<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
SEPTEMBER 14, 1999
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM 10-SB
REGISTRATION STATEMENT UNDER THE SECURITIES EXCHANGE ACT OF 1934
===============================================================================
SIMEX TECHNOLOGIES, INC.
(Name of Small Business Issuer as Specified in its Charter)
DELAWARE 58-2465647
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
Suite 995, 3475 Lenox Road, NE, Atlanta, GA 30326
- --------------------------------------------------
(Address of principal executive offices and zip code)
Issuer's telephone number, including area code: (404) 812-3130.
SECURITIES TO BE REGISTERED UNDER SECTION 12(B) OF THE ACT
NONE
SECURITIES TO BE REGISTERED UNDER SECTION 12(G) OF THE ACT
COMMON STOCK, $.001 PAR VALUE
-----------------------------
(TITLE OF CLASS)
<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS. SIMEX Technologies, Inc., a Delaware
corporation together with its subsidiaries, is referred to herein as the
"Company." The principal operating subsidiary is SIMEX A/S and is referred to
herein as "SIMEX A/S," a Norwegian corporation.
Some of the information in this Registration Statement may contain
forward-looking statements. These statements can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "anticipate,"
"estimate," "continue" or similar words. These statements discuss future
expectations, contain projections of results of operations or of financial
condition or state other "forward-looking" information. Important factors that
could cause actual results to differ materially from those discussed in such
forward-looking statements ("Cautionary Statements") include: the general
strength or weakness of the Company's products, the industry, and the pricing
policies of competitors. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on behalf of the
Company are expressly qualified in their entirety by such Cautionary Statements.
All amounts throughout this Registration Statement are expressed in
U.S. dollars unless otherwise indicated.
OVERVIEW
The Company is a diversified construction, engineering and service
company which offers a full range of services to its customers. The Company
derives its revenues primarily from customers in Norway and the North Sea, and
to a lesser extent, from international customers. The Company holds all of the
certifications available for a civil engineering company in the country of
Norway. The Company's services are divided equally between off-shore oil and
gas projects and on-shore commercial, industrial and government projects. In
order to improve operating efficiencies and to provide more meaningful
financial reporting, the Company has divided its business operations into four
business segments:
- Construction Services - This segment includes all operations, both
off-shore and on-shore, involved in the design, engineering and installation of
technical systems, including (a) heating, ventilation, air conditioning, and
cooling ("HVAC"), (b) plumbing, (c) refrigeration/cooling and (d) electrical.
For the first half of 1999, the Construction Services segment comprised
approximately 53% of the Company's gross revenues.
- Maintenance and Service - This segment includes all operations
related to service and maintenance contracts. Management's goal is to establish
and market its service capabilities as a separate operating unit. For the first
half of 1999, the Maintenance and Service segment comprised approximately 13% of
the Company's gross revenues.
- Production - This segment includes all operations involved with the
design and manufacture of the Company's products. The Company produces several
products in its manufacturing facilities such as customized machinery,
industrial doors, ice, refrigeration and cooling equipment, oil well caps and
ventilation systems. The Company has designed an innovative ventilation system
known as the "SIMDUCT" spiral duct product. For the first half of 1999, the
Production Services segment comprised 19% of the Company's gross revenues.
- Post-Tensioning - This segment includes the Company's international
post-tensioning operations which represent a technical skill provided by a
relatively few companies in the world. The Company is engaged in concrete
post-tensioning construction for off-shore oil and gas production platforms as
well as buildings, bridges, tunnels, piers and other concrete construction
projects. The Company has created a unique post-tensioning system known as the
"SIMCON Post-Tensioning" system which distinguishes the Company from its
competitors. For the first half of 1999, the Post-Tensioning segment comprised
11% of the Company's gross revenues.
The Company's predecessor corporation was originally organized in 1983
with limited operations until its reorganization with SIMEX A/S on April 28,
1998. Under the terms of the reorganization, the principal shareholders of SIMEX
A/S became the majority shareholders of the Company, and SIMEX A/S became a
wholly-owned subsidiary of the Company. Substantially all of the Company's
revenues are derived from the operations of SIMEX A/S.
SIMEX A/S began operations in 1980 as an engineering and service
company based in Stavanger, Norway. In May of 1998, SIMEX A/S acquired Norsk
Kjoleindustri A/S ("Norwegian Cooling Industries"), which is an HVAC equipment
design, manufacturer and maintenance organization that, among its products,
manufactures and installs ice machines and other cooling equipment for a variety
of applications. In late 1998, SIMEX A/S also acquired four (4) other companies
engaged in welding, manufacturing and service businesses, which compliment and
diversify the materials and services that SIMEX A/S offers to its existing
customers as a full-house service organization. This expansion of the number of
products and services positions the Company to compete with other engineering
and construction companies and to expand its services to other markets. SEE
"RECENT ACQUISITIONS."
<PAGE> 3
In April of 1999, the Company reincorporated as a Delaware corporation
and changed its name to SIMEX Technologies, Inc.
INDUSTRY BACKGROUND
The Company engages in the construction, engineering, installation and
maintenance of large-scale projects with a significant presence in the
off-shore oil production service industry. SIMEX A/S has participated in the
construction and maintenance of a majority of the large-scale off-shore oil
production platforms that were built during the 1980s and early 1990s. The
Company offers not only post-tensioning services but also HVAC, electrical,
plumbing and maintenance services for the off-shore industry. Oil production in
the North Sea area of Norway is second in the world, with Saudi Arabia ranking
first. There are approximately thirty off-shore oil production platforms
operating in the North Sea. These platforms are owned by the major oil
companies of the world including Shell Oil, Exxon, Statoil (the Norwegian State
oil company), Conoco, Phillips Petroleum, Amarada Hess and others. SIMEX A/S
recently completed (May 1999) its contract with Taylor Woodrow Civil
Engineering (UK) for post-tensioning and engineering for the construction of an
oil and gas platform located in the Danish oil field known as South Arne. SIMEX
A/S manufactured all of the post-tensioning steel ducts in its manufacturing
facility in Stavanger, Norway which were shipped to the job site. The Company
has other projects for the provision of construction services in the off-shore
industry. See "New Construction".
In the on-shore market, the Company participates in a variety of
projects such as the manufacture and installation of ice machines, the
construction of cooling plants and the provision of HVAC, electrical and
plumbing services for customers. The Company is one of the few companies in
Norway who offers a full range of services for its customers which results in
time and cost savings.
The Company operates in an industry with a relatively high barrier of
entry. In the off-shore, oil and gas industry, most companies only engage
contractors who operate under the ISO 9000 specification to perform construction
activities. In Norway, companies which engage in construction projects, in the
off-shore as well as on-shore market, must also comply with stringent government
regulations and reporting requirements. These regulations and reporting
requirements have forced many smaller companies to discontinue operations. These
regulations and reporting requirements have also caused a consolidation of
companies in the industry. See "Regulation".
PRODUCTS AND SERVICES
The Company is one of a limited number of companies that manufacture
galvanized and stainless steel duct tubing in the region. The Company has
designed a spiral duct product "SIMDUCT" in galvanized, aluminum and stainless
steel for HVAC systems which it manufactures at its facility in Stavanger,
Norway. Contractors who use this product for oil production projects include
ABB, Aker Marine, Kvaerner Oil and Gas, Hyundai, Elf Oil and other international
contractors. These contractors, as well as others, continue to utilize the
Company's products and services. For example, these contractors have installed
the SIMDUCT product in several off-shore oil platforms in the North Sea
including Ekofisk 2, Heidrun TLP and Oseberg, and the SIMDUCT products have also
been installed in onshore commercial oil and gas facilities. Several of the
aforementioned contractors require that the SIMDUCT product be installed in all
new and refurbished oil production facilities and utilized in all system
upgrades in existing oil production facilities.
The Company manufactures and installs through its subsidiary, Norwegian
Cooling Industries, a variety of ice and refrigeration products for various
uses, including the fishing industry and the oil and gas industry, for which
there is a growing worldwide demand. Norwegian Cooling Industries manufactures
and distributes the "Kuldvakten" HVAC monitoring and control system which is
used in a variety of applications, including supermarkets, food production and
distribution, marine vessels and hospitals. The Company has also acquired in the
acquisition of Weld Tech A/S a sophisticated, computer-operated water plasma jet
steel-cutting machine which is leased out to third party contractors for a daily
rate. The backlog for its use is over ninety days.
The Company markets its post-tensioning services as the SIMCON
Post-Tensioning system through its subsidiary, SIMCON UK Ltd. Concrete oil and
gas production platforms, buildings, bridges, piers and tunnels require a
construction reinforcing technique known as "post-tensioning." To solve the
requirement, SIMEX A/S secured a license to produce spiral duct products with
galvanized or stainless steel and redeveloped this system for post-tensioning
concrete construction, including the oil and gas production platforms. Prior to
pouring concrete into forms, cables are inserted through the ducts inside the
concrete forms. After pouring, the cables are mechanically tightened
considerably strengthening the concrete as it cures. The Company markets its
post-tensioning system as the "SIMCON Post-Tensioning" system.
The demand for large-scale construction projects such as off-shore oil
and gas platforms, bridges, shopping centers, water towers and tunnels is
cyclical and dependent upon numerous economic and political factors including
the worldwide demand for oil and gas production, hydro-electric power from dams
and infrastructure requirements of political subdivisions.
2
<PAGE> 4
In addition to participating in the design and construction phases of
new projects, there is a continuing need for maintenance of HVAC systems,
plumbing, electrical and other mechanical systems for both on-shore and
off-shore commercial projects. Other products and services remain in continuous
demand for existing customers, and the Company constantly seeks strategic
partners and joint ventures to meet the demands of its customers that include
general contractors, oil companies, government and private owners of public
facilities such as schools, hospitals and municipalities.
The development and implementation of solutions as well as new products
and services requires the successful integration of strategic consultation,
creative design and systems engineering abilities. Historically, expertise in
these areas has been fragmented and, accordingly, many businesses outsource or
subcontract with numerous companies to meet their overall requisites. The
subcontracting and outsourcing create opportunities for companies that can offer
a complete line of services to an end user. While there are a number of
companies in the Scandinavian market that may provide a single service, such as
HVAC, there is a limited number of companies that have assimilated the technical
expertise to offer multiple disciplines such as engineering, design,
construction, installation and monitoring in the fields of HVAC, plumbing,
electrical, welding and mechanical while simultaneously providing products that
complement these services, such as spiral duct pipes, cooling plants, integrated
ice plants, specialized industrial doors and others.
The Company believes that a market for the products and service that it
offers will continue and that it will be able to compete in the world market
because of the experience and technical skills it possess which are required for
new infrastructure construction.
STRATEGY
The Company's goals are:
- To expand its operations by acquiring businesses whose products
and services compliment the Company's existing products and
services and allow the Company to expand its presence in
additional markets;
- To develop new business opportunities in Norway and the North Sea
through increased marketing efforts;
- To maximize profits by achieving greater efficiencies in
operations through the control of costs and expenses and the
reorganization and consolidation of operations; and
- To build a strong management team.
3
<PAGE> 5
ISO 9000. The Company has adopted and operates under the ISO 9000
specifications and other specialty quality norms for the industry. This
accreditation allows the Company to participate with other civil and mechanical
engineering firms in joint ventures or acting alone as a subcontractor to large
multinational general contracting firms and distinguishes the Company from its
competitors. Health, safety and environmental concerns are integrated parts of
the system.
To obtain the designated quality certification, the Company was
required to develop a quality management system which is necessary to ensure
that the products and services offered meet the expectations of the customer and
that the expectation is continuously maintained to the prescribed standard,
specification, contract or order agreement. The quality assurance standard must
be met in accordance with a quality assurance manual developed and monitored by
the Company and subject to peer review and testing.
With the ISO 9000 accreditation, the Company intends to expand its
business by entering into additional joint ventures with contractors requiring
the designation as well as to acquire certain other companies that complement
its civil and mechanical engineering services who are not presently accredited
as an ISO 9000 or other quality service provider.
