Exhibit 10.27
EXECUTION COPY
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
AND WAIVER
This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER (this
“Amendment”), dated as of December 14, 2009, among RENTECH ENERGY MIDWEST
CORPORATION, a Delaware corporation (“Borrower”), RENTECH, INC., a Colorado
corporation (“Holdings”), the Lenders and the Agents (each as defined below) is
entered into in connection with the Credit Agreement referred to in the first
recital below.
RECITALS
WHEREAS, Borrower and Holdings are parties to that certain Amended and Restated
Credit Agreement, dated as of June 13, 2008 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement), among
Borrower, Holdings, the banks, financial institutions and other entities party
to the Credit Agreement as lenders (the “Lenders”), Credit Suisse, Cayman
Islands Branch, as administrative agent (in such capacity, the “Administrative
Agent”) and as collateral agent (in such capacity, the “Collateral Agent”);
WHEREAS, Holdings anticipates restating its previously reported consolidated
annual financial statements for fiscal year 2008 and its previously reported
financial statements for the quarterly periods in fiscal year 2008 and fiscal
year 2009 (i) to correct an error in the classification of deposits on forward
natural gas contracts on Holdings’ balance sheet as inventory instead of
deposits and (ii) to reverse the effects of impairments that Holdings recorded
on these deposits which were not calculated in a manner consistent with GAAP
(the items described in clauses (i) and (ii), the “Accounting Errors”);
WHEREAS, the prior treatment of the deposit impairments affected the timing, but
not the total amount, of expense recognized in conjunction with gas purchased
under forward contracts;
WHEREAS, as of the date hereof, Borrower has requested from Administrative Agent
(A) amendments with respect to the definition of Payment Premium under
Section 1.01 of the Credit Agreement, the extension fee under Section 2.04(b) of
the Credit Agreement, the Payment Premium under Section 2.09(c) of the Credit
Agreement, the minimum Consolidated EBITDA requirement under Section 6.11 of the
Credit Agreement and the Minimum Liquidity Threshold under Section 6.16 of the
Credit Agreement and (B) certain waivers with respect to (i) the calculation of
financial covenants and other accounting terms in accordance with GAAP pursuant
to Section 1.02 of the Credit Agreement, (ii) the representations and warranties
relating to the preparation of financial statements in accordance with GAAP
pursuant to Section 3.05(a) of the Credit Agreement, (iii) covenants relating to
the delivery of financial statements in accordance with GAAP pursuant to
Section 5.04(a), (b) and (c) of the Credit Agreement, (iv) the covenant relating
to the maintenance of books in conformity with GAAP pursuant to Section 5.07 of
the Credit Agreement, and (v) the covenant relating to compliance certificates
required pursuant to Section 5.04(d) of the Credit Agreement, in each of clauses
(B)(i) through (B)(v) above, solely to the extent relating to the Accounting
Errors; and
WHEREAS, the Lenders and Agents have agreed to amend and waive certain
provisions under the Credit Agreement to the extent set forth herein and subject
to the terms and conditions set forth in this Amendment.

 

 

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NOW, THEREFORE, in consideration of the premises made hereunder, and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
Section 1. Amendment of Section 1.01 of the Credit Agreement. Pursuant to
Section 6 of this Amendment, the definition of “Payment Premium” in Section 1.01
of the Credit Agreement shall be amended by replacing the reference to “4.0%”
therein with “5.0%.”
Section 2. Amendment of Section 2.04(b) of the Credit Agreement. Upon the
effectiveness of this Amendment, Section 2.04(b) of the Credit Agreement shall
be amended by deleting the reference to “an amount equal to 3.0% of the then
outstanding principal amount of the Loans as an extension fee” therein and
replacing the same with “an amount equal to 7.0% of the then outstanding
principal amount of the Loans as an extension fee.”
Section 3. Amendment of Section 2.09(c) of the Credit Agreement. Upon the
effectiveness of this Amendment, Section 2.09(c) of the Credit Agreement shall
be amended by adding the phrase “; provided that if this Agreement is prepaid in
full (i) on or before February 15, 2010, the otherwise applicable Payment
Premium shall be reduced by 1.0%, or (ii) on or after February 16, 2010 but on
or before March 15, 2010, the otherwise applicable Payment Premium shall be
reduced by 0.50%” immediately following the phrase “the applicable Payment
Premium” in the second sentence of such Section.
Section 4. Amendment of Section 6.11 of the Credit Agreement. Pursuant to
Section 6 of this Amendment, Section 6.11 of the Credit Agreement shall be
amended and restated as follows:
Section 6.11 Minimum EBITDA.
Borrower shall not permit Consolidated EBITDA for the twelve month period ending
on the last day of any fiscal quarter set forth below to be less than the
minimum amount set forth in the table below opposite such date:

