Exhibit 4.6
[EXECUTION COUNTERPART]
CONSENT, WAIVER AND AMENDMENT NO. 3
CONSENT, WAIVER AND AMENDMENT NO. 3 (this "Agreement") dated as of
November 22, 1996 among: TERRA CAPITAL, INC., a Delaware corporation (the
"Company"); TERRA NITROGEN, LIMITED PARTNERSHIP, a Delaware limited partnership
("TNLP" and, together with the Company, the "Borrowers); each of the entities
listed on the signature pages hereof under the caption "GUARANTORS" (each such
entity, and each of the Borrowers, an "Obligor" and, collectively, the
"Obligors"); each of the lenders (the "Lenders") and issuing banks (the "Issuing
Banks") listed on the signature pages hereof; and CITIBANK, N.A., as agent for
the Lenders and Issuing Banks under the Credit Agreement referred to below (in
such capacity, the "Agent"). The Obligors, the Lenders, the Issuing Banks and
the Agent are parties to an Amended and Restated Credit Agreement dated as of
December 14, 1995 (as from time to time amended, the "Credit Agreement").
PRELIMINARY STATEMENTS
Terms used in these Preliminary Statements and not otherwise defined
have the respective meanings assigned to them in Section 1 of this Agreement.
(1) As more fully provided in the ADP Documents, Terra Canada has
leased the ADP Property from the ADP Trust, and has an option (the
"Option") to acquire the ADP Property for approximately C$70,000,000. Terra
Canada has obtained an independent appraisal of the ADP Property indicating
that the same has a current fair market value of approximately
C$303,000,000. Accordingly, Terra Canada estimates that the fair market
value of the Option is approximately C$233,000,000.
(2) Terra Canada wishes to exercise the Option and to utilize non-
capital losses within the Minorco-controlled group of Canadian companies to
obtain a tax basis in the ADP Property equal to its current fair market
value. Terra Canada will pay a negotiated fee to HBMS as consideration for
HBMS entering into the Terra Canada Transaction. In connection with the
foregoing, Terra Canada wishes to implement the Terra Canada Transaction on
the terms and conditions set forth herein.
The Company has requested that the Lenders consent to the Terra Canada
Transaction and to amend the Credit Agreement in certain respects, and the
Lenders are willing to so consent and so amend the Credit Agreement, all on the
terms and conditions
Consent, Waiver and Amendment No. 3
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set forth herein. Accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined. In addition, as
used herein:
"ADP Documents" means, collectively, the InterParty Agreement and the
other Operative Documents referred to therein.
"ADP Property" means the anhydrous ammonia production facility and
related properties located in the Province of Ontario, Canada, owned by the
ADP Trust (which facility and related properties constitute the "Property",
as defined in the InterParty Agreement).
"ADP Trust" means The 1993 ▇▇▇▇▇▇▇▇▇▇ Property Trust formed pursuant
to the ADP Documents by a Declaration of Trust dated April 8, 1993.
"C$" means the lawful currency of Canada.
"HBMS" means ▇▇▇▇▇▇ Bay Mining & Smelting Co., Limited, a corporation
incorporated under the Canada Business Corporations Act and an indirect
wholly owned Subsidiary of Minorco.
"HBMS Fees" means the fees payable by Terra International and its
Subsidiaries to HBMS in connection with the Terra Canada Transaction.
"InterParty Agreement" means the InterParty Agreement dated as of
April 8, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇; Terra International, as Guarantor; W.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Trustee; Montreal Trust Company of Canada, as Paying
Agent; and the Purchasers party thereto, as from time to time amended.
"Terra Canada" means Terra International (Canada) Inc., a corporation
governed by the laws of Ontario and an indirect wholly owned Subsidiary of
Terra Capital.
"Terra Canada Transaction" means, collectively, the transactions
described in Section 2(A) of this Agreement, the other transactions
described in Section 2(B) of this Agreement and the payment of HBMS Fees.
