Exhibit 10.40

 

“[*]” = confidential portions of this document that have been omitted and have
been separately

filed with the Securities and Exchange Commission pursuant to an application for
confidential

treatment under Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

(Pages 7, 12 and 13)

 

DISTRIBUTION AGREEMENT

 

This DISTRIBUTION AGREEMENT (the “Agreement”) dated                         
between ROYSTER-CLARK RESOURCES LLC, a limited liability company organized and
existing under the laws of the State of Delaware and having its principal office
at 999 Waterside Drive, Suite 800, Norfolk, VA 23510 (“RCR”); and RENTECH
DEVELOPMENT CORPORATION, a Colorado corporation (“RDC”), a wholly owned
subsidiary of Rentech, Inc., a Colorado corporation (“Rentech”), having its
principal office at 1331 17th Street, Suite 720, Denver, CO 80202. RDC and RCR
are from time to time hereafter referred to individually as a “Party” and
collectively as the “Parties.”

 

W I T N E S S E T H:

 

WHEREAS, RCR’s parent company, Royster-Clark, Inc. (“RCI”), formerly owned and
operated, through its ownership of Royster-Clark Nitrogen, Inc., a facility (the
“Facility”) located in East Dubuque, Illinois at which it manufactured anhydrous
ammonia, granular urea, nitric acid, UAN solutions and carbon dioxide
(“Products”) for sale to its industrial and agri-business customers; and

 

WHEREAS, on the date hereof, RDC acquired the Facility, through its purchase of
Royster-Clark Nitrogen, Inc. from RCI, with a view to converting the Facility
over a period of

--------------------------------------------------------------------------------

approximately three (3) years to utilize alternative feedstock and to co-produce
synthetic fuels with ammonia; and

 

WHEREAS, RDC wishes to sell anhydrous ammonia, granular urea, UAN solutions and
nitric acid and related nitrogen-based products (“Facility Products”)
manufactured at the Facility to RCR and to engage RCR as its exclusive
distributor of the Facility Products for agricultural and industrial use within
the United States; and

 

WHEREAS, RCR wishes to purchase the Facility Products and to act as RDC’s
exclusive distributor of the Facility Products under the terms and conditions
set forth herein; and

 

WHEREAS, RCR is a major distributor of nitrogen products and has historically
sourced up to 25% of its need from the Facility.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
obligations contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:

 

ARTICLE I

 

APPOINTMENT AND TERMS OF DISTRIBUTORSHIP

 

1.1 Appointment. RDC hereby appoints RCR as its exclusive distributor for the
sale, purchase and resale of the Facility Products for agricultural and
industrial use throughout the United States subject to the terms and conditions
of this Agreement.

 

2

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1.2 Relationship of the Parties. The relationship between RDC and RCR is that of
independent contractors and not that of employer-employee or principal-agent.
RCR shall not be the agent or legal representative of RDC, nor shall RDC be the
agent or legal representative of RCR. Neither RDC nor RCR shall have the right,
power or authority to assume or undertake any obligation whatsoever or make any
representation on behalf of the other unless authorized to do so in writing.

 

1.3 Commercially Reasonable Efforts.

 

Subject to the terms and conditions of this Agreement (including, without
limitation, Sections 1.4, 1.5 and 2.1), (i) RCR agrees to use its commercially
reasonable efforts to promote the sale of, and to solicit and secure orders for
the Facility Products from its customers, particularly its customers within the
“truck market” area around the Facility, and to purchase from RDC all Facility
Products manufactured at the Facility, and (ii) RDC agrees to sell to RCR all of
its requirements of the Facility Products. Notwithstanding the foregoing, in no
event shall RDC be required to manufacture and deliver to RCR more than that
amount of Facility Product that RDC and RCR have agreed that RCR shall purchase
from RDC pursuant to Section 2.1. It is expressly understood and agreed that RCR
may purchase Facility Products hereunder for its own account as well as for
resale to its customers. In addition, RCR may accept deliveries of Facility
Products from RDC on consignment in RCR’s terminals upon such terms and
conditions as the Parties may agree.