BUSINESS OPERATIONS
The Company is involved in new construction projects, and it supplies
products and materials and performs maintenance for numerous customers. A
description of these operations is as follows:
NEW CONSTRUCTION. The Company has entered into an agreement to provide
HVAC, electrical and plumbing services for a general contractor for the
construction of a commercial shopping center with 150,000 square feet in Narvik,
Norway. Through the provision of post-tensioning services and materials,
supervision, engineering services and technical advice, the Company has become
involved in the construction of a service pier in Dabhol, India. The Company is
also working on the manufacture and installation of an ice machine in Nort
Salmon, Norway and the construction of four cooling plants for off-shore oil and
gas operations. In addition, the Company is currently installing plumbing and
sprinkler systems for an on-shore construction project in Bergen, Norway and an
off-shore oil platform in the North Sea. The Company has recently submitted bids
for the construction of aluminum silos utilizing the Company's post-tensioning
system in the state of Bahrain and Egypt.
MAINTENANCE AND SERVICE CONTRACTS. The Company has entered into over
250 HVAC, electrical, refrigeration, and plumbing system, service and
maintenance contracts with various customers which include the City of
Stavanger, Norway (for its local hospitals, schools and governmental
facilities), Conoco Oil, Phillips Petroleum, Statoil Norway, Elf Oil Company and
other large scale oil and gas production customers. Since the Company has
completed the project for Taylor Woodrow on the oil platform in the South Arne,
the Company will continue to provide maintenance services for this platform
through its operator, Amarada Hess. The Company also provides through its
subsidiary, Norwegian Cooling Industries, maintenance services for the
refrigeration and ice machines that it manufactures and installs.
4
<PAGE> 6
ACQUISITIONS. The Company embarked on an acquisition plan in 1998
designed to develop additional technical capabilities and products to supplement
its traditional areas of expertise. Through acquisitions in the steel
fabrication, HVAC design and installation and cooling products industries in
Norway, the Company was able to assemble additional production and service
capabilities, merge them into its operating structure and facilities to insure
quality and efficiency, and will begin developing markets for these products and
services. The Company's near-term objective is to continue and expand this
strategy to provide more regional recognition and opportunities for its niche
capabilities and products.
RECENT ACQUISITIONS. Principal acquisitions during 1998 were based on
the Company's objective of augmenting its product and service capabilities in
the Norwegian/North Sea region with a plan to expand its existing markets for
these products and services in Norway and the North Sea. With the Norwegian
Cooling Industries and the Weld Tech acquisitions, the Company's pro forma 1998
revenues were approximately $30,700,000. Principal among the 1998 acquisitions
were the following:
Norwegian Cooling Industries is an HVAC equipment design, manufacturer,
and maintenance company located in Stavanger, Norway. Norwegian Cooling
Industries' refrigeration products and services compliment the Company's
existing HVAC business. Norwegian Cooling Industries' production, service and
engineering are directly connected with SIMEX A/S's business with the additional
benefits of a proprietary
5
<PAGE> 7
ice-cooling system for the marine and off-shore industries. Norwegian Cooling
Industries additionally manufactures and distributes high capacity ice machines
for off-shore as well as on-shore uses. Norwegian Cooling Industries also
produces the "Kuldevakten" monitoring and control systems for a variety of
applications, including supermarkets, food production and distribution, marine
vessels and hospitals. All of the outstanding stock of Norwegian Cooling
Industries was purchased in May, 1998, and its administrative offices have been
moved to the offices of SIMEX A/S. The ownership interest was purchased for
approximately $2.7 million in cash.
Weld Tech A/S is a metal fabrication company in Stavanger, Norway. Weld
Tech was purchased in November, 1998. It is a specialized fabrication and
welding contractor in the oil and gas service industry. Weld Tech A/S owns
certain welding and cutting equipment including a new "water plasma cutter" that
it leases to general contractors on a fee basis. Engineering, production and
administration have been relocated within SIMEX A/S operations in Stavanger.
Since the date of its acquisition in September, 1998, Weld Tech's 1998 revenues
were approximately $117,000. Weld Tech was acquired for approximately $1.3
million in cash, plus 450,000 shares of the Company's common stock and an option
to acquire an additional 200,000 shares of the Company.
Hordaror A/S, a commercial plumbing and mechanical contractor located
in Bergen, Norway has been relocated with other SIMEX A/S operations in Bergen.
It provides sophisticated support systems for the projects that it undertakes.
Since acquisition, Hordaror A/S had revenues of approximately $51,000 in 1998.
Hordaror was purchased for approximately $104,000 plus 13,513 of the Company's
shares.
Vest Norge Doors A/S is a specialty manufacturer of over-sized door
systems in Stavanger, Norway. Vest Norge Doors A/S has recently developed a
proprietary horizontal folding door used for combustible containment and
protection in extreme weather conditions and emergency use in accordance with
international standards. These doors have been used on several oil and gas
platforms, helicopter hangars and other related facilitates. Since the date of
acquisition, Vest Norge Doors A/S had 1998 revenues of approximately $71,000.
Vest Norge Doors was purchased for approximately $135,000 plus 38,000 of the
Company's shares.
In September of 1998, SIMEX A/S purchased the assets of OIN Sprinkler
A/S, including its inventory and accounts receivable. This company designs and
installs sprinkler systems for fire prevention both for off-shore and on-shore
construction projects. As a division of SIMEX A/S, the business had revenues of
approximately $200,000 since its acquisition date in September 1998. The assets
of OIN Sprinkler were purchased for approximately $60,000 plus 22,400 shares of
the Company's common stock.
MARKETING. The Company markets its product lines directly through its
own sales force to major general contractors and other users of its services.
The Company's products and services are primarily marketed in Norway and the
North Sea.
PRODUCT DEVELOPMENT. The Company maintains an engineering and
development department to conduct research activities relating to the
improvement of existing products and the development of new products.
6
<PAGE> 8
RAW MATERIALS. The Company expects to have multiple sources of supply
for substantially all of its material requirements. The raw materials and
various purchased components required for its products have generally been
available in sufficient quantities.
COMPETITION. Although there is a relatively high barrier to entry in
this industry, the market for construction services of the type that are offered
by the Company is highly competitive. Many of the companies with which the
Company competes are larger in terms of capital and employees. As a result, the
Company's competitors may be better positioned to provide the types of services
that the Company also provides. There are a limited number of large-scale
projects offered in Norway and the North Sea, the two (2) principal markets in
which the Company operates today. The Company competes on the basis of a number
of factors including its pricing, creative design, engineering expertise,
technological innovation and others. Many of these factors are beyond the
Company's control. Existing or future competitors may offer products or services
that provide significant technological, performance, price or other advantages
over the products and services currently offered by the Company.
The Company may also compete directly with the general contractors who
offer the same types of services that it offers in-house. Many of the Company's
current and potential competitors have longer operating histories, longer
relationships with general contractors and significantly greater financial,
marketing and public relations resources than the Company. The list of the
Company's competitors consists primarily of smaller subcontracting companies.
The list also varies depending on the specific product or service offering. For
example, the primary competitors for the Company in the HVAC sector are ABB and
HVAC Marine. For post-tensioning products and services, the primary competitors
are VSL International, a Swiss subsidiary of Bouygues which is a large,
diversified company based in France, Freyssinet, a French company, and DSI, a
large German construction company.
Products similar to that which the Company manufactures and sells are
available through other suppliers. Accordingly, profitability depends upon the
prices offered by competitive companies that offer similar products at lower
prices.
Additionally, in pursuing acquisition opportunities, the Company may
compete with other companies with similar growth strategies and certain
competitors of the Company may be larger and have greater financial and other
resources. Competition for these acquisition targets could also result in
increased prices for acquisition targets in a diminished pool of companies
available for acquisition. Further, because the Company has adopted a strategy
of acquiring companies in exchange for its common stock, the ability to acquire
companies is dependent upon the market and price for its stock.
RESEARCH AND DEVELOPMENT. The Company has incurred research and
development expenses of approximately $450,000 for the two years ended December
31, 1998 and 1997, respectively.
REGULATION. The Company is subject to laws and regulations concerning
the environment, occupational safety and health and consumer products safety in
each of countries and local government areas in which it operates. Since the
Company conducts the majority of its business operations in the country of
Norway, Norwegian law dictates the business operations of the Company.
Although Norway is not a member of the European Union, Norway is a
member of the European Economic Association and, as such, has implemented
legislation relating to the "Four Freedoms" on which the European Union is
founded (i.e., free movement of goods, people, services and capital). In the
event of a conflict between Norwegian law and the laws of the European Union
which have been implemented by Norway, the laws of the European Union shall
control. Although Norway has decided not to adopt the Euro as its currency at
this time, the Company's results from operations may be impacted because of the
conversion to the Euro by the other European countries. Moreover, the Company's
business operations may be impacted if Norway decides in the future to adopt the
Euro as its sovereign currency.
In addition, Norway has enacted specific laws regarding the termination
of employees and holiday leave. Under the Work Environment Act (1977), all
employers must provide at least one calendar month's notice to an employee prior
to termination. This notice period will increase based upon the duration of the
employee's employment with the employer and the age of the employee. The Work
Environment Act also protects against the termination and dismissal of employees
without a valid reason such as altered conditions within the company or
circumstances related directly to the employee's work performance. If an
employee is terminated without a valid reason, the Norwegian courts may overturn
the termination of such employee. Each employee in Norway is also entitled to
four weeks and one day of vacation each year and is entitled to ten legal
holidays each year. Each employee receives 10.2% of his/her gross wage in the
preceding year during his/her vacation. Most employees take their vacations
during the summer months. These laws may impact the Company's results from
operations because these laws restrict the Company's ability to terminate
employees without cause and reduce the Company's productivity during the summer
months.
The Company must comply with various Norwegian laws concerning the
environment, construction and competition which may impact the Company's
results from operations. In Norway, construction companies must obtain certain
permits, licenses and approvals from municipalities prior to commencing any
construction activities. In addition, all construction companies must comply
with stringent regulations which govern the administration of construction
companies, require certain qualifications for construction companies and
mandate reporting requirements for construction companies. As a result of the
increased regulation of construction companies by the Norwegian government,
many smaller construction companies have discontinued business operations
because of their inability to comply with these regulations.
7
<PAGE> 9
EMPLOYEES. As of June 30, 1999, the Company had approximately 240
employees, including 40 engineers, 15 technicians and 10 office personnel.
Twenty-three of the employees of SIMEX A/S are members of various labor unions,
including the Lands Organisationen Union, Norway. SIMEX A/S is also a member of
an employer's labor union, the National Employers Organization. The Lands
Organisation Union and the National Employers Organization enter into a labor
agreement every two years. The current labor agreement expires April 30, 2000.
The Company has experienced no work stoppages and rates its relationship with
its employees as good. SEE RISK FACTORS - RISK RELATED TO OUR DEPENDENCE ON KEY
PERSONNEL AND THE ABILITY TO ATTRACT EMPLOYEES.
PROPERTY AND FACILITIES. The Company's executive offices are located in
Atlanta, Georgia consisting of approximately 1,600 square feet of leased space,
the lease for which expires in 2000. SIMEX A/S, located in Stavanger, Norway,
currently owns a building which it expects to sell in exchange for the purchaser
constructing a new production and office facility in Stavanger that will
accommodate the local operations employees of SIMEX A/S as well as the local
operations employees of its recent acquisitions. The new facility will contain
approximately 99,155 square feet and will have a lease term of twenty years with
a right of first refusal to purchase the facility at any time during the term of
the lease or at its termination.
RISK FACTORS
The risks and uncertainties described below are not the only ones which
may impact the operations of the Company. The occurrence of any of the following
risks could materially and adversely affect the Company's business, financial
condition and the results of operations. In such case, the trading price of the
Company's common stock could decline, and shareholders may lose all or a part of
their investment in the Company.
THE COMPANY CONDUCTS SUBSTANTIALLY ALL OF ITS BUSINESS THROUGH ITS
WHOLLY OWNED SUBSIDIARY.
