EX 10.16
May 10, 2001
Mr. Dennis L. Yakobson
President and Chief Executive Officer
Rentech, Inc.
1331 17th Street, Suite 720
Denver, CO 80202
Dear Dennis:
This letter confirms our understanding that Rentech, Inc. ("Rentech" or
the "Company") has engaged Petrie Parkman & Co., Inc. ("Petrie Parkman") as its
exclusive financial advisor to render financial advisory and investment banking
services to the Company in connection with a possible financing of the Company
through the sale of equity securities (including any class of common stock or
securities convertible into or exchangeable for any class of common stock) of
Rentech or its affiliates or successors in a private placement (the "lacement").
Services
In connection with its role as financial advisor and as part of its
efforts to help Rentech achieve its corporate objectives, Petrie Parkman will be
available to:
1. Meet with Rentech management to develop an understanding of the
Company' strategic objectives;
2. Meet with the management and any consultants, as appropriate, to
allow Petrie Parkman to gain a thorough understanding of the Company' assets;
3. Assist Rentech in the preparation of marketing and disclosure
materials;
4. Assist the Company in preparing for meetings with potential
investors;
5. Advise and assist Rentech in the course of its negotiation and
closing of a Placement; and
6. Prepare and deliver presentations to the Company's Board of
Directors regarding a possible Placement.
Fee Structure
In consideration for our role as financial advisor, the Company agrees
to compensate Petrie Parkman as follows:
If while this engagement is in effect or within twelve months following
the termination of this agreement, the Company has entered into a letter of
intent or a definitive agreement or is engaged in substantive negotiations, any
of which lead to a Placement, the Company agrees to pay Petrie Parkman, at
closing, a fee equal to 2.5% of the gross proceeds received from the Placement
(the "Transaction Fee").
The Company also agrees to reimburse Petrie Parkman for its
out-of-pocket expenses related to this assignment, including fees and expenses
of counsel.
Coordination
In order to coordinate efforts of the Company and Petrie Parkman to
effect the Placement in the most professional and efficient manner possible,
during the period of Petrie Parkman's engagement, neither the Company nor its
management will initiate any discussion with potential investors without the
prior knowledge of Petrie Parkman. In the event that the Company or its
management receives any inquiry or are otherwise aware of the interest of any
third party concerning a purchase of equity pursuant to the Placement, they will
promptly inform Petrie Parkman of such inquiry.
Confidential Information
Petrie Parkman acknowledges that it will be provided with certain
confidential information regarding the Company (the "Confidential Information")
and that it will not use the Confidential Information except as may be necessary
in connection with rendering its services as financial advisor to the Company or
as may be required by law.
Indemnification
Since Petrie Parkman will be acting on behalf of the Company in
connection with its engagement hereunder, the Company and Petrie Parkman have
entered into a separate letter agreement, dated the date hereof, providing for
the indemnification by the Company of Petrie Parkman and certain related
entities.
Termination
It is understood that our services may be terminated with or without
cause by us or by you upon notice to the other party at any time and without
liability or continuing obligation to us or to you (except for any compensation
earned pursuant to the fee structure described above, and any expenses incurred
by us up to the date of termination as described above). Notwithstanding the
foregoing, the indemnity provisions of this agreement shall remain operative
regardless of any such termination.
If the foregoing is in accordance with your understanding, I would
appreciate you signing and returning to us the enclosed duplicate of this
letter.
We sincerely look forward to working with you on this assignment.
Very truly yours,
PETRIE PARKMAN & CO., INC.
By: M.E. Bock
AGREED TO:
RENTECH, INC.
By: Dennis L. Yakobson
May 10, 2001
Petrie Parkman & Co., Inc.
