Document:

lq-ex105_395.htm

Exhibit 10.5

PERFORMANCE SHARE UNIT GRANT NOTICE
UNDER THE
LA QUINTA Holdings Inc.
2014 OMNIBUS INCENTIVE PLAN

La Quinta Holdings Inc. (the “Company”), pursuant to its 2014 Omnibus Incentive Plan, as it may be amended and restated from time to time (the “Plan”), hereby grants to the Participant set forth below a Performance Share Unit with a Target Value as set forth below.  The Performance Share Unit is subject to all of the terms and conditions as set forth herein, in the Performance Share Unit Agreement (attached hereto or previously provided to the Participant in connection with a prior grant), and in the Plan, all of which are incorporated herein in their entirety.  Capitalized terms not otherwise defined herein (including Exhibit A, attached hereto) shall have the meaning set forth in the Plan.

	
Participant:
	
[Insert Participant Name]

	
Date of Grant: 
	
[Insert Date of Grant]

	
Performance Period:
	
The period commencing on               and ending on                

	
Target Value: 
	
[Insert Participant’s Target Award expressed as a $ value]

	
Actual Value:
	
The Actual Value of the Performance Share Unit granted hereunder shall be determined and, to the extent vested, settled in accordance with, and subject to, the terms and conditions set forth on Exhibit A, attached hereto.

	
Vesting:
	
Provided a Participant has not undergone a Termination, the Performance Share Unit shall vest upon the date on which the Committee certifies the achievement of the applicable performance targets set forth on Exhibit A, attached hereto, which shall occur no later than sixty (60) days following the end of the Performance Period (the “Regular Vesting Date”).

	

	
Notwithstanding the foregoing: 

(i)in the event of the Participant’s Qualifying Termination prior to the Regular Vesting Date, a portion of the Performance Share Unit shall vest in an amount equal to (x) a fraction the numerator of which equals the number of elapsed days from the commencement of the Performance Period through the date of Termination, and the denominator of which equals 1,096, multiplied by (y) the Actual Value, determined on such date of Termination, with the applicable performance targets being measured as if the last day of the Performance Period was the date of Termination; and 

(ii)in the event of a Change in Control prior to the Regular Vesting Date, the Performance Share Unit shall vest in an amount equal to the Actual Value, determined on the date of Termination, with the applicable performance targets being 

 

 

measured as if the last day of the Performance Period was the date of the Change in Control.  

***

 

 

 

LA QUINTA Holdings Inc. 

 

________________________________
By: Mark M. Chloupek 
Title: General Counsel

 

[Signature Page to Performance Share Unit Award]

 

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS PERFORMANCE SHARE UNIT GRANT NOTICE, THE PERFORMANCE SHARE UNIT AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF PERFORMANCE SHARE UNIT HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS PERFORMANCE SHARE UNIT GRANT NOTICE, THE PERFORMANCE SHARE UNIT AGREEMENT AND THE PLAN. 

 

 

Participant

 

________________________________

 

[Signature Page to Performance Share Unit Award]

 

PERFORMANCE SHARE UNIT AGREEMENT
UNDER THE
LA QUINTA Holdings Inc.
2014 OMNIBUS INCENTIVE PLAN

Pursuant to the Performance Share Unit Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Performance Share Unit Agreement (this “Performance Share Unit Agreement”) and the La Quinta Holdings Inc. 2014 Omnibus Incentive Plan, as it may be amended and restated from time (the “Plan”), La Quinta Holdings Inc. (the “Company”) and the Participant agree as follows.  Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan. 

1.Grant of Performance Share Unit.  Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the Performance Share Unit as provided in the Grant Notice.  The Company may make one or more additional grants of Performance Share Units to the Participant under this Performance Share Unit Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Performance Share Unit Agreement to the extent provided therein.  The Company reserves all rights with respect to the granting of additional Performance Share Units hereunder and makes no implied promise to grant additional Performance Share Units. 

2.Vesting.  Subject to the conditions contained herein and the Plan, the Performance Share Unit shall vest as provided in the Grant Notice.

