risk using derivative financial instruments for (a) changes in natural gas supply prices and (b) interest rate fluctuations and (c) currency. Derivative financial instruments have credit risk and market risk. To manage credit risk, Terra enters into derivative transactions only with counter-parties who are currently rated BBB or better or equivalent as recognized by a national rating agency. Terra will not enter into transactions with a counter-party if the additional transaction will result in credit exposure exceeding $20 million. The credit rating of counter-parties may be modified through guarantees, letters of credit or other credit enhancement vehicles. Terra classifies a derivative financial instrument as a hedge if all of the following conditions are met: 1. The item to be hedged must expose Terra to currency, interest or price risk. 2. It must be probable that the results of the hedge position substantially offset the effects of currency, interest or price changes on the hedged item (e.g., there is a high correlation between the hedge position and changes in market value of the hedge item). 3. The derivative financial instrument must be designated as a hedge of the item at the inception of the hedge. A change in the market value of a derivative financial instrument is recognized as a gain or loss in the period of the change unless the instrument meets the criteria to qualify as a hedge. If the hedge criteria are met, the accounting for the derivative financial instrument is related to the accounting for the hedged item so that changes in the market value of the derivative financial instrument are recognized in income when the effects of related changes in the currency rate, interest rate or price of the hedged item are recognized. A change in the market value of a derivative financial instrument that is a hedge of a firm commitment is included in the measurement of the transaction that satisfies the commitment. Terra accounts for a change in the market value of a derivative financial instrument that hedges an anticipated transaction in the measurement of the subsequent transaction. If a derivative financial instrument that has been accounted for as a hedge is closed before the date of the anticipated transaction, Terra carries forward the accumulated change in value of the contract and includes it in the measurement of the related transaction. Natural Gas Prices--United Kingdom Operations--To meet natural gas production requirements at the Terra's United Kingdom production facilities, Terra enters into one- or two-year term gas supply contracts with fixed prices for generally 25-80% of total volume requirements. As of December 31, 2000, Terra had fixed-price contracts for 49% of its 2001 United Kingdom natural gas requirements and 12% of its 2002 United Kingdom natural gas requirements. Terra does not use derivative financial instruments for its United Kingdom natural gas needs. Natural Gas Prices--North American Operations--Natural gas supplies to meet production requirements at Terra's production facilities are purchased at market prices. Natural gas market prices are volatile F-14 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) and Terra effectively fixes prices for a portion of its natural gas production requirements and inventory through the use of futures contracts, swaps and options. These contracts reference physical natural gas prices or appropriate NYMEX futures contract prices. Contract physical prices are frequently based on prices at the Henry Hub in Louisiana, the most common and financially liquid location of reference for financial derivatives related to natural gas. However, natural gas supplies for Terra's six production facilities are purchased for each plant at locations other than Henry Hub, which often creates a location basis differential between the contract price and the physical price of natural gas. Accordingly, the use of financial derivatives may not exactly offset the change in the price of physical gas. The contracts are traded in months forward and settlement dates are scheduled to coincide with gas purchases during that future period. A swap is a contract between Terra and a third party to exchange cash based on a designated price. Option contracts give the holder the right to either own or sell a futures or swap contract. The futures contracts require maintenance of cash balances generally 10% to 20% of the contract value and option contracts require initial premium payments ranging from 2% to 5% of contract value. Basis swap contracts require payments to or from Terra for the amount, if any, that monthly published gas prices from the source specified in the contract differ from prices of NYMEX natural gas futures during a specified period. There are no initial cash requirements related to the swap and basis swap agreements. The following summarizes open natural gas contracts at December 31, 1999 and 2000:
1999 2000 -------------------- ------------------- Contract Unrealized Contract Unrealized MMBtu Gain (Loss) MMBtu Gain (Loss) -------- ----------- -------- ----------- (in thousands) Swaps............................. 36,570 $5,810 10,180 $24,399 Options........................... 36,095 -- 9,070 (2,280) ------ ------ ------ ------- 72,665 $5,810 19,250 $22,119 ====== ====== ====== ======= Basis swaps....................... 14,470 $ 458 6,590 $ 426 ====== ====== ====== =======
Annual consolidated production requirements are approximately 160 million MMBtu. Contracts and firm purchase commitments were in place at December 31, 2000 to cover approximately 17.5% of 2001 natural gas requirements. Gains and losses on settlement of these contracts and premium payments on option contracts are credited or charged to cost of sales in the month in which the hedged transaction closes. The risk and reward of outstanding natural gas positions are directly related to increases or decreases in natural gas prices in relation to the underlying NYMEX natural gas contract prices. Realized gains on closed contracts relating to future periods as of December 31, 2000 were $10 million. Cash flows related to natural gas hedging are reported as cash flows from operating activities. During 1998, 1999 and 2000, natural gas hedging activities reduced Terra's North American natural gas costs by approximately $15.4 million, $6.4 million and $76.8 million, respectively, compared with spot prices. Interest Rate Fluctuations--Terra has entered into interest rate swap agreements to fix the interest rate on $100 million of its floating rate obligations at an average base rate of approximately 6.05% per annum. The interest rate swap agreements are designated as hedges. The agreements expire December 31, 2002. The differential paid or received on interest rate swap agreements is recognized as an adjustment to interest expense. Cash flows for the interest rate swap agreements are classified as cash flows from operations. F-15 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The following table presents the carrying amounts and estimated fair values of Terra's derivative financial instruments at December 31, 1999 and 2000. SFAS 107, "Disclosures about Fair Value of Financial Instruments," defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties.
1999 2000 -------------- -------------- Carrying Fair Carrying Fair Amount Value Amount Value -------- ----- -------- ----- (in millions) Natural gas.................. $0.6 $5.7 $10.0 $32.5 Interest rate................ -- 2.4 -- (1.1)
The following methods and assumptions were used to estimate the fair value of each class of derivative financial instrument: Natural gas futures, swaps, options and basis swaps: Estimated based on quoted market prices from brokers, and computations prepared by Terra. Interest rate swap agreements: Estimated based on quotes from the market makers of these instruments. 13. Financial Instruments and Concentrations of Credit Risk The following table presents the carrying amounts and estimated fair values of Terra's financial instruments at December 31, 1999 and 2000. SFAS 107 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties.
1999 2000 --------------- --------------- Carrying Fair Carrying Fair Amount Value Amount Value -------- ------ -------- ------ (in millions) Financial Assets Cash and short-term investments. $ 9.8 $ 9.8 $101.4 $101.4 Receivables..................... 102.7 102.7 107.3 107.3 Equity and other investments.... 1.8 1.8 1.9 1.9 Other assets.................... 7.1 7.1 5.1 4.6 Financial Liabilities Short-term borrowings........... 6.0 6.0 -- -- Long-term debt.................. 480.4 474.6 473.4 483.1
The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Cash and receivables: The carrying amounts approximate fair value because of the short maturity of those instruments. Equity and other investments: Investments in untraded companies are valued on the basis of management's estimates and, when available, comparisons with similar companies whose shares are publicly traded. Other assets: The amounts reported relate to notes receivable obtained from sale of previous operating assets. The fair value is estimated based on current interest rates and repayment terms of the individual notes. F-16 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Short-term borrowings and long-term debt: The fair value of Terra's short-term borrowings and long-term debt is estimated based on the quoted market price of these or similar issues or by discounting expected cash flows at the rates currently offered to Terra for debt of the same remaining maturities. Concentration of Credit Risk: Terra is subject to credit risk through trade receivables and short-term investments. Although a substantial portion of its debtors' ability to pay is dependent upon the agribusiness economic sector, credit risk with respect to trade receivables generally is minimized due to its geographic dispersion. Short-term cash investments are placed in short duration corporate and government debt securities funds with well capitalized, high quality financial institutions. By policy, Terra limits the amount of credit exposure in any one type of investment instrument. Financial Instruments: At December 31, 2000, Terra had letters of credit outstanding totaling $21.3 million, guaranteeing various insurance and financing activities. 14. Stockholders' Equity Terra allocates $1.00 per share upon the issuance of Common Shares to the Common Share capital account. At December 31, 2000, 1.1 million Common Shares were reserved for issuance upon award of restricted shares and exercise of employee stock options. Terra has authorized 16,500,000 Trust Shares for issuance. There were no Trust Shares outstanding at December 31, 2000. 15. Stock-Based Compensation Terra accounts for its stock-based compensation under the provisions of Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees", which utilizes the intrinsic value method. Compensation cost related to stock-based compensation was $4.2 million, $0.9 million and $1.7 million for the years ended December 31, 1998, 1999 and 2000, respectively. Terra's 1997 Stock Incentive Plan authorized granting directors and key employees awards in the form of options, rights, performance units or restricted stock. The aggregate number of Common Shares that may be subject to awards under the plan may not exceed 3.8 million shares. There were no outstanding rights or performance units at December 31, 2000. Options generally may not be exercised prior to one year or more than ten years from the date of grant. Stock options and restricted shares vest over specified periods, or in some cases upon the attainment, prior to a termination date, of pre-established market price objectives for Terra's Common Shares. The restricted shares are entitled to normal voting rights and earn dividends as declared during the performance periods. At December 31, 2000, 1.1 million Common Shares were available for grant under the 1997 Plan. F-17 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) A summary of Terra's stock-based compensation activity related to stock options for the years ended December 31, 1998, 1999 and 2000 follows:
1998 1999 2000 --------------- --------------- --------------- Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Number Price Number Price Number Price ------ -------- ------ -------- ------ -------- Outstanding--beginning of year 2,428 $10.47 2,151 $10.35 3,015 $ 6.76 Granted....................... 35 8.47 1,522 3.32 -- -- Expired/terminated............ 269 11.75 655 10.45 754 11.71 Exercised..................... 43 6.69 3 4.11 5 1.43 ----- ------ ----- ------ ----- ------ Outstanding--end of year... 2,151 $10.35 3,015 $ 6.76 2,256 $ 5.16 ===== ====== ===== ====== ===== ======
The following table summarizes information about stock options outstanding and exercisable at December 31, 2000:
Options Outstanding Options Exercisable ------------------------------- -------------------- Weighted Weighted Weighted Average Average Average Range of Number Remaining Exercise Number Exercise Exercise Prices Outstanding Life Price Exercisable Price --------------- ----------- ---------- -------- ----------- -------- (options in (in years) (options in thousands) thousands) $1.00 $ 3.99 1,518 8.87 $ 3.35 520 $ 3.34 4.00 7.99 305 2.12 5.06 306 5.06 8.00 14.99 433 5.11 11.58 432 11.58 ----- ---- ------ ----- ------ Total.... 2,256 7.20 $ 5.16 1,258 $ 6.59 ===== ==== ====== ===== ======
There were 1,464,000 and 1,312,000 options exercisable at December 31, 1999 and 1998, respectively. The weighted average fair value of options granted was $2.83 per option for 1998 and $1.54 per option for 1999. The fair value of options granted was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions:
1998 1999 ----- ----- Risk-free interest rate......................................... 5.52% 5.95% Dividend yield.................................................. 2.30% 1.37% Expected volatility............................................. 42.00% 57.00% Expected life (years)........................................... 4.0 4.0
There were 699,000 restricted shares granted during 2000 with a weighted average fair value of $2.14 per share. There were 610,000 restricted shares granted during 1998 with a weighted average fair value of $5.75 per share and no restricted shares granted during 1999. The restricted shares granted in 1998 became fully vested in 2000. F-18 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The pro forma impact on net loss and diluted loss per share of accounting for stock-based compensation using the fair value method required by SFAS 123, "Accounting for Stock-Based Compensation," follows:
1998 1999 2000 -------- -------- -------- (in thousands, except per-share data) Net loss As reported.................... $(26,249) $(89,887) $(10,182) Pro forma...................... (28,270) (90,754) (11,123) Diluted loss per share As reported.................... $ (0.35) $ (1.20) $ (0.14) Pro forma...................... (0.38) (1.20) (0.15)
The pro forma impact takes into account only stock-based compensation grants since January 1, 1995 and is likely to increase in future years as additional awards are granted and amortized ratably over the vesting period. 16. Retirement Benefit Plans Terra and its subsidiaries maintain pension plans that cover substantially all salaried and hourly employees. Benefits are based on a pay formula for the salaried plans and a flat benefit formula for the hourly plans. The plans' assets consist principally of equity securities and corporate and government debt securities. Terra and its subsidiaries also have certain non-qualified pension plans covering executives, which are unfunded. Terra accrues pension costs based upon annual independent actuarial valuations for each plan and funds these costs in accordance with statutory requirements. The components of net periodic pension expense, including $10.6 million of 1999 curtailment benefits which were included in discontinued operations, follow:
1998 1999 2000 -------- -------- -------- (in thousands) Service cost........................... $ 8,319 $ 9,185 $ 6,856 Interest cost.......................... 9,689 11,325 11,614 Expected return on plan assets......... (13,523) (13,243) (14,361) Amortization of prior service cost..... 79 42 37 Amortization of actuarial (gain) loss.. (64) 1,471 1 Amortization of net asset.............. (307) (306) (314) Curtailment benefit.................... -- (10,556) -- -------- -------- -------- Pension expense (credit)............... $ 4,193 $ (2,082) $ 3,833 ======== ======== ========
F-19 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The following table reconciles the plans' funded status to amounts included in the Consolidated Statements of Financial Position at December 31:
1999 2000 -------- -------- (in thousands) Change in Benefit Obligation Benefit Obligation--beginning of year.... $173,925 $170,879 Service cost............................. 9,185 6,856 Interest cost............................ 11,325 11,614 Participants' contributions.............. 435 850 Curtailment gain......................... (9,381) -- Actuarial (gain) loss.................... (9,753) 2,410 Foreign currency exchange rate changes... (842) (6,074) Benefits paid............................ (4,015) (7,833) -------- -------- Benefit Obligation--end of year.......... 170,879 178,702 -------- -------- Change in Plan Assets Fair value plan assets--beginning of year 147,565 168,133 Actual return on plan assets............. 21,526 20,892 Foreign currency exchange rate changes... (705) (6,522) Employer contribution.................... 3,370 1,127 Participants' contributions.............. 391 1,222 Benefits paid............................ (4,014) (7,833) -------- -------- Fair value plan assets--end of year...... 168,133 177,019 -------- -------- Funded status............................ (2,745) (1,683) Unrecognized net actuarial (gain) loss... 715 (3,391) Unrecognized prior service cost.......... 232 200 Unrecognized net transition asset........ (985) (678) -------- -------- Accrued benefit cost..................... $ (2,783) $ (5,552) ======== ========
The non-qualified pension plans are unfunded and have an Accumulated Benefit Obligation of $4.8 million at December 31, 2000 which is included in other liabilities. The assumptions used to determine the actuarial present value of benefit obligations and pension expense during each of the years in the three-year period ended December 31, 2000 were as follows:
1998 1999 2000 ---- ---- ---- Weighted average discount rate........... 6.7% 7.1% 6.9% Long-term per annum compensation increase 4.2% 4.1% 4.3% Long-term return on plan assets.......... 8.9% 8.9% 8.8%
Terra also sponsors a qualified savings plan covering most full-time North American employees. Contributions made by participating employees are matched based on a specified percentage of employee contributions up to 6% of the employees' pay base. The cost of Terra's matching contribution to the savings plan totaled $4.9 million in 1998, $2.9 million in 1999 and $1.4 million in 2000. F-20 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 17. Post Retirement Benefits Terra also provides health care benefits for eligible retired employees. Participants generally become eligible after reaching retirement age with ten years of service. The plan pays a stated percentage of most medical expenses reduced for any deductible and payments made by government programs. The plan is unfunded. Employees hired prior to January 1, 1990 are eligible to participate in the plan if they elect to on or before January 1, 2002. Participant contributions and co-payments are subject to escalation. The following table indicates the components of the post-retirement medical benefits obligation included in Terra's Consolidated Statements of Financial Position at December 31:
1999 2000 ------- ------- (in thousands) Change in Benefit Obligation Benefit Obligation--beginning of year.... $ 4,372 $ 3,247 Service cost............................. 85 21 Interest cost............................ 295 220 Participants' contributions.............. 235 314 Actuarial (gain) loss.................... (916) 885 Foreign currency exchange rate changes... 27 (11) Curtailment gain......................... (18) -- Benefits paid............................ (833) (882) ------- ------- Benefit Obligation--end of year.......... 3,247 3,794 ------- ------- Change in Plan Assets Fair value plan assets--beginning of year -- -- Employer contribution.................... 599 568 Participants' contributions.............. 234 314 Benefits paid............................ (833) (882) ------- ------- Fair value plan assets--end of year...... -- -- ------- ------- Funded status............................ (3,247) (3,794) Unrecognized net actuarial gain.......... (2,101) (569) Unrecognized prior service cost.......... (446) (170) ------- ------- Accrued benefit cost..................... $(5,794) $(4,533) ======= =======
Net periodic post-retirement medical benefit income consisted of the following components:
1998 1999 2000 ----- ----- ----- (in thousands) Service cost.......................... $ 118 $ 85 $ 21 Interest cost......................... 372 295 220 Amortization of prior service cost.... (236) (525) (270) Amortization of actuarial gain........ (403) (429) (657) Effect of curtailment benefit......... -- (9) -- ----- ----- ----- Post-retirement medical benefit income $(149) $(583) $(686) ===== ===== =====
F-21 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Terra limits its future obligation for post-retirement medical benefits by capping at 5% the annual rate of increase in the cost of claims it assumes under the plan. The weighted average discount rate used in determining the accumulated post-retirement medical benefit obligation was 7.0% in 1998, 7.5% in 1999, and 7.5% in 2000. The assumed annual health care cost trend rate was 5.0% in 2000 and is assumed to remain at that level thereafter. A 1% increase in the assumed health care cost trend rate would increase total service and interest cost by $3,000 while a 1% decline would decrease cost by $27,000. The impact on the benefit obligation of a 1% increase in the assumed health care cost trend rate would be $42,000 while a 1% decline in the rate would decrease the benefit obligation by $41,000. 18. Income Taxes Components of the income tax provision (benefit) applicable to continuing operations are as follows:
1998 1999 2000 -------- -------- -------- (in thousands) Current: Federal............... $(35,106) $(18,659) $(21,451) Foreign............... 981 -- 215 State................. (1,955) (2,355) (1,592) -------- -------- -------- (36,080) (21,014) (22,828) -------- -------- -------- Deferred: Federal............... 8,586 (20,843) 9,612 Foreign............... 2,464 (2,940) 6,842 State................. 269 (1,203) 374 -------- -------- -------- 11,319 (24,986) 16,828 -------- -------- -------- Total income tax benefits $(24,761) $(46,000) $ (6,000) ======== ======== ========
The following table reconciles the income tax provision (benefit) per the Consolidated Statements of Operations to the federal statutory provision:
1998 1999 2000 -------- --------- -------- (in thousands) Loss from continuing operations before taxes: Domestic.................................. $(78,508) $(102,707) $(36,782) Foreign................................... 10,416 (13,391) 20,600 -------- --------- -------- $(68,092) $(116,098) $(16,182) ======== ========= ======== Statutory income tax provision (benefit): Domestic.................................. $(27,844) $ (35,947) $(12,874) Foreign................................... 4,100 (4,306) 7,107 -------- --------- -------- (23,744) (40,253) (5,767) Purchased Canadian tax benefit............... (4,344) 215 (1,750) Non-deductible expenses, primarily goodwill.. 6,884 6,125 6,152 State and local income taxes................. (700) (2,688) (1,126) Benefit of loss carryforwards................ (442) -- -- Other........................................ (2,415) (9,399) (3,509) -------- --------- -------- Income tax benefit........................... $(24,761) $ (46,000) $ (6,000) ======== ========= ========
F-22 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) The tax effect of net operating loss (NOL) and tax credit carryforwards and significant temporary differences between reported and taxable earnings that gave rise to net deferred tax (liabilities) assets were as follows:
1999 2000 --------- --------- (in thousands) Current deferred tax asset (liability) Accrued liabilities.................................. $ 4,832 $ (4,962) Inventory valuation.................................. 406 652 --------- --------- Net current deferred tax asset (liability).............. $ 5,238 $ (4,310) ========= ========= Non-current deferred tax liability Depreciation......................................... (182,556) $(187,369) Investments in partnership........................... (25,994) (26,460) U.S. international tax allowance..................... (11,432) (9,682) U.K. intercompany interest........................... -- (3,815) Unfunded employee benefits........................... 10,826 12,106 Discontinued business costs.......................... 18,846 7,538 Valuation allowance.................................. (4,825) (21,276) NOL, capital loss and tax credit carryforwards....... 32,073 84,464 Other................................................ 9,254 (11,981) --------- --------- Net noncurrent deferred tax liability................... (153,808) (156,475) --------- --------- Net deferred tax liability.............................. $(148,570) $(160,785) ========= =========
During 1996, after receiving a favorable ruling from Revenue Canada, Terra refreshed its tax basis in plant and equipment at its Canadian subsidiary by entering into a transaction with a Canadian subsidiary of Anglo American, plc, resulting in a deferred tax asset for Terra. The valuation of this tax basis has been challenged by Revenue Canada in 2000. The deferred tax asset related to NOLs includes $21.3 million which the Company's management believes likely will not be realized. Therefore, a valuation allowance of $21.3 million has been provided by the Company. The Company will continue to assess the recoverablility for these NOLs and to the extent it is determined that such valuation allowance is no longer required the tax benefit of these NOLs will be recognized at such time. Components of income tax provision (benefit) included in net income other than from continuing operations are as follows:
1998 1999 2000 ------ -------- ---- (in thousands) Current: Federal.............................................. $9,761 $(10,655) $-- State................................................ -- (3,070) -- ------ -------- --- $9,761 $(13,725) $-- ====== ======== ===
19. Industry Segment Data Terra operates in two principal industry segments--Nitrogen Products and Methanol. The Nitrogen Products business produces and distributes ammonia, urea, nitrogen solutions (UAN) and ammonium nitrate to agricultural and industrial users. The Methanol business manufactures and distributes methanol, which is F-23 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) principally used as a raw material in the production of a variety of chemical derivatives and in the production of methyl tertiary butyl ether (MTBE), an oxygenate and an octane enhancer for gasoline. Management evaluates performance based on operating earnings of each segment. Terra does not allocate interest, income taxes or infrequent items to the business segments. Included in Other are general corporate activities not attributable to a specific industry segment. The following summarizes additional information about Terra's industry segments:
Nitrogen Products Methanol Other Total ---------- -------- -------- ---------- (in thousands) 2000 Revenues............................ $ 916,959 $136,781 $ 9,270 $1,063,010 Operating earnings.................. 28,639 12,395 1,773 42,807 Total assets........................ 1,247,678 175,929 88,945 1,512,552 Depreciation and amortization....... 89,861 12,957 12,083 114,901 Capital expenditures................ 6,364 3,098 2,757 12,219 Equity earnings..................... 843 -- -- 843 Equity investments.................. 1,865 -- -- 1,865 Minority interest in earnings....... 5,379 -- -- 5,379 1999 Revenues............................ $ 745,901 $ 85,178 $ 2,364 $ 833,443 Operating loss...................... (43,909) (15,210) (3,923) (63,042) Total assets........................ 1,413,225 175,151 13,069 1,601,445 Depreciation and amortization....... 75,082 12,701 13,805 101,588 Capital expenditures................ 40,626 1,422 9,851 51,899 Equity earnings..................... 787 -- -- 787 Equity investments.................. 1,822 -- -- 1,822 Minority interest in earnings....... (1,088) 9,429 -- 8,341 1998 Revenues............................ $ 816,014 $ 96,547 $ (2,593) $ 909,968 Operating earnings (loss)........... 39,329 (7,891) (21,224) 10,214 Total assets........................ 1,332,765 176,197 528,806 2,037,768 Depreciation and amortization....... 81,933 12,821 6,299 101,053 Capital expenditures................ 53,908 1,354 65 55,327 Equity earnings..................... 1,236 -- -- 1,236 Equity investments.................. 1,985 -- -- 1,985 Minority interest in earnings....... 9,633 17,877 -- 27,510
The following summarizes geographic information about Terra:
Revenues Long-lived Assets ---------------------------- -------------------------------- 1998 1999 2000 1998 1999 2000 -------- -------- ---------- ---------- ---------- ---------- (in thousands) United States................ $572,836 $546,199 $ 749,145 $1,184,793 $ 938,365 $ 867,762 Canada....................... 57,734 41,376 45,868 70,404 56,897 49,467 United Kingdom............... 279,398 245,868 267,997 315,058 312,501 267,625 -------- -------- ---------- ---------- ---------- ---------- $909,968 $833,443 $1,063,010 $1,570,255 $1,307,763 $1,184,854 ======== ======== ========== ========== ========== ==========
F-24 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 20. Agreements of Limited Partnerships Terra Nitrogen Company, L.P. (TNCLP) In accordance with the TNCLP limited partnership agreement, quarterly distributions to unitholders and TNC are made in an amount equal to 100% of its available cash, as defined in the partnership agreement. The General Partner receives a combined minimum 2% of total cash distributions, and as an incentive, the general partner's participation increases if cash distributions exceed specified target levels. If at any time less than 25% of the issued and outstanding units are held by non-affiliates of the general partner, TNCLP may call, or assign to the general partner or its affiliates, its right to acquire all such outstanding units held by non-affiliated persons with at least 30 but not more than 60 days notice of its decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of any previous twenty trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by the general partner or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced. Terra owned 74.1% of the Common Units at December 31, 2000. Subsequent to December 31, 2000, the percentage owned by Terra increased to 75.1%. Beaumont Methanol, Limited Partnership (BMLP) Terra repurchased the limited interest in BMLP on June 30, 1999 for $225 million with proceeds from sale of the Distribution business. The limited BMLP interest had received a first priority return from BMLP approximating an annual rate of LIBOR plus 3.17% on its $225 million investment. The publicly held TNCLP Common Units and the BMLP limited interest are reflected in the financial statements as minority interest. 21. Pending Change of Control Anglo American plc, through a wholly-owned subsidiary, owns 49.5% of Terra's outstanding shares. Anglo American has made public its intention to dispose of its interest in Terra with the timing based on market and other conditions. 22. Guarantory Subsidiaries Payment obligations under the Senior Secured Notes due 2008 of Terra Capital, Inc. ("TCAPI") offered by this prospectus will be fully and unconditionally guaranteed on a joint and several basis by Terra Industries Inc. ("Parent") and its wholly owned U.S. subsidiaries (the "Guarantor Subsidiaries"). Terra Nitrogen, Limited Partnership, Terra Nitrogen Company, L.P. and the Parent's foreign subsidiaries will not guarantee the notes. Condensed consolidating financial information regarding Parent, TCAPI, the Guarantor Subsidiaries and subsidiaries of the Parent that are not Guarantor Subsidiaries for December 31, 1998, 1999 and 2000 are presented below for purposes of complying with the reporting requirements of the Guarantor Subsidiaries. Terra's ability to receive dividends from its subsidiaries is limited by the credit agreement to amounts required for the funding of operating expenses and debt service (not to exceed $40 million per year), income tax payments on the earnings of TCAPI and its subsidiaries and liabilities associated with discontinued operations (not to exceed $5 million per year). In addition, dividends to Terra are permitted for the purpose of retiring the 10.5% Senior Notes due in 2005 or purchasing common units in Terra Nitrogen Company, L.P. subject to credit agreement restrictions on such purchases. F-25 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Operations for the Year Ended December 31, 1998:
Non- Guarantor Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- -------- ------------ ------------ ------------ ------------ (in thousands) Revenues Net sales........................ $ -- $ -- $323,755 $623,386 $(42,215) $904,926 Other income, net................ -- 6,413 (32,674) 48,604 (17,301) 5,042 -------- -------- -------- -------- -------- -------- -- 6,413 291,081 671,990 (59,516) 909,968 -------- -------- -------- -------- -------- -------- Cost and Expenses Cost of sales.................... -- -- 327,593 551,408 (42,215) 836,786 Selling, general and administrative expenses........ 4,874 4,277 33,466 37,652 (17,301) 62,968 -------- -------- -------- -------- -------- -------- 4,874 4,277 361,059 589,060 (59,516) 899,754 -------- -------- -------- -------- -------- -------- Income (loss) from operations.... (4,874) 2,136 (69,978) 82,930 -- 10,214 Interest income.................. 32 22,661 (22,976) (1,537) 2,146 326 Interest expense................. (38,861) (15,885) 32,048 (28,424) -- (51,122) Minority interest................ -- (3,466) (27,510) -- 3,466 (27,510) Equity in the earnings (loss) of subsidiaries................... (4,185) (5,732) 27,965 41,086 (59,134) -- -------- -------- -------- -------- -------- -------- Income (loss) from continuing operations before income taxes.......................... (47,888) (286) (60,451) 94,055 (53,522) (68,092) Income tax provision (benefit)... (21,639) (125) (12,910) 5,890 4,023 (24,761) -------- -------- -------- -------- -------- -------- Income (loss) from continuing operations..................... (26,249) (161) (47,541) 88,165 (57,545) (43,331) Income from discontinued operations, net of taxes....... -- -- 17,082 -- -- 17,082 -------- -------- -------- -------- -------- -------- Net Income (Loss)................... $(26,249) $ (161) $(30,459) $ 88,165 $(57,545) $(26,249) ======== ======== ======== ======== ======== ========
F-26 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 1998:
Guarantor Non-Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- --------- ------------ ------------- ------------ ------------ (in thousands) Operating Activities Net income (loss)................... $(26,249) $ (161) $(30,459) $ 88,165 $ (57,545) $ (26,249) Adjustments to reconcile net loss to net cash flows from operating activities: Income from discontinued operations........................ (17,082) -- (17,082) -- 17,082 (17,082) Depreciation and amortization....... -- 2,143 76,425 21,928 557 101,053 Deferred income taxes............... (5,817) -- 14,920 -- 2,216 11,319 Minority interest in earnings....... -- 3,466 27,510 -- (3,466) 27,510 Equity in earnings (loss) of subsidiaries...................... 4,185 5,732 (27,965) (41,086) 59,134 -- Other non-cash items................ 556 -- -- -- (556) -- Change in operating assets and liabilities....................... (1,716) (462,573) (69,084) (40,201) 464,836 (108,738) Other............................... 19,590 (10,270) (3,466) -- (752) 5,102 -------- --------- -------- -------- --------- --------- Net Cash Flows from Operating Activities........................ (26,533) (461,663) (29,201) 28,806 481,506 (7,085) -------- --------- -------- -------- --------- --------- Investing Activities Purchase of property, plant and equipment......................... -- (47) (41,109) (14,181) 10 (55,327) Discontinued operations............. -- -- 96,766 -- -- 96,766 Other............................... -- -- -- -- 3,371 3,371 -------- --------- -------- -------- --------- --------- Net Cash Flows from Investing Activities.............. -- (47) 55,657 (14,181) 3,381 44,810 -------- --------- -------- -------- --------- --------- Financing Activities Principal payments on long-term debt.............................. -- -- (652) (8,886) -- (9,538) Change in investments and advances from (to) affiliates.............. 32,281 472,579 26,486 (33,847) (497,499) -- Stock (repurchase) issuance--net.... 286 -- -- -- -- 286 Distributions to minority interests. -- (2,164) (32,888) -- -- (35,052) Repurchase of TNCLP common units............................. -- (16,523) -- -- -- (16,523) Dividends........................... (14,986) -- 5,600 -- (5,600) (14,986) Other............................... -- (7) (10,594) (7,280) 17,881 -- -------- --------- -------- -------- --------- --------- Net Cash Flows from Financing Activities.............. 17,581 453,885 (12,048) (50,013) (485,218) (75,813) -------- --------- -------- -------- --------- --------- Effect of Foreign Exchange Rate on Cash...................... -- (331) -- (331) 331 (331) -------- --------- -------- -------- --------- --------- Increase (decrease) in Cash and short-term investments............ (8,952) (8,156) 14,408 (35,719) -- (38,419) -------- --------- -------- -------- --------- --------- Cash and Short-term investments at Beginning of Year.............. 14,993 35,384 79,627 50,058 -- 180,062 -------- --------- -------- -------- --------- --------- Cash and Short-term Investments At End of Year.................... $ 6,041 $ 27,228 $ 94,035 $ 14,339 $ -- $ 141,643 ======== ========= ======== ======== ========= =========
F-27 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Financial Position at December 31, 1999:
Non- Guarantor Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated ---------- -------- ------------ ------------ ------------ ------------ (in thousands) Assets Cash and short-term investments..................... $ 8 $ 183 $ 28,453 $(18,854) $ -- $ 9,790 Accounts Receivable............... -- -- 28,463 74,313 -- 102,776 Inventories....................... -- -- 33,959 99,675 -- 133,634 Other current assets.............. 3,972 5,905 32,915 16,832 (12,142) 47,482 Total current assets.......... 3,980 6,088 123,790 171,966 (12,142) 293,682 Property, plant and equipment, net.................. -- -- 522,909 474,850 42 997,801 Excess of cost over net assets of acquired businesses...................... -- -- 225,080 28,082 -- 253,162 Investments in and advanced to (from) affiliates...................... 1,115,739 628,969 884,971 206,123 (2,835,802) -- Other assets...................... 7,425 -- 10,747 38,670 (42) 56,800 ---------- -------- ---------- -------- ----------- ---------- Total assets.................. $1,127,144 $635,057 $1,767,497 $919,691 $(2,847,944) $1,601,445 ========== ======== ========== ======== =========== ========== Liabilities Debt due within one year............................ $ -- $ 6,000 $ 2,493 $ 8,659 $ -- $ 17,152 Accounts payable.................. -- 10,475 32,083 50,021 (4,166) 88,413 Accrued and other liabilities..................... 5,209 3,771 8,929 10,047 7,202 35,158 ---------- -------- ---------- -------- ----------- ---------- Total current liabilities..... 5,209 20,246 43,505 68,727 3,036 140,723 ---------- -------- ---------- -------- ----------- ---------- Long-term debt.................... 358,755 -- 8,974 101,580 -- 469,309 Deferred income taxes............. 78,705 74,510 (92) 863 9,747 163,733 Other liabilities................. 27,473 43,088 (7,808) 4,656 -- 67,409 Minority interest................. -- 17,143 86,126 -- -- 103,269 ---------- -------- ---------- -------- ----------- ---------- Total liabilities............. 470,142 154,987 130,705 175,826 12,783 944,443 ---------- -------- ---------- -------- ----------- ---------- Stockholders' Equity Common stock...................... 127,890 -- 73 50,585 (50,658) 127,890 Paid in capital................... 552,903 150,218 1,561,431 732,452 (2,444,101) 552,903 Accumulated other comprehensive loss.............. (9,852) (9,852) -- (9,852) 19,704 (9,852) Retained earnings (deficit)....................... (13,939) 339,704 75,288 (29,320) (385,672) (13,939) ---------- -------- ---------- -------- ----------- ---------- Total stockholders' equity...................... 657,002 480,070 1,636,792 743,865 (2,860,727) 657,002 ---------- -------- ---------- -------- ----------- ---------- Total liabilities and stockholders equity......... $1,127,144 $635,057 $1,767,497 $919,691 $(2,847,944) $1,601,445 ========== ======== ========== ======== =========== ==========
F-28 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Operations for the Year Ended December 31, 1999:
Non- Guarantor Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- -------- ------------ ------------ ------------ ------------ (in thousands) Revenues Net sales........................... $ -- $ -- $278,063 $546,929 $ -- $ 824,992 Other income, net................... -- 129 (1,610) 16,202 (6,270) 8,451 -------- -------- -------- -------- -------- --------- -- 129 276,453 563,131 (6,270) 833,443 -------- -------- -------- -------- -------- --------- Cost and Expenses Cost of sales....................... -- -- 323,045 518,016 -- 841,061 Selling, general and administrative expenses........... 5,521 214 7,877 48,794 (6,982) 55,424 -------- -------- -------- -------- -------- --------- 5,521 214 330,922 566,810 (6,982) 896,485 -------- -------- -------- -------- -------- --------- Loss from operations................ (5,521) (85) (54,469) (3,679) 712 (63,042) Interest income..................... 729 2,669 19,029 436 (14,502) 8,361 Interest expense.................... (38,966) (3,111) 1,408 (26,331) 13,924 (53,076) Minority interest................... -- (1,385) (6,956) -- -- (8,341) Equity in the earnings (loss) of subsidiaries...................... (52,479) (60,390) (4,024) (7,229) 124,122 -- -------- -------- -------- -------- -------- --------- Loss from continuing operations before income taxes............... (96,237) (62,302) (45,012) (36,803) 124,256 (116,098) Income tax provision (benefit)......................... (26,139) (19,610) (21,632) (4,029) 25,410 (46,000) -------- -------- -------- -------- -------- --------- Income (loss) from continuing operations........................ (70,098) (42,692) (23,380) (32,774) 98,846 (70,098) Income (loss) from discontinued operations: Income (loss) from operations, net of taxes...... (5,800) -- (5,800) -- 5,800 (5,800) Income (loss) from disposition, net of taxes..... (4,725) -- (6,285) 1,561 4,725 (4,724) Extraordinary loss on early retirement of debt, net of taxes............................. (9,264) (9,265) -- -- 9,264 (9,265) -------- -------- -------- -------- -------- --------- Net Loss............................... $(89,887) $(51,957) $(35,465) $(31,213) $118,635 $ (89,887) ======== ======== ======== ======== ======== =========
F-29 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 1999:
Non- Guarantor Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- --------- ------------ ------------ ------------ ------------ (in thousands) Operating Activities Net loss....................................... $(89,887) $ (51,957) $ (35,465) $ (31,213) $ 118,635 $ (89,887) Adjustments to reconcile net loss to net cash flows from operating activities: Loss from discontinued operations.............. 10,524 -- 10,524 -- (10,524) 10,524 Extraordinary loss on early retirement of debt. 9,264 9,265 -- -- (9,264) 9,265 Depreciation and amortization.................. -- -- 60,877 40,700 11 101,588 Deferred income taxes.......................... (13,882) 74,510 (93,325) 863 34,639 2,805 Minority interest in earnings.................. -- 1,385 6,956 -- -- 8,341 Equity in earnings (loss) of subsidiaries...... 52,479 60,390 4,024 7,229 (124,122) -- Change in operating assets and liabilities..... (18,809) 19,243 (67,646) (155,314) 21,457 (201,069) Other.......................................... 19,653 -- -- -- (15,080) 4,573 -------- --------- --------- --------- --------- --------- Net Cash Flows from Operating Activities......... (30,658) 112,836 (114,055) (137,735) 15,752 (153,860) -------- --------- --------- --------- --------- --------- Investing Activities Purchase of property, plant and equipment...... -- -- (49,283) (2,616) -- (51,899) Discontinued operations........................ -- -- 335,129 -- -- 335,129 Other.......................................... -- -- -- -- (4,531) (4,531) -------- --------- --------- --------- --------- --------- Net Cash Flows from Investing Activities......... -- -- 285,846 (2,616) (4,531) 278,699 -------- --------- --------- --------- --------- --------- Financing Activities Net short-term borrowings...................... -- 6,000 -- -- -- 6,000 Principal payments on long-term debt........... -- -- (657) (15,912) -- (16,569) Change in investments and advances from (to) affiliates.................................... 29,895 (157,688) (7,927) 144,579 (8,859) -- Stock issuance--net............................ 13 -- -- -- -- 13 Distributions to minority interests............ -- (1,565) (7,864) -- -- (9,429) Repurchase of TNCLP common units............... -- (5,994) -- -- -- (5,994) Redemption of minority interests in subsidiary. -- -- (225,000) -- -- (225,000) Dividends...................................... (5,283) -- -- -- 2 (5,281) Other.......................................... -- 19,798 4,075 (21,077) (2,796) -- -------- --------- --------- --------- --------- --------- Net Cash Flows from Financing Activities......... 24,625 (139,449) (237,373) 107,590 (11,653) (256,260) -------- --------- --------- --------- --------- --------- Effect of Foreign Exchange Rate on Cash.......... -- (432) -- (432) 432 (432) -------- --------- --------- --------- --------- --------- Increase (decrease) in Cash and Short-term Investments..................................... (6,033) (27,045) (65,582) (33,193) -- (131,853) -------- --------- --------- --------- --------- --------- Cash and Short-term Investments at Beginning of Year......................................... 6,041 27,228 94,035 14,339 -- 141,643 -------- --------- --------- --------- --------- --------- Cash and Short-term Investments at End of Year............................................ $ 8 $ 183 $ 28,453 $ (18,854) $ -- $ 9,790 ======== ========= ========= ========= ========= =========
F-30 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Financial Position at December 31, 2000:
Guarantor Non-Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated ---------- -------- ------------ ------------- ------------ ------------ (in thousands) Assets Cash and short-term investments....... $ -- $ 76,959 $ 11,844 $ 12,622 $ -- $ 101,425 Accounts receivable................... -- -- 38,653 68,646 -- 107,299 Inventories........................... -- -- 32,199 69,327 -- 101,526 Other current assets.................. 8,155 22 6,208 17,521 (14,458) 17,448 ---------- -------- ---------- --------- ----------- ---------- Total current assets................. 8,155 76,981 88,904 168,116 (14,458) 327,698 ---------- -------- ---------- --------- ----------- ---------- Property, plant and equipment, net.... -- -- 479,881 426,890 (3,970) 902,801 Excess of cost over net assets of acquired businesses.................. -- -- 207,652 23,720 -- 231,372 Investments in and advanced to (from) affiliates........................... 1,141,732 437,026 1,264,050 296,124 (3,138,932) -- Other assets.......................... 5,151 5,772 10,458 25,392 3,908 50,681 ---------- -------- ---------- --------- ----------- ---------- Total assets......................... $1,155,038 $519,779 $2,050,945 $ 940,242 $(3,153,452) $1,512,552 ========== ======== ========== ========= =========== ========== Liabilities Debt due within one year.............. $ -- $ -- $ 546 $ 5,000 $ -- $ 5,546 Accounts payable...................... -- 2,989 17,048 42,783 -- 62,820 Accrued and other liabilities......... 9,486 2,607 35,498 15,368 (2,635) 60,324 ---------- -------- ---------- --------- ----------- ---------- Total current liabilities............ 9,486 5,596 53,092 63,151 (2,635) 128,690 ---------- -------- ---------- --------- ----------- ---------- Long-term debt........................ 358,755 -- 8,428 100,625 -- 467,808 Deferred income taxes................. 150,721 17,182 -- 3,955 (15,383) 156,475 Other liabilities..................... 25,279 14,518 699 3,681 (669) 43,508 Minority interest..................... -- 19,653 85,621 -- -- 105,274 ---------- -------- ---------- --------- ----------- ---------- Total liabilities.................... 544,241 56,949 147,840 171,412 (18,687) 901,755 ---------- -------- ---------- --------- ----------- ---------- Stockholders' Equity Common stock.......................... 128,283 -- 73 49,710 (49,783) 128,283 Paid in capital....................... 554,750 150,218 1,798,968 905,816 (2,855,002) 554,750 Accumulated other comprehensive loss.. (48,115) (48,114) -- (48,114) 96,228 (48,115) Retained earnings (deficit)........... (24,121) 360,726 104,064 (138,582) (326,208) (24,121) ---------- -------- ---------- --------- ----------- ---------- Total stockholders' equity........... 610,797 462,830 1,903,105 768,830 (3,134,765) 610,797 ---------- -------- ---------- --------- ----------- ---------- Total liabilities and stockholders' equity.............................. $1,155,038 $519,779 $2,050,945 $ 940,242 $(3,153,452) $1,512,552 ========== ======== ========== ========= =========== ==========
F-31 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Operations for the Year Ended December 31, 2000:
Guarantor Non-Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- ------- ------------ ------------- ------------ ------------ (in thousands) Revenues Net sales..................... $ -- $ -- $383,628 $669,824 $ -- $1,053,452 Other income, net............. -- 401 4,205 4,952 -- 9,558 -------- ------- -------- -------- -------- ---------- -- 401 387,833 674,776 -- 1,063,010 -------- ------- -------- -------- -------- ---------- Cost and Expenses Cost of sales................. -- -- 376,337 595,376 -- 971,713 Selling, general and administrative expenses..... 1,471 1,089 31,709 14,221 -- 48,490 -------- ------- -------- -------- -------- ---------- 1,471 1,089 408,046 609,597 -- 1,020,203 -------- ------- -------- -------- -------- ---------- Income (loss) from operations. (1,471) (688) (20,213) 65,179 -- 42,807 Insurance settlement costs.... -- -- (5,968) -- -- (5,968) Interest income............... 6 3,994 13,814 353 (14,298) 3,869 Interest expense.............. (42,006) (792) (747) (22,894) 14,928 (51,511) Minority interest............. -- (995) (4,384) -- -- (5,379) Equity in the earnings (loss) of subsidiaries............. 20,232 17,300 42,199 19,402 (99,133) -- -------- ------- -------- -------- -------- ---------- Income (loss) from continuing operations before income taxes....................... (23,239) 18,819 24,701 62,040 (98,503) (16,182) Income tax provision (benefit)................... (13,057) 7,500 -- 7,057 (7,500) (6,000) -------- ------- -------- -------- -------- ---------- Net Income (Loss)................ $(10,182) $11,319 $ 24,701 $ 54,983 $(91,003) $ (10,182) ======== ======= ======== ======== ======== ==========
F-32 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Condensed Consolidating Statement of Cash Flows for the Year Ended December 31, 2000:
Guarantor Non-Guarantor Parent TCAPI Subsidiaries Subsidiaries Eliminations Consolidated -------- -------- ------------ ------------- ------------ ------------ (in thousands) Operating Activities Net income (loss)............................. $(10,182) $ 11,319 $ 24,701 $ 54,983 $(91,003) $(10,182) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization................. -- 925 63,733 50,243 -- 114,901 Deferred income taxes......................... 76,326 (57,328) 92 3,092 (20,301) 1,881 Minority interest in earnings................. -- 996 4,383 -- -- 5,379 Equity in earnings (loss) of subsidiaries..... (20,232) (17,300) (42,199) (19,402) 99,133 -- Other non-cash items.......................... 286 -- -- -- (286) -- Change in operating assets and liabilities.... (4,422) (31,337) 29,811 33,410 (4,637) 22,825 Other......................................... -- -- -- -- (1,975) (1,975) -------- -------- -------- --------- -------- -------- Net Cash Flows from Operating Activities........ 41,776 (92,725) 80,521 122,326 (19,069) 132,829 -------- -------- -------- --------- -------- -------- Investing Activities Purchase of property, plant and equipment..... -- -- (1,676) (10,543) -- (12,219) Other......................................... -- -- (3,863) 25,836 (26,935) (4,962) -------- -------- -------- --------- -------- -------- Net Cash Flows from Investing Activities........ -- -- (5,539) 15,293 (26,935) (17,181) -------- -------- -------- --------- -------- -------- Financing Activities Net short-term borrowings (repayments)........ -- (6,000) -- -- -- (6,000) Principal payments on long-term debt.......... -- -- (2,493) (4,614) -- (7,107) Change in investments and advances from (to) affiliates.............................. (44,024) 181,367 (99,343) (99,934) 61,934 -- Stock issuance--net........................... 2,240 -- -- -- (2,233) 7 Distributions to minority interests........... -- (207) (912) -- -- (1,119) Repurchase of TNCLP common units.............. -- (2,414) -- -- -- (2,414) Deferred financing costs...................... -- (6,697) -- -- -- (6,697) Other......................................... -- 4,135 11,157 (912) (14,380) -- -------- -------- -------- --------- -------- -------- Net Cash Flows from Financing Activities........ (41,784) 170,184 (91,591) (105,460) 45,321 (23,330) -------- -------- -------- --------- -------- -------- Effect of Foreign Exchange Rate on Cash......... -- (683) -- (683) 683 (683) -------- -------- -------- --------- -------- -------- Increase (decrease) in Cash and Short-term Investments.................................... (8) 76,776 (16,609) 31,476 -- 91,635 -------- -------- -------- --------- -------- -------- Cash and Short-term Investments at Beginning of Year.............................. 8 183 28,453 (18,854) -- 9,790 -------- -------- -------- --------- -------- -------- Cash and Short-term Investments at End of Year........................................... $ -- $ 76,959 $ 11,844 $ 12,622 $ -- $101,425 ======== ======== ======== ========= ======== ========
F-33 TERRA INDUSTRIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 23. Subsequent Event (Unaudited) On July 13, 2001, a British court found Terra Nitrogen (UK) Ltd. liable for damages associated with recalls of carbonated beverages containing carbon dioxide tainted with benzene, plus interest and attorney fees. In addition, there are three similar cases awaiting trial and certain other beverage manufacturers have indicated their intention to file claims for unspecified amounts. We estimate total claims against us from these lawsuits may be (Pounds)10 million, or $14 million. We have established reserves during the second quarter of 2001 in this amount to cover estimated losses. In addition to our plan to appeal the British court's decision, we also believe we have recourse for these claims against both our insurer and the previous owner of our U.K. operations. (Our insurer had previously paid, without recourse, two recall cost settlements on our behalf, plus a court judgment rendered against us. Nonetheless, the insurer reserved its right to deny coverage in whole or in part for adverse judgments in the remaining cases.) We will vigorously pursue our rights against these parties, but there will be no income recognition for those rights until settlements are finalized. We are involved in various other legal actions and claims, including environmental matters, arising from the normal course of business. While it is not feasible to predict with certainty the final outcome of these proceedings, we do not believe that these matters, or the U.K. benzene claims, will have a material adverse effect on our results of operations, financial position or net cash flows. F-34 PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 20: Indemnification of Directors and Officers. The following is a summary of the statutes, charter and bylaw provisions or other arrangements under which the Registrants' directors and officers are insured or indemnified against liability in their capacities as such. All of the directors and officers of the Registrants are covered by insurance policies maintained and held in effect by Terra Industries Inc. against certain liabilities for actions taken in their capacities as such, including liabilities under the Securities Act. Registrants Incorporated Under Delaware Law Beaumont Ammonia Inc., Beaumont Holdings Corporation, BMC Holdings Inc., Port Neal Corporation, Terra (UK) Holdings Inc., Terra Capital, Inc., Terra Capital Holdings, Inc., Terra International (Oklahoma) Inc., Terra International Inc., Tera Methanol Corporation, and Terra Nitrogen Corporation are incorporated under the laws of the State of Delaware. Section 145 of the General Corporation Law of the State of Delaware (the "Delaware Statute") provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), other than an action by or in the right of such corporation, by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise (an "indemnified capacity"). The indemnity may include expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. Similar provisions apply to actions brought by or in the right of the corporation, except that no indemnification shall be made without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred. Section 145 of the Delaware Statute further authorizes a corporation to purchase and maintain insurance on behalf of any indemnified person against any liability asserted against him and incurred by him in any indemnified capacity, or arising out of his status as such, regardless of whether the corporation would otherwise have the power to indemnify him under the Delaware Statute. The articles of incorporation and/or by-laws of these corporations provide that the respective corporation shall indemnify and hold harmless, to the fullest extent permitted by law, each person who is or was made a party, threatened to be made a party, or otherwise involved in any action, suit, or proceeding by reason of the fact that he or she is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, partner, or agent of another corporation, partnership, joint venture, or other enterprise, against expenses, liabilities, and losses. Furthermore, the directors of these respective corporations shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the Delaware Statute. Registrants Incorporated Under Iowa Law Terras Real Estate Corp. is incorporated under the laws of the State of Iowa. Section 490.851 of the Iowa Business Corporation Act ("IBCA") provides that a corporation has the power to indemnify its directors and officers against liabilities and expenses incurred by reason of such person serving in the capacity of director or officer, if such person has acted in good faith and in a manner reasonably believed by the individual to be in or not opposed to the best interests of the corporation, and in any criminal proceeding if such person had no reasonable cause to believe the individual's conduct was unlawful. The foregoing indemnity provisions notwithstanding, in the case of actions brought by or in the right of the corporation, no indemnification shall be II-1 made to such director or officer with respect to any matter as to which such individual has been adjudged to be liable to the corporation unless, and only to the extent that, a court determines that indemnification is proper under the circumstances. The By-laws of Terra Real Estate Corp. provide that any person who is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of this corporation as an officer, director, employee or agent of another corporation, partnership, joint venture, trust or enterprise, shall be entitled to indemnification to the same extent as permitted or required by the IBCA. Registrants Incorporated Under Maryland Law Terra Industries Inc. is incorporated under the laws of the State of Maryland. The Maryland General Corporation Law ("MGCL") permits a corporation to indemnify its directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities, unless it is established that (a) the act or omission of the directors or officer was material to the matter giving rise to such proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services, or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the action or omission was unlawful. The MGCL permits the charter of a Maryland corporation to include a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages, except to the extent that (i) the person actually received an improper benefit or profit in money, property or services or (ii) a judgment or other final adjudication is entered in a proceeding based on a finding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. Article SEVENTH, Paragraph (8) of Terra Industries Inc.'s Charter provides for indemnification of directors and officers of Terra Industries Inc. as follows. The Corporation shall indemnify (a) its directors to the full extent provided by the general laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures provided by such laws; (b) its officers to the same extent it shall indemnify its directors; and (c) its officers who are not directors to such further extent as shall be authorized by the Board of Directors and be consistent with law. The foregoing shall not limit the authority of the Corporation to indemnify other employees and agents consistent with law. Terra Industries Inc.'s Charter also contains a provision providing for elimination of the liability of its directors or officers to the Registrant or its stockholders for money damages to the fullest extent permitted by Maryland law. Item 21. Exhibits. (a) Reference is made to the attached Exhibit Index. (b) No financial statement schedules are required to be filed herewith pursuant to this Item. Item 22. Undertakings. (a) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described in Item 20, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a directors, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by II-2 controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (b) The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the Registrants' annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the date of the registration statement through the date of responding to the request. (d) The undersigned Registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. (e) The undersigned Registrants hereby undertake: 1. To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement. 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Capital, Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA CAPITAL, INC. /S/ FRANCIS G. MEYER By: ______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Industries Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA INDUSTRIES INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Senior Vice President and Chief Financial Officer Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002.