The Company is a holding company with limited assets of its own. The
Company conducts substantially all its business through SIMEX A/S, a
wholly-owned subsidiary whose principal place of business is located in
Stavanger, Norway. The amount of dividends which SIMEX A/S may pay to the
Company is restricted under Norwegian law. Under Norwegian law, the dividends
which are available for distribution by SIMEX A/S are limited to the annual
results of operations for the preceding year less unrecovered business losses
for previous years, the balance value of goodwill, capitalized research and
development expenses and net deferred taxes. If this amount is less than ten
percent (10%) of the equity set forth on SIMEX A/S's financial statements,
SIMEX A/S is restricted under Norwegian law from distributing any dividends to
the Company. Since the Company receives a majority of its income in the form of
dividends from SIMEX A/S, these restrictions upon the payment of dividends may
decrease the amount of funds available for distribution to the shareholders of
the Company.
In addition, any dividends which SIMEX A/S pays to the Company are
subject to Norwegian income taxes and United States income taxes. However,
under the tax treaty entered into between the United States and Norway, the
Company may reduce the amount of United States income taxes payable by the
Company by the amount of Norwegian income taxes paid by SIMEX A/S upon such
dividends. Thus, the amount of taxes payable upon such dividends will reduce
the amount of funds that will flow from SIMEX A/S to the Company. Although the
Company does not plan to pay dividends to shareholders, each shareholder who
receives a dividend distribution must pay personal income taxes upon such
amounts.
LIMITED CAPITAL/NEED FOR ADDITIONAL CAPITAL
As of June 30, 1999, the Company had approximately $(679,000) of
limited operating capital (i.e., current assets minus current liabilities) with
which to engage in its business endeavors. Upon the sale of the Company's
existing headquarters facility in Stavanger, Norway to Tjelta Eiendom, the
Company anticipates that a substantial portion of its short-term liabilities
will be paid in full thereby increasing the amount of the Company's operating
capital. Currently, the Company believes that the cash flow generated from its
operations will be adequate to fund its capital needs for a period of at least
twelve months and that it will be capable thereafter of continuing as a going
concern. From time to time, the Company may conduct fundraising activities in
order to raise additional funds to conduct its business operations. At this
time, there are no commitments for additional cash funding. There are currently
outstanding bank loans in the amount of approximately $9,348,000. These loans
are secured by real estate, furniture, fixtures and equipment and accounts
receivable. The lender has required that the Company seek additional equity
investors as a condition for future operations financing. The Company cannot
make any assurances that it will be successful in raising capital through
private placements or other means. In the event that the Company enters into
private placements with investors, there can be no assurances that such private
placements will be on terms and conditions which are favorable to the Company
and its current shareholders. If the Company elects to seek new equity investors
to raise additional capital, the additional equity investors will dilute
shareholder ownership interests.
8
<PAGE> 10
RISKS ASSOCIATED WITH POSSIBLE MERGERS OR CONSOLIDATIONS
In a short period of time, the Company has experienced rapid growth and
development through a series of acquisitions. In 1998, the Company acquired five
(5) companies: (a) Norwegian Cooling Industries, (b) OIN Sprinklers A/S, (c)
Weld Tech A/S, (d) Hordaror A/S and (e) Vest Norge Doors A/S. The Company
intends to continue its strategy of making acquisitions in the future in order
to remain competitive. Mergers and consolidations of business involve numerous
risks and uncertainties, including:
- Adverse effects on reported results of operations from merger-related
charges and amortization of goodwill and purchased technology.
- Inability to maintain customers or goodwill of a consolidated
business;
- Difficulties in the integration of operations, personnel,
technologies, products and the information systems of the consolidated
companies;
- Diversion of management's attention from other business concerns;
- Risks of entering geographic and business markets in which the
Company has no or limited prior experience; and
- Potential loss of key employees of consolidated organizations.
The Company's future performance will depend in part upon the ability
to integrate with other companies and businesses. If the Company is unable to
integrate successfully with other companies and businesses, such failures would
have a material adverse effect on the Company's business, results of operations
and financial condition. During the first half of 1999, the Company's management
diverted a substantial amount of its time and resources reorganizing the Company
into different operating segments and integrating the administrative,
management, technology and accounting systems of newly acquired businesses into
the corporate culture of the Company. The Company has experienced a net loss in
the first and second quarter of 1999 because, among other factors, the costs
associated with integrating its recently acquired businesses.
If the Company elects to consummate one or more significant mergers or
consolidations in the future in which the consideration consists of stock or
other securities, shareholders' equity could be significantly diluted. In the
alternative, if the Company elects to proceed with one or more significant
mergers or consolidations in which the consideration includes cash, it may
utilize a substantial portion of available cash to consummate the merger or
consolidation. In addition, if the Company does not have available cash to
consummate a merger or consolidation, there can be no assurances that financing
will be available on favorable terms, if at all, to finance such mergers or
consolidations. The Company may also have to compete for merger or consolidation
targets with other companies with similar growth strategies which could result
in increased prices of such targets and a diminished pool of companies available
for merger or consolidation.
THE COMPANY RELIES ON STRATEGIC MARKETING ALLIANCES
The Company is generally dependent on relationships with third parties.
The Company is employing alliances with third parties as a core strategy to
accomplish its objectives. There can be no assurance that such third parties
will regard their relationship with the Company as important to their own
business and operations, that they will not reassess their commitment to the
business at any time in the future, or that they will not develop their own
competitive services or products, either during their relationship with the
Company or after their relations expire. In addition, there can be no assurance
that any party to a strategic alliance agreement will perform its obligations as
agreed or that any strategic agreement will be enforceable. The Company's
arrangements with its strategic partners generally do not establish minimum
performance
9
<PAGE> 11
requirements and most agreements with strategic partners may be terminated by
either party with little notice. Accordingly, there can be no assurance that the
Company's existing relationships or future relationships will result in
sustained business partnerships, successful service offerings, or significant
revenues.
RISK OF OPERATIONS AND INSURANCE
Because the Company engages in construction in the oil and gas industry
as well as other large-scale projects, it encounters inherent risks in
operations including accidents, environmental mishaps, risks of off-shore marine
activity, and risks related to electrical installations. Any of these
occurrences could result in the following:
- significant personal injury or loss of life;
- severe damage to or destruction of property and equipment;
- pollution or environmental damage; and
- suspension of operations.
Claims arising from problems associated with products and systems sold
by the Company may also result in product liability lawsuits. Litigation could
result in the expenditure of significant financial and managerial resources. The
Company maintains insurance coverage against most, but not all, potential
losses. Insurance coverage is not always economically feasible and cannot always
be obtained, without significant exclusions, in amounts sufficient to cover all
types of operational risks and product liability claims. The occurrence of a
significant event that is not fully insured could have a material adverse effect
on the Company's financial condition, results of operations, or liquidity.
OTHER RISKS ASSOCIATED WITH OPERATIONS
- DEPENDENCE UPON OIL PRICES. The demand for the Company's
engineering services and the construction of new off-shore oil
and gas platforms depends upon the world demand for oil and
gas and the corresponding prices for oil and gas. If the price
of oil drops below the level at which oil or gas can be
economically extracted, the demand for off-shore oil and gas
platforms will decline. If the demand for new off-shore oil
and gas platforms declines, the materials and services that
the Company supplies may also decline.
- GOVERNMENTAL REGULATION. The Company's operations may be
subject to numerous international, federal, state, provincial
and local laws. The costs associated with compliance of these
laws and regulations may prevent the Company from selling some
or all of its products and services.
- EFFECT OF THE WEATHER. The weather may adversely affect the
construction activities of the Company and may cause periodic
interruptions in operations. In addition, the climate impacts
the demand for the HVAC services offered by the Company.
EMERGENCE OF THE EURO AS THE NEW CURRENCY FOR ELEVEN EUROPEAN COUNTRIES
On January 1, 1999, eleven of the fifteen member countries of the
European Union established fixed conversion rates between their existing
sovereign currencies and a common currency, the Euro. The participating
European Union countries include: Austria, Belgium, Finland, France, Germany,
Italy, Luxembourg, the Netherlands, Portugal and Spain. Although the initial
participating member countries do not include Norway, the Company's principal
place of operation, the introduction of the Euro is expected to reshape
financial markets, banking systems and monetary policies in Norway and other
parts of the world. For example, the process of implementing the Euro may
result in changes in the relative strength and value of the Norwegian krone as
compared to other major currencies, and the transition to the Euro is likely to
have a significant impact on fiscal and monetary policy in Norway and may
produce unpredictable effects on trade and commerce generally.
FOREIGN CURRENCY FLUCTUATIONS
The Company derives a substantial portion of its revenues primarily
from contracts entered into with customers in Norway. In addition, the majority
of the Company's assets and liabilities are dominated in the Norwegian krone.
Therefore, a fluctuation of the exchange rates for the Norwegian krone in
relation to the United States dollar may have an adverse effect on the
Company's earnings or assets when translating the Norwegian krone into the
United States dollar on the Company's financial statements. For example, a
weakening in value of the Norwegian krone against the United States dollar
could result in lower revenues and earnings for the Company when translated
into United States dollars and could have a material adverse effect on the
Company's results of operations and its financial condition. However, since
the expenses of the Company are generally incurred in the Norwegian krone, the
same currency in which a majority of the Company's revenues are generated, a
fluctuation in exchanges rates between the Norwegian krone and the United
States dollar will impact the Company's results of operations on its financial
statements to a lesser degree.
Since the Company cannot predict the effect of fluctuations in the
Norwegian krone against the United States dollar, the Company cannot quantify
the effect of exchange rate fluctuations on our future financial condition or
results of operations. While the Company may consider entering into transactions
to hedge the risk of exchange rate fluctuations, there can be no assurances that
the Company will engage in such transactions, or, if the Company decides to
engage in such transactions, that they will be successful and that shifts in the
currency rates will not have a material adverse effect on the Company.
10
<PAGE> 12
DEPENDENCE ON NEW CONSTRUCTION
The Company generates a large portion of its revenues from a limited
number of construction contracts for large-scale projects. For example, in first
quarter of 1999, the Company had at least one contract that accounted for 4% or
more of the total revenues in such quarter. The Company expects to continue to
depend upon new construction for a significant percentage of its revenues in the
future. The failure to secure contracts for large-scale projects in the future
may adversely affect the Company's results of operations or financial condition.
DEPENDENCE ON KEY PERSONNEL AND ABILITY TO ATTRACT EMPLOYEES
Growth and development of the Company depends on the continued service
of its executive officers and managers (i.e., key personnel). The Company has
not entered into employment contracts with its key personnel. It does, however,
carry key person life insurance. The loss of key personnel for any reason could
harm the Company's business.
Future success of the Company also depends upon the ability to attract
persons with technical expertise and experience to enable it to provide
technical services to customers. There is a substantial demand for persons who
have engineering degrees in the disciplines that the Company requires,
especially in the Scandinavian countries. In addition, there exists a limited
number of qualified personnel which demonstrate the ability to perform these
services. If the Company is not able to attract and retain qualified personnel,
its business may suffer.
DEPENDENCE UPON WORLD ECONOMIC FACTORS
The Company is dependent upon forming strategic alliances and
relationships with joint venture partners and securing subcontracts with large
multi-national companies in order to generate revenues. In turn, the ability of
the large multi-national contractors to secure contracts for infrastructure
construction such as bridges, dams and tunnels depends upon the economic factors
affecting the particular country in which the project is located. These
international economic factors include the following:
- The impact of recessions in economies outside of the United
States;
- Currency exchange rate fluctuations;
- Uncertain intellectual property rights protection;
- Political and economic instability;
- Policy, legal, regulatory or other changes affecting the oil
and gas industry, the HVAC, plumbing, mechanical contracting,
refrigeration, and engineering industries;
- Potential adverse tax consequences;
- Tariffs, export controls and other trade barriers;
11
<PAGE> 13
- Difficulties of administering foreign operations; and
- Seasonality.
RISKS ASSOCIATED WITH TECHNOLOGICAL ADVANCES IN THE CONSTRUCTION
INDUSTRY
Continued growth of the Company depends upon the ability to meet
technological changes in the construction industry and to develop and utilize
technologically advanced engineering practices for HVAC, plumbing, mechanical,
and refrigeration systems, as well as engineering and post-tensioning concrete
work. To remain competitive with other full-service engineering firms, the
Company must continue to develop and employ new techniques for its engineering
services, and the Company must continue to develop products and services
demanded by customers at prices that generate a profit.