	
 
	
3.
	
Company; Participant. 

(a)The term “Company” as used in this Agreement with reference to employment shall include the Company and its subsidiaries. 

(b)Whenever the word “Participant” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Performance Share Unit may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons. 

4.Non-Transferability.  The Performance Share Unit is not transferable by the Participant except to Permitted Transferees in accordance with Section 14(b) of the Plan.  Except as otherwise provided herein, no assignment or transfer of the Performance Share Unit, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Performance Share Unit shall terminate and become of no further effect. 

5.Rights as Stockholder.  The Participant or a permitted transferee of the Performance Share Unit shall have no rights as a stockholder with respect to any share of Common Stock underlying the Performance Share Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof.

6.Tax Withholding.  The provisions of Section 14(d) of the Plan are incorporated herein by reference and made a part hereof. 

 

 

7.Notice.  Every notice or other communication relating to this Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Company Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records.  Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.  

8.No Right to Continued Service.  This Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company. 

9.Binding Effect.  This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 

10.Waiver and Amendments.  Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee.  No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 

11.Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof.  Notwithstanding anything contained in this Performance Share Unit Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Performance Share Unit Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware. 

12.Plan. The terms and provisions of the Plan are incorporated herein by reference.  In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control.

13.Section 409A.  It is intended that the Performance Share Unit granted hereunder shall be compliant with Section 409A of the Code and shall be interpreted as such.

 

 

 

 

Exhibit A

 

1.Determination of Actual Value of the Performance Share Unit.  The Actual Value of the Performance Share Unit Award, if any, for the Performance Period shall be determined based on the Relative TSR, as set forth in Sections 2 and 3 of this Exhibit A, as further adjusted to reflect dividends declared and paid during the Performance Period (if any), as set forth in Section 4 of this Exhibit A.

2.Total Shareholder Return.  For purposes of calculating Total Shareholder Return (“TSR”), the Company’s TSR performance is calculated as the compounded annual growth rate, expressed as a percentage (rounded to the nearest tenth of a percentage (0.1%)), in the value per share of Common Stock during the Performance Period due to the appreciation in the price per share of Common Stock and dividends paid during the Performance Period (assuming dividends are reinvested).  The relative comparison, expressed in terms of relative percentile ranking, shall be applied to the tables set forth below in Sections 2(b) and 3 of this Exhibit A.  

(a)Relative TSR.  The Relative TSR shall be calculated as follows, expressed in terms of relative percentile ranking, as applied to the table set forth below in Section 3 of this Exhibit A:

Cumulative TSR = ((1+TSR Year 1)*(1+TSR Year 2)*(1+TSR Year 3)-1)

TSR for a given year shall be calculated as:

TSR = (((Ending Share Price + D)/Beginning Share Price) – 1)

D = amount of dividends paid to a shareholder of record with respect to one share of Common Stock during the Performance Period.

 

Ending Share Price = closing price of a share of Common Stock on the last day of the applicable calendar year, based on the twenty (20)-day trailing average closing price of such Common Stock.

 

Beginning Share Price = closing price of a share of Common Stock on the first day of the applicable calendar year, based on the twenty (20)-day trailing average closing price of such Common Stock.

 

(b)Relative TSR.  The Relative TSR comparison shall include the following lodging/hospitality companies; provided, that only companies in the below table that are public throughout the entire Performance Period shall be included for purposes of calculating Relative TSR:

		
	
Choice Hotels International Inc.
	
LaSalle Hotel Properties

	
Clubcorp Holdings, Inc.
	
Marcus Corporation

	
DiamondRock Hospitality Co.
	
Marriott International, Inc.

	
Extended Stay America Inc.
	
RLJ Lodging Trust

	
Hersha Hospitality Trust
	
Ryman Hospitality Properties, Inc.

	
Hilton Worldwide Holdings
	
Starwood Hotels & Resorts Worldwide, Inc.

	
Hospitality Properties Trust
	
Summit Hotel Properties, Inc.

	
Host Hotels & Resorts, Inc.
	
Vail Resorts, Inc.