Signature Title --------- ----- /S/ HENRY R. SLACK* Chairman of the Board - ------------------------ Henry R. Slack /S/ BURTON M. JOYCE* Vice Chairman of the Board - ------------------------ Burton M. Joyce /S/ MICHAEL L. BENNETT* Director, President and Chief Executive Officer (Principal - ------------------------ Executive Officer) Michael L. Bennett /S/ FRANCIS G. MEYER Senior Vice President and Chief Financial Officer (Principal - ------------------------ Financial Officer and Controller/Principal Accounting Francis G. Meyer Officer) /S/ EDWARD G. BEIMFOHR* Director - ------------------------ Edward G. Beimfohr
II-5 Signature Title --------- ----- /S/ EDWARD M. CARSON* Director --------------------------- Edward M. Carson /S/ THOMAS H. CLAIBORNE* Director --------------------------- Thomas H. Claiborne /S/ ERIC K. DIACK* Director --------------------------- Eric K. Diack /S/ DAVID E. FISHER* Director --------------------------- David E. Fisher /S/ MARTHA O. HESSE* Director --------------------------- Martha O. Hesse /S/ WILLIAM R. LOOMIS, JR.* Director --------------------------- William R. Loomis, Jr. /S/ JOHN R. NORTON III* Director --------------------------- John R. Norton III - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: ___________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Beaumont Ammonia Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. BEAUMONT AMMONIA INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002.
Signature Title --------- ----- /S/ FRANCIS G. MEYER Director and President (Principal Executive, Financial and - ------------------------ Accounting Officer) Francis G. Meyer /S/ MICHAEL L. BENNETT* Director - ------------------------ Michael L. Bennett /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary - ------------------------ Mark A. Kalafut
- -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Beaumont Holdings Corporation has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. BEAUMONT HOLDINGS CORPORATION /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002.
Signature Title --------- ----- /S/ FRANCIS G. MEYER Director and President (Principal Financial and - ------------------------ Accounting Officer) Francis G. Meyer /S/ MICHAEL L. BENNETT* Director and Vice President (Principal Executive Officer) - ------------------------ Michael L. Bennett /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary - ------------------------ Mark A. Kalafut
- -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, BMC Holdings Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. BMC HOLDINGS INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ WYNN S. STEVENSON* Director, Vice President and Treasurer ------------------------ Wynn S. Stevenson /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Port Neal Corporation has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. PORT NEAL CORPORATION /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President and Chief Financial Officer Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director, Vice President and Chief Financial Officer ------------------------ (Principal Financial and Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra (UK) Holdings Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA (UK) HOLDINGS INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002.
Signature Title --------- ----- /S/ FRANCIS G. MEYER - ------------------------ Director and President (Principal Financial and Francis G. Meyer Accounting Officer) /S/ MICHAEL L. BENNETT* Director and Vice President (Principal Executive Officer) - ------------------------ Michael L. Bennett /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary - ------------------------ Mark A. Kalafut
- -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-11 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Capital Holdings, Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA CAPITAL HOLDINGS, INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-12 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra International (Oklahoma) Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA INTERNATIONAL (OKLAHOMA) INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra International Inc. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA INTERNATIONAL INC. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Senior Vice President and Chief Financial Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002.
Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) - ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director, Senior Vice President and Chief Financial Officer - ------------------------ (Principal Financial and Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director, Vice President, General Counsel and Corporate - ------------------------ Secretary Mark A. Kalafut
- -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Methanol Corporation has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA METHANOL CORPORATION /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ WYNN S. STEVENSON* Director, Vice President and Treasurer ------------------------ Wynn S. Stevenson /S/ MARK A. KALAFUT Director, Vice President and Corporate Secretary ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Nitrogen Corporation has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA NITROGEN CORPORATION /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Vice President Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ BURTON M. JOYCE* Chairman of the Board ------------------------ Burton M. Joyce /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director and Vice President (Principal Financial and ------------------------ Accounting Officer) Francis G. Meyer /S/ DENNIS B. LONGMIRE* Director ------------------------ Dennis B. Longmire /S/ THEODORE D. SANDS* Director ------------------------ Theodore D. Sands /S/ ROBERT W. TODD* Director ------------------------ Robert W. Todd - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Terra Real Estate Corp. has duly caused this Pre-Effective Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA REAL ESTATE CORP. /S/ FRANCIS G. MEYER By: _______________________________ Francis G. Meyer Treasurer and Assistant Secretary Dated: January 16, 2002 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated on the 16th day of January 2002. Signature Title --------- ----- /S/ MICHAEL L. BENNETT* Director and President (Principal Executive Officer) - ------------------------ Michael L. Bennett /S/ FRANCIS G. MEYER Director, Treasurer and Assistant Secretary (Principal - ------------------------ Financial and Accounting Officer) Francis G. Meyer /S/ MARK A. KALAFUT Director and Vice President - ------------------------ Mark A. Kalafut - -------- * Signed pursuant to power of attorney: /S/ FRANCIS G. MEYER By: _________________________________________________________________________ Francis G. Meyer Attorney-in-fact II-17 EXHIBIT INDEX
Exhibit Filed No. Description Incorporated Herein by Reference to Herewith - ------- ----------- ----------------------------------- -------- 3.i.(a) Certificate of Incorporation of Terra Capital, Inc. + 3.i.(b) Certificate of Incorporation of Beaumont + Ammonia Inc. 3.i.(c) Certificate of Incorporation of Beaumont Holdings + Corporation 3.i.(d) Certificate of Incorporation of BMC Holdings Inc. + 3.i.(e) Certificate of Incorporation of Port Neal Corporation + 3.i.(f) Restated Certificate of Incorporation of Terra (UK) + Holdings Inc. 3.i.(g) Certificate of Incorporation of Terra Capital + Holdings, Inc. 3.i.(h) Articles of Restatement of Terra Industries Inc. Exhibit 3.1 to Terra Industries Form 10-K for the year ended December 31, 1990 3.i.(i) Articles of Amendment of Terra Industries Inc. Exhibit 3.1.2 to Terra Industries Form 10-K for the year ended December 31, 1992 3.i.(j) Articles Supplementary of Terra Industries Inc. Exhibit 4.1.3 to Terra Industries Form 8-K/A dated November 3, 1994 3.i.(k) Certificate of Incorporation of Terra International + (Oklahoma) Inc., as amended 3.i.(l) Certificate of Incorporation of Terra International Inc. + (f/k/a Terra Chemicals International, Inc.) 3.i.(m) Certificate of Incorporation of Terra Methanol + Corporation, as amended 3.i.(n) Restated Certificate of Incorporation of Terra Nitrogen + Corporation, as amended (f/k/a Agricultural Mineral Corporation) 3.i.(o) Articles of Incorporation of Terra Real Estate Corp. + 3.ii.(a) By-Laws of Terra Capital, Inc. + 3.ii.(b) Bylaws of Beaumont Ammonia Inc. + 3.ii.(c) Bylaws of Beaumont Holdings Corporation + 3.ii.(d) Bylaws of BMC Holdings Inc. + 3.ii.(e) Bylaws of Port Neal Corporation + 3.ii.(f) Bylaws of Terra (UK) Holdings Inc. + 3.ii.(g) Bylaws of Terra Capital Holdings, Inc. + 3.ii.(h) Bylaws of Terra Industries Inc., as amended through Exhibit 3 to Terra Industries August 7, 1991 Form 8-K dated September 30, 1991 3.ii.(i) Bylaws of Terra International (Oklahoma) Inc. + 3.ii.(j) Bylaws of Terra International Inc. + 3.ii.(k) Bylaws of Terra Methanol Corporation +
Exhibit Filed No. Description Incorporated Herein by Reference to Herewith - ------- ----------- ----------------------------------- -------- 3.ii.(l) Bylaws of Terra Nitrogen Corporation + 3.ii.(m) Bylaws of Terra Real Estate Corp. + 5.i.(a) Opinion of Kirkland & Ellis regarding the validity of + the securities offered hereby 12 Ratio of Earnings to Fixed Charges + 13 Financial Review and Consolidated Financial Exhibit 13 to Terra Industries Statements as contained in the Annual Report to Form 10-K for the year ended Stockholders of Terra Industries for the fiscal year December 31, 2001 ended December 31, 2000. 23 Consent of Deloitte & Touche LLP, Independent + Auditors 24 Power of Attorney (on signature pages hereto) Previously filed herewith 25 Statement of Eligibility of Trustee on Form T-1 under + the Trust Indenture Act of 1939 of U.S. Bank Trust National Association 99.1 Form of Letter of Transmittal + 99.2 Form of Tender Instructions + 99.3 Form of Notice of Guaranteed Delivery +
- -------- + Included in this filing. EX-3.I.(A) 3 dex3ia.txt CERTIFICATE OF INCORPORATION OF TERRA CAPITAL, INC Exhibit 3.i.(a) CERTIFICATE OF INCORPORATION OF TERRA CAPITAL, INC. ARTICLE ONE The name of the corporation is Terra Capital, Inc. ARTICLE TWO The address of the corporation's registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County of Kent 19904. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. ARTICLE THREE The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE FOUR The total number of shares of stock which the corporation has authority to issue is one thousand (1,000) shares of Common Stock, par value one cent ($0.01) per share. ARTICLE FIVE The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Thaddine G. Gomez 200 East Randolph Drive Suite 5700 Chicago, Illinois 60601 ARTICLE SIX The corporation is to have perpetual existence. ARTICLE SEVEN In furtherance and not in limitation of the powers conferred by statute, board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE EIGHT Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. ARTICLE NINE To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE NINE shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. -2- ARTICLE TEN The corporation expressly elects not to be governed by (S)203 of the General Corporation Law of the State of Delaware. ARTICLE ELEVEN The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incororation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand on the 10th day of October, 1994. /s/ Thaddine G. Gomez ----------------------- Thaddine G. Gomez Sole Incorporator -3- EX-3.I.(B) 4 dex3ib.txt CERTIFICATE OF INCORPORATION OF BEAUMONT Exhibit 3.1(b) CERTIFICATE OF INCORPORATION OF BEAUMONT AMMONIA INC. ARTICLE ONE ----------- The name of the corporation is Beaumont Ammonia Inc. ARTICLE TWO ----------- The address of the corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE ------------- The nature of the business or purposes to be conducted or promoted by the corporation is to engage in the following business and financial activities: (i) to construct and operate an ammonia loop and otherwise deal with such ammonia loop, including purchase of materials and sales of product related thereto; (ii) to make loans from time to time to Terra Capital, Inc. and its affiliates, including Terra (U.K.) Holdings Inc., to exercise its rights and perform its duties in connection therewith, and to otherwise deal with such loans and any proceeds therefrom; and (iii) to engage in any other acts and activities and to exercise any powers permitted to corporations under the laws of the State of Delaware that are related or incidental to the foregoing or are necessary, convenient or advisable to the foregoing. ARTICLE FOUR ------------ Notwithstanding any other provision of this Certificate and any provision of law that otherwise so empowers the corporation, the corporation shall not, without the affirmative vote of the holders of a majority of its outstanding Common Stock, do any of the following: (i) engage in any business or activity other than those as contemplated in Article THREE; (ii) incur any indebtedness for borrowed money, or assume or guaranty any indebtedness for borrowed money of any other entity, other than for working capital purposes; and (iii) institute any proceedings to be adjudicated bankrupt or insolvent, consent to the institution of bankruptcy or insolvency proceedings against the corporation, file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy, consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, (or other similar official) of the corporation or a substantial part of its property or admit its inability to pay its debts generally as they become due or authorize any of the foregoing to be done or taken on behalf of the corporation. ARTICLE FIVE ------------ The total number of shares of stock which the corporation has authority to issue is One Thousand (1,000) shares of Common Stock, with a par value of $0.01 per share. ARTICLE SIX ----------- The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Sally G. Burns 200 East Randolph Drive Chicago, IL 60601 ARTICLE SEVEN ------------- The corporation is to have perpetual existence. ARTICLE EIGHT ------------- In furtherance and not in limitation of the powers conferred by statute, the board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE NINE ------------ Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. ARTICLE TEN ----------- To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. -2- Any repeal or modification of this ARTICLE TEN shall not adversely affect any ----------- right or protection of a director of the corporation existing at the time of such repeal or modification ARTICLE ELEVEN -------------- The corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE TWELVE -------------- The corporation deserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand this 16th day of December, 1997. /s/ Sally G. Burns ----------------------------------- Sally G. Burns, Sole Incorporator -3- EX-3.I.(C) 5 dex3ic.txt CERTIFICATE OF INCORPORATION OF BEAUMONT HOLDINGS Exhibit 3.i. (c) CERTIFICATE OF INCORPORATION OF BEAUMONT HOLDINGS CORPORATION ARTICLE ONE The name of the corporation is Beaumont Holdings Corporation ARTICLE TWO The address of the corporation's registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE FOUR The corporation shall have the authority to issue One Thousand (1,000) shares of Common Stock, par value one cent($0.01) per share. ARTICLE FIVE The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Barbara A. Beach 200 East Randolph Drive Suite 5700 Chicago, Illinois 60601 ARTICLE SIX The corporation is to have perpetual existence. ARTICLE SEVEN In furtherance and not in limitation of the powers conferred by statute, the board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE EIGHT Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. ARTICLE NINE To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE NINE shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. ARTICLE TEN The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. -2- I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand on the 24/th/ day of June, 1999. /s/ Barbara A. Beach ---------------------------- Barbara A. Beach Sole Incorporator EX-3.I.(D) 6 dex3id.txt CERTIFICATE OF INCORPORATION OF BMC HOLDINGS EXHIBIT 3.i (d) CERTIFICATE OF INCORPORATION OF BMC HOLDINGS INC. ______________ ARTICLE I Name ---- SECTION 1.1. Name. The name of the Corporation is BMC Holdings Inc. ---- (the "Corporation"). ----------- ARTICLE II Registered Office and Registered Agent -------------------------------------- SECTION 2.1. Office and Agent. The address of the Corporation's ---------------- registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. ARTICLE III Corporate Purposes ------------------ SECTION 3.1. Purpose. The purpose of the Corporation is to engage in ------- any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE IV Capitalization -------------- SECTION 4.1. Authorized Capital. The total number of shares of capital ------------------ stock that the Corporation shall have authority to issue is: 30,000,000 shares of Common Stock, par value $.01 per share (the "Common Stock"), of which ------------ 15,000,000 shares shall be Class A Common Stock (the "Class A Common Stock") and -------------------- 15,000,000 shares shall be Class B Common Stock (the "Class B Common Stock"); -------------------- provided, however, the - -------- ------- 2 Corporation shall have the authority to issue more than 15,000,000 shares of Class A Common Stock in connection with the exchange of shares of Class B Common Stock pursuant to Section 4.2(d) and shall have the authority to issue more than 15,000,000 shares of Class B Common Stock, in connection with the exchange of shares of Class A Common Stock pursuant to Section 4.2(d). SECTION 4.2. Common Stock. (a) Identical Rights and Privileges; No ------------ ----------------------------------- Preemptive Rights. Except as otherwise expressly provided in this Certificate of - ----------------- Incorporation, all outstanding shares of Common Stock shall be identical and shall entitle the holders thereof to the same rights and privileges. The holders of shares of Common Stock shall have no preemptive or preferential rights of subscription to any shares of any class of capital stock of the Corporation. (b) Dividends and Distributions. As, if and when dividends or --------------------------- distributions are declared on outstanding shares of Common Stock, whether payable in cash, in property or in securities of the Corporation (other than shares of Common Stock), the holders of outstanding shares of Class A Common Stock and Class B Common Stock shall be entitled to share equally, share for share, in such dividends and distributions. If dividends or distributions are declared on outstanding shares of Common Stock that are payable in shares of, or in subscription or other rights to acquire shares of; Common Stock, such dividends shall be declared at the same rate on the outstanding shares of Class A Common Stock and the outstanding shares of Class B Common Stock, but shall be payable only in shares or in subscription or other rights to acquire shares, as the case may be, of Class A Common Stock to holders of outstanding shares of Class A Common Stock and of Class B Common Stock to holders of outstanding shares of Class B Common Stock. (c) Liquidation. Upon any liquidation, dissolution or winding up of the ----------- Corporation, whether voluntary or involuntary, the holders of outstanding shares of Class A Common Stock and outstanding shares of Class B Common Stock shall be entitled to share equally, share for share, in the assets of the Corporation to be distributed among the holders of shares of the Common Stock. (d) Exchange Rights. (1) Exchange of Class A Common Stock with Class B --------------- --------------------------------------------- Common Stock. Subject to and upon compliance with the provisions of this Section - ------------ 4.2(d), (A) each record holder of shares of Class B Common Stock shall be entitled at any time and from time to time to exchange any or 3 all of the shares of Class B Common Stock held by such holder for the same number of shares of Class A Common Stock and (B) each record holder of shares of Class A Common Stock shall be entitled at any time and from time to time to exchange any or all of the shares of Class A Common Stock held by such holder for the same number of shares of Class B Common stock; provided, however, that -------- ------- no holder of Class B Common Stock shall be entitled to exchange any share or shares of Class B Common Stock to the extent that, as a result of such exchange, such holder and its Affiliates (as hereinafter defined), directly or indirectly, would, in such holder's judgment, own, control or have power to vote a greater quantity of securities of any kind issued by the Corporation that such holder and its Affiliates shall be permitted to own, control or have power to vote under any law or under any regulation, rule or other requirement of any government authority at the time applicable to such holder and its Affiliates; provided further, however, that if any holder or prospective transferee (each, - -------- ------- ------- an "Electing Person") of any Class B Common Stock shall so elect by written --------------- notice to the Corporation (stating that such election is irrevocable), except to the extent otherwise provided in Section 4.2(e), such Electing Person shall only be entitled to exchange Class B Common Stock for Class A Common Stock in connection with the sale or other transfer to another person of such stock (such exchange to be effected solely by surrender of such Class B Common Stock to the Corporation whereupon the Corporation shall promptly deliver the shares of Class A Common Stock resulting from such exchange to the transferee thereof and any voting right to which the holder of such Class A Common Stock is entitled shall come into being only upon delivery by the Corporation of such Class A Common Stock to the transferee thereof) and if such Electing Person shall at any time and for any reason hold capital stock of the Corporation entitled to voting rights, then, anything in this Certificate of Incorporation to the contrary notwithstanding, for so long as such Electing Person shall hold such capital stock such Electing Person shall not be entitled to exercise any such voting rights; and provided further, however, that no holder of shares of Class B -------- ------- ------- Common Stock shall be entitled to exchange any shares of Class B Common Stock prior to the earlier of (A) the date on which a registration statement on Form S-1 (or any successor form) under the securities Act of 1933, as amended (the "1933 Act"), shall be declared effective thereunder and (B) the first date on -------- which The Morgan Stanley Leveraged Equity Fund II, L.P., a Delaware limited partnership ("MSLEF II"), and its controlled Affiliates no longer beneficially -------- own shares of Class A Common Stock entitling MSLEF II and its Affiliates to cast a majority of all the votes entitled to be cast in the election 4 of directors of the Corporation by the holders of all the outstanding shares of Common Stock. (2) Procedures for Exchange of Shares of One Class of Common Stock -------------------------------------------------------------- for Shares of Another Class of Common stock. Each exchange of shares of one - ------------------------------------------- class of Common Stock (the "Exchanging Class") for shares of another class of ---------------- Common Stock (the "Exchanged Class") pursuant to this Section 4.2(d) shall be --------------- effected by the surrender of the certificate or certificates evidencing the shares of Common Stock of the Exchanging Class to be exchanged at the principal office of the Corporation (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the holders of the Common Stock) at any time during its usual business hours, together with written notice by the holder of such shares of Common Stock of the Exchanging Class, stating that (A) such holder desires to exchange the shares, or a stated number of shares, of Common Stock of the Exchanging Class evidenced by such certificate or certificates into shares of Common Stock of the Exchanged Class and (B) such exchange is in compliance with this Section 4.2(d). Such notice shall also state the name or names (with addresses) and denominations in which the certificate or certificates evidencing shares of Common Stock of the Exchanged Class shall be issued and shall include instructions for delivery thereof. Receipt of such notice together with the certificates evidencing the shares of Common Stock of the Exchanging Class to be exchanged shall obligate the Corporation to issue such shares of Common Stock of the Exchanged Class. Promptly after such surrender and the receipt of such written notice, the Corporation shall issue and deliver in accordance with such instructions the certificate or certificates evidencing the shares of Common Stock of the Exchanged Class issuable upon such exchange. Such exchange, to the extent not prohibited by law or by this Certificate of Incorporation, shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates for shares of Common Stock of the Exchanged Class shall have been issued, and at such time the rights of the holder of such shares of Common Stock of the Exchanging Class (or specified portion thereof) as such holder shall cease and the person or persons in whose name or names any certificate or certificates evidencing shares of Common Stock of the Exchanged Class issued upon such exchange shall be deemed to have become the holder or holders of record of the shares of Common Stock of the Exchanged Class evidenced thereby. The Corporation shall be entitled to rely conclusively, as to the truth of the statements made therein, on such written notice, and the Corporation shall not be liable to any person with respect to 5 any action taken or omitted to be taken by it in connection with such exchange in reliance on the statements made in such written notice. (3) Stock Splits; Adjustments; Etc. If the Corporation shall in any manner ------------------------------ subdivide or combine the outstanding shares of one class of Common Stock, the outstanding shares of the other class of Common Stock (and series thereof, if applicable) shall be proportionately subdivided or combined, as the case may be. (4) Reservation. The Corporation will at all times reserve and keep ----------- available out of its authorized but unissued shares of: (A) Class A Common Stock, or its treasury shares, solely for the purpose of issue upon exchange of the shares of Class B Common Stock, as herein provided, such number of shares of Class A Common Stock as shall then be issuable upon an exchange of all outstanding shares of Class B Common Stock. The shares of Class A Common Stock so issuable shall be, when so issued, duly authorized and validly issued and will be fully paid and nonassessable; and (B) Class B Common Stock, or its treasury shares, solely for the purpose of issue upon exchange of the shares of Class A Common Stock, as herein provided, such number of shares of Class B Common Stock as shall then be issuable upon an exchange of all outstanding shares of Class A Common Stock. The shares of Class B Common Stock so issuable shall be, when so issued, duly authorized and validly issued and will be fully paid and nonassessable. (5) No Reissue. Shares of Class A Common Stock that are exchanged for ---------- shares of Class B Common Stock as provided in this Section 4.2 shall not be reissued, except in connection with an exchange of shares of Class B Common Stock into shares of Class A Common Stock pursuant to this Section 4.2(d). Shares of Class B Common Stock that are exchanged for shares of Class A Common Stock as provided in this Section 4.2 shall not be reissued, except in connection with an exchange of shares of Class A Common Stock into shares of Class B Common Stock pursuant to this Section 4.2(d). (6) No Charge. The issue of certificates evidencing shares of Common Stock --------- of any Exchanged Class upon exchange of shares of Common Stock of any Exchanging Class shall be made without charge to the holders of such shares for any issue tax in respect thereof, or other cost incurred 6 by the Corporation in connection with such exchange; provided, however, that the -------- ------- Corporation shall not be required to pay any tax that may be payable in respect of any transfer involving the issue and delivery of any certificate in a name other than that of the holder or former holder of the shares of Common Stock of the Exchanging Class so exchanged. (e) Voting Rights. (1) In General. The holders of outstanding shares ------------- ---------- of Class A Common Stock shall have the right to vote on the election and removal of the directors of the Corporation and on all other matters to be voted on by the stockholders of the Corporation. The holders of shares of Class B Common Stock shall not have any right to vote on any matters to be voted on by the stockholders of the Corporation, except (i) a consolidation or merger of the Corporation with or into any other corporation, (ii) the sale, lease or exchange of all or substantially all the Corporation's property and assets, (iii) a liquidation, dissolution or winding up of the Corporation, or (iv) as otherwise provided by law, and, with respect to each of the matters referred to in such clauses (i) through (iv), except as otherwise provided by law, the holders of the shares of Class B Common Stock shall vote together with the holders of the shares of Class A Common Stock as a single class. The shares of Class B Common Stock shall not be included in determining the number of shares voting or entitled to vote on any matters (other than the matters described in the foregoing clauses (i) through (iv)). (2) Procedures at Meetings. At every meeting with respect to matters ---------------------- on which the holders of outstanding shares of Class A Common Stock are entitled to vote, the holders of outstanding shares of Class A Common Stock shall be entitled to one vote per share. At every meeting with respect to matters on which the holders of outstanding shares of Class B Common Stock are entitled to vote, the holders of outstanding shares of Class B Common Stock shall be entitled to one vote per share. (f) Definitions. For purposes of this Certificate of Incorporation: ----------- (i) "Affiliate" means with respect to any Person, any other Person --------- directly or indirectly controlling, controlled by, or under common control with, such Person (for purposes of this definition, "control" (including with correlative meanings, the terms "controlling, "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause 7 the direction of management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise; and (ii) "Person" means an individual, a partnership, a joint venture, a ------ corporation, an association, a trust, or any other entity or organization. ARTICLE V Compromise or Arrangement ------------------------- SECTION 5.1. Compromise or Arrangement. Whenever a compromise or ------------------------- arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court is equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such a manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. ARTICLE VI Indemnification --------------- SECTION 6.1. Indemnification. (a) The Corporation shall indemnify any --------------- person who was or is a party or is threatened to be made a party to any threatened, pending, or 8 completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. 9 (c) To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) above (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b) above. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. (e) Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation pursuant to this Article VI or as otherwise authorized by law. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (f) The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, 10 partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of the General Corporation Law of the State of Delaware. (h) For purposes of this Article VI, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this Article VI, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves service by, such director, officer, employee or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation", as referred to in this Article VI. (j) The indemnification and advancement of expenses provided by, or granted pursuant to this Article VI, shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. 11 ARTICLE VII Liability of a Director ----------------------- SECTION 7.1. Director Liability. (a) A director of the Corporation ------------------ shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived any improper personal benefit. (b) Any repeal or modification of this Article VII shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE VIII Management of the Affairs of the Corporation -------------------------------------------- SECTION 8.1. Management of the Affairs of the Corporation. (a) The -------------------------------------------- business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all the powers of the Corporation and do all such lawful acts and things that are not conferred upon or reserved to the stockholders by law, by this Certificate of Incorporation or by the By-laws of the Corporation. (b) Election of directors of the Corporation need not be by written ballot, except and to the extent provided in the By-laws of the Corporation. (c) Except as may be otherwise expressly provided in the By-laws of the Corporation, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the By-laws of the Corporation. ARTICLE IX Private Property ---------------- SECTION 9.1. Private Property. The private property of the stockholders ---------------- of the Corporation shall not be subject to the payment of corporate debts to any extent whatsoever. 12 ARTICLE X Incorporator The name and mailing address of the sole incorporator is as follows: Name Mailing Address ---- --------------- Scott A. Budoff Shearman & Sterling 599 Lexington Avenue New York, NY 10022 I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 27/th/ day of November, 1991. /s/ Scott A. Budoff ---------------------------- Scott A. Budoff EX-3.I.(E) 7 dex3ie.txt CERTIFICATE OF INCORPORATION OF PORT NEAL CORP Exhibit 3.i.(e) CERTIFICATE OF INCORPORATION ---------------------------- OF -- PORT NEAL CORPORATION --------------------- ARTICLE ONE ----------- The name of the corporation is Port Neal Corporation. ARTICLE TWO ----------- The address of the corporation's registered office in the State of Delaware is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE ------------- The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE FOUR ------------ The total number of shares of stock which the corporation has authority to issue is 1,000 shares of Common Stock, with a par value of $.01 per share. ARTICLE FIVE ------------ The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Maureen L. Maher 200 East Randolph Drive Suite 5700 Chicago, Illinois 60601 ARTICLE SIX ----------- The corporation is to have perpetual existence. ARTICLE SEVEN ------------- In furtherance and not in limitation of the powers conferred by statute, the board of directors of the corporation is expressly authorized to make, alter or repeal the bylaws of the corporation. ARTICLE EIGHT ------------- Meetings of stockholders may be held within or without the State of Delaware, as the bylaws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation. Election of directors need not be by written ballot unless the bylaws of the corporation so provide. ARTICLE NINE ------------ To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE NINE shall not adversely affect any right or ------------ protection of a director of the corporation existing at the time of such repeal or modification. ARTICLE TEN ----------- The corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE ELEVEN -------------- The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand on the 31st day of August, 1995. /s/ Maureen L. Maher ---------------------------- Maureen L. Maher Sole Incorporator EX-3.I.(F) 8 dex3if.txt RESTATED CERTIFICATE OF INCORPORATION OF TERRA(UK) Exhibit 3.i(f) RESTATED CERTIFICATE OF INCORPORATION TERRA (U.K.) HOLDINGS INC. The undersigned, being the duly elected and authorized President of Terra (U.K.) Holdings Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that: FIRST: The Corporation filed its original Certificate of Incorporation with the Secretary of State of Delaware on December 16, 1997. SECOND: The Board of Directors of the Corporation, in accordance with Sections 141(f), 242 and 245 of the General Corporation Law of the State of Delaware, duly adopted resolutions by unanimous written consent authorizing the Corporation to amend and restate the Certificate of Incorporation of the Corporation in its entirety to read as set forth in Exhibit A attached hereto --------- and made a part hereof (the "Restated Certificate"). THIRD: The stockholders of the Corporation approved and adopted the Restated Certificate of the Corporation in its entirety, in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, by written consent in lieu of a meeting of the stockholders. IN WITNESS WHEREOF, the undersigned officer of the Corporation, for the purpose of amending and restating the Restated Certificate of Incorporation of the Corporation pursuant to the General Corporation Law of the State of Delaware, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Certificate of Restated Certificate of Incorporation this 29th day of December, 1997. TERRA (U.K.) HOLDINGS INC. By: /s/ Francis G. Meyer -------------------------------- Francis G. Meyer, President RESTATED EXHIBIT A --------- CERTIFICATE OF INCORPORATION OF TERRA (U.K.) HOLDINGS INC. ARTICLE ONE ----------- The name of the corporation if Terra (U.K.) Holdings Inc. ARTICLE TWO ----------- The address of the corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE ------------- The nature of the business or purposes to be conducted or promoted by the corporation is to engage in the following business and financial activities: (i) to organize, invest in, manage and otherwise deal with Beaumont Ammonia Inc., a Delaware corporation (the "Permitted Subsidiary"), and the assets and business of the Permitted Subsidiary; (ii) to make a secured loan in an initial principal amount not to exceed $175 million to Terra Nitrogen (U.K.) Limited, to exercise its rights and perform its duties in connection therewith, and to otherwise deal with such loan, any collateral thereunder and any proceeds therefrom; (iii) to make loans from time to time to Terra Capital, Inc. and its affiliates, to exercise its rights and perform its duties in connection therewith, and to otherwise deal with such loans and any proceeds therefrom; and (iv) to engage in any other acts and activities and to exercise any powers permitted to corporations under the laws of the State of Delaware that are related or incidental to the foregoing or are necessary, convenient or advisable to the foregoing. ARTICLE FOUR ------------ Notwithstanding any other provision of this Certificate and any provision of law that otherwise so empowers the corporation, the corporation shall not, without the affirmative vote of the holders of a majority of its outstanding Common Stock, do any of the following: (i) engage in any business or activity other than those as contemplated in Article THREE; (ii) incur any indebtedness for borrowed money, or assume or guaranty any indebtedness for borrowed money of any other entity, other than (a) for working capital purposes, (b) indebtedness to Permitted Subsidiary and (c) guaranties of indebtedness of Permitted Subsidiary; and (iii) institute any proceedings to be adjudicated bankrupt or insolvent, consent to the institution of bankruptcy or insolvency proceedings against the corporation, file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy, consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the corporation or a substantial part of its property or admit its inability to pay its debts generally as they become due or authorize any of the foregoing to be done or taken on behalf of the corporation. ARTICLE FIVE ------------ The total number of shares of stock which the corporation has authority to issue is One Thousand (1,000) shares of Common Stock, with a par value of $0.01 per share. ARTICLE SIX ----------- The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Sally G. Burns 200 East Randolph Drive Chicago, IL 60601 ARTICLE SEVEN ------------- The corporation is to have perpetual existence. ARTICLE EIGHT ------------- In furtherance and not in limitation of the powers conferred by statute, the board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE NINE ------------ Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. -2- ARTICLE TEN ----------- To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE TEN shall not adversely affect any right or ----------- protection of a director of the corporation existing at the time of such repeal or modification. ARTICLE ELEVEN -------------- The corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware. ARTICLE TWELVE -------------- The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. -3- EX-3.I.(G) 9 dex3ig.txt CERTIFICATE OF INCORORATION OF TERRA CAPITAL Exhibit 3.i.(g) CERTIFICATE OF INCORPORATION OF TERRA CAPITAL HOLDINGS, INC. ARTICLE ONE The name of the corporation is Terra Capital Holdings, Inc. ARTICLE TWO The address of the corporation's registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County of Kent 19904. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. ARTICLE THREE The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE FOUR The total number of shares of stock which the corporation has authority to issue is one thousand (1,000) shares of Common Stock, par value one cent ($0.01) per share. ARTICLE FIVE The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Thaddine G. Gomez 200 East Randolph Drive Suite 5700 Chicago, Illinois 60601 ARTICLE SIX The corporation is to have perpetual existence. ARTICLE SEVEN In furtherance and not in limitation of the powers conferred by statute, the board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE EIGHT Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. ARTICLE NINE To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE NINE shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. -2- ARTICLE TEN The corporation expressly elects not to be governed by (S)203 of the General Corporation Law of the State of Delaware. ARTICLE ELEVEN The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand on the 10th day of October, 1994 /s/ Thaddine G. Gomez ----------------------------------- Thaddine G. Gomez Sole Incorporator -3- EX-3.I.(K) 10 dex3ik.txt CERTIFICATE OF INCORPORATION - TERRA INTERNATIONAL Exhibit 3.i(k) CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF TERRA OKLAHOMA HOLDINGS, INC. It is hereby certified that: 1. The name of the corporation (hereinafter called the "corporation") is Terra Oklahoma Holdings, Inc. 2. The certificate of incorporation of the corporation is hereby amended by striking out Article 1. thereof and by substituting in lieu of said Article the following new Article 1.: "Name. The name of the corporation is TERRA INTERNATIONAL (OKLAHOMA) ---- INC." 3. The amendment of the certificate of incorporation herein certified has been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware. Signed and attested to on July 30, 1993. /s/ Mark A. Kalafut --------------------------------- Mark A. Kalafut, Vice President Attest: /s/ Jane A. Rice - -------------------------- Jane A. Rice, Secretary CERTIFICATE OF INCORPORATION of TERRA OKLAHOMA HOLDINGS, INC. The undersigned incorporator, in order to form a corporation under the General Corporation Law of the State of Delaware, certifies as follows: 1. Name. The name of the corporation is TERRA OKLAHOMA HOLDINGS, INC. ---- 2. Address; Registered Agent. The address of the Corporation's registered ------------------------- office is 229 South State Street, City of Dover, County of Kent, State of Delaware; and its registered agent at such address is The Prentice-Hall Corporation System, Inc. 3. Purposes. The nature of the business and purposes to be conducted or -------- promoted by the Corporation are to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. Number of Shares. The total number of shares of stock which the ---------------- Corporation shall have authority to issue is: One Thousand (1,000), all of which shall be shares of Common Stock of the Par Value of One Cent ($0.01) each. 5. Name and Address of Incorporator. The name and mailing address of the -------------------------------- incorporator is: Scott R. Coleman, Esq., 1285 Avenue of the Americas, New York, New York 10019. 6. Election of Directors. Members of the Board of Directors may be --------------------- elected either by written ballot or by voice vote. 7. Limitation of Liability. No director of the Corproation shall be ----------------------- personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. 2 8. Adoption, Amendment and/or Repeal of By-laws. The Board of Directors -------------------------------------------- may from time to time (after adoption by the undersigned of original by-laws of the Corporation) make, alter or repeal the by-laws of the Corporation; provided, that any by-laws made, amended or repealed by the Board of Directors may be amended or repealed, and any by-laws may be made, by the stockholders of the Corporation. IN WITNESS WHEREOF, this Certificate has been signed on this 7th day of September, 1988. /s/ Scott R. Coleman ------------------------------ Scott R. Coleman, Incorporator 3 EX-3.I.(L) 11 dex3il.txt CERTIFICATE OF INCORPORATION - TERRA INTERNATIONAL Exhibit 3.i.(l) CERTIFICATE OF INCORPORATION OF TERRA CHEMICALS INTERNATIONAL, INC. Dated: July 13, 1964 CERTIFICATE OF INCORPORATION of TERRA CHEMICALS INTERNATIONAL, INC. ___________________ We, the undersigned, in order to form a corporation for the purposes hereinafter stated, pursuant to the provisions of Chapter 1 of Title 8 of the Delaware Code of 1953, do hereby certify as follows: FIRST: The name of the proposed corporation is TERRA CHEMICALS INTERNATIONAL, INC. (hereinafter called "the Corporation"). SECOND: The location of the principal office of the Corporation in the State of Delaware is to be No. 129 South State Street, in the City of Dover, County of Kent. The name of the resident agent of the Corporation in said State is United States Corporation Company, the address of which is No. 129 South State Street, in said City. THIRD: The nature of the business and the objects and purposes for which it is formed are, to the extent permitted by law and except as otherwise specifically provided in this Certificate of Incorporation, to do any and all of the things hereinafter set forth to the same extent as natural 2 persons might or could do in any part of the world, namely: 1. To engage generally in the business of manufacturing, producing, mining, smelting, buying, selling, distributing, importing, exporting and trading and dealing in and with any and all kinds of chemicals and fertilizers of every nature and description and any and all ingredients, compounds, derivatives and by-products thereof and any and all materials, goods, merchandise and products incidental thereto or used in connection therewith. 2. To purchase, lease, option or otherwise acquire, to own, hold, use, operate, mine, exploit, manage, repair, maintain, control, to sell, assign, transfer, convey, exchange, lease or otherwise dispose of, to mortgage or otherwise encumber, real property whether improved or unimproved, including mineral lands, or structures, buildings or other improvements thereon or therein, or leaseholds or any other interest or right, whether legal or equitable, therein, and to construct, improve, alter or remove, structures, buildings or other improvements upon real property. 3. To make, purchase, lease, option or otherwise acquire, to own, hold, use, operate, repair, maintain, process, import, export, to sell, assign, transfer, exchange, lease or otherwise dispose of, to mortgage, pledge or otherwise encumber or in any manner to exploit, turn to account, trade or 3 deal in or with, personal property, whether tangible or intangible, or any interest or right, whether legal or equitable, therein. 4. To make, create, apply for, purchase, lease or otherwise acquire, to hold, own, register, use, operate, to sell, assign, license, lease, transfer, exchange or otherwise dispose of, to mortgage, pledge or otherwise encumber, to acquire or grant licenses with respect to, or in any manner to exploit, turn to account, trade or deal in or with, copyrights, trademarks, designs, inventions, discoveries, improvements, developments, processes, formulae, patents, tradenames, labels, prints or any interest or right, whether legal or equitable, therein; and to engage in research, experimental, laboratory and other developmental activities. 5. To borrow money or contract debts and to mortgage, pledge, convey, assign in trust or otherwise encumber or dispose of, the property, good will, franchises or other assets of the Corporation, including contract rights and including after-acquired property. 6. To lend money, with or without security; provided, that the Corporation shall not have the power to engage in the business of banking. 9. To issue, reissue, sell, assign, negotiate or 4 otherwise dispose of, to purchase or otherwise acquire, to deal in or with, or to cancel, stocks, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness or other securities or obligations of the Corporation of any kind, whether secured or unsecured. 8. To acquire, invest in, or otherwise become interested in, whether by subscription, purchase, underwriting, loan, participation in syndicates or otherwise, to own, hold, sell, assign, or otherwise dispose of, or in any manner to deal in or with, stocks, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness or other securities or obligations of any kind by whomsoever issued; to exercise in respect thereof all powers and privileges of individual ownership or interest therein, including the right to vote thereon for any and all purposes, to consent or otherwise act with respect thereto, without limitation; and to issue in exchange therefor the Corporation's stock, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness or other securities or obligations of any kind. 9. To guarantee or assume liability for the payment of the principal of, or dividends or interest on, or sinking fund payments in respect to, stocks, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness or other securities or obligations of any kind by whomsoever issued; and to guarantee or assume liability for the performance of any other contract or obligation, made or issued by 5 any domestic or foreign corporation, partnership, association, trustee, group, individual or entity. 10. To acquire in whole or in part the good will, property, business or assets of any domestic or foreign corporation, partnership, association, trustee, group, individual or entity. 11. To enter into any joint venture, arrangement for sharing of profits, union of interest, reciprocal concession or cooperation with any domestic or foreign corporation, partnership, association, trustee, group, individual or entity. 12. To form or cause to be formed under the laws of any state or country, to control or in any manner participate in the management of, to reorganize, merge, consolidate, to liquidate or dissolve any corporation, association or organization of any kind. 13. To engage in and carry on any business which is similar or related to any business herein set forth, or which is capable of being conveniently carried on in connection with any such business or which may directly or indirectly protect or enhance the value of any of the rights or property of the Corporation. 14. To engage in any branch of the activities 6 authorized in this Certificate of Incorporation, including, where applicable, manufacturing, wholesaling, retailing or distributing, whether as principal, agent, contractor or otherwise. 15. To do everything necessary, suitable or proper for the accomplishment, attainment or furtherance of, to do every other act or thing incidental to, appurtenant to, growing out of or connected with, the purposes, objects and powers set forth in this Certificate of Incorporation, whether alone or in association with others, to possess all the rights, powers and privileges now or hereafter conferred by the laws of the State of Delaware upon a corporation organized under such laws; and, in general, to carry on any of the activities and to do any of the things herein set forth to the same extent and as fully as a natural person or partnership might or could do; provided, that nothing herein set forth shall be construed as authorizing the Corporation to possess any purpose, object or power, or to do any act or thing forbidden by law to a corporation organized under Chapter 1 of Title 8 of the Delaware Code of 1953. The foregoing provisions of this Article THIRD shall be construed as purposes, objects and powers, and each as an independent purpose, object and power, in furtherance, and not in limitation, of the purposes, objects and powers granted to the Corporation by the laws of the State of Delaware; and, except as otherwise specifically provided in 7 any such provision, no purpose, object or power herein set forth shall be in any way limited or restricted by reference to, or inference from, any other provision of this Certificate of Incorporation. FOURTH: The total number of shares that the Corporation shall have authority to issue is ten thousand (10,000) shares of Common Stock, par value One Dollar ($1.00) per share. FIFTH: The minimum amount of capital with which the Corporation shall commence business shall be One Thousand Dollars ($1,000). No holder of stock of any class of the Corporation, whether now or hereafter authrorized, shall have any preemptive or preferential or other rights to subscribe for or purchase any shares of capital stock of any class or series, whether now or hereafter authorized, or any bonds, debentures, or other evidences of indebtedness, whether or not convertible into or exchangeable for capital stock, but shares of stock of any class, or bonds, debentures, or other evidences of indebtedness may be issued, sold or otherwise disposed of by the Corporation on such terms and conditions, and for such consideration, so far as may be permitted by law, and to such person or persons as the Board of Directors may, in its sole discretion, determine. 8 SIXTH: The names and places of residence of each of the incorporators are as follows: Name Places of Residence ---- ------------------- David C. Brodhead 3 Riverside Drive New York, New York Neale M. Albert 8 Nassau Road Yonkers, New York Martin D. Payson 225 Sterling Place Brooklyn, New York SEVENTH: The Corporation is to have perpetual existence. EIGHTH: The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatsoever. NINTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and it is expressly provided that the same are intended to be in furtherance and not in limitation or exclusion of the powers conferred by law: 1. The stockholders and the Board of Directors of the Corporation shall each have power to hold their meetings, to have an office or offices, and to keep the books of the Corporation, subject to the provisions of the laws of the State of Delaware, outside of said State at such place or places as may be duly designated in accordance with the By-laws. 9 2. The number of directors of the Corporation shall be determined, and may be changed from time to time, in the manner provided by the By-laws, but shall not be less than three (3). Except as otherwise provided in this Certificate of Incorporation or the By-laws, a majority of the directors in office at the time of a duly assembled meeting shall be necessary to constitute a quorum for the transaction of business, and the act of a majority of the directors present at such meeting shall be the act of the Board of Directors; provided, that the By-laws shall not fix the number of directors necessary to constitute a quorum at a number less than one-third of the total number of directors, nor fewer than two (2) directors. Directors may be removed, and vacancies in the Board of Directors may be filled, in the manner provided in the By-laws. The method of election of directors shall be as provided in the By-laws, and unless otherwise provided therein, need not be by ballot. Directors need not be stockholders. 3. All corporate powers, including but not limited to the mortgaging, hypothecation and pledge of the whole or any part of the corporate property (including after-acquired property) and the purchase, acquisition and lease of any property, real or personal, within or without the State of Delaware, may be exercised by the Board of Directors, without the assent of or other action by the stockholders, except as otherwise provided by law or by this Certificate of 10 Incorporation. The Board of Directors shall also have power, with the consent in writing, or upon the affirmative vote given at a meeting called for the purpose of the holders of a majority in voting power of the issued and outstanding stock then entitled to vote thereon, to sell, lease or exchange all of the property and assets of the Corporation, including its good will and corporate franchises, for such consideration and upon such terms and conditions as the Board of Directors shall deem expedient and in the best interest of the Corporation. 4. The Board of Directors shall have power from time to time to fix and determine and vary the amount of the working capital of the Corporation; subject to the provisions of this Certificate of Incorporation, to direct and determine the use and disposition of any net profits or surplus from whatever source arising; to create or abolish a reserve or reserves for any proper purpose; and in its discretion, but only to the extent permitted by law and by this Certificate of Incorporation, to use and apply any such profits or surplus in purchasing or acquiring bonds or other obligations of the Corporation or shares of the capital stock of the Corporation, to such extent and in such manner and on such terms and conditions as the Board of Directors shall deem expedient, and any shares of such capital stock so purchased or acquired may be resold, at the discretion of the Board of Directors, for such consideration and upon such terms 11 and conditions as the Board of Directors may determine. 5. To the extent permitted by law, and except as otherwise provided in this Certificate of Incorporation, the Board of Directors shall have absolute discretion as to the declaration, amount and nature of dividends, and may invest and reinvest the funds of the Corporation to such extent and in such manner as in its absolute discretion it may deem advisable. 6. The By-laws may confer upon the Board of Directors powers in addition to the foregoing and in addition to the powers and authorities expressly conferred upon them by law, but only to the extent permitted by law and by the provisions of this Certificate of Incorporation. 