Exhibit 10.14
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is entered into as of June
22, 2001 by RENTECH, INC., a Colorado corporation, with headquarters
at 0000 - 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (Rentech) and
GTL BOLIVIA S.A., a Bolivian corporation, with headquarters at Santa
Xxxx, Bolivia (GTL Bolivia).
Background Circumstances:
A. GTL Bolivia is principally engaged in the development of one or
more GTL facilities in the country of Bolivia. The GTL facilities will
use natural gas to produce GTL products for use in the country and
export.
B. Rentech has developed a synthesis gas-to-liquids process
incorporating Xxxxxxx-Tropsch Technology with a slurry reaction bed and
use of Rentech's iron-based catalyst (GTL Technology). The GTL
Technology is useful for converting carbon-bearing solids and gases
into various liquid hydrocarbons such as synthetic diesel fuel,
naphtha, wax and other liquid hydrocarbon products.
C. Rentech has previously licensed use of its GTL Technology to
other corporations Rentech is willing to license its GTL Technology to
GTL Bolivia for use in plants that GTL Bolivia, alone or with partners,
may construct and operate to convert some of GTL Bolivia's natural gas
reserves, whether now owned or subsequently acquired, into liquid
hydrocarbon products, as well as for use in industrial gas plants that
GTL Bolivia may acquire and convert to use Rentech's GTL Technology.
D. Rentech and GTL Bolivia intend to enter into a strategic
alliance for these purposes.
Now, therefore, in consideration of the background circumstances
and the following mutual agreements, the parties agree as follows:
1. Negotiations of License. Rentech agrees to enter into
discussions with GTL Bolivia with the objective of granting one or more
licenses to GTL Bolivia that allows it to use Rentech's GTL Technology
in plants developed by GTL Bolivia for conversion of natural gas into
liquid hydrocarbons, or in industrial gas plants, or in existing
industrial plants that GTL Bolivia will convert to gas-to-liquids
plants. The licenses will be nonexclusive and limited to the use of
100% natural gas as feedstock. If mutually acceptable terms are agreed
upon between the parties, Rentech will grant licenses to GTL Bolivia
providing for use of Rentech's GTL Technology at one or more sites
selected by GTL Bolivia.
2. Responsibilities of GTL Bolivia. GTL Bolivia will be
responsible for providing suitable sources of natural gas feedstock and
for planning, developing, designing, financing, constructing or
converting, and operating each conversion plant that uses Rentech's GTL
Technology. GTL Bolivia will also market liquid hydrocarbons produced
by its plants.
3. Cooperation of Parties. Upon the mutual execution of this
Memorandum, Rentech will cooperate with GTL Bolivia's evaluation of its
potential plant sites by analyzing the suitability of the chemical
composition of the proposed feedstock gas for the GTL Technology. Upon
a decision by GTL Bolivia to develop a plant for a particular gas
reserve, or to convert an industrial gas plant, a site-specific license
will be negotiated to use Rentech's GTL Technology at the specific site
4. General Provisions of License. Each license to GTL Bolivia
will provide for payment of license fees to Rentech for each plant,
royalties based on production of liquid hydrocarbons, and other
provisions customary to licenses of such technology.
5. Confidentiality Obligations of GTL Bolivia. In addition to the
provisions of any separate, additional agreements of confidentiality
between GTL Bolivia and Rentech, GTL Bolivia agrees as follows:
5.1 Information That Is Confidential; Obligation of
Confidentiality. Confidential Information means all information
received by GTL Bolivia relating to Rentech's GTL Technology, including
but not limited to the design and operating process of synthesis
reactor modules that incorporate this technology; formulas for the
production and induction of Rentech's catalyst; the designs, plans and
prospects of Rentech for development of plants using the GTL
Technology; and all other know-how, trade secrets and proprietary
information of Rentech including processes, formulas, software programs
and source codes, improvements, inventions, techniques, induction
procedures, designs, and plans for plants using the GTL Technology
forecasts, new products, customer lists, information regarding
prospective financing sources and licensees, feedstocks; fee and
royalty amounts charged by Rentech; and non-published financial
information relating to Rentech or the GTL Technology. All
Confidential Information shall be considered confidential even though
disclosed and transferred to GTL Bolivia. GTL Bolivia agrees that,
except as necessary to protect itself against claims of infringement,
it shall neither use such information, except pursuant to and in
accordance with the terms and conditions of this Memorandum, nor
disclose such information to anyone except its employees and agents
that GTL Bolivia determines need to know in connection with the
evaluation of natural gas reserves for use as feedstock for the GTL
Technology, or the development, financing, construction, retrofitting,
or operation of a GTL Technology plant, whose knowledge of such
information is necessary to effect the purposes set out in this
Memorandum. GTL Bolivia may disclose Confidential Information to such
person only if (i) such person has executed a confidentiality agreement
maintained by GTL Bolivia in substantially the form of the
confidentiality agreement used by Rentech, and (ii) GTL Bolivia has
taken other reasonable steps to ensure that such person will maintain
the confidentiality of the Confidential Information during the term of
this Memorandum, and after termination or expiration of this Memorandum
until such time as the information ceases being Confidential
Information pursuant to the provisions of the following section. GTL
Bolivia shall be responsible to Rentech for breach of these obligations
of confidentiality by any such person.