FAILURE TO PROTECT PROPRIETARY TECHNOLOGY MAY IMPAIR COMPETITIVE
POSITION
Although the Company seeks to protect its intellectual property rights
through patents, copyrights, trade secrets and other measures, the Company
cannot be certain that:
- it will be able to protect its proprietary technology
adequately;
- its patents and any other issued patents will not be
successfully challenged by one or more third parties, which
could result in the loss of the right to prevent others from
exploiting the Company's technology;
- competitors will not be able to develop similar or superior
technology independently;
- intellectual property laws will protect the Company's
intellectual property rights; and
- third parties will not assert that the Company's products
infringe upon their patents, copyrights or trade secrets.
If the Company is not successful in protecting its proprietary
technology and intellectual property, there could be a material adverse effect
on the Company's business, financial condition or results of operations.
COMPETITION
The Company competes with many companies that offer similar products
and services. Many of these companies possess greater assets and greater
financial and personnel resources than the Company's. Some of these competitors
also carry product lines which the Company does not carry and offer services
which the Company does not provide. The competitive pressures of these companies
may have a material adverse effect on the Company's business and upon its
financial condition. In the event that more companies begin to compete with the
Company by carrying similar products and services, the price competition with
competitors will increase. These competitive pressures could cause the Company
to reduce the prices of its
12
<PAGE> 14
products and services which will, in turn, decrease the amount of profits it
generates. Prolonged price competition with competitors could produce a material
adverse effect on the Company's operating results and financial condition. In
addition, if the Company's competitors develop new or enhanced products or
services, the Company may also suffer adverse effects on business operations.
Because of the intense competition in the engineering industry, the Company
cannot assure shareholders that it will compete successfully with other
competitors in the future.
INVESTMENT RISKS
The Company invests a portion of its capital in higher risk instruments
such as government-secured obligations or money market accounts. While this
investment strategy allows the Company to obtain a higher yield on its capital,
the Company also assumes the risk that it may lose all or part of its investment
capital in addition to the loss of interest.
THE COMPANY'S CERTIFICATE OF INCORPORATION HINDERS A CHANGE OF CONTROL
The Articles of Incorporation of the Company contain certain provisions
which could impede a change of control of the Company. The Board of Directors of
the Company may issue up to 5,000,000 shares of preferred stock with rights
preferences determined by the Board of Directors without the approval of the
shareholders. These provisions may prevent stockholders from obtaining a premium
for their common stock. See "Description of Securities."
13
<PAGE> 15
NO DIVIDENDS
The Company does not currently intend to pay cash dividends on its
common stock and does not anticipate paying such dividends at any time in the
foreseeable future. At present, the Company will follow a policy of retaining
all of its earnings, if any, to finance the development and expansion of its
business.
LIMITED LIABILITY OF MANAGEMENT
The Company has adopted provisions in its Articles of Incorporation
which limit the liability of its officers and directors. In addition, the Bylaws
of the Company provide for indemnification by the Company of officers and
directors to the full extent permitted by Delaware corporate law. The Articles
of Incorporation generally provide that directors shall have no personal
liability to the Company or shareholders for monetary damages for breaches of
their fiduciary duties as directors, except for:
- breaches of their duties of loyalty;
- acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law;
- acts involving unlawful payment of dividends or unlawful stock
purchase or redemptions; or
- transactions from which a director derives an improper
personal benefit.
Such provisions substantially limit the shareholders' ability to hold
directors and officers liable for breaches of fiduciary duty. See
"Indemnification of Directors and Officers."
SALES OF A SUBSTANTIAL NUMBER OF SHARES OF COMMON STOCK IN THE PUBLIC
MARKET COULD IMPACT THE MARKET PRICE
If the Company's shareholders sell substantial amounts of their
common stock, including shares issued upon the exercise of outstanding
warrants, in the public market, then the market price of the Company's common
stock could decline. In addition, the sale of substantial amounts of common
stock in the public market could impair the ability to raise additional capital
through the sale of equity securities. In November 1998, the Company granted
Reidar Kindervag and John Reider Kindervag, principal shareholders of Weld Tech
A/S, the option exercisable on or before June 30, 2000 to purchase 200,000
shares of the Company at an exercise price of $2.75 per share. This option
expires on November 17, 2001. In April 1998, the Company and its three
principal shareholders agreed to enter into a lock-up agreement which restricts
these shareholders from selling in excess of five percent of the common stock
held by such shareholder in any given twelve month period for a period of three
years. In November 1998, the Company entered into a lock-up agreement with Weld
Tech A/S which allows Weld Tech A/S to sell 90,000 shares of common stock
immediately, 180,000 shares of common stock after June 30, 1999 and 180,000
shares of common stock after January 1, 2000. These lock-up agreements will
limit the number of shares of common stock available for sale in the public
market. There are approximately 12,823,873 shares of common stock outstanding,
of which approximately 2,500,000 shares of common stock are freely transferable
without restriction or registration under the Securities Act of 1933.
EXISTING SHAREHOLDERS WILL CONTINUE TO CONTROL THE COMPANY AND EXERT
CONTROL OVER CORPORATE ACTIONS
Principal shareholders beneficially own approximately 54% of the
Company's outstanding common stock. See "Security Ownership of Certain
Beneficial Owners and
14
<PAGE> 16
Management." As a result, these shareholders, acting together, will be able to
control the outcome of all matters submitted for shareholder action, including
the following:
- Electing members of the Board of Directors;
- Approving significant change-in-control transactions;
- Determining the amount and timing of dividends paid; and
- Controlling management and operations.
POTENTIAL ISSUANCE OF ADDITIONAL COMMON AND PREFERRED STOCK
The Company has the authority to issue up to 50,000,000 shares of
common stock. The Board of Directors has the ability, without seeking
shareholder approval, to issue additional shares of common stock in the future
(up to 50,000,000 shares) for such consideration as the Board of Directors may
consider sufficient. The issuance of additional common stock in the future
dilutes current existing ownership in the Company as well as voting power. The
Company also has the authority to issue up to 5,000,000 shares of preferred
stock, and the Board of Directors may designate the rights and preferences of
such preferred stock without seeking shareholder approval. If the Company issues
preferred stock in the future, the designation and issuance of such preferred
stock would create additional securities which may have dividend and liquidation
preferences over common stock.
APPLICABILITY OF LOW PRICED STOCK/PENNY STOCK RISK DISCLOSURE
REQUIREMENTS
The Company's common stock may be considered a low priced security or
"penny stock" under rules promulgated under the Exchange Act. Under the
Securities Enforcement and Penny Stock Reform Act of 1990, broker-dealers
participating in transactions in low priced securities must first deliver a
risk disclosure document which describes:
- the risks associated with such stocks;
- the broker-dealer's duties;
- the broker-dealer's compensation;
- the customer's rights and remedies; and
- certain market and other information.
Based upon this information, the broker-dealer must make a suitability
determination approving the customer for low priced stock transactions based on
the customer's financial situation, investment experience and objectives.
Broker-dealers must also disclose these restrictions in writing to the
customer, obtain specific written consent of the customer, and provide monthly
account statements to the customer. These restrictions may decrease the
willingness of broker-dealers to make a market for the stock, may decrease the
liquidity of the stock and may increase the transaction cost of sales and
purchases of such stock as compared to other securities.
15
<PAGE> 17
THE COMPANY'S BUSINESS COULD BE AFFECTED BY YEAR 2000 ISSUES
The risks posed by Year 2000 issues could adversely affect the
Company's business in a number of significant ways. The Year 2000 issue is the
result of computer programs being written using two digits rather than four to
define the applicable year. As a result, the Company's computer systems that
have date-sensitive software and software of companies with which the Company's
network is interconnected may recognize a date using "00" as the year 1900,
rather than the Year 2000. This error could result in system failures or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices or engage
in similar normal business activities. The Company has assessed its systems and
it believes the majority of them to be Year 2000 compliant. However, the Company
relies on information technology supplied by third parties. If the systems of
other companies on whose services the Company depends or with whom the Company's
systems interconnect are not Year 2000 compliant, it could have a material
adverse effect on the Company's business operations, financial condition and the
results of operations. Given the pervasive nature of the Year 2000 problem, the
Company cannot guarantee that disruptions in other industries and market
segments will not adversely affect the Company's business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Year
2000 Risk."
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
The following Summary Historical Consolidated Financial Information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's Audited
Consolidated Financial Statements included elsewhere in this Registration
Statement. The Consolidated Statement of Operations Data set forth below for the
years ended December 31, 1998 and 1997 are derived from and qualified by
reference to the Company's Audited Consolidated Financial Statements, which
appear elsewhere in this Registration Statement. The Consolidated Statement of
Operations Data for the six (6) months ended June 30, 1999 and 1998 and the
Consolidated Balance Sheet Data at June 30, 1999 are derived from and are
qualified by reference to the Company's Unaudited Consolidated Financial
Statements, which appear elsewhere in this Registration Statement and, in the
opinion of Management, include all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial data for such
periods. The results of operations for the six (6) months ended June 30, 1999
are not necessarily indicative of the results to be expected for the full year
or for any future period. All of the Company's acquisitions have been accounted
for using the purchase method and accordingly, the actual Consolidated Statement
of Operations Data reflects the results of operations of these businesses from
their respective acquisition dates.
16
<PAGE> 18
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(IN THOUSANDS, EXCEPT SIX MONTHS ENDED
PER SHARE DATA) YEARS ENDED DECEMBER 31, JUNE 30,
1998 1997 1999 1998
-------- ------- ------ ------
==================================================================================================
<S> <C> <C> <C> <C>
Revenues $ 24,403 13,740 16,174 10,293
Cost of revenues 20,757 12,418 13,107 8,199
-------- ------- ------ ------
Gross profit 3,646 1,322 3,067 2,094
Selling, general and administrative expenses 2,245 765 2,928 1,384
-------- ------- ------ ------
Operating income (loss) 1,401 557 139 710
Other income (expense):
Interest income 105 31 156 9
Interest expense (385) (207) (415) (87)
Other 7 -- (130) --
-------- ------- ------ ------
Total other expense (273) (176) (389) (78)
-------- ------- ------ ------
Income (loss) before income taxes 1,128 381 (250) 672
Income taxes 377 168 117 217
-------- ------- ------ ------
Net income (loss) $ 751 213 (367) 415
======== ======= ====== ======
Earnings (loss) per share:
Diluted $ .06 .02 (.03) .04
======== ======= ====== ======
Basic $ .06 .02 (.03) .04
======== ======= ====== ======
</TABLE>
17
<PAGE> 19
CONSOLIDATED BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1998 1999
================================================================================
<S> <C> <C>
Cash and cash equivalents $ 877 277
Total assets $20,946 20,580
Total long-term debt, including current portion $ 5,864 5,732
Total shareholders' equity $ 7,071 6,382
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion of the financial condition and results of
operations of the Company should be read with "Selected Consolidated Financial
Data" and the Company's Consolidated Financial Statements, including the Notes
included elsewhere in this Registration Statement.
OVERVIEW. The Company is a diversified engineering, consulting,
mechanical contracting, technical services and maintenance company. It also
manufactures products for commercial projects for the off-shore oil and gas
industry and on-shore commercial, industrial and government projects. In
addition, the Company offers HVAC, electrical, plumbing, refrigeration/cooling
and maintenance services and is engaged in concrete post-tensioning construction
for off-shore oil and gas production platforms, bridges and other related
concrete construction projects.
The Company is the successor by way of reorganization to a predecessor
public shell company. Since the reorganization in April 1998, the Company,
through its wholly-owned subsidiary, SIMEX A/S, has acquired five companies.
All of the Company's acquisitions have been accounted for using the purchase
method. Therefore, the historical financial data includes the results of
operations of companies acquired from their respective acquisition dates. The
Company operated with a profit for the year ending December 31, 1998, but
incurred a loss for the period ending June 30, 1999 as a result of the cost
incurred for administration charges, assimilation of acquisitions, upgrades and
replacements of its computer systems and software in connection with its Year
2000 remedial efforts, as well as the recognition of fees related to the filing
of this Registration Statement.