7. Except as otherwise provided in the By-laws, the Board of Directors may from time to time, by resolution or resolutions adopted by a majority of the directors then in office, designate an Executive Committee consisting of three or more directors, which Executive Committee shall have and may exercise, to the extent provided in such resolution or resolutions or in the By-laws, and to the extent permitted by law, the powers of the Board of Directors in the management of the business and affairs of the Corporation; and such other committees, consisting of such number of directors and having such powers, as shall be provided in such resolution or resolutions or in the By-laws. 12 8. Except as otherwise provided by law, at any meeting of stockholders a majority in voting power of the outstanding shares of stock entitled to vote at such meeting, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for the transaction of business. 9. Except as otherwise provided by law, or by this Certificate of Incorporation, any action authorized by the affirmative vote of the holders of a majority in voting power of the shares of stock entitled to vote, represented at a meeting of stockholders at which a quorum is present, shall constitute action by the stockholders. 10. By-laws may be made in the first instance by the incorporators. Thereafter, except as otherwise provided in a By-law made by the incorporators or by the stockholders, the Board of Directors may from time to time make, amend or repeal By-laws; provided, that any By-laws made, amended or repealed by the Board of Directors may be amended or repealed, and new By-laws may be made, by the stockholders entitled to vote. 11. The fact of membership on the Board of Directors shall not disqualify any director from rendering unusual or special services to the Corporation, or any director who may be an officer, agent or employee of the 13 Corporation and who may, as such officer, agent or employee, render services to the Corporation otherwise than in his capcacity as a director, from receiving compensation appropriate to the value of such services, and the Board of Directors may, in its discretion, cause such compensation to be paid. 12. In the absence of actual fraud, no contract or other transaction of the Corporation, or in which the Corporation is interested, shall be in any way affected by the fact that any of the directors or officers of the Corporation is in any way interested in or connected with, such contract or transaction, as a party thereto or otherwise, or any other party to such contract or transaction; and any such director or officer, and each and every person who may become a director or an officer of the Corporation, is hereby released from any liability that might otherwise result from contracting with the Corporation for the benefit of himself or of any other party in or with which he may be in any way interested or connected. Any and all directors of the Corporation who are so interested in, or so connected with, such other party or such contract or transaction, may be counted in determining the presence of a quorum at any meeting of the Board of Directors which shall authorize or ratify any such contract or transaction, and may vote to authorize or ratify any such contract or transaction, with like force and effect as if they were not so or interested or connected. No ratification by stockholders of any such contract or transaction shall be necessary to the validity thereof. 14 13. If any of the incorporators or the stockholders entitled to vote adopt any provision of By-laws, or if two or more subscribers to stock or stockholders enter into any agreement, abridging, limiting or restricting the rights of any one or more stockholders to sell, assign, transfer, mortgage, pledge, hypothecate, or transfer on the books of the Corporation, any or all of the stock of the Corporation held by any stockholder, or requiring any one or more stockholders first to offer any or all of the stock of the Corporation held by such stockholder for sale to other stockholders or persons or to the Corporation, under rules and regulations established in such By-laws or pursuant to such agreement, then all certificates of stock subject to such abridgement, limitations, or restrictions shall have a reference thereto endorsed thereon, and a copy of such agreement, if any, shall be filed at the office of the Corporation, and such stock shall not thereafter be transferred on the books of the Corporation except in accordance with the terms and provisions of any such By-laws or agreement, as the case may be. 14. The Corporation, acting through the Board of Directors, without action by the stockholders, may at any time or from time to time, and for such consideration, and upon such terms and conditions, as the Board deems proper, grant to any one or more persons, firms or corporations, rights or options to run for any period of time, including an unlimited period of time, to subscribe for or purchase from the Corporation 15 any shares of its stock of any class or classes (but at not less than the par value in the case of shares having a par value, or at the consideration determined by the Board of Directors in accordance with the General Corporation Law of the State of Delaware in the case of shares without par value) and/or to create and issue warrants and other instruments representing said rights or options in any form, all as the Board of Directors may, in its sole discretion, determine. TENTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code, or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders 16 or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. ELEVENTH: The Corporation shall indemnify any and all of its directors or officers or former directors or officers or any person who may have served at its request as a director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding, civil or criminal, in which they, or any of them, are made parties, or a party, by reason of being or having been directors or officers or a director of officer of the Corporation, or of such other corporation, except in relation to matters as to which any such director or officer or former director or officer or person shall be adjudged in such action, suit or proceeding, civil or criminal, to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those hereby indemnified may be entitled, under any By-law, 17 agreement, vote of stockholders or otherwise. TWELFTH: To the extent now or hereafter permitted by law, the Corporation reserves the right to amend, alter, change, supplement or repeal any provision of this Certificate of Incorporation, as from time to time amended, altered, changed, supplemented or repealed, and all rights of stockholders, directors and officers are subject to this express reservation. IN WITNESS WHEREOF, we have hereunto set our hands and seals this 13th day of July, 1964. /s/ David C. Brodhead (L.S.) ----------------------------- David C. Brodhead /s/ Neale M. Albert (L.S.) ----------------------------- Neale M. Albert /s/ Martin D. Payson (L.S.) ----------------------------- Martin D. Payson STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) BE IT REMEMBERED that on the 13th day of July, 1964, personally came before me DAVID C. BRODHEAD, NEALE M. ALBERT and MARTIN D. PAYSON, all of the parties to the foregoing Certificate of Incorporation, known to me personally to be such, and severally acknowledged the said Certificate of Incorporation to be the act and deed of signers, respectively, and that the facts therein stated are truly set forth. GIVEN under my hand and seal of office the day and year aforesaid. /s/ Judith L. Kaplan --------------------------------------- Notary Public JUDITH L. KAPLAN Notary Public, State of New York No. 31-2032250 Qualified in New York County Commission Expires March 30, 1965 EX-3.I.(M) 12 dex3im.txt CERTIFICATE OF INCORPORATION OF TERRA METHANOL EXHIBIT 3.i.(m) CERTIFICATE OF CORRECTION TO CERTIFICATE OF INCORATION OF TERRA METHANOL, INC. * * * * * Adopted in accordance with the provisions of (S)103(f) of the General Corporation Law of the State of Delaware * * * * * Thaddine G. Gomez, being the sole incorporator of Terra Methanol, Inc., a corporation duly organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY as follows: FIRST: The name of the corporation is Terra Methanol, Inc. (the "Corporation") SECOND: The Corporation has not received payment for any of its stock. The directors of the Corporation were not named in the Certificate of Incorporation and to date have not been elected. THIRD: The Certificate of Incorporation of the corporation which was filed with the Secretary of State of Delaware on December 19, 1994 is hereby corrected. FOURTH: The defect to be corrected in the Certificate of Incorporation is as follows: ARTICLE ONE The name of the corporation is Terra Methanol, Inc. FIFTH: The portion of the Certificate of Incorporation in corrected form is as follows: ARTICLE ONE The name of the corporation is Terra Methanol Corporation. IN WITNESS WHEREOF, the undersigned does hereby certify under penalties of perjury that this Certificate of Correction to the Certificate of Incorporation is the act and deed of the undersigned and the facts stated herein are true and accordingly has hereunto set her hand this 28th day of December, 1994. Terra Methanol, Inc., a Delaware corporation By: /s/ Thaddine G. Gomez -------------------------- Thaddine G. Gomez Sole Incorporator -2- CERTIFICATE OF INCORPORATION OF TERRA METHANOL, INC. ARTICLE ONE The name of the corporation is Terra Methanol, Inc. ARTICLE TWO The address of the corporation's registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County of Kent 19904. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. ARTICLE THREE The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE FOUR The total number of shares of stock which the corporation has authority to issue is one thousand (1,000) shares of Common Stock, par value one cent ($0,01) per share. ARTICLE FIVE The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS ---- --------------- Thaddine G. Gomez 200 East Randolph Drive Suite 5700 Chicago, Illinois 60601 ARTICLE SIX The corporation is to have perpetual existence. ARTICLE SEVEN In furtherance and not in limitation of the powers conferred by statue, the board of directors of the corporation is expressly authorized to make, alter or repeal the by-laws of the corporation. ARTICLE EIGHT Meetings of stockholder may be held within or without the State of Delaware, as the by-laws of the corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Election of directors need not be by written ballot unless the by-laws of the corporation so provide. ARTICLE NINE To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE NINE shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. -2- ARTICLE TEN The corporation expressly elects not to be governed by (S)203 of the General Corporation Law of the State of Delaware. ARTICLE ELEVEN The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have hereunto set my hand on the 19th day of December, 1994. /s/ Thaddine G. Gomez --------------------------- Thaddine G. Gomez Sole Incorporator -3- EX-3.I.(N) 13 dex3in.txt RESTATED CERTIFICATE INCORPORATION- TERRA NITROGEN EXHIBIT 3.i.(n) CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION OF AGRICULTURAL MINERALS CORPORATION * * * * Adopted in accordance with the provisions of (S)242 of the General Corporation Law of the State of Delaware * * * * George H. Valentine, being the President of Agricultural Minerals Corporation, a corporation duly organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY as follows: FIRST: The Board of Directors of the Corporation adopted the resolution set forth below proposing an amendment to the Certificate of Incorporation of the Corporation (the "Amendment") and directed that the Amendment be submitted to the sole holder of the issued and outstanding shares of Common Stock of the Corporation entitled to vote thereon for its consideration and approval: RESOLVED, that the Certificate of Incorporation of the Corporation be, and hereby is, amended in accordance with (S)242 of the General Corporation Law of the State of Delaware by deleting ARTICLE I thereof in its entirety and substituting therefor ARTICLE I as follows: ARTICLE I The name of the corporation shall be Terra Nitrogen Corporation. SECOND: The Amendment was duly adopted in accordance with (S)228 and (S)242 of the General Corporation Law of the State of Delaware by the sole holder of the issued and outstanding shares of the Common Stock of the Corporation entitled to vote thereon. * * * * * -2- IN WITNESS WHEREOF, the undersigned does hereby certify under penalties of perjury that this Certificate of Amendment to the Certificate of Incorporation of the Corporation is the act and deed of the undersigned and the facts stated herein are true and accordingly has hereunto set his hand this 20th day of October, 1994. Agricultural Minerals Corporation, a Delaware corporation By: /s/ George H. Valentine -------------------------------- George H. Valentine President -3- RESTATED CERTIFICATE OF INCORPORATION OF AGRICULTURAL MINERALS CORPORATION Agricultural Minerals Corporation, a Delaware corporation, hereby certifies as follows: 1. The name of the Corporation is Agricultural Minerals Corporation. The date of filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was February 2, 1990. 2. This Restated Certificate of Incorporation amends and restates the Certificate of Incorporation of the Corporation and was duly adopted by the written consent of the sole stockholder of the Corporation entitled to vote thereon in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware. 3. The text of the Certificate of Incorporation is hereby amended and restated in its entirety to read as follows: ARTICLE I Name ---- SECTION 1.1. Name. The name of the Corporation is Agricultural Minerals ---- Corporation (the "Corporation"). ----------- ARTICLE II Registered Office and Registered Agent -------------------------------------- SECTION 2.1. Office and Agent. The address of the Corporation's registered ---------------- office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. 2 ARTICLE III Corporate Purposes ------------------ SECTION 3.1. Purpose. The purpose of the Corporation is to engage in any ------- lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "General Corporation Law"). ----------------------- ARTICLE IV Capitalization -------------- SECTION 4.1. Authorized Capital. The total number of shares of stock that ------------------ the Corporation shall have authority to issue is 1,000, all of which shall be shares of Common Stock, par value $.01 per share. SECTION 4.2. No Preemptive Rights. The holders of shares of Common Stock -------------------- shall have no preemptive or preferential rights of subscription to any shares of any class of capital stock of the Corporation. ARTICLE V Indemnification --------------- SECTION 5.1. Indemnification. (a) The Corporation shall indemnify any --------------- person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fee), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that 3 the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) above (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b) above. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. 4 (e) Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation pursuant to this Article V or as otherwise authorized by law. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (f) The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this Article V shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of the General Corporation Law of the State of Delaware. (h) For purposes of this Article V, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article V with respect to the resulting of surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this Article V, references to "other enterprises" shall include employee benefit plans; 5 references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves service by, such director, officer, employee or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation", as referred to in this Article V. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE VI Liability of a Director ----------------------- SECTION 6.1. Director Liability. (a) A director of the Corporation ------------------ shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. (b) Any repeal or modification of this Article VI shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE VII Management of the Affairs of the Corporation -------------------------------------------- SECTION 7.1. Management of the Affairs of the Corporation. (a) The -------------------------------------------- business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all the powers of the Corporation and do all such lawful acts and things that are not conferred upon or reserved to the stockholders by law, by this Certificate of Incorporation or by the By-laws of the Corporation. (b) Election of directors of the Corporation need not be by written ballot, except and to the extent provided in the By-laws of the Corporation. (c) Except as may be otherwise expressly provided in the By-laws of the Corporation, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the By-laws of the Corporation. ARTICLE VIII Amendments ---------- SECTION 8.1. Amendments. No amendment to this Certificate of ---------- Incorporation may be made unless it shall have been approved by the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock at a meeting duly called and held. ARTICLE IX Private Property ---------------- SECTION 9.1. Private Property. The private property of the ---------------- stockholders of the Corporation shall not be subject to the payment of corporate debts to any extent whatsoever. IN WITNESS WHEREOF, Agricultural Minerals Corporation has caused this certificate to be signed by Alan E. Goldberg, its President, and attested by David R. Ramsay, its Secretary, this 20th day of February, 1990. AGRICULTURAL MINERALS CORPORATION By /s/ Alan E. Goldberg ------------------------------ ATTEST: /S/ David R. Ramsay - ------------------------------- EX-3.I.(O) 14 dex3io.txt ARTICLES OF INCORPORATION OF TERRA REAL ESTATE Exhibit 3.i.(o) EXHIBIT A ARTICLES OF INCORPORATION OF TERRA REAL ESTATE CORPORATION To the Secretary of State of the State of Iowa I, the undersigned, acting as incorporator of a corporation under the Iowa Business Corporation Act, adopt the following Articles of Incorporation for such corporation: I. The name of the corporation is Terra Real Estate Corporation. II. The period of its duration is perpetual. III. The purpose or purposes for which the corporation is organized are: to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the Iowa Business Corporation Act. IV. The aggregate number of shares which the corporation is authorized to issue is one thousand (1,000), all of which shall be shares of Common Stock of the par value of one dollar ($1.00) each. V. The address of the initial registered office of the corporation is c/o Terra Chemicals International, Inc., Plaza Building, 4th and Jackson Streets, Sioux City, Iowa 51101, and the name of its initial registered agent at such address is William T. Dible. VI. The number of directors constituting the initial board of directors of the corporation is four (4), and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are: Name Address ---- ------- William T. Dible P. O. Box 1828 Sioux City, Iowa 51102 Raymond W. Nason, Jr. P. O. Box 1828 Sioux City, Iowa 51102 John M. Timmons P. O. Box 1828 Sioux City, Iowa 51102 Raymond H. Armor P. O. Box 1828 Sioux City, Iowa 51102 VII. The name and address of the incorporator is: Name Address ---- ------- Richard S. Borisoff 345 Park Avenue New York, New York 10154 Dated: December 3, 1981 /s/ Richard S. Borisoff ------------------------- Richard S. Borisoff Incorporator STATE OF NEW YORK ) : ss.: COUNTY OF NEW YORK ) On this 3rd day of December, 1981, before me, Alyce Hopko, personally appeared Richard S. Borisoff, to me known to be the person named in and who executed the foregoing articles of incorporation, and acknowledged that he executed the same as his voluntary act and deed. /s/ Alyce Hopko ------------------------- Notary Public in and for Said County and State ALYCE HOPKO Notary Public, State of New York No. 41-4663145 Qualified in Queens County Commission Expires March 30, 1982 OFFICE OF THE SECRETARY OF STATE Des Moines, Iowa EXHIBIT B ================================================================================ IOWA No. 120878 SECRETARY OF STATE CERTIFICATE OF INCORPORATION December 8, 1981 TERRA REAL ESTATE CORPORATION Sioux City, Iowa 51101 has filed articles of incorporation in this office and is hereby authorized to transact business as a corporation from December 8, 1981, perpetually, under the provisions of Chapter 496A, 1981 Code of Iowa. [SEAL] Fees Paid: Filing ... $ 50.00 Recording. $ xx /s/ Mary Jane Odell ------------------------------------- SECRETARY OF STATE BY _____________________________________ DEPUTY ================================================================================ EXHIBIT C - -------------------------------------------------------------------------------- Affidavit of Publication State of Iowa, Polk County, ss. Copy of Publication NOTICE OF INCORPORATION OF TERRA REAL ESTATE CORPORATION TO WHOM IT MAY CONCERN: Pursuant to the requirements of Chapter 496A, 1979 Code of Iowa, notice is hereby given that a corporation known as Terra Real Estate Corporation was duly Incorporated and a Certificate of Incorporation issued on the 8th day of December, 1981. The purpose or purposes for which the corporation is organized are: to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the Iowa Business Corporation Act. The aggregate number of shares which the corporation is authorized to issue is one thousand (1,000), all of which shall be shares of Common Stock of the par value of one dollar ($1.00) each. The registered agent of this corporation is William T. Dible and the address of the initial registered office of the corporation is c/o Terra Chemicals International, Inc., Plaza Building, 4th and Jackson Streets, Sioux City, Iowa 51101. The name and address of the incorporator is Richard S. Borisoff, 345 Park Avenue, New York, New York 10154. For further information concerning the Articles of Incorporation all persons are referred to the Articles on file and of record in a manner provided by law. TERRA REAL ESTATE CORPORATION By: Richard S. Borisoff, Incorporator Published in the West Des Moines Express, December 24, 1981. The undersigned being duly sworn says he is publisher of THE WEST DES MOINES EXPRESS, a weekly newspaper regularly published and printed in the English language at West Des Moines, Polk County, Iowa, a paper of general circulation. And the affiant says that said notice was published in THE WEST DES MOINES EXPRESS for 7 consecutive weeks, the first publication of said notice being made on the 24/th/ day of December A.D. 1981 ---------- ------------- -- the second on the __________ day of _____________ A.D. 19__. the third on the ___________ day of _____________ A.D. 19__. the fourth on the __________ day of _____________ A.D. 19__. /s/ [ILLEGIBLE] ----------------------------------------- Subscribed and sworn to before me this 24/th/ day of December A.D. 1981. -------- ------------ /s/ [ILLEGIBLE] ------------------------------------ Notary Public in and for Polk County - -------------------------------------------------------------------------------- EX-3.II.(A) 15 dex3iia.txt BY-LAWS OF TERRA CAPITAL, INC. EXHIBIT 3.ii.(a) BY-LAWS OF TERRA CAPITAL, INC. A Delaware corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation --------- ----------------- in the State of Delaware shall be located at 32 Loockerman Square, Suite L-100, Dover, Delaware, County of Kent. The name of the corporation's registered agent at such address shall be The Prentice-Hall Corporation System, Inc. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special metting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take --------- ------ action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock ledger --------- ----------------- of the corporation shall make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares of --------- ------ capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another time --------- ------------------ and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. -2- Section 8. Vote Required. When a quorum is present, the affirmative --------- ------------- vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is coupled with an interest and the fact of the interest appears on the fact of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular. Section 11. Action by Written Consent. Unless otherwise provided in ---------- ------------------------- the certificate of incorporation, any action required to be taken at any annual or special meeting of such stockholders, may be taken without a meeting, of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents -3- delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III. ------------ DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of --------- ------------------------------------ directors which shall constitute the first board shall be one (1). Thereafter, the number of directors shall be established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board --------- ----------------------- of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. -4- Section 5. Annual Meetings. The annual meeting of each newly elected board --------- --------------- of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president on at least twenty-four (24) hours notice to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the total --------- ------------------------------------- number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by --------- ---------- a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or ---------- ------------------------ any committee thereof may participate in and act at any meeting of such board or committee -5- through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the ---------- ------------------------------------------ board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the ---------- ------------------------- certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by the --------- ------ board of directors and shall consist of a president, one or more vice-presidents, secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and -6- qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors --------- ------- may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, --------- --------- resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by the --------- ------------ board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The President. The president shall be the chief executive --------- ------------- officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these by-laws. Section 7. Vice-presidents. The vice-president, or if there shall be more --------- --------------- than one, the vice-presidents in the order determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these by-laws may, from time to time, prescribe. Section 8. The Secretary and Assistant Secretaries. The secretary shall --------- --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the -7- corporate seal to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 9. The Treasurer and Assistant Treasurer. The treasurer shall have --------- ------------------------------------- the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. Section 10. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 11. Absence or Disability of Officers. In the case of the absence ---------- --------------------------------- or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. -8- ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a --------- ------------------- party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so unless prohibited from doing so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. --------- ------------------------------------------------------- Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty (60) days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty (30) days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its -9- final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance --------- --------- on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 --------- -------- of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. -10- Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be entitled --------- ---- to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee, or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares -11- endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the --------- --------------------------------------------- corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered -12- to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of any owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof. Section 7. Subscriptions for Stock. Unless otherwise provided for in the --------- ----------------------- subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the --------- --------- corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board -13- of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside our of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders --------- ------------------------ for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or offices, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any --------- ----- obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation, Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be --------- ----------- fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be vote by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person -14- authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of ---------- ----------------------- these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -15- EX-3.II.(B) 16 dex3iib.txt BYLAWS OF BEAUMONT AMMONIA INC. Exhibit 3.ii.(b) BY-LAWS OF BEAUMONT AMMONIA INC. A Delaware Corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation --------- ----------------- in the State of Delaware shall be located 1209 Orange Street, Wilmington, Delaware 19801. The name of the corporation's registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within on hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of directors, the president or the holders of shares entitled to cast not less than a majority of the votes at the meeting. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take --------- ------ action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Section 5. Stockholders List. The officer having charge of the stock --------- ----------------- ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares of --------- ------ capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjorned Meetings. When a meeting is adjourned to another time --------- ----------------- and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjourment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote --------- ------------- of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. -2- Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Section 11. Action by Written Consent. Unless otherwise provided in the ---------- ------------------------- certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. -3- Section 2. Number, Election and Term of Office. The number of directors --------- ----------------------------------- which shall constitute the first board shall be __________ (____). Thereafter, the number of directors shall be between one and nine as established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected --------- --------------- board of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or any director on at least 24 hours notice to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the --------- ------------------------------------- total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors, present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed --------- ---------- by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the -4- directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member of members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or ---------- ------------------------ any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the ---------- ------------------------------------------ board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the ---------- ------------------------- certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings or the board of committee. -5- ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by the --------- ------ board of directors and shall consist of a president, one or more vice-presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person except that neither the chairman of the board nor the president shall also hold the office of secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors --------- ------- may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, --------- --------- resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by the --------- ------------ board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. Chairman of the Board. The chairman of the board shall be the --------- --------------------- chief executive officer of the corporation, and shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he or she shall be in the general and active charge of the entire business and affairs of the corporation, and shall be its chief policy making officer. He or she shall preside at all meetings of the board of directors and stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these by-laws. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilites and exercise all the powers of the president. Section 7. The President. The President shall, subject to the powers of the --------- ------------- board of directors and the chairman of the board, have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and -6- resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board or the board of directors or as may be provided in these by-laws. If there is no chairman of the board, the president shall be the chief executive officer of the corporation and shall have all the powers and perform the duties incidental to that position. Section 8. Chief Operating Officer. The chief operating officer of the --------- ----------------------- corporation, subject to the powers of the board of directors, shall have general and active management of the business of the corporation; and shall see that all orders and resolutions of the board of directors are carried into effect. The chief operating officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer or the board of directors or as may be provided in these by-laws. Section 9. Chief Financial Officer. The chief financial officer of the --------- ----------------------- corporation shall, under the direction of the chief executive officer, be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, chief executive officer or the board of directors or as may be provided in these by-laws. Section 10. Vice-Presidents. The vice-president, or if there shall be more ---------- --------------- than one, the vice-presidents in the order determined by the board of directors shall, in the absence or dissability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. Section 11. The Secretary and Assistant Secretaries. The secretary shall ---------- --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have the authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such duties and have such powers as the board of directors, the chairman of the board, the president, or secretary may, from time to time, prescribe. -7- Section 12. The Treasurer and Assistant Treasurer. The treasurer shall ---------- ------------------------------------- have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or treasurer may, from time to time, prescribe. Section 13. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 14. Absence or Disability of Officers. In the case of the ---------- --------------------------------- absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party --------- ------------------- or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do -8- so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any --------- ------------------------------------------------------- indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, -9- provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance --------- --------- on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 --------- -------- of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. -10- ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be entitled --------- ---- to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the --------- --------------------------------------------- corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any -11- adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 4. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive -12- dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. Section 7. Subscriptions for Stock. Unless otherwise provided for in the --------- ----------------------- subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the --------- --------- corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders --------- ------------------------ for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Fiscal Year. The fiscal year of the corporation shall be --------- ----------- fixed by resolution of the board of directors. Section 5. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of circle and shall have inscribed thereon the name of the corporation and the words -13- "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 6. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 7. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purposes thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 8. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 9. Inconsistent Provisions. In the event that any provision of --------- ----------------------- these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of thse by-laws shall not be given any affect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -14- EX-3.II.(C) 17 dex3iic.txt BYLAWS OF BEAUMONT HOLDINGS CORPORATION Exhibit 3.ii.(c) BY-LAWS OF BEAUMONT HOLDINGS CORPORATION A Delaware Corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation in --------- ----------------- the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the corporation's registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be called --------- ---------------- for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of directors, the president or the holders of shares entitled to cast not less than a majority of the votes at the meeting. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take --------- ------ action at a meeting, written or printed notice stating the place, date, time and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Section 5. Stockholders List. The officer having charge of the stock ledger --------- ----------------- of the corporation shall make at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares of --------- ------ capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another time --------- ------------------ and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of --------- -------------- the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. -2- Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent of dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Section 11. Action by Written Consent. Unless otherwise provided in the ---------- ------------------------- certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. -3- Section 2. Number, Election and Term of Office. The number of directors --------- ----------------------------------- which shall constitute the first board shall be three (3). Thereafter, the number of directors shall be established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of the directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to vote as the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by a majority of directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected --------- --------------- board of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or any director on at least 24 hours notice to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the total --------- ------------------------------------- number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by --------- ---------- a majority of the whole board, designate one or more committees, each committee to consist of one or more of the -4- directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may he determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or ---------- ------------------------ any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the ---------- ------------------------------------------ board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the ---------- ------------------------- certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and writing or writings are filed with the minutes of proceedings of the board or committee. -5- ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by the --------- ------ board of directors and shall consist of a president, one or more vice-presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of officers may be held by the same person except that neither the chairman of the board nor the president shall also hold the office of secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors --------- ------- may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby. but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, --------- --------- resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by --------- ------------ the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. Chairman of the Board. The Chairman of the Board shall be the --------- --------------------- chief executive officer of the corporation, and shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he or she shall be in the general and active charge of the entire business and affairs of the corporation, and shall be its chief policy making officer. He or she shall preside at all meetings of the board of directors and stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these-by-laws. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president. Section 7. The President. The president shall, subject to the powers of the --------- ------------- board of directors and the chairman of the board, have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and -6- resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board or the board of directors or as may be provided in these by-laws. Section 8. Chief Operating Officer. The chief operating officer of the --------- ----------------------- corporation, subject to the powers of the board of directors, shall have general and active management of the business of the corporation; and shall see that all orders and resolutions of the board of directors are carried into effect. The chief operating officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer or the board of directors or as may be provided in these by-laws. Section 9. Chief Financial Officer. The chief financial officer of the --------- ----------------------- corporation shall, under the direction of the chief executive officer, be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, chief executive officer or the board of directors or as may be provided in these by-laws. Section 10. Vice-Presidents. The vice-president, or if there shall be ---------- --------------- more than one, the vice-presidents in the order determined by the board of directors shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. Section 11. The Secretary and Assistant Secretaries. The secretary shall ---------- --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president, or secretary may, from time to time, prescribe. -7- Section 12. The Treasurer and Assistant Treasurer. The treasurer shall ---------- ------------------------------------- have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements: and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or treasurer may, from time to time, prescribe. Section 13. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 14. Absence or Disability of Officers. In the case of the ---------- --------------------------------- absence of disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party --------- ------------------- or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do -8- so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance to its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. --------- ------------------------------------------------------- Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or it stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (incuding its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, -9- provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance --------- --------- on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 --------- -------- of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V. --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. -10- ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be --------- ---- entitled to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that --------- --------------------------------------------- the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any -11- adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporation action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. De1ivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive -12- dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner, Section 7. Subscriptions for Stock. Unless otherwise provided for in the --------- ----------------------- subscription agreement, subcriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payments on subcriptions shall be uniform as to all shares of the same class or as all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the --------- --------- corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purposed and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders --------- ------------------------ for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or continued to specific instances. Section 4. Loans. No loans shall be made by the corporation to its --------- ----- officers or directors, and no loans shall be made by the corporation secured by its shares. No loans shall be made or contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by resolution of the board of directors. Such authority may be general or confined to specific instances. -13- Section 5. Fiscal Year. The fiscal year of the corporation shall be --------- ----------- fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of ---------- ----------------------- these by-laws is or becomes inconsistent, with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal -14- the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -15- EX-3.II.(D) 18 dex3iid.txt BYLAWS OF BMC HOLDINGS INC. Exhibit 3.ii.(d) EXHIBIT A ------------------------------------------ BY-LAWS OF BMC HOLDINGS INC. ------------------------------------------ STATEMENT OF SOLE INCORPORATOR OF BMC HOLDINGS INC. The Certificate of Incorporation of BMC Holdings Inc. (the "Corporation") having been filed in the office of the Secretary of State of the ----------- State of Delaware, the undersigned, being the sole incorporator named in such Certificate of Incorporation, does hereby state that the following actions permitted to be taken at the organization meeting of the incorporator of the Corporation were taken, as of the date hereof, without a meeting, in accordance with Section 108(c) of the General Corporation Law of the State of Delaware: 1. The By-laws attached hereto as Exhibit A were adopted as the original By-laws of the Corporation; and 1. The following persons were elected as directors of the Corporation to hold office until the first annual meeting of stockholders or until their successors are elected and qualify: Alan E. Goldberg David Ramsay IN WITNESS WHEREOF, this Statement has been signed as of November 27th, 1991. /s/ Scott A. Budoff ------------------------------- Scott A. Budoff TABLE OF CONTENTS ----------------- Section Page - ------- ---- ARTICLE I OFFICES 1.01 Registered Office ............................................. 1 1.02 Other Offices ................................................. 1 ARTICLE II MEETINGS OF STOCKHOLDERS 2.01 Annual Meetings ............................................... 1 2.02 Special Meetings .............................................. 1 2.03 Notice of Meetings ............................................ 2 2.04 Waiver of Notice .............................................. 2 2.05 Adjournments .................................................. 2 2.06 Quorum ........................................................ 3 2.07 Voting ........................................................ 3 2.08 Proxies ....................................................... 3 2.09 Stockholders' Consent in Lieu of Meeting ...................... 3 ARTICLE III BOARD OF DIRECTORS 3.01 General Powers ................................................ 4 3.02 Number and Term of Office ..................................... 4 3.03 Resignation ................................................... 4 3.04 Removal ....................................................... 4 3.05 Vacancies ..................................................... 4 3.06 Meetings ...................................................... 5 3.07 Committees of the Board ....................................... 6 3.08 Directors' Consent in Lieu of Meeting ......................... 7 3.09 Action by Means of Telephone or Similar Communications Equipment .................................... 7 3.10 Compensation .................................................. 7 (i) TABLE OF CONTENTS ----------------- Section Page - ------- ---- ARTICLE IV OFFICERS 4.01 Officers ...................................................... 8 4.02 Authority and Duties .......................................... 8 4.03 Term of Office, Resignation and Removal ....................... 8 4.04 Vacancies ..................................................... 8 4.05 The Chairman .................................................. 8 4.06 The President ................................................. 9 4.07 Vice Presidents ............................................... 9 4.08 The Secretary ................................................. 9 4.09 Assistant Secretaries ......................................... 9 4.10 The Treasurer ................................................. 10 4.11 Assistant Treasures ........................................... 10 ARTICLE V CHECKS, DRAFTS, NOTES AND PROXIES 5.01 Checks, Drafts and Notes ...................................... 10 5.02 Execution of Proxies .......................................... 10 ARTICLE VI SHARES AND TRANSFERS OF SHARES 6.01 Certificates Evidencing Shares ................................ 11 6.02 Stock Ledger .................................................. 11 6.03 Transfers of Shares ........................................... 11 6.04 Addresses of Stockholders ..................................... 12 6.05 Lost, Destroyed and Mutilated Certificates ................... 12 6.06 Regulations ................................................... 12 6.07 Fixing Date for Determination of Stockholders of Record ...................................... 12 (ii) TABLE OF CONTENTS -----------------
Section Page - ------- ---- ARTICLE VII SEAL 7.01 Seal ............................................. 13 ARTICLE VIII FISCAL YEAR 8.01 Fiscal Year ...................................... 13 ARTICLE IX AMENDMENTS 10.01 Amendments ....................................... 13