 

1.4 Third Party Sales. In the event that RCR and RDC are not able to reach an
agreement during the Negotiation Period (as defined below) with respect to a
transaction proposed under either of Sections 2.1(a) or 2.1(b), then RDC shall
have the right to sell to third parties the same Facility Products that were the
subject of such proposed transaction; provided that any such sale to a third
party (each, a “Third Party Sale”) must satisfy each of the following
conditions: (a)

 

3

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such Facility Products shall only be sold and shipped on the same timetable and
in the same volume as were included in the terms of the last proposal in writing
by RDC to RCR during the Negotiation Period with respect to such proposed
transaction and (b) such Facility Products shall only be sold at a price (taking
into account rebates and similar items, if any) not less than the lowest price
included in such proposal (the price at which such Facility Products are
actually sold to a third party being the “Third Party Price” with respect
thereto). Notwithstanding the foregoing, RCR shall receive the Applicable
Commission based on the Third Party Price of any Third Party Sale, except that
in the case of Third Party Sales to New Customers (as defined below) after the
date that is two years after the date hereof RCR shall not receive any
commission under this Section 1.4. “New Customers” shall mean persons to which
RCR shall not have sold any Facility Products during the five (5) year period
prior to such Third Party Sale and to which RDC shall not have sold any Facility
Products during the first two (2) year period of this Agreement. Notwithstanding
anything to the contrary herein, RDC shall have the exclusive right to market
and sell Facility Products for agricultural or industrial end-use outside the
United States.

 

1.5 Inventory. Subject to Section 2.1, no specific minimum purchase obligations
on the part of RCR shall be established in connection with its inventory of
Facility Products or otherwise, and no specific minimum production obligations
on the part of RDC with respect to the Facility Products shall be established
under this Agreement.

 

1.6 Inspection. (a) RDC shall have the right, from time to time, upon at least
fourteen (14) days’ prior written notice to RCR, to inspect, during regular
business hours, RCR’s books and records relating to sales of Facility Products
to its customers, for the purpose of determining the accuracy of the “Applicable
Commission,” as subsequently defined in this Agreement, provided that RDC shall
use its best efforts to minimize any disruption to RCR’s business resulting from
such inspection.

 

4

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(b) RCR shall have the right, from time to time, upon at least fourteen
(14) days’ prior written notice to RDC, to inspect, during regular business
hours, RDC’s books and records relating to sales of Facility Products to third
parties (including with respect to rebates and similar items, if any), for the
purposes of determining whether Third Party Sales by RDC were made in compliance
with Section 1.4 and whether the reporting thereof was accurate.

 

1.7 Sales Forecasts. RCR and RDC shall cooperate and use their commercially
reasonable efforts to prepare and mutually agree upon, on or before September 1
of each year (or, during the first year of the Term, within 30 days after the
date hereof, for the calendar year immediately following, a 12-month forecast of
RCR’s Sales of Facility Products (“Sales Forecast”) under a format to be
mutually agreed upon by the parties. It is understood and agreed, however, that
such forecasts shall be estimates only, and shall not constitute a commitment by
RCR to purchase, nor RDC to produce, the amount of Facility Products identified
in the Sales Forecast. RCR and RDC shall cooperate and use their commercially
reasonable efforts to mutually agree upon updates to the Sales Forecast prior to
each calendar quarter. The parties intend to cooperatively develop marketing and
promotion plans to maximize sales of the Facility Products. RCR and RDC agree
that they will in be in regular contact with one another such that RCR shall
keep RDC reasonably well-apprised of the third-party market for Facility
Products and RDC shall keep RCR reasonably well-apprised of its levels of
production and inventory of Facility Products.

 

1.8 RDC Sales. RDC shall not, directly or indirectly, sell any Facility Products
for agricultural or industrial use within the United States other than to or
through RCR or through Third Party Sales. Notwithstanding anything herein to the
contrary, RDC reserves the right to sell carbon dioxide, fuels, electricity and
sulfur and any other product produced at the Facility other than

 

5

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Facility Products and RCR shall not be entitled to receive any commission or
other compensation on, or any other rights in respect of, any such sales
pursuant to this Agreement.

