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Subsequent Events | 9 Months Ended
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Sep. 30, 2015
Subsequent Events [Abstract] |
Subsequent Events | Note 14: Subsequent Events Commitment For Financing - On November 6, 2015, we obtained from an investor (including one or more of its affiliates) a commitment for financing primarily for the purpose of completing our planned capital additions at the El Dorado Facility. The commitment is for $260 million of capital in the form of debt, preferred stock, and common stock warrants, as follows:
| • |  | $50 million in Senior Secured Notes issued at par with a 12% annual interest rate, subject to a limited reset based on certain circumstances but in no event not to exceed a 13.5% annual interest rate. The notes will mature in August 2019, and we have the right to redeem the notes beginning August 2016 at 106%, August 2017 at 103%, and after August 2018 at par. These notes will be pari passu obligations with and share in the note collateral of our existing $425 million of Senior Secured Notes issued in 2013, and they will have substantially similar covenants and events of default.
| • |  | $210 million in cumulative redeemable nonconvertible perpetual non-voting preferred stock (“Preferred Stock”) with a 14% annual dividend rate and an economic participation right equal to 2% of our outstanding common stock before the transaction. The Preferred Stock will rank senior in right of dividends and liquidation payments to all our other existing capital stock, including the preferred stock held by the Golsen family. We will have the right to pay dividends on the Preferred Stock in cash or in-kind. We may redeem the Preferred Stock at any time without premium or penalty at the liquidation preference plus accrued and unpaid dividends plus the value of the participating right. The Preferred Stock is redeemable at the option of the holder beginning one day after the maturity date of our existing Senior Secured Notes. We may settle the redemption of the Preferred Stock in cash or common stock, with the consent of the holder, but subject to our obtaining prior stockholder approval for stock settlement under NYSE requirements.
| • |  | In connection with this financing, we have also committed to issue the purchaser of the Preferred Stock warrants to purchase common stock equal to 17.99% of our outstanding common stock before the transaction at an exercise price of $0.01 per share. The warrant has a ten-year term. The purchaser of the Preferred Stock will also obtain voting rights with our common stock equal to 19.99% of our outstanding common stock before the transaction and will have customary registration rights and pro rata preemptive rights on equity issuance, subject to customary exceptions.
| • |  | The Company will pay a commitment fee of 2% ($5.2 million) on the full amount of the committed financing and a funding fee of 2% (totaling $5.2 million) upon issuance of each of the Senior Secured Notes and the Preferred Stock.
The commitment is subject to the negotiation and execution of definitive documentation and other customary conditions. Although we have entered into exclusivity with the purchaser, we will pay a fee of 3% of the Preferred Stock commitment if the Preferred Stock and warrants are not issued in certain circumstances. Amendment to Agreement with Leidos – During October 2015, our subsidiaries, EDA and EDC, entered into an amendment agreement (the “Amendment Agreement”) with Leidos to amend certain contracts (the “Leidos Contracts”). The Amendment Agreement allows for short term payment terms for net 60 days not to exceed $50 million outstanding at any time and net 30 day terms for any amount of outstanding invoices submitted in excess of $50 million, beginning after our payment to Leidos on October 2, 2015. The Amendment Agreement further provides that within 72 hours after closing financing for the remainder of all the projects in the Leidos Contracts, but no later than December 10, 2015, EDA and EDCC will pay to Leidos all outstanding invoices that are more than 30 days old and all remaining outstanding invoices will revert to net 30 day terms. The Amendment Agreement also reduced the amount of direct cost mark-up up to a certain threshold (reduced from 4.5% to 2.25% for the direct costs up to $70 million in the aggregate across all the Leidos Contracts, after which any additional direct costs will have a mark-up of 4.5%) and increased the overhead charges payable to Leidos (increased by a total of $6.2 million), in addition to other changes in the Leidos Contracts. Ammonia Supply Agreement - On November 2, 2015, EDC and Koch Fertilizer, LLC (“Koch Fertilizer”) entered into an ammonia purchase and sale agreement under which Koch Fertilizer agrees to purchase, with minimum purchase requirements, the ammonia that (a) will be produced at the El Dorado Facility and (b) that is in excess of El Dorado’s needs. The initial term of the agreement is for three years, which term begins once the new ammonia plant is completed, and automatically continues for one or more additional one-year terms unless terminated by either party by delivering a notice of termination at least nine months prior to the end of term in effect. However, if the new ammonia plant is not completed by July 31, 2016, either party may provide notice of termination on or before October 31, 2016.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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