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EXHIBIT 10.7
RENTECH, INC.
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EXCLUSIVE LICENSE AGREEMENT
granted to Esquire Gujarat Petrochemicals Ltd.
and dated June 25, 1994
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EXCLUSIVE LICENSE AGREEMENT
THIS AGREEMENT is entered into as of June 25, 1994 by and between
Rentech, Inc., a corporation incorporated in the USA under provisions of the
laws of Colorado (Licensor), having its registered office at 0000 Xxxxxx
Xxxxxx, Xxxxx 000X, Xxxxxx, Xxxxxxxx 00000, XXX, and Esquire Gujarat
Petrochemicals Ltd., a company incorporated and registered in India under
provisions of the Companies Act, 1956 (Licensee), having its registered
office at 6-H, North Stand, Xxxxx Xxxxxx Gate, Xxxxxxxx Stadium, D-Road,
Churchgate Bombay - 400 020, ITN, Inc., a corporation incorporated in the
USA under provisions of the laws of Colorado ("ITN"), having its registered
office at 00000 Xxxx Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx XXX.
BACKGROUND CIRCUMSTANCES:
The circumstances leading to this Agreement are as follows:
A. Licensor is the owner of a proprietary process based on the
Xxxxxxx-Tropsch process for conversion of carbon-bearing solids or gases
into various liquid hydrocarbons such as clean sulphur-free diesel fuel,
high olefinic naphtha, and hard and soft wax, or into gaseous hydrocarbons.
The hydrocarbons produced by such technology are called the Rentech
Products.
B. The use of Licensor's process for the production of Rentech
Products requires confidential know-how and trade secret information that
is proprietary to Licensor. Some aspects of the proprietary process are the
subject of Licensor's U.S. Patent Applications filed with the U.S. Patent
and Trademark Office (Patent Applications). Any U.S. Letters Patent that
may result from the Patent Application are deemed subject to this Agreement
(Licensed Patents). The confidential know-how and trade secret information
including unpatentable information that is necessary in the planning,
design, construction, commissioning, and start-up operation of process
plants utilizing the Rentech Process Technology for the production of
Rentech Products (Rentech Plants), and the Licensed Patents are collectively
referred to in this Agreement as the Rentech Process Technology.
C. The Rentech Process Technology does not include the Licensor's
confidential know-how and trade secrets and its proprietary information,
technology and formulas useful in the preparation and manufacture of the
catalyst used in Rentech Plants (Rentech Catalyst), but does include the
right to use the catalyst in Rentech Plants.
D. Licensee desires and Licensor is willing to grant to Licensee an
exclusive license to use the Rentech Process Technology and to practice the
inventions of any one or more of any Licensed Patents maturing from the
Patent Applications, subject to the terms and conditions of this Agreement,
in the territory described as the Union of India, including the plant to be
located in Arunachal Pradesh, India, and to sell Rentech Products worldwide.
E. Licensee desires to receive all the technical information, whether
patented or otherwise, including documents, manuals or drawings containing
technical knowledge, inventions, trade secrets, formulae, manufacturing
techniques, procedures, methods, current and accumulated experiences,
engineering data, designs, material specifications and applicable computer
software from the Licensor necessary to design, construct, commission,
start-up and operate Rentech Plant, and Licensor is willing to disclose to
and deliver to Licensee, on the terms and conditions of this Agreement, said
technical information with respect to Rentech Plants and the production of
Rentech Products. It is intended that the technical information to be
provided pursuant to the terms of this Agreement for the proposed 350 barrel
per day Rentech Plant to be located in Arunachal Pradesh, India xxxx
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achieve under operational conditions the following ranges of product mix
and yields per barrel of production: naphtha 8%-12%; diesel 13%-17%;
wax 73%-77%.
NOW, THEREFORE, in consideration of the background circumstances and
the following mutual covenants, promises and agreements, the parties hereto
agree as follows:
1. Grants and Reservations of Rights. Subject to all terms and
conditions set forth in this Agreement and related agreements:
1.1 Exclusive License; Term of License. Licensor hereby grants
to Licensee an exclusive license, in the territory described as the Union
of India (Licensed Territory), to use the Rentech Process Technology for the
development, design, construction, and operation of Rentech Plants located
in the Licensed Territory for the production of Rentech Products and their
sale anywhere in the world. Notwithstanding any provisions of this
Agreement to the contrary, the license granted hereby shall expire and
terminate seven years from the date of this Agreement or seven years after
commencement of on-line operation for 30 days at the designed production
capacity of the first Rentech Plant constructed under this license at
Arunachal Pradesh, whichever is earlier, unless the parties agree in writing
to extend this license. Upon expiration of this license, Licensee shall
continue to have the right to use the Rentech Process Technology in its
Rentech Plants then in use or for which actual construction under binding
construction contracted with independent prime engineering and constructions
contractors has been commenced.
1.2 Sublicensing Rights. Licensor hereby grants to Licensee the
right to grant sublicenses within the Licensed Territory, on such terms and
conditions as are mutually agreed upon between the parties in a separate
agreement.
1.3 Trade Name and Trademarks. Licensor hereby grants to
Licensee, during any period for which royalties are payable to Licensor
pursuant to this Agreement the nonexclusive right to use and sublicense, on
such terms and conditions as are consistent with this Agreement, Licensor's
trade names and trademarks, now existing or hereafter created, that are
specifically designated by it for use in connection with the sale of Rentech
Products produced pursuant to the terms of this Agreement (collectively
Licensed Trademarks). In order to promote and identify the Rentech Products
produced pursuant to this Agreement, Licensee covenants and agrees to
exclusively use either Licensor's Licensed Trademarks or any other Licensed
Trademarks of Licensee that are approved by Licensor (such approval not to
be unreasonably withheld) in connection with the production, marketing and
sale of the Rentech Products, it being the intention of Licensor that all
products produced under this Agreement bear identification that reasonably
indicates that they are derived from the application of Rentech Process
Technology; provided, however, Licensee may use its own name or trade name
to identify Rentech Plants without any prior approval of Licensor. The
license granted herein conveys no right to Licensee to use licensor's name,
logo, or symbols but only to use any of Licensor's Licensed Trademarks
designated by it for such use, none of which shall be used in any other
manner whatsoever. Licensee agrees to use such trade name and trademarks
in strict compliance with the provisions of all applicable laws and
regulations and subsequent provisions of this Agreement.
1.4 Reservation of Rights by Licensor. Nothing in this Agreement
shall be construed as conveying to Licensee, either expressly or by
implication, any right under any other letters patent except those Licensed
Patents that may mature from the Patent Application or any other patent
application or letters patent maturing from the Rentech Process Technology.
Nothing in this Agreement shall be construed as conveying to Licensee any
right to use advances, improvements and information not associated with use
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of the Rentech Process Technology. Licensor hereby reserves to itself and
its successors and assigns, subject only to the grant of the license
described in this Agreement, all rights of ownership of the Rentech Process
Technology and Rentech Catalyst, including but not limited to (i) the right,
by itself or with others, to develop, design, construct and operate Rentech
Plants using Rentech Process Technology for the production of Rentech
Products anywhere in all countries of the world other than in the Licensed
Territory; (ii) the right to license, sublicense, use, produce, patent,
protect and sell Rentech Catalyst anywhere in all countries of the world,
including the Licensed Territory, and the Rentech Process Technology
anywhere in all countries of the world, excluding the Licensed Territory,
except to the extent consistent with this Agreement; (iii) the right to sell
Rentech Products worldwide; (iv) subject only to the rights granted in this
Agreement, the exclusive right to the Licensed Trademarks and all other
trade names and trademarks used by Rentech or its other licensees in
connection with the Rentech Process Technology, Rentech Catalyst or Rentech
Products; (v) all rights to the preliminary process flow diagrams,
preliminary heat and mass balance diagrams, preliminary process plans,
engineering designs and specifications, instrumentation drawings, computer
software programs and source codes, cost estimates, marketing studies,
construction standards, operating standards and procedures, catalyst
induction procedures and other know-how, technology, trade secret and
proprietary information provided by Licensor for the use of Licensee or
learned by Licensee through or in the course of development, design,
construction and operation of process plants pursuant to this Agreement,
and; (vi) all rights not specifically granted to Licensee in this
Agreement.
