UNITED STATES
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): November 7, 2005
Balchem Corporation
(Exact name of registrant as specified in its charter)
Maryland 1-13648 13-257-8432
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
P.O. Box 600, New Hampton, NY 10958
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (845) 326-5600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On November 7, 2005, Balchem Corporation ("Balchem"), entered into a
license agreement (the "License Agreement") with Project Management and
Development Co., Ltd. ("PMD"), a corporation organized under the laws of Great
Britain. The License Agreement gives PMD the right to utilize Balchem's
proprietary continuous manufacturing technology for the production of aqueous
choline chloride (the "Balchem Technology") in connection with PMD's
construction and operation of an aqueous choline chloride production facility at
PMD's Al-JuBail, Saudi Arabia petrochemical facility, currently scheduled for
completion in 2008.
The License Agreement provides PMD with the exclusive right to use the
Balchem Technology in the Kingdom of Saudi Arabia, Bahrain, Oman, Qatar, Iraq,
Iran, Kuwait and UAE, as well as the non-exclusive right to market, sell and use
the products derived from the Balchem Technology on a world-wide basis. The
License Agreement further provides that Balchem will be PMD's exclusive North
American distributor for said products during the term of the agreement. The
License Agreement terminates either 10 years from the start-up of the PMD's
production facility or December 31, 2020, whichever is earlier.
Pursuant to the License Agreement, PMD will pay Balchem a license fee of
$1,400,000 and a fee of $840,000 for the delivery by Balchem of certain
preliminary drawings, specifications, process design documents containing the
Balchem Technology, and additional training. These fees are to be paid in
installments upon achievement of certain performance milestones set forth in the
License Agreement.
Balchem will provide certain performance guarantees associated with the
Balchem Technology. In the event that the PMD manufacturing facility, if
properly designed and constructed, fails to attain said performance guarantees,
liquidated damages may be assessed, but not exceeding 70% of the license fee.
The foregoing description of the License Agreement is qualified in its
entirety by the terms and provisions of the Process and Product License
Agreement which is attached hereto as Exhibit 10.1. Although the PMD's signature
on the License Agreement is dated October 18, 2005, PMD did not communicate its
acceptance of the agreement to Balchem or deliver the executed agreement to
Balchem until November 7, 2005, and therefore it did not become a binding
agreement until that date.
On November 14, 2005, the Company issued a press release announcing the
entry into the Process and Product License Agreement. A copy of the press
release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 10.1 Process and Product License Agreement dated November 7, 2005,
by and between Balchem Corporation and Project Management and
Development Co., Ltd.
Exhibit 99.1 Press Release of Balchem Corporation dated November 14, 2005
SIGNATURE
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.
BALCHEM CORPORATION
By:/s/ Dino A. Rossi
---------------------------
Dino A. Rossi, President &
Chief Executive Officer
Dated: November 14, 2005
Exhibit Index
Exhibit Number Description
-------------- -----------
10.1 Process and Product License Agreement dated November 7, 2005,
by and between Balchem Corporation and Project Management and
Development Co., Ltd.
99.1 Press Release of Balchem Corporation dated November 14, 2005