(iii) BY-LAWS OF BMC HOLDINGS INC. ARTICLE I OFFICES SECTION 1.01. Registered Office. The registered office of BMC Holdings ----------------- Inc. (the "Corporation") in the State of Delaware shall be at the principal ----------- office of The Corporation Trust Company in the City of Wilmington, County of New Castle, and the registered agent in charge thereof shall be The Corporation Trust Company. SECTION 1.02. Other Offices. The Corporation may also have an office or ------------- offices at any other place or places within or without the State of Delaware as the Board of Directors of the Corporation (the "Board") may from time to time ----- determine or the business of the Corporation may from time to time require. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 2.01. Annual Meetinqs. The annual meeting of stockholders of --------------- the Corporation for the election of directors of the Corporation ("Directors"), --------- and for the transaction of such other business as may properly come before such meeting, shall be held at such place, date and time as shall be fixed by the Board and designated in the notice or waiver of notice of such annual meeting; provided, however, that no annual meeting of stockholders need be held if all - -------- ------- actions, including the election of Directors, required by the General Corporation Law of the State of Delaware (the "General Corporation Law") to be ----------------------- taken at such annual meeting are taken by written consent in lieu of meeting pursuant to Section 2.09 hereof. SECTION 2.02. Special Meetings. Special meetings of stockholders for ---------------- any purpose or purposes may be called by the Board or the Chairman of the Board, the President or the Secretary of the Corporation or by the recordholders of at least a majority of the shares of common stock of the Corporation issued and outstanding ("Shares") and entitled to vote thereat, to be held at such place, ------ date and time as shall be designated in the notice or waiver of notice thereof. 2 SECTION 2.03. Notice of Meetings. (a) Except as otherwise provided by ------------------ law, written notice of each annual or special meeting of stockholders stating the place, date and time of such meeting and, in the case of a special meeting, the purpose or purposes for which such meeting is to be held shall be given personally or by first-class mail (airmail in the case of international communications) to each recordholder of Shares (a "Stockholder") entitled to ----------- vote thereat, not less than 10 nor more than 60 days before the date of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the Stockholder at such Stockholder's address as it appears on the records of the Corporation. If, prior to the time of mailing, the Secretary of the Corporation (the "Secretary") shall --------- have received from any Stockholder a written request that notices intended for such Stockholder are to be mailed to some address other than the address that appears on the records of the Corporation, notices intended for such Stockholder shall be mailed to the address designated in such request. (b) Notice of a special meeting of Stockholders may be given by the person or persons calling the meeting, or, upon the written request of such person or persons, such notice shall be given by the Secretary on behalf of such person or persons. If the person or persons calling a special meeting of Stockholders give notice thereof, such person or persons shall deliver a copy of such notice to the Secretary. Each request to the Secretary for the giving of notice of a special meeting of Stockholders shall state the purpose or purposes of such meeting. SECTION 2.04. Waiver of Notice. Notice of any annual or special meeting ---------------- of Stockholders need not be given to any Stockholder who files a written waiver of notice with the Secretary, signed by the person entitled to notice, whether before or after such meeting. Neither the business to be transacted at, nor the purpose of, any meeting of Stockholders need be specified in any written waiver of notice thereof. Attendance of a Stockholder at a meeting, in person or by proxy, shall constitute a waiver of notice of such meeting, except when such Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the grounds that the notice of such meeting was inadequate or improperly given. SECTION 2.05. Adjournments. Whenever a meeting of Stockholders, annual ------------ or special, is adjourned to another date, time or place, notice need not be given of the adjourned meeting if the date, time and place thereof are 3 announced at the meeting at which the adjournment is taken. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Stockholder entitled to vote thereat. At the adjourned meeting, any business may be transacted which might have been transacted at the original meeting. SECTION 2.06. Quorum. Except as otherwise provided by law or the ------ Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), the recordholders of a majority of the Shares entitled to vote thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at all meetings of Stockholders, whether annual or special. If, however, such quorum shall not be present in person or by proxy at any meeting of Stockholders, the Stockholders entitled to vote thereat may adjourn the meeting from time to time in accordance with Section 2.05 hereof until a quorum shall be present in person or by proxy. SECTION 2.07. Voting. Each Stockholder shall be entitled to one vote ------ for each Share held of record by such Stockholder. Except as otherwise provided by law or the Certificate of Incorporation, when a quorum is present at any meeting of Stockholders, the vote of the recordholders of a majority of the Shares constituting such quorum shall decide any question brought before such meeting. SECTION 2.08. Proxies. Each Stockholder entitled to vote at a meeting ------- of Stockholders or to express, in writing, consent to or dissent from any action of Stockholders without a meeting may authorize another person or persons to act for such Stockholder by proxy. Such proxy shall be filed with the Secretary before such meeting of Stockholders or such action of Stockholders without a meeting, at such time as the Board may require. No proxy shall be voted or acted upon more than three years from its date, unless the proxy provides for a longer period. SECTION 2.09. Stockholders' Consent in Lieu of Meeting. Any action ---------------------------------------- required by the General Corporation Law to be taken at any annual or special meeting of Stockholders, and any action which may be taken at any annual or special meeting of Stockholders, may be without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the recordholders of Shares having not less than the minimum number of votes necessary to authorize or take such action at a meeting at which the recordholders of all Shares entitled to vote thereon were present and voted. 4 ARTICLE III BOARD OF DIRECTORS SECTION 3.01. General Powers. The business and affairs of the -------------- Corporation shall be managed by the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Certificate of Incorporation or these By-laws directed or required to be exercised or done by Stockholders. SECTION 3.02. Number and Term of Office. The number of Directors shall ------------------------- be two or such other number as shall be fixed from time to time by the Board. Directors need not be Stockholders. Directors shall be elected at the annual meeting of Stockholders or, if, in accordance with Section 2.01 hereof, no such annual meeting is held, by written consent in lieu of meeting pursuant to Section 2.09 hereof, and each Director shall hold office until his earlier death or resignation or removal in the manner hereinafter provided. SECTION 3.03. Resignation. Any Director may resign at any time by giving ----------- written notice to the Board, the Chairman of the Board of the Corporation (the "Chairman") or the Secretary. Such resignation shall take effect at the time -------- specified in such notice or, if the time be not specified, upon receipt thereof by the Board, the Chairman or the Secretary, as the case may be. Unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. SECTION 3.04. Removal. Any or all of the Directors may be removed, with ------- or without cause, at any time by vote of the recordholders of a majority of the Shares then entitled to vote at an election of Directors, or by written consent of the recordholders of Shares pursuant to Section 2.09 hereof. SECTION 3.05. Vacancies. Vacancies occurring on the Board as a result --------- of the removal of Directors without cause may be filled only by vote of the recordholders of a majority of the Shares then entitled to vote at an election of Directors, or by written consent of such recordholders pursuant to Section 2.09 hereof. Vacancies occurring on the Board for any other reason, including, without limitation, vacancies occurring as a result of the creation of new directorships that increase the number of Directors, may be filled by such vote or written consent or by vote of the Board or by written consent of the Directors pursuant to Section 3.08 hereof. If the number of Directors then in 5 office is less than a quorum, such other vacancies may be filled by vote of a majority of the Directors then in office or by written consent of all such Directors pursuant to Section 3.08 hereof. Unless earlier removed pursuant to Section 3.04 hereof, each Director chosen in accordance with this Section 3.05 shall hold office until the next annual election of Directors by the Stockholders and until his successor shall be elected and qualified. SECTION 3.06. Meetings. (a) Annual Meetings. As soon as practicable -------- --------------- after each annual election of Directors by the Stockholders, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 3.08 hereof. (b) Other Meetings. Other meetings of the Board shall be held at such -------------- times as the Chairman, the President of the Corporation (the "President"), the --------- Secretary or a majority of the Board shall from time to time determine. (c) Notice of Meetings. The Secretary shall give written notice to each ------------------ Director of each meeting of the Board, which notice shall state the place, date, time and purpose of such meeting. Notice of each such meeting shall be given to each Director, if by mial, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telecopy, telegraph, cable, or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held. A written waiver of notice, signed by the Director entitled to notice, whether before or after the time of the meeting referred to in such waiver, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of any meeting of the Board need be specified in any written waiver of notice thereof. Attendance of a Director at a meeting of the Board shall constitute a waiver of notice of such meeting, except as provided by law. (d) Place of Meetings. The Board may hold its meetings at such place or ----------------- places within or without the State of Delaware as the Board or the Chairman may from time to time determine, or as shall be designated in the respective notices or waivers of notice of such meetings. (e) Quorum and Manner of Acting. One-third of the total number of --------------------------- Directors then in office (but in no event less than two if the total number of directorships, including vacancies, is greater than one and in no event a number less 6 than one-third of the total number of directorships, including vacancies) shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those Directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law, the Certificate of Incorporation or these By-laws. In the absence of a quorum for any such meeting, a majority of the Directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (f) Organization. At each meeting of the Board, one of the following ------------ shall act as chairman of the meeting and preside, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any Director chosen by a majority of the Directors present. The Secretary or, in the case of his absence, any person (who shall be an Assistant Secretary, if an Assistant Secretary is present) whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. SECTION 3.07. Committees of the Board. The Board may, by resolution ----------------------- passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member. Any committee of the Board, to the extent provided in the resolution of the Board designating such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that no such committee shall have such power or -------- ------- authority in reference to amending the Certificate of Incorporation (except that such a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock 7 adopted by the Board as provided in Section 151(a) of the General Corporation Law, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation under Section 251 or 252 of the General Corporation Law, recommending to the Stockholders the sale, lease or exchange of all or substantially all the Corporation's property and assets, recommending to the Stockholders a dissolution of the Corporation or the revocation of a dissolution, or amending these By-laws; provided further, however, that, unless expressly so provided in -------- ------- ------- the resolution of the Board designating such committee, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law. Each committee of the Board shall keep regular minutes of its proceedings and report the same to the Board when so requested by the Board. SECTION 3.08. Directors' Consent in Lieu of Meeting. Any action ------------------------------------- required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the members of the Board or such committee and such consent is filed with the minutes of the proceedings of the Board or such committee. SECTION 3.09. Action by Means of Telephone or Similar Communications ------------------------------------------------------ Equipment. Any one or more members of the Board, or of any committee thereof, - --------- may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. SECTION 3.10. Compensation. Unless otherwise restriction by the ------------ Certification of Incorporation, the Board may determine the compensation of Directors. In addition, as determined by the Board, Directors may be reimbursed by the Corporation for their expenses, if any, in the performance of their duties as Directors. No such compensation or reimbursement shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. 8 ARTICLE IV OFFICERS SECTION 4.01. Officers. The officers of the Corporation shall be the -------- Chairman, the President, the Secretary and a Treasurer and may include one or more Vice Presidents and one or more Assistant Secretaries and one or more Assistant Treasurers. Any two or more offices may be held by the same person. SECTION 4.02. Authority and Duties. All officers shall have such -------------------- authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent not so provided, by resolution of the Board. SECTION 4.03. Term of Office, Resignation and Removal. (a) Each officer --------------------------------------- shall be appointed by the Board and shall hold office for such term as may be determined by the Board. Each officer shall hold office until his successor has been appointed and qualified or his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified in such notice or, if the time be not specified, upon receipt thereof by the Board, the Chairman, the President or the Secretary, as the case may be. Unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents appointed by the Board shall be subject to removal, with or without cause, at any time by the Board or by the action of the recordholders of a majority of the Shares entitled to vote thereon. SECTION 4.04. Vacancies. Any vacancy occurring in any office of the --------- Corporation, for any reason, shall be filled by action of the Board. Unless earlier removed pursuant to Section 4.03 hereof, any officer appointed by the Board to fill any such vacancy shall serve only until such time as the unexpired term of his predecessor expires unless reappointed by the Board. SECTION 4.05. The Chairman. The Chairman shall have the power to call ------------ special meetings of Stockholders, to call special meetings of the Board and, if present, to 9 preside at all meetings of Stockholders and all meetings of the Board. The Chairman shall perform all duties incident to the office of Chairman of the Board and all such other duties as may from time to time be assigned to him by the Board or these By-laws. SECTION 4.06. The President. The President shall be the chief executive ------------- officer of the Corporation and shall have general and active management and control of the business and affairs of the Corporation, subject to the control of the Board, and shall see that all orders and resolutions of the Board are carried into effect. The President shall perform all duties incident to the office of President and all such other duties as may from time to time be assigned to him by the Board or these By-laws. SECTION 4.07. Vice Presidents. Vice Presidents, if any, in order of --------------- their seniority or in any other order determined by the Board, shall generally assist the President and perform such other duties as the Board or the President shall prescribe, and in the absence or disability of the President, shall perform the duties and exercise the powers of the President. SECTION 4.08. The Secretary. The Secretary shall, to the extent ------------- practicable, attend all meetings of the Board and all meetings of Stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform the same duties for any committee of the Board when so requested by such committee. He shall give or cause to be given notice of all meetings of Stockholders and of the Board, shall perform such other duties as may be prescribed by the Board, the Chairman or the President and shall act under the supervision of the Chairman. He shall keep in safe custody the seal of the Corporation and affix the same to any instrument that requires that the seal be affixed to it and which shall have been duly authorized for signature in the name of the Corporation and, when so affixed, the seal shall be attested by his signature or by the signature of the Treasurer of the Corporation (the "Treasurer") or an Assistant Secretary or Assistant --------- Treasurer of the Corporation. He shall keep in safe custody the certificate books and stockholder records and such other books and records of the Corporation as the Board, the Chairman or the President may direct and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. SECTION 4.09 Assistant Secretaries. Assistant Secretaries of the --------------------- Corporation ("Assistant Secretaries"), if --------------------- 10 any, in order of their seniority or in any other order determined by the Board, shall generally assist the Secretary and perform such other duties as the Board or the Secretary shall prescribe, and, in the absence or disability of the Secretary, shall perform the duties and exercise the powers of the Secretary. SECTION 4.10. The Treasurer. The Treasurer shall have the care and ------------- custody of all the funds of the Corporation and shall deposit such funds in such banks or other depositories as the Board, or any officer or officers, or any officer and agent jointly, duly authorized by the Board, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board and the President. He shall keep a full and accurate account of all moneys received and paid on account of the Corporation and shall render a statement of his accounts whenever the Board, the Chairman or the President shall so request. He shall perform all other necessary actions and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. When required by the Board, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the Board shall approve. SECTION 4.11. Assistant Treasurers. Assistant Treasurers of the -------------------- Corporation ("Assistant Treasurers"), if any, in order of their seniority or in -------------------- any other order determined by the Board, shall generally assist the Treasurer and perform such other duties as the Board or the Treasurer shall prescribe, and, in the absence or disability of the Treasurer, shall perform the duties and exercise the powers of the Treasurer. ARTICLE V CHECKS, DRAFTS, NOTES, AND PROXIES SECTION 5.01. Checks, Drafts and Notes. All checks, drafts and other ------------------------ orders for the payment of money, notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall be determined, from time to time, by resolution of the Board. SECTION 5.02. Execution of Proxies. The Chairman or the President, or, -------------------- in the absence or disability of both of them, any Vice President, may authorize, from time to time, 11 the execution and issuance of proxies to vote shares of stock or other securities of other corporations held of record by the Corporation and the execution of consents to action taken or to be taken by any such corporation. All such proxies and consents, unless otherwise authorized by the Board, shall be signed in the name of the Corporation by the Chairman, the President or any Vice President. ARTICLE VI SHARES AND TRANSFERS OF SHARES SECTION 6.01. Certificates Evidencing Shares. Shares shall be evidenced ------------------------------ by certificates in such form or forms as shall be approved by the Board. Certificates shall be issued in consecutive order and shall be numbered in the order of their issue, and shall be signed by the Chairman, the President or any Vice President and by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer. If such a certificate is manually signed by one such officer, any other signature on the certificate may be a facsimile. In the event any such officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to hold such office or to be employed by the Corporation before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such officer had held such office on the date of issue. SECTION 6.02. Stock Ledger. A stock ledger in one or more counterparts ------------ shall be kept by the Secretary, in which shall be recorded the name and address of each person, firm or corporation owning the Shares evidenced by each certificate evidencing Shares issued by the Corporation, the number of Shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly require by law, the person in whose name Shares stand on the stock ledger of the Corporation shall be deemed the owner and recordholder thereof for all purposes. SECTION 6.03. Transfers of Shares. Registration of transfers of Shares ------------------- shall be made only in the stock ledger of the Corporation upon request of the registered holder of such shares, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, and upon the surrender of the certificate or certificates evidencing such Shares properly endorsed or accompanied by a stock power duly executed, together with such proof of the authenticity of signatures as the Corporation may reasonably require. 12 SECTION 6.04. Addresses of Stockholders. Each Stockholder shall ------------------------- designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to such Stockholder, and, if any Stockholder shall fail to so designate such an address, corporate notices may be served upon such Stockholder by mail directed to the mailing address, if any, as the same appears in the stock ledger of the Corporation or at the last known mailing address of such Stockholder. SECTION 6.05. Lost, Destroyed and Mutilated Certificates. Each ------------------------------------------ recordholder of Shares shall promptly notify the Corporation of any loss, destruction or mutilation of any certificate or certificates evidencing any Share or Shares of which he is the recordholder. The Board may, in its discretion, cause the Corporation to issue a new certificate in place of any certificate theretofore issued by it and alleged to have been mutilated, lost, stolen or destroyed, upon the surrender of the mutilated certificate or, in the case of loss, theft or destruction of the certificate, upon satisfactory proof of such loss, theft or destruction, and the Board may, in its discretion, require the recordholder of the Shares evidenced by the lost, stolen or destroyed certificate or his legal representative to give the Corporation a bond sufficient to indemnify the Corporation against any claim made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. SECTION 6.06. Regulations. The Board may make such other rules and ----------- regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates evidencing Shares. SECTION 6.07. Fixing Date for Determination of Stockholders of Record. ------------------------------------------------------- In order that the Corporation may determine the Stockholders entitled to notice of or to vote at any meeting of Stockholders or any adjournment thereof, or to express consent to, or to dissent from, corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other such action. A determination of the Stockholders entitled to notice of or to vote at a meeting of Stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new -------- ------- record date for the adjourned meeting. 13 ARTICLE VII SEAL SECTION 7.01. Seal. The Board may approve and adopt a corporate seal, ---- which shall be in the form of a circle and shall bear the full name of the Corporation, the year of its incorporation and the words "Corporate Seal Delaware". ARTICLE VIII FISCAL YEAR SECTION 8.01. Fiscal Year. The fiscal year of the Corporation shall end ----------- on the thirty-first day of December of each year unless changed by resolution of the Board. ARTICLE IX AMENDMENTS SECTION 10.01 Amendments. Any By-law (including these By-laws) may be ---------- adopted, amended or repealed by the vote of the recordholders of a majority of the Shares then entitled to vote at an election of Directors or by written consent of Stockholders pursuant to Section 2.09 hereof, or by vote of the Board or by a written consent of Directors pursuant to Section 3.08 hereof. EX-3.II.(E) 19 dex3iie.txt BYLAWS OF PORT NEAL CORPORATION Exhibit 3.ii.(e) BYLAWS OF PORT NEAL CORPORATION A Delaware corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation --------- ----------------- in the State of Delaware shall be located at the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year to elect directors and conduct such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of 1 directors, the president or the holders of shares entitled to cast not less than 51 percent of the votes at the meeting. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting is otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to --------- ------ take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than five (5) days nor more than thirty (30) days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, unless the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock --------- ----------------- ledger of the corporation shall make, at least five (5) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for at least five (5) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares --------- ------ of capital stock entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of 2 the stockholders, except as otherwise provided by statute or by the certificate of incorporation. Where a separate vote by class or classes is required, a majority of the outstanding shares of such class or classes, present in person or represented by proxy, shall constitute a quorum to take action with respect to that vote on that matter. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another --------- ------------------ time and place, notice need not be given of the adjourned meeting if the time and place are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitles to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative --------- ------------- votes of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. When a separate vote by class is required, the affirmative votes of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class. Section 9. Voting rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. At each meeting of the stockholders, and before voting commences, all proxies 3 filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found invalid or irregular. Section 11. Action by Written Consent. Unless otherwise provided in ---------- ------------------------- the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered according to this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. 4 Section 2. Number, Election and Term of office. The number of directors --------- ----------------------------------- that shall constitute the first board shall be ______. Thereafter, the number of directors shall be established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote generally at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply (with respect to the removal without cause of a director of directors so elected), to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by the holders of a majority of the shares then entitled to vote generally in the election of directors. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. This Section 4 may only be amended by the vote of the holders of a majority of the shares then entitled to vote generally in the election of directors. Section 5. Annual Meetings. The annual meeting of each newly elected --------- --------------- board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president on at least twenty-four (24) hours notice 5 to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the total --------- ------------------------------------- number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by --------- ---------- a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law or the certificate of incorporation. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting for any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or ---------- ------------------------ any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, 6 and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the ---------- ------------------------------------------ board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting unless such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the ---------- ------------------------- certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by the --------- ------ board of directors and shall consist of a chief executive officer, a president, one or more vice presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently possible. Vacancies may be filled or new offices created and filled at any meeting of the 7 board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors --------- ------- may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of --------- --------- death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by --------- ------------ the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. Chief Executive Officer. The chief executive officer shall be --------- ----------------------- in general and active charge of the entire business and affairs of the corporation, and shall be its chief policy making officer. He shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these bylaws. Whenever the chief executive officer is unable to serve, by reason of sickness, absence or otherwise, the president shall perform all the duties and responsibilities and exercise all the powers of the chief executive officer. Section 7. The President. Subject to the powers of the board of directors, --------- ------------- the president shall manage the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall be the corporation's chief operating officer. The president shall have concurrent power to execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to another officer or agent of the corporation. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the vice-president shall have the powers and perform the duties of the president. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these bylaws. 8 Section 8. Vice President. The vice President, or if there shall be more --------- -------------- than one, the vice presidents in the order determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice presidents shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to another officer or agent of the corporation. The vice presidents shall also perform such other duties and have such other powers as the board of directors, the president or these bylaws may, from time to time, prescribe. Section 9. The Secretary and Assistant Secretaries. The secretary shall --------- --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof, and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the presidents' supervision, the secretary shall give, or cause to be given, all notices required to be given by these bylaws or by law; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 10. Treasurer and Assistant Treasurer. The treasurer shall have the ---------- --------------------------------- custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors 9 so requires, an account of the corporation; and shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the chief financial officer or treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president, or treasurer may, from time to time, prescribe. Section 11. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 12. Absence or Disability of Officers. In the absence or ---------- --------------------------------- disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party or --------- ------------------- is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be 10 indemnified and held harmless by the corporation to the fullest extent that it is empowered to do so unless prohibited from doing so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 of this Article V, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any --------- ------------------------------------------------------- indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty (60) days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty (30) days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct that make it permissible under the 11 General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have determined prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain --------- --------- insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in --------- -------- Section 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amounts if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V who are or were employees or agents of the corporation, or who are or were serving 12 at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contracts Rights. The provisions of this Article V shall be --------- ---------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be entitled --------- ---- to have a certificate, signed by, or in the name of the corporation by either of the president or a vice president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been 13 used on, any such certificate or certificates, shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both, in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that --------- --------------------------------------------- the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, 14 which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than thirty (30) nor less than five (5) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than five (5) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may 15 fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than thirty (30) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares by any other person, whether or not it shall have express or other notice thereof. Section 7. Subscriptions for Stock. Unless otherwise provided for in --------- ----------------------- the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the --------- --------- corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may 16 modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other --------- ------------------------ orders for payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any --------- ----- obligation of, or otherwise assist any officer or other employee of the corporation or its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgement of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal-Year. The fiscal year of the corporation shall be the --------- ----------- year ending December 31. Section 6. Employees and Compensation. The president shall have the --------- -------------------------- authority to hire and fire employees of the corporation and shall fix the compensation of all employees (other than officers whose compensation is fixed in accordance with Section 5 of Article IV) unless the board of directors specifically confers such authority, which authority may be general or confined to specific instances, upon itself or another person or officer. Section 7. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation or partnership held by the corporation (including, without limitation, partnership interests) shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon 17 another person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger; a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware at its principal place of business. Section 9. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of ---------- ----------------------- these bylaws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These bylaws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the bylaws has been conferred upon the board of directors shall not divest the stockholders holding a majority of the then outstanding shares of the class of common stock entitled to vote on all matters to be voted on by the corporation's stockholders at such time pursuant to Article Fourth of the certificate of incorporation of the same -------------- powers. 18 EX-3.II.(F) 20 dex3iif.txt BYLAWS OF TERRA (UK) HOLDINGS INC. EXHIBIT 3.ii.(f) BY-LAWS OF TERRA (U.K.) HOLDINGS INC. A Delaware Corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation --------- ----------------- in the State of Delaware shall be located 1209 Orange Street, Wilmington, Delaware 19801. The name of the corporation's registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by the action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of directors, the president or the holders of shares entitled to cast not less than a majority of the votes at the meeting. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to --------- ------ take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Section 5. Stockholders List. The officer having charge of the stock --------- ----------------- ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote as such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, it not so specified, at the place where the meeting is to held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares --------- ------ of capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another --------- ------------------ time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative --------- ------------- vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. -2- Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Section 11. Action by Written Consent. Unless otherwise provided in the ---------- ------------------------- certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. -3- Section 2. Number, Election and Term of Office. The number of directors --------- ----------------------------------- which shall constitute the first board shall be _______________ (___). Thereafter, the number of directors shall be between one and nine as established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected --------- --------------- board of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or any director on at least 24 hours notice to each director, either personally, by telephone, by mail or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the --------- ------------------------------------- total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution --------- ---------- passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the -4- directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors --------- --------------- may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors ---------- ------------------------ or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of ---------- ------------------------------------------ the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by ---------- ------------------------- the certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, of or any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. -5- ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by --------- ------ the board of directors and shall consist of a president, one or more vice-presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person except that neither the chairman of the board nor the president shall also hold the office of secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of --------- ------- directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of --------- --------- death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed --------- ------------ by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. Chairman of the Board. The chairman of the board shall be --------- --------------------- the chief executive officer of the corporation, and shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he or she shall be in the general and active charge of the entire business and affairs of the corporation, and shall be its chief policy making officer. He or she shall preside at all meetings of the board of directors and stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these by-laws. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president. Section 7. The President. The president shall, subject to the powers --------- ------------- of the board of directors and the chairman of the board, have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and -6- resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board or the board of directors or as may be provided in these by-laws. If there is no chairman of the board, the president shall be the chief executive officer of the corporation and shall have all the powers and perform the duties incidental to that position. Section 8. Chief Operating Officer. The chief operating officer of the --------- ----------------------- corporation, subject to the powers of the board of directors, shall have general and active management of the business of the corporation; and shall see that all orders and resolutions of the board of directors and carried into effect. The chief operating officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer or the board of directors or as may be provided in these by-laws. Section 9. Chief Financial Officer. The chief financial officer of the --------- ----------------------- corporation shall, under the direction of the chief executive officer, be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, chief executive officer or the board of directors or as may be provided in these by-laws. Section 10. Vice-Presidents. The vice-president, or if there shall be ---------- --------------- more than one, the vice-presidents in the order determined by the board of directors shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. Section 11. The Secretary and Assistant Secretaries. The secretary ---------- --------------------------------------- shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president, or secretary may, from time to time, prescribe. -7- Section 12. The Treasurer and Assistant Treasurer. The treasurer shall ---------- ------------------------------------- have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or treasurer may, from time to time, prescribe. Section 13. Other Officers, Assistant Officers and Agents. Officers, ---------- -------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 14. Absence or Disability of Officers. In the case of the ---------- --------------------------------- absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may be resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party --------- ------------------- or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do -8- so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Section 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any --------- ------------------------------------------------------- indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnity the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, -9- provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance --------- --------- on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section --------- -------- 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. -10- ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. From. Every holder of stock in the corporation shall be --------- ---- entitled to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a --------- ----------------- new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholders Meetings. In order that --------- ---------------------------------------------- the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any -11- adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive -12- dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. Section 7. Subscriptions for Stock. Unless otherwise provided for in --------- ----------------------- the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the --------- --------- corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any such property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other --------- ------------------------ orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Fiscal Year. The fiscal year of the corporation shall be --------- ----------- fixed by resolution of the board of directors. Section 5. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words -13- "Corporate Seal, Delaware". The seal may be used by causing it or facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 6. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 7. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or its principal place of business. Section 8. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 9. Inconsistent Provisions. In the event that any provision of --------- ----------------------- these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -14- EX-3.II.(G) 21 dex3iig.txt BYLAWS OF TERRA CAPITAL HOLDINGS, INC. Exhibit 3.ii.(g) BY-LAWS OF TERRA CAPITAL HOLDINGS, INC. A Delaware corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation in --------- ----------------- the State of Delaware shall be located at 32 Loockerman Square, Suite L-100, Dover, Delaware, County of Kent. The name of the corporation's registered agent at such address shall be The Prentice-Hall Corporation System, Inc. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take --------- ------ action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders Lists. The officer having charge of the stock --------- ------------------ ledger of the corporation shall make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares of --------- ------ capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another time --------- ------------------ and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. -2- Section 8. Vote Required. When a quorum is present, the affirmative vote --------- ------------- of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular. Section 11. Action by Written Consent. Unless otherwise provided in the ---------- ------------------------- certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents -3- delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of directors --------- ----------------------------------- which shall constitute the first board shall be one(1). Thereafter, the number of directors shall be established form time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships resulting --------- --------- from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. -4- Section 5. Annual Meetings. The annual meeting of each newly elected board --------- --------------- of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president on at least twenty-four (24) hours notice to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the total --------- ------------------------------------- number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by --------- ---------- a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or ---------- ------------------------ any committee thereof may participate in and act at any meeting of such board or committee -5- through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the ---------- ------------------------------------------ board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the ---------- ------------------------- certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by the --------- ------ board of directors and shall consist of a president, one or more vice-presidents, secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and -6- qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors --------- ------- may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of --------- --------- death, resignation, removal, disqualified or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by --------- ------------ the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The President. The president shall be the chief executive --------- ------------- officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these by-laws. Section 7. Vice-presidents. The vice-president, or if there shall be more --------- --------------- than one, the vice-presidents in the other determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these by-laws may, from time to time, prescribe. Section 8. The Secretary and Assistant Secretaries. The secretary shall --------- --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the -7- corporate seal to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 9. The Treasurer and Assistant Treasurer. The treasurer shall have --------- ------------------------------------- the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. Section 10. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 11. Absence or Disability of Officers. In the case of the absence ---------- --------------------------------- or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any officer or to any director, or to any other person whom it may select. -8- ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party or --------- ------------------- is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so unless prohibited from doing so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but,in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorney's fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Section 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any --------- ------------------------------------------------------- indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty (60) days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty (30) days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its -9- final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the --------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance --------- --------- on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section --------- -------- 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as the employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. -10- Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not effect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For the purposes of this Article V, - --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be --------- ---- entitled to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issued, with the number of shares and date of issue, shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares -11- endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that --------- --------------------------------------------- the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action By Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered -12- to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof. Section 7. Subscriptions for Stock. Unless otherwise provided for in the --------- ----------------------- subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due to the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the corporation, --------- --------- subject to the provisions of the certificate of incorporation, if any, may be declared by the board -13- of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the matter in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders --------- ------------------------ for the payment of money by the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer or --------- --------- officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any --------- ----- obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed --------- ----------- by resolution of the board of directors. Section 6. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person -14- authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, in --------- ------------------------------- person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of ---------- ----------------------- these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -15- EX-3.II.(I) 22 dex3iii.txt BYLAWS OF TERRA INTERNATIONAL (OKLAHOMA) INC. Exhibit 3.ii.(i) BY-LAWS OF TERRA OKLAHOMA HOLDINGS, INC. (A Delaware Corporation) ____________________________ ARTICLE 1 DEFINATIONS ----------- As used in these By-laws, unless the context otherwise requires, the term: 1.1 "Assistant Secretary" means an Assistant Secretary of the Corporation. 1.2 "Assistant Treasurer" means an Assistant Treasurer of the Corporation. 1.3 "Board" means the Board of Directors of the Corporation. 1.4 "By-laws" means the initial by-laws of the Corporation, as amended from time to time. 1.5 "Certificate of Incorporation" means the initial certificate of incorporation of the Corporation, as amended, supplemented or restated from time to time. 1.6 "Corporation" means TERRA OKLAHOMA HOLDINGS, INC. 1.7 "Directors" means directors of the Corporation. 2 1.8 "General Corporation Law" means the General Corporation Law of the State of Delaware, as amended from time to time. 1.9 "Office of the Corporation" means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding. 1.10 "President" means the President of the Corporation. 1.11 "Secretary" means the Secretary of the Corporation. 1.12 "Stockholders" means stockholders of the Corporation. 1.13 "Total number of directors" means the total number of directors determined in accordance with Section 141(b) of the General Corporation Law and Section 3.2 of the By-laws. 1.14 "Treasurer" means the Treasurer of the Corporation. 1.15 "Vice President" means a Vice President of the Corporation. 1.16 "Whole Board" means the total number of directors of the Corporation. 3 ARTICLE 2 STOCKHOLDERS ------------ 2.1 Place of Meetings. Every meeting of stockholders shall be held at ----------------- the office of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notice of such meeting or in the waiver of notice thereof. 2.2 Annual Meeting. A meeting of stockholders shall be held annually -------------- for the election of directors and the transaction of other business on the 4th Tuesday in April at such hour and on such business day in April or May as may be determined by the Board and designated in the notice of meeting. 2.3 Deferred Meeting for Election of Directors, Etc. If the annual ------------------------------------------------ meeting of stockholders for the election of directors and the transaction of other business is not held within the months specified in Section 2.2, the Board shall call a meeting of stockholders for the election of directors and the transaction of other business as soon thereafter as convenient. 2.4 Other Special Meetings. A special meeting of stockholders (other ---------------------- than a special meeting for the election 4 of directors), unless otherwise prescribed by statute, may be called at any time by the Board or by the President or by the Secretary. At any special meeting of stockholders only such business may be transacted as is related to the purpose or purposes of such meeting set forth in the notice thereof given pursuant to Section 2.6 of the By-laws or in any waiver of notice thereof given pursuant to Section 2.7 of the By-laws. 2.5 Fixing Record Date. For the purpose of determining the ------------------ stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a date as the record date for any such determination of stockholders. Such date shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no such record date is fixed: 2.5.1 The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the 5 day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; 2.5.2 The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed; 2.5.3 The record date for determining stockholders for any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto. When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section 2.5 such determination shall apply to any adjournment thereof, unless the Board fixes a new record date for the adjourned meeting. 2.6 Notice of Meetings of Stockholders. Except as otherwise provided ---------------------------------- in Sections 2.5 and 2.7 of the By-laws, whenever under the General Corporation Law or the Certificate of Incorporation or the By-laws, stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or 6 purposes for which the meeting is called. A copy of the notice of any meeting shall be given, personally or by mail, not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to notice of or to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this section has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. 2.7 Waivers of Notice. Whenever notice is required to be given to any ----------------- stockholder under any provision of the General Corporation Law or the Certificate of 7 Incorporation or the By-laws, a written waiver thereof, signed by the stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need to be specified in any written waiver of notice. 2.8 List of Stockholders. The secretary shall prepare and make, or cause -------------------- to be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. 8 The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.9 Quorum of Stockholders; Adjournment. The holders of one-third of ----------------------------------- the shares of stock entitled to vote at any meeting of stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of any business at such meeting. When a quorum is once present to organize a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders. The holders of a majority of the shares of stock present in person or represented by proxy at any meeting of stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. 2.10 Voting; Proxies. Unless otherwise provided in the Certificate of --------------- Incorporation, every stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of capital stock standing in his name on the record of stockholders determined in accordance with Section 2.5 of the By-laws. If the Certificate of Incorporation provides for more or less than one vote for any share, on any matter, every reference in the By-laws or the General Corporation Law to a majority or other proportion of stock shall refer to such majority or other proportion of the votes 9 of such stock. The provisions of Sections 212 and 217 of the General Corporation Law shall apply in determining whether any shares of capital stock may be voted and the persons, if any, entitled to vote such shares; but the Corporation shall be protected in treating the persons in whose names shares of capital stock stand on the record of stockholders as owners thereof for all purposes. At any meeting of stockholders (at which a quorum was present to organize the meeting), all matters, except as otherwise provided by law or by the Certificate of Incorporation or by the By-laws, shall be decided by a majority of the votes cast at such meeting by the holders of shares present in person or represented by proxy and entitled to vote thereon, whether or not a quorum is present when the vote is taken. All elections of directors shall be by written ballot unless otherwise provided in the Certificate of Incorporation. In voting on any other question on which a vote by ballot is required by law or is demanded by any stockholder entitled to vote, the voting shall be by ballot. Each ballot shall be signed by the stockholder voting or by his proxy, and shall state the number of shares voted. On all other questions, the voting may be viva voce. Every ---- ---- stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy. The 10 validity and enforceability of any proxy shall be determined in accordance with Section 212 of the General Corporation Law. 2.11 Selection and Duties of Inspectors at Meetings of Stockholders. -------------------------------------------------------------- The Board, in advance of any meeting of stockholders, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at such meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the Board in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspector or inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with 11 fairness to all stockholders. On request of the person presiding at the meeting or any stockholder entitled to vote thereat, the inspector or inspectors shall make a report in writing of any challenge, question or matter determined by him or them and execute a certificate of any fact found by him or them. Any report or certificate made by the inspector or inspectors shall be prima facie evidence of the facts stated and of the vote as certified by him or them. 2.12 Organization. At every meeting of stockholders, the President, or ------------ in the absence of the President a Vice President, and in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present), shall act as chairman of the meeting. The Secretary, or in his absence one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting. 2.13 Order of Business. The order of business at all meetings of ----------------- stockholders shall be as determined by the 12 chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting. 2.14 Written Consent of Stockholders Without a Meeting. Unless ------------------------------------------------- otherwise provided in the Certificate of Incorporation, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. 13 ARTICLE 3 DIRECTORS --------- 3.1 General Powers. Except as otherwise provided in the Certificate of -------------- Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate or Incorporation or the By-laws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation. In addition to the powers expressly conferred by the By-laws, the Board may exercise all powers expressly conferred by the By-laws, the Board may exercise all powers and perform all acts which are not required, by the By-laws or the Certificate of Incorporation or by law, to be exercised and performed by the stockholders. 3.2 Number; Qualification; Term of Office. The Board shall consist of one ------------------------------------- or more members. The total number of directors shall be fixed initially by the incorporator and may thereafter be changed from time to time by action of the stockholders or by action of the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified or until his earlier death, resignation or removal. 3.3 Election. Directors shall, except as otherwise required by law or by --------- the Certificate of Incorporation, be elected by a plurality of the votes cast at a meeting of 14 stockholders by the holders of shares entitled to vote in the election. 3.4 Newly Created Directorships and Vacancies. Unless otherwise provided ----------------------------------------- in the Certificate of Incorporation, newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board for any other reason, including the removal of directors without cause, may be filled by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, or may be elected by a plurality of the votes cast by the holders of shares of capital stock entitled to vote in the election at a special meeting of stockholders called for that purpose. A director elected to fill a vacancy shall be elected to hold office until his successor is elected and qualified, or until his earlier death, resignation or removal. 3.5 Resignations. Any director may resign at any time by written notice ------------ to the Corporation. Such resignation shall take effect at the time therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. 3.6 Removal of Directors. Subject to the provisions of Section 141(k) of -------------------- the General Corporation Law, any or all of the directors may be removed with or without cause, 15 by the holders of a majority of the shares then entitled to vote at an election of directors. 3.7 Compensation. Each director, in consideration of his service as ------------ such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at directors' meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable expenses incurred by him in connection with the performance of his duties. Each director who shall serve as a member of any committee of directors in consideration of his serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable expenses incurred by him in the performance of his duties. Nothing contained in this section shall preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor. 3.8 Place and Time of Meetings of the Board. Meetings of the Board, --------------------------------------- regular or special, may be held at any place within or without the State of Delaware. The times and places for holding meetings of the Board may be fixed from time to time by resolution of the Board or (unless contrary to resolution of the Board) in the notice of the meeting. 16 3.9 Annual Meetings. On the day when and at the place where the --------------- annual meeting of stockholders for the election of directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such meeting, for the purposes of organization, the election of officers and the transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in Section 3.11 of the By-laws for special meetings of the Board or in a waiver of notice thereof. 3.10 Regular Meetings. Regular meetings of the Board may be held at ---------------- such times and places as may be fixed from time to time by the Board. Unless otherwise required by the Board, regular meetings of the Board may be held without notice. If any day fixed for a regular meeting of the Board shall be a Saturday or Sunday or a legal holiday at the place where such meeting is to be held, then such meeting shall be held at the same hour at the same place on the first business day thereafter which is not a Saturday, Sunday or legal holiday. 