The Company is involved in new construction projects as well as
long-term maintenance arrangements. On new construction projects, the Company is
generally retained by a project general contractor. Revenue is recognized
primarily using the percentage-of-completion method on a contract-by-contract
basis. The Company's use of the percentage-of-completion method for revenue
recognition requires management to estimate the degree of completion of each
project. To the extent that these estimates prove to be inaccurate, the revenues
and gross profits reported for periods during which work on the project is
ongoing may not accurately reflect the final
18
<PAGE> 20
results of the project. Any anticipated losses on projects are charged to
earnings when identified. The Company primarily prices its projects on a time
and materials basis plus a percentage for its profit. Costs include standard
personnel billing rates, project implementation risk and overall technical
complexity of a project. Accordingly, there is no standard pricing for a
particular project.
The Company has also secured in excess of 250 maintenance contracts
which provide ongoing preventive maintenance for HVAC, plumbing,
refrigeration/cooling and electrical systems of commercial facilities and users.
A significant number of the maintenance contracts are for customers located in
Stavanger, Norway, the headquarters of SIMEX A/S. Because of the large number of
customers, no customer accounts for more than 5% of the Company's revenues.
The Company's revenues are comprised of its engineering and technical
services as well as from the products it manufactures and sells. In particular,
SIMEX A/S manufactures spiral ducts for installation of HVAC systems as well as
for the concrete post-tensioning projects. The SIMDUCT system has a large
potential market due to the Company's production technologies and many years of
experience. In addition, through the subsidiaries that have been acquired, other
products are offered to existing customers as well as customers of SIMEX A/S.
Norwegian Cooling Industries designs and manufactures ice machines, cooling
systems and products utilized in commercial refrigeration. Weld Tech provides
welding services to many of the customers of SIMEX A/S as well as its existing
customers. Vest Norge Doors manufactures very large and complex specialty doors
for off-shore oil platforms, helicopter hangers, and other manufacturing
facilities.
Historically, a majority of the Company's revenues have been derived
from the sale of the Company's products, traditional construction and
engineering services as well as maintenance contracts which include private and
public facilities such as hospitals and schools.
The Company's expenses include cost of revenues and selling, general
and administrative expenses. Costs of revenues include salaries, benefits and
related overhead expenses associated with the generation of revenues. Selling
expenses include promotion, new business generation expenses and the salary and
benefits costs of personnel in these functions. General and administrative
expenses include management, accounting, legal and human resources costs. In
accordance with Norwegian law, SIMEX A/S provides a defined benefit pension plan
for all of its employees. Moreover, expenses for salaries include paid vacations
for most of its employees for a period of a minimum of four weeks and one day
per year. Most employees of the Company vacation during the entire month of July
of each year and the last two weeks of December of each year.
In addition, the Company has budgeted approximately $60 per month in
1999 for expenses incurred by the United States holding company. This budgeted
amount includes overhead costs and direct operating costs as well as accrued
accounting costs associated with the audit of the Company's financial
statements and anticipated legal expenses. The Company's future success will
depend largely on its ability to secure contracts with general contractors for
the construction of new projects that require its products and services and its
ability to market its products and its maintenance services to its existing
customer base and to new customers. Future success will also depend on its
ability to attract, train and retain highly-skilled engineers as well as
technical, consulting and sales personnel. Competition for such personnel is
intense, and there is a shortage of personnel having the requisite skills to
meet the qualifications for the job descriptions.
19
<PAGE> 21
Historically, the Company has been able to attract and retain qualified
personnel. However, in order to expand its operations and to offer its products
and services to other markets, it will be dependent on its ability to attract
other qualified personnel.
The Company also requires capital expenditures to continue to upgrade
its manufacturing capabilities as well as its maintenance contracts. The Company
leases approximately 90 service vehicles and must maintain its fleet in good
working order and repair. In addition, it must continue to add to and replace
the fleet on a regular basis.
To reduce the overhead associated with the production facilities and office
space of the recently acquired companies, SIMEX A/S has entered into an
agreement to lease, on a long-term basis, a new facility that will accommodate
its production facility and office needs for all of its personnel on a combined
basis. The lease is for a term of twenty years and includes a right of first
refusal to purchase the facility during the lease term and a right to renew the
lease upon commercially reasonable terms at the end of the lease term. The
lease is conditioned upon the purchase by lessor of SIMEX A/S's current
facility in Stavanger, Norway. Other terms will not be finalized until the
Company takes occupancy, which is scheduled for September 1999.
The Company intends to implement a stock option plan in 1999 for its
employees, directors and consultants. In connection with the issuance of option
grants, it may incur non-cash stock compensation expenses. The amount is
unknown.
ACQUISITION PROGRAM
The Company has acquired five (5) businesses since April 1998 and
intends to continue acquiring similar businesses. The Company evaluates
acquisitions based on numerous quantitative and qualitative factors.
Quantitative factors include historical and projected revenues and
profitability, geographic and customer-based coverage and contract backlog.
Qualitative factors include strategic and cultural fit, management skills,
customer base and technical proficiency. The Company intends to continue to
expand the number of technical services that it can offer to its customer base.
If a business is capable of meeting its criteria, the Company intends to acquire
these businesses. With the Norwegian Cooling Industries and the Weld Tech
acquisitions, the Company's pro forma 1998 revenues were approximately $30.7
million.
Most of the consideration paid by the Company for the 1998 acquisitions
has been in the form of cash and common stock. The Company anticipates that
common stock and options or warrants to acquire common stock will continue to
constitute much of the consideration used to make future acquisitions. The
Company's acquisition program will result in additional ownership dilution to
its existing investors.
All of the Company's acquisitions have been accounted for using the
purchase method. The results of operations of the acquired entities are
consolidated with those of the Company from the date of the acquisition. For
each acquisition, a portion of the purchase price is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on
their respective fair market values as of the acquisition date. A portion of
the purchase price in excess of tangible and identifiable intangible assets and
liabilities assumed is allocated to goodwill and amortized on a straight-line
basis over the estimated period of benefit, which is primarily twenty (20)
years. The Company elected to amoritize the goodwill over a 20 year period
because the Company acquired established companies that have been in business
for many years and operate in traditional machining, welding and service
industries. Since these businesses are established and operate in traditional
industries, the Company believes that the future economic benefit period to the
Company is at least 20 years. For the year ended December 31, 1998,
amortization expense was $128,000. The
20
<PAGE> 22
Company expects additional acquisition-related amortization expense as a result
of its acquisition program.
The Company believes that its acquisitions have contributed to its
growth by rapidly expanding its customer base, employee base, geographic
coverage, industry expertise and technical skills. Our acquisitions may be
summarized as follows:
Norwegian Cooling Industries. From the time of acquisition forward,
1998 revenues for Norwegian Cooling Industries were approximately $7,100,000.
The Company paid $2.7 million in cash for the outstanding stock of Norwegian
Cooling Industries.
Weld Tech A/S. From the time of acquisition forward, 1998 revenues for
Weld Tech were approximately $1 million. The Company paid $1.3 million in cash
plus 450,000 shares of the Company's common stock and an option to acquire an
additional 200,000 shares to complete this acquisition.
Hordaror A/S. From the time of acquisition forward, 1998 revenues for
Hordaror were approximately $51,000. The Company paid $ 104,000 in cash
plus 13,513 shares of the Company's common stock to complete this acquisition.
Vest Norge Doors A/S. From the time of acquisition forward, 1998
revenues for Vest Norge Doors were $71,000. The Company paid $135,000 in cash
plus 38,000 shares of the Company's common stock to complete this acquisition.
OIN Sprinkler A/S. From the time of acquisition forward, 1998 revenues
for the sprinkler division were approximately $200,000. The Company paid $60,000
in cash plus 22,400 shares of the Company's common stock to complete the
acquisition of OIN Sprinkler's assets.
In addition, the Company believes that the formation of its wholly
owned subsidiary, SIMEX Energy Services, Inc. ("SIMEX Energy") will contribute
to the Company's growth in the United States. SIMEX Energy provides services and
designs products which reduce demand for electricity and minimize electrical
usage. The principal market for SIMEX Energy is in the southeastern United
States.
21
<PAGE> 23
RESULTS OF OPERATIONS. COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 AND
SIX MONTHS ENDED JUNE 30, 1998.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS DATA SIX MONTHS ENDED PERCENTAGE
(IN THOUSANDS) JUNE 30, OF REVENUES
1999 1998 1999 1998
=================================================================================================
<S> <C> <C> <C> <C>
Revenues $16,174 10,293 100.0% 100.0
Cost of revenues 13,107 8,199 81.0 79.7
------- ------ ------ ------
Gross profit 3,067 2,094 19.0 20.3
Selling, general and administrative expenses 2,928 1,384 18.1 13.4
------- ------ ------ ------
Operating income 139 710 0.9 6.9
Other income (expense):
Interest income 156 9 1.0 --
Interest expense (415) (87) (2.6) (0.8)
Other (130) -- (0.8) --
------- ------ ------ ------
Total other expense (389) (78) (2.4) (0.8)
------- ------ ------ ------
Income (loss) before income taxes (250) 632 (1.5) 6.1
Income taxes 117 217 0.7 2.1
------- ------ ------ ------
Net income (loss) $ (367) 415 (2.2)% 4.0
======= ====== ====== ======
</TABLE>
REVENUES (IN THOUSANDS). Revenues during the six months ended June 30,
1999 were $16,174, compared to $10,293 during the six months ended June 30,
1998. The increase in net sales in the amount of $5,881, was primarily due to
several business acquisitions which occurred on or after May 1998 and therefore
only partial operating results of the acquired businesses were included in the
six months ended June 30, 1998. The increase in revenues for the six months
ended June 30, 1999 which is attributable to the acquired businesses was $4,379,
and the increase attributable to the existing operations was $1,502.
COST OF REVENUES. In the six months ended June 30, 1999, cost of
revenues was $13,107, which represented 81% of net sales. During the six months
ended June 30, 1998, cost of goods sold was $8,199, which represented 81% of net
sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses during the six months ended June 30, 1999 were $2,928,
which represented 18% of net sales. During the six months ended June 30, 1998,
general and administrative expenses were $1,384, which represented 13% of net
sales. The increase in general and administrative expenses is the result of
several business acquisitions which occurred on or after May 1998 and the
expenses related to the Company's Atlanta, Georgia executive offices. A
significant portion of the increased expenses related to legal, accounting and
other professional fees, incurred in both the United States and Norway, related
to the filing of the Company's registration statement.
OTHER INCOME (EXPENSE). Other income (expense) decreased $(311)
during the six months ended June 30, 1999 as compared to the six months ended
June 30, 1998. This decrease primarily results from increased interest costs
related to increased borrowings in 1999 to finance the Company's growth. The
Company intends to repay a portion of its indebtedness during 1999.
NET INCOME (LOSS). During the six months ended June 30, 1999, the
Company had net loss of $(367) or $(0.03) per weighted-average diluted share.
During the six months ended June 30, 1998, the Company reported a net income of
$415 or $0.04 per weighted-average diluted share. The loss for the six months
ended June 30, 1999, was primarily due to increased expenses related to the
Company's United States operations and losses in the Company's service segment
as a result of increased cost of sales.
22
<PAGE> 24
ANNUAL HISTORICAL RESULTS OF OPERATIONS, YEAR ENDED DECEMBER 31, 1998
COMPARED TO YEAR ENDED DECEMBER 31, 1997.
<TABLE>
<CAPTION>
CONSOLIDATED YEARS ENDED PERCENTAGE
STATEMENT OF OPERATIONS DATA DECEMBER 31, OF REVENUES
(IN THOUSANDS)
1998 1997 1998 1997
-------- ------- ------ ------
====================================================================================================
<S> <C> <C> <C> <C>
Revenues $ 24,403 13,740 100.0% 100.0
Cost of revenues 20,757 12,418 85.1 90.4
-------- ------- ------ ------
Gross profit 3,646 1,322 14.9 9.6
Selling, general and administrative expenses 2,245 765 9.2 5.5
-------- ------- ------ ------
Operating income 1,401 557 5.7 4.1
-------- ------- ------ ------
Other income (expense):
Interest income 105 31 .5 .2
Interest expense (385) (207) (1.6) (1.5)
Other 7 -- -- --
-------- ------- ------ ------
Total other expense (273) (176) (1.1) (1.3)
-------- ------- ------ ------
Income before income taxes 1,128 381 4.6 2.8
Income taxes 377 168 1.5 1.2
-------- ------- ------ ------
Net income $ 751 213 3.1% 1.6
======== ======= ====== ======
</TABLE>
The following discussion relates to the Company's actual operating
results for the periods noted. These operating results include the operations of
the companies acquired by the Company during the periods referenced from the
date of acquisition. As a result, the Company believes the operating results for
the year ending December 31, 1998 are not comparable to the year ended December
31, 1997.