475 17th Street
Denver, CO 80202
Gentlemen:
In connection with your engagement to advise and assist us pursuant to
the engagement letter dated hereof (the "Agreement"), Rentech, Inc. (the
"Company") hereby agrees to indemnify and hold harmless Petrie Parkman & Co.,
Inc. ("Petrie Parkman"), which for purposes of this agreement includes its
affiliates, the respective directors, officers, partners, agents and employees
of Petrie Parkman and its affiliates and each controlling person (as such term
is defined under the Securities Act of 1933, as amended), to the full extent
lawful, from and against all losses, claims, damages, liabilities, joint or
several (and all actions, claims, proceedings and investigations in respect
thereof), and expenses incurred by them (including fees and disbursements of
counsel) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including any untrue statements made or any statements omitted to
be made) by the Company or (ii) actions taken or omitted to be taken by Petrie
Parkman with our consent or in conformity with our actions or omissions or (B)
are otherwise related to or arise out of Petrie Parkman's activities on our
behalf under Petrie Parkman's engagement, and we will reimburse Petrie Parkman
for all expenses (including fees and disbursements of counsel) as they are
incurred by Petrie Parkman in connection with investigating, preparing or
defending any such action or claim, whether or not in connection with pending or
threatened litigation in which Petrie Parkman is a party. We will not be
responsible, however, for any losses, claims, damages, liabilities or expenses
pursuant to clause (B) of the preceding sentence which are finally judicially
determined to have resulted primarily from the bad faith or gross negligence of
the person seeking indemnification hereunder. We also agree that Petrie Parkman
shall not have any liability to us for or in connection with such engagement
except for such liability for losses, claims, damages, liabilities or expenses
incurred by us which is finally judicially determined to have resulted primarily
from Petrie Parkman's bad faith or gross negligence. If for any reason the
foregoing indemnification (including the reimbursement provisions described
above) or exculpation is unavailable to Petrie Parkman or insufficient to hold
it harmless, then the Company shall contribute to the amount paid or payable by
Petrie Parkman as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
(or anticipated to be received) by the Company on the one hand and Petrie
Parkman on the other hand but also the relative fault of the Company and Petrie
Parkman as well as any relevant equitable considerations, provided, that in no
event will Petrie Parkman's aggregate contribution hereunder exceed the amount
of fees actually paid to Petrie Parkman in respect of the subject matter of such
loss, claim, damage or liability pursuant to the Agreement. The indemnity,
exculpation, reimbursement and contribution obligations of the Company under
this paragraph shall be in addition to any liability which the Company may
otherwise have, shall survive any termination of the Agreement and shall be
binding upon and extend to the benefit of any successors, assigns, heirs and
personal representatives of the Company and Petrie Parkman. If any action,
claim, proceeding or investigation is instituted or threatened against Petrie
Parkman in respect of which indemnity may be sought against the Company
hereunder, Petrie Parkman shall promptly notify the Company thereof in writing,
but the omission to so notify the Company shall not relieve the Company from any
obligation or liability that the Company may have to Petrie Parkman under this
letter or otherwise. Petrie Parkman will have the right to retain counsel of its
choice to represent Petrie Parkman in connection with any such action, claim,
proceeding or investigation, provided that such counsel shall be reasonably
satisfactory to the Company. Notwithstanding anything to the contrary above,
Petrie Parkman shall not have any obligation to provide notice to the Company as
to any action, claim, proceeding or investigation in which the Company is named
a defendant. We also agree that we will not, without the prior written consent
of Petrie Parkman, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not Petrie Parkman is
an actual or potential party to such claim, action, suit or proceeding) unless
such settlement, compromise or consent includes an unconditional release of
Petrie Parkman from all liability arising out of such claim, action, suit or
proceeding. We hereby consent to personal jurisdiction and service and venue in
any court in which any claim which is subject to this agreement is brought
against Petrie Parkman or any other indemnified person.
It is understood that, in connection with Petrie Parkman's
above-mentioned engagement, Petrie Parkman may also be engaged to act for us in
one or more additional capacities, and that the terms of the original engagement
or any such additional engagement may be embodied in one or more separate
written agreements. This indemnification shall apply to the original engagement,
any such additional engagement and any modification of the original engagement
or such additional engagement and shall remain in full force and effect
following the completion or termination of Petrie Parkman's engagement(s).
We further understand that if Petrie Parkman is asked to act for us in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
Very truly yours,
RENTECH, INC.
By: Dennis L. Yakobson
Agreed to and Accepted:
PETRIE PARKMAN & CO., INC.
By: M.E. Bock