2. Technical and Engineering Information and Services. Subject to
applicable law, rules, regulations and the provisions of this Agreement, and
for the purpose of enabling Licensee more fully to exercise the license and
rights granted to it by this Agreement, Licensor hereby agrees, upon
reasonable notice, to disclose to and perform for Licensee all technical and
engineering information and services in support of design and operation of
the Rentech Plant to be located in Arunachal Pradesh and any other Rentech
Plants located in the Licensed Territory. Subject to compensation to
Licensor as subsequently provided for in this Agreement, such services shall
be provided to the best of Licensor's ability during the periods of
development, preliminary design, detailed design, construction, plant
start-up and initial operation of the Rentech Plants, shall be as follows:
2.1 Fee Consulting Services. The terms and conditions for the
provision of any additional technical support services not included in a
negotiated preliminary process plant engineering design contract between the
parties for a specific Rentech Plant shall be negotiated in good faith
between the parties.
2.2 No Other Assistance. Licensor shall not be required to
provide to Licensee, and Licensee does not expect or desire to receive from
Licensor (i) any control or assistance in the business methods that
Licensee selects for the conduct of its business; or (ii) any business,
technical advice or other assistance in the selection, acquisition and
production of Licensee's feedstock for its Rentech Plants; Licensee is
responsible for all such matters and represents to Licensor that it is well
informed about them and is fully capable of making such decisions.
2.3 ITN, INC. as Administrative and Project Coordinator.
Licensor has granted ITN, Inc. (ITN), the exclusive right to market licenses
for use of the Rentech Process Technology in the Union of India. Licensor
hereby appoints ITN and its administrative and project coordinator for the
purposes of this Agreement, whose duties will include, but not by way of
limitation, providing technical support to Licensee during actual
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construction and procuring and importing to Licensee necessary equipment
that cannot be obtained within India.
3. Rentech Synthesis Reactor Modules.
3.1 Design and Construction. Licensee shall be responsible for
financing, designing, constructing, testing, operating and all other aspects
of each Rentech Plant built pursuant to the terms of this Agreement. For
each such Rentech Plant, Licensee shall contract with Licensor directly, or
as a subcontractor to Licensee's general contractor, for the design of the
Synthesis Reactor Modules used with each plant unless otherwise agreed to
in writing.
3.2 Ownership. Subject to the superior proprietary rights of
Licensor in the designs, processes, technology, know-how, trade secrets,
patent rights and other proprietary rights embodied and used with
incorporated in the Synthesis Reactor Modules, all of which are reserved by
Licensor, the Licensee shall be the owner of any Synthesis Reactor Modules
constructed for its licensed Rentech Plants.
4. Catalyst Supply.
4.1 Catalyst Ownership. Operation of each Rentech Plant for the
production of Rentech Products requires Rentech Catalyst. Licensor owns the
proprietary formulas, know-how, trade secrets, procedures and other
proprietary technology required for preparation of the Rentech Catalyst, and
such technology, other than Licensor's proprietary procedures for induction
of the Rentech Catalyst, shall not be conveyed or disclosed to Licensee.
No rights shall be acquired in the Rentech Catalyst by Licensee.
4.2 Catalyst. Licensor will guarantee a continuous supply of
Rentech Catalyst to Licensee for the Rentech Plant designed, constructed and
operated by Licensee pursuant to this Agreement, and Licensee will purchase
and pay for the Rentech Catalyst. Licensor and ITN shall at the appropriate
time develop, design, construct and operate a Rentech Catalyst manufacturing
plant in the Union of India. If Licensor, for any reason, is unable to
supply Rentech Catalyst to Licensee, Licensee shall have the exclusive right
to design, develop and construct a catalyst manufacturing plant in the
Licensee's territory to be financed, owned and operated by Licensee for the
production of Rentech Catalyst for use only in Rentech Plants located in the
Licensed Territory and other Rentech Plants constructed under license
contracts developed by ITN.
5. Access. Licensee will permit Licensor to have access to the
Rentech Plants constructed under this Agreement at all reasonable times for
the purpose of determining whether all of Licensee's undertakings pursuant
to this section and elsewhere in this Agreement are being met and
maintained; provided, however, neither such access, inspection, nor the
preliminary and detailed engineering design and specifications or other
know-how, trade secrets or proprietary information provided by Licensor
shall impose any duty upon Licensor to warn of, or make Licensor responsible
or liable in any way, for errors, omissions or inadequate standards of
Licensee or the consequences thereof.
6. Monetary Compensation.
6.1 License Fees. As consideration for the exclusive license and
other rights granted to Licensee in Section 1, and for the development
consulting services to be provided by Licensor pursuant to Section 2.1, the
Licensee shall pay Licensor a license fee for the Rentech Plant to be
constructed by Licensee or its sublicensees. The license fee shall be based
upon the design production capacity of each separate Rentech Plant
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contracted to be built by or under sublicense from Licensee, and shall be
US$2,000 per barrel of liquid hydrocarbons of plant capacity measured in
U.S. barrels of Rentech Products produced. For example: the license fee
for the 350 barrel per day Rentech Plant to be located in Arunachal Pradesh,
India will be $700,000. The license fee for each Rentech Plant is payable
in three installments, as follows:
(a) First Installment. The first installment of the license
fee shall be equal to one-third of the license fee determined according to
the designed production capacity of the applicable plant. The first
installment shall be paid by Licensee to Licensor upon delivery of the
preliminary Rentech Plant engineering design for start of the detailed
design of the plant by Licensee's prime engineering company.
(b) Second Installment. The second installment shall be
equal to one-third of the license fee of determined according to the
designed production capacity of the applicable plant. The second
installment shall be paid by Licensee to Licensor upon delivery of the
Rentech Synthesis Reactor Modules.
(c) Third Installment. The third installment shall be equal
to one-third of the license fee of determined according to the designed
production capacity of the applicable plant. The third installment shall
be paid by Licensee to Licensor at the time the plant has operated on-line
for 60 days at levels of production that meet its design capacity, sometimes
called "Start-Up."
[6.2 intentionally left blank.]
6.3 Production Royalties. As consideration for the exclusive
license and other rights granted to Licensee in Section 1, Licensee shall
pay to Licensor on a schedule as may be permitted by the government of India
from time to time throughout the term of this Agreement, and thereafter so
long as Rentech Products are produced and used or sold by or for Licensee
or its sublicensees, a royalty computed as described in this section. The
royalty shall be payable upon all Rentech Products sold after production
from Rentech Plants, excluding any gaseous hydrocarbons produced that are
either used as fuel in the operation process or recycled into the operation
process to improve its efficiency. The royalty shall be based upon "Total
Net Hydrocarbons" which is defined as the number of U.S. barrels (42 gallons
per barrel) of all liquid hydrocarbons produced. The royalty shall be
US$2.00 per U.S. barrel until January 1, 1998, after which the royalty for
1998 and each succeeding year shall be US$2.00 per U.S. barrel plus a
percentage increase to be negotiated in good faith between the parties to
reflect inflationary increases in other prices of liquid hydrocarbons.
6.4 Payments.
(a) Manner of Payment. All payments made under this
Agreement shall be made in U.S. dollars, by wire transfer, to such bank or
account as Licensor shall from time to time designate in writing.
(b) Non-Business Days. Whenever any payment hereunder shall
be stated to be due on a day that is not a business day, such payment shall
be made on the immediately succeeding business day.
(c) Receipt. Payments shall not be considered to be made
until the day they are received at Licensor's final bank account that is
designated by it for such purpose.
(d) Payment Due Date. Royalty payments shall be due in
accordance with a payment schedule as may be permitted by the government of
India from time to time.