3.11 Special Meetings. Special meetings of the Board shall be held ---------------- whenever called by the President or the Secretary or by any two or more directors. Notice of each special meeting of the Board shall, if mailed, be addressed to each director at the address designated by him for that 17 purpose or, if none is designated, at his last known address at least two days before the date on which the meeting is to be held; or such notice shall be sent to each director at such address by telegraph, cable, or wireless, or be delivered to him personally, not later than the day before the date on which such meeting is to be held. Every such notice shall state the time and place of the meeting but need not state the purposes of the meeting, except to the extent required by law. If mailed, each notice shall be deemed given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States post office department. Such mailing shall be by first class mail. 3.12 Adjourned Meetings. A majority of the directors present at any ------------------ meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Notice of any adjourned meeting of the Board need not be given to any director whether or not present at the time of the adjournment. Any business may be transacted at any adjourned meeting that might have been transacted at the meeting as originally called. 3.13 Waiver of Notice. Whenever notice is required to be given to any ---------------- director or member of a committee of directors under any provision of the General Corporation 18 Law or of the Certificate of Incorporation or By-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice. 3.14 Organization. At each meeting of the Board, the President of the ------------ Corporation, or in the absence of the President, a chairman chosen by a majority of the directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting. 3.15 Quorum of Directors. One-third of the total number of directors ------------------- shall constitute a quorum for the 19 transaction of business or of any specified item of business at any meeting of the Board. 3.16 Action by the Board. All corporate action taken by the Board or ------------------- any committee thereof shall be taken at a meeting of the Board, or of such committee, as the case may be, except that any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.16 shall constitute presence in person at such meeting. Except as otherwise provided by the Certificate of Incorporation or by law, the vote of a majority of the directors present (including those who participate by means of conference telephone or similar communications equipment) at the time of the vote, if a quorum is present at such time, shall be the act of the Board. 20 ARTICLE 4 COMMITTEES OF THE BOARD ----------------------- The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation 21 or a revocation of a dissolution, or amending the By-laws of the Corporation; and, unless the resolution designating it expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. ARTICLE 5 OFFICERS -------- 5.1 Officers. The Board shall elect a President, a Secretary and a -------- Treasurer, and may elect or appoint one or more Vice Presidents and such other officers as it may determine. The Board may designate one or more Vice Presidents as Executive Vice Presidents, and may use descriptive words or phrases to designate the standing, seniority or area of special competence of the Vice Presidents elected or appointed by it. Each officer shall hold his office until his successor is elected and qualified or until his earlier death, resignation or removal in the manner provided in Section 5.2 of the By-laws. Any two or more offices may be held by the same person. The Board may require any officer to give a bond or other security for the faithful performance of his duties, in such amount and with such securities as the Board may determine. All officers as between themselves and the Corporation shall have such authority and perform such duties 22 in the management of the Corporation as may be provided in the By-laws or as the Board may from time to time determine. 5.2 Removal of Officers. Any officer elected or appointed by the Board ------------------- may be removed by the Board with or without cause. The removal of an officer without cause shall be without prejudice to his rights, if any. The election or appointment of an officer shall not of itself create contract rights. 5.3 Resignations. Any officer may resign at any time by so notifying ------------ the Board or the President or the Secretary in writing. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. 5.4 Vacancies. A vacancy in any office because of death, resignation, --------- removal, disqualification or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in the By-laws for the regular election or appointment to such office. 5.5 Compensation. Salaries or other compensation of the officers may ------------ be fixed from time to time by the Board. No officer shall be prevented from receiving a salary or 23 other compensation by reason of the fact that he is also a director. 5.6 President. The President shall be the Chief Executive Officer of --------- the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of directors. The President shall, if present, preside at all meetings of the stockholders and at all meetings of the Board. He may, with the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, sign certificates for shares of capital stock of the Corporation. He may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by the By-laws to some other officer or agent of the Corporation, or shall be required by law otherwise to be signed or executed; and, in general, he shall perform all duties incident to the office of President and such other duties as from time to time may be assigned to him by the Board. 5.7 Vice Presidents. At the request of the President, or, in his --------------- absence, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of 24 the President and so acting shall have all the powers of and be subject to all restrictions upon the President. Any Vice President may also, with the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, sign certificates for shares of capital stock of the Corporation; may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments authorized by the Board, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by the By-laws to some other officer or agent of the Corporation, or shall be required by law otherwise to be signed or executed; and shall perform such other duties as from time to time may be assigned to him by the Board or by the President. 5.8 Secretary. The Secretary, if present, shall act as secretary of --------- all meetings of the stockholders and of the Board, and shall keep the minutes thereof in the proper book or books to be provided for that purpose; he shall see that all notices required to be given by the Corporation are duly given and served; he may, with the President or a Vice President, sign certificates for shares of capital stock of the Corporation; he shall be custodian of the seal of the Corporation and may seal with the seal of the Corporation, or a facsimile thereof, all certificates for shares of capital stock of the Corporation and all documents the execution of which on behalf of the Corporation under its corporate seal 25 is authorized in accordance with the provisions of the By-laws; he shall have charge of the stock ledger and also of the other books, records and papers of the Corporation relating to its organization and management as a Corporation, and shall see that the reports, statements and other documents required by law are properly kept and filed; and shall, in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board or by the President. 5.9 Treasurer. The Treasurer shall have charge and custody of, and be --------- responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositaries as shall be selected in accordance with these By-laws; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined in accordance with any provisions of the By-laws, and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books to be kept by him or under his direction full and adequate account of all moneys received or paid by him for the account of the Corporation; have the right to require, from time to 26 time, reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the President or the Board, whenever the President or the Board, respectively, shall require him so to do, an account of the financial condition of the Corporation and of all his transactions as Treasurer; exhibit at all reasonable times his books of account and other records to any of the directors upon application at the office of the Corporation where such books and records are kept; and, in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board or by the President; and he may sign with the President or a Vice President certificates for shares of capital stock of the Corporation. 5.10 Assistant Secretaries and Assistant Treasurers. Assistant ---------------------------------------------- Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board or by the President. Assistant Secretaries and Assistant Treasurers may, with the President or a Vice President, sign certificates for shares of capital stock of the Corporation. 27 ARTICLE 6 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. ---------------------------------------------- 6.1 Execution of Contracts. The Board may authorize any officer, ---------------------- employee or agent, in the name and on behalf of the Corporation, to enter into any contract or execute and satisfy any instrument, and any such authority may be general or confined to specific instances, or otherwise limited. 6.2 Loans. The President or any other officer, employee or agent ----- authorized by the By-laws or by the Board may effect loans and advances at any time for the Corporation from any bank, trust company or other institutions or from any firm, corporation or individual and for such loans and advances may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, and, when authorized by the Board so to do, may pledge and hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances or otherwise limited. 6.3 Checks, Drafts, Etc. All checks, drafts and other orders for the ------------------- payment of money out of the funds of the Corporation and all notes or other evidences of indebtedness of the Corporation shall be signed on behalf of the 28 corporation in such manner as shall from time to time be determined by resolution of the Board. 6.4 Deposits. The funds of the Corporation not otherwise employed -------- shall be deposited from time to time to the order of the Corporation in such banks, trust companies or other depositaries as the Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board. ARTICLE 7 STOCK AND DIVIDENDS ------------------- 7.1 Certificates Representing Shares. The shares of capital stock of -------------------------------- the Corporation shall be represented by certificates in such form (consistent with the provisions of Section 158 of the General Corporation Law) as shall be approved by the Board. Such certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile 29 signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. 7.2 Transfer of Shares. Transfers of shares of capital stock of ------------------ the Corporation shall be made only on the books of the Corporation by the holder thereof or by his duly authorized attorney appointed by a power of attorney duly executed and filed with the secretary or a transfer agent of the Corporation, and on surrender of the certificate or certificates representing such shares of capital stock properly endorsed for transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "Cancelled," with the date of cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation. No transfer of shares of capital stock shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the 30 Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred. 7.3 Transfer and Registry Agents. The Corporation may from time to time ---------------------------- maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board. 7.4 Lost, Destroyed, Stolen and Mutilated Certificates. The holder of -------------------------------------------------- any shares of capital stock of the Corporation shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares, and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or mutilated certificate, or his legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and registrars against any claim that may be made against any of them on account of 31 the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim. 7.5 Regulations. The Board may make such rules and regulations as it ----------- may deem expedient, not inconsistent with the By-laws or with the Certificate of Incorporation, concerning the issue, transfer and registration of certificates representing shares of its capital stock. 7.6 Restriction on Transfer of Stock. A written restriction on the -------------------------------- transfer or registration of transfer of capital stock of the Corporation, if permitted by Section 202 of the General Corporation Law and noted conspicuously on the certificate representing such capital stock, may be enforced against the holder of the restricted capital stock or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificate representing such capital stock, a restriction, even though permitted by Section 202 of the General Corporation Law, shall be ineffective except against a person with actual knowledge of the restriction. A restriction on the transfer or registration of transfer of capital stock of the Corporation may be imposed either by the Certificate of Incorporation or by an agreement among any number of stockholders or 32 among such stockholders and the Corporation. No restriction so imposed shall be binding with respect to capital stock issued prior to the adoption of the restriction unless the holders of such capital stock are parties to an agreement or voted in favor of the restriction. 7.7 Dividends, Surplus, Etc. Subject to the provisions of the ----------------------- Certificate of Incorporation and of law, the Board: 7.7.1 May declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time or times as, in its discretion, the condition of the affairs of the Corporation shall render advisable; 7.7.2 May use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness; 7.7.3 May set aside from time to time out of such surplus or net profits such sum or sums as, in its discretion, it may think proper, as a reserve fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any purpose it may 33 think conducive to the best interests of the Corporation. ARTICLE 8 INDEMNIFICATION --------------- 8.1 Indemnification of Officers and Directors. The Corporation shall ----------------------------------------- indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or an officer of the Corporation, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding to the fullest extent and in the manner set forth in and permitted by the General Corporation Law, and any other applicable law, as from time to time in effect. Such right of indemnification shall not be deemed exclusive of any other rights to which such director or officer may be entitled apart from the foregoing provisions. The foregoing provisions of this Section 8.1 shall be deemed to be a contract between the Corporation and each director and officer who serves in such capacity at any time while this Article 8 and the relevant provisions of the General Corporation Law and other applicable law, if any, are in effect, and any 34 repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. 8.2 Indemnification of Other Persons. The Corporation may indemnify -------------------------------- any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding to the extent and in manner set forth in and permitted by the General Corporation Law, and any other applicable law, as from time to time in effect. Such right of indemnification shall not be deemed exclusive of any other rights to which any such person may be entitled apart from the foregoing provisions. 8.3 Insurance. The Corporation shall have power to purchase and --------- maintain insurance on behalf of any person 35 who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of Section 8.1 and 8.2 of the By-laws or under Section 145 of the General Corporation Law or any other provision of law. ARTICLE 9 BOOKS AND RECORDS ----------------- 9.1 Books and Records. The Corporation shall keep correct and complete ----------------- books and records of account and shall keep minutes of the proceedings of the stockholders, the Board and any committee of the Board. The Corporation shall keep at the office designated in the Certificate of Incorporation or at the office of the transfer agent or registrar of the Corporation, a record containing the names and addresses of all stockholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof. 36 9.2 Form of Records. Any records maintained by the Corporation in the --------------- regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible written form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. 9.3 Inspection of Books and Records. Except as otherwise provided by ------------------------------- law, the Board shall determine from time to time whether, and, if allowed, when and under what conditions and regulations, the accounts, books, minutes and other records of the Corporation, or any of them, shall be open to the inspection of the stockholders. ARTICLE 10 SEAL ---- The Board may adopt a corporate seal which shall be in the form of a circle and shall bear the full name of the Corporation, the year of its incorporation and the word "Delaware." 37 ARTICLE 11 FISCAL YEAR ----------- The fiscal year of the Corporation shall be determined, and may be changed, by resolution of the Board. ARTICLE 12 VOTING OF SHARES HELD --------------------- Unless otherwise provided by resolution of the Board, the President may, from time to time, appoint one or more attorneys or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as a stockholder or otherwise in any other corporation, any of whose shares or securities may be held by the Corporation, at meetings of the holders of stock or other securities of such other corporation, or to consent in writing to any action by any such other corporation, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed on behalf of the Corporation and under its corporate seal, or otherwise, such written proxies, consents, waivers or other instrument as he may deem necessary or proper in the premises; or the President may himself attend any meeting of the holders of the stock or other securities of any such other corporation and thereat vote or exercise any or all other 38 powers of the Corporation as the holder of such stock or other securities of such other corporation. ARTICLE 13 AMENDMENTS ---------- The By-laws may be altered, amended, supplemented or repealed, or new By-laws may be adopted, by vote of the holders of the shares entitled to vote in the election of directors. The By-laws may be altered, amended, supplemented or repealed, or new By-laws may be adopted, by the Board. Any By-laws adopted, altered, amended, or supplemented by the Board may be altered, amended, or supplemented or repealed by the stockholders entitled to vote thereon. EX-3.II.(J) 23 dex3iij.txt BYLAWS OF TERRA INTERNATIONAL INC. Exhibit 3.ii.(j) BY-LAWS of TERRA CHEMICALS INTERNATIONAL, INC. (A Delaware Corporation) ARTICLE 1 Offices ------- 1.1. Principal Office. The principal office of TERRA CHEMICALS ---------------- INTERNATIONAL, INC. (hereinafter called the "Corporation") in the State of Delaware shall be established and maintained at the office of United States Corporation Company, 129 South State Street, City of Dover, County of Kent, State of Delaware, and United States Corporation Company shall be the resident agent of the Corporation in charge thereof. 1.2. Other Offices. The Corporation, in addition to its principal ------------- office in the State of Delaware, may establish and maintain such other office or offices at such place or places without the State of Delaware as the Board of Directors may determine. ARTICLE 2 Meetings of Stockholders ------------------------ 2.1. Place of Holding Meetings. Each annual meeting of stockholders, ------------------------- and every other meeting of stockholders at which directors are to be elected, shall be held at the executive office of the Corporation, provided that the Board of Directors may fix some other place within the city in which such office is located for the holding of any such meeting, in which event at least ten (10) days' notice of the place so fixed shall be given to the stockholders entitled to vote thereat, and the meeting shall be held at such place. Each special meeting of stockholders for purposes other than election of directors shall be held at such place, within or without the State of Delaware, as shall be designated in the notice of such meeting. 2.2. Annual Meetings. Each annual meeting of stockholders, for the --------------- purpose of electing directors and transacting such other business as may properly come before the meeting, shall be held on the second Monday in October of each year at 1l:00 o'clock in the forenoon. If this date shall be a legal holiday at the place where the meeting is to be held, the -2- meeting shall be held at the same hour on the next succeeding business day which is not a legal holiday. At each annual meeting, the stockholders present or represented by proxy and entitled to vote shall elect directors and may transact such other business as may properly come before the meeting, whether or not specified in the notice of such meeting. 2.3 Special Meetings. Special meetings of the stockholders entitled to ---------------- vote may be called by the Chairman of the Board of Directors, the President or the Secretary, and shall be called (a) upon requisition therefor, stating the purpose or purposes thereof, delivered to the Chairman of the Board of Directors, the President or the Secretary and signed by three (3) directors then in office or by the holders of one-third (l/3) in number of the issued and outstanding shares of stock entitled to vote thereat; (b) if ordered by resolution of the Board of Directors; or (c) if required by the provisions of the Certificate of Incorporation. The notice of any special meeting shall designate, as the place thereof, the office of the Corporation described in Section 2.1 of these By-laws; provided that if such meeting shall be ordered by resolution of the Board of Directors, such resolution may, subject to the provisions of Section 2.1 of these By-laws, specify another place for the holding of such meeting, in which case the notice thereof -3- shall designate such other place and the meeting shall be held at such place. 2.4 Voting. The rights of the holders of stock of any class of the ------ Corporation to vote at any election of directors and on any matter shall be as provided in the Certificate of Incorporation. In voting at any election of directors or any matter, each stockholder holding one or more shares entitled to vote at such election or on such matter shall have one vote for each such share registered in his name on the books of the Corporation (a) on the date fixed pursuant to Section 2.10 of these By-laws as the record date for the determination of stockholders entitled to vote; (b) if no such record date shall have been fixed, then at the time of the meeting at which such vote shall be taken, provided that, except where the transfer books of the Corporation shall have been closed or a record date shall have been fixed as aforesaid, no share of stock shall be voted at any election of directors which shall have been transferred on the books of the Corporation within twenty (20) days next preceding such election. The Corporation shall not vote directly or indirectly any share of its own capital stock. 2.4.1 Each stockholder entitled to vote may vote either in person or by proxy appointed by an instrument in writing (including telegram, cablegram, radiogram or similar communication) signed by the stockholder or by his duly authorized attorney, but no proxy shall be voted after three (3) years from its date unless the proxy shall -4- provide for a longer period. 2.4.2 The vote of stockholders at any election of directors or on any matter need not be by ballot unless demanded by the holders of at least ten per cent (10%) of the stock present or represented by proxy at the meeting and entitled to vote at such election or on such matter. 2.4.3 Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held in person or by proxy. In the case of stock held jointly by two or more fiduciaries, such fiduciaries may designate in writing one or more of their number to represent such stock and vote the shares so held in person or by proxy, unless there is a provision to the contrary in the instrument, if any, defining their powers and duties. Persons whose stock is pledged shall be entitled to represent such stock and vote thereon unless, in a transfer by the pledgor on the books of the Corporation, the pledgor shall have expressly empowered the pledgee so to act, in which case only the pledgee may represent such stock and vote thereon. 2.5 Quorum. At each meeting of stockholders held for any purpose, the ------ presence in person and/or the representation by proxy of the holders of a majority of the issued and -5- outstanding shares of stock entitled to vote shall be necessary and sufficient to constitute a quorum. The affirmative vote of the holders of a majority of the shares of stock entitled to vote which are represented at any meeting of stock-holders at which a quorum is present shall be necessary and sufficient to constitute action by the stockholders unless another applicable requirement shall be set by law or by the Certificate of Incorporation. 2.6. Adjournment of Meetings. Any meeting of stockholders may be ----------------------- adjourned from time to time and from place to place by the holders of a majority of the shares of stock entitled to vote present in person or represented by proxy, whether or not a quorum, without any notice other than an announcement at the meeting. At any adjourned meeting at which there shall be a quorum, any business may be transacted which might have been transacted at the meeting as originally called. Only those stockholders entitled to vote at the meeting as originally called shall be entitled to vote at any adjournment thereof. 2.7. Notice of Meetings. Notice of each meeting of stockholders, ------------------ stating the place and time of the meeting and, in the case of special meetings, the nature of the business to be considered, shall be given personally or by mail, telegram, cablegram, radiogram or similar communication, in the case of annual meetings, not less than ten (10) days and, in the case -6- special meetings, not less than ten (10) days, nor more (in any case) than forty (40) days, before the meeting, to each stockholder of record entitled to vote at such meeting, at his address as it appears on the stock transfer books of the Corporation. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, and no notice need be given when the giving of such notice may be dispensed with according to law. No notice of any adjourned meeting need be given. 2.8. Waiver of Notice. Notice of any meeting of stockholders may be ---------------- waived in writing or by telegram, cablegram, radiogram or similar communication signed either before or after such meeting by any stockholder entitled to vote thereat, and any such waiver shall, as to such stockholder, be in substitution for, and equivalent to, the due giving of such notice. 2.9. List of Stockholders. The Secretary or an Assistant Secretary -------------------- shall prepare, at least ten (10) days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder during ordinary business hours, for a period of at least ten (10) days prior to the election, either at a -7- place within the city, town or village where the election is to be held and which place shall be specified in the notice of the meeting or, if not so specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of election during the whole time thereof, and subject to the inspection of any stockholder who may be present. 2.10. Closing of Transfer Books and Record Date. The Board of ----------------------------------------- Directors may, by resolution, direct that the stock transfer books of the Corporation be closed for a period not exceeding fifty (50) days next preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or for a period not exceeding fifty (50) days in connection with obtaining the consent of stockholders for any purpose. In lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding fifty (50) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or the date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such -8- dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. 2.11. Judges. Two (2) judges for each meeting of stockholders of the ------ Corporation at which judges are required to or may act may be appointed by the Board of Directors before the meeting. If no such appointment shall have been made, or if one or both of the judges appointed by the Board of Directors shall refuse to act or fail to attend and no alternate judge or judges who are willing and able to act shall have been so appointed, the appointment or appointments shall be made by the presiding officer at the meeting. The judges shall receive and take in charge all proxies and ballots and shall decide all questions relating to the qualification of voters, the validity of proxies and the acceptance and rejection of votes. In case the judges cannot agree on any question, the presiding officer shall decide such question. The judges shall be entitled to reasonable compensation for their services, paid by the Corporation. Each judge, before entering upon the discharge of his -9- duties, shall be sworn faithfully to execute the duties of his office with strict impartiality and according to the best of his ability, and the oath so taken shall be subscribed by him. 2.12. Procedural Committee. The Board of Directors may, in its -------------------- discretion, appoint a procedural committee to prepare and administer, and amend or modify, such rules and regulations as may appear appropriate or desirable to govern the conduct of any meeting of stockholders held for any purpose, which rules and regulations shall have governing effect with respect to the filing of proxies, nominations, opening and closing of polls, questions of parliamentary procedure, and other similar matters at and with respect to such meeting. ARTICLE 3 Board of Directors ------------------ 3.1. General Powers. The property, affairs and business of the -------------- Corporation shall be managed by the Board of Directors and, subject to such restrictions as may be imposed by law, by the Certificate of Incorporation or by these By-laws, the Board of Directors may exercise all of the powers of the Corporation. 3.2. Number and Qualifications. The number of directors, which shall be ------------------------- not less than three (3) nor more than fifteen (15), shall be determined in the first instance by the -10- the incorporators and thereafter at the annual election of directors by the stockholders entitled to vote or, in the intervals between annual elections, by vote of a majority of the directors then in office. The stockholders entitled to vote, but not the directors, may at any time reduce the number of directors below the number then in office, such reduction and the director or directors whose term or terms shall expire upon such reduction to be determined at an annual or special meeting of stockholders; provided that no such action shall result in the expiration of the term of a director without the affirmative vote or written consent of the holders of a majority of the outstanding shares of the class of stock, the holders of which elected such director. Directors need not be stockholders. 3.3. Term of Office. Subject to the provisions of Section 3.2 -------------- of these By-laws, each director shall be elected to serve until the annual meeting of stockholders next following his election and until a duly qualified successor shall be elected, or until he shall die, resign or be removed. 3.4. Place of Meetings. The directors may hold their meetings ----------------- and have one or more offices at such place or places (whether within or without the State of Delaware) as they may from time to time by resolution determine. -11- 3.5. First or Annual Meeting. Each newly elected Board of ----------------------- Directors may, if a quorum shall be present, hold its first or annual meeting without prior notice thereof for the purpose of organization, the election of officers and the transaction of other business, immediately after the annual meeting of stockholders, or the time and place of such meeting may be fixed by consent in writing of all the directors, or such meeting may be held on notice given as hereinafter provided for special meetings of directors. 3.6. Election of Officers. At such first or annual meeting, -------------------- the Board of Directors may elect a Chairman of the Board of Directors and shall elect a President, one or more Vice Presidents (one or more of whom may be designated Executive Vice Presidents), a Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers and such other officers as the Board of Directors may determine. No officer other than the Chairman of the Board of Directors need be a director. 3.7. Regular Meetings. Regular meetings of the directors may ---------------- be held without notice at such places and times as shall be determined from time to time by resolution of the Board of Directors. 3.8. Special Meetings; How Called; Notice. Special meetings ------------------------------------ of the directors may be called by the Chairman of the -12- Board of Directors, the President, the Executive Vice President, the Secretary or an Assistant Secretary and, on the written request of any three (3) directors, the Secretary or an Assistant Secretary shall call such meeting. Not less than three (3) days' notice of any such meeting shall be given personally or by mail, telegram, cablegram, radiogram or similar communication. Notice of any special meeting may be waived in writing or by telegram, cablegram or radiogram or similar communication signed, either before or after such meeting, by any of the directors then in office, and any such waiver shall, as to such director, be in substitution for, and equivalent to, the due giving of such notice. No notice of a meeting need be given to any director who shall attend such meeting, and any meeting of directors shall be a valid and lawful meeting, whether or not notice thereof shall have been given, if all the directors then in office shall be present, and any action taken thereat by the requisite vote shall be valid and binding for all purposes. 3.9. Quorum and Adjournment of Meetings. A majority of the directors in ---------------------------------- office, but in no event less than two (2) directors, shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at a meeting at which there shall be a quorum shall be the act of the Board unless another applicable requirement shall be set by law, by the Certificate of Incorporation or by these By-laws. A majority of the directors present at any -13- meeting, although less than a quorum, may adjourn the meeting from time to time and from place to place without any notice other than an announcement at the meeting. At any adjourned meeting at which there shall be a quorum, any business may be transacted which might have been transacted at the meeting as originally called. 3.10. Organization. At each meeting of the Board of Directors, the ------------ Chairman of the Board of Directors or, in his absence, the President or, in the absence of both of them, a director chosen by the majority of the directors present, shall act as chairman of the meeting. The Secretary of the Corporation shall act as secretary of each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of secretary at such meeting, and in the absence from such meeting of the Secretary and all of the Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting. 3.11. Compensation. Directors as such shall not receive any stated ------------ compensation for their services, but by resolution of the Board of Directors a fixed fee for, and out-of-pocket expenses in connection with, attending meetings may be allowed. Nothing in this Section shall preclude a director from serving the Corporation in any capacity other than as director and receiving compensation therefor. -14- 3.12. Resignation and Removal. Any director may resign at any time. ----------------------- Such resignation shall be in writing and shall take effect at the time specified therein or, if no time be so specified, at the time of its receipt by the Corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided therein. Any director may be removed at any time, with or without cause, by vote of the holders of a majority of the outstanding shares of the class of stock, the holders of which elected such director. 3.13. Filling of Vacancies. Any vacancy or vacancies in the Board of -------------------- Directors caused by an increase in the number of directors shall be filled at an annual or special meeting by the stockholders entitled to vote thereat, or, if the increase shall be determined by the directors, the additional director or directors shall be elected by vote of a majority of the directors then in office at any regular or special meeting. Notwithstanding the foregoing, if the holders of any particular class of stock of the Corporation shall, as a result of such increase, be entitled to elect one or more additional directors, such additional director or directors shall be elected by the holders of the outstanding shares of such class. -15- 3.13.1 Any vacancy in the Board of Directors caused by the death, resignation or removal of a director may be filled by vote of a majority of the directors remaining in office (although less than a quorum) who were elected by the holders of the class of stock of the Corporation, the holders of which elected the director theretofore filling such vacancy (or if only one director so elected shall remain in office, by that one), or at a special meeting of stockholders by the stockholders entitled to vote thereat. 3.13.2 When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, who were elected by the holders of the class of stock of the Corporation who elected the director or directors who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of other vacancies in the Board of Directors. -16- ARTICLE 4 Executive Committee and Other Committees ---------------------------------------- 4.1. Constitution and Powers. The Board of Directors, by resolution ----------------------- adopted by a majority of the directors then in office, may designate three or more directors to constitute an Executive Committee, who shall have and may exercise, so far as may be permitted by law, all the powers of the Board of Directors in the management of the property, affairs and business of the Corporation in the intervals between meetings of the Board, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. The fact that the Executive Committee has acted shall be conclusive evidence that the Board of Directors was not in session at the time of such action and had not theretofore given specific direction respecting such action, unless actual notice to the contrary shall have been given. 4.2. Vacancies. The Board of Directors shall fill any and all vacancies --------- in the Executive Committee and may, from time to time, appoint alternate members of the Executive Committee to serve in the temporary absence or disability of any member. Such designation of a member or such appointment of an alternate member may be terminated at any time, with or -17- without cause, and any member or alternate member of said Committee may be removed, with or without cause, at any time, by vote of a majority of the whole Board then in office. 4.3. Organization, Meetings, Etc. The Executive Committee, at each --------------------------- meeting thereof, shall elect one of its number to act as chairman of the meeting, and shall also elect a person (who need not be a member of the Executive Committee) to act as secretary of the meeting. The Executive Committee may adopt rules governing the time of its meetings and the method of calling and/or method of holding such meetings, and may also adopt rules governing the conduct of its business. The Executive Committee shall keep minutes of its acts and proceedings and shall report thereon to the Board of Directors. 4.4. Quorum. A majority of the members of the Executive Committee shall ------ constitute a quorum for the transaction of business, and the act of a majority of those present at a meeting at which there shall be a quorum shall be the act of the Executive Committee. 4.5. Other Committees. The Board of Directors may also, by resolution ---------------- adopted by vote of a majority of the directors then in office, appoint such other committees, consisting of two or more directors, and, to the extent permitted by law, may delegate to any such committee such of the powers of the Board, as the Board shall determine. -18- ARTICLE 5 Officers -------- 5.1. Officers. The officers of the Corporation shall be a President, one or -------- more Vice Presidents (one or more of whom may be designated Executive Vice Presidents), a Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers and such other officers as the Board may determine. More than two offices, other than the offices of President and Secretary, may be held by the same person. Each officer, for his services as such, shall be entitled to receive such salary or other compensation, if any, as may be fixed from time to time by the Board of Directors. 5.2. Election, Term of Office and Qualifications. Each officer shall be ------------------------------------------- elected annually by the Board of Directors, and shall hold office until a duly qualified successor shall be elected, or until he shall die, resign or be removed. 5.3. Resignation and Removal. Any officer may resign at any time. Such ----------------------- resignation shall be in writing and shall take effect at the time specified therein, or, if no time be so specified, at the time of its receipt by the Corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided therein. Any officer may be removed from office, with or without cause, -19- at any regular meeting of the Board of Directors or at any special meeting called for that purpose, by vote of a majority of the whole BOard of Directors. 5.4. Vacancies. If any office of the Corporation shall be or become --------- vacant for any reason, the Board of Directors may elect any qualified person to fill such vacancy, such person to hold office for the unexpired term and until a duly qualified successor shall be elected. 5.5. Chairman of the Board of Directors. The Board of Directors may ---------------------------------- designate one of their number to act as Chairman of the Board of Directors. The Chairman of the Board of Directors shall preside at all meetings of the Board at which he shall be present, and shall perform such other duties as may be provided in these By-laws or delegated to him by the Board of Directors. In the event of the absence or disability of the President, the Chairman of the Board of Directors shall be chief executive officer of the Corporation and shall have all the powers and perform all the duties of the President. 5.6. President. The President shall be the chief executive officer of --------- the Corporation. He shall also preside at all meetings of stockholders, and shall also preside at all meetings of the Board of Directors at which the Chairman of the Board of Directors shall not be present. He shall have power to call, for any purpose or purposes, special meetings of the -20- holders of stock of any class or series and of directors; he may, subject to any general or specific resolution of the Board of Directors, appoint and discharge employees and agents of the Corporation, prescribe their duties and fix their compensation; he may make and sign bonds, mortgages and other contracts and agreements in the name and on behalf of the Corporation, except when the Board of Directors by either general or special resolution instructs the same to be done by some other officer or agent; he shall have power to cause the seal of the Corporation to be affixed to any instrument requiring the same, and the same, when so affixed, shall be attested by the signature of the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, or by such other officer or agent as may be designated by the Board; he shall see that the books, reports, statements and certificates required by the statute under which the Corporation is organized or by any other statutes applicable thereto are properly kept, made and filed according to law. He shall generally do and perform all acts which the president of a corporation is authorized or required by law to do or to perform, and shall have such general powers as the president of a corporation is given by law. 5.7. Vice Presidents. Each Vice President shall have the usual powers and --------------- duties pertaining to his office, together with such further powers and duties as may be assigned to him by the Board of Directors or by the President. In case -21- of the absence or disability of the President and of the Chairman of the Board of Directors, if any, the duties of the President and of the Chairman of the Board of Directors, if any, shall be performed by the Executive Vice Presidents, if any, in the order of their designation by the Board or, in the absence of such designation, in the order of their seniority or, in the absence or disability of all of the Executive Vice Presidents, by the Vice Presidents in such order, unless and until the Board shall otherwise direct. 5.8. Secretary. The Secretary shall give, or cause to be given, notice --------- of all meetings of stockholders and of directors, and all other notices required or permitted by law, by the Certificate of Incorporation or by these By-laws, and in case of his absence, or his refusal or neglect so to do, any such notice may be given by any person designated by the President or by the directors or the stockholders upon whose requisition the meeting is called; he shall record, or cause to be recorded, all the proceedings of the meetings of the stockholders and the Board of Directors in a book or books to be kept for that purpose, and shall perform such other duties as may be assigned to him by the Board of Directors or by the President, under whose supervision he shall be; he shall have custody of the seal of the Corporation; he shall perform all the other duties incident to the office of secretary of a corporation. -22- 5.9. Assistant Secretaries. The Board of Directors may appoint an --------------------- Assistant Secretary or more than one Assistant Secretary. Each Assistant Secretary shall have the usual powers and duties pertaining to his office, together with such other powers and duties as may be assigned to him by the Board of Directors. At the request of the Secretary or in case of the absence or disability of the Secretary, the duties of the Secretary shall be performed by one or more of the Assistant Secretaries, as the Secretary or the Board shall determine. 5.10. Treasurer. The Treasurer shall have the custody of all funds, --------- securities, evidences of indebtedness and other valuable documents of the Corporation, and shall deposit the same in the name of the Corporation in such depositaries or places of safekeeping as may be designated by the Board of Directors. He shall have charge of disbursing the funds of the Corporation, subject to the control of the Board, and of taking proper vouchers and causing to be given receipts and acquittances therefor; he shall enter, or cause to be entered, in books of the Corporation to be kept for that purpose, full and accurate accounts of all moneys received and paid out for the account of the Corporation and, whenever required by the Board of Directors or the President, he shall render a statement of his accounts; he shall keep, or cause to be kept, such other books as will show a true record of the expenses, losses, gains, assets and liabilities of the Corporation; he shall, -23- unless otherwise determined by the Board, have charge of the original stock books, transfer books and stock ledgers and shall, unless otherwise so determined, act as transfer agent in respect of the stock and securities of the Corporation; he shall perform such other duties as shall be assigned to him by the Board of Directors or the President, under whose supervision he shall be, and he shall perform all other duties incident to the office of treasurer of a corporation. If and to the extent that the Board of Directors so determines, he shall give the Corporation a bond, in such amount and on such conditions and with such surety as the Board shall prescribe, for the faithful discharge of his duties and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. 5.11. Assistant Treasurers. The Board of Directors may appoint an -------------------- Assistant Treasurer or more than one Assistant Treasurer. Each Assistant Treasurer shall have the usual powers and duties pertaining to his office, together with such other powers and duties as may be assigned to him by the Board of Directors. At the request of the Treasurer, or in case of the absence or disability of the Treasurer, the duties of the Treasurer shall be performed by one or more of the Assistant Treasurers, as the Treasurer or the Board shall determine. -24- 5.12. Delegation of Duties. In case of the absence of any officer of the -------------------- Corporation, or for any other reason that the Board of Directors may deem sufficient, the Board may, for the time being, delegate the powers or duties of such officer to any other officer or to any director. ARTICLE 6 Capital Stock ------------- 6.1. Certificates for Shares. Certificates for shares of capital stock of ----------------------- the Corporation shall be in such form as shall be approved by the Board of Directors, and shall be signed by the Chairman of the Board of Directors, the President or a Vice President, and also by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer; provided that when such certificate is signed (a) by a transfer agent or assistant transfer agent or (b) by an individual acting as transfer clerk on behalf of the Corporation and by a registrar, the signature of any such Chairman of the Board of Directors, President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer may be facsimile. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation, for whatever reason, before such certificate or certificates -25- shall have been delivered by the Corporation, such certificate or certificates may nevertheless, unless otherwise ordered by the Board of Directors, be delivered as though the person or persons who shall have signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation. The corporate seal shall be affixed to all certificates of stock and may be facsimile. 6.2. Transfer of Shares. Shares of stock shall be transferable on the ------------------ books of the Corporation only by the person named in the certificate as the owner of the shares represented thereby, or by his duly authorized attorney, upon surrender of the certificate or certificates therefor and upon payment of all requisite transfer taxes thereon. 6.3. Transfer Agents; Transfer Clerks and Registrars. The Board of ----------------------------------------------- Directors may appoint and remove transfer agents, assistant transfer agents, transfer clerks and/or registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent, assistant transfer agent, transfer clerk and/or registrar. 6.4. Lost Certificates. Any person claiming a certificate of stock to be ----------------- lost, stolen or destroyed shall make an affidavit or affirmation of the fact of such loss, theft or destruction and, if requested so to do by the Board of Directors, -26- shall advertise such fact in such manner as the Board may require, and shall give the Corporation, its transfer agents, assistant transfer agents, transfer clerks, registrars and/or other agents, or such of them as the Board may require, a bond of indemnity in such amount, or unlimited in amount, as shall be determined by the Board and in form and contents satisfactory to the Board (and to the other persons thereby indemnified, if any) and with such sureties as the Board may prescribe; whereupon the Corporation may cause to be issued a new certificate of the same tenor and for the same number of shares as the one alleged to have been lost, stolen or destroyed. Action with respect to lost, stolen or destroyed certificates may be taken by the Board of Directors by resolution with respect to a particular certificate or certificates or by resolution pertaining generally to lost, stolen or destroyed certificates. 6.5. Regulations. The Board of Directors may make such rules and ----------- regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock of the Corporation, not inconsistent with the provisions of law, the Certificate of Incorporation or these By-laws. 6.6. Holder of Record to be Deemed Holder in Fact. The holder of record of -------------------------------------------- any share or shares of stock may be treated as the holder in fact thereof, and no equitable or other claim to, or interest in, such share or shares on the part of -27- any other person, whether or not there shall be express or other notice thereof to the Corporation, need be recognized, except as otherwise expressly provided by law. ARTICLE 7 Miscellaneous Provisions ------------------------ 7.1. Corporate Seal. The seal of the Corporation shall be in such form and -------------- of such content as the Board of Directors shall from time to time determine. 7.2. Fiscal Year. The Board of Directors may determine the fiscal year of ----------- the Corporation and may from time to time change the same. 7.3. Checks. All checks, drafts or orders for the payment of money and all ------ acceptances or notes or other commercial paper of the Corporation shall be signed by such person or persons as the Board of Directors may from time to time designate. 7.4. Receipts. All receipts for property, cash, stocks, bonds and other -------- securities received by the Corporation shall be signed, and all such property may be received, for and in the name of the Corporation, by any officer (or by any other person who may be authorized so to do by the Board of Directors). 7.5. Transfer of Securities. All endorsements, assignments, transfers, ---------------------- stock powers or other instruments of -28- transfer of stock or other securities belonging to and/or standing in the name of the Corporation shall be executed and delivered for and in the name of the Corporation by any officer (or by any other person who may be authorized so to do by the Board of Director). 7.6. Books. The accounts, books and records of the Corporation shall be ----- kept at such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine. The stock record books and the blank stock certificate books shall be kept by the Treasurer or by any other officer or agent designated by the Board of Directors. The original or a duplicate stock ledger containing the names and addresses of the stockholders and the number of shares of each class or series held by them respectively shall be kept at the principal office of the Corporation in the State of Delaware. 7.7. Inspection of Books. Subject to the General Corporation Law, the ------------------- Board of Directors from time to time may determine whether, to what extent, at what times and places and under what conditions and regulations the accounts, books and records of the Corporation, or any of them, shall be open to the inspection of stockholders; and no stockholder shall have any right to inspect any account, book or record of the Corporation except as such right may be expressly conferred by the General Corporation Law or may be expressly granted by the Board of Directors. -29- 7.8. Powers of Attorney. The Board of Directors may delegate to any ------------------ officer or director of the Corporation, or to any other person, the right and power to act on behalf of the Corporation in such matters, with such general or limited powers, under such conditions and for such duration as the Board may, in each instance, determine. Any power of attorney or other evidence of such grant of rights and powers shall be made in writing and, when duly authorized and executed in the name and on behalf of the Corporation, shall be fully binding upon the Corporation in accordance with its terms. 7.9. Voting of Stock or Other Securities. Unless otherwise provided by ----------------------------------- resolution of the Board of Directors, the President, the Chairman of the Board of Directors, or any Vice President may from time to time in his discretion, in the name and on behalf of the Corporation, (a) attend any meeting of the holders of stock or other securities of any other corporation which may be held by the Corporation and at such meeting vote and exercise any and all of the rights and powers of the Corporation as the holder of such stock or other securities; (b) appoint one or more attorneys or agents of the Corporation to attend any meeting of the holders of stock or other securities of any such other corporation and at such -30- meeting to vote and exercise any and all of the rights and powers of the Corporation as the holder of such stock or other securities; (c) execute consents in writing to any action by any such other corporation, and/or appoint one or more attorneys or agents to execute such consents; (d) instruct the attorneys or agents appointed as aforesaid as to the manner of voting, exercising such rights and powers and/or executing such consents; and (e) execute such written proxies, consents, waivers or other instruments as he may deem necessary or proper with respect to any such meeting of the holders of stock or other securities of any such other corporation or with respect to any such consent to any action by any such other corporation. 7.10. Indemnification of Directors and Officers. Any person made a party ----------------------------------------- to any action, suit or proceeding, whether civil, administrative or criminal, by reason of the fact that he, his testator or intestate, is or was a director, officer or employee of the Corporation or of any corporation which he served as such at the request of the Corporation, shall be indemnified by the Corporation against the reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with or arising out of the defense of such action, suit or proceeding, or any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, -31- officer or employee is liable to the Corporation, or to any Corporation which he served as such at the request of the Corporation, for negligence or misconduct in the performance of the duties of his office, but a plea of nolo contendere --------------- or guilty, conviction, judgment or settlement entered in any such action, suit or proceeding shall not by itself be regarded as conclusively constituting an adjudication of iability for such negligence or misconduct. 