 

ARTICLE II

 

PURCHASE ORDERS, PRICE, PAYMENT AND DELIVERY TERMS

 

2.1 Placement of Orders and Shipping. (a) To the extent RCR desires to purchase
Facility Products from RDC, RCR shall so notify RDC and include with such notice
details as to the type and quantity of Facility Products, the timing of delivery
and the pricing terms with respect to which it desires to make such purchase.

 

(b) To the extent RDC desires to sell Facility Products to RCR, RDC shall so
notify RCR and include with such notice details as to the type and quantity of
Facility Products, the timing of delivery and the pricing terms with respect to
which it desires to make such sale.

 

(c) In each circumstance in which Section 2.1(a) or Section 2.1(b) is
implicated, RCR or RDC, as the case may be, shall have two (2) business days to
respond to the other (the “Offer Period”). In the case of Section 2.1(a), if RDC
shall not have responded within the Offer Period, it shall be deemed to have
rejected the terms of the purchase proposed by RCR. In the case of
Section 2.1(b), if RCR shall not have responded within the Offer Period, it
shall be deemed to have rejected the terms of the sale proposed by RDC. In the
event that RCR fails to respond during the Offer Period or either RCR or RDC, as
the case may be, responds that it will not agree to the proposed transaction,
then the two shall negotiate in good faith, for a period not to exceed two
(2) business days (the “Negotiation Period”), seeking to reach agreement on the
terms of the proposed transaction. During the Negotiation Period and with
respect to pricing terms, the parties shall take into consideration (among other
factors) the preceding two weeks FOB Midwest Market Prices for the particular
product as published by Fertilizer Week America (FOB Midwest) and Green Markets

 

6

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(Mid Cornbelt). If RCR and RDC shall agree on the terms of the proposed
transaction during the Offer Period or the Negotiation Period, the agreed price
with respect to that transaction (the “Sales Price”), less the Applicable
Commission, shall be payable with respect thereto under Section 2.4.

 

(d) If RDC is unable to ship on a timely basis the Facility Products that are
required by an agreed transaction, it will so notify RCR and inform it of the
anticipated shipping date, and if shipment is not made within five (5) days
after the shipping date specified with respect to such agreed transaction, RCR
shall have the right to cancel such agreed transaction without prejudice to any
other right or remedy of RCR.

 

2.2 Delivery of Facility Products. Delivery of the Facility Products to RCR or
its customer shall be FOB the Facility in East Dubuque, Illinois, and title to
and risk of loss of Facility Products shall pass upon delivery to RCR or its
customer when the Facility Products pass the flange into RCR’s or its customer’s
barge, truck or railcar. RCR shall arrange and pay for shipping of Facility
Products hereunder. Collection of freight from its customers shall be RCR’s
responsibility. However, RDC acknowledges that RCR may wish to have RDC (at
RCR’s sole cost and expense) ship Facility Products to RCR or its customers from
time to time.

 

2.3 Applicable Commission. As used herein, the “Applicable Commission” shall
mean with respect to transactions for which the Sales Price or the Third Party
Price is agreed during the following periods: (a) from the date of this
Agreement until the date that is four years from the date hereof, [*]% of the
applicable Sales Price or Third Party Price, and (b) for the fifth year of the
Term, each year of the Second Term and each subsequent one (1) year renewal
period, such percentage of the applicable Sales Price or Third Party Price as
RDC and RCR shall negotiate and agree in good faith at least thirty (30) days
before the commencement of such twelve (12) month period. Notwithstanding the
foregoing, the maximum amount of the

 

7

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Applicable Commission payable by RDC to RCR hereunder shall not exceed $[*] with
respect to any of the four twelve (12) month periods ending on the first four
(4) anniversaries of the date hereof.

 

2.4 Payment. (a) RDC shall, on a weekly basis, deliver to RCR a written
statement (hereinafter referred to as the “Shipping Statement”) showing all
Facility Products shipped to RCR or its customers during the preceding one week
period. RCR shall remit to RDC within thirty (30) days from the date of Shipping
Statement, by wire transfer, an amount equal to such amount indicated on the
Shipping Statement. The Shipping Statement amount will be based on the
applicable Sales Prices less the Applicable Commission. No Shipping Statement
need be delivered if during the applicable week no Facility Products were
shipped as described above.