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(e) Late Payments. In the event any payment of any type by
Licensee or its sublicensees to Licensor shall at any time be overdue,
Licensee shall pay interest to Licensor on any and all such late payments
at the rate of four percent per annum over the prime rate of interest
charged by a U.S. bank designated by Licensee or the successor of such bank,
such interest being calculated on each late payment from the date it became
due to the date of actual payment. Payment of such interest shall be in
addition to any of Licensor's other rights under this Agreement resulting
from Licensee's default in making timely payments. Interest shall accrue
on late payments from the due date regardless of whether Licensor has given
Licensee written notice of the default.
6.5 Taxes Withheld. If Licensee is required by any government
with jurisdiction to withhold any tax or tax payment from any payment due
by it to Licensor, Licensee shall remit the net amount of the payment to
Licensor, together with official receipts or other evidence acceptable to
Licensor establishing payment of such amounts. Any such tax payments shall
be made by Licensee on time and in the proper amount to relieve Licensor
from all liabilities for failure to pay such payments timely or fully.
6.6 Production Royalties. Production Royalties shall be payable
upon all Rentech Products for a term of seven years and for a longer term
as may be permitted by the government of India from time to time.
7. Reports and Records.
7.1 Records and Books of Account. Licensee shall make and keep
complete and accurate records and books of account describing all activities
by it and its sublicensees under this Agreement in sufficient detail to
enable royalties payable to be determined.
7.2 Production Reports. Licensee shall deliver to Licensor
within twenty days after the end of each calendar month, beginning with the
calendar month in which Start-Up is achieved for any Rentech Plant, a
written report, certified by the plant manager for each plant and the chief
financial officer of Licensee, as being true and correct, describing for the
applicable calendar month and separately for each Rentech Plant subject to
this Agreement:
(a) Production and Price. The type, composition and
quantities of all Rentech Products produced, the BTUs contained in gaseous
hydrocarbons produced, and the Total Net Hydrocarbons produced for the
month, together with all other data necessary for the calculation of
royalties.
(b) Royalties. Calculations showing the total royalties due
for the month and the cumulative total royalties due for the calendar year
to date.
[7.3 Intentionally Left Blank.]
7.4 Reports of Chartered Public Accountants. Licensee shall
deliver to Licensor within ninety days after the end of each calendar year,
(i) a written report prepared by Licensee's chartered accountants which
summarizes for the Rentech Plant and for the calendar year just completed,
all royalties and other amounts due to Licensor hereunder, month by month,
and certifies to the accuracy of the calculations, and (ii) a written report
prepared and certified by Licensee's chief financial officer which states
that, with respect to the calendar year just completed, Licensee and its
sublicensees are in compliance with the provisions of this Agreement. Both
of such reports shall be in reasonable detail and satisfactory in scope to
Licensor. Licensee shall also deliver to Licensor such other financial
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data and written evidence as Licensor may reasonably request to verify the
accuracy of the reports.
7.5 Right to Audit. Licensee agrees, at the request of Licensor,
to permit Licensor and its accountants, or any of them, to have full access
during customary business hours to the books and records of Licensee
pertaining to activities under this Agreement, and they shall have the right
to make copies therefrom at Licensor's expense. The right to examine may
be exercised at any time during the term of this Agreement and for a period
of two years after its expiration or termination.
8. Confidentiality.
8.1 Information That Is Confidential; Obligation of
Confidentiality. In addition to the provisions of any separate, additional
agreements of confidentiality between them, Licensee agrees that all
information that it receives from Licensor relating to the Rentech Process
Technology; the design and operating process of Synthesis Reactor Modules;
formulas for the production and induction of Rentech Catalyst; the designs,
plans and prospects of Licensor for development of Rentech Plants, and all
other know-how, trade secrets and proprietary information of Licensor
including processes, formulas, software programs and source codes,
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 Licensor, and non-published
financial information relating to Licensor (Confidential Information) shall
be considered confidential, except as specified in section 8.2 of this
Agreement. Licensee agrees that, except as necessary to protect itself
against infringement, 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, agents and
sublicensees that Licensee determines need to know in connection with the
development, financing, construction or operation of the Rentech Plant of
Licensee or its sublicensees whose knowledge of such information is
necessary to effect the purposes of this Agreement. Licensee may only
disclose Confidential Information to such person if (i) such person has
executed a confidentiality agreement maintained by Licensee in substantially
the form of Exhibit A attached hereto and incorporated herein, or
(ii) Licensee 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 Section 8.2.
8.2 Exception to Confidentiality. It is agreed, as an exception
to the foregoing obligations of confidentiality, that information received
by Licensee from the Licensor as a result of this Agreement shall not be
considered confidential, and Licensee 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 Licensee from a source other than the Licensor or its agents; (iii) was
already known by Licensee at the time of its receipt, as shown by reasonable
proof filed with the Licensor within a reasonable time after its receipt;
(iv) is information such as improvements that either party is expressly
permitted by the terms of this Agreement to sublicense or license for use
by other parties, expressly including Licensor's rights to use, license and
patent the information; or (v) 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
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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 Licensee'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
Licensee's possession unless the combination itself and its principle of
operation are available to the general public.
8.3 Published Disclosure. It is agreed that the disclosure of
certain information by Licensor in a publication, such as in letters patent
or by otherwise placing it in the public domain, will not free Licensee 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.
Licensee shall have the right to publish information or articles pertaining
to the Rentech Process Technology, Rentech Plants and Rentech Products so
long as such information is not confidential, and, with respect to
Confidential Information, only upon prior written approval by Licensor,
which it may withhold in its absolute discretion.
8.4 Non-Use after Termination. Unless otherwise provided for in
this Agreement, Licensee shall not use the Confidential Information after
termination or expiration of this Agreement and further, for the time period
after termination or expiration of this Agreement until such time as the
information ceases being Confidential Information pursuant to the provisions
of this section.
9. Defense of Claims of Patent Infringement.
9.1 Responsibility for Patent Infringement. The exact manner in
which Licensee conducts its business is substantially within the discretion
and decision of Licensee. Any risks of infringement of the rights of others
that may be associated with using the Rentech Process Technology and any
Licensed Patents as permitted under this Agreement cannot be foreseen and
evaluated until Licensee has established its own business practice
techniques. Licensor does not, therefore, accept responsibility for actual
or alleged patent infringement by reason of the practice by Licensee of the
Rentech Process Technology and any Licensed Patents, except as follows:
(a) Defense of Patent Infringement. Licensor agrees to
defend, at its sole expense and with counsel of its own choice and by
conduct solely determined by Licensor, all patent infringement actions
brought against Licensor or Licensee asserting infringement of one or more
Licensed U.S. Letters Patents (other than Licensed Patents registered in
names other than the name of Licensor) by reason of use by Licensee of such
Licensed Patents as permitted under this Agreement. If Licensor does not
defend or in the reasonable judgment of Licensee, reached after giving
written notice of its concerns to Licensor, is not vigorously and adequately
defending against any such action, including appropriate appeals, Licensee
may defend against such an action and Licensor shall reimburse Licensee for
its reasonable expenses incurred in connection with such defense. Licensor
shall have the right to be kept informed of the status and progress of each
such defense by Licensee.
(b) Licensor Indemnity. Licensor shall indemnify Licensee
against any adverse final monetary judgment awarded against Licensee with
respect to legal actions maintained by Licensor to defend against claims of
infringement of U.S. Letters Patent (other than Licensed Patents registered
in names other than the names of Licensor).
PAGE 10
10. Representations, Warranties and Covenants.
10.1 Representations, Warranties and Covenants of Licensee.
Licensee hereby represents, warrants and covenants to Licensor as follows:
(a) Compliance With Law. Licensee will carry out all
activities contemplated by this Agreement in accordance with all applicable
laws, rules and regulations governing licensee and that it has the authority
to enter into this Agreement and to carry out all of the terms and
conditions.
