Exhibit 10.03
RECIPROCAL LICENSE AND
TECHNOLOGY SHARING AGREEMENT
BETWEEN
STEEL DYNAMICS, INC.
AND
NAKORNTHAI STRIP MILL
PUBLIC COMPANY LIMITED
RECIPROCAL LICENSE AND TECHNOLOGY SHARING AGREEMENT
THIS RECIPROCAL LICENSE AND TECHNOLOGY SHARING AGREEMENT(the "SDI License
Agreement") is entered into as of the _______ day of March, 1998, by and between
Steel Dynamics, Inc. ("SDI"), an Indiana corporation with its principal office
and place of business in Butler, Indiana USA, and Nakornthai Strip Mill Public
Company Limited ("NSM"), a public limited company organized under the laws of
Thailand, and is intended to describe the Parties' reciprocal rights of access
to and to the use of the SDI Technology and NSM Technology, all related to their
respectively owned and operated thin-slab/flat-rolled steel mini-mills and
certain additional ancillary facilities as described herein.
WHEREAS, SDI has accumulated certain know-how and technical expertise in
connection with the planning, construction, and operation of the SDI Facilities;
WHEREAS, NSM is developing certain technical expertise and know-how in
connection with the construction and impending operation of the NSM Facilities;
WHEREAS, NSM desires to obtain, and SDI is willing to grant to NSM, access
to and the right and license to use its know-how and technical expertise,
relating to SDI Technology, to the extent that SDI possesses the rights to
provide such access and licenses, all in accordance with the terms and
conditions hereinafter set forth; and
WHEREAS, SDI desires to obtain, and NSM is willing to grant to SDI access
to and the right and license to use its know-how and technical expertise,
relating to NSM Technology, to the extent that NSM possesses the rights to
provide such access and licenses, all in accordance with the terms and
- -conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
of the Parties set forth herein, the Parties agree as follows:
ARTICLE I
Definitions
Defined terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Definitions and Rules of Usage (March _,
1998), which is incorporated herein by reference as though fully set forth
herein, and the related Rules of Usage shall be applicable hereto.
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ARTICLE II
License
2.1 Grant by SDI. Subject to the terms and conditions of this Agreement,
SDI hereby grants to NSM, subject to Management Co.'s control, supervision, and
direction, a non-exclusive, non-transferable, non-divisible and non-assignable
license and right, without the right to grant sublicenses hereunder, during the
term of this Agreement, to have access to and to use SDI Technology, in
connection with NSM's Mill or with NSM's other mill facilities, if any, in
Thailand, Malaysia, and the Philippines, to manufacture the Products.
SDI does not know whether, and has made no representations to NSM,
express or implied, to the effect that SDI Technology is appropriate for or is
best suited to NSM's needs. SDI's undertaking herein is solely to make SDI
Technology available to NSM, for Management Co.'s and/or NSM's use, rejection,
modification, or adaptation as Management Co. and/or NSM deems appropriate. The
Parties likewise agree that SDI shall have no prospective ongoing monitoring or
oversight functions over NSM's Mill operations.
2.2 Grant by NSM. Subject to the terms and conditions of this Agreement,
NSM hereby grants to SDI and/or to IDI, a non-exclusive, non-transferable,
non-divisible, and non-assignable license and right, without the right to grant
sub-licenses hereunder, during the term of this Agreement, to have access to and
to use NSM Technology in connection with its mill facilities in the United
States, Mexico, and Canada, to manufacture the Products.
2.3 Each party hereby grants to the other Party a license to use any
Technical Information provided by the Providing Party to the Requesting Party
for any purpose, including manufacturing, using, selling or otherwise disposing
of its Products. Unless otherwise agreed between the Parties, the additional
license rights granted hereunder to SDI shall be for SDI's plants in the United
States, Mexico, and Canada, and the license rights granted hereunder to NSM
shall be for NSM's Mill or for NSM's other mill facilities, if any, in Thailand,
Malaysia, and the Philippines. The licenses granted hereby are nonexclusive,
nontransferable and paid-up, and do not include the right to sublicense to any
third party.
