EXH 10.10
AGREEMENT FOR PLANT DESIGN STUDY AND MARKETING
This Agreement is made and entered into as of July 22, 2000, by and
between RENTECH, INC., a corporation organized under the laws of the United
States (Rentech), and COMART, a business entity organized under the laws of
Italy (Comart).
The circumstances leading to this Agreement are as follows:
A. Rentech has developed a synthesis gas-to-liquids process
incorporating Fischer-Tropsch technology with a slurry reaction bed and an
iron-based catalyst known as the Rentech Gas-To-Liquids Technology (Rentech GTL
Technology). The Rentech GTL Technology is useful for converting carbon-bearing
gases into various liquid hydrocarbons such as synthetic diesel fuel, naphtha,
waxes, and other liquid hydrocarbon products.
B. Comart wishes to obtain certain rights to market the Rentech GTL
Technology for use with natural gas feedstocks. Comart also wishes to engage
Rentech to assist in the preparation of a basic design for a generic 1,000
barrel per day plant to use the Rentech GTL Technology to convert natural gas
into liquid hydrocarbon products.
Now, therefore, in consideration of the background circumstances and
the following covenants, the parties agree as follows:
1. Marketing Rights. Rentech grants Comart non-exclusive rights to
market Rentech's licenses to use the Rentech GTL Technology anywhere in the
world, except India, for plants using natural gas as feedstock that have a
production capacity of up to 2,000 barrels per day of liquid hydrocarbons.
Rentech also grants Comart the exclusive right to market Rentech's license to
use the Rentech GTL Technology anywhere in the world except India for plants
that may be constructed by ENI SpA and Edison SpA using only natural gas as
feedstock. Comart shall have no authority, nor shall it represent that it has
authority, to bind or commit Rentech to a license agreement or any other
obligation or commitment with any party. Rentech retains and reserves all rights
to determine the terms and provisions of its license agreements, catalyst supply
contracts and all other agreements related to the use of the Rentech GTL
Technology.
2. Cooperation. If Comart obtains one or more customers that
demonstrate bona fide interest to Rentech in using the Rentech GTL Technology,
Comer and Rentech will jointly consider the opportunity. If Rentech decides to
pursue the opportunity, Rentech will conduct its own negotiations, with the
assistance of Comart, with the prospective customer. Rentech will negotiate in
good faith with each Comart customer in an effort to reach agreement with the
customer as to the terms of a license agreement and related agreements for use
of the Rentech GTL Technology for each specific site proposed by the customer.
If Rentech and the customer agree upon mutually acceptable terms, Rentech will
provide a license to the customer, or where appropriate a license to Comart
allowing Comart to grant a sub-license to the customer, for each specific site.
To recognize the marketing costs associated with this Agreement, Rentech shall
pay to Comart, as its sole compensation, 15% of any royalties Rentech actually
receives under a license agreement from production of liquid hydrocarbons in
plants originated by Comart.
3. Technical Scope.
3.1 Plant Design Study - Technical Support. Rentech will conduct
engineering services for Comart to help to prepare the basic designs for a
generic plant (one that is not intended for any specific site or natural gas
feedstock) including process flow diagrams for a 1,000 barrel per day plant to
use the Rentech GTL Technology to convert natural gas into liquid hydrocarbon
products such as synthetic diesel fuel, naphtha and waxes. The design for the
generic plant will emphasize efficiency of capital costs and operating costs,
which will nevertheless depend in part upon the location for any plant, with a
goal of obtaining the maximum ratio of performance to cost. If Comart requests,
Rentech will also prepare alternate process flow diagrams to enable Comart to
compare the capital and operating costs of the alternative configurations to use
various natural gas feedstocks.
3.2 Plant Design Study - Fees. For the engineering services to be
carried out by Rentech in support of Comart, as described in paragraph 3.1,
Rentech will invoice Comart monthly for materials and engineering services.
Rentech's invoices will include a description and the actual cost of the
materials used and the designation of level of experience of each engineer who
provided services and the time spent by each on the plant design study. Comart
agrees to pay for the cost of any travel or other out-of-pocket costs and for
the cost of engineering services at the rates described in Appendix A.