(b) Licensor Held Harmless.
(i) Licensee shall indemnify and hold Licensor harmless
and cause each sublicensee of Licensee to indemnify and hold Licensor
harmless, from and against any and all claims, injuries, liabilities, costs
and expenses resulting from or caused by or claimed to have resulted from
any use or operation of the Rentech Process Technology, Rentech Plants,
Synthesis Reactor Modules, or Rentech Catalyst by Licensee, any sublicensee
of Licensee, any Related Party or any Unrelated Party whether based on
negligence, strict liability, product liability, breach of warranty, or any
cause that was under their control, and from liabilities and claims for
consequential damages and lost profits arising from such use or operation.
Licensee agrees to defend, at its sole expense or at the sole expense of its
sublicensees and itself and with counsel of its own choice, all such actions
brought against Licensor. Licensee and its sublicensees shall also
indemnify against any adverse final monetary judgment award rendered against
Licensor in any such action. Licensee shall maintain insurance policies
issued by reputable insurance companies. Licensee shall also cause
sublicensees of Licensee to indemnify Licensor against any adverse final
monetary judgment award rendered against Licensor in any such action brought
against Licensor.
10.2 Representations, Warranties and Covenants of Licensor.
Licensor hereby represents and warrants to Licensee as of the date of
execution of this Agreement and hereby covenants to Licensee as follows:
(a) Compliance With Law. Licensor will carry out all
activities contemplated by this Agreement in accordance with all applicable
laws, rules and regulations governing Licensor and that it has the authority
to enter into this Agreement and to carry out all of its terms and
conditions.
(b) No Patent Invalidity. To the best of Licensor's
knowledge, there are no U.S. Letters Patent or foreign patents which
invalidate the Patent Application, and the use by Licensee of any Licensed
Patents that may result from the Patent Application will not infringe upon
any third-party rights, including patent rights.
(c) No Knowledge of Prior Trademarks. Licensor knows of no
prior use of the Licensed Trademarks by others than those authorized by the
Licensor as of the date of execution of this Agreement.
(d) Licensor Owner of Licensed Technology. Licensor has the
right to use the Rentech Process Technology and has the right to grant
licenses to the Rentech Process Technology. To the best of Licensor's
knowledge, the use by Licensee of the Rentech Process Technology under the
terms of this Agreement will not infringe upon any third-party rights.
PAGE 11
(e) Licensing All Rights. The Rentech Process Technology
licensed hereunder represents all rights of Licensor with respect to
technologies or equipment for the Rentech Process Technology for the
production of Rentech Products. In the event that any technologies or
equipment invented, now or hereafter, by Licensor with respect to it are not
included in the Rentech Process Technology for the production of Rentech
Products, such technologies or equipment shall be deemed to be included with
the intent that they be the subject of the grant of the license hereunder
as subsequently provided in article 12.
10.3 Process and Mechanical Guarantees. Licensor will provide
process and mechanical guarantees to the Licensee or to Licensee's
engineering or construction contractor for the Rentech Synthesis Reactor
Modules as may be required after negotiation of the prime construction
contract.
10.4 No Other Representations or Warranties. No representations
or warranties are given or made by Licensor to Licensee or any sublicensee
of Licensee other than those expressly set forth in this article.
11. Termination and Expiration.
11.1 Automatic Expiration. Unless it is terminated on an earlier
date pursuant to this article, this Agreement shall continue in full force
and effect until it automatically expires, which expiration shall occur upon
the earliest of seven years from the date of this Agreement or seven years
after commencement of on-line operation for 30 days at the designed
production capacity of the Rentech Plant to be constructed under this
Agreement; provided, however, this Agreement shall terminate at any time
before then that is at least two years after the date of this Agreement,
upon written notice by Licensor, if Licensee is not diligently proceeding
with actual construction or operation of one or more Rentech Plants. Any
termination of this Agreement under this article shall not terminate the
license granted hereunder with respect to any Rentech Plants in operation
or for which actual construction has been commenced pursuant to binding
construction contracts with an independent third party engineering and
construction company, so long as Licensee pays royalties and other payments
due. The relevant provisions of this Agreement shall apply to such plants
until they are permanently shut down and cease to operate for the production
of Rentech Plants and plants for the manufacture of Rentech Catalyst shall
be deemed terminated. In the event of the termination of this Agreement
pursuant to this article, all rights and licenses to utilize Licensor's
Rentech Process Technology granted to Licensee by this Agreement and any
contract between the parties for the purchase and sale of Rentech Catalyst
shall thereby automatically be revoked except that Licensee shall continue
to be entitled to use the Rentech Process Technology and Rentech Catalyst
with respect to any Rentech Plants in operation or under such actual
construction at the time of termination until they are permanently shut down
and closed to operate for the production of Rentech Products; provided,
however, Licensee shall continue to pay any and all fees, royalties, and
other amounts due during such continued period of use.
11.2 Defaults - General. Except as provided in the following
subsection of this section, should there be a material breach as to any
obligation hereunder that does not involve payment of a fee, royalty, or
other amount due to Licensor, and should the breaching party fail to put
into action, within forty-five days after receiving written notice thereof
from the other party, and diligently thereafter pursue, a reasonable remedy
designed to diligently cure (in the reasonable judgment of the other party)
such material breach or default, then this Agreement may thereupon be
terminated by the other party by giving written notice of termination to the
breaching party. Specifically, and without limitations to the foregoing,
PAGE 12
a breach or violation of any of the covenants contained in this preceding
section 28 10 shall be deemed a material breach of this Agreement.
11.3 Defaults - Non-Payment by Licensee. (a) Should Licensee
fail to pay any fee, royalty or other amount due to Licensor by Licensee or
any of its sublicensees when it is due hereunder, and following such failure
of payment, should Licensee fail to pay such fee, royalty or amount in full
within thirty days after receiving written notice thereof from Licensor,
then this Agreement may thereupon be terminated by Licensor giving written
notice of termination.
11.4 Payment Obligations Continue. Upon termination of this
Agreement for any reason, nothing shall be construed to release Licensee
from any of its obligations or liabilities to Licensor hereunder, including
without limitation, Licensee's obligations to pay Licensor any and all fees,
royalties or other amounts accrued but unpaid hereunder prior to the date
of such termination, and from its obligations of confidentiality.
11.5 Other Remedies. Should Licensee fail to make any payment
to Licensor within thirty days after receiving written notice from Licensor
of Licensee's failure to pay the payment when it became due hereunder,
Licensor shall have the right, in addition to its other rights and powers
described herein or in other documents, to terminate all rights of Licensee
to grant sublicenses or to delegate duties under this Agreement.