 

(b) RCR shall on a weekly basis deliver to RDC a statement (hereinafter referred
to as the “Sales Statement”) for all sales of Facility Product that RDC has
placed on consignment in RCR’s terminals for the preceding one week period. The
Sales Statement shall list all sales based on the terms and conditions agreed to
at the time Facility Product was placed on consignment with RCR. RCR shall remit
to RDC within thirty (30) days from the date of Sales Statement, by wire
transfer, an amount equal to such amount indicated on the Sales Statement. No
Sales Statement need be delivered if during the applicable week no Facility
Products were placed on consignment as described above.

 

(c) RDC shall, on a weekly basis, deliver to RCR a written statement
(hereinafter referred to as the “Third Party Sales Statement”) showing all
Facility Products shipped through Third Party Sales during the preceding one
week period. RDC shall remit to RCR within thirty (30) days from the date of
Third Party Sales Statement, by wire transfer, an amount equal to such amount
indicated on the Third Party Sales Statement. The Third Party Sales Statement
amount will

 

8

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be the Applicable Commission based on the applicable Third Party Prices. No
Third Party Sales Statement need be delivered if during the applicable week no
Third Party Sales were made.

 

(d) It is understood and agreed that RCR shall bear the credit risk on all
resales of Facility Products to its customers, and that the purchase price
payable by RCR to RDC for Facility Products hereunder shall be based upon the
Sales Price, less the Applicable Commission, regardless of whether or when such
amounts are actually collected by RCR. Notwithstanding anything herein to the
contrary, RDC shall bear the credit risk on all Third Party Sales.

 

2.6 Use of Facility. RDC covenants and agrees that during any period in which
RDC shall have shut-down or ceased the production of Facility Products at the
Facility for a period of thirty (30) or more consecutive days, either (i) the
Facility shall be used for some purpose(s) other than the provision of customary
fertilizer terminal services or (ii) if the Facility is not so put to use during
such period, RDC shall commence negotiations with RCR in good faith so as to
provide RCR with a reasonable opportunity to utilize the Facility on an
exclusive basis as a terminal (including, without limitation, RDC providing
customary fertilizer terminal services to RCR at such fee-rate and on such other
terms as are reasonably negotiated by the parties based upon then prevailing
industry standards). In no event shall RDC allow a third party to utilize the
Facility as a fertilizer terminal on terms less favorable to RDC than the least
favorable terms made available in writing to RCR.

 

ARTICLE III

 

WARRANTIES AND INDEMNIFICATION

 

3.1 Warranty. RDC makes no warranty of any kind, express or implied, except that
RDC represents and warrants that (i) Facility Products sold hereunder shall
conform to the Product Specifications set forth in Exhibit A hereto, as amended
or supplemented from time to time as the

 

9

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parties may mutually agree, (ii) RDC will convey good title thereto, free from
any security interest (except for a security interest created by or through RCR)
(iii) Facility Products sold hereunder shall be of a quality that is usual and
customary in the industry, (iv) Facility Products sold hereunder shall not be
adulterated, and be generally free of foreign materials, all in accordance with
and subject to industry standards, and (v) Facility Products sold hereunder
shall be in conformity with, in all material respects, any applicable statutes,
rules or regulations. In the event that RCR becomes aware of changes in
applicable statutes, rules or regulations, or industry standards, RCR will
notify RDC of such changes. All such notification will be made to the
specifications as indicated in Exhibit A and will amend current industry
standards. RCR or its customer shall notify RDC in writing of any claims of
defect or non-conformity noticeable upon ordinary inspection therefor within ten
(10) days after the customer’s receipt of any Facility Products. RCR shall
notify RDC in writing of any defect or non-conformity not so noticeable within
ten (10) days of RCR becoming aware of the defect or non-conformity. If RDC does
not receive written notice of a claim of defect or non-conformity within the
appropriate time period described above, a claim for that defect or
non-conformity will be deemed to have been waived. If RDC does receive such
notice within said time period and the claim is valid, RDC and RCR will agree on
an adjusted price or shall arrange for and RDC will bear the cost of shipping
the defective Facility Products back to RDC, and upon receipt of the Facility
Products and upon reasonable confirmation of the existence of such defect or
non-conformity, shall as soon as practicable and in any event within thirty
(30) days, at its election either deliver at its own expense a replacement
Product to RCR or its customer, as applicable, or return to RCR the purchase
price thereof. All costs of disposal of non-conforming or defective Facility
Products shall be borne by RDC.

