Agreement between domestic and foreign steel producers to cooperate in management, marketing and technological development

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Agreement is made _________[date] by and between OVERSEAS STEEL CO., LTD., a _________ corporation ("OSC") and DOMESTIC STEEL CORPORATION, a _________ corporation ("DSC").

This Agreement is for the purpose of providing a vehicle by which the parties can render each other assistance in areas of mutual business interest including: improvement of management and organization, development of methods for improving the efficiency of production and the quality of product, development of new technology or improvement of existing technology, expansion of markets for the corporations' products and development of better and more efficient methods of marketing products and procuring raw materials.

 

In order to implement these purposes, the parties agree as follows:

  1. OSC and DSC shall establish a Management Working Group, which shall include in its membership the chief executive officers of both corporations and other senior management personnel. The Management Working Group shall meet semiannually and shall be for the purpose of:

    (a) analyzing the world economy as it applies to the corporations and the steel industry in _________ and the United States;

    (b) developing and implementing plans for joint business activities between OSC and DSC;

    (c) analyzing and advising on the disposition and deployment of the resources of both corporations; and

    (d) analyzing and advising with regard to the management structure of both corporations.

  2. OSC and DSC shall establish a Business Working Group, which shall include in its membership marketing and purchasing personnel from both corporations. The Business Working Group shall meet semiannually and shall be for the purpose of:

    (a) exploring and developing ways in which OSC and DSC can be of mutual assistance to each other in improving the marketing of their products and the expansion of such markets; and

    (b) exploring and developing ways in which OSC and DSC can be of mutual assistance to each other in the purchasing and supplying of raw materials or semifinished products to each of them and the securing of reliable and timely sources of such materials.

  3. OSC and DSC shall establish a Technology Working Group, which shall include in its membership engineering and metallurgical personnel from both corporations. The Technology Working Group shall meet semiannually and shall be for the purpose of:

    (a) developing technology to improve manufacturing techniques and efficiencies;

    (b) developing technology to improve product quality; and

    (c) developing technology to produce new products.

  4. OSC and DSC have entered into a certain Stock Purchase Agreement dated _________(the "Stock Purchase Agreement") providing, among other things, for the purchase of DSC's Common Stock by OSC from DSC and for DSC to use its best efforts to cause a designee of OSC to be elected to the Board of Directors of DSC.

  5. OSC and DSC and their respective counsel shall develop guidelines and rules in order to limit the topics of discussion at the meetings contemplated in paragraphs 1, 2 and 3 to subject matters which are permissible under the antitrust and other laws of the United States and of _________. DSC shall also develop guidelines pursuant to which the OSC representative on the DSC Board of Directors shall not vote upon or participate in discussions relating to the production or marketing of any product lines which DSC sells or may propose to sell in connection with OSC in any market or which in the reasonable opinion of DSC would entail risk of violation of the United States antitrust laws.

  6. In order to secure an ongoing interest in OSC, DSC shall, within six months after the closing under the Stock Purchase Agreement and subject to having obtained the consents described below, purchase such number of shares of OSC Common Stock on the _________ Stock Exchange or otherwise that will result in a cash investment equal to 40% of the equivalent of the dollar amount paid by OSC to acquire DSC Common Stock under the Stock Purchase Agreement. This investment should provide for the purchase of approximately _________ million shares of OSC Common Stock and sufficient OSC Common Stock shall be purchased within 45 days after the closing under the Stock Purchase Agreement so that the DSC investment will equal at least 30% of the equivalent of the dollar amount paid by OSC to acquire DSC Common Stock under the Stock Purchase Agreement. DSC represents and warrants that it has full corporate power and authority to purchase such OSC Shares, that such purchase has been duly authorized by all necessary corporate action and, subject to obtaining the consents necessary to the OSC Shares purchase transaction (which DSC agrees to use its best efforts promptly to obtain) that its purchase of OSC Shares will not result in a breach of, or a default under, any material agreement to which it is a party.

  7. The term of this Agreement shall be for a period of _________ years from the date of this Agreement and shall continue on a year-to-year basis unless terminated by either party by written notice to the other not less than 60 days prior to the anniversary date of this Agreement.

 

In witness of which, the parties have executed this Agreement on the date set forth above.

 

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