11.6 Licensee Shall Cease Practice of the Technology. Licensee
agrees that, if this Agreement is terminated or expires, it shall following
actions and have the following rights:
(a) Discontinue Use and Operations. Licensee shall
immediately discontinue and shall specifically cease the use of Rentech
Process Technology and discontinue operations of the Rentech Plants
permitted under this Agreement for the production of Rentech Products;
(b) Nine Months Preceding Termination. If the date of
termination or expiration is known in advance, Licensee shall, during the
nine-month period immediately preceding the date of termination or
expiration, complete uses of the Rentech Process Technology and operations
in progress, finish production of Rentech Products, and liquidate its
inventory of Rentech Products, all in accordance with the terms and
conditions of this Agreement;
(c) One Year Following Termination. In addition to its
rights under the preceding section, Licensee shall have the right for a
period of one year, but not more, after the date of termination or
expiration to sell any Rentech Products produced before termination or
expiration, any Rentech Catalyst in inventory, and all Synthesis Reactor
Modules comprising part of the Rentech Plant subject to this Agreement, to
Licensor or any other party that Licensor approves, all in accordance with
the terms and conditions of this Agreement, but not to anyone else;
(d) Use and Supply Contracts. Any separate use agreement
or supply contract for Rentech Catalyst entered into between Licensor and
Licensee, any sublicensee of Licensee or any Related Party shall be
terminated as of the date this Agreement terminates or expires; and
12. Improvements Made by Licensor. Certain improvements and
technological advances may be made by Licensor or its permitted assigns or
other licensees to the Rentech Process Technology before, during or after
the design, construction, start-up and operation of the initial Rentech
Plant or subsequent Plants in the Licensed Territory. Any improvements and
advances made by Licensor affecting the Rentech Process Technology shall be
PAGE 13
the property of Licensor, and if any such improvements and advances are made
by Licensor's permitted assigns or licensees other than Licensee, they shall
be the property of Licensor or its assigns or licensees, as they have agreed
between themselves; provided, however, that Licensee shall be provided with
such improvements or advances on a royalty-free basis to the extent
Licensee's improvements and advances are shared with Licensor and its
assigns or licensees pursuant to the following section 13. Details,
descriptions and technical data regarding such improvements or advances,
when developed by Licensor or its permitted assigns or licensees, shall be
conveyed fully by Licensor to Licensee without delay, and without any cost
to Licensee or any further payment to Licensor, in order that Licensee may
take full advantage of them at its expense for the improvement of the
design, construction and operation of the Rentech Plants in the Licensed
Territory. Licensor agrees that its obligations to provide data as to such
advances or improvements shall remain in effect for the duration of this
Agreement, and Licensee agrees that it shall hold all such information
subject to the provisions of confidentiality contained in this Agreement and
any related confidentiality agreements with Licensor. In the event that any
patent or improvement patent results from the Patent Application, or any
application for such an improvement patent is made by the Licensor affecting
the Rentech Process Technology, the Licensee shall have the right to use
such improvement or invention on the basis previously described in this
Agreement as though the same were specifically covered by this Agreement and
under the same terms, covenants and conditions as the Rentech Process
Technology.
13. Improvements Made by Licensee. Any improvements and advances made
by Licensee affecting the Rentech Process Technology shall become and be the
property of Licensee. However, Licensor shall have a nonexclusive
royalty-free license to use such improvements and advances for itself and its
licensees and permitted assigns for the life of the improvement or advance;
provided however, that all such licensees and assigns must be obligated to
provide Licensor with information relating to any of their improvements and
advances to the Rentech Process Technology so that Licensor can share and
distribute all such information with and to all of its licensees and assigns
on a royalty-free basis (excepting any licenses granted by Licensor previous
to the date of this Agreement). Details, descriptions and technical data
regarding Licensee's improvements and advances shall be conveyed fully by
Licensee to Licensor without delay, and without any cost to Licensor, in
order that Licensor and its licensees and assigns may take full advantage
of them for the improvement of the design, construction and operation of
Rentech Plants. Licensor agrees that all such information shall be subject
to the provisions of confidentiality contained in this Agreement and any
related confidentiality agreements with Licensee.
14. Miscellaneous.
14.1 Assignments by Licensor. This Agreement and any and all of
the rights of Licensor hereunder shall be freely assignable by Licensor.
14.2 Assignments by Licensee. This Agreement, and any of the
rights and obligations of Licensee hereunder, shall not be assigned or
delegated by Licensee without the prior written consent of Licensor to do
so, which consent Licensor shall not unreasonably withheld.
14.3 Arbitration.
(a) Governing Law. This Agreement will be governed by the
Law of the Union of India.
PAGE 14
(b) Arbitration Provisions. All disputes, differences and
questions whatsoever arising either during the continuance of this agreement
or afterwards between the parties hereto of their respective representatives
or between any party touching these present or the construction of the
applications thereof or as to any act, deed or omission of any of the
parties hereto in any way relating to these presents shall be referred to
as sole arbitrator in case the parties agree upon one otherwise to two
arbitrators one to be appointed by each of the parties or to an umpire to
be appointed by such arbitrators before entering upon the reference, such
arbitration shall be held in India at New Delhi and shall be in accordance
with the Arbitration Act, 1940, or any other statuary modifications or
re-enactments thereof for the time being in force in India.
(c) Language. Such arbitration shall be conducted in the
English language.
(d) Courts. Subject to what is stated herein above, the
Courts in India will have jurisdiction in relation to any matter pertaining
to or arising from this Agreement.
14.4 Waiver. Any breach of any provision of this Agreement shall
not be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement.
14.5 No Other Relationship. Nothing herein contained shall be
deemed to create an agency, joint venture, partnership or franchise relation
between the parties hereto.
14.6 Conversion to Dollars. If any payment due to Licensor is
stated in a currency other than Dollars, such payment shall be converted
into Dollars at the commercial rate quoted in Denver, Colorado by First
Interstate Bank of Denver for a prime commercial customer to buy Dollars
with such other currency for spot value at or about eleven a.m. (Denver
time) five business days immediately preceding the date on which the payment
(whether royalty or other amount) with respect to such payment becomes due.
If no such commercial rate is or can be quoted at such time, such payment
shall be converted into Dollars at the commercial rate most recently quoted
in Denver, Colorado by Licensor's designated bank for a commercial customer
to buy Dollars with such other currency for spot value prior to the due
date. If no such commercial rate has been quoted at any time during the
three-month period preceding the payment due date, such payment shall be
converted into Dollars at the rate most recently used for the currency other
than Dollars by Licensee, a sublicensee of Licensee or a Related Party in
a sale to an Unrelated Party who is a purchaser in the United States of
America for a purchase of Rentech Products.
14.7 Force Majeure.
(a) No Liability for Certain Delays or Defaults. Neither
Licensor nor Licensee shall be liable in damages, or have the right to
terminate this Agreement, for any delay or default in performing any
obligation hereunder if that failure or delay is due to any cause beyond the
reasonable control and without default or negligence of that party;
provided, however, in order to excuse its delay or default hereunder, a
party shall notify the other of the occurrence or the cause specifying the
nature and particulars thereof and the expected duration thereof; and
provided, further, that within ten business days of the termination of such
occurrence or cause, such party shall give notice to the other party
specifying the date of termination thereof. All obligations of both parties
shall return to being in full force and effect upon the termination of such
occurrence or cause (including without limitations any payment that became
due and payable hereunder prior to the termination of such occurrence or
PAGE 15
cause). However, in the event that the duration of such occurrence or cause
extends beyond one year, the non-excused party shall then have the right,
by giving sixty days prior written notice to the other party, to terminate
this Agreement unless the other party shall substantially cure such
occurrence or cause within said sixty days.
(b) Cause Beyond the Reasonable Control. For the purposes
of this section, a "cause beyond the reasonable control" of a party shall
include, without limiting the generality of the phrase, any act of God, act
of any government or other authority or statutory undertaking, industrial
dispute, fire, explosion, accident, power failure, flood, riot or war
(declared or undeclared).
14.8 Survival of Contents. Notwithstanding anything else in this
Agreement to the contrary, the parties agree that those provisions of this
Agreement which by their nature survive the termination or expiration of
this Agreement shall do so to the extent required thereby for the full
observation and performance by any or all of the parties hereto.
14.9 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 that the facsimile message was received by
the party to be notified, or (iii) three business days after sent by
registered or certified mail, postage paid, to the party to be notified; or
(iv) three business days after sent by ordinary mail, upon delivery, postage
paid, to the party to be notified, at the address set forth below:
Licensor: Licensee:
President Managing Director
Rentech, Inc. Esquire Gujarat Petrochemicals Ltd.
0000 00xx Xxxxxx, Xxxxx 000X 0-X, Xxxxx Stand, Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000 Xxxxxxxx Xxxxxxx, X-Xxxx
XXXXXX XXXXXX XX XXXXXXX Xxxxxxxxxx Xxxxxx-000 000
XXXXX
Facsimile: (000) 000-0000 Facsimile: 00-00-000 8956
Administrative and Project Coordinator:
ITN, Inc.
00000 Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
XXXXXX XXXXXX OF AMERICA
Either Licensor or Licensee may change its address, facsimile number or
representative to be notified by written notice to the other party.