Comart agrees to pay Rentech's invoices for materials and engineering
services within 30 days from the date of receipt of each invoice according to
Comart's regular month-end payment schedule for its accounts payable. Interest
shall accrue at the four percentage points over the official Euro LIBOR rate in
effect at the time on sums not paid when due. Comart will pay Rentech's costs of
collection for unpaid sums, including attorneys? fees and costs, and reasonable
travel expenses. All payments to Rentech will be in U.S. dollars by wire
transfer to its designated bank account. Upon default by Comart in timely
payment or in any other obligation under this Agreement, Rentech may, in
addition to any other remedies available to it at law or in equity, discontinue
all its work under this Agreement and hold as its property all payments
previously made by Comart as well as all work product of Rentech not already
paid for by Comart.
3.3 Fischer-Tropsch (FT) Synthesis Reactor Module. A Schedule A package
for the FT Synthesis Reactor Module will be prepared by Rentech and its
subcontractors in accordance with the scope of work set forth in Appendix B. The
fixed cost for the Schedule A package, including deliverables and the payment
terms, are set forth in Appendix B.
3.4. Rentech will not start the work on the plant design study until it
receives written notice to do so from Comart that includes the chemical
composition of the proposed feedstock gas and the basis of the design selected
by Comart, together with payment of the sum described in Appendix B.
4. Waiver of License Fee. Comart understands and agrees that Rentech
cannot license its technology in violation of any restrictions or prohibitions
imposed by the laws of the United States. No license from Rentech is required
for it to conduct the plant design study for Comart. Accordingly, Rentech waives
its customary charge of a license fee for the purposes of this plant design
study. Rentech will require that a license agreement providing for payment of
license fees and royalties and other consideration to Rentech be entered into
between it and anyone to whom the Rentech GTL Technology is licensed. In the
event of a change in business approach to accomplish the purposes of this
Agreement, Rentech and Comart will negotiate a new agreement to reflect the new
approach.
5. Use of the Plant Design Study. Comart will use the information
provided by the plant design study to obtain capital cost estimates from
contractors and suppliers of its choice for construction of a 1,000 barrel per
day plant using the Rentech GTL Technology for conversion of natural gas to
liquid hydrocarbons. Comart agrees to keep the capital cost estimates it obtains
confidential and not to disclose them to anyone other than its potential
customers. The parties agree that the engineering drawings and other depictions
of the Fischer-Tropsch (FT) Synthesis Reactor Module that are proprietary, such
as the internal designs, aspects, configurations, operating conditions and
functions of the reactor module, and catalyst volume and separation of waxes
from catalyst, will remain in Rentech's possession and will not be removed from
the United States until a license agreement has been executed by Rentech.
Rentech and Comart will cooperate to enable Comart and its contractors and
suppliers to examine and study these engineering drawings at Rentech's
facilities in Denver, Colorado, provided that no copies or other duplications of
them may be made.
6. Export Licenses. Any and all obligations of Rentech under this
Agreement to provide Comart with any technical services or information, for any
purpose or pursuant to any other contract between them, are expressly
conditioned upon Rentech obtaining any and all export and re-expert
authorizations and licenses that may from time to time be required of it for
such purposes under United States law. Rentech agrees to use its best efforts to
obtain authorizations and licenses required of it, but its inability to obtain
such authorizations and licenses shall not constitute a breach of this
Agreement. If Rentech is unable to obtain such authorizations or licenses,
Comart may, but is not required to, attempt to do so at its expense.
7. Reservation of Rights by Rentech. Rentech reserves the right, by
itself or with others, to develop, design, construct, license and sell all
synthesis gas reactors for use of the Rentech GTL Technology and to prepare
their designs and specifications, including without limitation, processes,
plans, flow sheets, drawings related to the internal designs, aspects,
configurations, operating conditions and functions of the reactors, catalyst
volume and catalyst recovery. Rentech also reserves ownership of any and all
rights to all proprietary information and other know-how, technology and trade
secrets contained in the process flow diagrams, heat and mass balance diagrams,
process plans, engineering designs and specifications, instrumentation drawings,
computer software programs and source and object codes, construction and
fabrication standards and specifications, operating standards and procedures
provided by Rentech in the drawings for the plant design study or in the course
of presenting the plant design study. Comart will own the plant design study
drawings.
8. Term. The term of this Agreement shall extent for two (2) years from
the date stated in the introductory paragraph. The term shall be automatically
renewed for additional successive periods of one (1) year each, unless either
party gives the other written notice ninety(90) days before the end of the term
then in effect that it does not wish to extend the term. The obligation to pay
any fees or other sums of money for obligations entered into before expiration
of hits Agreement will survive termination of this Agreement.
