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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): January 26, 1996
INTERSYSTEMS, INC.
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Exact Name of Registrant as specified in charter
Delaware
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(State or Other Jurisdiction of Incorporation)
1-9547 13-3256265
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Commission file No. I.R.S. Employer Identification No.
8790 Wallisville Road, Houston, TX 77029
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(Address of Principal Executive Offices)
(713) 675-0307
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(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On January 26, 1996, Chemtrusion, Inc.("Chemtrusion"), a Delaware
corporation and the wholly-owned subsidiary of InterSystems, Inc., entered into
a Definitive Agreement for Compounding Services with Mytex Polymers ("Mytex"),
a Delaware general partnership of affiliates of Mitsubishi Chemical America and
Exxon Chemical Company, a division of Exxon Corporation.
Pursuant to the Agreement, Chemtrusion has undertaken to acquire 16.4
acres of land in Jeffersonville, Indiana, and to construct thereon and equip in
accordance with agreed upon plans and specifications a plastics compounding
plant at a cost currently estimated not to exceed $12.7 million. As designed,
the plant will initially contain four production lines with an annual capacity
of 35 million ounds of product, and will contain sufficient space to add
several additional production lines, if desirable, at a future date.
Chemtrusion and Mytex are working together to obtain construction financing for
the plant, and Mytex has agreed to fund the cost of construction on an interim
basis until permanent construction financing is in place. Ground has been
broken and the expected completion date of the plant is August 31, 1996.
Upon completion of the plant, Chemtrusion will produce an array of
polypropylene-based compounds at the plant exclusively for the benefit of
Mytex. Production at the plant will use raw materials and specifications
provided by Mytex. Once the plant is completed, Chemtrusion will be paid a
monthly management fee for its operation of the plant which will cover most
operating expenses of the plant and construction financing debt service, and
which management currently expects to provide annual net profits to Chemtrusion
of approxmately $400,000.
The initial term of the Agreement is five years, and Mytex has the option
to renew the Agreement for two additional five year terms. The Agreement may
be terminated by either party upon the default of the other, except that
certain defaults require notice and an opportunity to cure. Termination of the
Agreement triggers purchase rights on behalf of Mytex (the "Option") and put
rights on behalf of Chemtrusion (the "Put") with respect to the facility. The
purchase price under the Option and Put ranges from $1.5 million plus
assumption of the construction financing, to assumption of construction
financing less $700,000, depending on when the rights are exercised and whether
the exercise follows a default by Mytex or Chemtrusion.
Mytex has the right to require Chemtrusion to undertake the expansion of
the plant at any time at its sole cost and expense, with adjustment in the
management fee payable to Chemtrusion.
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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.
INTERSYSTEMS, INC.
By:/s/ Fred S. Zeidman
Fred S. Zeidman, President
Date: March 5, 1996
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