EX 10.14
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is entered into as of June
22, 2001 by RENTECH, INC., a Colorado corporation, with headquarters at
1331 - 17th Street, Suite 720, Denver, Colorado 80202 (Rentech) and GTL
BOLIVIA S.A., a Bolivian corporation, with headquarters at Santa Cruz,
Bolivia (GTL Bolivia).
Background Circumstances:
A. GTL Bolivia is principally engaged in the development of one
or more GTL facilities in the country of Bolivia. The GTL facilities
will use natural gas to produce GTL products for use in the country and
export.
B. Rentech has developed a synthesis gas-to-liquids process
incorporating Fischer-Tropsch Technology with a slurry reaction bed and
use of Rentech's iron-based catalyst (GTL Technology). The GTL
Technology is useful for converting carbon-bearing solids and gases into
various liquid hydrocarbons such as synthetic diesel fuel, naphtha, wax
and other liquid hydrocarbon products.
C. Rentech has previously licensed use of its GTL Technology to
other corporations Rentech is willing to license its GTL Technology to
GTL Bolivia for use in plants that GTL Bolivia, alone or with partners,
may construct and operate to convert some of GTL Bolivia's natural gas
reserves, whether now owned or subsequently acquired, into liquid
hydrocarbon products, as well as for use in industrial gas plants that
GTL Bolivia may acquire and convert to use Rentech's GTL Technology.
D. Rentech and GTL Bolivia intend to enter into a strategic
alliance for these purposes.
Now, therefore, in consideration of the background circumstances
and the following mutual agreements, the parties agree as follows:
1. Negotiations of License. Rentech agrees to enter into
discussions with GTL Bolivia with the objective of granting one or more
licenses to GTL Bolivia that allows it to use Rentech's GTL Technology in
plants developed by GTL Bolivia for conversion of natural gas into liquid
hydrocarbons, or in industrial gas plants, or in existing industrial
plants that GTL Bolivia will convert to gas-to-liquids plants. The
licenses will be nonexclusive and limited to the use of 100% natural gas
as feedstock. If mutually acceptable terms are agreed upon between the
parties, Rentech will grant licenses to GTL Bolivia providing for use of
Rentech's GTL Technology at one or more sites selected by GTL Bolivia.
2. Responsibilities of GTL Bolivia. GTL Bolivia will be
responsible for providing suitable sources of natural gas feedstock and
for planning, developing, designing, financing, constructing or
converting, and operating each conversion plant that uses Rentech's GTL
Technology. GTL Bolivia will also market liquid hydrocarbons produced by
its plants.
3. Cooperation of Parties. Upon the mutual execution of this
Memorandum, Rentech will cooperate with GTL Bolivia's evaluation of its
potential plant sites by analyzing the suitability of the chemical
composition of the proposed feedstock gas for the GTL Technology. Upon a
decision by GTL Bolivia to develop a plant for a particular gas reserve,
or to convert an industrial gas plant, a site-specific license will be
negotiated to use Rentech's GTL Technology at the specific site.
4. General Provisions of License. Each license to GTL Bolivia
will provide for payment of license fees to Rentech for each plant,
royalties based on production of liquid hydrocarbons, and other
provisions customary to licenses of such technology.
5. Confidentiality Obligations of GTL Bolivia. In addition to
the provisions of any separate, additional agreements of confidentiality
between GTL Bolivia and Rentech, GTL Bolivia agrees as follows:
5.1 Information That Is Confidential; Obligation of
Confidentiality. Confidential Information means all information received
by GTL Bolivia relating to Rentech's GTL Technology, including but not
limited to the design and operating process of synthesis reactor modules
that incorporate this technology; formulas for the production and
induction of Rentech's catalyst; the designs, plans and prospects of
Rentech for development of plants using the GTL Technology; and all other
know-how, trade secrets and proprietary information of Rentech including
processes, formulas, software programs and source codes, improvements,
inventions, techniques, induction procedures, designs, and plans for
plants using the GTL Technology forecasts, new products, customer lists,
information regarding prospective financing sources and licensees,
feedstocks; fee and royalty amounts charged by Rentech; and non-published
financial information relating to Rentech or the GTL Technology. All
Confidential Information shall be considered confidential even though
disclosed and transferred to GTL Bolivia. GTL Bolivia agrees that,
except as necessary to protect itself against claims of infringement, it
shall neither use such information, except pursuant to and in accordance
with the terms and conditions of this Memorandum, nor disclose such
information to anyone except its employees and agents that GTL Bolivia
determines need to know in connection with the evaluation of natural gas
reserves for use as feedstock for the GTL Technology, or the development,
financing, construction, retrofitting, or operation of a GTL Technology
plant, whose knowledge of such information is necessary to effect the
purposes set out in this Memorandum. GTL Bolivia may disclose
Confidential Information to such person only if (i) such person has
executed a confidentiality agreement maintained by GTL Bolivia in
substantially the form of the confidentiality agreement used by Rentech,
and (ii) GTL Bolivia has taken other reasonable steps to ensure that such
person will maintain the confidentiality of the Confidential Information
during the term of this Memorandum, and after termination or expiration
of this Memorandum until such time as the information ceases being
Confidential Information pursuant to the provisions of the following
section. GTL Bolivia shall be responsible to Rentech for breach of these
obligations of confidentiality by any such person.