 

10

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3.2 Limitations on Warranty. THE EXPRESS WARRANTIES SET FORTH ABOVE ARE IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY SPECIFICALLY
DISCLAIMED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. NO PARTY SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HEREUNDER.

 

3.3 Indemnification. (a) RDC hereby agrees to indemnify RCR and hold it harmless
from and against all claims, suits, damages, judgments, losses, amounts paid in
settlement thereof and all costs and expenses (including reasonable attorney
fees and expenses) incurred by RCR based upon or arising out of any
manufacturing defect, product liability claim, breach of warranty or other
non-compliance by RDC with its obligations hereunder.

 

(b) RCR hereby agrees to indemnify RDC and hold it harmless from and against all
claims, suits, damages, judgments, losses, amounts paid in settlement thereof
and all costs and expense (including reasonable attorney fees and expenses)
incurred by RDC based upon or arising out of non-compliance by RCR with its
obligations hereunder.

 

ARTICLE IV

 

TERM AND TERMINATION

 

4.1 Term; Termination by Either Party. (a) This Agreement shall commence on the
date hereof and terminate on the fifth anniversary thereof (the “Term”) unless
earlier terminated as provided herein. Unless cancelled by either party by
giving the other party three (3) months written notice of such cancellation
prior to the expiration of the Term, this Agreement shall automatically be
extended for a second five (5) year period (the “Second Term”) unless earlier
terminated as provided herein. In the event RDC elects not to extend the
Agreement for the Second Term, it shall

 

11

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be permitted, during the five year period that would otherwise comprise the
Second Term, to sell Facility Products for use in the United States only
pursuant to a distribution arrangement with a third-party distributor similar to
the arrangement created under this Agreement. The restrictive covenant set forth
in the preceding sentence shall survive the termination of this Agreement on the
expiration of the Term.

 

(b) Unless cancelled by either party by giving the other party three (3) months
written notice of such cancellation prior to the expiration of the Second Term,
this Agreement shall be extended for a one (1) year period unless earlier
terminated as provided herein. Subsequently, unless cancelled by either party by
giving the other party three (3) months written notice of such cancellation
prior to the expiration of each successive one (1) year period, this Agreement
shall renew for an indefinite number of one (1) year periods unless earlier
terminated as provided herein.

 

(c) This Agreement may be terminated by the aggrieved party immediately upon
written notice to the other (“Defaulting Party”) in the event that the
Defaulting Party:

 

(i) fails to pay any amounts when due under this Agreement, which failure shall
not be remedied within ten (10) days after giving notice thereof to the
Defaulting Party;

 

(ii) commits a breach or default under this Agreement (other than a failure
described in clause (i)), which breach or default shall not be remedied within
thirty (30) days after giving of notice thereof to the Defaulting Party; or

 

(iii) is unable to meet its debts as they fall due or enters into liquidation or
dissolution or becomes bankrupt or insolvent, or if a trustee or receiver is
appointed for such party, whether by voluntary act or otherwise, or if any
proceeding is instituted by or against such party under the provisions of any
bankruptcy act or amendment thereto which results in the entry of any order for
relief against it which is not stayed or remains undismissed for a period of
sixty (60) days, or if it enters into a voluntary arrangement with its
creditors.

 

12

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(d) RDC may also terminate this Agreement upon thirty (30) days prior written
notice (which notice may only be provided within thirty (30) days after a Period
End) to RCR if RCR shall not have purchased at least [*]% (by ton) of both
(i) the UAN which constitutes Facility Products and (ii) the Ammonia which
constitutes Facility Products, which (in each case) are both produced at the
Facility during any one-year period beginning on [MONTH AND DAY OF THIS
AGREEMENT] and ending on [ONE DAY PRIOR] (each such date, a “Period End”) and
sold and shipped by RDC to RCR or pursuant to a Third Party Sale during such
period; provided, that RCR shall have been deemed to have satisfied the
criterion set forth in the foregoing clause (ii) with respect to a given
one-year period if it shall have purchased [*] tons of Ammonia under this
Agreement by the applicable Period End. The word “ton” shall mean a “short ton”
of 2,000 pounds for all purposes of this Agreement.