9. Confidentiality.
9.1 Information That Is Confidential; Obligation of Confidentiality.
Comart agrees that the terms of this Agreement are to be strictly confidential
except to the extent required to be disclosed by law. In addition to the
provisions of any separate, additional agreements of confidentiality between
them, Comart agrees that all information that it receives from Rentech relating
to the Rentech GTL Technology; (i) the results of the plant design study, all
aspects of the design and operating process of synthesis gas reactor modules;
(ii) formulas for the use and induction of Rentech's catalyst; (iii) the
designs, plans and prospects of Rentech for development of plants using the
Rentech GTL Technology, and (iv) all other know-how, trade secrets and
proprietary information of Rentech including processes, formulas, software
programs and source and object code, improvements, inventions, techniques,
induction procedures, designs and plans for Rentech plants, forecasts, new
products, customer lists, information regarding prospective financing sources,
feedstocks, competitors, fee and royalty amounts charged by Rentech, and (v)
non-published financial information relating to Rentech (Confidential
Information) shall be considered confidential, except as specified in the next
section of this Agreement. In addition, all information described as
confidential in other written confidentiality agreements executed by the parties
shall be considered confidential, except as specified in the next section of
this Agreement. Comart agrees that it shall neither use such information, except
pursuant to and in accordance with the terms and conditions of this Agreement,
nor disclose such information to anyone except to its employees and agents that
Comart determines need to know in connection with the development, financing,
construction or operation of any plant licensed by Rentech to use the Rentech
GTL technology and whose knowledge of such information is necessary to effect
the purposes of this Agreement. Comart may only disclose Confidential
Information to such person if (i) such person has executed a confidentiality
agreement maintained by Comart in substantially the form of these provisions on
confidentiality, or (ii) Comart has taken other reasonable steps to ensure that
such person will maintain the confidentiality of the Confidential Information
during the term of this Agreement, and for the additional period after
termination or expiration of this Agreement until such time as the information
ceases being Confidential Information pursuant to the provisions of the next
section. Comart shall maintain the confidentiality of the Confidential
Information during the continuance of this Agreement and thereafter until the
information ceases being confidential pursuant to the provisions of the next
section.
9.2 Exception to Confidentiality. It is agreed, as an exception to the
foregoing obligations of confidentiality, that information received by Comart
from Rentech as a result of this Agreement shall not be considered confidential,
and Comart 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 Comart from a source other than Rentech or
its agents; (iii) was already known by Comart at the time of its receipt, as
shown by reasonable proof filed with Rentech within a reasonable time after its
receipt; or (iv) required to be disclosed by law or 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 like 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
Comart'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 Comart's possession unless
the combination itself and its principle of operation are available to the
general public.
9.3 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 Comart 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. Comart shall have the right to publish
information or articles pertaining to the Rentech GTL Technology, and its liquid
hydrocarbon products only if such information is not confidential, and, with
respect to Confidential Information, only upon prior written approval by
Rentech, which Rentech may withhold in its absolute discretion.
9.4 Non-Use after Termination. Comart shall not use the Confidential
Information after termination or expiration of this Agreement unless and until
such time as the information ceases being Confidential Information pursuant to
the provisions of this section.
10. Consequential Damages. In no event shall either Comart or Rentech
be liable to the other, whether arising under contract, tort (including
negligence), or otherwise, for loss of anticipated profits or revenue, or
opportunities if the design prepared for Comart is not used in any plant
constructed to use the Rentech GTL Technology. Comart assumes the risk that it
may not be able to find customers who can obtain a license from Rentech, for
legal reasons or otherwise. Comart will in any event pay the sums due to Rentech
for the plant design study. Rentech makes no warranties, express or implied,
with respect to use of the Rentech GTL Technology.
11. Applicable Law. This agreement shall be governed by and construed
in accordance with the laws of the state of Colorado, United States of America,
(without regard to conflicts of law). All suits, actions or proceedings arising
out of or related to this agreement (related proceedings) shall be brought in a
court of competent jurisdiction located in Denver County, Colorado, each of
which courts shall be an appropriate forum for all such related proceedings.
Each party hereby waives any objection which it ay now or hereafter have to the
jurisdiction of any such court over, or the laying of venue in any such court or
any such related proceeding.
