Item 1.01 Entry into a Material Definitive Agreement.
On June 10, 2011, Rentech, Inc. (the Company) and its subsidiary, Rentech Energy Midwest Corporation (REMC),
replaced REMCs existing term loan facility with a new five year $150,000,000 secured term loan facility pursuant to a
Credit Agreement (the Credit Agreement) with Credit Suisse AG, Cayman Islands Branch (Credit Suisse), as
administrative agent and collateral agent and the lenders party thereto. Immediately prior to signing the Credit
Agreement, REMC and the Company entered into a waiver agreement with the lenders under the existing term loan facility
that permitted the prepayment of the existing term loan prior to the expiration of the no-call period. REMC, the
borrower under the Credit Agreement, used the net proceeds of the term loan to repay the existing term loan facility,
to pay fees and expenses and to make a distribution to the Company.
The Credit Agreement includes an uncommitted incremental term loan facility under which REMC may request up to
$25,000,000 in incremental term loans that may be used only for an expansion of the REMC facility, subject to the
satisfaction of conditions, including the condition that, after giving effect to the incurrence of any incremental term
loans, the total outstanding principal amount of all term loans under the Credit Agreement may not exceed $120,000,000.
REMC paid upfront fees to the
lenders under the Credit Agreement equal to 2.0% of the aggregate
principal amount of the term loans. The term loans will bear interest, upon the election of REMC, at either
(a)(i) the greater of LIBOR or 1.5%, plus (ii) 8.5% or (b)(i) the greatest of (w) the prime rate, as determined by
Credit Suisse, (x) 0.5% in excess of the federal funds effective rate, (y) LIBOR plus 1.0% or (z) 2.5% plus (ii) 7.5%.
Interest payments are generally required to be made on a quarterly basis.
The term loans are subject to amortization, payable quarterly, of 2.5% of the original principal amount until March 31,
2016. The remaining principal is payable on June 10, 2016, the maturity date.
The obligations of REMC under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries. REMC
has granted a mortgage on its real property located in East Dubuque, Illinois to secure its obligations under the
Credit Agreement, and REMC, the Company and the subsidiary guarantors have granted a security interest in substantially
all their assets to secure their obligations pursuant to a Guarantee and Collateral Agreement and certain related
The term loans are subject to mandatory prepayment and reduction under certain circumstances, with customary
exceptions, from the proceeds of the sale of assets and the sale or issuance of certain indebtedness, from certain
insurance and condemnation proceeds, and from a percentage of annual excess cash flow. The term loans may be prepaid
voluntarily at any time. In the first year, voluntary prepayments of the term loans may be made subject to a
prepayment fee of 2.0% of the amount prepaid, and if prepaid in the second year, 1.0% of the amount prepaid. Voluntary
prepayments made after the second anniversary of the closing date may
be prepaid without any prepayment fee.
The Credit Agreement contains customary representations and warranties, covenants, and events of default, including
limitations on distributions and loans from REMC to the Company, and financial covenants applicable to REMC including
maximum annual capital expenditures, minimum interest coverage ratios, maximum leverage ratios and a minimum liquidity
The descriptions of the Credit Agreement and the Guarantee and Collateral Agreement and the Mortgage are qualified in
their entirety by reference to the full text of such agreements which are attached hereto as Exhibits 10.1, 10.2 and
10.3, respectively, and incorporated by reference herein.
||Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
See Exhibit Index attached hereto.