 

4.2 Cessation of Deliveries. Upon termination of this Agreement, RDC may
restrict or stop deliveries of Facility Products to RCR, other than deliveries
on orders already received at the time of the notice of termination (in which
case, the payment provisions set forth herein with respect to such deliveries
shall survive the termination of this Agreement).

 

4.3 Disposition of Inventory Upon Termination. Upon termination of this
Agreement, except to the extent otherwise required for continued deliveries
pursuant to Section 4.2 above, (i) RDC shall have no obligation to repurchase
any of RCR’s inventory of Facility Products, if any, and shall have no
obligation to sell any Facility Products to RCR and (ii) RCR shall have no
obligation to purchase any Facility Products from RDC or to sell or promote the
sale of any such Facility Products.

 

13

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ARTICLE V

 

DISPUTE RESOLUTION

 

5.1 Informal Dispute Resolution. RCR and RDC agree that it is in both their best
interests to attempt to resolve disputes that arise under this Agreement in a
quick and inexpensive manner. To that end, RCR and RDC commit to use their best
efforts to resolve disputes informally. RDC and RCR shall each select a
representative (individually, a “Party Representative;” together, the “Parties’
Representatives”) and notify each other in writing of the identity of their
designated Party Representative within ten (10) days of the date hereof. RDC and
RCR may change their designated Party Representative from time to time upon
written notice to the other Party. For disputes that arise as to any action,
decision or performance of any of the Parties to this Agreement other than as
set forth in Section 5.4, the Parties’ Representatives shall negotiate with one
another in good faith in order to reach resolution of the dispute. Such
negotiation shall commence within five (5) days of the date of the letter from
one Party Representative to the other Party Representative notifying that Party
of the nature of the dispute. In the event that the Parties’ Representatives
cannot agree to a resolution of the dispute within thirty (30) days after the
commencement of negotiations, written notice of the dispute (the “Dispute
Notice”), together with a statement describing the issues or claims, shall be
delivered, within seventy-two (72) hours after the expiration of such thirty
(30) day period, by each of the Parties’ Representatives to its respective
senior officer or official (such senior officer or official to be selected by
each of the Party Representatives in his or her sole discretion, provided such
senior officer or official has authority to bind the respective Party). Within
five (5) days after receipt of the Dispute Notice, the senior officers or
officials for both Parties shall negotiate in good faith to resolve the dispute.

 

14

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5.2 Arbitration. If a dispute arises and cannot be resolved through the process
outlined in Section 5.1 within thirty (30) days of the delivery of a Dispute
Notice, either Party may submit the disputed issue for binding arbitration in
New York, New York in accordance with the most current Rules of the American
Arbitration Association (“AAA”) for Commercial Arbitration. All disputes and/or
claims with an amount in controversy of less than or equal to $100,000 shall be
heard by a single neutral arbitrator, and disputes and/or claims with an amount
in controversy in excess of that amount shall be heard by a panel of three
neutral arbitrators.

 

5.3 Binding Nature. The arbitration decision shall be binding and non-appealable
in any forum. The final decision however, may be submitted by the prevailing
Party to a court of competent jurisdiction for entry of judgment thereon.

 

5.4 Exclusions. Notwithstanding anything herein to the contrary, Section 5.1
shall not apply to any action, decision or performance of any Party pursuant to
Section 1.4 of this Agreement, and neither Section 5.1 nor Section 5.2 shall
apply to any action by any Party for equitable remedies, including without
limitation, injunction.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

6.1 Representations of RCR. RCR hereby represents and warrants to RDC as
follows:

 

(a) Organization; Due Authorization. RCR is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware. This Agreement: (i) has been duly authorized, executed and delivered
by RCR and (ii) constitutes legal, valid and binding obligations of RCR which
are enforceable in accordance with their respective terms, except as the same
may be limited by applicable bankruptcy,

 

15

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insolvency, reorganization, moratorium or similar laws in effect from time to
time relating to or affecting the enforcement of creditors’ rights generally and
by general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).