5.2 Exception to Confidentiality. It is agreed, as an
exception to the foregoing obligations of confidentiality, that
information received by GTL Bolivia from Rentech as a result of this
Memorandum shall not be considered confidential, and GTL Bolivia shall
not be limited in disclosing the same, if and to the extent that the
information, as shown by competent evidence; (i) is or becomes, through
no fault of the party obligated to maintain confidentiality, in the
public domain; (ii) is lawfully obtained by GTL Bolivia from a source
other than the Rentech or its agents; (iii) was already known by GTL
Bolivia at the time of its receipt, as shown by reasonable proof filed
with GTL Bolivia within a reasonable time after its receipt; or (iv) is
required to be disclosed by order of any court or governmental authority
having jurisdiction. Disclosures that are specific, including but not
limited to operating conditions such as pressures, temperatures,
formulas, procedures and other such standards and conditions, shall not
be deemed to be within the foregoing exceptions merely because they are
embraced by general disclosures available to the general public or in GTL
Bolivia's possession. Additionally, any combination of features shall
not be deemed to be within the foregoing exceptions merely because the
individual features are available to the general public or in GTL
Bolivia's possession unless the combination itself and its principles of
operation are available to the general public.
5.3 Published Disclosure. It is agreed that the
disclosure of certain information by Rentech in a publication, such as in
letters patent or by otherwise placing it in the public domain, will not
free GTL Bolivia from its obligation to maintain in confidence any
information not specifically disclosed in or fairly ascertainable from
the publication or other disclosure, such as, for example, the fact that
information in the publication or any portion of it is or is not used by
either party. GTL Bolivia shall have the right to publish information or
articles pertaining to the GTL Technology, GTL Bolivia?s plants using the
technology, and products so long as such information is not confidential,
and, with respect to Confidential Information, only upon prior written
approval by Rentech, which it may withhold in its absolute discretion.
6. Confidentiality Obligations of Rentech. In addition to the
provisions of any separate, additional agreements of confidentiality
between Rentech and GTL Bolivia, Rentech agrees as follows:
6.1 Information that is Confidential; Obligation of
Confidentiality. Confidential Information means all information received
by Rentech relating to GTL Bolivia's gas reserves, insofar as the
information is confidential data about the extent or specific chemical
composition of the reserves, or GTL Bolivia?s plans or prospects for
acquiring interests in gas reserves or in acquiring and converting
industrial gas plants to use Rentech's GTL Technology. All Confidential
Information shall be considered confidential even though disclosed and
transferred to Rentech. Rentech agrees that it shall neither use such
information, except pursuant to and in accordance with this Memorandum,
nor disclose such information to anyone except its employees and agents
that Rentech determines needs to know in connection with evaluation of
natural gas reserves for use as feedstock for the GTL Technology or the
development, financing, construction, retrofitting, or operation of any
GTL Technology plant whose knowledge of such information is necessary to
effect the purposes of this Memorandum. Rentech may only disclose
Confidential Information to such persons only if (i) such person has
executed a confidentiality agreement maintained by Rentech in
substantially the form of the confidentiality agreement used by GTL
Bolivia, and (ii) Rentech has taken other reasonable steps to ensure that
such person will maintain the confidentiality of the Confidential
Information during the term of this Memorandum and after termination or
expiration of this Memorandum until such time as the information ceases
being Confidential Information pursuant to the provision of the following
section. Rentech shall be responsible to GTL Bolivia for breach of these
obligations of confidentiality by any such person.
6.2 Exception to Confidentiality. It is agreed, as an
exception to the foregoing obligations of confidentiality, that
information received by Rentech from GTL Bolivia as a result of this
Memorandum shall not be considered confidential, and Rentech shall not be
limited in disclosing the same, if and to the extent that the
information, as shown by competent evidence; (i) is or becomes, through
no fault of the party obligated to maintain confidentiality, in the
public domain; (ii) is lawfully obtained by Rentech from a source other
than GTL Bolivia or its agents; (iii) was already known by Rentech at the
time of its receipt, as shown by reasonable proof filed with Rentech
within a reasonable time after its receipt; or (iv) is required to be
disclosed by order of any court or governmental authority having
jurisdiction. Disclosures that are specific shall not be deemed to be
within the foregoing exceptions merely because they are embraced by
general disclosures available to the general public or in Rentech's
possession.
