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, Suite 720 Calle Cochabamba, Torres CAINCO, Piso 7, 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.
By: /s/ Dennis L. Yakobson
- -----------------------------
Dennis L. Yakobson, President
GTL BOLIVIA S.A.
By: /s/ Luis C. Kinn
- -----------------------------
Luis C. Kinn, General Manager