RENTECH,
INC.
WARRANT
To Purchase [______] Shares of
Common Stock
Warrant No.
[_]
Date of Issuance: January 14,
2009
VOID
AFTER JANUARY 14, 2014
THIS WARRANT (the “ Warrant
”) CERTIFIES THAT, for value received, [___], or permitted
registered assigns (the “ Holder ”), is
entitled, upon the terms and subject to the limitations on exercise
and the conditions hereinafter set forth, at any time during the
applicable Exercise Period (defined below), to subscribe for and
purchase at the Exercise Price (defined below) from Rentech, Inc.,
a Colorado corporation (the “ Company ”), up to
[____] shares (the “ Shares ”) of the common
stock of the Company, par value $0.01 per share (the “
Common Stock ”).
1.
DEFINITIONS. As used herein, the following terms
shall have the following respective meanings:
(A) “
Business Day ” shall mean any day other than a
Saturday, Sunday, or a day on which banks in New York City are
authorized or required by law to close.
(B) “
Credit Agreement ” shall mean that certain Amended and
Restated Credit Agreement dated as of June 13, 2008 among Rentech
Energy Midwest Corporation, the Company, the Lenders identified
therein and Credit Suisse, Cayman Islands Branch, as administrative
agent and as collateral agent for the Lenders, as amended, modified
or supplemented from time to time.
(C) “
Early Prepayment ” shall mean the payment in full,
prior to maturity, of all amounts due under the Credit Agreement,
including the entire principal amount of the Loans (as defined in
the Credit Agreement), together with all accrued and unpaid
interest thereon plus the applicable Payment Premium (as defined in
the Credit Agreement), by Rentech Energy Midwest
Corporation.
(D) “
Exercise Period ” shall mean, as applicable, the
Initial Exercise Period or the Deferred Exercise Period, each as
defined in Section 2.1 .
(E) “
Exercise Price ” shall mean $0.92 per share, subject
to adjustment pursuant to Section 5 below.
(F) “
Registration Statement ” shall mean the Registration
Statement on Form S-3 initially filed by the Company on March 20,
2006 (File No. 333-132594), and any Registration Statement on Form
S-3 filed by the Company pursuant to Rule 415(a)(6) under the
Securities Act covering unsold securities under such Registration
Statement.
(G) “
Securities Act ” shall mean the Securities Act of
1933, as amended.
(H) “
Trading Day ” shall mean (i) any day on which the
Common Stock is listed or quoted and traded on any eligible Trading
Market, (ii) if the Common Stock is not then listed or quoted
and traded on any eligible Trading Market, then a day on which
trading occurs on the OTC Bulletin Board (or any successor
thereto), or (iii) if trading does not occur on the OTC Bulletin
Board (or any successor thereto), any Business Day.
(I) “
Trading Market ” shall mean the NYSE Alternext US, New
York Stock Exchange, NASDAQ Capital Market, NASDAQ Global Market,
NASDAQ Global Select Market or other market or exchange on which
the Common Stock is listed or traded.
(J)
“Warrant Shares ” shall mean, collectively, the
Initial Shares and the Deferred Shares, each as defined in
Section 2.1 , in each case as adjusted in accordance with
the terms hereof.
2.
EXERCISE PERIOD .
2.1
INITIAL WARRANT SHARES . Subject to the terms and
conditions hereof, this Warrant may be exercised for [75% OF THE
WARRANT SHARES] (as such number of Shares may be adjusted pursuant
to Section 5 , the “ Initial Shares ”),
at any time during the period (the “ Initial Exercise
Period ”) commencing on the Date of Issuance and ending
on the close of business on the fifth anniversary of the Date of
Issuance.
Upon expiration of the Initial Exercise Period,
the right to exercise this Warrant for the Initial Shares shall
terminate and shall be of no further force or effect.
2.2
DEFERRED WARRANT SHARES . In addition to the
Initial Shares and subject to the terms and conditions hereof, this
Warrant may be exercised for the remaining [25% OF THE WARRANT
SHARES] (as such number of Shares may be adjusted pursuant to
Section 5 , the “ Deferred Shares ”), at
any time during the period (the “ Deferred Exercise
Period ”) commencing on July 1, 2009 and ending on the
maturity date of the Credit Agreement, as the same may be extended
pursuant to the terms thereof as in effect on the Date of Issuance
(without giving effect to any amendments, modifications or
supplements thereto after the date hereof); provided that if
an Early Prepayment occurs prior to July 1, 2009, then the Deferred
Exercise Period shall not commence and the Holder shall have no
right hereunder to exercise the Warrant for the Deferred
Shares.
Upon expiration of the Deferred Exercise Period,
the right to exercise this Warrant for the Deferred Shares shall
terminate and shall be of no further force or
effect. Neither an Early Prepayment nor the expiration
of the Deferred Exercise Period shall affect in any manner the
right to exercise this Warrant for the Initial Shares pursuant to
Section 2.1 .
Upon expiration of both of the Exercise Periods,
this Warrant shall terminate and shall be of no further force or
effect.
3.
EXERCISE OF WARRANT .