14.10 Severability. If any provisions of this Agreement shall
be held to be invalid, illegal or unenforceable, the same shall be deemed
severed from this Agreement, and the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
14.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
PAGE 16
14.12 Integration. This Agreement represents the entire
agreement of the parties with respect to the subject matter herein contained
and supersedes all prior correspondence, conversations, negotiations and
understandings with respect to those subjects, other than to other written
agreements referred to in this Agreement.
14.13 Sole Rights. Nothing contained in this Agreement shall be
deemed or constrained to give to either party any right or license in any
trade xxxx, patent or other industrial property of the other party, except
as in herein agreed to between the parties.
14.14 No Agency. Neither party shall be deemed to be the legal
representative or agent of the other nor shall either party have the right
or authority to assume or make any obligation, guarantee, warranty or
representation of any kind, express or implied, in the name of or binding
upon the other.
14.15 Government Approval. This Agreement shall be subject to
the necessary approval of the Government of India and/or the Reserve Bank
of India and such other authorities concerned of the Government of India.
14.16 Waiver. No waiver of compliance with any provision or
condition of this Agreement shall constitute a waiver of any other provision
or condition hereof or the later enforcement of the provision or condition
previously waived as to new circumstances or events.
IN WITNESS WHEREOF, the parties have executed duplicate originals of
this Agreement by their duly authorized officers as of the date first
mentioned above.
LICENSOR
RENTECH, INC. ATTEST:
By: (Signature) (Signature)
------------------------------ --------------------------
Xxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxx, Secretary
LICENSEE
ESQUIRE GUJARAT PETROCHEMICALS LTD. WITNESS:
By: (Signature) (Signature)
------------------------------ --------------------------
Xxxxxxx Xxxxx, Director Xxxxxxx Xxxxxx
ITN, INC. WITNESS:
(Signature) (Signature)
By: ------------------------------ --------------------------
Xx. Xxxxx X. Xxxxx, President Xxxxxxx Xxxxxx
PAGE 17
EXHIBIT A
Confidentiality Agreement
This Agreement is entered into as of , 199 by and
between Rentech, Inc., a Colorado corporation (Company), and ----------
-----------------------, (Recipient) whose address is ---------------.
BACKGROUND CIRCUMSTANCES:
A. The Company is the owner of a proprietary process, including
confidential know-how and trade secrets, to convert carbon bearing solids
or gases into liquid hydrocarbons such as crude oil, or into distilled
hydrocarbon liquids such as diesel fuel, naphtha, and microcrystalline wax,
or into gaseous hydrocarbons. The hydrocarbons as produced by such
technology are called the Rentech Products. Some aspects of the proprietary
process are the subject of the Company's patent application filed with the
U.S. Patent and Trademark Office. The patentable and unpatentable
information is collectively called the Rentech Process Technology.
B. The Company is engaged in the highly specialized business of
licensing the Rentech Process Technology for use in conversion process
plants for the production of Rentech Products. For the purpose of
evaluating the Company and the Rentech Process Technology, Recipient desires
to receive confidential information about the Rentech Process Technology
that is material to the Company's business and not generally known in the
industry. During the term of this Agreement and any further agreement for
the use of the Rentech Process Technology, the Recipient may also receive
confidential information concerning production and reduction of the
Company's proprietary catalyst used for the production of Rentech Products,
the design and operating process of Synthesis Reactor Modules, and its
Company's present and ongoing research, developments, processes, procedures,
formulas, software programs, improvements, inventories, techniques,
forecasts and new products. All of the foregoing confidential information,
including the Rentech Process Technology, is collectively called
Confidential Information.
Now, therefore, in consideration of the background circumstances and
the following covenants, promises and agreements, the Company agrees to
disclose to the Recipient, on the following terms and conditions, certain
aspects of the Confidential Information.
1. Receipt and Confidentiality. Whether or not Recipient enters into
any further transaction with the Company, Recipient will not use such
information except for the purpose of evaluation described in this
Agreement, nor disclose such information to anyone except to its employees
and agents that Licensee determines need to know in connection with the
evaluation, and to them only if (i) they have executed a confidentiality
agreement maintained by Recipient in substantially the form of this
Agreement or (ii) Recipient has taken other reasonable steps to ensure that
such persons will maintain its confidentiality. The Confidential
Information shall be kept confidential during the term of this Agreement and
after termination or expiration of this Agreement until such time as the
information ceases being Confidential Information pursuant to the following
provisions of paragraph 2.
2. Limit on Obligation. Confidential Information, for the purpose of
this Agreement, shall not include, and Recipient and its employees and
agents will have no obligation to protect any information that:
PAGE 18
(a) is or becomes, through no fault of the party obligated to
maintain confidentiality, in the public domain;
(b) is lawfully obtained by Recipient from a source other than
the Company or its agents;
(c) is already known by Recipient at the time of its receipt,
as shown by reasonable proof filed with the Company within a
reasonable time after its receipt by the Recipient; or
(d) 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,
computer software programs, 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
Recipient'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 Recipient's
possession unless the combination itself and its principle of operation are
available to the general public or in Recipient's possession.
3. Published Disclosure. It is agreed that the disclosure of certain
information by the Company in a publication, such as in letters patent or
by otherwise placing it in the public domain, will not free Recipient 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.
4. Duration of Obligations. Recipient shall not use the Confidential
Information after termination or expiration of this Agreement until such
time as the information ceases being Confidential Information pursuant to
the provisions of paragraph 2.
5. Remedies for Breach. Recipient hereby agrees that the violation,
breach or threatened violation or breach of the agreements contained herein
may cause immediate and irreparable harm to the Company and its affiliated
entities, which may be difficult to compute and that any award of any sum
of money damages may not be adequate relief to the Company. Recipient
therefore agrees that, in the event of any actual or threatened violation
of the provisions of the Agreement, the Company shall have the right to
injunctive and other equitable relief against Recipient in addition to any
other judicial remedies in any court of competent jurisdiction, without
bond.
6. Legal and Accounting Fees. In the event that a court of competent
jurisdiction judicially determines that there has been a breach of this
Agreement by either party, the prevailing party shall be entitled to all
costs and expenses incurred by the other in the enforcement hereof,
including, without limitation, all actual and reasonable attorney fees and
accounting fees.
7. Conflicting Obligations. The Recipient believes that it is free
to enter into this Agreement and perform in accordance therewith. If,
however, the Recipient finds, upon its receipt of Confidential Information
from the Company, that a conflict appears likely to occur because of
Recipient's previous and continuing obligations or commitments to other
parties, then Recipient will promptly so advise the Company in writing and,
PAGE 19
unless otherwise then agreed by the parties, will return to the Company any
documents and other materials containing Confidential Information without
copying, retaining copies, summaries, analyses or extracts thereof; however,
Recipient may retain a record copy, to be maintained in confidence and used
only in the administration of this Agreement.
8. Effects of Agreement. It is further understood and agreed that the
execution of this Agreement creates and ratifies only the relationship and
prior agreements recited herein and conveys no right to use any of the
Confidential Information disclosed for any commercial purposes beyond the
contemplated evaluation without the specific written authorization of the
Company. Termination of this Agreement shall not in itself operate to
terminate obligations of the parties arising under the Agreement.
9. Binding Effect; Governing Law. The agreements contained herein
shall be binding upon and inure to the benefit of Recipient and the Company,
their successors, assigns and legal representatives. This is a contract,
made and to be performed in the State of Colorado, whose substantive laws,
without regard to conflict of laws, shall apply to its construction and
enforcement. The agreements contained in this Agreement supersede any and
all prior agreements between Recipient and the Company relating to the
subject matter.
RECIPIENT: COMPANY:
RENTECH, INC.
By:
--------------------------- ------------------------------
Xxxxxx X. Xxxxxxxx, President
PAGE 20
June 25, 1994
Xx. Xxxxxxx Xxxxx, Director
Esquire Gujarat Petrochemicals Ltd.