 

(b) No Consent or Conflicts. The execution, delivery and performance by RCR of
this Agreement does not and will not (i) require any consent or approval of any
person which has not been obtained, (ii) violate the provisions of any federal,
state or local law, regulation or order applicable to RCR, (iii) result in a
breach of, contravene or constitute a default under the organizational documents
of RCR, or any other material agreement, lease or instrument to which RCR is a
party or by which it or its properties may be bound or affected, or (iv) result
in the creation or imposition of any liens on the property of RCR, result in
acceleration of any obligations under or in a condition or event which
constitutes (or which, upon notice or lapse of time or both, would constitute) a
default or an event of default under any contract or other instrument binding
upon RCR or any of its properties or other assets.

 

6.2 Representations of RDC. RDC hereby represents and warrants to RCR as
follows:

 

(a) Organization; Due Authorization. RDC is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Colorado.
This Agreement: (i) has been duly authorized, executed and delivered by RDC and
(ii) constitutes legal, valid and binding obligations of RDC which are
enforceable in accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws in effect from time to time relating to or affecting the
enforcement of creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

 

16

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(b) No Consent or Conflicts. The execution, delivery and performance by RDC of
this Agreement does not and will not (i) require any consent or approval of any
person which has not been obtained, (ii) violate the provisions of any federal,
state or local law, regulation or order applicable to RDC, (iii) result in a
breach of, contravene or constitute a default under the organizational documents
of RDC, or any other material agreement, lease or instrument to which RDC is a
party or by which it or its properties may be bound or affected, or (iv) result
in the creation or imposition of any liens on the property of RDC, result in
acceleration of any obligations under or in a condition or event which
constitutes (or which, upon notice or lapse of time or both, would constitute) a
default or an event of default under any contract or other instrument binding
upon RDC or any of its properties or other assets.

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

7.1 Entire Agreement. This Agreement (including the Exhibits hereto) constitutes
the entire agreement between the Parties relating to the sale of Facility
Products by RDC to RCR; it supersedes all prior agreements and understandings
between the Parties relating to that subject, either oral or written, all of
which are hereby expressly terminated; and this Agreement cannot be modified,
except in a writing signed by both Parties hereto. ALL PURCHASE ORDERS AND
ACKNOWLEDGEMENTS THAT MAY BE USED BY THE PARTIES HERETO TO ORDER OR ACKNOWLEDGE
ORDERS FOR FACILITY PRODUCTS HEREUNDER SHALL BE FOR RECORD PURPOSES ONLY. IN THE
EVENT OF ANY DISCREPANCY OR CONFLICT BETWEEN THE TERMS THEREOF AND OF THIS
AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL.

 

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7.2 Assignment. This Agreement may not be assigned by either Party without the
prior written consent of the other Party hereto, except that (i) RCR may assign
this Agreement to one or more of its affiliates wholly owned by RCI or RCR
without RDC’s consent upon prior written notice to RDC and provided that such
affiliate assumes the obligations of RCR under this Agreement in writing,
(ii) RDC may assign this Agreement to one or more of its affiliates wholly owned
by Rentech or RDC without RCR’s consent upon prior written notice to RCR, and
provided that the Facility is then owned by such affiliate and such affiliate
assumes the obligations of RDC under this Agreement in writing, and (iii) RDC or
its assignee and RCR or its assignee may assign this Agreement to its respective
senior lenders as collateral to secure the performance of RDC’s or such
assignee’s or RCR’s or such assignee’s, as the case may be, obligations to such
senior lenders (it being agreed that, upon RDC’s or RCR’s request (as the case
may be), the other Party shall enter into a customary consent with any such
lender (or an agent or trustee thereof) acknowledging such lender’s security
interest in this Agreement).

 

7.3 No Waiver of Terms. Neither the failure of either Party hereto to require
the performance of any term of this Agreement, nor the waiver by either Party of
any breach under this Agreement, shall prevent a subsequent enforcement of any
such term or be deemed a waiver of any subsequent breach.

 

7.4 Headings. The headings set forth herein are for convenience of reference
only and shall not be considered to limit or amplify the terms and provisions
hereof, nor shall they be examined or referred to in construing or interpreting
this Agreement.