3.1
EXERCISE . Subject to Section 3.3 , the
rights represented by this Warrant may be exercised in whole or in
part at any time during the applicable Exercise Period, by delivery
of the following to the Company at its address set forth below (or
at such other address as the Company may designate by notice in
writing to the Holder):
(A) An
executed and duly completed Notice of Exercise in the form attached
hereto;
(B) Subject
to Section 3.3 , payment of the Exercise Price in cash;
and
Each exercise of this Warrant shall be
irrevocable. Execution and delivery of the Notice of
Exercise shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to
purchase the remaining number of Warrant Shares, if any, in
accordance with the terms and conditions of this
Warrant.
Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker
with The Depository Trust Company through its Deposit Withdrawal
Agent Commission (“ DWAC ”) system if the
Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of
Exercise within three Trading Days from the delivery to the Company
of a duly completed Notice of Exercise, surrender of this Warrant
and payment of the aggregate Exercise Price in accordance with this
Warrant.
3.2
EFFECT OF EXERCISE . This Warrant shall be deemed
to have been exercised on the date this Warrant is surrendered and
the Exercise Price and a duly completed Notice of Exercise are
received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a
holder of record of such Warrant Shares for all purposes, as of the
date this Warrant has been exercised irrespective of the date of
delivery of such certificate or certificates, except that, if the
date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open. In the event certificates for Warrant
Shares are to be issued in a name other than the name of the
Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder, and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto.
3.3
REGISTRATION; LIMITATIONS ON EXERCISABILITY; CASHLESS
EXERCISE .
The Company hereby represents and warrants that
the offering and sale of the Warrant and Warrant Shares is being
made pursuant to (1) an effective Registration Statement on Form
S-3 (Registration No. 333-132594) filed by the Company with the
Commission, which contains the base prospectuses dated March 30,
2006 (the “ Base Prospectus ”), and (2) a
prospectus supplement to the Base Prospectus dated January 14,
2009, containing certain supplemental information regarding the
Warrant and Warrant Shares that will be filed with the Commission
and delivered to the Holder (or made available to the Holder by the
filing by the Company of an electronic version thereof with the
Commission) along with the Company’s signature to the
Warrant.
At any time during either Exercise Period when a
Restrictive Legend Event (as defined below) has occurred, the
Holder may only exercise this Warrant (or portion thereof being
canceled) (a) if the “fair market value” (as calculated
below) of one Share is greater than the Exercise Price and (b) in
accordance with the next sentence. If such exercise is
permitted by the preceding sentence, then the Holder may exercise
this Warrant (or the portion thereof being canceled) by delivery of
this Warrant at the principal office of the Company, together with
the properly endorsed Notice of Exercise, in which event the
Company shall issue to the Holder a number of Warrant Shares
computed using the following formula (such exercise pursuant to
this Section 3.3 , a “ Cashless Exercise
”):
X = Y (A-B)
A
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the number of
Shares to be issued to the Holder
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the number of
Shares purchasable under this Warrant or, if only a portion of this
Warrant is being exercised, the portion of this Warrant being
canceled (at the date of such calculation)
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the fair market
value of one share of the Company’s Common Stock (at the date
of such calculation)
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Exercise Price
(as adjusted to the date of such calculation)
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For purposes of the above calculation, the
“fair market value” of one share of Common Stock shall
mean (i) the volume-weighted average sales price for the
Shares on the NYSE Alternext US or other Trading Market where such
security is listed or traded as reported by Bloomberg Financial
Markets (or a comparable reporting service of national reputation
selected by the Company and reasonably acceptable to the Holder if
Bloomberg Financial Markets is not then reporting sales prices of
such security) (collectively, “ Bloomberg ”) for
the ten (10) consecutive Trading Days immediately preceding (but
not including) the Exercise Date, or (ii) if the foregoing does not
apply, the volume-weighted average sales price of the Shares during
the same period in the over-the-counter market on the pink sheets
or bulletin board for such security as reported by Bloomberg, or if
no sales price is so reported for the Shares, the last bid price of
the Shares as reported by Bloomberg or (iii) if none of the
foregoing applies, the fair market value shall be as determined by
the Board of Directors of the Company in the exercise of its good
faith judgment.
The Company shall provide to the Holder prompt
written notice of any time that the Company is unable to issue the
Warrant Shares via DWAC transfer (or otherwise without restrictive
legend) or if, upon issuance for cash in accordance with Section
3.1 , the Warrant Shares would be “restricted
securities” under Rule 144(a) under the Securities Act or any
successor provision, in any such case because (a) the Securities
and Exchange Commission (the “ Commission ”) has
issued a stop order with respect to the Registration Statement, (b)
the Commission otherwise has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or
permanently, (c) the Company has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or
permanently, or (d) otherwise (each, a “ Restrictive
Legend Event ”).
To the extent that a Restrictive Legend Event
occurs after the Holder has exercised this Warrant in accordance
with Section 3.1 but prior to the delivery of the Warrant
Shares, the Company shall (i) if the fair market value (as
calculated above) of the Warrant Shares is greater than the
Exercise Price, deliver that number of Warrant Shares to the Holder
as should be delivered in a Cashless Exercise in accordance with
this Section 3.3 , and return to the Holder all
consideration paid to the Company in connection with the
Holder’s atte