	
Hyatt Hotels Corporation
	
Wyndham Worldwide Corporation

	
InterContinental Hotels Group PLC
	
 

 

 

 

	
 
	
3.
	
Performance Criteria.  The performance criteria for the Performance Share Unit shall be as follows:  

					
	
Performance Metric
	
Weighting
	
Threshold

0.33x
	
Target

1.0x
	
Maximum

2.0x

	
Relative TSR v. Peer Group
	
100%
	
 
	
 
	
 

 

In the table above, x = the Target Award.  To the extent that the Company’s performance falls between two levels set forth on the table above, linear interpolation shall apply.  In the event that the Company’s performance does not meet the “Threshold” requirement in the table above, no award shall be earned.  If the Company’s performance for the Performance Period exceeds the “Maximum”, such award shall be capped at the “Maximum” amount.  Notwithstanding the foregoing, in the event that the Absolute TSR has a negative value, the resulting award shall be capped at 1.5x.

The resulting value of the Performance Share Unit based on actual performance of the Company during the Performance Period, based on the table set forth in this Section 3 is hereinafter referred to as the “Initial Actual Value”.  

4.Adjustments for Dividends. The Actual Value of the Performance Share Units shall equal the sum of (i) Initial Actual Value, plus (ii) the per share dollar value of any dividends declared and paid on Common Stock during the Performance Period multiplied by (A) the Initial Actual Value divided by (B) the Beginning Share Price. 

5.Settlement of Performance Share Unit.  As soon as practicable, but in no event later than thirty (30) days following, the earliest to occur of: (i) the Regular Vesting Date; (ii) the date of Participant’s Qualifying Termination; and (iii) a Change in Control, the Company will issue shares of Common Stock to the Participant in settlement of the Performance Share Unit; provided, however, that in the event that a Change in Control is the first event to occur, the Committee shall, have the sole discretion to settle such Performance Share Unit in cash or shares of Common Stock on the date of such Change in Control.  The number of shares of Common Stock to be delivered to the Participant in settlement of the Performance Share Unit will be equal to (x) Actual Value divided by (y) Beginning Share Price.

6.Definitions.

(a)“Absolute TSR” shall be calculated in the same manner as described above in Section 2(a) of this Exhibit A, expressed as a percentage.

(b)“Good Reason” shall, in the case of any Participant who is party to an agreement between the Participant and the Company that contains a definition of “Good Reason”, mean and refer to the definition set forth in such agreement, and in the case of any other Participant, “Good Reason” shall mean: (A) a diminution in Participant’s base salary or material diminution in Participant ‘s annual bonus opportunity; (B) any material diminution in Participant’s authority, duties or responsibilities; or (C) the relocation of Participant’s principal work location by more than fifty (50) miles; provided that none of these events shall constitute Good Reason unless the Company fails to cure such event within thirty (30) days after receipt from Participant of written notice of the event which constitutes Good Reason; provided, further, that “Good Reason” shall cease to exist for an event on the sixtieth (60th) day following the later of its occurrence or Participant’s knowledge thereof, unless Participant has given the Company’s written notice thereof prior to such date.  Notwithstanding anything herein to the contrary, for purposes of the last proviso of the immediately foregoing sentence, a series of related events shall be deemed to have occurred on the date upon which the last event in such series of related events has occurred.

 

 

 

(c)“Qualifying Termination” shall mean Participant’s Termination, prior to a Change in Control, (i) as a result of Participant’s death or Disability; (ii) by the Service Recipient without Cause; or (iii) by the Participant for Good Reason.rtk-ex101_6.htm

EXHIBIT 10.1

 

EXECUTION COPY

COOPERATION AGREEMENT

This COOPERATION AGREEMENT is made and entered into as of April 27, 2016 (the “Agreement”) by and among Rentech, Inc., a Colorado corporation (the “Company”), each of the parties listed on Exhibit A hereto (each, an “Investor” and collectively, the “Investors”) and, with respect to Section 1(b), Kevin Rendino.  The Company, the Investors and, with respect to Section 1(b), Kevin Rendino, are referred to herein as the “Parties.”

