Item 1.01. Entry into Material Definitive Agreement.
The following descriptions are summaries only, are not complete and are qualified in their entirety by reference to the full text of the Exhibits filed herewith, which are incorporated herein by reference.
Second Amended and Restated Term Loan Credit Agreement
On April 1, 2016, Rentech Nitrogen Holdings, Inc. (“RNHI”), an indirect wholly-owned subsidiary of Rentech, Inc. (the “Company”), entered into a Second Amended and Restated Term Loan Credit Agreement (the “Credit Agreement”) among RNHI, certain funds managed by or affiliated with GSO Capital Partners LP, as lenders, and Credit Suisse AG, Cayman Islands Branch, as administrative agent (the “Agent”) and repaid approximately $42 million of term debt in exchange for approximately 5.4 million common units (“CVR Common Units”) of CVR Partners, LP (“CVR”). The Credit Agreement consists of a $53,250,000 term loan facility, which matures on April 9, 2019.
The loans are part of a single tranche of term loans made up of (i) $45 million of tranche B loans borrowed under the prior credit agreement and maintained and continued under the Credit Agreement and (ii) $8.25 million of tranche A loans borrowed under the prior credit agreement and rolled over into the tranche B loans at the closing of the Credit Agreement (collectively, the “Loans”). The Loans under the Credit Agreement bear interest at a rate equal to the greater of (i) LIBOR plus 7.00% and (ii) 8.00% per annum.
RNHI’s obligations under the Credit Agreement are guaranteed by the Company and the Company’s direct and indirect subsidiaries other than certain excluded subsidiaries (such subsidiaries guaranteeing obligations under the Credit Agreement, the “Subsidiary Guarantors,” and together with the Company and RNHI, the “Loan Parties”). On April 1, 2016, the Company and the Subsidiary Guarantors entered into a Second Amended and Restated Guaranty Agreement (the “Guaranty Agreement”) in favor of the Agent. The Guaranty Agreement contains customary affirmative and negative covenants for the Company, the Subsidiary Guarantors and their respective subsidiaries, including, among others, certain reporting requirements to the Agent, payment of material obligations, compliance with laws, use of proceeds and limitations on the incurrence of indebtedness and liens, the sale of assets and the making of restricted payments by the Company and the Subsidiary Guarantors. Furthermore, the obligations under the Credit Agreement and the guarantees are secured by a lien on substantially all of the Loan Parties’ tangible and intangible property, and by a pledge of all of the shares of stock and limited liability company interests owned by the Loan Parties, of which the Loan Parties now own or later acquire more than a 50% interest, subject to certain exceptions.
The Credit Agreement contains customary affirmative and negative covenants and events of default relating to the Loan Parties. The covenants and events of default include, among other things, a provision with respect to a change of control and limitations on the incurrence of indebtedness and liens, the sale of assets, and the making of restricted payments by the Loan Parties. In addition, upon the occurrence of an initial public offering of the wood pellets or wood fibre operations of the Company, the Company must make an offer to prepay the entire outstanding principal amount of the facility.
The obligations of RNHI under the Credit Agreement are also secured by 7,179,996 CVR Common Units owned by RNHI.
Preferred Equity Exchange and Discharge Agreement
On April 1, 2016, the Company and DSHC, LLC, a wholly owned subsidiary of the Company (“DSHC”), entered into the Preferred Equity Exchange and Discharge Agreement (the “Exchange Agreement”) with certain funds managed by or affiliated with GSO Capital Partners LP (the “GSO Funds”) and GSO Capital Partners LP, as the Holders’ Representative under the Exchange Agreement, pursuant to which the Company acquired and cancelled all 100,000 shares of the Company’s Series E Convertible Preferred Stock, par value $10.00 per share (the “Preferred Shares”), from the GSO Funds in exchange for approximately 11.6 million CVR Common Units, $10.0 million in cash and the payment of all unpaid accrued and accumulated dividends on the Preferred Shares through April 1, 2016. In connection with the closing of the Exchange Agreement:
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the parties terminated various provisions of the Subscription Agreement, dated as of April 9, 2014, by and among the Company, the GSO Funds and the Holders’ Representative, as amended; and
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the parties terminated (a) each of the Amended and Restated Put Option Agreements, dated as of February 12, 2015, by and between a GSO Fund and DSHC, (b) the Amended and Restated Pledge Agreement, dated February 12, 2015, by and among DSHC, Credit Suisse AG, Cayman Islands Branch, and the GSO Funds, (c) the Collateral Account Control Agreement, dated April 15, 2014, among DSHC, Credit Suisse AG, Cayman Islands Branch, and The Bank of New York Mellon, and (d) the Amended and Restated Registration Rights Agreement, dated February 12, 2015, by and among the Company, the Holders and the Holders’ Representative.
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For further descriptions of the documents (or provisions thereof) that have been terminated as described above, please see the Current Reports on Form 8-K filed by the Company on April 11, 2014 and February 12, 2015.
GSO Funds Letter Agreement
On April 4, 2016, the Company, DSHC and RNHI entered into a letter agreement (the “Letter Agreement”) with certain GSO Funds and the Holders’ Representative. The Letter Agreement, provides for, among other things, the following:
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for so long as any GSO Fund holds any CVR Common Units, the Company agrees to provide to GSO Capital Partners the following board designation rights with respect to the board of directors of the general partner of CVR (the “CVR Board”):
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to the extent the Company, DSHC and/or RNHI, individually or collectively, has the right to designate two directors to the CVR Board under the Transaction Agreement, dated as of August 9, 2015 by and among CVR, Coffeyville Resources, LLC, the Company, DSHC and RNHI (the “Transaction Agreement”), the Company, DSHC and RNHI agree to permit GSO Capital Partners LP to name one of the two director designees; and
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to the extent the Company, DSHC and/or RNHI, individually or collectively, has the right to designate only one director to the CVR Board under the Transaction Agreement, the Company, DSHC and RNHI agree to permit GSO Capital Partners LP to name such designee to the extent, and so long as, the GSO Funds hold more CVR Common Units than the Company, DSHC and RNHI, collectively.
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RNHI and DSHC assigned to the GSO Funds certain of the registration rights relating to the CVR Common Units under the Registration Rights Agreement, dated as of August 9, 2015 by and among the CVR, Coffeyville Resources, LLC, DSHC and RNHI (the “Registration Rights Agreement”).
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For further descriptions of the Transaction Agreement and Registration Rights Agreement referenced above, please see the Current Report on Form 8-K filed by the Company on August 13, 2015.