23
<PAGE> 25
REVENUES (IN THOUSANDS). Revenues increased $10,663 or 78% to $24,403
for the year ended December 31, 1998, from $13,740 for the year ended December
31, 1997. The Company's acquisition program contributed $6,872 to this increase
for the year ended December 31, 1998, and the development and growth of the
construction segment contributed $1,441 for this increase for the year ended
December 31, 1998. The remainder of the increase for the year ended December
31, 1998 was attributable to, among other things, the increase in client
engagements.
COST OF REVENUES. Cost of revenues increased $8,339 or 67% to $20,757
for the year ended December 31, 1998 from $12,418 for the year ended December
31, 1997. As a percentage of revenues, cost of revenues decreased from 90.4%
for the year ended December 31, 1997 to 85.1% for the year ended December 31,
1998. The increase in dollar amounts was primarily attributable to the
integration of the companies acquired by the Company since May 1998, and, to a
lesser extent, increased costs associated with the increased revenues from
existing operations. An increase of $6,164 in the cost of revenues for the year
ended December 31, 1998 was attributable to the acquisitions consummated by the
Company in 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $1,480 or 193% to $2,245 for the year ended
December 31, 1998 from $765 for the year ended December 31, 1997. As a
percentage of revenues, selling, general and administrative expenses increased
from 5.5% for the year ended December 31, 1997 to 9.2% for the year ended
December 31, 1998. This increase in dollar and percentage terms was primarily
attributable to the acquisitions and increase in the number of employees at the
end of 1998. In addition, with the reorganization of the Company, certain
expenses for office overhead and related expenses in the United States were
incurred. An increase of $877 for the year ended December 31, 1998 was
attributable to the consummation of the acquisitions by the Company in 1998.
The remainder of the increase is primarily attributable to the expenses
associated with the integration costs and the expansion of the management
infrastructure to support the growth in the Company's operations.
OTHER INCOME (EXPENSE). Other income (expense) increased by $97 for
the year ended December 31, 1998. An increase of $73 in other expenses for the
year ended December 31, 1998 was attributable to the consummation of the
acquisitions by the Company in 1998.
Net income for 1998 increased by $538 to $751 for the year ended
December 31, 1998 from $213 for the year ended December 31, 1997. This increase
was attributable to the increase in net income from the acquisitions as well as
the increase in revenues generated by SIMEX A/S.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (IN THOUSANDS).
Historically, the Company has financed its operations primarily with cash flows
from operations and proceeds from its available credit lines. Cash flows
provided by operating activities for the year ended December 31, 1997
aggregated $836, while cash used in operating activities for the year ended
December 31, 1998 aggregated $(691). For the six
24
<PAGE> 26
months ended June 30, 1998, cash used in operating activities was $(272); for
the six months ended June 30, 1999, cash flows used in operating activities
were $(1,507). The impact on cash flows for the year ended December 31, 1998
and for the six months ended June 30, 1999 were primarily due to the
acquisitions.
With the reorganization, the Company raised additional capital during
the six months ended June 30, 1998 through the sale of common and preferred
stock, the net proceeds of which aggregated $2,506.
Cash used in investing activities which was related to additions to
property and equipment and for acquisitions for business, net of cash acquired,
for the years ended December 31, 1997 and 1998 aggregated $(516) and $(5,265),
respectively. For the six months ended June 30, 1998 and 1999, cash used in
investing activities was $(2,759) and $(673), respectively. The significantly
higher additions to property, plant and equipment for the six months ended June
30, 1999 and the year ended December 31, 1998 resulted from the acquisition of
businesses and integration of these businesses into the Company.
Cash flows used in financing activities for the year ended December 31,
1997 were $(243); for the year ended December 31, 1998, cash flows provided by
financing activities were $6,686. For the six months ended June 30, 1999, cash
flows provided by financing activities were $1,758; for the six months ended
June 30, 1998, cash flows provided by financing activities were $3,323. While
cash flows provided by financing activities for the year ended December 31, 1998
were $6,686, net borrowings by the Company under its line of credit provided
$203 for year ended December 31, 1998 and $159 and $1,890 for the six months
ended June 30, 1998 and 1999, respectively; for the year ended December 31,
1997, net cash repayments under the Company's line of credit aggregated $(273).
During 1997, the Company borrowed $30. During 1998, the Company borrowed $5,247
and repaid $2,598 under the Company's line of credit.
Cash flows provided by the issuance of preferred and common stock for
the year ending December 31, 1998, net of dividends, was $3,834 and $0 for the
year ending December 31, 1997. The effect of exchange rate changes and cash and
cash equivalents for the year ending December 31, 1997 was $(23), and for the
year ending December 31, 1998 was $(38). For the six months ended June 30, 1998,
the effective exchange rate changes and cash and cash equivalents was $(186) and
for six months ended June 30, 1999 was $(178).
CAPITAL EXPENDITURES. For the year ended December 31, 1998, the Company
had outstanding operating lease commitments of approximately $623. For the six
months ended June 30, 1999, the Company had an outstanding note payable in
connection with the Company's revolving line of credit to Spare Bank in the
principal amount of $3,613. For the six months ended June 30, 1999, the Company
had a note payable to Spare Bank of approximately $5,732 secured by real
property, furniture, fixtures and equipment of which $2,611 was due in less than
one year.
In addition, SIMEX A/S has entered into a twenty year lease commencing
on September 1, 1999 with Tjelta Eiendom for the lease of new headquarters
facility in Stavanger, Norway which represents a significant commitment by the
Company for a capital expenditure. Under the terms of the lease, SIMEX A/S shall
construct tenant improvements to the facility of approximately $1,500. At the
end of the lease, SIMEX A/S will receive from the lessor a payment of
approximately $2,300 for such improvements. The parties have negotiated variable
rental payments under the lease which are based upon the interest payable by the
lessor on the loan for the building and the amount invested by SIMEX A/S for the
production facilities and the office facilities. These rental payments are
approximately $687 for the first year of the lease and $455 for the last year of
the lease. The lease between Tjelta Eiendom and SIMEX A/S is conditioned upon
Tjelta Eiendom purchasing SIMEX A/S's existing headquarters facility in
Stavanger, Norway. The parties are negotiating the terms and conditions of this
purchase by Tjelta Eiendom. Proceeds from the sale of the real property will be
sufficient to retire all of the debt on the real and personal property and leave
approximately $500 to be used working capital needs.
Under the Company's revolving line of credit which is secured by real
property, furniture, fixtures and equipment and accounts receivable, the Company
had drawn $3,613 as of June 30, 1999. The revolving line of credit bears
interest at NIBOR (Norwegian) plus .75% (8.97% at December 31, 1998). The
revolving line of credit is payable upon demand and is secured by real property,
furniture, fixtures and equipment and accounts receivable of the Company.
The Company believes that its available cash resources and credit
facilities, combined with its cash flows from operations will be sufficient to
meet its anticipated working capital and capital expenditure requirements for at
least the next twelve months. However, the Company will need to raise
significant additional equity in order to increase its line of credit with its
Bank to support growth, respond to competitive pressures, acquire complimentary
businesses or technologies or to take advantage of unanticipated opportunities.
SEE RISK FACTORS - LIMITED CAPITAL/NEED FOR ADDITIONAL CAPITAL.
SEASONALITY
Revenues of the Company generally reflect the weather-related
construction periods as well as the extended vacation terms in Norway in July
and December of each year.
25
<PAGE> 27
YEAR 2000 RISK
In the summer of 1998, the Company established an internal task
force to assess the impact that potential Year 2000 problems may have on
company-wide operations. The task force determined that much of the computer
systems and software used for order entry, billing, inventory management, job
costing and other accounting functions would either need to be upgraded or
replaced in order to be Year 2000 ready. The Company is in the process of
making the necessary upgrades and replacements to its computer systems and
software to insure Year 2000 readiness. During the past year, the Company has
made substantial capital investments to replace a majority of its computer
systems with computer systems and software which are Year 2000 ready and expects
to replace or upgrade non-compliant critical computer systems and software
before the end of the third quarter of 1999. To date, the Company has incurred
expenses of approximately $510,000 in connection with such upgrades and
replacements of computer systems and software. Although the Company is still in
the process of determining the most cost-effective means of upgrading or
replacing its remaining non-year 2000 ready computer systems and software, the
Company anticipates that these additional expenses will not be excessive. In
addition, the Company has determined that the majority of its critical
equipment, such as electrical systems and production machinery, is not
controlled or regulated by embedded computer chips. Based on the Company's
internal review of its critical equipment and the results of testing to date,
the Company believes that the Company would be able to operate its critical
equipment on a manual basis for some period of time without experiencing a
significant negative impact on its operations.
However, the Company believes that its largest Year 2000 risk is the
Company's dependence upon third parties. The failure of third parties to
achieve Year 2000 readiness could have a material adverse effect on the
Company's results from operations and could damage its relationships with its
customers. The Company has identified significant suppliers whose Year 2000
readiness could affect the Company and has inquired about the status of their
Year 2000 readiness. Despite the positive responses received from these
significant suppliers, the Company is unable to verify independently these
assurances. The Company also cannot provide assurances that all significant
third parties, such as public utility companies, will achieve Year 2000
readiness in a timely manner. For example, a failure outside the Company's
control, such as a prolonged loss of electrical or telephone service, could
materially impact its operations and may prevent the Company from operating its
critical equipment on a manual basis.
In the event potential problems arise from the failure of the
Company's computer systems or critical equipment, the Company has adopted
limited contingency plans. If a problem occurs in the Company's critical
equipment, the Company has arranged for employees to be available on December
31, 1999 and January 1, 2000 in order to operate manually the Company's
critical equipment. Although the Company has adopted limited contingency plans,
the Company cannot make assurances that the Company will not be adversely
affected by the failure of its computer systems and critical equipment to
operate correctly after December 31, 1999.
26
<PAGE> 28
ITEM 3. DESCRIPTION OF PROPERTY. The following table shows the
location, general character, square footage, annual rent and lease expiration
date of the principal operating facilities owned or leased by the Company as of
June 30, 1999. The executive offices are located in Atlanta, Georgia, which is a
leased facility occupying approximately 1,643 square feet. The Company considers
its properties to be in generally good condition and well-maintained, and are
generally suitable and adequate to carry on the Company's business.
<TABLE>
<CAPTION>
SQUARE
LOCATION CITY GENERAL CHARACTER FEET ANNUAL RENT LEASE EXPIRATION
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
Suite 995, 3475 Lenox Atlanta, Principal Executive Office 1,643 $29,830 January 31, 2001
Road, NE Georgia
Godesetdalen 24 Forus Production Facility and 23,606 Owned, subject to
(Stavanger), European Administrative Office mortgage
Norway indebtedness.
Fabrikkveien 28 Forus Production Facility, 12,600 Owned, subject to
(Stavanger), Norwegian Cooling Industries. mortgage
Norway indebtedness.
Fjosangerveien 70A Bergen, Norway Production Facility and 10,730 $55,000 May 31, 2004
Satellite Administrative
Office
Gregorius Dagssons GT Skien (Oslo), Telefrost Kjoleindustri A/S 5,365 $47,000 April 2003
207 Norway
</TABLE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of June 30, 1999 certain information
regarding beneficial ownership of common stock by:
- Each person known to the Company who owns beneficially more than five
percent (5%) of the common stock;
- The directors;
- The executive officers; and
- All executive officers and directors as a group.
27
<PAGE> 29
Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission. In computing the number
of shares beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to options held by that person that are
currently exercisable or exercisable within sixty (60) days of the date of this
Registration Statement are deemed outstanding. These shares, however are not
deemed outstanding for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each shareholder named in the table has sole
voting and investment power with respect to the shares set forth opposite such
shareholder's name. Unless otherwise indicated, the address for the following
shareholders is c/o SIMEX Technologies, Inc.