ARTICLE III
Confidentiality
3.1 All Technical Information, technical trade secrets, know-how,
proprietary information, and data furnished or made available by either Party
hereunder (hereinafter "Confidential Information"), will be deemed to be and
will be received by the Requesting Party as confidential and proprietary, so
long as it is identified as such when furnished, and such Confidential
Information is for the Requesting Party's own use as limited herein and is to be
kept confidential, in accordance with the standards set forth in the next
paragraph, by the Requesting Party during and following the expiration or
termination of this Agreement. This Article shall survive expiration or
termination of this Agreement.
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Confidential Information shall not be made available, given, sold or
disclosed by the Requesting Party to any other person without the prior written
consent of the Providing Party. Each Party agrees to use its best efforts to
maintain the confidentiality of the Confidential Information disclosed to it and
each shall use no less than the same safeguards as it uses to protect its own
Confidential Information of a similar nature. A Requesting Party shall disclose
Confidential Information received from the Providing Party only to the
Requesting Party's officers, agents, employees, consultants and advisors whose
duties reasonably require familiarity with such information, provided that the
Requesting Party shall first obtain from such Persons legally enforceable
undertakings, in form and substance satisfactory to the Providing Party, not to
personally use Confidential Information, or knowledge derived therefrom, not to
disclose it to or for the benefit of any third party and containing such other
protections as the Providing Party shall reasonably request. Copies of all such
undertakings shall be delivered to the Providing Party, with evidence of its
proper adoption and legality. Except as otherwise agreed by the Parties, the
Requesting Party shall be required at its own expense to take such legal actions
as may be reasonably necessary to enforce such undertakings.
3.2 The confidentiality obligation of the Requesting Party under Section
3.1 above shall not apply to Confidential Information which:
3.2.1. is or becomes publicly known through no wrongful act of the
Requesting Party or its employees;
3.2.2. is received by the Requesting Party without restriction from
a third party without breach of any obligation of nondisclosure;
3.2.3. is or has been independently developed by the Requesting
Party;
3.2.4. is contained in any published patent or published patent
application or which becomes otherwise published or generally known to
Requesting Party through no wrongful act of Requesting Party, from and
after the date it becomes published or generally known; or
3.2.5. is disclosed pursuant to Applicable Law.
ARTICLE IV
License to Improvements Made by Requesting Party
A Requesting Party shall make available to a Providing Party on a fully-paid,
nonexclusive, non-assignable, non-sublicensable, and as is basis, a license to
use any information,invention (whether or not patentable), improvements and
innovations developed and owned by the Requesting Party substantially through
the use of Technical Information provided by the Providing Party pursuant to
this Agreement. Such right is to manufacture, assemble, use, sell, or otherwise
dispose of products during the term of this Agreement using the information,
inventions, improvements, innovations developed and owned by the Requesting
Party.
ARTICLE V
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Obtaining Rights to Patents and Technical Information From Third Parties
5.1 Neither Party represents that by virtue of its use of certain
machinery, equipment, processes or technology, it necessarily possesses the
legal right to disclose the trade secrets, know-how, or proprietary information
involved in such activity, or that such Party has the legal right to authorize
and license others to use or employ such machinery, equipment, processes or
technology.
5.2 Notwithstanding Section 5.1, and subject to Section 5.3, each Party,
upon receipt of a written request from the other Party for disclosure of and/or
the right to use any trade secrets, know-how and proprietary information which,
if solely owned and licensable by the Providing Party, would constitute
Technical Information, shall use its best efforts to ascertain whether it has
the legal right to make the disclosure and/or whether the Requesting Party may
need to obtain third party approvals, consents, licenses (with or without
royalties), or other rights in advance of disclosure or in connection with the
matter of use. In the event that the Providing Party does not have such rights,
the Providing Party shall so advise the Requesting Party, together with the
name(s) of the person(s) to contact regarding such rights, if known, and the
Providing Party shall use its best efforts to cooperate with the Requesting
Party in obtaining any such necessary permission, but subject to such terms,
conditions, and restrictions as the third party may impose. These provisions
shall also apply to any patents which relate to SDI Technology or to NSM
Technology. In the event that the Providing Party, after using its best efforts,
is unable to obtain the necessary legal rights or licenses, the Providing Party
shall be under no further obligation hereunder nor to violate the terms of any
license or other agreements it may have with such third party.