      Measurement Date   Minimum EBITDA June 30, 2008   $33,000,000
September 30, 2008   $40,000,000 December 31, 2008   $41,000,000 March 31, 2009
  $39,000,000 June 30, 2009   $42,500,000 September 30, 2009   $42,500,000
December 31, 2009   $46,000,000 March 31, 2010   $50,000,000 June 30, 2010  
$27,500,000 September 30, 2010   $24,500,000 December 31, 2010   $60,000,000
March 31, 2011   $60,000,000

 

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In addition, Borrower shall not permit Consolidated EBITDA for the thirteen
month period ending on October 31, 2010 to be less than $60,000,000. Within
30 days after October 31, 2010, Borrower shall furnish to the Administrative
Agent, which shall furnish to each Lender, a certificate of a Financial Officer
in the form of Exhibit D (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance with
this October 31, 2010 covenant. This certificate requirement is in addition to,
and not in lieu of, all other reporting requirements under the Credit Agreement.
Notwithstanding the foregoing, for purposes of this Section 6.11, beginning with
the measurement period during which the Maturity Date has been extended pursuant
to the definition of “Maturity Date” in Section 1.01, the amount of Consolidated
EBITDA for the period in which the Incremental Extension Fee is paid shall be
increased by the amount of the Incremental Extension Fee Amount. “Incremental
Extension Fee Amount” means 4.0% of the then outstanding principal amount of the
Loans upon the effectiveness of the extension of the Maturity Date.
Section 5. Amendment of Section 6.16 of the Credit Agreement. Pursuant to
Section 6 of this Amendment, Section 6.16 of the Credit Agreement shall be
amended to add the following proviso at the end thereof: “provided, however, in
the event that the Maturity Date is extended beyond the second anniversary of
the Initial Closing Date, the Minimum Liquidity Threshold for the Borrower shall
be $5,500,000 for the month of August 2010.
Section 6. Effectiveness of Amendment of Sections 1.01, 6.11 and 6.16 of the
Credit Agreement. On the terms and subject to the conditions set forth herein
(including, without limitation, the satisfaction of the conditions in Section 7
of this Amendment and payment of the fee under Section 7(d) of this Amendment),
and so long as Borrower has elected to extend the Maturity Date in accordance
with, and has otherwise complied with the requirements applicable to such
extension under, the Credit Agreement, and the representations and warranties
contained in the Credit Agreement (after giving effect to the waivers in this
Amendment) are true and correct in all material respects as of the date of the
extension as if made on the date thereof (except those, if any, which by their
terms specifically relate only to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date), the amendment and restatement of Section 6.11
of the Credit Agreement and the amendments of Section 1.01, and Section 6.16 of
the Credit Agreement shall be effective on May 29, 2010.
Section 7. Conditions Precedent. This Amendment shall become effective upon
satisfaction of each of the following conditions precedent:
(a) The Administrative Agent shall have received originals of this Amendment
duly executed by each of the Agents, the Loan Parties, and the Lenders.
(b) The representations and warranties contained herein shall be true and
correct in all respects, as of the date hereof as if made on the date hereof.
(c) No Default or Event of Default (other than the Specified Defaults) shall
have occurred and be continuing as of the date hereof.
(d) Borrower shall have paid an aggregate amount equal to 1.0% of the then
outstanding principal amount of the Loans on the execution and delivery of this
Amendment, in

 

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immediately available funds to the Administrative Agent, for the benefit of, and
distribution to, the Lenders.
(e) Borrower shall have paid all outstanding fees and expenses on the effective
date of this Amendment and other amounts incurred in connection with the
preparation, execution and delivery of this Amendment, on or prior to the date
of this Amendment, including all reasonable fees and expenses of Proskauer Rose
LLP, and, to the extent invoiced with reasonable detail, reimbursement or
payment of all reasonable out-of-pocket expenses required to be reimbursed or
paid by Borrower.