6.3 Published Disclosure. It is agreed that the disclosure
of certain information by GTL Bolivia in a publication will not free
Rentech from its obligation to maintain in confidence any information not
specifically disclosed in or fairly ascertainable from the publication or
other disclosure, such as, for example, the fact that information in the
publication or any portion of it is or is not used by either party.
Rentech shall have the right to publish information or articles
pertaining to GTL Bolivia's gas reserves, plants using the technology,
and products so long as such information is not confidential, and, with
respect to Confidential Information, only upon prior written approval by
GTL Bolivia, which it may withhold in its absolute discretion.
7. Entire Agreement. This Memorandum (including any exhibits
hereto) and the agreements, documents and instruments to be signed and
delivered pursuant hereto or thereto, are intended to embody the final,
complete and exclusive agreement among the parties with respect to the
current aspects of the subject matter of this Memorandum; are intended to
supersede all prior agreements, understandings and representations,
written or oral, with respect thereto, and may not be contradicted by
evidence of any such prior to contemporaneous agreement, understanding or
representation, whether written or oral. No change or modification to
this Memorandum shall be valid unless in writing and signed by the
parties hereto.
8. Business Relationship. Notwithstanding any other provisions
of this Memorandum, nothing in this document is intended or shall be
constructed as creating a partnership, joint venture, or any other legal
entity between the parties, nor any continuing relationship or commitment
between them except as specifically provided in this Memorandum. Each
party shall conduct all business in such party's own name as in
independent contractor. Neither party shall be liable for the
representations or acts of the other party contrary to the terms
of this Memorandum. Neither party has the right or power to act for or
on behalf of the other or to bind the other in any respect whatsoever,
other than as expressly provided for in this Memorandum.
9. Expenses. Except as may be otherwise agreed to in writing,
each party shall be responsible for and pay its own costs and expenses
incurred in the performance of its obligations under this Memorandum.
10. Duration. This Memorandum will be effective upon execution
and will continue until superseded by a license agreement or terminated
by written notice given by one party to the other. After termination
each party shall be free from any obligation or liability to the other
except for the obligations and liabilities of confidentiality set forth
in paragraphs 5 and 6, all of which shall survive the termination of this
Memorandum.
11. Paragraph Headings. The headings of the paragraphs or
sections of this Memorandum are inserted solely for convenience of
reference and are not a part of the Memorandum. They are not intended to
govern, limit or aid in the construction of any term or provision of this
Memorandum.
12. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier or other
means of personal service (including by means of a nationally recognized
courier service or professional messenger service); or sent by telex or
telecopy; or mailed first class, postage prepaid, by certified mail,
return receipt requested; in all cases, addressed to each party at the
following address. All notices, requests, and other communications shall
be deemed given on the date of actual receipt or delivery as evidenced by
written receipt, acknowledgment or other evidence of actual receipt or
delivery to the address specified above. In case of service by telecopy,
a copy of such notice need not be personally delivered or sent by
certified mail. Any party hereto may from time to time, by notice in
writing served as set forth previously, designate a different address or
a different or additional person to which all such notices or
communications thereafter are to be given.
Rentech: GTL Bolivia:
1331 17th Street Calle Cochabamba, Torres CAINCO, Piso 7,
Suite 720 Of. 2B
Denver, CO 80202 Santa Cruz, Bolivia
13. Assignment. Neither party shall transfer or assign any of
its rights, liabilities, or obligations under this Memorandum without the
express written consent of the other. Such consent may be withheld in
the sole discretion of that party.
14. Facsimile Signatures. The parties agree that this Memorandum
and related documents may be transmitted between them by facsimile
machine. The parties intend that faxed signatures constitute signed
original signatures that are binding upon the party who signs a document,
and that a faxed document containing the signatures (original or faxed)
of all the parties is binding upon all parties.
15. Counterparts. This Memorandum may be executed in one or more
counterparts, with the same effect as if all parties to this Memorandum
had signed the same document. All counterparts shall be constructed
together and constitute one agreement.
16. It is specifically understood that GTL Bolivia partners have
made no arrangements with a joint developer, principal, project manager,
source of gas, domestic or export group. In addition the legislation to
permit the project in favorable economic terms to GTL Bolivia have not
yet been implemented. However, GTL Bolivia S.A. may have partners in the
future, for the implementation of the GTL Project with Rentech. GTL
Bolivia will extend all the provisions of this memorandum to such
possible partners.
17. Rentech currently has no understanding or any other
arrangement for developing a GTL project in Bolivia with any third party.
RENTECH, INC.
/s/
By: _________________________________
Dennis L. Yakobson, President
GTL BOLIVIA S.A.
/s/
By: __________________________________
Luis C. Kinn, General Manager