5.3 To the extent that any obligation for compensation, for indemnity, for
performance, or otherwise to a third party is required to be undertaken in
connection with the disclosures or rights to use described in Section 5.2, any
such obligations shall be direct obligations between the Requesting Party and
the third party; and the Providing Party shall not be required to incur any
primary or secondary obligations, as guarantor or otherwise, to any such third
party, nor to place its own rights with such party in jeopardy by reason of such
disclosures and/or use.
5.4 In the event that either Party shall, during the term of this
Agreement, obtain Acquired Technology from a third party (including from its
employees), such Acquired Technology shall come within the scope of this
Agreement; provided, however, that, except as to Acquired Technology acquired
from the Party possessing such Acquired Technology, a Party may, as a condition
to including such Acquired Technology within the license granted to the other
Party under Section 2.3, require the Requesting Party to contribute a fair
proportion of the cost incurred in acquiring the Acquired Technology. In such
event, the Parties shall determine by mutual agreement the amount of such
compensation by the Requesting Party to the Providing Party. If the Parties do
not so agree, the Acquired Technology shall not be included within the scope of
this Agreement, and the Requesting Party shall incur no financial obligation or
liability regarding such Acquired Technology.
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5.5 In the event that either Party has or acquires one or more patents, or
files for one or more patent applications, relating to a process or a product
that would otherwise be includable as Technical Information within a request for
Technical Assistance, or within the broad definition of SDI or, if applicable,
IDI Technology, or of NSM Technology, as the case may be, such patent rights
shall not be deemed automatically includable within the scope of the license
rights contemplated by this SDI License Agreement but may be included, at the
option of the holder of such rights and unless otherwise prohibited, upon the
negotiation and agreement of a specific license for each such process or
product, with a royalty rate and other terms that are fair and reasonable for
the type of process or product involved.
ARTICLE VI
Compensation
6.1 Solely in consideration of SDI's grant of the license rights described
in Article IV, shall issue to SDI, contemporaneously with the execution of this
License Agreement, (i) 74,468,090 Shares of NSM and (ii) Warrants to purchase
11,421,480 Shares of NSM. Pursuant to the SDI Warrant Agreement, the Warrants
shall become exercisable at the time, and in the proportion, that the Warrants
issued to the Senior Subordinated Notes are exercised. To the extent that the
Warrants shall not become exercisable on or prior to the 10th anniversary or the
Closing Date, or to the extent such Warrants shall have become exercisable but
shall not have been exercised on or before such date, such Warrants shall
expire. Concurrently with each exercise of Warrants by SDI, NSM shall pay to SDI
an amount which, after taking into account the net amount, after application of
all foreign tax credits to which SDI shall be entitled as a result thereof, of
all Thai and U.S. withholding and income taxes payable in respect of the receipt
thereof, shall be equal to Baht 10 for each Warrant which shall have been
exercised at such time. After giving effect to the exercise of all Warrants
which shall become exercisable in accordance herewith and with the Warrant
Agreement, SDI shall hold Shares equal to 10% of the total number of Shares
issued on the Closing Date and in connection with all such Warrants.
Such shares shall be deemed fully earned and paid for upon issuance, the
consideration from SDI therefor being SDI's grant of license rights to NSM
hereunder, without regard to any actual use thereof by NSM. No portion of the
value of such shares is attributable to any future services to be rendered by
SDI hereunder or under any other agreement. The value of this license grant has
been determined by NSM's Board of Directors, by Management Company, and by the
New Equity Investors (excluding SDI) and other shareholder signatories to the
Shareholder Agreement to be fair and adequate for the NSM common shares to be
issued to SDI.
6.2 The foregoing compensation shall be payable to SDI in addition to any
expense reimbursements required to be paid hereunder.
6.3 Subject to the provisions of Section 6.1, SDI shall be responsible for
all U.S. taxes on any shares issuable or amounts payable to SDI hereunder.