6-H North Stand
Xxxxx Xxxxxx Gate
Xxxxxxxx Stadium, D-Road
Churchgate, Xxxxxx 000000
XXXXX
Re: Exclusive License to Use Rentech Technology in India
Dear Xx. Xxxxx:
As you understand, Rentech, Inc. is simultaneously with this letter
granting to Esquire Gujarat Petrochemicals Ltd. an exclusive license to
use the Rentech technology in the Union of India. The license contract
executed as of this date contains the financial terms of the arrangement
and only some other terms and conditions of the license tat have been
agreed between us but not all terms that are material and integral terms
and conditions of the license contract. Accordingly, we therefore agree
to enter into an amendment to the license contract that contains other
material provisions that Rentech normally uses in its international
licenses.
We understand that these are limitations by the government of India
on the duration of royalty payments for the use of technology. (If these
limitations continue to apply, Esquire Gujarat Petrochemicals Ltd. agrees
to take all necessary actions to assist Rentech in getting the royalty
reinstated or we will negotiate in good faith alternative arrangements in
lieu of the royalty payments.
This agreement is entered into as of the date previously given on
behalf of:
1. ESQUIRE GUJARAT PETROCHEMICALS LTD.
(signature)
Signed by: XX. XXXXXXX XXXXX
Director
Witnessed: (signature,
Xxxxxxx Xxxxxx)
2. RENTECH, INC.
(signature)
Signed by: XX. XXXXXX XXXXXXXX
President and CEO
(signature)
Witnessed: XX. XXXXXX X. XXXX
PAGE 21
Amendment to the :
Exclusive Licence Agreement dated June 25, 1994
and the Design Contract dated June 15, 1994.
This amendment hereby rectifies the typographical error in the exclusive
licence agreement dated June 25, 1994 and the Supplementary that has
taken effect on October 10, 1994 and the Design Contract dated June 15,
1994 along with the supplement that has taken effect on February 27,
1995, which states the design capacity of the plant to be '350 barrels
per day' and the same should be read as "360 barrels per day".
The said amendment has been consented by both parties of the agreement
and has been duly signed-off below.
Agreed and accepted Agreed and accepted
------------------- -------------------
for Rentech Inc. for Donyi Polo
Petrochemicals Limited
(signature) (signature)
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxx
--------------- ---------------
President Director
PAGE 22
Supplementary to the Agreement dated June 25, 1994
In pursuant to the agreement signed on June 25, 1994 between Rentech Inc.
(Licensor) and Esquire Gujarat Petrochemicals Limited (Licencee), the
following shall take place:-
Wherever the word "Esquire Gujarat Petrochemicals Limited" along with the
address "6-H, North Stand, Xxxxx Xxxxxx Gate, Xxxxxxxx Stadium, D-Road,
Churchgate, Bombay 400-020" appears in the above statement the same
should read as "Donyi Polo Petrochemicals Limited" along with its address
as "511 Xxxxxx Xxxxxx, X.X.Xxxxx Xxxx, Xxxxxx 000 000".
For the purpose of the interpretation of this agreement, Donyi Polo
Petrochemicals Limited shall, with immediate effect, assume all
responsibilities as "Licensee", the role and responsibilities of which is
clearly defined in the above stated agreement.
By virtue of the above agreement, Rentech, Inc., remains as "Licensor"
and Donyi Polo Petrochemicals Limited shall be the "Licencee".
The above amendment to the agreement dated 25 June 1994, is accepted by
and binding upon all parties concerns, i.e. Rentech Inc., Esquire Gujarat
Petrochemicals Limited and Donyi Polo Petrochemicals Limited.
This supplement has taken effect on October 10, 1994.
Agreed and accepted Agreed and accepted Agreed and accepted
------------------- ------------------- -------------------
for Rentech Inc. for Esquire Gujarat for Donyi Polo
Petrochemicals Limited Petrochemicals Limited
(signature) (signature) (signature)
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx
----------------- ----------------- -----------------
PAGE 23
NO. FC.II. :23(95)/17(9
Government of India
Ministry of Industry
Department of Industrial Development
Secretariat For Industrial Approvals
Foreign Collaboration - II Section
New Delhi the January 10, 1995
To
DONYI POLO PETRO CHEMICALS LIMITED
511. VYAPAR BHAWAN
X. X'XXXXX ROAD
BOMBAY-400009
SUBJECT : Application for foreign collaboration (SIA Regn.
No. FC.I. 17 dated 24/10/94)
Dear Sir:
I am directed to refer to the above mentioned application and to
convey approval of Government of India to your proposal, subject to the
following terms and conditions, in addition to those detailed in Annexure
I :-
1 Name and address : RENTECH INC.
of foreign 0000 XXXXXX XXXXXX
xxxxxxxxxxxx XXXXXX XXXXXXXX
XXX
2 Item(s) of manufacture/ : SYNTHETIC WAX: SULPHUR FREE DIESEL:
activity covered by the OTHER LIQUID HYDROCARBON
foreign collaboration
3 Proposed Location :KUNCHAI XXXX
Xxxxxxxx :XXXXXXXXX
Xxxxx :XXXXXXXXX XXXXXXX
0 a) Foreign Equity Participation : 5.00% (Five Percent) amounting
to Rs. 150.00 Lakhs (One Hundred and Fifty Lakhs) in the paid up
capital of Rs. 3000.00 Lakhs in the joint venture company.
b) NRI Equity Participation (Repatriable) : 30.00% (Thirty
Percent) amounting to Rs. 900.00 Lakhs (Nine Hundred Lakhs) in
the paid up capital of Rs. 3000.00 Lakhs in the joint venture
company.
5 Royalty : US$ 2.5 per barrel subject to taxes for 7 (seven )
years.
6 Lumpsum Payments :
a. Technical Know-how fee : US$ 10.30 Lakhs (Ten Lakhs and
Eighty thousand) subject to taxes to be paid in 3 instalments.
b. Payment for design/drawings : US$ 3.00 Lakhs (Three Lakhs)
net of taxes to be paid in 3 instalments. the tax liability if
any will be borne by you.
PAGE 24
It is noted that the proposed project will utilise natural gas as
raw material as per the allocation made by the Government of
Arunachal Pradesh. It is further noted that the project will be
situated at the well and, therefore, no pipeline will be required
and it will not cause any adverse effect to the environment.
8 Duration of the agreement: Duration of the Technology
collaboration agreement shall be 10 (Ten) years from the date of
agreement, or 7 (seven) years from the date of commencement of
commercial production.
9 Condition No. 5 of Annexure I is not applicable.
10 This approval letter is made a part of the foreign collaboration
agreement to be executed between you and the foreign collaborator
and only those provisions of the agreement which are covered by
the said letter or which are not in variance with the provisions
or the said letter shall be binding on the Government of India or
Reserve Bank of India.
11 You may now proceed to finalise the agreement.
12 This approval is valid for a period of two years from the date of
issue. Within this period, you are required to file the
collaboration agreement with the Reserve Bank of India/Authorised
Foreign Exchange Dealer.
13 In case the proposed activity is not exempted from the provisions
of Industrial (Development & Regulation) Act, 1951 and the
Foreign Exchange Regulation Act, 1973 it will be your
responsibility be your responsibility (sic) to obtain such
clearances as may be required under the said Acts.
14 You shall not manufacture items reserved for the Small Scale
Sector without prior approval of the Government as per the
prescribed policy and procedure.
15 The Administrative Ministry for this project is the :
Ministry of Petroleum & Natural Gas, New Delhi.
II. You may approach your Regional Office of Exchange Control Deptt.
of Reserve Bank of India for necessary permission under Section
19 of FERA, 1973 for allotment of shares to Non-Residents.
III. You are requested to send Foreign Investment Remittance
Certificate (FIRC) to the Regional Office, Reserve Bank of India
immediately on receipt of foreign remittance.