 

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Section 8. Representations and Warranties. Each of Holdings and Borrower hereby
represents and warrants to the Agents and the Lenders that, as of the date
hereof, (a) all representations and warranties set forth in the Credit Agreement
(after giving effect to the waivers in Section 13 of this Amendment) and in any
other Loan Document are true and correct in all material respects as if made
again on and as of such date (except those, if any, which by their terms
specifically relate only to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects as of
such earlier date), (b) no Default or Event of Default (other than the Specified
Defaults) has occurred and is continuing, and (c) the Credit Agreement (as
amended by this Amendment), and all other Loan Documents are and remain legal,
valid, binding and enforceable obligations of the Loan Parties in accordance
with the terms thereof except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles (regardless of whether enforcement
is sought in equity or at law).
Section 9. Survival of Representations and Warranties. All representations and
warranties made in this Amendment or any other Loan Document shall survive the
execution and delivery of this Amendment, and no investigation by any Agent or
any Lender shall affect the representations and warranties or the right of the
Agents and the Lenders to rely upon them.
Section 10. Reference to Agreement. Each of the Loan Documents, including the
Credit Agreement, and any and all other agreements, documents or instruments now
or hereafter executed and/or delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement as amended hereby, are hereby amended so
that any reference in such Loan Documents to the Credit Agreement, whether
direct or indirect, shall mean a reference to the Credit Agreement as amended
hereby. This Amendment shall constitute a Loan Document under the Credit
Agreement.
Section 11. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
Section 12. Execution. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier or electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment.
Section 13. Waivers. The Required Lenders hereby permanently waive, solely with
respect to the 2008 fiscal year and the 2009 fiscal year, any Defaults and any
Events of Default (the “Specified Defaults”) existing or arising (i) solely as a
result of the Accounting Errors and (ii) in connection with Holdings’ and
Borrower’s
(a) calculation of financial covenants and other accounting terms in accordance
with GAAP as required under Section 1.02 of the Credit Agreement;
(b) representations and warranties that the financial statements referenced in
Section 3.05(a) of the Credit Agreement were prepared in accordance with GAAP in
any report, certificate, financial statement, amendment or other instrument
furnished in connection with or pursuant to any Loan Document;
(c) delivery of financial statements in accordance with GAAP as required under
Sections 5.04(a), (b) and (c) of the Credit Agreement for all fiscal years,
fiscal quarters and fiscal months

 