6.4 Except for the amount of any Thai withholding tax payable in respect
of the receipt by SDI of the NSM common shares described in Section 6.1(i), and
of the NSM common shares
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issuable upon exercise of the Warrants described in Section 6.1(ii), which NSM
agrees to bear and to pay, in SDI's name (the same as if paid directly by SDI),
if NSM shall be required under the laws of Thailand to deduct from any payment
made to SDI any other income tax which may be levied against SDI for or in
respect of this Agreement, then NSM shall pay or deduct such amounts from the
payments due to SDI, and NSM shall promptly remit to the relevant tax
authorities such income tax. NSM shall promptly furnish to SDI such necessary
tax receipts or other documentary evidence issued by the competent Thai tax
authorities, relating to any such payments made by NSM and showing the payment
made in the name of SDI, so that SDI may obtain a tax credit in the United
States. The burden of obtaining any such tax credits, and the risk of
disallowance, shall be borne by SDI.
ARTICLE VII
Term of Agreement
7.1 Unless sooner terminated hereunder, this Agreement shall continue in
effect for a term of ten (10) years.
7.2 In the event that either Party fails to perform any material
obligation or undertaking to be performed by it under this Agreement, and such
failure shall not be cured within sixty (60) days after written notice thereof
from the other Party, then a default shall have occurred. In such event, the
non-defaulting Party's sole and exclusive remedy shall be the right to terminate
this Agreement forthwith, by giving written notice of termination to the
defaulting Party; provided, however, that a majority of the interest in
Management Co. or a majority of the Board of Directors of NSM, including a
majority of the Directors nominated by the New Equity Investors, shall have
approved the delivery of the foregoing notice. No claim for monetary damages
shall exist against the defaulting Party, nor, in the case of a default by SDI,
shall any recovery, cancellation, or recoupment of any of the NSM Common Stock
or Warrants conveyed or required to be conveyed to SDI pursuant to Section 6. 1,
or in respect of any of the payments required to be paid to SDI hereunder shall
exist or be asserted; provided, however, that no termination, regardless of
cause, shall be deemed to diminish the defaulting party's rights to continue to
use any Technical Information theretofore teamed, communicated, or conveyed to
that Party.
7.3 Upon expiration or termination of this Agreement, as provided for in
this Article VII, by operation of law or otherwise, all rights granted to, and
obligations undertaken by, the Parties hereunder shall terminate, except the
following, all of which shall survive expiration. or termination of this
Agreement:
7.3.1. Each Party's rights to continue to use any Technical
Information theretofore learned, communicated or conveyed to that Party;
7.3.2. Each Party's obligation to pay all amounts accrued hereunder
upon or prior to expiration or termination of this Agreement; and
7.3.3. Each Party's confidentiality obligations under Article III
hereof;
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ARTICLE VIII
Force Majeure
8.1 In the event that performance of obligations hereunder by either Party
hereto is legally excusable because of an event of Force Majeure, the following
provisions shall apply:
8.1.1. Either Party who believes that his performance is excused by
such event of Force Majeure shall give written notice to the other as soon
as possible and with sufficient detail to permit the other to minimize
inconvenience and expense.
8.1.2. Both Parties will cooperate to minimize the financial
consequences of such event of Force Majeure.
8.1.3. Either Party hereto shall have the right to request the
termination of this Agreement if such event of Force Majeure continues for
a period greater than 180 days.
ARTICLE IX
Notice
Any notice required or contemplated hereunder shall be in English and shall be
deemed to be given when received by mail or facsimile (with follow-on hard copy
by mail), properly addressed as follows:
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If to SDI: Keith E. Busse, President
Steel Dynamics, Inc.
4500 County Road 59
Butler, IN 46721
Fax: 1-219-868-8951
Phone: 1-219-868-8108
with a copy to: Robert S. Walters, Esq.
Barrett & McNagny
215 East Berry Street
Fort Wayne, IN 46802
Fax: 1-219-423-8924
Phone: 1-219-423-8905
If to NSM: Mr. John Schultes
Nakornthai Strip Mill Public Company Limited
Chonburi Industrial Estate
(Bowin) 358 Moo 6
Highway 331, Bowin
Sri Racha, Chonburi 20230
Thailand
Fax: (66-38) 345-693, 345375
Phone: (66-38) 345-950-84, Ext. 255
with a copy to: Mr. Chamni Janchai
Nakornthai Strip Mill Public Company Limited
16th Floor UM Tower
9 Ramkhamhaeng Road
Suanluang
Bangkok 10250, Thailand
Fax: (662) 719-9828-9
or to such other addresses either party shall from time to time furnish in
writing to the other for such purpose. Such notice shall be deemed given when
actually received, or ten (10) days after the date mailed if sent by certified
or registered mail.