WHEREAS, the Investors beneficially own the number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) listed on Exhibit A hereto;

WHEREAS, on December 28, 2015, Lone Star Value Management, LLC and certain affiliates (“Lone Star Value”) delivered a letter to the Company expressing an intention to nominate two director candidates (the “Nomination Letter”) for election to the Company’s Board of Directors (the “Board”) at the Company’s 2016 annual meeting of shareholders (including any adjournment thereof, the “2016 Annual Meeting”); and

WHEREAS, the Company and the Investors have reached an agreement with respect to certain matters related to the 2016 Annual Meeting, including the Nomination Letter, and certain other matters, as provided in this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

Section 1.Settlement Covenants.  

(a)Election of Additional Director.  The Investors and the Company hereby acknowledge and agree that:

(i)The Board will, promptly after the execution of this Agreement, take all necessary actions to appoint Kevin Rendino as a director (the “Additional Director”) to serve in the class of directors with a term expiring at the 2017 annual meeting of shareholders (including any adjournment thereof, the “2017 Annual Meeting”).  The Additional Director will be appointed to serve on each of the Finance Committee of the Board and the Compensation Committee of the Board, provided that, the Board may revise its committee memberships, including those of the Additional Director, after the Company’s 2016 annual meeting.

(ii)Upon execution of this Agreement, the Investors hereby irrevocably withdraw the Nomination Letter.

(b)Director Fiduciary Duties; Duty of Confidentiality.   The Investors agree that they will not, and will cause their Affiliates and Associates (as defined below) not to, seek to obtain confidential information of the Company from the Additional Director and (ii) the Additional Director agrees to preserve the confidentiality of the Company’s business and information, including, but not limited to, discussions, determinations and other matters considered in meetings of the Board and Board committees and with Company officers and 

 

 

 

employees, and will enter into a confidentiality agreement consistent with those entered into by other non-employee directors of the Company and adhere to, among other things, all confidentiality-related requirements included in the policies, codes and guidelines of and relating to the Company. 

(c)The Company agrees that if the Additional Director is unable to serve as a director, resigns as a director or is removed during the Standstill Period (as defined in Section 2 below), then the Investors shall have the ability to make a non-binding recommendation of a substitute person; provided that any substitute person recommended by the Investors shall qualify as “independent” pursuant to Nasdaq Stock Market listing standards, and have relevant financial and business experience to fill the resulting vacancy.  In the event the Nominating and Corporate Governance Committee (the “Nominating Committee”) does not accept a substitute person recommended by the Investors, provided that the Nominating Committee shall not unreasonably withhold its consent with respect to any substitute person, the Investors will have the right to make additional non-binding recommendation(s) of a substitute person(s) for consideration by the Nominating Committee, provided that the Nominating Committee shall not unreasonably withhold its consent with respect to any substitute person. Upon the approval of a replacement director nominee by the Nominating Committee and by the Board acting in good faith, the Board will take such actions as to appoint the replacement director to the Board no later than five business days after the Nominating Committee recommendation of such replacement director, and if consistent with the Board’s fiduciary duties, the Board will take such actions as to appoint such replacement director to the Board.  

Section 2.2016 Annual Meeting.

(a)The Company agrees to use its reasonable best efforts to hold the 2016 Annual Meeting no later than July 1, 2016.

(b)At the 2016 Annual Meeting, the Investors agree to vote by proxy and vote all shares of Common Stock beneficially owned by each Investor and its Affiliates (i) in favor of the election of directors nominated by the Board, (ii) in accordance with the Board’s recommendation with respect to the ratification of the Company’s independent registered public accounting firm for the current fiscal year, and (iii) in accordance with the recommendation of Institutional Shareholder Services (“ISS”) with respect to any other matter put to a shareholder vote at the 2016 Annual Meeting.  Such proxy shall be voted in accordance with this Agreement as soon as practicable after receipt by each Investor.

(c)The Company agrees that the only proposals that may be presented by the Company for consideration at the 2016 Annual Meeting include (i) election of directors, and (ii) ratification of the Company’s independent registered public accounting firm for the current fiscal year. 