7.10.1 Without limitation of the generality of the foregoing, the expenses referred to in the preceding paragraph shall be deemed to include (a) if any such action, suit or proceeding shall proceed to judgment, any and all judgments, costs, fines, penalties and other expenses imposed upon such person by reason of such judgment, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer or employee is liable to the Corporation, or to any corporation which he served as such at the request of the Corporation, for negligence or misconduct in the performance of the duties of his office, and (b) in the event of any settlement of any such action, suit or proceeding, all reasonable costs and other expenses of such settlement (other than any payments made to the Corporation itself, or to such other corporation), provided that independent legal counsel designated by a majority of the total number of directors of the Corporation shall have advised the -32- Corporation that, in the opinion of such counsel, the director, officer or employee was not liable to the Corporation, or to such other corporation, for negligence or misconduct in the performance of the duties of his office. 7.10.2. Any amount payable by way of indemnity shall be determined and paid pursuant to (a) a court order, or (b) a resolution adopted by a majority of the non-interested directors of the Corporation then in office (whether or not such majority constitutes a quorum, but provided that there shall be least two such directors in office) or (c) a resolution adopted by the vote of the holders of at least a majority of the outstanding shares of stock at the time entitled to vote for the election of directors of the Corporation. 7.10.3. If any such indemnity is paid otherwise than pursuant to a court order or action by the stockholders, the Corporation shall, within eighteen (18) months from the date of such payment, mail to its stockholders at the time entitled to vote for election of directors, a statement specifying the persons paid, the amounts of the payments and the final disposition of the action, suit or proceeding. 7.10.4. The foregoing rights of indemnification -33- shall not be exclusive of any other rights to which any such director, officer or employee may be entitled under any present or future law, statute, agreement, vote of stockholders or otherwise. 7.11. Notices. Whenever any notice is required or permitted ------- by these By-laws to be given, personal notice shall not be necessary unless expressly so stated. Any notice so required or permitted shall be deemed given effectively if the same shall be deposited in a post office box in a sealed postpaid wrapper addressed to the person entitled thereto at his post office address as shown on the stock book of the Corporation, in the case of a stockholder, or at such person's last known post office address, in the case of a director or officer, or if transmitted to such person at his address as aforesaid by telegram, cablegram, radiogram or similar communication, and such notice shall be deemed to have been given on the day of such deposit or transmittal. 7.12. References. Wherever in these By-laws reference is made ---------- to the Certificate of Incorporation, such reference shall be deemed made to the Certificate of Incorporation (as such term is defined in section 102(c) of the General Corporation Law) of the Corporation, as the same may have been and may be amended, and wherever in these By-laws reference is made to these By-laws, such reference shall be deemed made to the By-laws of the Corporation, as the same may have been -34- and may be amended. Wherever in these By-laws reference is made to the General Corporation Law, such reference shall be deemed made to the General Corporation Law of the State of Delaware, as the same may have been and may be amended. ARTICLE 8 Action by Consent ----------------- 8.1. Board of Directors and Committees. Any action required or --------------------------------- permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if prior to such action a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. 8.2. Stockholders. Any action required or permitted to be ------------ taken at any meeting of the stockholders may be taken without a meeting if all of the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to the action being taken. ARTICLE 9 Amendments ---------- 9.1. General. These By-laws and any provision or provisions ------- thereof may be amended (which amendments may be -35- effected by changing, altering, suspending, repealing, rescinding, revoking or readopting the same, or by substituting new By-laws or provisions therefor, or by adding new By-laws or provisions thereto) and any such amended By-law or By-laws may likewise be amended, at any annual or special meeting of stockholders by the holders of the shares entitled to vote thereat, or at any regular or special meeting of the Board of Directors by a majority of the directors present at the meeting, a quorum being present; provided that no action may be taken under any of the provisions of this Article within sixty (60) days before the day on which an election of directors is to be held which would change the time and place of such election. -36- CERTIFICATION The undersigned, Asst. Secretary of TERRA CHEMICALS INTERNATIONAL, INC., a Delaware corporation, hereby certifies that the foregoing is a true and correct copy of the By-laws of said Corporation in effect on the date of this certification. IN WITNESS WHEREOF I have signed this certificate and affixed the seal of said Corporation hereto this 20th day of July, 1964. /s/ [ILLEGIBLE] --------------------------- Asst. Secretary (Corporate Seal) EX-3.II.(K) 24 dex3iik.txt BYLAWS OF TERRA METHANOL CORPORATION Exhibit 3.ii.(k) BY-LAWS OF TERRA METHANOL CORPORATION A Delaware corporation ARTICLE I --------- OFFICES ------- Section 1. Registered Office. The registered office of the corporation --------- ----------------- in the State of Delaware shall be located at 32 Loockerman Square, Suite L-100, Dover, Delaware, County of Kent. The name of the corporation's registered agent at such address shall be The Prentice-Hall Corporation System, Inc. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such --------- ------------- other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II ---------- MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place and Time of Meetings. An annual meeting of the --------- -------------------------- stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting. Section 2. Special Meetings. Special meetings of stockholders may be --------- ---------------- called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Section 3. Place of Meetings. The board of directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to --------- ------ take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock --------- ----------------- ledger of the corporation shall make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. The holders of a majority of the outstanding shares --------- ------ of capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Section 7. Adjourned Meetings. When a meeting is adjourned to another --------- ------------------ time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. -2- Section 8. Vote Required. When a quorum is present, the affirmative --------- ------------- vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. Voting Rights. Except as otherwise provided by the General --------- ------------- Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of ---------- ------- stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular. Section 11. Action by Written Consent. Unless otherwise provided in the ---------- ------------------------- certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents -3- delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. ARTICLE III ----------- DIRECTORS --------- Section 1. General Powers. The business and affairs of the corporation --------- -------------- shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of directors --------- ----------------------------------- which shall constitute the first board shall be one (1). Thereafter, the number of directors shall be established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of --------- ----------------------- directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships --------- --------- resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. -4- Section 5. Annual Meetings. The annual meeting of each newly elected --------- --------------- board of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the --------- ------------------------- annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president on at least twenty-four (24) hours notice to each director, either personally, by telephone, by mail, or by telegraph. Section 7. Quorum, Required Vote and Adjournment. A majority of the --------- ------------------------------------- total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed --------- ---------- by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may --------- --------------- fix its own rules of procedures and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors ---------- ------------------------ or any committee thereof may participate in and act at any meeting of such board or committee -5- through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of ---------- ------------------------------------------ the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by ---------- ------------------------- the certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. ARTICLE IV ---------- OFFICERS -------- Section 1. Number. The officers of the corporation shall be elected by --------- ------ the board of directors and shall consist of a president, one or more vice-presidents, secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation --------- --------------------------- shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and -6- qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of ------- directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of --------- death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by ------------ the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The President. The President shall be the chief executive ------------- officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these by-laws. Section 7. Vice-president. The vice-pesident, or if there shall be more -------------- than one, the vice-presidents in the order determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these by-laws may, from time to time, prescribe. Section 8. The Secretary and Assistant Secretaries. The secretary shall --------------------------------------- attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary shall have authority to affix the -7- corporate seal to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 9. The Treasurer and Assistant Treasurer. The treasurer shall --------- ------------------------------------- have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. Section 10. Other Officers, Assistant Officers and Agents. Officers, ---------- --------------------------------------------- assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 11. Absence or Disability of Officers. In the case of the ---------- --------------------------------- absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. -8- ARTICLE V --------- INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS ------------------------------------------------- Section 1. Nature of Indemnity. Each person who was or is made a party --------- ------------------- or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so unless prohibited from doing so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding) and such indemnification shall inure to the benefit of his heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Section 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. --------- ------------------------------------------------------- Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty (60) days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty (30) days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its -9- final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Article Not Exclusive. The rights to indemnification and the ------- --------------------- payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain --------- --------- insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in --------- -------- Section 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the --------- -------------------- foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. -10- Section 7. Contract Rights. The provisions of this Article V shall be --------- --------------- deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, --------- ----------------------- references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI ---------- CERTIFICATES OF STOCK --------------------- Section 1. Form. Every holder of stock in the corporation shall be --------- ---- entitled to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares -11- endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new --------- ----------------- certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the --------- --------------------------------------------- corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order --------- -------------------------------------------------- that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statue, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered -12- to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporation action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the --------- --------------------------------------- corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Registered Stockholders. Prior to the surrender to the --------- ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof. Section 7. Subscriptions for Stock. Unless otherwise provided for in the --------- ----------------------- subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII ----------- GENERAL PROVISIONS ------------------ Section 1. Dividends. Dividends upon the capital stock of the corporation, --------- --------- subject to the provisions of the certificate of incorporation, if any, may be declared by the board -13- of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other --------- ------------------------ orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer --------- --------- or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any --------- ----- obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be --------- ----------- fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors shall provide a --------- -------------- corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in --------- -------------------------------------- any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person -14- authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, --------- ------------------------------- in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these by-laws are for --------- ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of ---------- ----------------------- these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII ------------ AMENDMENTS ---------- These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers. -15- EX-3.II.(L) 25 dex3iil.txt BYLAWS OF TERRA NITROGEN CORPORATION Exhibit 3.ii.(1) BY-LAWS OF AGRICULTURAL MINERALS CORPORATION _____________________ ARTICLE I OFFICES SECTION 1. Registered Office. The address of the registered ----------------- office of Agricultural Minerals Corporation (the "Corporation") in the State of ----------- Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. SECTION 2. Other Offices. The Corporation may also have an ------------- office or offices at any other place or places within or without the State of Delaware. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 1. Annual Meetings. The annual meeting of the --------------- stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, either within or without the State of Delaware, on such date and at such hour as shall be fixed by resolution of the Board of Directors of the Corporation (the "Board") and designated in the notice or waiver of notice ----- thereof; provided, however, that no annual meeting of stockholders need be held -------- ------- if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (the "General Corporation Law") to be ----------------------- taken at such annual meeting are taken by written consent in lieu of meeting pursuant to Section 9 hereof. SECTION 2. Special Meetings. A special meeting of the ---------------- stockholders for any purpose or purposes may be called by the Board, the Chairman of the Board, the President or the Secretary of the Corporation or by the recordholders of at 2 least a majority of the shares of common stock of the Corporation issued and outstanding ("Shares") and entitled to vote thereat, to be held at such place, ------ within or without the State of Delaware, on such date and at such hour as shall be designated in the notice or waiver or notice thereof. SECTION 3. Notice of Meetings. Except as otherwise provided by ------------------ law, written notice of each annual or special meeting of stockholders stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is held, shall be given personally or by first class mail to each stockholder entitled to vote at such meeting, not less then 10 nor more than 60 calendar days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the records of the Corporation. If, prior to the time of mailing, the Secretary shall have received from any stockholder entitled to vote a written request that notices intended for such stockholder are to be mailed to some address other than the address that appears on the records of the Corporation, notices intended for such stockholder shall be mailed to the address designated in such request. Notice of a special meeting may be given by the person or persons calling the meeting, or, upon the written request of such person or persons, such notice shall be given by the Secretary of the Corporation on behalf of such person or persons. If the person or persons calling a special meeting of stockholders give notice thereof, such person or persons shall forward a copy thereof to the Secretary. Every request to the Secretary for the giving of notice of a special meeting of stockholders shall state the purpose or purposes of such meeting. SECTION 4. Waiver of Notice. Notice of any annual or special ---------------- meeting of stockholders need not be given to any stockholder entitled to vote at such meeting who files a written waiver of notice with the Secretary, signed by the person entitled to notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any meeting of stockholders need be specified in any written waiver of notice. Attendance of a stockholder at a meeting, in person or by proxy, shall constitute a waiver of notice of such meeting, except as provided by law. SECTION 5. Adjournments. When a meeting is adjourned to another ------------ date, hour or place, notice need not be given of the adjourned meeting if the date, hour and place thereof are announced at the meeting at which the adjournment is taken. If the adjournment is for more then 30 calendar 3 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. At the adjourned meeting any business may be transacted which might have been transacted at the original meeting. SECTION 6. Quorum. Except as otherwise provided by law or the ------ Certificate of Incorporation, whenever a class of stock of the Corporation is entitled to vote as a separate class, or whenever classes of stock of the Corporation are entitled to vote together as a single class, on any matter brought before any meeting of the stockholders, whether annual or special, holders of shares entitled to cast a majority of the votes entitled to be cast by all the holders of the shares of stock of such class voting as a separate class, or classes voting together as a single class, as the case may be, outstanding and entitled to vote thereat, present in person or by proxy, shall constitute a quorum at any such meeting of the stockholders. If, however, such quorum shall not be present or represented at any such meeting of the stockholders, the stockholders entitled to vote thereat may adjourn the meeting from time to time in accordance with Section 5 of this Article II until a quorum shall be present or represented. SECTION 7. Voting. Except as otherwise provided by law or the ------ Certificate of Incorporation, when a quorum is present with respect to any matter brought before any meeting of the stockholders, the vote of the holders of shares entitled to cast a majority of the votes entitled to be cast by all the holders of the shares constituting such quorum shall decide any such matter. SECTION 8. Proxies. Each stockholder entitled to vote at a ------- meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. Such proxy shall be filed with the Secretary before such meeting of stockholders or such corporate action without a meeting, at such time as the Board may require. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. SECTION 9. Stockholders' Consent in Lieu of Meeting. Any action ---------------------------------------- required by the General Corporation Law to be taken at any annual or special meeting of stockholders, and any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the recordholders of Shares having not less than the 4 minimum number of votes necessary to authorize or take such action at a meeting at which the recordholders of all Shares entitled to vote thereon were present and voted. ARTICLE III BOARD OF DIRECTORS SECTION 1. General Powers. The business and affairs of the Corporation -------------- shall be managed by the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation directed or required to be exercised or done by the stockholders. SECTION 2. Number and Term of Office. The number of directors shall be ------------------------- four, or such other number as shall be fixed from time to time by the Board. None of the directors need be stockholders of the Corporation. Directors shall be elected at the annual meeting of the stockholders by the holders of the outstanding shares of Common Stock of the Corporation entitled to vote thereat, and each Director shall hold office until his successor is elected by the holders of the outstanding shares of Common Stock, or until his earlier death or resignation or removal in the manner hereinafter provided. SECTION 3. Resignation, Removal and Vacancies. Any director may resign ---------------------------------- at any time by giving written notice to the Board, the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt by the Corporation thereof; and, unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. Any Director may be removed, with or without cause, at any time by vote of the holders of shares entitled to cast a majority of the votes entitled to be cast by all the holders of the outstanding shares of Common Stock, voting together as a single class, entitled to vote at an election of Directors. Vacancies occurring in the Board and newly created directorships may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director or by the stockholders in the manner set forth in Article II, and each director so chosen shall hold office until the next annual election and until his successor shall be elected and qualified. 5 SECTION 4. Meetings. (a) Annual Meetings. As soon as practicable after -------- --------------- each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 5 of this Article III. (b) Other Meetings. Other meetings of the Board shall be held at such -------------- times as the Board or the Chairman of the Board shall from time to time determine. (c) Notice of Meetings. The Secretary shall give notice to each ------------------ director of each special meeting, which notice shall state the time, place and purpose of such meeting. Notice of each such meeting shall be given to each director prior to such meeting. A waiver of notice by the person entitled thereto, whether before or after the time of any such meeting, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting. (d) Place of Meetings. The Board may hold its meetings at such place ----------------- or places, within or without the State of Delaware, as the Board or the Chairman of the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (e) Quorum and Manner of Acting. One third of the total number of --------------------------- directors (but not less than one) shall constitute a quorum for the transaction of business at any meeting of the Board, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (f) Organization. At each meeting of the Board, one of the following ------------ shall act as chairman of the meeting and preside, in the following order of precedence: (i) the Chairman of the Board; (ii) the President; or (iii) any director chosen by a majority of the directors present. The Secretary or, in the case of his absence, any person (who shall be an Assistant Secretary, if an Assistant Secretary is present) whom the chairman shall appoint shall act as secretary of such meeting and keep the minutes thereof. 6 SECTION 5. Directors' Consent in Lieu of Meeting. Any action required or ------------------------------------- permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if any members of the Board or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee. SECTION 6. Action by Means of Telephone or Similar Communications ------------------------------------------------------ Equipment. Any one or more members of the Board, or of any committee designated - --------- by the Board, may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. ARTICLE IV OFFICERS SECTION 1. Executive Officers. The executive officers of the Corporation ------------------ shall be a Chairman of the Board, a President, a Secretary and a Treasurer and may include one or more Vice Presidents one or more Assistant Secretaries and one or more Assistant Treasurers. Any two or more offices may be held by the same person. SECTION 2. Authority and Duties. All officers, as between themselves and -------------------- the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent not so provided, by resolution of the Board. SECTION 3. Term of Office, Resignation and Removal. All officers shall --------------------------------------- be elected or appointed by, or in such manner as shall be determined by, the Board and shall hold office for such term as may be determined by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. Any officer may resign at any time by given written notice to the Board or to the President or the Secretary of the Corporation, and such resignation shall take effect at the time specified therein or, if the time when it shall become effective is not specified therein, at the time it is accepted by action of the Board. Except as aforesaid, 7 acceptance of such resignation shall not be necessary to make it effective. All officers and agents elected or appointed by the Board shall be subject to removal at any time, with or without cause, by the Board or by the stockholders of the Corporation entitled to vote. SECTION 4. Vacancies. Any vacancy occurring in any office of the --------- Corporation, for any reason, shall be filled by action of the Board. Any officer appointed or elected by the Board to fill any vacancy shall serve only until such time as the unexpired term of his predecessor expires unless reelected or reappointed by the Board. SECTION 5. Chairman of the Board. The Chairman of the Board shall have --------------------- the power to call special meetings of the stockholders, to call special meetings of the Board and to preside at all meetings of the stockholders and all meetings of the Board. SECTION 6. President. The President shall be the chief executive officer --------- of the Corporation and shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board, and shall see that all orders and resolutions of the Board are carried into effect. SECTION 7. Vice President. Vice Presidents, if any, in order of their -------------- seniority or in any other order determined by the Board, shall generally assist the President and perform such other duties as the Board or the President shall prescribe, and in the absence or disability of the President, perform the duties and exercise the powers of the President. SECTION 8. Treasurer. The Treasurer, if any, shall have the care and --------- custody of all the funds of the Corporation and shall deposit the same in such banks or other depositories as the Board, or any officer or officers, or any officer and agent jointly, duly authorized by the Board, shall, from time to time, direct or approve. He shall disburse the funds of the Corporation under the direction of the Board, the Chairman of the Board or the President. He shall keep a full and accurate account of all moneys received and paid on account of the Corporation and shall render a statement of his accounts whenever the Board shall require. He shall perform all other necessary acts and duties in connection with the administration of the financial affairs of the Corporation and shall generally perform all the duties usually appertaining to the office of treasurer of a corporation. 8 SECTION 9. Assistant Treasurers. Assistant Treasurers, if any, in order -------------------- of their seniority or in any other order determined by the Board, shall generally assist the Treasurer and perform such other duties as the Board or the Treasurer shall prescribe, and, in the absence or disability of the Treasurer, shall perform the duties and exercise the powers of the Treasurer. SECTION 10. Secretary. The Secretary shall, to the extent practicable, --------- attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for any standing committees when required. He shall give or cause to be given notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or the Board. SECTION 11. Assistant Secretaries. Assistant Secretaries, if any, in --------------------- order of their seniority or in any other order determined by the Board, shall generally assist the Secretary and perform such other duties as the Board or the Secretary shall prescribe, and, in the absence or disability of the Secretary, shall perform the duties and exercise the powers of the Secretary. SECTION 12. Compensation. The Board shall have the power to fix the ------------ compensation of all officers of the Corporation. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. SECTION 1. Execution of Documents. The Board shall designate the ---------------------- officers, employees and agents of the Corporation who shall have power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts, and other orders for the payment of money and other documents for and in the name of the Corporation, and each such officer, employee and agent, without further action by 9 the Board, may delegate such power (including authority to redelegate) by any means, written on oral, to other officers, employees or agents of the Corporation; and, unless so designated or expressly authorized by these By-laws, no officer or agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable pecuniarily for any purposes or to any amount. SECTION 2. Deposits. All funds of the Corporation not otherwise employed -------- shall be deposited from time to time to the credit of the Corporation or otherwise as the Board, or any officer of the Corporation to whom power in this respect shall have been give by the Board, shall direct. SECTION 3. Proxies in Respect of Stock or Other Securities of Other -------------------------------------------------------- Corporation. The Board shall designate the officers of the Corporation who shall - ----------- have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights that the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent in respect of such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise such powers and rights. ARTICLE VI SHARES AND TRANSFER OF SHARES SECTION 1. Certificates for Shares. Every owner of shares of stock of ----------------------- the Corporation shall be entitled to have a certificate certifying the number and class of shares of stock of the Corporation owned by him, which certificate shall be in such form as may be prescribed by the Board. Certificates shall be issued in consecutive order and shall be numbered in the order of their issue, and shall be signed by or in the name of, the Corporation by the President or a Vice President and by the Secretary, Treasurer or an Assistant Secretary. SECTION 2. Stock Ledger. A stock ledger in one or more counterparts ------------ shall be kept, in which shall be recorded the name of each person, firm or corporation owning the shares evidence by each certificate for stock of the Corporation issued, the number of shares of stock evidenced 10 by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock ledger of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. SECTION 3. Transfer of Stock. (a) The transfer of shares of stock and ----------------- the certificates evidencing such shares of stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time. (b) Registration of transfers of shares of stock of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares of stock properly endorsed or accompanied by a stock power duly executed. SECTION 4. Addresses of Stockholders. Each stockholder shall designate to ------------------------- the Secretary of the Corporation an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to so designate such an address, corporate notices may be served upon him by mail directed to him at his post office address, if any, as the same appears on the share record books of the Corporation or at his last known post office address. SECTION 5. Lost, Destroyed and Mutilated Certificates. A holder of any ------------------------------------------- shares of stock of the Corporation shall promptly notify the Corporation of any loss, destruction or mutilation of any certificate or certificates evidencing all or any such shares of stock. The Board may, in its discretion, cause the Corporation to issue a new certificate in place of any certificate theretofore issued by it and alleged to have been mutilated, lost, stolen or destroyed, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond sufficient to indemnify the Corporation against any claim made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. SECTION 6. Regulations. The Board may make such rules and regulations as ----------- it may deem expedient, not inconsistent with these By-laws, concerning the issue, 11 transfer and registration of certificates for stock of the Corporation. ARTICLE VII SEAL The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation and the words and figures "CORPORATE SEAL 1990 DELAWARE". ARTICLE VIII FISCAL YEAR The fiscal year of the Corporation shall end on June 30 of each year, unless changed by resolution of the Board. EX-3.II.(M) 26 dex3iim.txt BYLAWS OF TERRA REAL ESTATE CORP. Exhibit 3.ii.(m) BY-LAWS OF TERRA REAL ESTATE CORPORATION ARTICLE I OFFICES The principal office of the corporation in the State of Iowa shall be located in the City of Sioux City, Woodbury County. The corporation may have such other offices, within or without the State of Iowa, as the business of the corporation may require from time to time. The registered office of the corporation required by the Iowa Business Corporation Act to be continuously maintained in Iowa shall be initially as provided in the Articles of Incorporation subject to change from time to time by resolution of the Board of Directors and filing of statement of said change as required by the Iowa Business Corporation Act. ARTICLE II SHAREHOLDERS SECTION 1. ANNUAL MEETING. The annual meeting of shareholders shall be held at such hour and on such business day in April or May as the Board of Directors shall by resolution specify. At each annual meeting the election of the directors shall take place and such other business shall be transacted as may be properly presented to such meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a meeting of the shareholders as soon thereafter as conveniently may be. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be called by the President, by the Board of Directors or by the holders of not less than one-tenth of all the shares entitled to vote at the meeting. SECTION 3. PLACE OF MEETING. The Board of Direc- tors may designate any place, either within or without the State of Iowa, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders may designate any place, either within or without the State of Iowa, as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the registered office of the corporation in the State of Iowa. SECTION 4. NOTICE OF MEETINGS. Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. SECTION 5. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purposes, the Board of Directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, fifty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders, entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. 2 When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof. SECTION 6. VOTING LIST. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of shareholders, a complete record of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which record, for a period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation, and shall be subject to inspection by any shareholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to who are the shareholders entitled to examine such record or transfer books or to vote at any meeting of shareholders. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting. SECTION 7. QUORUM OF SHAREHOLDERS. A majority of shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Iowa Business Corporation Act, the Articles of Incorporation or the Bylaws. SECTION 8. PROXIES. At all meetings of the shareholders, a shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. SECTION 9. VOTING OF SHARES. Subject to the provisions of Section 10 of this Article, each outstanding share of stock shall be entitled to one vote upon each matter submitted to vote at a meeting of the shareholders. SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Treasury shares shall not be voted at any meeting or counted in determining the total number of outstanding shares at any given time. 3 Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the By-laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. SECTION 11. INFORMAL ACTION BY SHAREHOLDERS. Any action required by the Iowa Business Corporation Act to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of shareholders, may be taken without a meeting if a consent in writing setting forth the action so taken, shall be signed by all the shareholders entitled to vote with respect to the subject matter thereof. SECTION 12. VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the presiding officer shall order or any shareholder shall demand that voting be by ballot. SECTION 13. INSPECTORS OR JUDGES. The Board of Directors, in its discretion, in advance of any meeting of shareholders, may appoint one or more inspectors or judges to act at such meeting or any adjournment thereof. If the inspectors or judges shall not be so appointed, or if any of them shall fail to appear or act, the 4 chairman of such meeting shall appoint the inspectors or judges, or such substitute or substitutes therefor, as the case may be. Such inspectors or judges, before entering on the discharge of their duties, shall take and sign an oath or affirmation faithfully to execute the duties of inspectors or judges at meetings for which they are appointed. At such meeting, the inspectors or judges shall receive and take charge of the proxies and ballots, decide all questions relating to the qualification of voters, and the validity of proxies, and the acceptance or rejection of votes. An inspector or judge need not be a shareholder of the corporation, and any officer of the corporation may be an inspector or judge on any question other than a vote for or against a proposal in which he shall have a material interest. ARTICLE III DIRECTORS SECTION 1. GENERAL POWERS. The business and affairs of the corporation shall be managed by its Board of Directors. SECTION 2. NUMBER AND ELECTION OF DIRECTORS. The number of directors shall be four (4) but such number may be increased or decreased as provided herein without action of the shareholders. The Board of Directors may increase or decrease the number of directors by amendment to these By-laws. Any increase in the size of the Board of Directors shall create a vacancy which may be filled immediately by the existing directors without any vote of the shareholders. No decrease in the number of directors shall have the effect of shortening the term of office of any incumbent director. At the first annual meeting of shareholders and at each annual meeting thereafter, the shareholders shall elect directors to hold office until the next succeeding annual meeting, and each director shall hold office for the term for which he is elected and until his successor shall have been elected and qualified. SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without other notice than this By-law, immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide by resolution the time and place, either within or without the State of Iowa, for the holding of additional regular meetings without other notice than such resolution. 5 SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the President, or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Iowa, as the place for holding any special meeting of the Board of Directors called by them. SECTION 5. NOTICE. Notice of any special meeting shall be given at least three (3) days previous thereto by written notice delivered personally or mailed to each director at his business address, or by telegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed and postage prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. A majority of the number of the directors fixed by the By-laws shall constitute a quorum for the transaction of business; provided, that if less than a majority of such number of directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors except to the extent otherwise provided in the Articles of Incorporation of these By-laws. SECTION 8. VACANCIES. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, if any. SECTION 9. COMPENSATION. The Board of Directors, by the affirmative vote of a majority of the directors then 6 in office, and irrespective of any personal interest of its members, shall have authority to establish reasonable compensation of all directors or other persons for services to the corporation as directors, officers or otherwise. By resolution of the Board of Directors the directors may be paid their expenses, if any, of attendance at each meeting of the Board. SECTION 10. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of its Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as secretary of the meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 11. INFORMAL ACTION BY DIRECTORS. Any action required by the Iowa Business Corporation Act to be taken at a meeting of directors of the corporation, or any action which may be taken at a meeting of the directors or of a committee of directors, may be taken without a meeting if a consent in writing setting forth the action so taken, shall be signed by all of the directors or all of the members of the Committee of directors, as the case may be. SECTION 12. RESIGNATION. Any director may resign at any time by giving written notice of his resignation to the President or the Secretary. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective shall not be specified therein, it shall take effect immediately upon its receipt. Except as specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 13. REMOVAL OF DIRECTORS. Any or all directors may be removed with or without cause, at a meeting called expressly for that purpose by a vote of the holders of a majority of the shares entitled to vote at an election of directors; and the vacancy on the Board of Directors caused by any such removal may be filled by the shareholders at such meeting or otherwise as provided in Section 8 of this Article. 7 SECTION 14. CONFERENCE TELEPHONE MEETINGS. Subject to other applicable provisions of this Article and to Article X, any action required by the Iowa Business Corporation Act to be taken at a meeting of directors of the corporation, or any action which may be taken at a meeting of the directors or a committee of directors, may be taken by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and the participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. SECTION 15. EXECUTIVE COMMITTEE. The Board of Directors may by resolution create an executive Committee, and one or more other committees from among its members, each of which to the extent provided in such resolution or in the Articles of Incorporation or these By-laws, shall have and may exercise all of the authority of the Board of Directors, but no such committee shall have the authority of the Board of Directors in reference to amending the Articles of Incorporation, adopting a plan of merger or consolidation, recommending to the shareholders the sale, lease, exchange or other disposition of all or substantially all the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the corporation or a revocation thereof, or amending the By-laws of the corporation. The designation of any such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. ARTICLE IV OFFICERS SECTION 1. NUMBER. The officers of the corporation shall consist of a President, one or more Vice-Presidents, a Secretary and a Treasurer, and such Assistant Treasurers, Assistant Secretaries, or other officers, if any, as may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the Board of Directors at the first meeting of the Board of 8 Directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected and qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Election or appointment of an officer or agent shall not of itself create contract rights. SECTION 3. REMOVAL. Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. SECTION 5. THE PRESIDENT. The President shall be the principal executive officer of the corporation and shall in general supervise and control all of the business and affairs of the corporation, subject to the general powers of the Board of Directors, He shall preside at all meetings of the shareholders and of the Board of Directors. He may sign, with the Secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation, deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed. In general he shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. SECTION 6. THE VICE PRESIDENT(S). In the absence of the President or in the event of his inability or refusal to act, the Vice President, (or in the event there be more than one Vice President, the Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the 9 President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors. SECTION 7. THE TREASURER. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation; and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of Article V of these By-laws. He shall in general perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. SECTION 8. THE SECRETARY. The Secretary shall keep the minutes of the shareholders and of the Board of Directors meetings in one or more books provided for that purpose; see that all notices are duly given in accordance with the provisions of these By-laws or as required by law; be custodian of the corporate records; keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; sign with the President or a Vice President, certificates for shares of the corporation, the issue of which shall have been authorized by resolution of the Board of Directors; have general charge of the stock transfer books of the corporation; and in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Any Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. Any Assistant Secretaries as thereunto authorized by the Board of Directors may sign with the President or a Vice President certificates for shares of the Corporation. The 10 Assistant Treasurers and Assistant Secretaries, in general, shall perform such duties as shall be assigned to them by the Treasurer or the Secretary, respectively, or by the President or the Board of Directors. SECTION 10. SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS SECTION 1. CONTRACTS. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidence of indebtedness of the Board of Directors. Such authority may be general or confined to specific instances. SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation, and in such manner as shall from time to time be determined by resolution of the Board of Directors. SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositaries as the Board of Directors may select. ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. CERTIFICATES FOR SHARES. Subject to the provisions of Section 22 of the Iowa Business Corporation Act, certificates representing shares of the corporation shall be in such form as may be determined by the Board of Directors. Such certificates shall be signed by the President or a Vice President and the Secretary or an Assistant Secretary of the corporation and shall be sealed with the seal of the corporation or a facsimile thereof. The signatures of the President or Vice President and the Secretary or Assistant Secretary upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. SECTION 2. TRANSFERS OF SHARES. Subject to the rights conferred by the Code of Iowa, transfers of shares of the corporation shall be made only on the books of the corporation by the holder of record thereof, or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, and only on surrender for cancellation of the certificate for such shares. Except as otherwise provided by law, the person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall begin on the first day of January in each year and shall end on the last day of December in each year. ARTICLE VIII DIVIDENDS The Board of Directors may, from time to time, declare and the corporation may pay dividends on its out- standing shares in the manner and upon the terms and conditions provided by the Iowa Business Corporation Act, and the Articles of Incorporation. ARTICLE IX SEAL The Board of Directors may adopt a corporate seal which shall be in the form of a circle and shall bear the full name of the corporation, the year of its incorporation and the word "Iowa." ARTICLE X WAIVER OF NOTICE Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of the Iowa Business Corporation Act or under the provisions of the Articles of Incorporation or By-laws of the corporation, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. ARTICLE XI AMENDMENTS These By-laws may be altered, amended or repealed and new By-laws may be adopted at any meeting of the Board of Directors of the corporation at which a quorum is present, by a majority vote of the directors present at the meeting. ARTICLE XII VOTING OF STOCK IN OTHER CORPORATIONS In the absence of a resolution of the Board of Directors to the contrary, the President or the Vice President of this corporation is authorized and empowered to act for and on behalf of the corporation by attending meetings, voting shares, executing proxies, waiving notice, executing any formal consent, or taking similar or related actions, all respecting stock of other corporations which is owned by the corporation, all without further authority than as herein 13 contained. The Board of Directors may, in its discretion, designate any officer or person as a proxy or attorney-in-fact to vote the shares of stock in any other corporation in which this corporation may own or hold shares of stock. ARTICLE XIII INDEMNIFICATION Any person who is or was an officer, director, employee or agent of this corporation, or is or was serving at the request of this corporation as an officer, director, employee or agent of another corporation, partnership, joint venture, trust or enterprise, shall be entitled to indemnification by this corporation to the extent the same is permitted or required pursuant to the provisions of the Iowa Business Corporation Act. ARTICLE XIV RESTRICTION ON SALE OF STOCK The corporation shall have a lien on the stock of any shareholder for any debts due from said shareholder to the corporation, and, further, the sale and transfer of the stock of the corporation shall at all times be subject to the provisions of any stockholders' agreements and the officers or directors of the corporation shall have no authority to effect any transfer of stock contrary to the provisions of any such shareholders' agreements. ARTICLE XV CONFLICT BETWEEN BY-LAWS AND SHAREHOLDERS' AGREEMENTS That in the event any conflict exists between the provisions of the By-laws of the corporation and the provisions of a shareholders' agreement duly executed by all of the owners of the stock of the corporation, the provisions of such shareholders' agreement shall always take precedence and be controlling where any such conflict exists. 14 EX-5.I.(A) 27 dex5ia.txt OPINION OF KIRKLAND & ELLIS EXHIBIT 5.1 [LETTERHEAD OF KIRKLAND & ELLIS] , 2002 Terra Capital, Inc. and each of the Guarantors of the Exchange Notes Terra Centre 600 Fourth Street, P.O. Box 6000 Sioux City, Iowa 51102 Re: Registration Statement on Form S-4, Registration No. 333-73198 -------------------------------------------------------------- Ladies and Gentlemen: We are issuing this opinion letter in our capacity as special legal counsel to Terra Capital, Inc., a Delaware corporation (the "Issuer"), and each of the other guarantors listed on Schedule A hereto (such guarantors are hereinafter referred to as the "Guarantors" and the Guarantors, together with the Issuer, are hereinafter referred to as the "Registrants"), in connection with the proposed registration by the Issuer of $200,000,000 in aggregate principal amount of the Issuer's 12 7/8% Senior Secured Notes due 2008, Series B (the "Exchange Notes"), pursuant to a Registration Statement on Form S-4 (Registration No. 333-73198) originally filed with the Securities and Exchange Commission (the "Commission") on November 13, 2001, under the Securities Act of 1933, as amended (the "Act") (such Registration Statement, as amended or supplemented, is hereinafter referred to as the "Registration Statement"). The obligations of the Issuer under the Exchange Notes will be guaranteed by the Guarantors (the "Guarantees"). The Exchange Notes and the Guarantees are to be issued pursuant to the Indenture (as amended and supplemented from time to time, the "Indenture"), dated as of October 10, 2001, between the Issuer, the Guarantors and US Bank Trust National Association, as trustee. The Exchange Notes and the Guarantees are to be issued in exchange for and in replacement of the Issuer's outstanding 12 7/8% Senior Secured Notes due 2008 (the "Old Notes"), of which $200,000,000 in aggregate principal amount is outstanding. In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion, including (i) the Articles of Incorporation and By-Laws of the Registrants, (ii) minutes and records of the corporate proceedings of the Registrants with respect to the issuance of the Exchange Notes and the Guarantees, (iii) the Indenture, and (iv) the Registration Statement. KIRKLAND & ELLIS Terra Capital, Inc. , 2002 Page 2 For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto other than the Registrants and the due authorization, execution and delivery of all documents by the parties thereto other than the Registrants. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Registrants and others. Our opinion expressed below is subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of (i) any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other similar law affecting the enforcement of creditors' rights generally, (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and (iii) public policy considerations which may limit the rights of parties to obtain certain remedies. Based upon and subject to the assumptions, qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that when (i) the Registration Statement becomes effective, (ii) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, and (iii) the Exchange Notes have been duly executed and authenticated in accordance with the provisions of the Indenture and duly delivered to the holders thereof in exchange for the Old Notes, the Exchange Notes and the Guarantees will be validly issued and binding obligations of the Issuer and Guarantors, respectively. We hereby consent to the filing of this opinion with the commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the heading "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission. Our advice on every legal issue addressed in this letter is based exclusively on the internal law of the State of New York, the General Corporation Law of the State of Delaware and the Delaware case law decided thereunder or the federal law of the United States, except that for purposes of our opinion that the Exchange Notes and Guarantees will be validly issued and binding obligations of the Issuer and the Guarantors, respectively, we have concluded the Indenture has been duly authorized, executed and delivered and the Exchange Notes and Guarantees have been duly KIRKLAND & ELLIS Terra Capital, Inc. , 2002 Page 3 authorized by the Issuer and the Guarantors, respectively, based solely on a review of the applicable state corporate statutes of the States of Iowa (with respect to Terra Real Estate Corp.) and Maryland (with respect to Terra Industries Inc.). We note that we are not admitted to practice in the States of Iowa and Maryland and, as such, our conclusions as to due authorization, execution and delivery are based solely on our review of the provisions of the above referenced state corporate statutes as such statutes relate to the Registrants without regard to regulations promulgated thereunder or any judicial interpretations thereof. This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. We assume no obligation to revise or supplement this opinion should the present laws of the States of New York or Delaware or the federal law of the United States be changed by legislative action, judicial decision or otherwise. This opinion is furnished to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose. Sincerely, /s/ KIRKLAND & ELLIS Kirkland & Ellis KIRKLAND & ELLIS Terra Capital, Inc. , 2002 Page 4 SCHEDULE A ---------- Beaumont Ammonia Inc. Beaumont Holdings Corporation BMC Holdings Inc. Port Neal Corporation Terra (UK) Holdings Inc. Terra Capital Holdings, Inc. Terra Industries Inc. Terra International (Oklahoma) Inc. Terra International Inc. Terra Methanol Corporation Terra Nitrogen Corporation Terra Real Estate Corp. EX-12 28 dex12.txt RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12 TERRA INDUSTRIES INC.
