SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 3, 1997
MELAMINE CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16032 64-0475913
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
Highway 18 West, Donaldsonville, Louisiana 70346
(Address of principal executive offices) (Zip Code)
(504) 473-3121
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets.
On April 3, 1997, pursuant to the terms of a Technology Transfer and
Technical Cooperation Agreement dated February 25, 1997 (the "Agreement")
by and between Melamine Chemicals, Inc. (the "Company") and DSM Melamine
B.V. ("DSM"), the Company assigned to DSM its patented and unpatented high
pressure and high temperature noncatalytic melamine process and production
technology (the "Technology"), and granted to DSM a non-exclusive license
to use its related application patents worldwide. In exchange therefor,
the Company received $25 million, $15 million of which was paid at closing
and $10 million of which is payable in two equal installments under
promissory notes maturing January 1, 2000 and January 1, 2005. These notes
will bear interest at a per annum rate of 5.94% and 6.32%, respectively,
payable annually on January 1 of each year during which the notes remain
outstanding. In addition, the Company has retained the royalty-free right
to use the Technology to (i) construct in the Western Hemisphere up to two
additional melamine plants with an aggregate maximum production capacity of
80,000 metric tons (only one of which may be built outside of the United
States or Canada) and (ii) construct any additional melamine plants in the
United States or Canada that replace the 50,000 metric tons of aggregate
annual production capacity of the Company's two existing melamine plants in
Donaldsonville, Louisiana. As additional consideration under the
Agreement, DSM will assist the Company in modifying its low pressure
melamine plant to implement improvements to be recommended by DSM following
its study of the Company's plant. The Company anticipates that DSM will
complete its study and issue its recommendations in late 1997 or early
1998.
Subject to certain exceptions, prior to June 2015 (i) DSM will not be
permitted to use the Technology to construct a melamine plant in the United
States or Canada, other than plants built by DSM or its affiliates to
replace the 80,000 metric ton production capacity of DSM's joint venture
melamine plant located in Fortier, Louisiana, and (ii) the Company will not
be permitted to use the Technology to construct a melamine plant outside of
the Western Hemisphere. The Company and DSM will remain free to sell
melamine worldwide without restriction under the Agreement.
Under the Agreement each party will cooperate for ten years in the
development of improvements to the Technology. All such improvements
developed by the Company, DSM or both during this ten-year period will be
owned by DSM, subject to the Company's royalty-free right to use such
improvements in the Western Hemisphere on the same terms as the Technology.
Subject to certain limitations, DSM will be permitted for ten years to use
the Company's existing high pressure and high temperature plant to test
ideas that DSM reasonably believes may be developed into commercially
useful improvements of the Technology. DSM will have access to such plant
for up to eight weeks annually during the first four years of the
Agreement, and for up to six weeks annually during the next six years.
Subject to certain limitations and restrictions, the Company has
agreed to indemnify DSM under various circumstances, including in
connection with any proceedings alleging that DSM's ownership or use of the
Technology infringes any other person's intellectual property rights.
DSM is a subsidiary of DSM N.V., an international chemical and
materials company headquartered in Heerlen, The Netherlands. Either
directly or through joint ventures, DSM operates melamine plants in Europe,
the United States and Indonesia.
The foregoing description of the Agreement is qualified in its
entirety by reference to the Agreement, a copy of which is filed herewith
as Exhibit 2.1.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Pro Forma financial information.
Not Applicable.
(c) Exhibits.
2.1 - Technology Transfer and Technical Cooperation Agreement,
dated as of February 25, 1997, by and between Melamine Chemicals,
Inc. and DSM Melamine B.V. (Portions of this agreement are
confidential and have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment.)
Pursuant to the regulations of the Securities and Exchange
Commission, all schedules and exhibits to the foregoing agreement
(other than Exhibits B, C, E) have been intentionally omitted
from this Report. The table of contents to the foregoing
agreement contains a complete listing of all schedules and
exhibits. Registrant agrees to furnish supplementally a copy of
any omitted schedule or exhibit to the Securities and Exchange
Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MELAMINE CHEMICALS, INC.
By: /s/ Wayne D. DeLeo
--------------------------------
Wayne D. DeLeo
Vice President and
Chief Financial Officer
Dated: April 10, 1997