IV. You are requested to furnish the informations as per the
questionnaire at Annexure II on 1st January & 1st July every year
till the receipt of approved foreign equity and commencement of
production to the Secretariat for Industrial Approvals (FC. II
Section), Udyog Bhawan, New Delhi.
V. You are requested to acknowledge and confirm acceptance of the
above terms and conditions to Secretariat for Industrial
Approvals (FC. II Section ) and the Administrative Ministry.
PAGE 25
I. All future correspondence for ammendments / changes in terms and
conditions of the approval letter or for extension of its
validity, if required, etc. may be addressed to the
Entrepreneurial Assistance Unit of the Secretariat for Industrial
Approvals, Udyog Bhavan, New Delhi-11.
Yours faithfully,
(signature)
( XXXXXX XXXXX )
SEAL OF THE MINISTRY UNDER SECRETARY TO THE GOV. OF INDIA.
PAGE 26
Supplementary to the Design Contract dated June 15, 1994
In pursuant to the agreement signed on June 15, 1994 between Rentech,
Inc. and Esquire Gujarat Petrochemicals Limited , the following shall
take place :-
Wherever the word "Esquire Gujarat Petrochemicals Limited" (herein after
mentioned as EGPL) along with the address "6-H, North Stand, Xxxxx Xxxxxx
Gate, Xxxxxxxx Stadium, D-Road, Churchgate, Bombay 400-020" appears in he
above statement the same should read as "Donyi Polo Petrochemicals
Limited" (herein after mentioned as DPPL) along with its address as "511
Xxxxxx Xxxxxx, X.X.Xxxxx Xxxx, Xxxxxx 000 000".
EGPL hereby transfers all the rights and obligations arising out of the
design contract entered into between EGPL and Rentech on June 15, 1994
for a consideration equal to the amount actually paid till date by EGPL
to Rentech under the said design agreement.
For the purpose of interpretation of this agreement, Donyi Polo
Petrochemicals Limited shall, with immediate effect, assume all
responsibilities in the contract, of which is clearly defined in the
above stated agreement.
By virtue of the above contract, Donyi Polo Petrochemicals Limited shall
be the first part of the contract and Rentech Inc., remains as second
part of the contract.
The above amendment to the Contract dated June 15, 1994, is accepted by
and binding upon all parties concerned, i.e. Rentech Inc., Esquire
Gujarat Petrochemicals Limited and Donyi Polo Petrochemicals Limited.
This supplement has taken effect on February 27, 1995.
Agreed and accepted Agreed and accepted Agreed and accepted
------------------- ------------------- -------------------
for Rentech Inc. for Esquire Gujarat for Donyi Polo
Petrochemicals Limited Petrochemicals Limited
(signature) (signature) (signature)
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx
----------------- --------------- ---------------
(President) (Director) (Director)
PAGE 00
XXXXXXXX XXXXXXX XXXX XX XXXXX POST BOX No. 10127
RESERVBANK EXCHANGE CONTROL DEPARTMENT TELE. 2661644
BOMBAY XXXXXX XXXXXXXX XXXXXX
XXXX XXXXXXXX, 0XX XXXXX
XXXXXX - 000000
Ref. No. XX.Xx. FITT 1315/D-52/94-95 May 03, 1995
M/S DONYI POLO PETRO CHEMICALS LTD.
000, XXXXXX XXXXXX
X. X'XXXXX XXXX
XXXXXX
XXXXXXXXXXX 000000.
Dear Sir:
Foreign Technical Collaboration with
RENTECH INC., U.S.A.
Allotment of Registration Number
--------------------------------
This has reference to Government's letter No. FC.II.23(95) / 17(94)
dated 10/01/95. and Government's letter No. dated
----------- ----------
2. You are advised to file a copy of the collaboration agreement with
your Authorised Dealer: BANK OF BARODA, MARINE DRIVE BRANCH, BOMBAY, as
indicated in your application dated 02/05/95.
Please note that the government's above letter of approval should be made
part of the collaboration agreement to be executed / executed by you with
the overseas collaborator. Any further amendment in Government's
letter/s of approval/s during the currency of the agreement should also
be made part of the original agreement by way of execution of
supplementary agreements which, too, should be filed with the concerned
authorised dealer. You are advised to submit to us certified copy of the
collaboration / supplementary agreement to be executed / executed for
perusal and record.
3. The above collaboration has been allotted Registration
No.: -FCT95BYG0023. This no. should be quoted in all your future
references to this Office.
4. In case you are paying Income-tax at the flat rate of 30%, you may
request in writing the receiving bank branch to forward a copy of the
received certificate regarding payment of tax, direct to your above
authorised dealer to enable you to remit the proposed payment.
5. Please note that you will make all remittances under the
collaboration through your above authorised dealer. Requests for each
remittance under the collaboration, as & when necessary, should be made
direct to Authorised Dealer on Form A-2 supported by the following
documents:-
a) A No Objection Certificate / tax Clearance Certificate issued by
the Income-tax authorities in the enclosed standard form or a copy of
the certificate issued by the designated bank regarding payment of tax
where the tax has been paid at a flat rate of 30% to the designated
bank.
PAGE 28
b) A certificate from the chartered Accountant in the form TCK/TCR
(depending upon the purpose of payment).
c) Declaration by you to the effect that the proposed remittance is
strictly in accordance with the terms & conditions of the collaboration
approved by the Government.
6. Please note that only those provisions of the collaboration agreement
which are covered by the Government's letter/s of approval/s or which are
not at variance with the letter of approvals shall be binding on
Government of India &/or Reserve Bank of India. The remittances which
are not covered under the Government's letter of approval including
interest on delayed payments are not permitted to be remitted though the
authorised dealer unless specific approval for the sale is obtained from
the concerned department of the Govt. / R B I & produced before the
authorised dealer.
7. The payment of Cess at the rate of 5% on all payments including
payments made locally in Indian rupees towards passage fares, local
living expenses etc. in connection with the deputation of the technicians
under the R & D Cess Act, 1986 is not insisted upon by us in view of the
order No. 2261 of 1989 in the High Court of Calcutta. However, our
permission to remit the fees payable by you to Foreign Technicians shall
be without prejudice to our right to prefer any appeal against the said
order and your liability would be subject to the outcome of the said
appeal, if any, preferred by us.
8. You should submit an Annual Return in Form TCD (in duplicate)
furnishing details of all remittances made during the previous calendar
year. This Return should reach us in the 1st fortnight January each
year. Where no payments have been made during a year a nil Return should
be sent. You should watch for acknowledgement of the Return by us.
9. Regarding equity participation you are advised to approach our C.I.
Section for approval in principal for issue of shares to your
collaborator.
10. Please submit a certified copy of supp. agreement.
11. Please submit a certified copy of Memorandum & Articles of
Association in the name of M/S "Donyi Polo Petro chemicals Ltd."
Yours faithfully,
(signature)
( X. X. Xxxxx )
p. Joint Controller
Encls.
i) No Objection Certificate
ii) TCK Form
iii) TCK Form
iv) TCK Form
PAGE 29
Supplementary Agreement
In pursuant to the agreement signed on June 25, 1994 between Rentech Inc.
(Licensor) and Esquire Gujarat Petrochemicals Limited (Licensee), and the
supplementary agreement signed on October 10, 1995 between Rentech Inc.
(Licensor) and Donyi Polo Petrochemicals Limited (Licensee) the following
stands stated:
We accept the terms and conditions stipulated by the Government of India,
Ministry of Industry, Secretariat for Industrial Approvals, in their
letter no. FC.II.:23(95)/17/(94) dated January 10, 1995, and also that
Reserve Bank of India vide their registration letter no.
EC.BY.FITT./D-52/94-95 dated May 3, 1995 and it forms a part of this
agreement.
Agreed and accepted Agreed and accepted
------------------- -------------------
for Rentech Inc. for Donyi Polo
Petrochemicals Limited
(signature) (signature)
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxx
--------------- --------------
President Director
Dated: May 10, 1995
Place: Bombay