Consent, Waiver and Amendment No. 3
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Section 2. Description of Terra Canada Transaction.
A. Contemplated Transaction. The Company has requested that the
Lenders and the Issuing Banks consent to the following transactions (the
elements of which would occur in the order set forth below and, as to the
elements described in Paragraphs 1 through 4 below, would occur as promptly as
reasonably practicable):
1. Formation of Newco. Terra Canada will incorporate a new corporation
("Newco"). The authorized share capital of Newco will include common shares
and preferred shares. The authorized preferred shares of Newco will be non-
voting, will have no par value and will be redeemable for an amount equal
to the fair market value of the consideration received by Terra Canada upon
the issuance of such shares. Terra Canada will subscribe for one common
share of Newco in exchange for a contribution of C$1.00 to the capital of
Newco. Terra Canada will thereupon transfer the Option to Newco in exchange
for preferred shares of Newco ("Newco Preferred Shares") having an
aggregate redemption amount approximately equal to C$233,000,000. No other
consideration will be received by Terra Canada, and no other property will
be transferred by Terra or any of its Subsidiaries to Newco, in respect of
the elements of the Terra Canada Transaction described in this Paragraph 1.
2. Redemption of Newco Preferred; Newco Note. Newco will redeem the
Newco Preferred Shares held by Terra Canada in exchange for the issuance of
a promissory note (the "Newco Note") payable by Newco to Terra Canada in an
aggregate amount approximately equal to C$233,000,000. The Newco Note will
be repayable on demand and will not bear interest. The obligations of Newco
to Terra Canada in respect of the Newco Note will be secured by a pledge of
the Option; Terra Canada will have no other right of recourse against Newco
in respect of the Newco Note. Newco may, at its option, repay or prepay the
Newco Note through an assignment of the Option to Terra Canada.
3. Sale of Newco to HBMS. No later than the date three days following
the occurrence of the transactions described in Paragraph 2 above, Terra
Canada will sell the issued and outstanding common share of Newco to HBMS
for C$1.00. Upon the consummation of such sale, Newco will become a wholly
owned Subsidiary of HBMS and will cease to be a Subsidiary of Terra Canada.
4. Dissolution of Newco. HBMS will cause Newco to be wound up. Upon
the winding up of Newco (i) the assets of
Consent, Waiver and Amendment No. 3
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Newco will be distributed to, and the liabilities of Newco will be assumed
by, HBMS and (ii) Newco will be dissolved. Following the assumption of
Newco's liabilities from HBMS as aforesaid, Terra Canada will demand
repayment of the Newco Note from HBMS. HBMS will transfer the Option to
Terra Canada in full satisfaction of the Newco Note. The events referred to
in this Paragraph 4 shall be concluded no later than the date three days
following the sale of the capital stock of Newco to HBMS as described in
Paragraph 3 above.
5. Exercise of Option. Following the transfer of the Option to Terra
Canada described in Paragraph 4 above, Terra Canada will exercise the
Option in accordance with the terms of the ADP Documents.
B. Additional Transaction Elements. In addition to the contemplated
steps described in Section 2(A) above, the Terra Canada Transaction may include:
(a) such other transactions as are permitted under the terms of the
Credit Agreement and the other Loan Documents (in each case as in effect
immediately prior to the effectiveness of this Agreement); and/or
(b) such other transactions that, taken collectively, have
substantially the same result as the transactions described in Section 2(A)
above, provided that such other transactions are consummated as promptly as
reasonably practicable and (after giving effect to the consummation of all
such transactions):
(i) do not result in the Disposition by the Company or any of its
Subsidiaries of any Collateral;
(ii) do not result in the transfer of the Option or any ADP
Property to any Person other than a Subsidiary of the Company;
(iii) do not result in the Company or any of its Subsidiaries
being subject to any continuing indenture, instrument or other
agreement containing terms more restrictive than indentures,
instruments and other agreements to which such Persons are subject
immediately prior to the Terra Canada Transaction;
(iv) do not include the sale of ownership interests in any
Subsidiary of the Company (other than Subsidiaries created solely for
the purpose of the Terra Canada Transaction) to any Person other than
to the Company or a Subsidiary of the Company; and
Consent, Waiver and Amendment No. 3
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(v) do not have a Material Adverse Effect.