 

7.5 Severability. In the event any one or more of the Agreements, provisions or
terms contained herein shall be declared invalid, illegal or unenforceable in
any respect, such agreement, provision or term shall be enforced to the extent
permitted by law and the validity of the remaining

 

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agreements, provisions or terms contained herein shall be in no way affected,
prejudiced or disturbed thereby.

 

7.6 Force Majeure. Neither of the Parties hereto shall be responsible for or
liable to the other Party for any damage or loss of any kind, directly or
indirectly, resulting from fire, flood, explosion, riot, rebellion, revolution,
war, labor trouble (whether or not the fault of either Party hereto),
requirements or acts of any government or subdivision thereof, or any other
similar cause beyond the reasonable control of the Party. The occurrence and the
termination of any such event shall be promptly communicated to the other Party.

 

7.7 Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to conflict of law principles of such State. To the fullest extent
permitted by applicable law, RDC and RCR hereby unconditionally and irrevocably
waive any claim to assert that the law of any other jurisdiction governs this
Agreement. Subject to Section 5.2, RCR and RDC hereby agree and consent to be
subject to the exclusive jurisdiction of the United States District Court for
the Southern District of New York, and in the absence of such Federal
jurisdiction, Seller and Buyer consent to be subject to the exclusive
jurisdiction of a court of The State of New York located in such district and
hereby waive the right to assert the lack of personal or subject matter
jurisdiction or improper venue in connection with any such suit, action or other
proceeding. In furtherance of the foregoing, each of RDC and RCR (i) waives the
defense of inconvenient forum, (ii) agrees not to commence any suit, action or
other proceeding arising out of this Agreement or any transactions contemplated
hereby other than in any such court (subject to Section 5.2), and (iii) agrees
that a final judgment in any such suit, action or other proceeding shall be
conclusive and may be enforced in other jurisdictions by suit or judgment or in
any other manner provided by law. THE PARTIES HEREBY

 

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KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT SUCH PARTIES MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT OR ACTION ARISING OUT OF THIS
AGREEMENT. EACH PARTY HEREBY CERTIFIES THAT NONE OF THE OTHER PARTY, ITS SENIOR
MANAGEMENT OR ITS REPRESENTATIVES HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH PARTY WOULD NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL.
FURTHER, EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY RELIED ON THIS WAIVER OF
RIGHT TO JURY TRIAL AS A MATERIAL INDUCEMENT TO SUCH PARTY TO ENTER INTO THIS
AGREEMENT.

 

7.8 Notices. All notices, requests, demands and other communications made
hereunder shall be in writing and shall be deemed duly given on the date of
receipt if personally delivered or five days after mailing if sent by mail,
postage prepaid, to the addresses set forth below or to such other address or
person as either Party may designate by notice to the other Party hereunder:

 

If to RCR, to:

   Royster Clark Resources LLC      c/o Royster-Clark, Inc.      999 Waterside
Drive, Suite 800      Norfolk, VA 23510      Attention: G. Kenneth Moshenek

with a copy to:

   Torys LLP      237 Park Avenue      New York, New York 10017      Attention:
Richard G. Willoughby, Esq.

If to RDC, to:

   Rentech Development Corporation      1331 17th Street, Suite 720      Denver,
CO 80202      Attention: Richard O. Sheppard

with a copy to:

   Rentech, Inc.      1331 17th Street, Suite 720      Denver, CO 80202     
Attention: Amanda M. Darby

 

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7.9 Counterparts; Facsimile Signatures. This Agreement may be executed in
separate counterparts and by facsimile (or similar electronic means), with the
same effect as if both Parties had executed the same document. All such
counterparts shall be construed together and shall constitute one agreement.

 

*    *    *    *

 

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IN WITNESS WHEREOF, the parties have caused the due execution of this Agreement
on the day first above written.

 

ROYSTER-CLARK RESOURCES LLC

By:

   

Name:

   

Title:

   

RENTECH DEVELOPMENT CORPORATION

By:

   

Name:

  Richard O. Sheppard

Title:

  President

 

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Exhibit A

 

Facility Product Specifications

 

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