5.2 Exception to Confidentiality. It is agreed, as an exception
to the foregoing obligations of confidentiality, that information
received by GTL Bolivia from Rentech as a result of this Memorandum
shall not be considered confidential, and GTL Bolivia shall not be
limited in disclosing the same, if and to the extent that the
information, as shown by competent evidence; (i) is or becomes, through
no fault of the party obligated to maintain confidentiality, in the
public domain; (ii) is lawfully obtained by GTL Bolivia from a source
other than the Rentech or its agents; (iii) was already known by GTL
Bolivia at the time of its receipt, as shown by reasonable proof filed
with GTL Bolivia within a reasonable time after its receipt; or (iv) is
required to be disclosed by order of any court or governmental
authority having jurisdiction. Disclosures that are specific,
including but not limited to operating conditions such as pressures,
temperatures, formulas, procedures and other such standards and
conditions, shall not be deemed to be within the foregoing exceptions
merely because they are embraced by general disclosures available to
the general public or in GTL Bolivia's possession. Additionally, any
combination of features shall not be deemed to be within the foregoing
exceptions merely because the individual features are available to the
general public or in GTL Bolivia's possession unless the combination
itself and its principles of operation are available to the general
public.
5.3 Published Disclosure. It is agreed that the disclosure
of certain information by Rentech in a publication, such as in letters
patent or by otherwise placing it in the public domain, will not free
GTL Bolivia from its obligation to maintain in confidence any
information not specifically disclosed in or fairly ascertainable from
the publication or other disclosure, such as, for example, the fact
that information in the publication or any portion of it is or is not
used by either party. GTL Bolivia shall have the right to publish
information or articles pertaining to the GTL Technology, GTL Bolivia's
plants using the technology, and products so long as such information
is not confidential, and, with respect to Confidential Information,
only upon prior written approval by Rentech, which it may withhold in
its absolute discretion.
6. Confidentiality Obligations of Rentech. In addition to the
provisions of any separate, additional agreements of confidentiality
between Rentech and GTL Bolivia, Rentech agrees as follows:
6.1 Information that is Confidential; Obligation of
Confidentiality. Confidential Information means all information
received by Rentech relating to GTL Bolivia's gas reserves, insofar
as the information is confidential data about the extent or
specific chemical composition of the reserves, or GTL Bolivia's plans
or prospects for acquiring interests in gas reserves or in acquiring
and converting industrial gas plants to use Rentech's GTL Technology.
All Confidential Information shall be considered confidential even
though disclosed and transferred to Rentech. Rentech agrees that it
shall neither use such information, except pursuant to and in
accordance with this Memorandum, nor disclose such information to
anyone except its employees and agents that Rentech determines needs to
know in connection with evaluation of natural gas reserves for use as
feedstock for the GTL Technology or the development, financing,
construction, retrofitting, or operation of any GTL Technology plant
whose knowledge of such information is necessary to effect the purposes
of this Memorandum. Rentech may only disclose Confidential Information
to such persons only if (i) such person has executed a confidentiality
agreement maintained by Rentech in substantially the form of the
confidentiality agreement used by GTL Bolivia, and (ii) Rentech has
taken other reasonable steps to ensure that such person will maintain
the confidentiality of the Confidential Information during the term of
this Memorandum and after termination or expiration of this Memorandum
until such time as the information ceases being Confidential
Information pursuant to the provision of the following section.
Rentech shall be responsible to GTL Bolivia for breach of these
obligations of confidentiality by any such person.
6.2 Exception to Confidentiality. It is agreed, as an
exception to the foregoing obligations of confidentiality, that
information received by Rentech from GTL Bolivia as a result of this
Memorandum shall not be considered confidential, and Rentech shall not
be limited in disclosing the same, if and to the extent that the
information, as shown by competent evidence; (i) is or becomes, through
no fault of the party obligated to maintain confidentiality, in the
public domain; (ii) is lawfully obtained by Rentech from a source other
than GTL Bolivia or its agents; (iii) was already known by Rentech at
the time of its receipt, as shown by reasonable proof filed with
Rentech within a reasonable time after its receipt; or (iv) is required
to be disclosed by order of any court or governmental authority having
jurisdiction. Disclosures that are specific shall not be deemed to be
within the foregoing exceptions merely because they are embraced by
general disclosures available to the general public or in Rentech's
possession.