Section 3. Consent, Waiver and Amendment. Subject to the satisfaction
of the conditions precedent set forth in Section 6 hereof, but effective as of
the date hereof:
(a) each of the Lenders and Issuing Banks hereby consents to the Terra
Canada Transaction for all purposes of the Credit Agreement and the other
Loan Documents, and agrees that the same may be implemented (and in such
connection consents to the execution, delivery and performance of all
documents, instruments and other undertakings necessary to give effect to
the proposed transaction);
(b) each of the Lenders and Issuing Banks hereby waives all
prepayments under Sections 2.05(b) of the Credit Agreement that would
otherwise be required as a result of the occurrence of Dispositions
constituting part of the Terra Canada Transaction;
(c) each of the Lenders and Issuing Banks hereby waives any Default or
Event of Default that would otherwise occur solely as a result of the
consummation of the Terra Canada Transaction; and
(d) the Credit Agreement shall be amended by adding a new Section 9.16
thereto reading as follows:
"Section 9.16. Terra Canada Transaction. Notwithstanding anything
in this Agreement or the other Loan Documents to the contrary, nothing
in this Agreement or in any of the other Loan Documents shall prohibit
or otherwise restrict (or require any prepayment with the Net
Available Proceeds (if any) of) the Terra Canada Transaction (as such
term is defined in Consent, Waiver and Amendment No. 3 hereto dated as
of November 22, 1996)."
Section 4. Additional Amendments. Subject to the Agent's receipt of
this Agreement, duly executed by each of the Obligors, each of the Lenders and
the Agent, but effective as of the date hereof, the Credit Agreement is hereby
further amended as follows:
A. Definitions. Section 1.01 of the Credit Agreement is hereby amended
by amending clause (ii) of the definition of "Disposition" in said Section 1.01
to read as follows:
Consent, Waiver and Amendment No. 3
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"(ii) by any Obligor or a wholly owned Subsidiary of an Obligor to
another Obligor or to a wholly owned Subsidiary of an Obligor,".
B. Ownership, Etc. Section 5.01(o) of the Credit Agreement shall be
amended by amending paragraph (vi) thereof to read as follows:
"(vi) TNC will own no property other than cash and:
(v) ownership interests of TNCLP and its successors and a general
partnership interest in TNLP and its successors;
(w) capital stock of a wholly owned Subsidiary of TNC organized for
the purpose of holding Senior Preference Units;
(x) equipment and other property principally used in connection with
TNC's performance of general and administrative services (including,
without limitation, property related to incentive compensation plans,
deferred compensation plans and other funded benefit plans) for Terra and
its Subsidiaries;
(y) raw materials and other property used in the manufacture, storage,
sale and distribution of nitrogen and methanol products by Terra and its
Subsidiaries in the ordinary course of business, provided that the
aggregate book value of all tangible property of TNC referred to in this
paragraph (y) shall not at any time exceed $10,000,000; and
(z) other property incidental to its business as a holding company and
a general partner."
Section 5. Representations and Warranties. The Company hereby
represents and warrants to the Agent and the Lenders that:
(a) the representations and warranties contained in each Loan Document
are correct on and as of the date hereof, as though made on and as of such
date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and
(b) no event has occurred and is continuing that constitutes a Default
or an Event of Default.
Consent, Waiver and Amendment No. 3
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Section 6. Conditions Precedent. As provided in Section 3 hereof, the
consents, waivers and amendment set forth in said Section 3 shall each become
effective, as of the date hereof, upon the Agent's receipt of the following
(each in form and substance satisfactory to it):
A. Execution and Delivery, Etc. This Agreement, duly executed by each
of the Obligors, each of the Lenders and the Agent.