ARTICLE X
Governing Law
This Agreement is executed in English as the controlling text, and the
rights and obligations of the Parties hereunder shall be governed by and
construed in accordance with the laws
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of the State of New York. The Parties agree that their rights and obligations
under this Agreement shall not be governed by either the provisions of the 1980
U.N. Convention for the International Sale of Goods nor by the laws of any
jurisdiction other than as specified herein.
ARTICLE XI
Arbitration
11.1 In the event of any disputes, controversies or differences which may
arise among the Parties, out of or in relation to or in connection with this
Agreement, or for the breach thereof, the Parties hereto shall exert their
utmost to settle the same by means of good faith negotiations.
11.2 The disputes, controversies or differences arising in connection with
this Agreement shall be finally settled under the Rules of Conciliation and
Arbitration of the ICC by three arbitrators appointed in accordance with said
Rules, but no such award shall produce a result inconsistent with the provisions
of Sections 7.2 and 7.3 regarding termination and damages. The place of
arbitration shall be London, England and the proceedings shall be conducted in
the English language.
11.3 Judgment upon the award rendered may be entered in any court having
competent jurisdiction thereof, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be.
ARTICLE XII
Negation of Agency and Other Relationships
Nothing contained in this Agreement, nor anything done by either
party in the discharge of its obligations hereunder, shall be deemed to
constitute either party the agent, employee, joint venturer, or partner of the
other.
ARTICLE XIII
Miscellaneous
13.1 The relationship between SDI and NSM and/or Management Co. shall be
that of independent contractors, and nothing contained in this Agreement shall
be construed to (i) give either Party the power to direct and control the
day-to-day activities of the other, (ii) constitute the Parties as partners,
joint venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) constitute either Party, its agents or employees, as the
agents or employees of the other Party, or to grant to them any power or
authority to act for, bind or otherwise create or assume any obligation on
behalf of the other Party for any purpose whatsoever.
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13.2 Neither Party shall attempt to patent or otherwise register any right
to exclude other Persons from using the Technical Information that it receives
from the other Party pursuant to this Agreement. Neither Party shall attempt to
patent in another country the subject matter of any Patent for which it has
received a license from the other Party under this Agreement.
13.3 This Agreement constitutes the entire agreement of the Parties with
respect to the matters addressed herein and supersedes any prior understandings.
Except as noted herein, no changes to this Agreement shall be binding unless in
writing and signed by each Party.
13.4 The headings and captions used in this Agreement are for reference
purposes only and shall not limit or otherwise affect the meaning,
interpretation or application of this Agreement.
13.5 Neither Party may assign its rights or obligations under this
Agreement and this agreement shall not inure to the benefit of any trustee in
bankruptcy, receiver, or other successor of either Party, without the express
written approval of the other Party.
13.6 In the event that any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect in any jurisdiction such part shall be deemed severed from this
Agreement, and the remainder of this Agreement shall continue in full force and
effect. The Parties shall consult as to the manner in which their original
intention can be fulfilled as closely as possible, and if appropriate, shall
amend this Agreement accordingly.
13.7 No delay or failure of any Party in exercising any right hereunder
and no partial or single waiver shall be deemed to constitute a waiver of any
subsequent delay or failure. No waiver of any one duty, agreement, condition or
breach of this Agreement shall constitute a waiver of any other duty, agreement,
condition or breach.
13.8 NSM and Management Co. agree to deliver to SDI, as promptly as
possible following the NSM Closing, two (2) complete sets of all equity and debt
closing documents, as executed, with all schedules and exhibits attached, and
NSM further agrees that SDI shall be deemed entitled to the same rights
thereunder as any other shareholder purchasing common stock for value in
connection therewith.
13.9 This Agreement may be executed in one or more counterparts, each of
which shall constitute an original version of the Agreement.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed as of the date first above written by its duly authorized officer or
representative.
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NAKORNTHAI STRIP MILL PUBLIC COMPANY
LIMITED
By: /s/ John W. Schultes
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Title: President/CEO
STEEL DYNAMICS, INC
By: /s/ Tracy Shellabarger
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