Section 3.Standstill.  

(a)Each Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period, neither it nor any of its Affiliates or Associates will, and it 

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will cause each of its Affiliates and Associates not to, directly or indirectly, in any manner, acting alone or in concert with others: 

(i)submit any shareholder proposal (pursuant to Rule 14a-8 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise) or any notice of nomination or other business for consideration, or nominate any candidate for election to the Board (including by way of Rule 14a-11 of Regulation 14A), other than as expressly permitted by this Agreement;

(ii)engage in, directly or indirectly, any “solicitation” (as defined in Rule 14a-1 of Regulation 14A) of proxies (or written consents) or otherwise become a “participant in a solicitation” (as such term is defined in Instruction 3 of Schedule 14A of Regulation 14A under the Exchange Act) in opposition to the recommendation or proposal of the Board, or recommend or request or induce or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of the Common Stock (including any withholding from voting) or grant a proxy with respect to the voting of the Common Stock or other voting securities to any person other than to the Board or persons appointed as proxies by the Board; 

(iii)seek to call, or to request the call of, a special meeting of the Company’s shareholders, or make a request for a list of the Company’s shareholders or for any books and records of the Company;

(iv)form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement or subject any shares of Common Stock to any voting agreement or pooling arrangement, other to the extent such a group may be deemed to result with the Company or any of its Affiliates of Associates as a result of this Agreement;

(v)vote for any nominee or nominees for election to the Board, other than those nominated or supported by the Board;

(vi)except as specifically provided in Section 1(a)(i) of this Agreement, seek to place a representative or other Affiliate, Associate or nominee on the Board or seek the removal of any member of the Board or a change in the size or composition of the Board;

(vii)acquire or agree, offer, seek or propose to acquire, or cause to be acquired, ownership (including beneficial ownership) of any of the assets or business of the Company or any rights or options to acquire any such assets or business from any person;

(viii)other than at the direction of the Board, publicly seek, propose, or make any public statement with respect to, or solicit, or negotiate with, any person with respect to, a merger, consolidation, acquisition of control or other business combination, tender or exchange offer, purchase, sale or transfer of substantially all assets or securities, dissolution, liquidation, reorganization, change in structure or composition of the Board, change in capital 

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structure, recapitalization, dividend, share repurchase or similar extraordinary transaction involving the Company, its subsidiaries or its business, whether or not any such transaction involves a change of control of the Company; 

(ix)acquire, announce an intention to acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, beneficial ownership of any (A) interests in any of the Company’s indebtedness or (B) Common Stock of the Company representing in the aggregate (amongst the Investors and their Affiliates and Associates) in excess of the lesser of (x) 14.99% of the Company’s outstanding Common Stock or (y) for so long as the Company’s Tax Benefit Preservation Plan (the “Plan”) shall remain in place, such lower percentage as the Company shall advise the Investors in writing no later May 4, 2016 represents the maximum exemption that the Company believes it can provide, after consultation with its tax advisors, while maintaining the Company’s cumulative ownership shift as calculated pursuant to Section 382 of the Internal Revenue Code and the regulations promulgated thereunder from exceeding 40% in the aggregate; provided, however, that nothing herein shall prevent the Investors from confidentially seeking a waiver to acquire in excess of the limitation otherwise imposed by this subsection (ix); 

(x)disclose publicly, or privately in a manner that could reasonably be expected to become public, any intention, plan or arrangement inconsistent with the foregoing; 

(xi)take any public action challenging the validity or enforceability of any provisions of this Section 3, (provided, that the Lone Star Value Stockholders may make requests to the Board to amend, modify or waive any provision of this Section 3 provided that such requests are made on a confidential basis in a manner that will not require public disclosure thereof by the Company); or

(xii)enter into any agreement, arrangement or understanding concerning any of the foregoing (other than this Agreement) or encourage or solicit any person to undertake any of the foregoing activities.