RATIO OF EARNINGS TO FIXED CHARGES (Amounts in Thousands, Except Ratio) - ------------------------------------------------------------------------------------------------------------------------------------ Nine Months Ended Year Ended December 31, September 30, --------------------------------------------------------------- ----------------------- 1996 1997 1998 1999 2000 2000 2001 EARNINGS BEFORE INCOME TAXES $ 166,938 $ 284,377 $ (68,092) $ (116,098) $ (16,182) $ (17,814) $ (72,801) Minority interest 44,485 27,633 27,510 8,341 5,379 5,360 (2,468) Equity investee income (491) (1,380) (1,236) (787) (843) (548) (547) Distributed income of equity investees 600 1,700 1,180 950 800 - - Preference security dividend (53,493) (34,402) (17,175) - (1,119) - (2,028) --------- --------- --------- ---------- --------- --------- --------- 158,039 277,928 (57,813) (107,594) (11,965) (13,002) (77,844) FIXED CHARGES: Interest expense 43,623 48,400 51,122 53,076 51,511 38,684 37,857 Preference security dividend 53,493 34,402 17,175 - 1,119 - 2,028 Deferred finance amortization 1,671 1,699 2,994 1,232 1,155 462 2,528 Bond discounts 22 22 22 22 22 16 7 Estimated interest expense component of operating leases 5,394 6,531 6,864 6,798 5,940 4,583 3,488 --------- --------- --------- ---------- --------- --------- --------- Total fixed charges 104,203 91,054 78,177 61,128 59,747 43,745 45,908 --------- --------- --------- ---------- --------- --------- --------- EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $ 262,242 $ 368,982 $ 20,364 $ (46,466) $ 47,782 $ 30,743 $ (31,936) ========= ========= ========= ========== ========= ========= ========= RATIO OF EARNINGS TO FIXED CHARGES 2.52X 4.05X - - - - - DEFICIENCY $ - $ - $ (57,813) $ (107,594) $ (11,965) $ (13,002) $ (77,844)
TERRA CAPITAL, INC. RATIO OF EARNINGS TO FIXED CHARGES - PRO FORMA (Amounts in Thousands, Except Ratio) - -------------------------------------------------------------------------------- Nine Months Year Ended Ended December 31, September 30, 2000 2001 PRO FORMA EARNINGS BEFORE INCOME TAXES $ 3,944 $(57,425) Minority interest 5,379 (2,468) Equity investee income (843) (547) Distributed income of equity investees 800 - Preference security dividend (1,119) (2,028) --------- -------- 8,161 (62,468) PRO FORMA FIXED CHARGES: Interest expense 32,603 25,717 Preference security dividend 1,119 2,028 Deferred finance amortization 1,400 1,050 Bond discounts 22 7 Estimated interest expense component of operating leases 5,940 3,488 --------- -------- Total fixed charges 41,084 32,290 --------- -------- PRO FORMA EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $ 49,245 $(30,178) ========= ======== PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES 1.20X - PRO FORMA DEFICIENCY $ - $(62,468) TERRA INDUSTRIES INC. RATIO OF EARNINGS TO FIXED CHARGES - PRO FORMA (Amounts in Thousands, Except Ratio) - -------------------------------------------------------------------------------- Year Ended Nine Months December 31, Ended September 30, 2000 2001 PRO FORMA EARNINGS BEFORE INCOME TAXES $(18,519) $(74,933) Minority interest 5,379 (2,468) Equity investee income (843) (547) Distributed income of equity investees 800 - Preference security dividend (1,119) (2,028) -------- -------- (14,302) (79,976) PRO FORMA FIXED CHARGES: Interest expense 53,603 41,467 Preference security dividend 1,119 2,028 Deferred finance amortization 1,400 1,050 Bond discounts 22 7 Estimated interest expense component of operating leases 5,940 3,488 -------- -------- Total fixed charges 62,084 48,040 -------- -------- PRO FORMA EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $ 47,782 $(31,936) ======== ======== PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES - - PRO FORMA DEFICIENCY $(14,302) $(79,976) EX-23 29 dex23.txt CONSENT OF DELOITTE & TOUCHE LLP Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Pre-Effective Amendment No. 1 to Registration Statement No. 333-73198 of Terra Capital, Inc. on Form S-4 of our report dated January 25, 2001, on our audit of the consolidated financial statements of Terra Industries Inc. as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, appearing in the Prospectus, which is part of this Registration Statement, and of our report dated January 25, 2001 relating to the financial statement schedules in the Annual Report on Form 10-K of Terra Industries Inc. for the year ended December 31, 2000, incorporated by reference in this Registration Statement. We consent to the incorporation by reference in this Pre-Effective Amendment No. 1 to Registration Statement No. 333-73198 of Terra Capital, Inc. on Form S-4 of our report dated January 25, 2001, appearing in the Annual Report on Form 10-K of Terra Nitrogen Company, L.P. for the year ended December 31, 2000. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Omaha, Nebraska January 14, 2002 EX-25 30 dex25.txt STATEMENT OF ELIGIBILITY OF TRUSTEE - FORM T-1 Exhibit 25 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2)___ _______________________________________________________ U.S. BANK NATIONAL ASSOCIATION (Exact name of Trustee as specified in its charter) 31-0841368 I.R.S. Employer Identification No. 601 Second Avenue South Minneapolis, MN 55402 (Address of principal executive offices) (Zip Code) Richard H Prokosch U.S. Bank National Association 180 East Fifth Street St. Paul, MN 55101 (Name, address and telephone number of agent for service) TERRA CAPITAL, INC. (Exact name of Registrant as specified in its charter) Delaware 42-1431650 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) Terra Centre 600 Fourth Street, P.O. Box 600 Sioux City, IA 51102 (Address of Principal Executive Offices) (Zip Code) 12.875% Senior Secured Notes due 2008 (Title of the Indenture Securities) ================================================================================ FORM T-1 -------- Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee. a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency Washington, D.C. b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the \ Trustee, describe each such affiliation. None Items 3-15 Items 3-15 are not applicable because to the best of the Trustee's knowledge the obligor is not in default under any Indenture for which the Trustee acts as Trustee. Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification. 1. A copy of the Articles of Association of the Trustee now in effect, attached as Exhibit 1. 2. A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2. 3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3. 4. A copy of the existing bylaws of the Trustee, as now in effect, attached as Exhibit 4. 5. A copy of each Indenture referred to in Item 4. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6. 7. Report of Condition of the Trustee as of June 30, 2001, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7. 2 NOTE The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 13th day of November, 2001. U.S. BANK NATIONAL ASSOCIATION By: /s/ Richard H Prokosch --------==------------------------------- Richard H Prokosch Vice President By: /s/ Julie Eddington ------------------- Julie Eddington Assistant Vice President 3 Exhibit 1 --------- U.S. BANK NATIONAL ASSOCIATION (FORMERLY NAMED FIRSTAR BANK, NATIONAL ASSOCIATION) CHARTER NO. 24 AMENDED AND RESTATED ARTICLES OF ASSOCIATION ----------------------- These Amended and Restated Articles of Association supersede the Articles of Association of Firstar Bank, National Association, being renamed U.S. Bank National Association (the "Association"), heretofore in effect. FIRST: The title of the Association shall be "U.S. Bank National ----- Association." SECOND: The main office of the Association shall be in the City of ------ Cincinnati, County of Hamilton, State of Ohio. The general business of the Association shall be conducted at its main office and its branches. THIRD: The Board of Directors of the Association shall consist of not less ----- than five (5) nor more than twenty-five (25) shareholders, the exact number of Directors within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by resolution of the shareholders at any annual or special meeting thereof. Unless otherwise provided by the laws of the United States, any vacancy in the Board of Directors for any reason, including an increase in the number thereof, may be filled by action of the Board of Directors. FOURTH: The annual meeting of the shareholders for the election of ------ Directors and the transaction of whatever other business may be brought before said meeting shall be held at the main office or such other place as the Board of Directors may designate, on the day of each year specified thereof by the Bylaws, but if no election is held on that day, it may be held on any subsequent day according to the provisions of law; and all elections shall be held according to the provisions of law; and all elections shall be held according to such lawful regulations as may be prescribed by the Board of Directors. FIFTH: The aggregate number of shares of common stock that the Association ----- has authority to issue is 3,640,000, all of which are of one class only, each such share having a par value of $5.00 (the "Common Stock"). The Association shall also have authority to issue 2,411,935 shares of preferred stock, without par value (the "Preferred Stock"). No holder of shares of the capital stock of any class of the Association shall have any pre-emptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association issued or sold, nor any right of subscription to any thereof other than such, if any, as the Board of Directors, in its discretion, may from time to time determine and at such price as the Board of Directors may from time to time fix. 4 The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Section 5.01. Series A Preferred Stock. Pursuant to the provisions of this ------------------------ Article Fifth, a series of Series A Non-Cumulative Preferred Stock, consisting of one hundred sixty-seven thousand (167,000) shares, is hereby established and authorized to be issued, and in addition to such matters specified elsewhere in this Article Fifth, such Series A Non-Cumulative Preferred Stock shall have the following powers, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions: (a) Designation and Amount. The shares of Preferred Stock shall be ---------------------- designated as the Series A Non-Cumulative Preferred Stock (the "Series A Preferred Stock"), and the number of shares constituting the Series A Preferred Stock shall be one hundred sixty-seven thousand (167,000). The liquidation preference of the Series A Preferred Stock shall be $1,000 per share (the "Series A Liquidation Value"). (b) Rank. The Series A Preferred Stock shall, with respect to dividend ---- rights and upon liquidation, dissolution and winding up of the Association, rank (i) senior to all classes and series of Common Stock of the Association and to all classes and series of capital stock of the Association now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series A Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association, or which do not specify their rank (collectively with the Common Stock, the "Series A Junior Securities"); (ii) on a parity with the Series B Preferred Stock and the Series C Preferred Stock and each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank on a parity with the Series A Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively with the Series B Preferred Stock and the Series C Preferred Stock, the "Series A Parity Securities"); and (iii) junior to each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank senior to the Series A Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively, the "Series A Senior Securities"). (c) Dividends. Dividends are payable on the Series A Preferred Stock as --------- follows: (i) The holders of shares of the Series A Preferred Stock in preference to the Series A Junior Securities shall be entitled to receive, out of funds legally available for that purpose, and when, as, and if declared by the Board of Directors of the Association, dividends payable in cash at the annual rate of eight percent (8%) of the Series A Liquidation Value (the "Series A Dividend Rate"). (ii) Dividends on the Series A Preferred Stock shall be non-cumulative. Dividends not paid on any Series A Dividend Payment Date shall not accumulate thereafter. Dividends shall accumulate from the first day of any Series A Dividend Period to but excluding the immediately succeeding Series A Dividend Payment Date. Dividends, if and when declared, shall be payable in arrears in cash on each Series A Dividend Payment Date of each year with respect to the Series A Dividend Period ending 5 on the day immediately prior to such Series A Dividend Payment Date at the Series A Dividend Rate to holders of record at the close of business on the applicable Record Date, commencing on December 31, 2000 with respect to any shares of Series A Preferred Stock issued prior to that Series A Dividend Payment Date; provided that dividends payable on the Series A Preferred Stock on the Series A Dividend Payment Date immediately following the first Series A Dividend Period following the Issue Date (and any dividend payable for a period less than a full semiannual period) shall be prorated for the period and computed on the basis of a 360-day year of twelve 30-day months and the actual number of days in such Series A Dividend Period; and provided, further, that dividends payable on the Series A Preferred Stock on the Series A Dividend Payment Date immediately following the first Series A Dividend Period following the Issue Date shall include any accumulated and unpaid dividends on the Realty Company Series B Exchangeable Stock exchanged for the Series A Preferred Stock as of the Exchange Date for the then current dividend period. Dividends on such Series A Preferred Stock shall be paid only in cash. (iii) No dividends on shares of Series A Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Board of Directors or paid or set apart for payment by the Association if such declaration or payment shall be restricted or prohibited by law. (iv) Holders of shares of Series A Preferred Stock shall not be entitled to any dividends in excess of full dividends declared, as herein provided, on the shares of Series A Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment on the shares of Series A Preferred Stock that may be in arrears. (v) (A) So long as any shares of Series A Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Series A Junior Securities and other than as provided in clause (B) below) shall be declared, paid or set aside for payment or other distribution upon any Series A Junior Securities or any other Series A Parity Securities, nor shall any shares of any Series A Junior Securities or any other Series A Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or set aside or made available for a sinking fund for the redemption of any shares of any such stock) by the Association (except by conversion into or exchange for shares of, or options, warrants or rights to subscribe for or purchase, Series A Junior Securities) unless, in each case, the full dividends on all outstanding shares of the Series A Preferred Stock shall have been declared and paid, when due, for the Series A Dividend Period, if any, terminating on or immediately prior to the date of payment in respect of such dividend, distribution, redemption, purchase or acquisition. (B) When dividends for any Series A Dividend Period are not paid in full, as provided in clause (A) above, on the shares of the Series A Preferred Stock or any other Series A Parity Securities, dividends may be declared and paid on any such shares for any dividend period therefor, but only if such dividends are declared and paid pro rata so that the amount of dividends declared and paid per share on the shares of the Series A Preferred Stock and any other Series A Parity Securities, in all cases shall bear to each other the same ratio that the amount of unpaid dividends per share on the shares of the 6 Series A Preferred Stock for such Series A Dividend Period and such other Series A Parity Securities for the corresponding dividend period bear to each other. (d) Liquidation Preference. ---------------------- (i) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Association, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Association available for distribution to its shareholders an amount in cash equal to the Series A Liquidation Value for each share outstanding, plus an amount in cash equal to all unpaid dividends thereon for the then current Series A Dividend Period, whether or not earned or declared, before any payment shall be made or any assets distributed to the holders of Series A Junior Securities. If the assets of the Association are not sufficient to pay in full the liquidation payments payable to the holders of outstanding shares of the Series A Preferred Stock and any Series A Parity Securities, then the holders of all such shares shall share ratably in such distribution of assets in accordance with the amount which would be payable on such distribution if the amounts to which the holders of outstanding shares of Series A Preferred Stock and the holders of outstanding shares of such Series A Parity Securities are entitled were paid in full. (ii) For the purpose of this Section 5.01(d), neither the voluntary sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Association, nor the consolidation or merger of the Association, shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Association, unless such voluntary sale, conveyance, exchange or transfer shall be in connection with a plan of liquidation, dissolution or winding up of the Association. (e) Redemption. The Series A Preferred Stock is not redeemable prior ---------- to December 31, 2021. On or after such date, the Series A Preferred Stock shall be redeemable, in whole or in part, at the option of the Association, but with the consent of the Comptroller of the Currency and any other appropriate regulatory authorities, if required, for cash out of any source of funds legally available, at a redemption price equal to 100% of the Series A Liquidation Value per share plus unpaid dividends thereon accumulated since the immediately preceding Series A Dividend Payment Date (the "Series A Redemption Price"). Any date of such redemption is referred to as the "Series A Redemption Date." If fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed, the Association will select those to be redeemed by lot or pro rata or by any other method as may be determined by the Board of Directors to be equitable. The Series A Preferred Stock is not subject to any sinking fund. (f) Procedure for Redemption. ------------------------ (i) Upon redemption of the Series A Preferred Stock pursuant to Section 5.01(e) hereof, notice of such redemption (a "Series A Notice of Redemption") shall be mailed by first-class mail, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the Series A Redemption Date to the holders of record of the shares to be redeemed at their respective addresses as they shall appear in the records of the Association; provided, however, that failure to give such notice or any defect therein or in the mailing thereof shall not affect the validity of the proceeding for the redemption 7 of any shares so to be redeemed except as to the holder to whom the Association has failed to give such notice or except as to the holder to whom notice was defective. Each such notice shall state: (A) the Series A Redemption Date; (B) the Series A Redemption Price; (C) the place or places where certificates for such shares are to be surrendered for payment of the Series A Redemption Price; and (D) the CUSIP number of the shares being redeemed. (ii) If a Series A Notice of Redemption shall have been given as aforesaid and the Association shall have deposited on or before the Series A Redemption Date a sum sufficient to redeem the shares of Series A Preferred Stock as to which a Series A Notice of Redemption has been given in trust with the Transfer Agent with irrevocable instructions and authority to pay the Series A Redemption Price to the holders thereof, or if no such deposit is made, then upon the Series A Redemption Date (unless the Association shall default in making payment of the Series A Redemption Price), all rights of the holders thereof as shareholders of the Association by reason of the ownership of such shares (except their right to receive the Series A Redemption Price thereof without interest) shall cease and terminate, and such shares shall no longer be deemed outstanding for any purpose. The Association shall be entitled to receive, from time to time, from the Transfer Agent the interest, if any, earned on such moneys deposited with it, and the holders of any shares so redeemed shall have no claim to any such interest. In case the holder of any shares of Series A Preferred Stock so called for redemption shall not claim the Series A Redemption Price for its shares within twelve (12) months after the related Series A Redemption Date, the Transfer Agent shall, upon demand, pay over to the Association such amount remaining on deposit, and the Transfer Agent shall thereupon be relieved of all responsibility to the holder of such shares, and such holder shall look only to the Association for payment thereof. (iii) Not later than 1:30 p.m., Eastern Standard Time, on the Business Day immediately preceding the Series A Redemption Date, the Association shall irrevocably deposit with the Transfer Agent sufficient funds for the payment of the Series A Redemption Price for the shares to be redeemed on the Series A Redemption Date and shall give the Transfer Agent irrevocable instructions to apply such funds, and, if applicable and so specified in the instructions, the income and proceeds therefrom, to the payment of such Series A Redemption Price. The Association may direct the Transfer Agent to invest any such available funds, provided that the proceeds of any such investment will be available to the Transfer Agent in Milwaukee, Wisconsin at the opening of business on such Series A Redemption Date. (iv) Except as otherwise expressly set forth in this Section 5.01(f), nothing contained in these Amended and Restated Articles of Association shall limit any legal right of the Association to purchase or otherwise acquire any shares of Series A Preferred Stock at any price, whether higher or lower than the Series A Redemption Price, in private negotiated transactions, the over-the-counter market or otherwise. (v) If the Association shall not have funds legally available for the redemption of all of the shares of Series A Preferred Stock on any Series A Redemption Date, the Association shall redeem on the Series A Redemption Date only the number of shares of Series A Preferred Stock as it shall have legally available funds to redeem, as determined in an equitable manner, and the remainder of the shares of Series A Preferred Stock shall be redeemed, at the option of the Association, on the earliest practicable date next 8 following the day on which the Association shall first have funds legally available for the redemption of such shares. (g) Reacquired Shares. Shares of the Series A Preferred Stock that ----------------- have been redeemed, purchased or otherwise acquired by the Association are not subject to reissuance or resale as shares of Series A Preferred Stock and shall be held in treasury. Such shares shall revert to the status of authorized but unissued shares of preferred stock, undesignated as to series, until the Board of Directors of the Association shall designate them again for issuance as part of a series. (h) Voting Rights. Except as otherwise required by applicable law, ------------- the holders of Series A Preferred Stock shall not have any voting rights. SECTION 5.02. SERIES B PREFERRED STOCK. PURSUANT TO THE PROVISIONS OF THIS ARTICLE FIFTH, A SERIES OF SERIES B NON-CUMULATIVE PREFERRED STOCK, CONSISTING OF ONE MILLION FOUR HUNDRED NINETY-FOUR THOUSAND NINE HUNDRED THIRTY-FIVE (1,494,935) SHARES, IS HEREBY ESTABLISHED AND AUTHORIZED TO BE ISSUED, AND IN ADDITION TO SUCH MATTERS SPECIFIED ELSEWHERE IN THIS ARTICLE FIFTH, SUCH SERIES B NON-CUMULATIVE PREFERRED STOCK SHALL HAVE THE FOLLOWING POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS: (a) Designation and Amount. The shares of Preferred Stock shall be ---------------------- designated as the Series B Non-Cumulative Preferred Stock (the "Series B Preferred Stock"), and the number of shares constituting the Series B Preferred Stock shall be one million four hundred ninety-four thousand nine hundred thirty-five (1,494,935). The liquidation preference of the Series B Preferred Stock shall be $1,000 per share (the "Series B Liquidation Value"). (b) Rank. The Series B Preferred Stock shall, with respect to ---- dividend rights and upon liquidation, dissolution and winding up of the Association, rank (i) senior to all classes and series of Common Stock of the Association and to all classes and series of capital stock of the Association now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series B Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association, or which do not specify their rank (collectively with the Common Stock, the "Series B Junior Securities"); (ii) on a parity with the Series A Preferred Stock and the Series C Preferred Stock and each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank on a parity with the Series B Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively with the Series A Preferred Stock and the Series C Preferred Stock, the "Series B Parity Securities"); and (iii) junior to each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank senior to the Series B Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively, the "Series B Senior Securities"). 9 (c) Dividends. Dividends are payable on the Series B Preferred Stock --------- as follows: (i) The holders of the Series B Preferred Stock in preference to the Series B Junior Securities shall be entitled to receive, out of funds legally available for that purpose, and when, as, and if declared by the Board of Directors of the Association, dividends payable in cash at the applicable annual rate set forth in this Section 5.02(c)(i) below of the Series B Liquidation Value (the "Series B Dividend Rate"): (1) With respect to dividends payable on each Series B Dividend Payment Date occurring from the Issue Date through December 31, 2005, the Series B Dividend Rate shall be eight and seven-eighths percent (8.875%); and (2) Thereafter, dividends shall accrue at a variable rate per annum equal to the 5-year CMT Rate plus two percent (2%). On December 31, 2005, and on December 31 every five (5) years thereafter, the previous dividend rate shall be replaced by the then-current 5-year CMT Rate plus two percent (2%). The 5-year CMT Rate for each 5-year period shall be determined by the Calculation Agent on the second Business Day immediately preceding the first day of such period (each a "CMT Determination Date"). (ii) Dividends on the Series B Preferred Stock shall be non-cumulative. Dividends not paid on any Series B Dividend Payment Date shall not accumulate thereafter. Dividends shall accumulate from the first day of any Series A Dividend Period to but excluding the immediately succeeding Series A Dividend Payment Date. Dividends, if and when declared, shall be payable in arrears in cash on each Series B Dividend Payment Date of each year with respect to the Series B Dividend Period ending on the day immediately prior to such Series B Dividend Payment Date at the Series B Dividend Rate per share to holders of record at the close of business on the applicable Record Date, commencing on the Exchange Date with respect to any shares of Series B Preferred Stock issued prior to that Series B Dividend Payment Date; provided that dividends payable on the Series B Preferred Stock on the Series B Dividend Payment Date immediately following the first Series B Dividend Period following the Issue Date (and any dividend payable for a period less than a full quarterly period) shall be prorated for the period and computed on the basis of a 360-day year of twelve 30-day months and the actual number of days in such Series B Dividend Period; and provided, further, that dividends payable on the Series B Preferred Stock on the Series B Dividend Payment Date immediately following the first Series B Dividend Period following the Issue Date shall include any accumulated and unpaid dividends on the Realty Company Series C Exchangeable Stock exchanged for the Series B Preferred Stock as of the Exchange Date for the then current dividend period. Dividends on such Series B Preferred Stock shall be paid only in cash. (iii) No dividends on shares of Series B Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Board of Directors or paid or set apart for payment by the Association if such declaration or payment shall be restricted or prohibited by law. 10 (iv) Holders of shares of Series B Preferred Stock shall not be entitled to any dividends in excess of full dividends declared, as herein provided, on the shares of Series B Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment on the shares of Series B Preferred Stock that may be in arrears. (v) (A) So long as any shares of Series B Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Series B Junior Securities and other than as provided in clause (B) below) shall be declared, paid or set aside for payment or other distribution upon any Series B Junior Securities or any other Series B Parity Securities, nor shall any shares of any Series B Junior Securities or any other Series B Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or set aside or made available for a sinking fund for the redemption of any shares of any such stock) by the Association (except by conversion into or exchange for shares of, or options, warrants or rights to subscribe for or purchase, Series B Junior Securities) unless, in each case, the full dividends on all outstanding shares of the Series B Preferred Stock shall have been declared and paid, when due, for the Series B Dividend Period, if any, terminating on or immediately prior to the date of payment in respect of such dividend, distribution, redemption, purchase or acquisition. (B) When dividends for any Series B Dividend Period are not paid in full, as provided in clause (A) above, on the shares of the Series B Preferred Stock or any other Series B Parity Securities, dividends may be declared and paid on any such shares for any dividend period therefor, but only if such dividends are declared and paid pro rata so that the amount of dividends declared and paid per share on the shares of the Series B Preferred Stock and any other Series B Parity Securities, in all cases shall bear to each other the same ratio that the amount of unpaid dividends per share on the shares of the Series B Preferred Stock for such Series B Dividend Period and such other Series B Parity Securities for the corresponding dividend period bear to each other. (d) Liquidation Preference. ---------------------- (i) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Association, the holders of shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Association available for distribution to its shareholders an amount in cash equal to the Series B Liquidation Value for each share outstanding, plus an amount in cash equal to all unpaid dividends thereon for the then current Series B Dividend Period, whether or not earned or declared, before any payment shall be made or any assets distributed to the holders of Series B Junior Securities. If the assets of the Association are not sufficient to pay in full the liquidation payments payable to the holders of outstanding shares of the Series B Preferred Stock and any Series B Parity Securities, then the holders of all such shares shall share ratably in such distribution of assets in accordance with the amount which would be payable on such distribution if the amounts to which the holders of outstanding shares of Series B Preferred Stock and the holders of outstanding shares of such Series B Parity Securities are entitled were paid in full. 11 (ii) For the purpose of this Section 5.02(d), neither the voluntary sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Association, nor the consolidation or merger of the Association, shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Association, unless such voluntary sale, conveyance, exchange or transfer shall be in connection with a plan of liquidation, dissolution or winding up of the Association. (e) Redemption. The Series B Preferred Stock is not redeemable prior to ---------- December 31, 2005. On such date and on each fifth anniversary of such date, the Series B Preferred Stock shall be redeemable, in whole or in part, at the option of the Association, but with the consent of the Comptroller of the Currency and any other appropriate regulatory authorities, if required, for cash out of any source of funds legally available, at a redemption price equal to 100% of the Series B Liquidation Value per share plus unpaid dividends thereon accumulated since the immediately preceding Series B Dividend Payment Date (the "Series B Redemption Price"). Any date of such redemption is referred to as the "Series B Redemption Date." If fewer than all the outstanding shares of Series B Preferred Stock are to be redeemed, the Association will select those to be redeemed by lot or pro rata or by any other method as may be determined by the Board of Directors to be equitable. The Series B Preferred Stock is not subject to any sinking fund. (f) Procedure for Redemption. ------------------------ (i) Upon redemption of the Series B Preferred Stock pursuant to Section 5.02(e) hereof, notice of such redemption (a "Series B Notice of Redemption") shall be mailed by first-class mail, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the Series B Redemption Date to the holders of record of the shares to be redeemed at their respective addresses as they shall appear in the records of the Association; provided, however, that failure to give such notice or any defect therein or in the mailing thereof shall not affect the validity of the proceeding for the redemption of any shares so to be redeemed except as to the holder to whom the Association has failed to give such notice or except as to the holder to whom notice was defective. Each such notice shall state: (A) the Series B Redemption Date; (B) the Series B Redemption Price; (C) the place or places where certificates for such shares are to be surrendered for payment of the Series B Redemption Price; and (D) the CUSIP number of the shares being redeemed. (ii) If a Series B Notice of Redemption shall have been given as aforesaid and the Association shall have deposited on or before the Series B Redemption Date a sum sufficient to redeem the shares of Series B Preferred Stock as to which a Series B Notice of Redemption has been given in trust with the Transfer Agent with irrevocable instructions and authority to pay the Series B Redemption Price to the holders thereof, or if no such deposit is made, then upon the Series B Redemption Date (unless the Association shall default in making payment of the Series B Redemption Price), all rights of the holders thereof as shareholders of the Association by reason of the ownership of such shares (except their right to receive the Series B Redemption Price thereof without interest) shall cease and terminate, and such shares shall no longer be deemed outstanding for any purpose. The Association shall be entitled to receive, from time to time, from the Transfer Agent the interest, if any, earned on such moneys deposited with it, and the 12 holders of any shares so redeemed shall have no claim to any such interest. In case the holder of any shares of Series B Preferred Stock so called for redemption shall not claim the Series B Redemption Price for its shares within twelve (12) months after the related Series B Redemption Date, the Transfer Agent shall, upon demand, pay over to the Association such amount remaining on deposit, and the Transfer Agent shall thereupon be relieved of all responsibility to the holder of such shares, and such holder shall look only to the Association for payment thereof. (iii) Not later than 1:30 p.m., Eastern Standard Time, on the Business Day immediately preceding the Series B Redemption Date, the Association shall irrevocably deposit with the Transfer Agent sufficient funds for the payment of the Series B Redemption Price for the shares to be redeemed on the Series B Redemption Date and shall give the Transfer Agent irrevocable instructions to apply such funds, and, if applicable and so specified in the instructions, the income and proceeds therefrom, to the payment of such Series B Redemption Price. The Association may direct the Transfer Agent to invest any such available funds, provided that the proceeds of any such investment will be available to the Transfer Agent in Milwaukee, Wisconsin at the opening of business on such Series B Redemption Date. (iv) Except as otherwise expressly set forth in this Section 5.02(f), nothing contained in these Amended and Restated Articles of Association shall limit any legal right of the Association to purchase or otherwise acquire any shares of Series B Preferred Stock at any price, whether higher or lower than the Series B Redemption Price, in private negotiated transactions, the over-the-counter market or otherwise. (v) If the Association shall not have funds legally available for the redemption of all of the shares of Series B Preferred Stock on any Series B Redemption Date, the Association shall redeem on the Series B Redemption Date only the number of shares of Series B Preferred Stock as it shall have legally available funds to redeem, as determined in an equitable manner, and the remainder of the shares of Series B Preferred Stock shall be redeemed, at the option of the Association, on the earliest practicable date next following the day on which the Association shall first have funds legally available for the redemption of such shares. (g) Reacquired Shares. Shares of the Series B Preferred Stock that have ----------------- been redeemed, purchased or otherwise acquired by the Association are not subject to reissuance or resale as shares of Series B Preferred Stock and shall be held in treasury. Such shares shall revert to the status of authorized but unissued shares of preferred stock, undesignated as to series, until the Board of Directors of the Association shall designate them again for issuance as part of a series. (h) Voting Rights. Except as otherwise required by applicable law, the -------------- holders of Series B Preferred Stock shall nothave any voting rights. SECTION 5.03. SERIES C PREFERRED STOCK. PURSUANT TO THE PROVISIONS OF THIS ARTICLE FIFTH, A SERIES OF SERIES C NON-CUMULATIVE PREFERRED STOCK, CONSISTING OF SEVEN HUNDRED FIFTY THOUSAND (750,000) SHARES, IS HEREBY ESTABLISHED AND AUTHORIZED TO BE ISSUED, AND IN ADDITION TO SUCH MATTERS 13 SPECIFIED ELSEWHERE IN THIS ARTICLE FIFTH, SUCH SERIES C NON-CUMULATIVE PREFERRED STOCK SHALL HAVE THE FOLLOWING POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS: (a) Designation and Amount. The shares of Preferred Stock shall be ---------------------- designated as the Series C Non-Cumulative Preferred Stock (the "Series C Preferred Stock"), and the number of shares constituting the Series C Preferred Stock shall be seven hundred fifty thousand (750,000). The liquidation preference of the Series C Preferred Stock shall be $1,000 per share (the "Series C Liquidation Value"). (b) Rank. The Series C Preferred Stock shall, with respect to dividend ---- rights and upon liquidation, dissolution and winding up of the Association, rank (i) senior to all classes and series of Common Stock of the Association and to all classes and series of capital stock of the Association now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series C Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association, or which do not specify their rank (collectively with the Common Stock, the "Series C Junior Securities"); (ii) on a parity with the Series A Preferred Stock and the Series B Preferred Stock and each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank on a parity with the Series C Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively with the Series A Preferred Stock and the Series B Preferred Stock, the "Series C Parity Securities"); and (iii) junior to each other class of capital stock or series of preferred stock issued by the Association after the date hereof, the terms of which specifically provide that such class or series will rank senior to the Series C Preferred Stock as to dividend distributions and distributions upon the liquidation, dissolution or winding up of the Association (collectively, the "Series C Senior Securities"). (c) Dividends. Dividends are payable on the Series C Preferred Stock as --------- follows: (i) The holders of the Series C Preferred Stock in preference to the Series C Junior Securities shall be entitled to receive, out of funds legally available for that purpose, and when, as, and if declared by the Board of Directors of the Association, dividends payable in cash at the annual rate of 7.75% of the Series C Liquidation Value (the "Series C Dividend Rate"). (ii) Dividends on the Series C Preferred Stock shall be non-cumulative. Dividends not paid on any Series C Dividend Payment Date shall not accumulate thereafter. Dividends shall accumulate from the first day of any Series C Dividend Period to but excluding the immediately succeeding Series C Dividend Payment Date. Dividends, if and when declared, shall be payable in arrears in cash on each Series C Dividend Payment Date of each year with respect to the Series C Dividend Period ending on the day immediately prior to such Series C Dividend Payment Date at the Series C Dividend Rate per share to holders of record at the close of business on the applicable Record Date, commencing on the Exchange Date with respect to any shares of Series C Preferred Stock issued prior to that Series C Dividend Payment Date; provided that dividends payable on the Series C Preferred Stock on the Series C Dividend Payment Date immediately following the first Series C Dividend Period following the Issue Date 14 (and any dividend payable for a period less than a full quarterly period) shall be prorated for the period and computed on the basis of a 360-day year of twelve 30-day months and the actual number of days in such Series C Dividend Period; and provided, further, that dividends payable on the Series C Preferred Stock on the Series C Dividend Payment Date immediately following the first Series C Dividend Period following the Issue Date shall include any accumulated and unpaid dividends on the Funding Company Exchangeable Securities exchanged for the Series C Preferred Stock as of the Exchange Date for the then current dividend period. Dividends on such Series C Preferred Stock shall be paid only in cash. (iii) No dividends on shares of Series C Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Board of Directors or paid or set apart for payment by the Association if such declaration or payment shall be restricted or prohibited by law. (iv) Holders of shares of Series C Preferred Stock shall not be entitled to any dividends in excess of full dividends declared, as herein provided, on the shares of Series C Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment on the shares of Series C Preferred Stock that may be in arrears. (v) (A) So long as any shares of Series C Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Series C Junior Securities and other than as provided in clause (B) below) shall be declared, paid or set aside for payment or other distribution upon any Series C Junior Securities or any other Series C Parity Securities, nor shall any shares of any Series C Junior Securities or any other Series C Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or set aside or made available for a sinking fund for the redemption of any shares of any such stock) by the Association (except by conversion into or exchange for shares of, or options, warrants or rights to subscribe for or purchase, Series C Junior Securities) unless, in each case, the full dividends on all outstanding shares of the Series C Preferred Stock shall have been declared and paid, when due, for the Series C Dividend Period, if any, terminating on or immediately prior to the date of payment in respect of such dividend, distribution, redemption, purchase or acquisition. (B) When dividends for any Series C Dividend Period are not paid in full, as provided in clause (A) above, on the shares of the Series C Preferred Stock or any other Series C Parity Securities, dividends may be declared and paid on any such shares for any dividend period therefor, but only if such dividends are declared and paid pro rata so that the amount of dividends declared and paid per share on the shares of the Series C Preferred Stock and any other Series C Parity Securities, in all cases shall bear to each other the same ratio that the amount of unpaid dividends per share on the shares of the Series C Preferred Stock for such Series C Dividend Period and such other Series C Parity Securities for the corresponding dividend period bear to each other. (d) Liquidation Preference. ---------------------- 15 (i) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Association, the holders of shares of Series C Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Association available for distribution to its shareholders an amount in cash equal to the Series C Liquidation Value for each share outstanding, plus an amount in cash equal to all unpaid dividends thereon for the then current Series C Dividend Period, whether or not earned or declared, before any payment shall be made or any assets distributed to the holders of Series C Junior Securities. If the assets of the Association are not sufficient to pay in full the liquidation payments payable to the holders of outstanding shares of the Series C Preferred Stock and any Series C Parity Securities, then the holders of all such shares shall share ratably in such distribution of assets in accordance with the amount which would be payable on such distribution if the amounts to which the holders of outstanding shares of Series C Preferred Stock and the holders of outstanding shares of such Series C Parity Securities are entitled were paid in full. (ii) For the purpose of this Section 5.03(d), neither the voluntary sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Association, nor the consolidation or merger of the Association, shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Association, unless such voluntary sale, conveyance, exchange or transfer shall be in connection with a plan of liquidation, dissolution or winding up of the Association. (e) Redemption. The Series C Preferred Stock shall be redeemable at any ---------- time, in whole or in part, at the option of the Association, but with the consent of the Comptroller of the Currency and any other appropriate regulatory authorities, if required, for cash out of any source of funds legally available, at a redemption price equal to 100% of the Series C Liquidation Value per share plus unpaid dividends thereon accumulated since the immediately preceding Series C Dividend Payment Date (the "Series C Redemption Price"). Any date of such redemption is referred to as the "Series C Redemption Date." If fewer than all the outstanding shares of Series C Preferred Stock are to be redeemed, the Association will select those to be redeemed by lot or pro rata or by any other method as may be determined by the Board of Directors to be equitable. The Series C Preferred Stock is not subject to any sinking fund. (f) Procedure for Redemption. ------------------------ (i) Upon redemption of the Series C Preferred Stock pursuant to Section 5.03(e) hereof, notice of such redemption (a "Series C Notice of Redemption") shall be mailed by first-class mail, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the Series C Redemption Date to the holders of record of the shares to be redeemed at their respective addresses as they shall appear in the records of the Association; provided, however, that failure to give such notice or any defect therein or in the mailing thereof shall not affect the validity of the proceeding for the redemption of any shares so to be redeemed except as to the holder to whom the Association has failed to give such notice or except as to the holder to whom notice was defective. Each such notice shall state: (A) the Series C Redemption Date; (B) the Series C Redemption Price; (C) the place or places where certificates for such shares are to be surrendered for payment of the Series C Redemption Price; and (D) the CUSIP number of the shares being redeemed. 16 (ii) If a Series C Notice of Redemption shall have been given as aforesaid and the Association shall have deposited on or before the Series C Redemption Date a sum sufficient to redeem the shares of Series C Preferred Stock as to which a Series C Notice of Redemption has been given in trust with the Transfer Agent with irrevocable instructions and authority to pay the Series C Redemption Price to the holders thereof, or if no such deposit is made, then upon the Series C Redemption Date (unless the Association shall default in making payment of the Series C Redemption Price), all rights of the holders thereof as shareholders of the Association by reason of the ownership of such shares (except their right to receive the Series C Redemption Price thereof without interest) shall cease and terminate, and such shares shall no longer be deemed outstanding for any purpose. The Association shall be entitled to receive, from time to time, from the Transfer Agent the interest, if any, earned on such moneys deposited with it, and the holders of any shares so redeemed shall have no claim to any such interest. In case the holder of any shares of Series C Preferred Stock so called for redemption shall not claim the Series C Redemption Price for its shares within twelve (12) months after the related Series C Redemption Date, the Transfer Agent shall, upon demand, pay over to the Association such amount remaining on deposit, and the Transfer Agent shall thereupon be relieved of all responsibility to the holder of such shares, and such holder shall look only to the Association for payment thereof. (iii) Not later than 1:30 p.m., Eastern Standard Time, on the Business Day immediately preceding the Series C Redemption Date, the Association shall irrevocably deposit with the Transfer Agent sufficient funds for the payment of the Series C Redemption Price for the shares to be redeemed on the Series C Redemption Date and shall give the Transfer Agent irrevocable instructions to apply such funds, and, if applicable and so specified in the instructions, the income and proceeds therefrom, to the payment of such Series C Redemption Price. The Association may direct the Transfer Agent to invest any such available funds, provided that the proceeds of any such investment will be available to the Transfer Agent in Milwaukee, Wisconsin at the opening of business on such Series C Redemption Date. (iv) Except as otherwise expressly set forth in this Section 5.03(f), nothing contained in these Amended and Restated Articles of Association shall limit any legal right of the Association to purchase or otherwise acquire any shares of Series C Preferred Stock at any price, whether higher or lower than the Series C Redemption Price, in private negotiated transactions, the over-the-counter market or otherwise. (v) If the Association shall not have funds legally available for the redemption of all of the shares of Series C Preferred Stock on any Series C Redemption Date, the Association shall redeem on the Series C Redemption Date only the number of shares of Series C Preferred Stock as it shall have legally available funds to redeem, as determined in an equitable manner, and the remainder of the shares of Series C Preferred Stock shall be redeemed, at the option of the Association, on the earliest practicable date next following the day on which the Association shall first have funds legally available for the redemption of such shares. 17 (g) Reacquired Shares. Shares of the Series C Preferred Stock that have ----------------- been redeemed, purchased or otherwise acquired by the Association are not subject to reissuance or resale as shares of Series C Preferred Stock and shall be held in treasury. Such shares shall revert to the status of authorized but unissued shares of preferred stock, undesignated as to series, until the Board of Directors of the Association shall designate them again for issuance as part of a series. (h) Voting Rights. Except as otherwise required by applicable law, the ------------- holders of Series C Preferred Stock shall not have any voting rights. SECTION 5.04. DEFINITIONS. FOR THE PURPOSE OF SECTIONS 5.01, 5.02 AND 5.03 HEREOF, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS INDICATED: "5-year CMT Rate" for any CMT Determination Date will be the rate equal to: (i) the weekly average interest rate of U.S. Treasury securities having an index maturity of five years for the week that ends immediately before the week in which the relevant CMT Determination Date falls, as such rate appears on page "7052" on Telerate (or such other page as may replace the 7052 page on that service or any successor services) under the heading "... Treasury Constant Maturities ... Federal Reserve Board Release H.15 ... Mondays Approximately 3:45 p.m." (ii) If the applicable rate described in clause (i) above is not displayed on Telerate page 7052 at 3:00 p.m., New York City time, on the relevant CMT Determination Date, then the 5-year CMT Rate will be the Treasury constant maturity rate applicable to a five-year index maturity for the weekly average as published in H.15(519) (as defined below). (iii) If the applicable rate described in clause (ii) above does not appear in H.15(519) at 3:00 p.m., New York City time, on the relevant CMT Determination Date, then the 5-year CMT Rate will be the Treasury constant maturity rate, or other U.S. Treasury rate, applicable to a five-year index maturity with reference to the relevant CMT Determination Date, that: (a) is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury; and (b) is determined by the Association to be comparable to the applicable rate formerly displayed on Telerate page 7052 and published in H.15(519). (iv) If the rate described in clause (iii) above does not appear at 3:00 p.m., New York City time, on the relevant CMT Determination Date, than the 5-year CMT Rate will be the yield to maturity of the arithmetic mean of the secondary market offered rates for Treasury notes having an original maturity of approximately five years and a remaining term to maturity of not less than four years, and in a representative amount, as of 18 approximately 3:30 p.m., New York City time, on the relevant CMT Determination Date, as quoted by three primary U.S. government securities dealers in New York City selected by the Association. In selecting these offered rates, the Association will request quotations from five primary dealers and will disregard the highest quotation - or, if there is equality, one of the highest - and the lowest quotation - or, if there is equality, one of the lowest. (v) If the Association is unable to obtain three quotations of the kind described in clause (iv) above, the CMT Rate will be the yield to maturity of the arithmetic mean of the secondary market offered rates for Treasury notes with an original maturity longer than five years and a remaining term to maturity closest to five years, and in a representative amount, as of approximately 3:30 p.m., New York City time, on the relevant CMT Determination Date, as quoted by the three primary U.S. governmental securities dealers in New York City selected by the Association. In selecting these offered rates, the Association will request quotations from five primary declares and will disregard the highest quotation - or, if there is equality, one of the highest - and the lowest quotation, or, if there is equality, one of the lowest. (vi) If fewer than five but more than two primary dealers are quoting offered rates as described above in clause (v), then the 5-year CMT Rate for the relevant CMT Determination Date will be based on the arithmetic mean of the offered rates so obtained, and neither the highest nor the lowest of those quotations will be disregarded. (vii) If two or fewer primary dealers are quoting offered rates as described above in clause (v), the 5-year CMT Rate in effect for the new dividend period will be the 5-year CMT Rate in effect for the prior dividend period. As used in this definition, "H.15(519)" means the weekly statistical release entitled "Statistical Release H.15(519)," or any successor publication, published by the Board of Governors of the Federal Reserve System. Absent manifest error, the Association's determination of the 5-year CMT Rate will be final and binding. "Association" means U.S. Bank National Association (formerly named Firstar Bank, National Association), a national banking association. "Business Day" means a day on which the New York Stock Exchange is open for trading and which is not a day on which banking institutions in The City of New York and Milwaukee, Wisconsin are authorized or required by law or executive order to close. "Calculation Agent" means any Person authorized by the Association to determine the Series B Dividend Rate, which initially shall be the Association. "CMT Determination Date" has the meaning set forth in Section 5.02(c)(i)(2) hereof. 