B. Consents; Approvals; Etc. A certificate of a senior officer of the
Company to the effect that:
(a) all necessary governmental and material third party consents
and approvals (including, without limitation, a favorable tax ruling
from Revenue Canada and the consent of the Trustee of the ADP Trust)
in connection with the Terra Canada Transaction have been obtained and
remain in effect; and
(b) a committee consisting of independent members of Terra's
board of directors has approved the amount of the HBMS Fees.
C. Other Documents. Such other documents as the Agent or any Lender or
special New York counsel to the Agent may reasonably request.
Section 7. Miscellaneous. Except as herein provided, the Credit
Agreement and each of the other Loan Documents shall remain unchanged and in
full force and effect. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
Consent, Waiver and Amendment No. 3
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWERS
-------------
TERRA CAPITAL, INC.
By
---------------------------------
Title:
TERRA NITROGEN, LIMITED PARTNERSHIP
By Terra Nitrogen Corporation,
its General Partner
By
---------------------------------
Title:
GUARANTORS
----------
TERRA INDUSTRIES INC.
By
---------------------------------
Title:
TERRA NITROGEN CORPORATION
By
---------------------------------
Title:
BEAUMONT METHANOL, LIMITED
PARTNERSHIP
By Terra Methanol Corporation,
its General Partner
By
----------------------------
Title:
Consent, Waiver and Amendment No. 3
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TERRA METHANOL CORPORATION
By
----------------------------
Title:
BMC HOLDINGS, INC.
By
----------------------------
Title:
TERRA CAPITAL HOLDINGS, INC.
By
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Title:
THE AGENT
---------
CITIBANK, N.A.
By
----------------------------
Title:
COMMITMENTS THE LENDERS
----------- -----------
Terra Commitment CITIBANK, N.A.
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
-----------------------------
Title:
Terra Commitment THE CHASE MANHATTAN BANK
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
-----------------------------
Title:
Consent, Waiver and Amendment No. 3
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ CORPORATION
----------------
$16,500,000.00
TNLP Commitment
---------------
$ 1,100,000.00 By
----------------------------
Title:
Terra Commitment BANK OF AMERICA ILLINOIS
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------
Title:
Terra Commitment THE BANK OF NOVA SCOTIA
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------
Title:
Terra Commitment CAISSE NATIONAL DE CREDIT AGRICOLE
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------
Title:
Terra Commitment COOPERATIEVE CENTRALE RAIFFEISEN-
---------------- BOERENLEEBANK, B.A. "RABOBANK
$28,500,000.00 NEDERLAND", NEW YORK BRANCH
TNLP Commitment
---------------
$ 1,900,000.00
By
----------------------------
Title:
By
----------------------------
Title:
Consent, Waiver and Amendment No. 3
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ CREDIT LYONNAIS CHICAGO BRANCH
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------
Title:
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By
---------------------------------
Title:
Terra Commitment DRESDNER BANK AG, CHICAGO AND GRAND
---------------- CAYMAN BRANCHES
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
---------------------------------
Title:
By
---------------------------------
Title:
Terra Commitment FIRST BANK NATIONAL ASSOCIATION
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------------
Title:
Terra Commitment THE FUJI BANK, LIMITED
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------------
Title:
Terra Commitment MELLON BANK, N.A.
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
----------------------------------
Title:
Consent, Waiver and Amendment No. 3
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
----------------
$28,500,000.00
TNLP Commitment
---------------
$ 1,900,000.00 By
---------------------------------
Title:
Terra Commitment UNION BANK OF SWITZERLAND, NEW YORK
---------------- BRANCH
$16,500,000.00
TNLP Commitment
---------------
$ 1,100,000.00 By
----------------------------------
Title:
By____________________________
Title:
Consent, Waiver and Amendment No. 3
-----------------------------------