(b)As used in this Agreement: 

(i)the terms “Affiliate” and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms “beneficial owner” and “beneficial ownership” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and the terms “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature;

(ii)the term  “Standstill Period” shall mean the period commencing on the date of this Agreement and ending on the earlier to occur of (x) the day following the completion of the Company’s 2017 Annual Meeting or (y) the date that is 15 days prior to the last date that a shareholder may properly notify the Company that it intends to nominate a candidate for election as a director at the 2017 Annual Meeting (such date, the “Nomination Deadline”) if, with respect to this clause (y) the Company has not notified Lone Star Value in 

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writing at least 30 days prior to the Nomination Deadline that the Company will nominate the Additional Director for reelection at the 2017 Annual Meeting.   

(iii)the term “beneficial ownership” of shares shall mean shares “beneficially owned” within in the meaning afforded such term by Regulation 13d-3 promulgated under the Exchange Act. 

Section 4.Representations and Warranties of the Company.  The Company represents and warrants to the Investors that (a) the Company has the corporate power and authority to execute the Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

Section 5.Representations and Warranties of the Investors.  Each Investor, on behalf of itself, represents and warrants to the Company that (a) as of the date hereof, such Investor beneficially owns only the number of shares of Common Stock as described opposite its name on Exhibit A and Exhibit A includes all Affiliates of any Investors that own any securities of the Company beneficially or of record, (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) such Investor has the authority to execute the Agreement on behalf of itself and the applicable Investor associated with that signatory’s name, and to bind such Investor to the terms hereof and (d) the execution, delivery and performance of this Agreement by such Investor does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.

Section 6.Mutual Non-Disparagement. 

(a)Each Party agrees that, during the Standstill Period, neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, 

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directly or indirectly, in any capacity or manner, make, express, transmit speak, write, verbalize or otherwise communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically transferred or otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward, the Party or any of its directors, officers, Affiliates, subsidiaries, employees, agents or representatives (collectively, the “Representatives”), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Party or its subsidiaries or Affiliates, or to malign, harm, disparage, defame or damage the reputation or good name of the Party, its business or any of its Representatives. 

(b)Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in this Agreement shall prohibit any Party from making any statement or disclosure required under the federal securities laws or other applicable laws; provided, that such Party must provide written notice to the other Parties at least two business days prior to making any such statement or disclosure required by under the federal securities laws or other applicable laws that would otherwise be prohibited the provisions of this Section 6, and reasonably consider any comments of such other Parties.

Section 7.Public Announcements.  Promptly following the execution of this Agreement, the Company shall file a Form 8-K, in substantially the form attached hereto as Exhibit B (the “Mutual Announcement”), announcing certain terms of this Agreement.  

Section 8.Specific Performance.  Each of the Investors, on the one hand, the Company, on the other hand, and, with respect to Section 1(b), the Additional Investor, acknowledges and agrees that irreparable injury to the other Party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages.  It is accordingly agreed that the Parties hereto (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available.

Section 9.Notice.  Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

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To the Company:

 

Rentech, Inc.
10877 Wilshire Boulevard, 10th Floor
Los Angeles, CA 90024
Fax No.: (310) 208-7165
E-mail:  cmorris@rentk.com
Attention:  Colin Morris

with a copy to (which shall not constitute notice):

Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA 94025
Fax No.: (650) 463-2600
E-mail:  tony.richmond@lw.com
Attention:  Anthony J. Richmond

To the Investors:  

 

Lone Star Value Management, LLC

531 Forest Avenue, 1st Floor

Old Greenwich, CT 06870

Facsimile: (203) 990-0727

Email: je@lonestarvm.com  

Attention: Jeff Eberwein

 

with a copy to (which shall not constitute notice):

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

Facsimile: (212) 451-2222

Email: swolosky@olshanlaw.com 

acrawford@olshanlaw.com 

Attention: Steve Wolosky

Aneliya S. Crawford

 

Section 10.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the Law of the State of Colorado, without regard to conflict of law principles thereof.  