<TABLE>
<CAPTION>
COMMON
STOCK BENEFICIALLY OWNED
NAME AND ADDRESS OF BENEFICIAL OWNER (1) NO. OF SHARES % OF CLASS
==================================================================================================
<S> <C> <C>
MR. ELMER LUNDE 5,265,000 41.06%
Roaldsoyveien 44
N-4085 Hundvag
Norway
MR. KNUT ROSVOLD 742,500 5.79%
Eiganesveien 57
4009 Stavanger
Norway
MR. OYSTEIN FRAFJORD 742,500 5.79%
Slettmyrhagen 14
N-4033 Forus
Norway
LANCER OFFSHORE, INC.(2) 1,919,474 13.85%
Suite 2006
375 Park Avenue
New York, New York 10152
MR. KJELL INGE JAGELID(3) 117,500 .09%
140 South Falcon Bluff
Alpharetta, Georgia 30022
MR. WARREN L. TRAVER(4) 117,500 .09%
21 Middleton Road
Savannah, Georgia 31411
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A 6,985,000 54%
GROUP (3 Persons)
</TABLE>
(1) Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of common stock beneficially owned by them. Under the rules of
the Securities and Exchange Commission, a person is
28
<PAGE> 30
deemed to be a "beneficial" owner of securities if he or she has or
shares the power to vote or direct the voting of such securities or the
power to direct the disposition of such securities. A person is deemed
to be the beneficial owner of any securities of which that person has
the right to acquire beneficial ownership within 60 days. More than one
person may be deemed to be a beneficial owner of the same securities.
(2) Lancer Offshore, Inc. owns 1,177,500 shares of common stock which
represents 9.12% of the outstanding shares. Lancer Offshore, Inc. is
an affiliate of (a) Lancer Partners, L.P. which owns 571,000 shares of
common stock which represents 4.6% of the outstanding shares, (b)
Lancer Voyager Fund which owns 117,500 shares of common stock which
represents .09% of the outstanding shares and (c) Michael Lauer who
owns 53,474 shares of common stock which represents .04% of the
outstanding shares. These affiliated entities own beneficially 13.85%
of the outstanding shares of the Company.
(3) Mr. Kjell Inge Jagelid owns 25,000 shares of common stock in his own
name and is Trustee of the Jagelid Family Trust of which he may be
deemed to be the "beneficial" owner of 92,500 shares of common stock by
virtue of his family relationships.
(4) Mr. Warren L. Traver is the Trustee of the Traver Family Trust of which
he may be deemed to be the "beneficial" owner of 75,000 shares of
common stock and is the Trustee of the Stewart Wigton Traver Trust of
which he may be deemed to be the beneficial owner of 42,500 shares of
common stock by virtue of his family relationships.
29
<PAGE> 31
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Our executive officers, directors and certain key employees, their ages as of
June 30, 1999 and their position(s) with SIMEX are as follows:
NAME AGE POSITION
MR. ELMER LUNDE 43 Director and Chairman of the Board since
April 28, 1998 and President and Treasurer
of the Company since July 1, 1999. Mr. Lunde
is also the founder of SIMEX A/S, the
principal subsidiary of the Company. Since
1980 and prior to his appointment as
Director, Mr. Lunde served as director of
SIMEX A/S and has been involved in the
development and implementation of all
aspects of that business. Mr. Lunde serves
as Chief Financial Officer of Simex, A/S.
Mr. Lunde has an extensive background in
HVAC, having performed an extensive
apprenticeship in these disciplines. Mr.
Lunde is a resident of Stavanger, Norway.
MR. WARREN L. TRAVER 53 Director since April 28, 1998. Mr. Traver
also serves as Executive Vice-President and
General Counsel of the Company. Mr. Traver
has been instrumental in structuring the
Company and has become part of the
management team with responsibilities
including mergers, acquisitions and legal
matters. In addition to serving as a
director of the Company, Mr. Traver has been
engaged in the private practice of law with
emphasis in corporate finance and securities
regulation since 1970. Mr. Traver received a
B.A. degree from the University of the South
and a J.D. from Mercer University. Mr.
Traver is a member of the State Bar of
Georgia and the Florida Bar.
MR. KJELL JAGELID 55 Director from April 28, 1998 until June 30,
1999. Mr. Jagelid has also served as
President and Treasurer of the Company from
April 28, 1998 until June 30, 1999. Mr.
Jagelid currently serves as President of
SIMEX Energy and serves as a consultant to
the Company. Prior to being elected as
director and officer of the Company, Mr.
Jagelid worked as Manager of Special
Projects for SIMEX A/S and as an independent
business consultant. He was actively
involved in these posts since 1991. From
1991 to 1993, Mr. Jagelid also owned and
operated Watkins Industries, Inc., a
precision parts manufacturer for the
aerospace and automotive industries. Mr.
Jagelid is also responsible for the
invention of the J.M. Matic spiral duct
machine for HVAC and post-tensioning ducts
used in heavy construction currently
utilized by SIMEX A/S. Mr. Jagelid has been
associated with several large engineering
and construction firms involving concrete
construction for bridges, oil and gas
drilling platforms and other civil
engineering projects. Mr. Jagelid holds
approximately fifteen patents in the
manufacturing and construction industries.
He received a Bachelor's Degree in Finance,
PHF, Goteborg, Sweden and a Masters Degree
in Civil and Mechanical Engineering, GTI,
Sweden. Mr. Jagelid is fluent in English and
the Scandinavian languages.
30
<PAGE> 32
MR. C. MICKLE MOYE 63 Director since May 1999. Mr. Moye has served
as the President and Chief Executive Officer
of three bank and trust companies over the
past 15 years. In December 1998, Mr. Moye
retired as President and CEO of Security
State Bank, Canton, Georgia after 10 years
of employment. Mr. Moye holds a B.S. degree
in Industrial Management from the Georgia
Institute of Technology and has pursued
post-graduate studies at the Harvard
Business School.
MR. JOHN P. O'BRIEN 32 Secretary. Mr. O'Brien acts as Corporate
Secretary and consultant to the Company. He
began working with the Company in February
1999. Prior to his engagement at the
Company, Mr. O'Brien worked as a consultant
to numerous businesses and business
organizations on matters related to
technology, internet communications
strategy, and Latin American public policy
issues. Mr. O'Brien holds a B.A. degree from
Baylor University, a J.D. degree from South
Texas College of Law in Houston, Texas, and
a M.A. in Latin American Studies from the
University of Texas at Austin. He is a
member of the Georgia and Texas state bar
associations. Mr. O'Brien also speaks
Spanish and French.
MR. KNUT T. ROSVOLD 55 President and Director of SIMEX A/S. Mr.
Rosvold is an HVAC and plumbing engineer.
Prior to beginning his employment at SIMEX
A/S in 1988, Mr. Rosvold worked as the
manager of the HVAC Division in Stavanger,
Norway for ABB. Mr. Rosvold has been General
Manager of SIMEX A/S since 1988.
MR. BJORN HILLEROY OKLAND 36 Secretary and Director of Finance of SIMEX
A/S. Mr. Okland has been the Director of
Finance at SIMEX A/S since the acquisition
of Norwegian Cooling Industries in 1998.
Prior to the acquisition, he was employed
for three years as the Director of Finance
for that company. From 1993 to 1996, Mr.
Okland served as the dean of the IHM
Business School in Bergen, Norway. Mr.
Okland holds the equivalent of a Bachelor of
Business Administration and a Masters degree
in Science. He received the latter from the
University of Surrey in England.
MR. FRODE LASTAD 42 General Manger, Norwegian Cooling
Industries. Mr. Lastad has served as General
Manager since June of 1988. He graduated
from the Norwegian Technical University with
a civil engineering degree in refrigeration
in 1982. Mr. Lastad has been employed by
Norwegian Cooling Industries since 1984.
MR. OYSTEIN FRAFJORD 34 Manager, Ventilation Division, and Director
of SIMEX A/S. Mr. Frafjord began his
employment at SIMEX A/S in 1981 as a
blacksmith apprentice. In 1988, Mr. Frafjord
was promoted to manager for the Ventilation
Division. In this capacity, he is
responsible for sales, planning, and project
management. Mr. Frafjord has five years of
technical training in metal technology.
31
<PAGE> 33
BOARD COMPOSITION
Each member of the Board of Directors is elected on an annual basis by
the shareholders. At each annual meeting of shareholders, directors are elected
for the next year. Each director serves for a one (1) year term.
Each officer is elected by, and serves at the discretion of, the Board
of Directors. There are no family relationships among any of the directors or
executive officers.
COMMITTEES OF THE BOARD
The Board of Directors has not created any committees. However, prior
to filing an application for listing of the common stock with any stock
exchange, the Board of Directors will establish an Audit committee and a
Compensation committee. The Audit Committee will review, act on and report to
the Board of Directors with respect to various auditing and accounting matters,
including the selection of our independent auditors, the scope of the annual
audits, fees to be paid to the independent auditors, the performance of our
independent auditors and our accounting practices.
The Compensation Committee will establish salaries, incentives and
other forms of compensation for our officers and other employees and administers
our incentive compensation and benefit plans.
DIRECTOR COMPENSATION
Outside Directors receive $1,000 per meeting. Other Directors receive
no cash remuneration for serving on the Board of Directors but are reimbursed
for reasonable expenses incurred by them in attending Board and Committee
meetings.
EMPLOYEE CONTRACTS
The Company has not entered into any employment agreements with its
officers or key employees.
LOCK-UP AGREEMENTS
As of April 20, 1998, the Company and the Chairman of the Board of
Directors, Mr. Elmer Lunde, the President of SIMEX A/S, Mr. Knut Rosvold, and
Mr. Oystein Frafjord, Director of SIMEX A/S agreed to enter into lock-up
agreements expiring April 20, 2001 in order to limit the number of shares that
may be sold during any twelve (12) month period to 5% of the number of shares
owned. No shares have been disposed of by any shareholder/officer since the date
of the reorganization. In addition, the Company entered into a lock-up agreement
with Weld Tech A/S which allows Weld Tech A/S to sell 90,000 shares of common
stock immediately, 180,000 shares of common stock after June 30, 1999 and
180,000 shares of common stock after January 1, 2000. The holders of these
shares must also comply with the restrictions set forth under Rule 144A of the
Securities and Exchange Act of 1933 prior to reselling these shares.
32
<PAGE> 34
ITEM 6. EXECUTIVE COMPENSATION. No executive officer, director or other
individual received compensation of more than $100,000 for the prior fiscal
year.
COMPENSATION TABLES
The compensation paid in 1998 to the Chief Executive Officer of the
Company and to SIMEX A/S is set forth in the table below. No other executive
officers or any officer of a subsidiary had total compensation that exceeded
$100,000.
<TABLE>
<CAPTION>
1998 SUMMARY COMPENSATION TABLE
THE COMPANY
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
OTHER ANNUAL RESTRICTED OPTIONS LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION STOCK SARS PAYOUT COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) AWARDS (#) ($) ($)
======================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kjell I. Jagelid(1) 1998 0 0 0 0 0 0 0
Elmer Lunde(2) 1998 80,000 0 0 0 0 0 0
</TABLE>
There were no options granted to the Executive Officers of the Company
and its subsidiaries during the year ending December 31, 1998. The Company has
no stock appreciation rights ("SARs") outstanding.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
THE REORGANIZATION. The Company was originally organized under the laws
of the State of Utah on January 27, 1983 under the name Medical Technologies,
Inc. The Company subsequently changed its name several times and in January
1996, changed the state of incorporation to Nevada and the name to Maile
International, Inc. ("Maile"). On April 28, 1998, the shareholders of SIMEX A/S,
the Company's principal operating subsidiary in Norway, exchanged all of its
shares of stock for 6,000,000 shares representing approximately sixty percent
(60%) of all of the outstanding stock of Maile prior to the receipt of 1,500,000
shares placed in escrow. At the closing of the exchange of shares, Maile changed
its name to SIMEX/NK Technologies, Inc. Simultaneously with the exchange of the
shares, 357,142 common stock and 1,130,000 shares of its 8% Series A Convertible
Preferred Stock were sold in a private offering. The price paid for the common
stock was $1.40 per share for the common stock and $1.90 per share for the
Preferred Stock. The preferred stock was convertible into shares of common stock
on a one-for-one basis after 90 days. The preferred stock accrued dividends of
$47,000 which were
- -----------
(1) Mr. Jagelid is presently compensated as a consultant to the Company. See
Certain Relationships and Related Transactions.