12. Compliance. Comart and Rentech agree to strictly comply with all
applicable laws, regulations and orders of the United States. Each party
acknowledges and agrees that certain laws of the United States, including the
foreign Corrupt Practices Act, (15 U.S.C. Sections 78dd-1 et seq.), prohibits
any person subject to the jurisdiction of the United States from making any
payment of money or anything of value, directly or indirectly, to any foreign
government official, foreign political party, or candidate for foreign political
office for the purpose of obtaining or retraining business. Each party
represents and warrants that, in the performance of its obligations under this
Agreement, it has not made, and will not make, any such proscribed payment. Each
party shall indemnify and hold the other party and its affiliates, officers,
directors, agents and employees harmless against any and all claims, losses and
liabilities attributable to any breach of this provision.
13. Invalidity of Provision. If any of the provisions of this Agreement
shall be held by a court or administrative agency of competent jurisdiction to
contravene the laws of any country, it is agreed that such invalidity or
illegality should not invalidate the whole Agreement, but this Agreement shall
be construed as if it did not contain the provision or provisions held to be
invalid or illegal in the particular jurisdiction concerned, and insofar as such
construction does not affect the substance of this Agreement and the rights and
obligations of the parties hereto, it shall be construed and enforced
accordingly. In the event, however, that such invalidity or illegality shall
substantially alter the relationship between the parties hereto, affecting
adversely the interest of either party, then the parties hereto shall negotiate
a mutually acceptable alternative provision not conflicting with such laws.
14. Notices. Any notice, payment, request, demand or other
communication hereunder shall be in writing and shall be deemed to have been
duly given when (i) delivered personally, upon personal delivery to the party to
be notified; or (ii) one business day after sent by facsimile transmission with
confirmation by the sending party's facsimile machine that the message was
received by the party to be notified, or (iii) seven business days after sent by
airmail, registered or certified mail, postage paid, to the party to be
notified, at the address set forth below:
Rentech, Inc.: COMART:
Dennis L. Yakobson, President Massimillano Guglielminetti, Vice
President
Rentech, Inc. Comart
1331 17th St., Suite 720 Via Raffaello Sanzio 2d
Denver, Colorado 80202 21013 Gallarate (VA) - Italy
Either party may change its address, facsimile number or representative to be
notified by written notice to the other party.
15. Assignment. Neither party shall transfer or assign any of its
rights, liabilities, or obligations under this Agreement without the express
written consent of the other party, other than to one of its subsidiary or
affiliated companies; provided, however, that the assigning party shall not be
relieved of any of its obligations under this Agreement. This Agreement is
binding upon the successors and permitted assigns of the parties.
16. Expenses. Except as may be otherwise agreed to in writing each
party shall be responsible for and bear its own costs and expenses incurred in
connection with the performance of its obligations under this Agreement.
17. Miscellaneous. This Agreement contains every obligation and
understanding between the Parties relating to the subject matter hereof and
merges all prior discussions, negotiations and agreements, if any, between them,
except for the Pre-Bid Agreement between them dated May 24, 2000. Neither of the
parties shall be bound by any conditions, definitions, understandings,
warranties or representations relating to the subject matter hereof other than
as expressly provided for or referred to in this Agreement. This Agreement can
be amended only by written instrument properly executed by the parties; any
purported amendment not in writing and properly executed shall be null and void
and of no effect.
18. Counterparts. This Agreement may be executed in several
counterparts, and all copies so executed shall constitute but one and the same
agreement, which shall be binding on all the parties hereto notwithstanding that
less than all of the parties may have signed the original or the same
counterpart.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date herein above first stated.
RENTECH, INC. COMART
By: /s/ Dennis L. Yakobson By: /s/ Massimillano Guglielminetti
- --------------------------- -----------------------------------
Name: Dennis L. Yakobson Name: Massimillano Guglielminetti
Its: President Its: Vice President
APPENDIX A
Charges for Engineering Services
Designation of Engineer or Technician Hourly Rate
Senior Scientist $293/hour
Senior Engineer $250/hour
Engineer $152/hour
Rentech estimates that the cost of these engineering services will not exceed US
$50,000.
APPENDIX B
SCHEDULE A
The following outline describes the information to be provided. The
fixed cost of Rentech, Inc. for the following Schedule A package is US $250,000.
One-half of the payment (US $125,000) is due at the start of this task and
one-half (US $125,000) upon submittal of the Schedule A package to Comart or
other payment terms as may be negotiated between the parties.