Section 11.Exclusive Jurisdiction.  Each Party to this Agreement (i) irrevocably and unconditionally submits to the personal jurisdiction of the state courts of the State of Colorado and the federal courts of the United States of America located in the State of Colorado, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other 

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request for leave from any such court, (iii) agrees that any actions or proceedings arising in connection with this Agreement or the transactions contemplated by this Agreement shall be brought, tried and determined only in the state and federal courts for or in the State of Colorado, (iv) waives any claim of improper venue or any claim that those courts are an inconvenient forum and (v) agrees that it will not bring any action relating to this Agreement or the transactions contemplated hereunder in any court other than as specified in clause (iii) of this Section 12.   

Section 12.Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.

Section 13.Entire Agreement.  This Agreement constitutes the full and entire understanding and agreement among the Parties with regard to the subject matter hereof, and supersedes all prior agreements with respect to the subject matter hereof.

Section 14.Receipt of Adequate Information; No Reliance; Representation by Counsel.  Each Party acknowledges that it has received adequate information to enter into this Agreement, that is has not relied on any promise, representation or warranty, express or implied not contained in this Agreement and that it has been represented by counsel in connection with this Agreement.  Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived.  The provisions of the Agreement shall be interpreted in a reasonable manner to effect the intent of the Parties. 

Section 15.Each Party shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution and effectuation of this Agreement and the transactions contemplated hereby and leading up to it; provided, however, that the Company shall reimburse the Investors for their reasonable, documented fees and expenses in connection with their participation in the foregoing matters, all in an aggregate amount not to exceed $30,000.

Section 16.Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or 

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unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.  The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision. 

Section 17.Amendment.  This Agreement may be modified, amended or otherwise changed only in a writing signed by the Company and the Investors, except that Section 1(b) may be modified, amended or otherwise changed only in a writing signed by all of the Parties.

Section 18.Successors and Assigns; No Third Party Beneficiaries.  This Agreement shall bind the successors and permitted assigns of the Parties, and inure to the benefit of any successor or permitted assign of any of the parties; provided, however, that no party may assign this Agreement without the prior written consent of the other Parties.  No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any person other than the Parties hereto and their respective successors and assigns.

Section 19.Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Parties hereto.  Counterparts delivered by electronic transmission shall be deemed to be originally signed counterparts.

(Signature page follows)

 

9

 

IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement as of the date first above written.

RENTECH, INC.

 

		
	
By: 
	
/s/ Colin Morris

	
Name:
	
Colin Morris

	
Title:
	
Senior Vice President

[Cooperation Agreement Signature Page]

 

ADDITIONAL INVESTOR

As to Section 1(b) only:

 

__/s/ Kevin Rendino__________

Kevin Rendino

INVESTORS:

 

				
	
 
	
Lone Star Value Investors, LP

	
 
	
 

	
 
	
By:
	
Lone Star Value Investors GP, LLC
General Partner

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
/s/ Jeffrey Eberwein

	
 
	
 
	
Name:
	
Jeffrey E. Eberwein

	
 
	
 
	
Title:
	
Manager

 

 

				
	
 
	
Lone Star Value Investors GP, LLC

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ Jeffrey Eberwein

	
 
	
 
	
Name:
	
Jeffrey E. Eberwein

	
 
	
 
	
Title:
	
Manager

 

 

				
	
 
	
Lone Star Value Management, LLC

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ Jeffrey Eberwein

	
 
	
 
	
Name:
	
Jeffrey E. Eberwein

	
 
	
 
	
Title:
	
Sole Member

 

 

		
	
 
	
/s/ Jeffrey Eberwein

	
 
	
Jeffrey E. Eberwein

 

[Cooperation Agreement Signature Page]

 

 

 

 

EXHIBIT A

 

 

 

		
	
Investor
	
Shares of Common Stock
Beneficially Owned

	
 
	
 

	
Lone Star Value Investors, LP
	
801,000

	
Lone Star Value Investors GP, LLC
	
801,000

	
Lone Star Value Management, LLC
	
951,000

	
Jeffrey E. Eberwein
	
951,000

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
Total
	
951,000

 

 

 

 

 

 

EXHIBIT B

 

Form 8-K Filing

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