19 "Dividend Payment Date" means, as the context requires, a Series A Dividend Payment Date, a Series B Dividend Payment Date or a Series C Dividend Payment Date. "Exchange Date" means, as the context requires, any date on which the Realty Company Series B Exchangeable Stock is exchanged for the Series A Preferred Stock, any date on which the Realty Company Series C Exchangeable Stock is exchanged for the Series B Preferred Stock, or any date on which the Funding Company Exchangeable Securities are exchanged for the Series C Preferred Stock. "Firstar Realty" means Firstar Realty L.L.C., an Illinois limited liability company. "Funding Company Exchangeable Securities" means the Non-Cumulative Exchangeable Preferred Securities of USB Funding LLC, a Delaware limited liability company. "Issue Date" means, as the context requires, the first date on which shares of Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock are issued. "Person" means any individual, firm, bank or other entity and shall include any successor (by merger or otherwise) of such entity. "Realty Company Series B Exchangeable Stock" means the Series B Non-Cumulative Exchangeable Preferred Stock of Firstar Realty. "Realty Company Series C Exchangeable Stock" means the Series C Non-Cumulative Exchangeable Preferred Stock of Firstar Realty. "Record Date" means the 15th day of the month in which the applicable Dividend Payment Date falls for dividends declared by the Board of Directors. "Series A Dividend Payment Date" means each June 30 and December 31 of each year. "Series A Dividend Period" is the period from a Series A Dividend Payment Date to, but excluding, the next succeeding Series A Dividend Payment Date, except that the initial Series A Dividend Period shall commence on the date of the original issuance of shares of Series A Preferred Stock. "Series A Dividend Rate" has the meaning set forth in Section 5.01(c)(i) hereof. "Series A Junior Securities" has the meaning set forth in Section 5.01(b) hereof. "Series A Liquidation Value" has the meaning set forth in Section 5.01(a) hereof. "Series A Notice of Redemption" has the meaning set forth in Section 5.01(f)(i) hereof. "Series A Parity Securities" has the meaning set forth in Section 5.01(b) hereof. "Series A Preferred Stock" has the meaning set forth in Section 5.01(a) hereof. 20 "Series A Redemption Date" has the meaning set forth in Section 5.01(e) hereof. "Series A Redemption Price" has the meaning set forth in Section 5.01(e) hereof. "Series A Senior Securities" has the meaning set forth in Section 5.01(b) hereof. "Series B Dividend Payment Date" means each June 30 and December 31 of each year. "Series B Dividend Period" is the period from a Series B Dividend Payment Date to, but excluding, the next succeeding Series B Dividend Payment Date, except that the initial Series B Dividend Period shall commence on the original issuance of shares of Series B Preferred Stock. "Series B Dividend Rate" has the meaning set forth in Section 5.02(c)(i) hereof. "Series B Junior Securities" has the meaning set forth in Section 5.02(b) hereof. "Series B Liquidation Value" has the meaning set forth in Section 5.02(a) hereof. "Series B Notice of Redemption" has the meaning set forth in Section 5.02(f)(i) hereof. "Series B Parity Securities" has the meaning set forth in Section 5.02(b) hereof. "Series B Preferred Stock" has the meaning set forth in Section 5.02(a) hereof. "Series B Redemption Date" has the meaning set forth in Section 5.02(e) hereof. "Series B Redemption Price" has the meaning set forth in Section 5.02(e) hereof. "Series B Senior Securities" has the meaning set forth in Section 5.02(b) hereof. "Series C Dividend Payment Date" means each January 15 and July 15 of each year. "Series C Dividend Period" is the period from a Series C Dividend Payment Date to, but excluding, the next succeeding Series C Dividend Payment Date, except that the initial Series C Dividend Period shall commence on the original issuance of shares of Series C Preferred Stock. "Series C Dividend Rate" has the meaning set forth in Section 5.03(c)(i) hereof. "Series C Junior Securities" has the meaning set forth in Section 5.03(b) hereof. "Series C Liquidation Value" has the meaning set forth in Section 5.03(a) hereof. "Series C Notice of Redemption" has the meaning set forth in Section 5.03(f)(i) hereof. "Series C Parity Securities" has the meaning set forth in Section 5.03(b) hereof. "Series C Preferred Stock" has the meaning set forth in Section 5.03(a) hereof. "Series C Redemption Date" has the meaning set forth in Section 5.03(e) hereof. 21 "Series C Redemption Price" has the meaning set forth in Section 5.03(e) hereof. "Series C Senior Securities" has the meaning set forth in Section 5.03(b) hereof. "Transfer Agent" means a bank or trust company as may be appointed from time to time by the Board of Directors of the Association, or a committee thereof, to act as transfer agent, paying agent and registrar of the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock. SIXTH: The Board of Directors shall appoint one of its members ----- President of the Association, who shall be Chairman of the Board, unless the Board appoints another Director to be the Chairman of the Board. The Board of Directors shall have the power to appoint one or more Vice Presidents; and to appoint a Cashier and such other officers and employees as may be required to transact the Business of the Association. The Board of Directors shall have the power to define the duties of the officers and employees of the Association; to fix the salaries to be paid to them; to dismiss them; to require bonds from them and to fix the penalty thereof; to regulate the manner in which any increase of the capital of the Association shall be made; to manage and administer the business affairs of the Association; to make all Bylaws that it may be lawful for them to make and generally to do and perform all acts that it may be legal for a Board of Directors to do and perform. SEVENTH: The Board of Directors, without need for approval of ------- shareholders, shall have the power to change the location of the main office of the Association, subject to such limitations as from time to time may be provided by law; and shall have the power to establish or change the location of any branch or branches of the Association to any other location, without the approval of the shareholders, but subject to the approval of the Comptroller of the Currency. EIGHTH: The corporate existence of the Association shall continue until ------ terminated in accordance with the laws of the United States. NINTH: The Board of Directors of the Association, the Chairman of the ----- Board, the President, or any three or more holders of Common Stock owning, in the aggregate, not less than twenty-five percent of the Common Stock of this Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least ten (10) days prior to the date of such meeting to each shareholder of record entitled to vote at such meeting at his address as shown upon the books of the Association. TENTH: Any person, his heirs, executors, or administrators, may be ----- indemnified or reimbursed by the Association for reasonable expenses actually incurred in connection with any action, suit, or proceeding, civil or criminal, to which he or they shall be made a party by reason of his being or having been a Director, officer, or employee of the Association or of any firm, corporation, or organization which he served in any such capacity at the request of the Association. Provided, however, that no person shall be so indemnified or reimbursed in relation to any matter in such action, suit, or proceeding as to which he shall finally be adjudged to have been guilty of or liable for gross negligence, willful misconduct or criminal acts in the performance of his duties to the Association. And, provided further, that no person shall be so 22 indemnified or reimbursed in relation to any matter in such action, suit, or proceeding which has been made the subject of a compromise settlement except with the approval of a court of competent jurisdiction, or the holders of record of a majority of the outstanding shares of the Association, or the Board of Directors, acting by vote of Directors not parties to the same or substantially the same action, suit or proceeding, constituting a majority of the whole number of Directors. And, provided further, that no Director, officer or employee shall be so indemnified or reimbursed for expenses, penalties or other payments incurred in an administrative proceeding or action instituted by an appropriate bank regulatory agency where said proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association. The foregoing right of indemnification shall not be exclusive of other rights to which such person, his heirs, executors, or administrators, may be entitled as a matter of law. The Association may, upon the affirmative vote of a majority of its Board of Directors, purchase insurance for the purpose of indemnifying its Directors, officers and other employees to the extent that such indemnification is allowed in the preceding paragraph. Such insurance may, but need not, be for the benefit of all Directors, officers, or employees. ELEVENTH: Except as otherwise specifically provided in Article Fifth -------- hereof, these Amended and Restated Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Association, unless the vote of the holders of a greater amount of stock is required by law and in that case by the vote of the holders of such greater amount. 23 Exhibit 2 --------- Exhibit 3 --------- Exhibit 4 --------- BYLAWS OF U.S. BANK NATIONAL ASSOCIATION ARTICLE I. - ---------- MEETINGS OF SHAREHOLDERS SECTION 1. ANNUAL MEETING The annual meeting of shareholders shall be held at the main banking house of the Association or other convenient place duly authorized by the Board of Directors (the "Board") at 11:00 a.m. on the second Tuesday in March of each year, or such other date or time which the Board may designate at any Board meeting held prior to the required date for sending notice of the annual meeting to the shareholders. Notice of such meeting shall be mailed to shareholders not less than ten (10) or more than sixty (60) days prior to the meeting date. SECTION 2. SPECIAL MEETINGS Special meetings of shareholders may be called and held at such times and upon such notice as is specified in the Articles of Association. SECTION 3. QUORUM A majority of the outstanding capital stock represented in person or by proxy shall constitute a quorum of any meeting of the shareholders, unless otherwise provided by law, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held as adjourned without further notice. SECTION 4. INSPECTORS The Board of Directors may, and in the event of its failure so to do, the Chairman of the Board may appoint Inspectors of Election who shall determine the presence of quorum, the validity of proxies, and the results of all elections and all other matters voted upon by shareholders at all annual and special meetings of shareholders. SECTION 5. VOTING In deciding on questions at meetings of shareholders, except in the election of directors, each shareholder shall be entitled to one vote for each share of stock held. A majority of votes cast shall decide each matter submitted to the shareholders, except where by law a larger vote is required. In all elections of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected, or to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his shares equal, or to distribute them on the same principle among as many candidates as he shall think fit. SECTION 6. WAIVER AND CONSENT The shareholders may act without notice or a meeting by a unanimous written consent by 26 all shareholders. ARTICLE II. BOARD OF DIRECTORS SECTION 1. TERM OF NOTICE The directors of this Association shall hold office for one year and until their successors are duly elected and qualified. SECTION 2. REGULAR MEETINGS The organizational meeting of the Board of Directors shall be held on the same date as soon as practical following the annual meeting of shareholders wherever the Directors deem appropriate. Other regular meetings of the Board of Directors shall be held at such time and place as may be designated in the notice of the meeting. When any regular meeting of the Board falls on a holiday, the meeting shall be held on the next banking business day, unless the Board shall designate some other day. SECTION 3. SPECIAL MEETINGS Special meetings of the Board of Directors may be called by the Chairman of the Board of the Association, or at the request of three or more Directors. Notice of the time, place and purposes of such meetings shall be given by letter, by telephone, in person, by facsimile, by electronic mail or other reasonable manner to every Director. SECTION 4. QUORUM A majority of the entire membership of the Board shall constitute a quorum of any meeting of the board. SECTION 5. NECESSARY VOTE A majority of those Directors present and voting at any meeting of the Board of Directors shall decide each matter considered, except where otherwise required by law or the Articles or Bylaws of this Association. SECTION 6. COMPENSATION Directors, excluding full-time employees of the Bank, shall receive such reasonable compensation as may be fixed from time to time by the Board of Directors. SECTION 7. ELECTION-AGE & RETIREMENT-AGE LIMITATION No person shall be elected or re-elected a Director after reaching his seventieth (70/th/) birthday. Every Director of the Bank shall retire no later than the first month next following his seventieth (70/th/) birthday. SECTION 8. DIRECTORS EMERITUS The Board shall have the right from time to time to choose as Directors Emeritus persons who have had prior service as members of the Board and who may receive such compensation as shall be fixed from time to time by the Board of Directors. 27 ARTICLE III. OFFICERS - -------- SECTION 1. WHO SHALL CONSTITUTE The Officers of the Association shall be a Chairman of the Board, Chief Executive Officer, a President, a Secretary, and other officers such as Vice Chairman of the Board, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries, Trust Officers, Trust Investment Officers, Trust Real Estate Officers, Assistant Trust Officers, Controller, Assistant Controller, Auditor and Assistant Auditors, as the Board may appoint from time to time. The Board may choose to delegate authority to elect officers other than the Chairman, Chief Executive Office, President, Secretary, Vice Chairman and Executive Vice Presidents, to the Chief Executive Officer or President. Any person may hold two offices. The Chairman of the Board, all Vice Chairmen of the Board, Chief Executive Officer and the President shall at all times be members of the Board of Directors. SECTION 2. NUMBER As provided in the Articles of Association, the Board of this Association shall consist of not less than five nor more than twenty-five members. At any meeting of the shareholders held for the purpose of electing directors, or changing the number thereof, the number of directors may be determined by a majority of the votes cast by the shareholders in person or by proxy. Any vacancy occurring in the Board shall be filled by the remaining directors. Between meetings of the shareholders held for the purpose of electing directors, the Board by a majority vote of the full Board may increase the size of the Board by not more than four directors in any one year, but not to more than a total of twenty-five directors, and fill any vacancy so created in the Board. All directors shall hold office until their successors are elected and qualified. SECTION 3. TERM OF OFFICE All officers shall be elected for and shall hold office for one year and until their successors are elected and qualified, subject to the right in the Board of directors by a majority vote of the entire membership to discharge any officer at any time. SECTION 4. CHAIRMAN OF THE BOARD The Chairman of the Board shall have general executive powers and duties and shall perform such other duties as may be assigned from time to time by the Board of Directors. He shall, when present, preside at all meetings of the shareholders and directors and shall be ex officio a member of all committees of the Board. He shall name all members of the committees of the Board, subject to the confirmation thereof by the Board. SECTION 5. CHIEF EXECUTIVE OFFICER The Chief Executive Officer, who may also be the Chairman or the President, shall have general executive powers and duties and shall perform such other duties as may be assigned from time to time by the Board of Directors. SECTION 6. PRESIDENT The President shall have general executive powers and duties and shall perform such other 28 duties as may be assigned from time to time by the board of Directors. In addition, if designated by the Board of Directors, the President shall be the Chief Executive Officer and shall have all the powers and duties of the Chief Executive Officer, including the same power to name temporarily a Chief Executive Officer to serve in the absence of the President if there is a vacancy in the position of the chairman or in the event of the absence or incapacity of the Chairman. SECTION 7. VICE CHAIRMAN OF THE BOARD The Board of directors shall have the power to elect one or more Vice Chairmen of the Board of Directors. Any such Vice Chairmen of the Board shall participate in the formation of the policies of the Association and shall have such other duties as may be assigned to him from time to time by the Chairman of the Board or by the Board of Directors. SECTION 8. OTHER OFFICERS The Secretary and all other officers appointed by the Board of Directors shall have such duties as defined by law and as may from time to time be assigned to them by the chief executive Officer or the Board of Directors. SECTION 9. RETIREMENT Every officer of the Association shall retire not later than the first of the month next following his 65/th/ birthday. The Board of directors may, in its discretion, set the retirement date and terms of retirement of an officer at a date later than provided above. ARTICLE IV. COMMITTEES SECTION 1. COMPENSATION COMMITTEE The duties of the Compensation Committee of the Association shall be carried out by the Compensation Committee of the financial holding company that is the parent of this Association. SECTION 2. COMMITTEE ON AUDIT The duties of the Audit Committee of the Association shall be carried out by the Audit Committee of the financial holding company that is the parent of this Association. SECTION 3. TRUST COMMITTEE The Board of Directors of this Association shall also serve as the Trust Committee. The Trust Committee shall determine policies of the Department and review actions of the Trust Policy Committee. All actions of the Trust Committee shall be reported to the Board of Directors. SECTION 4. TRUST POLICY COMMITTEE There shall be a standing committee of this association to be known as the Trust Policy Committee composed of the officers of the Association. The Trust Policy Committee or such officers as may be duly designated by the Trust Policy Committee, shall pass upon the 29 acceptance of all trusts, the closing out or relinquishment of all trusts and the making, retention, or disposition of all investments of trust funds in conformity with policies established by the Trust Committee. Action of the Trust Policy Committee shall be reported to the Trust Committee. SECTION 5. PENSION COMMITTEE The duties of the Pension Committee of the Association shall be carried out by the Compensation Committee of the financial holding company that is the parent of this Association. SECTION 6. OTHER COMMITTEES The Chairman may appoint, from time to time, other committees for such purposes and with such powers as he or the Board my direct. ARTICLE V. MINUTE BOOK The organization papers of this Association, the Bylaws as revised or amended from time to time and the proceedings of all regular and special meetings of the shareholders and the directors shall be recorded in a minute book or books. All reports of committees required to be made to the Board shall be recorded in a minute book or shall be filed by the recording officer. The minutes of each meeting of the shareholders and the Board shall be signed by the recording officer. ARTICLE VI. CONVEYANCES, CONTRACTS, ETC. All transfers and conveyances of real estate, mortgages, and transfers, endorsements or assignments of stock, bonds, notes, debentures or other negotiable instruments, securities or personal property shall be signed by any elected or appointed officer. All checks, drafts, certificates of deposit and all funds of the Association held in its own or in a fiduciary capacity may be paid out by an order, draft or check bearing the manual or facsimile signature of any elected or appointed officer of the Association. All mortgage satisfactions, releases, all types of loan agreements, all routine transactional documents of the Association, and all other instruments not specifically provided for, whether to be executed in a fiduciary capacity or otherwise, may be signed on behalf of the Association by any elected or appointed officer thereof. The Secretary or any Assistant Secretary of the Association or other proper officer may execute and certify that required action or authority has been given or has taken place by resolution of the Board under this Bylaw without the necessity of further action by the Board. ARTICLE VII. SEAL The Association shall have no corporate seal. 30 ARTICLE VIII. INDEMNIFICATION OF DIRECTORS, OFFICERS, AND EMPLOYEES SECTION 1. INDEMNIFY The Association shall indemnify such persons for such liabilities in such manner under such circumstances and to such extent as permitted by the corporate laws of the Sate of Ohio as enacted or amended. The Board of Directors may authorize the purchase and maintenance of insurance and/or the execution of individual agreements for the purpose of such indemnification, and the Association shall advance all reasonable costs and expenses (including attorneys' fees) incurred in defending any action, suit or proceeding to all persons entitled to indemnification under this Section 1. SECTION 2. PAYMENTS Notwithstanding Section 1, however, (a) any indemnification payments to an institution-affiliated party, as defined at 12 USC 1813(u), for an administrative proceeding or civil action initiated by a federal banking agency, shall be reasonable and consistent with the requirements of 12 USC 1828(k) and the associated regulations; and (b) any indemnification payments and advancement of costs and expenses to an institution-affiliated party, as defined at 12 USC 1813(u), in cases involving an administrative proceeding or civil action not initiated by a federal banking agency, shall be consistent with safe and sound banking practices. ARTICLE IX. AMENDMENTS These Bylaws, or any of them, may be added to, altered, amended or repealed by the Board at any regular or special meeting of the Board. ARTICLE X. GOVERNING LAW This Association designates the Ohio Business Corporation Act, as amended from time to time, as the governing law for its corporate governance procedures, to the extent not inconsistent with Federal banking statutes and regulations. 31 Exhibit 6 --------- CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: November 13, 2001 U.S. BANK NATIONAL ASSOCIATION By: /s/ Richard H Prokosch ---------------------- Richard H Prokosch Vice President By: /s/ Julie Eddington ------------------- Julie Eddington Assistant Vice President 32 Exhibit 7 --------- U.S. Bank National Association Statement of Financial Condition As of 6/30/2001 ($000's) 6/30/2001 --------- Assets Cash and Due From Depository Institutions $ 3,561,101 Federal Reserve Stock 0 Securities 4,731,459 Federal Funds 1,058,080 Loans & Lease Financing Receivables 62,250,889 Fixed Assets 558,051 Intangible Assets 5,316,987 Other Assets 2,975,129 ----------- Total Assets $80,451,696 Liabilities Deposits $52,892,333 Fed Funds 1,342,118 Treasury Demand Notes 0 Trading Liabilities 90,576 Other Borrowed Money 11,563,493 Acceptances 138,422 Subordinated Notes and Debentures 2,430,442 Other Liabilities 1,542,375 ----------- Total Liabilities $69,999,759 Equity Minority Interest in Subsidiaries $ 766,058 Common and Preferred Stock 321,551 Surplus 6,094,941 Undivided Profits 3,269,387 ----------- Total Equity Capital $10,451,937 Total Liabilities and Equity Capital $80,451,696 - -------------------------------------------------------------------------------- To the best of the undersigned's determination, as of this date the above financial information is true and correct. U.S. Bank National Association By: /s/ Richard H Prokosch ----------------------- Vice President Date: November 13, 2001 33 EX-99.1 31 dex991.txt FORM OF LETTER OF TRANSMITTAL Exhibit 99.1 LETTER OF TRANSMITTAL To Tender for Exchange 12.875% Senior Secured Notes due 2008 of TERRA CAPITAL, INC. Pursuant to the Prospectus Dated , 2002 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002 UNLESS EXTENDED (THE "EXPIRATION DATE"). PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed and submitted to the Exchange Agent: US Bank Trust National Association (the "Exchange Agent")
By Overnight Courier or Registered/Certified Mail: By Hand: - -------------------------------------------------- -------- US Bank Trust National Association US Bank Trust National Association 180 East Fifth Street 180 East Fifth Street St. Paul, Minnesota 55101 St. Paul, Minnesota 55101 Attention: Specialized Finance Department Attention: Specialized Finance Department 4th Floor 4th Floor
Facsimile Transmission: For Information Telephone: ----------------------- -------------------------- (615) 244-1537 (800) 934-6802 Attention: Specialized Finance Department Confirm Receipt of Facsimile by Telephone: (800) 934-6802 Delivery of this Letter of Transmittal to an address or facsimile number other than as set forth above will not constitute a valid delivery. For any questions regarding this Letter of Transmittal or for any additional information, you may contact the Exchange Agent by telephone at (800) 934-6802 or by facsimile at (615) 244-1537. The undersigned hereby acknowledges receipt of the Prospectus dated , 2002 (the "Prospectus") of Terra Capital, Inc., a Delaware corporation (the "Issuer"), and this Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Issuer's offer (the "Exchange Offer") to exchange $1,000 in principal amount of its 12.875% Senior Secured Notes due 2008, Series B ("New Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act") for each $1,000 in principal amount of its outstanding 12.875% Senior Secured Notes due 2008 ("Outstanding Securities"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. The undersigned hereby tenders the Outstanding Securities described in Box 1 below (the "Tendered Securities") pursuant to the terms and conditions described in the Prospectus and this Letter of Transmittal. The undersigned is the registered owner of all the Tendered Securities and the undersigned represents that it has received from each beneficial owner of the Tendered Securities ("Beneficial Owners") a duly completed and executed form of "Instruction to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal. Subject to, and effective upon, the acceptance for exchange of the Tendered Securities, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Issuer all right, title, and interest in, to and under the Tendered Securities. Please issue the New Securities exchanged for Tendered Securities in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions" below (Box 3), please send or cause to be sent the certificates for the New Securities (and accompanying documents, as appropriate) to the undersigned at the address shown below in Box 1. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney in fact of the undersigned with respect to the Tendered Securities, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver the Tendered Securities to the Issuer or cause ownership of the Tendered Securities to be transferred to, or upon the order of, the Issuer, on the books of the registrar for the Outstanding Securities and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Issuer upon receipt by the Exchange Agent, as the undersigned's agent, of the New Securities to which the undersigned is entitled upon acceptance by the Issuer of the Tendered Securities pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise exercise all rights of beneficial ownership of the Tendered Securities, all in accordance with the terms of the Exchange Offer. The undersigned understands that tenders of Outstanding Securities pursuant to the procedures described under the caption "The Exchange Offer" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Issuer upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any Beneficial Owner(s), and every obligation of the undersigned or any Beneficial Owner(s) hereunder shall be binding upon the heirs, representatives, successors, and assigns of the undersigned and such Beneficial Owner(s). The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign, and transfer the Tendered Securities and that the Issuer will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, and adverse claims when the Tendered Securities are acquired by the Issuer as contemplated herein. The undersigned and each Beneficial Owner will, upon request, execute and deliver any additional documents reasonably requested by the Issuer or the Exchange Agent as necessary or desirable to complete and give effect to the transactions contemplated hereby. The undersigned hereby represents and warrants that the information set forth in Box 2 is true and correct. By accepting the Exchange Offer, the undersigned hereby represents and warrants that (i) the New Securities to be acquired by the undersigned and any Beneficial Owner(s) in connection with the Exchange Offer are being acquired by the undersigned and any Beneficial Owner(s) in the ordinary course of business of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each Beneficial Owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the New Securities, (iii) except as otherwise disclosed in writing herewith, neither the undersigned nor any Beneficial Owner is an "affiliate," as defined in Rule 405 under the Securities Act, of the Issuer, (iv) that the undersigned is not a broker-dealer tendering securities directly acquired from the Issuer for its own account, and (v) the undersigned and each Beneficial Owner acknowledge and agree that any person participating in the Exchange Offer with the intention or for the purpose of distributing the New Securities must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale of the New Securities acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission (the "Commission") set forth in the no-action letters that are discussed in the section of the Prospectus entitled "The Exchange Offer--Resale of the Exchange Notes." 2 In addition, by accepting the Exchange Offer, the undersigned hereby (i) represents and warrants that, if the undersigned or any Beneficial Owner of the Outstanding Securities is a broker-dealer, such broker-dealer acquired the Outstanding Securities for its own account as a result of market-making activities or other trading activities and has not entered into any arrangement or understanding with the Issuer or any "affiliate" of the Issuer (within the meaning of Rule 405 under the Securities Act) to distribute the New Securities to be received in the Exchange Offer, and (ii) acknowledges that, by receiving New Securities for its own account in exchange for Outstanding Securities, where such Outstanding Securities were acquired as a result of market-making activities or other trading activities, such broker-dealer will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The Issuer has agreed that, for a period starting on the Expiration Date and ending on the close of business on the earlier of the (i) 180th day after the Expiration Date and (ii) date on which all broker-dealers who have elected to exchange Outstanding Securities acquired for their own account as a result of market-making activities or other trading activities for New Securities have sold all New Securities held by them, it will make the Prospectus available to any such broker-dealer for use in connection with any such resale. [_] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED HEREWITH. [_] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE "Use of Guaranteed Delivery" BELOW (Box 4). [_] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE "Use of Book-Entry Transfer" BELOW (Box 5). 3 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THE BOXES
- ------------------------------------------------------------------------------------------------------------------------------ BOX 1 DESCRIPTION OF OUTSTANDING SECURITIES TENDERED (Attach additional signed pages, if necessary) - --------------------------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Outstanding Security Certificate Holder(s), exactly as name(s) appear(s) on Number(s) of Aggregate Principal Outstanding Security Certificate(s) Outstanding Amount Represented Aggregate Principal (Please fill in, if blank) Securities* by Certificate(s) Amount Tendered** - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- Total - ---------------------------------------------------------------------------------------------------------------------------- * Need not be completed by persons tendering by book-entry transfer. ** The minimum permitted tender is $1,000 in principal amount of any series of Outstanding Securities. All other tenders must be in integral multiples of $1,000 of principal amount of any series of Outstanding Securities. Unless otherwise indicated in this column, the principal amount of all Outstanding Security Certificates identified in this Box 1 or delivered to the Exchange Agent herewith shall be deemed tendered. See Instruction 4. - ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- BOX 2 BENEFICIAL OWNER(S) - -------------------------------------------------------------------------------- State of Principal Residence of Each Principal Amount of Tendered Securities Beneficial Owner of Tendered Securities Held for Account of Beneficial Owner - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
4 --------------------------------------------------------------------------- BOX 3 SPECIAL DELIVERY INSTUCTIONS (See Instructions 5, 6 and 7) TO BE COMPLETED ONLY IF NEW SECURITIES EXCHANGED FOR OUTSTANDING SECURITIES AND UNTENDERED OUTSTANDING SECURITIES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE. Mail New Securities and any untendered Outstanding Securities to: Name(s): (please print) Address: (include Zip Code) Tax Identification or Social Security No.: --------------------------------------------------------------------------- --------------------------------------------------------------------------- BOX 4 USE OF GUARANTEED DELIVERY (See Instruction 2) TO BE COMPLETED ONLY IF OUTSTANDING SECURITIES ARE BEING TENDERED BY MEANS OF A NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): Date of Execution of Notice of Guaranteed Delivery: Name of Institution which Guaranteed Delivery: --------------------------------------------------------------------------- ------------------------------------------------------------------------- BOX 5 USE OF BOOK-ENTRY TRANSFER (See Instruction 1) TO BE COMPLETED ONLY IF DELIVERY OF TENDERED SECURITIES IS TO BE MADE BY BOOK-ENTRY TRANSFER. Name of Tendering Institution: Account Number: Transaction Code Number: ------------------------------------------------------------------------- 5 BOX 6 TENDERING HOLDER SIGNATURE (See Instructions 1 and 5) In Addition, Complete Substitute Form W-9 X X (Signature of Registered Holder(s) or Authorized Signatory) Note: The above lines must be signed by the registered holder(s) of Outstanding Securities as their name(s) appear(s) on the Outstanding Securities or by persons(s) authorized to become registered holder(s) (evidence of such authorization must be transmitted with this Letter of Transmittal). If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer, or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. See Instruction 5. Name(s): Capacity: Street Address: (include Zip Code) Area Code and Telephone Number: Tax Identification or Social Security Number: Signature Guarantee (If required by Instruction 5) Authorized Signature X Name: (please print) Title: Name of Firm: (Must be an Eligible Institution as defined in Instruction 2) Address: (include Zip Code) Area Code and Telephone Number: Dated: BOX 7 BROKER-DEALER STATUS - ------------------------------------------------------------------------------ [_] CHECK HERE IF THE BENEFICIAL OWNER IS A PARTICIPATING BROKER-DEALER WHO HOLDS SECURITIES ACQUIRED AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO FOR USE IN CONNECTION WITH RESALES OF NEW SECURITIES RECEIVED IN EXCHANGE FOR SUCH SECURITIES. Name: Address: Area Code and Telephone Number: Contact Person: 6 PAYOR'S NAMES: TERRA CAPITAL, INC. - ----------------------------------------------------------------------------------------------------------------------------- Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part I below. See instructions if your name has changed.) SUBSTITUTE Form W-9 -------------------------------------------------------------------------------------------------- Department of the Treasury Address -------------------------------------------------------------------------------------------------- Internal Revenue Service City, State and ZIP Code -------------------------------------------------------------------------------------------------- List account number(s) here (optional) -------------------------------------------------------------------------------------------------- Part 1--PLEASE PROVIDE YOUR TAXPAYER Social Security Number IDENTIFICATION NUMBER ("TIN") IN THE BOX AT or TIN RIGHT AND CERTIFY BY SIGNING AND DATING BELOW --------------------------------------------- -------------------------------------------------------------------------------------------------- Part 2--Check the box if you are NOT subject to backup withholding under the provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. [_] -------------------------------------------------------------------------------------------------- CERTIFICATION--UNDER THE PENALTIES OF Part 3 -- PERJURY, I CERTIFY THAT THE INFORMATION Awaiting TIN [_] PROVIDED ON THIS FORM IS TRUE, CORRECT, AND COMPLETE. SIGNATURE DATE
Note:FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 7 TERRA CAPITAL, INC. INSTRUCTIONS TO LETTER OF TRANSMITTAL FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Delivery of this Letter of Transmittal and Outstanding Securities. A properly completed and duly executed copy of this Letter of Transmittal, including Substitute Form W-9, and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein, and either certificates for Tendered Securities must be received by the Exchange Agent at its address set forth herein or such Tendered Securities must be transferred pursuant to the procedures for book-entry transfer described in the Prospectus under the caption "The Exchange Offer--Procedures for Tendering" (and a confirmation of such transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of certificates for Tendered Securities, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the tendering holder and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Outstanding Securities should be sent to the Issuer. Neither the Issuer nor the registrar is under any obligation to notify any tendering holder of the Issuer's acceptance of Tendered Securities prior to the closing of the Exchange Offer. 2. Guaranteed Delivery Procedures. Holders who wish to tender their Outstanding Securities but whose Outstanding Securities are not immediately available, and who cannot deliver their Outstanding Securities, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Outstanding Securities according to the guaranteed delivery procedures set forth below, including completion of Box 4. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a recognized Medallion Program approved by the Securities Transfer Association Inc. (an "Eligible Institution") and the Notice of Guaranteed Delivery must be signed by the holder; (ii) prior to the Expiration Date, the Exchange Agent must have received from the holder and the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by mail, hand delivery or facsimile transmission) setting forth the name and address of the holder, the certificate number(s) of the Tendered Securities and the principal amount of Tendered Securities, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, this Letter of Transmittal together with the certificate(s) representing the Outstanding Securities or a confirmation of book-entry transfer of the Outstanding Securities into the Exchange Agent's account at The Depository Trust Company (the "DTC") and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal or facsimile of the Letter of Transmittal, as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all Tendered Securities in proper form for transfer or a confirmation of book-entry transfer of the Outstanding Securities into the Exchange Agent's account at the DTC, must be received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. Any holder who wishes to tender Outstanding Securities pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Outstanding Securities prior to 5:00 p.m., New York City time, on the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by an Eligible Holder who attempted to use the guaranteed delivery process. 3. Beneficial Owner Instructions to Registered Holders. Only a holder in whose name Tendered Securities are registered on the books of the registrar (or the legal representative or attorney-in-fact of such registered holder) may execute and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered 8 Securities who is not the registered holder must arrange promptly with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the registered holder of the Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner form accompanying this Letter of Transmittal. 4. Partial Tenders. Tenders of Outstanding Securities will be accepted only in integral multiples of $1,000 in principal amount. If less than the entire principal amount of Outstanding Securities held by the holder is tendered, the tendering holder should fill in the principal amount tendered in the column labeled "Aggregate Principal Amount Tendered" of the box entitled "Description of Outstanding Securities Tendered" (Box 1) above. The entire principal amount of Outstanding Securities delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Outstanding Securities held by the holder is not tendered, then Outstanding Securities for the principal amount of Outstanding Securities not tendered and New Securities issued in exchange for any Outstanding Securities tendered and accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, as soon as practicable following the Expiration Date. 5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed by the registered holder(s) of the Tendered Securities, the signature must correspond with the name(s) as written on the face of the Tendered Securities without alteration, enlargement or any change whatsoever. If any of the Tendered Securities are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any Tendered Securities are held in different names, it will be necessary to complete, sign and submit as many separate copies of the Letter of Transmittal as there are different names in which Tendered Securities are held. If this Letter of Transmittal is signed by the registered holder(s) of Tendered Securities, and New Securities issued in exchange therefor are to be issued (and any untendered principal amount of Outstanding Securities is to be reissued) in the name of the registered holder(s), then such registered holder(s) need not and should not endorse any Tendered Securities, nor provide a separate bond power. In any other case, such registered holder(s) must either properly endorse the Tendered Securities or transmit a properly completed separate bond power with this Letter of Transmittal, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of any Tendered Securities, such Tendered Securities must be endorsed or accompanied by appropriate bond powers, in each case, signed as the name(s) of the registered holder(s) appear(s) on the Tendered Securities, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal or any Tendered Securities or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Issuer, evidence satisfactory to the Issuer of their authority to so act must be submitted with this Letter of Transmittal. Endorsements on Tendered Securities or signatures on bond powers required by this Instruction 5 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution unless the Tendered Securities are tendered (i) by a registered holder who has not completed the box set forth herein entitled "Special Delivery Instructions" (Box 3) or (ii) by an Eligible Institution. 9 6. Special Delivery Instructions. Tendering holders should indicate, in the applicable box (Box 3), the name and address to which the New Securities and/or substitute Outstanding Securities for principal amounts not tendered or not accepted for exchange are to be sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 7. Transfer Taxes. The Issuer will pay all transfer taxes, if any, applicable to the exchange of Outstanding Securities pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the transfer and exchange of Outstanding Securities pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or on any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Tendered Securities listed in this Letter of Transmittal. 8. Tax Identification Number. Federal income tax law requires that the holder(s) of any Tendered Securities which are accepted for exchange must provide the Issuer (as payor) with its correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual, is his or her social security number. If the Issuer is not provided with the correct TIN, the Holder may be subject to backup withholding and a $50 penalty imposed by the Internal Revenue Service. (If withholding results in an over-payment of taxes, a refund may be obtained.) Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. To prevent backup withholding, each holder of Tendered Securities must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that (i) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the Tendered Securities are registered in more than one name or are not in the name of the actual owner, consult the "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for information on which TIN to report. The Issuer reserves the right in its sole discretion to take whatever steps are necessary to comply with the Issuer's obligation regarding backup withholding. 9. Validity of Tenders. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of Tendered Securities will be determined by the Issuer in its sole discretion, which determination will be final and binding. The Issuer reserves the right to reject any and all Outstanding Securities not validly tendered or any Outstanding Securities the Issuer's acceptance of which would, in the opinion of the Issuer or its counsel, be unlawful. The Issuer also reserves the right to waive any conditions of the Exchange Offer or defects or irregularities in tenders of Outstanding Securities as to any ineligibility of any holder who seeks to tender Outstanding Securities in the Exchange Offer. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Issuer shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Securities must be cured within such time as the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Outstanding Securities, nor shall any of them incur any liability for failure to give such notification. Tenders of Outstanding Securities will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding Securities received by the Exchange Agent that are not properly tendered 10 and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 10. Waiver of Conditions. The Issuer reserves the absolute right to amend, waive or modify any of the conditions in the Exchange Offer in the case of any Tendered Securities. 11. No Conditional Tender. No alternative, conditional, irregular, or contingent tender of Outstanding Securities or transmittal of this Letter of Transmittal will be accepted. 12. Mutilated, Lost, Stolen or Destroyed Outstanding Securities. Any tendering Holder whose Outstanding Securities have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions. 13. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address indicated herein. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. 14. Acceptance of Tendered Securities and Issuance of New Securities; Return of Outstanding Securities. Subject to the terms and conditions of the Exchange Offer, the Issuer will accept for exchange all validly tendered Outstanding Securities as soon as practicable after the Expiration Date and will issue New Securities therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be deemed to have accepted tendered Outstanding Securities when, as and if the Issuer has given written or oral notice (immediately followed in writing) thereof to the Exchange Agent. If any Tendered Securities are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Outstanding Securities will be returned, without expense, to the undersigned at the address shown in Box 1 or at a different address as may be indicated herein under "Special Delivery Instructions" (Box 3). 15. Withdrawal. Tenders may be withdrawn only pursuant to the procedures set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." 11 EX-99.2 32 dex992.txt FORM OF TENDER INSTRUCTIONS Exhibit 99.2 INSTRUCTIONS TO REGISTERED HOLDER AND/OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER OF TERRA CAPITAL, INC. In Respect of Exchange Offer for 12.875% Senior Secured Notes due 2008 Pursuant to the Prospectus dated , 2002 To Registered Holder and/or Book Entry Transfer Facility Participant: The undersigned hereby acknowledges receipt of the Prospectus, dated , 2002 (the "Prospectus") of Terra Capital, Inc., a Delaware corporation (the "Issuer"), and the accompanying Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Issuer's offer (the "Exchange Offer"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This will instruct you, a registered holder and/or Book-Entry Transfer Participant, as to action to be taken by you relating to the Exchange Offer with respect to the $200,000,000 in aggregate principal amount of the 12.875% Senior Secured Notes due 2008 (the "Outstanding Securities") held by you for the account of the undersigned. The aggregate principal amount of the Outstanding Securities held by you for the account of the undersigned is (fill in amount): $ . With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box): [_] TO TENDER Outstanding Securities held by you for the account of the undersigned in the aggregate principal amount of (fill in amount, if any): $ . [_] NOT TO TENDER any Outstanding Securities held by you for the account of the undersigned. If the undersigned instructs you to tender the Outstanding Securities held by you for the account of the undersigned, it is understood that you are authorized: (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the undersigned's principal residence is in the state of (fill in state) , (ii) the undersigned is not participating, does not participate, and has no arrangement or understanding with any person to participate in the distribution of the New Securities, (iii) the New Securities to be acquired by the undersigned and any Beneficial Owner(s) in connection with the Exchange Offer are being acquired by the undersigned and any Beneficial Owner(s) in the ordinary course of business of the undersigned and any Beneficial Owner(s), (iv) the undersigned and each Beneficial Owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the New Securities, (v) except as otherwise disclosed in writing herewith, neither the undersigned nor any Beneficial Owner is an "affiliate," as defined in Rule 405 under the Securities Act, of the Issuer, (vi) that the undersigned is not a broker-dealer tendering securities directly acquired from the Issuer for its own account, and (vii) the undersigned and each Beneficial Owner acknowledge and agree that any person participating in the Exchange Offer with the intention or for the purpose of distributing the New Securities must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the "Securities Act"), in connection with a secondary resale of the New Securities acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission (the "Commission") set forth in the no-action letters that are discussed in the section of the Prospectus entitled "The Exchange Offer--Resale of the Exchange Notes" (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of such Outstanding Securities. - -------------------------------------------------------- SIGN HERE Name of beneficial owner(s): Signature(s): Name (please print): Address: Telephone number: Taxpayer Identification or Social Security Number: Date: - -------------------------------------------------------- 2 EX-99.3 33 dex993.txt FORM OF NOTICE OF GUARANTEED DELIVERY Exhibit 99.3 NOTICE OF GUARANTEED DELIVERY TERRA CAPITAL, INC. With Respect to the Exchange Offer Pursuant to the Prospectus Dated , 2002 This form must be used by a holder of the $200,000,000 in aggregate principal amount of the 12.875% Senior Secured Notes due 2008 (the "Outstanding Securities") of Terra Capital, Inc., a Delaware corporation (the "Issuer"), who wishes to tender Outstanding Securities to the Exchange Agent pursuant to the guaranteed delivery procedures described in "The Exchange Offer--Guaranteed Delivery Procedures" of the Issuer's Prospectus, dated , 2002 and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes to tender Outstanding Securities pursuant to such guaranteed delivery procedures must ensure that the Exchange Agent receives this Notice of Guaranteed Delivery prior to the Expiration Date of the Exchange Offer. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal. - --------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002 UNLESS EXTENDED (THE "EXPIRATION DATE"). - --------------------------------------------------------------------------- US Bank Trust National Association (the "Principal Exchange Agent") By Overnight Courier or Registered/Certified Mail: By Hand: - -------------------------------------------------- -------- US Bank Trust National Association US Bank Trust National Association 180 East Fifth Street 180 East Fifth Street St. Paul, Minnesota 55101 St. Paul, Minnesota 55101 Attention: Specialized Finance Department Attention: Specialized Finance Department 4th Floor 4th Floor
Facsimile Transmission: For Information Telephone: ----------------------- -------------------------- (615) 244-1537 (800) 934-6802 Attention: Specialized Finance Department Confirm Receipt of Facsimile by Telephone: (800) 934-6802 Delivery of this instrument to an address other than as set forth above will not constitute a valid delivery. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to the Issuer, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Outstanding Securities set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and in Instruction 2 of the related Letter of Transmittal. The undersigned hereby tenders the Outstanding Securities listed below:
Aggregate Principal Certificate Number(s) (if known) of Outstanding Amount Aggregate Principal Securities or Account Number at the Book-Entry Facility Represented Amount Tendered - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE - -------------------------------------------------------------------------------- Securities of Registered Holder(s) or Authorized Signatory: __________ Date: _________________________, 2001 ___________________________________ Address: ____________________________ ___________________________________ _____________________________________ Name(s) or Registered Holder(s): __ Area Code and Telephone No. _________ _____________________________________________________________________________ _____________________________________________________________________________ 2 - ------------------------------------------------------------------------------- This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as their name(s) appear on certificates for Outstanding Securities or on a security position listing as the owner of Outstanding Securities, or by person(s) authorized to become holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information. Please print name(s) and address(es) Name(s): Capacity: Address(es): - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GUARANTEE (Not to be used for signature guarantee) The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or is a commercial bank or trust company having an office or correspondent in the United States, or is otherwise an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof), together with the Outstanding Securities tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Outstanding Securities into the Exchange Agent's account at the Book-Entry Transfer Facility described in the Prospectus under the caption "The Exchange Offer" and in the Letter of Transmittal) and any other required documents, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the Expiration Date Name of firm: (Authorized Signature) Address: Name: (Please Print) Title: (Include Zip Code) Area Code and Tel. No. Dated: , 2001 - -------------------------------------------------------------------------------- DO NOT SEND OUTSTANDING SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF OUTSTANDING SECURITIES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL. 3 INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY 1. Delivery of this Notice of Guaranteed Delivery. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address as set forth herein prior to the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and sole risk of the holder, and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the holders may wish to consider using an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 2 of the related Letter of Transmittal. 2. Signatures on this Notice of Guaranteed Delivery. If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Securities referred to herein, the signature must correspond with the name(s) written on the face of the Outstanding Securities without alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is signed by the Trustee whose name appears on a security position listing as the owner of the Outstanding Securities, the signature must correspond with the name shown on the security position listing as the owner of the Outstanding Securities. If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Securities listed or a participant of the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appears on the Outstanding Securities or signed as the name of the participant shown on the Book-Entry Transfer Facility's security position listing. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit with the Letter of Transmittal evidence satisfactory to the Issuer of such person's authority to so act. 3. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer. 4 -----END PRIVACY-ENHANCED MESSAGE-----