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from the Closing Date through October 31, 2009, and delivery of the related
compliance certificates required pursuant to Section 5.04(d) of the Credit
Agreement; and
(d) maintenance of books of record and account in conformity with GAAP as
required under Section 5.07 of the Credit Agreement.
Section 14. Limited Effect. This Amendment relates only to the specific matters
expressly covered herein, shall not be considered to be a waiver of any rights
or remedies any Agent or Lender may have under the Credit Agreement or under any
other Loan Document, and shall not be considered to create a course of dealing
or to otherwise obligate in any respect any Agent or Lender to execute similar
or other amendments or grant any waivers under the same or similar or other
circumstances in the future.
Section 15. Ratification by Subsidiary Guarantors. Each Subsidiary Guarantor
acknowledges that its consent to this Amendment is not required, but each
Subsidiary Guarantor nevertheless hereby agrees and consents to this Amendment
and to the documents and agreements referred to herein. Each Subsidiary
Guarantor agrees and acknowledges that (i) notwithstanding the effectiveness of
this Amendment, such Subsidiary Guarantor’s Guarantee shall remain in full force
and effect without modification thereto and (ii) nothing herein shall in any way
limit any of the terms or provisions of any Subsidiary Guarantor’s Guarantee or
any other Loan Document executed by any Subsidiary Guarantor (as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time), all of which are hereby ratified, confirmed and affirmed in all respects.
Each Subsidiary Guarantor hereby agrees and acknowledges that no other
agreement, instrument, consent or document shall be required to give effect to
this Section 15. Each Subsidiary Guarantor hereby further acknowledges that
Borrower, Holdings, the Agents and any Lender may from time to time enter into
any further amendments, modifications, terminations and/or waivers of any
provisions of the Loan Documents without notice to or consent from any
Subsidiary Guarantor and without affecting the validity or enforceability of any
Subsidiary Guarantor’s Guarantee or giving rise to any reduction, limitation,
impairment, discharge or termination of any Subsidiary Guarantor’s Guarantee.
Section 16. Agreement of Administrative Agent to Extend the Maturity Date. In
the event Borrower elects to extend the Maturity Date pursuant to Section 6
hereof, the Administrative Agent agrees to consent to such extension.
Section 17. Payment of Legal Fees. Borrower shall pay all reasonable fees and
expenses of Proskauer Rose LLP in connection with the preparation, execution and
delivery of this Amendment.
[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Amended and Restated Credit Agreement and Waiver to be executed by their
respective officers thereunto duly authorized, as of the date first above
written.

            RENTECH ENERGY MIDWEST CORPORATION,
as Borrower
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   VP and
Treasurer        RENTECH, INC.,
as Holdings
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP &
CFO     

[Signature Pages to Third Amendment to Amended and Restated Credit Agreement]

 

 

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            CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Administrative Agent and Collateral Agent
      By:   /s/ Nupur Kumar         Name:   Nupur Kumar        Title:   Vice
President        By:   /s/ Kevin Buddhdew         Name:   Kevin Buddhdew       
Title:   Associate        CREDIT SUISSE LOAN FUNDING LLC,
as Lender
      By:   /s/ Robert Healey         Name:   Robert Healey        Title:  
Director        By:   /s/ Michael Wotanowski         Name:   Michael Wotanowski 
      Title:   Director        BLT II LLC,
as Lender
      By:   /s/ Robert Healey         Name:   Robert Healey        Title:  
Authorized Signatory        CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Lender
      By:   /s/ Robert Healey         Name:   Robert Healey        Title:  
Director        By:   /s/ Michael Wotanowski         Name:   Michael Wotanowski 
      Title:   Authorized Signatory     

[Signature Pages to Third Amendment to Amended and Restated Credit Agreement]

 

 

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            SOLUS CORE OPPORTUNITY MASTER FUND LTD.,
as Lender
      By:   /s/ Chris Bondy         Name:   Chris Bondy        Title:  
Attorney-in-Fact     

[Signature Pages to Third Amendment to Amended and Restated Credit Agreement]

 

 

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AGREEMENT AND CONSENT OF SUBSIDIARY GUARANTORS
In accordance with Section 15 herein the amendments set forth herein are agreed
and consented to by each of the below named Subsidiary Guarantors and each such
Subsidiary Guarantor affirms the obligations of such Subsidiary Guarantor under
the Guarantee and Collateral Agreement.

            RENTECH DEVELOPMENT CORPORATION,
as Subsidiary Guarantor
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP
and Treasurer        RENTECH SERVICES CORPORATION,
as Subsidiary Guarantor
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP
and Treasurer        RENTECH ENERGY TECHNOLOGY CENTER, LLC,
as Subsidiary Guarantor
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP
and Treasurer        RENTECH SILVAGAS LLC,
as Subsidiary Guarantor
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP
and Treasurer        SILVAGAS CORPORATION,
as Subsidiary Guarantor
      By:   /s/ Dan J. Cohrs         Name:   Dan J. Cohrs        Title:   EVP
and Treasurer     

[Signature Pages to Third Amendment to Amended and Restated Credit Agreement]