6.3 Published Disclosure. It is agreed that the disclosure
of certain information by GTL Bolivia in a publication will not free
Rentech from its obligation to maintain in confidence any information
not specifically disclosed in or fairly ascertainable from the
publication or other disclosure, such as, for example, the fact that
information in the publication or any portion of it is or is not used
by either party. Rentech shall have the right to publish information
or articles pertaining to GTL Bolivia's gas reserves, plants using the
technology, and products so long as such information is not
confidential, and, with respect to Confidential Information, only upon
prior written approval by GTL Bolivia, which it may withhold in its
absolute discretion
7. Entire Agreement. This Memorandum (including any exhibits
hereto) and the agreements, documents and instruments to be signed and
delivered pursuant hereto or thereto, are intended to embody the final,
complete and exclusive agreement among the parties with respect to the
current aspects of the subject matter of this Memorandum; are intended
to supersede all prior agreements, understandings and representations,
written or oral, with respect thereto, and may not be contradicted by
evidence of any such prior to contemporaneous agreement, understanding
or representation, whether written or oral. No change or modification
to this Memorandum shall be valid unless in writing and signed by the
parties hereto.
8. Business Relationship. Notwithstanding any other provisions of
this Memorandum, nothing in this document is intended or shall be
constructed as creating a partnership, joint venture, or any other legal
entity between the parties, nor any continuing relationship or
commitment between them except as specifically provided in this
Memorandum. Each party shall conduct all business in such party's own
name as in independent contractor. Neither party shall be liable for
the representations or acts of the other party contrary to the terms of
this Memorandum. Neither party has the right or power to act for or on
behalf of the other or to bind the other in any respect whatsoever,
other than as expressly provided for in this Memorandum.
9. Expenses. Except as may be otherwise agreed to in writing,
each party shall be responsible for and pay its own costs and expenses
incurred in the performance of its obligations under this Memorandum.
10. Duration. This Memorandum will be effective upon execution
and will continue until superseded by a license agreement or terminated
by written notice given by one party to the other. After termination
each party shall be free from any obligation or liability to the other
except for the obligations and liabilities of confidentiality set forth
in paragraphs 5 and 6, all of which shall survive the termination of
this Memorandum.
11. Paragraph Headings. The headings of the paragraphs or
sections of this Memorandum are inserted solely for convenience of
reference and are not a part of the Memorandum. They are not intended
to govern, limit or aid in the construction of any term or provision of
this Memorandum.
12. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier or
other means of personal service (including by means of a nationally
recognized courier service or professional messenger service); or sent
by telex or telecopy; or mailed first class, postage prepaid, by
certified mail, return receipt requested; in all cases, addressed to
each party at the following address. All notices, requests, and other
communications shall be deemed given on the date of actual receipt or
delivery as evidenced by written receipt, acknowledgment or other
evidence of actual receipt or delivery to the address specified above.
In case of service by telecopy, a copy of such notice need not be
personally delivered or sent by certified mail. Any party hereto may
from time to time, by notice in writing served as set forth previously,
designate a different address or a different or additional person to
which all such notices or communications thereafter are to be given.
Rentech: GTL Bolivia:
0000 00xx Xxxxxx, Xxxxx 720 Xxxxx Xxxxxxxxxx, Xxxxxx XXXXXX,
Xxxx 0,Xx. 2B
Xxxxxx, XX 00000 Santa Xxxx, Bolivia
13. Assignment. Neither party shall transfer or assign any of its
rights, liabilities, or obligations under this Memorandum without the
express written consent of the other. Such consent may be withheld in
the sole discretion of that party.
14. Facsimile Signatures. The parties agree that this Memorandum
and related documents may be transmitted between them by facsimile
machine. The parties intend that faxed signatures constitute signed
original signatures that are binding upon the party who signs a
document, and that a faxed document containing the signatures (original
or faxed) of all the parties is binding upon all parties.
15. Counterparts. This Memorandum may be executed in one or more
counterparts, with the same effect as if all parties to this Memorandum
had signed the same document. All counterparts shall be constructed
together and constitute one agreement.
16. It is specifically understood that GTL Bolivia partners have
made no arrangements with a joint developer, principal, project
manager, source of gas, domestic or export group. In addition the
legislation to permit the project in favorable economic terms to GTL
Bolivia have not yet been implemented. However, GTL Bolivia S.A. may
have partners in the future, for the implementation of the GTL Project
with Rentech. GTL Bolivia will extend all the provisions of this
memorandum to such possible partners.
17. Rentech currently has no understanding or any other
arrangement for developing a GTL project in Bolivia with any third
party.
RENTECH, INC.
/s/ Xxxxxx X. Xxxxxxxx
By: ____________________________________
Xxxxxx X. Xxxxxxxx, President
GTL BOLIVIA S.A.
/s/ Xxxx X. Xxxx
By: ____________________________________
Xxxx X. Xxxx, General Manager