(2) Mr. Lunde is a participant in the Defined Benefit Pension Plan of the
Company's subsidiary, SIMEX A/S.
33
<PAGE> 35
paid in connection with the conversion of all of the outstanding preferred stock
into common stock in August 1998.
The common stock issued in the private placement and the common stock
converted from the preferred stock are subject to registration rights of the
holders.
At the time of the exchange, the persons serving as the management of
SIMEX A/S became the management of the Company. The remaining 2,512,857 shares
of common stock are owned by approximately 200 shareholders.
In April 1999, the Company reincorporated in the State of Delaware and
changed its name to SIMEX Technologies, Inc.
THE ESCROW SHARES. In addition to the 6,000,000 shares issued to the
original SIMEX A/S shareholders, 1,500,000 shares of stock were deposited into
escrow pending release at the earlier of (i) the Company achieving earnings
before interest, income taxes, depreciation and amortization ("EBITDA") of at
least $1,800,000 after certain unusual items such as currency exchange
fluctuations, excess depreciation and unusual losses during the year ended
December 31, 1998 or 1999 or (ii) five (5) years from the date of the depositing
of the shares into escrow. The shares were released in May 1999 to the original
SIMEX A/S shareholders.
THE PRIVATE PLACEMENT. In July 1998, the Company authorized the
issuance of an additional 1,200,000 shares. The Company sold 789,474 shares to a
group of four (4) investors designated by the Company as the Lauer Group for a
purchase price of $1.90 per share. The Lauer Group has certain registration
rights with respect to the shares of the common stock. In September and December
1998, the Company issued 10,000 shares at $3.25 per share and 4,600 shares at
$3.25 per share, respectively. Proceeds to the Company were $47,000. The
purchases were not related to the Lauer Group.
THE ACQUISITIONS. The Company acquired five (5) companies in 1998 and
in connection therewith paid for the acquisitions in cash or a combination of
cash and issuance of common stock. A description of the acquisitions are as
follows:
- In May 1998, the Company's subsidiary, SIMEX A/S, acquired the
outstanding shares of Norwegian Cooling Industries. In
connection with that transaction, the Company paid the
shareholders of Norwegian Cooling Industries $2.7 million in
cash.
- In September 1998, SIMEX A/S purchased the assets of OIN
Srinklers A/S, including its inventory and accounts. In
connection with that transaction, the Company paid
approximately $60,000 plus 22,400 shares of the Company's
common stock in exchange for these assets.
- In November 1998, SIMEX A/S acquired all of the outstanding
shares of Weld Tech A/S. In connection with that transaction,
the Company paid the shareholders approximately $1.3 million
cash and issued 450,000 shares of common stock with an option
to acquire an additional 200,000 shares at a par of $2.75 per
share. The option expires in two (2) years.
34
<PAGE> 36
- In November 1998, SIMEX A/S acquired all of the outstanding
share of Hordaror A/S. In connection with that transaction,
the Company paid the shareholders approximately $104,000 cash
and issued 13,513 shares of common stock.
- In November 1998, SIMEX A/S acquired all of the outstanding
share of Vest Norge Doors. In connection with that
transaction, the Company paid the shareholders approximately
$135,000 cash and issued 38,000 shares of common stock.
LOANS TO SHAREHOLDERS. The Company has loaned money to Elmer Lunde,
Kjell Jagelid, Knut Rosvold and Oystein Frafjord. The loans are payable upon
the earlier to occur of (a) a demand for payment by the Company or (b) August
1, 2003. The loans carry interest at the United States prime rate published
from time to time by the Wall Street Journal and require quarterly payments
of interest. The purpose of these loans was to pay personal income tax
(Norwegian) on the value of the stock received in the reorganization.
FUTURE TRANSACTIONS. All future transactions, including loans between
the Company and its officers, directors, principal shareholders and their
affiliates, are required to be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested outside directors on
the Board and will be on terms no less favorable than could be obtained from
unaffiliated third parties.
CONSULTANTS. In September of 1997, SIMEX A/S engaged Mr. Kjell Inge
Jagelid and Mr. Warren L. Traver to assist the Company in securing capital in
the United States. Mr. Traver receives $10,000 a month as compensation for his
services as a consultant for the Company, and Mr. Jagelid receives $5,000 a
month as compensation for his services as a consultant for the Company. Prior
to June 30, 1999, Mr. Jagelid received $10,000 a month for compensation for his
services as a consultant for the Company. The Board of Directors elected to pay
this amount of compensation to Mr. Jagelid and Mr. Traver because the Company
does not intend to employ Mr. Jagelid and Mr. Traver on a long-term basis.
Messieurs Jagelid and Traver also beneficially own shares of the Company. See
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
INVESTMENTS. In 1998, the Company acquired forty percent of the
outstanding common stock of two information technology companies, Jotronic Data
A/S ("Jotronic") and Unitronic Data A/S ("Unitronic"), which are located in
Stavanger, Norway. The purchase price paid by the Company for this investment
was approximately $253,800. Jotronic and Unitronic develop computer software
which the Company integrates into its systems in order to improve operating
efficiencies. In addition, Jotronic and Unitronic assist the Company in
maintaining and improving its electronic communication capabilities and its
computer network. The Company intends to consolidate Jotronic and Unitronic
into one company known as Unitron at the end of 1999.
35
<PAGE> 37
ITEM 8. DESCRIPTION OF SECURITIES. The authorized capital stock of the
Company consists of 50,000,000 shares of common stock $.001 par value, and
5,000,000 shares of preferred stock, $.001 par value. As of the date of this
Registration Statement, there are outstanding:
- 12,823,873 shares of common stock, held of record by
approximately 200 shareholders;
- Options to purchase an aggregate of 200,000 shares of common
stock at an exercise price of $2.75 per share. The options
must be exercised by June 30, 2000. The options expire on
November 17, 2000.
COMMON STOCK
The holders of common stock are entitled to one (1) vote per share on
all matters to be voted upon by the shareholders. Subject to preferences that
may be applicable to any outstanding preferred stock, the holders of common
stock are entitled to receive ratably such dividends, if any, that may be
declared from time to time by the Board of Directors out of funds legally
available therefor. In the event of our liquidation, dissolution or winding up,
the holders of common stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior distribution rights of
holders of preferred stock, if any. The common stock has no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock.
PREFERRED STOCK
The Company's Board of Directors has the authority to issue preferred
stock in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series, without further vote or action by the shareholders.
36
<PAGE> 38
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS.
(A) MARKET INFORMATION. Prior to the filing of this Form 10-SB
Registration Statement, the shares of stock have been traded in over-the-counter
market transactions.
The following is the range of high and low SALES PRICES for each
quarter for the two (2) years ended December 31, 1997 and 1998 and six months
ended June 30, 1999 is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1998 1999
QUARTER HIGH LOW HIGH LOW HIGH LOW
- -------------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
First N/A N/A .26 .26 3.50 2.00
Second N/A N/A 4.50 .26 6.13 2.00
Third N/A N/A 4.50 3.25
Fourth N/A N/A 6.25 3.00
</TABLE>
The quotation reflects inter-dealer prices without retail mark-up,
mark-down or commissions and may not represent actual transactions.
The shares may also be sold by one or more of the following methods,
without limitation, (a) block trades in which a broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker and dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions (which may
include long or short sales) and transactions in which a broker solicits
purchases; (d) "at the market" to or through market makers and into an existing
market for the shares; (e) in other ways not involving market makers or
established trading markets, including direct sales to purchasers or sales
effected through agents; (f) through transactions in options, swaps or other
derivatives (including transactions with broker-dealers or other financial
institutions that require the delivery by such broker-dealers or institutions of
the shares, which shares may be resold thereafter pursuant to this Prospectus);
or (g) any combination of the foregoing, or by any other legally available
means. In effecting sales, brokers or dealers engaged by a shareholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from a shareholder in amounts to be negotiated.
Such brokers and dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the 1933 Act in connection
with such sales.
37
<PAGE> 39
(B) HOLDERS. The approximate number of holders of the common stock of
Company is 200 as of June 30, 1999.
(C) DIVIDENDS. The Company has not paid any dividends on its common
shares in the past, and it is not expected to pay any dividends in the
foreseeable future.
ITEM 2. LEGAL PROCEEDINGS. There are no pending legal proceedings
incidental to the business of the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE. There have been no disagreements with independent auditors
nor any changes in the Company's independent auditors.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Other than the exchange of stock during the preceding three (3) years,
the Company has issued and sold or otherwise transferred the below listed
unregistered securities. These issuances were deemed exempt from registration
under the Securities Act in reliance on either (a) Section 4(2) of the
Securities Act, as transactions not involving any public offering, or (b) Rule
701 promulgated under the Securities Act. No underwriters were involved in
connection with the sales of securities referred to in this Part II Item 4.
1. On April 28, 1998, the Company issued and sold 1,130,000
shares of convertible preferred stock to four (4) investors in a private
placement for an aggregate of $2,147,000 in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act.
2. On April 28, 1998, the Company issued and sold 357,142 shares
of common stock to 15 investors in a private placement for an aggregate of
$500,000 in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
3. In August 1998, the Company issued and sold 789,474 shares of
common stock to four (4) investors in a private placement for an aggregate of
$1,500,000 in reliance on the exemption from registration provided by Section
4(2) of the Securities Act.
4. In September 1998 and December 1998, the Company issued and
sold 10,000 and 4,600 shares, respectively, of common stock to two (2) investors
in a private placement for an aggregate of $47,450 in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Section 145 of the General Business Act
of Delaware (the "DBCA") to indemnify its directors and officers to the extent
provided for in such statute. The Company's Certificate of Incorporation permit
indemnification of directors and officers to the fullest extent permitted by
law.
38
<PAGE> 40
The DBCA provides in part that a corporation may indemnify a director
or officer or other person who was, is, or is threatened to be made a named
defendant or respondent in a proceeding because the person is or was a director,
officer, employee or agent of the corporation, if it is determined that such
person (a) conducted himself in good faith; (b) reasonably believed, in the case
of conduct in his official capacity as a director or officer of the corporation,
that his conduct was in the corporation's best interests, and, in all other
cases, that his conduct was at least not opposed to the corporation's best
interests; and (c) in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful.
A corporation may indemnify a person under the DBCA against judgments,
penalties, (including excise and similar taxes), fines, settlements, and
reasonable expenses actually incurred by the person in connection with the
proceeding. If the person is found liable to the corporation or is found liable
on the basis that personal benefit was improperly received by the person, the
indemnification is limited to reasonable expenses actually incurred by the
person in connection with the proceeding, and shall not be made in respect of
any proceeding in which the person shall have been found liable for willful or
intentional misconduct in the performance of his duty to the corporation.
A corporation may also pay or reimburse expenses incurred by a person
in connection with his appearance as a witness or other participation in a
proceeding at a time when he is not a named defendant or respondent in the
proceeding.
The effect of these provisions is to eliminate the rights of the
Company and its shareholders (through shareholders' derivative suits on behalf
of the Company
39
<PAGE> 41
to recover monetary damages against an officer or director for breach of
fiduciary duty as an officer or director (including breaches resulting from
grossly negligent behavior), except in the situations described above. These
provisions will not limit the liability of directors or officers under the
federal securities laws of the United States. The foregoing summary of the
Company's Certificate of Incorporation, as amended, is qualified in its entirety
by reference to the relevant provisions thereof (filed as Exhibit 3.1).
40
<PAGE> 42
INDEX TO FINANCIAL STATEMENTS FOR THE COMPANY AND ITS SUBSIDIARIES
SIMEX TECHNOLOGIES, INC.
HISTORICAL:
Independent auditors' report
Consolidated balance sheets as of December 31, 1998 and June 30, 1999
(unaudited)
Consolidated statements of operations for the years ended December 31, 1998 and
1997 and the (unaudited) six months ended June 30, 1999 and 1998
Consolidated statements of shareholders' equity for the years ended December 31,
1998 and 1997 and the six months ended June 30, 1999 (unaudited)
Consolidated statements of cash flows for the years ended December 31, 1998 and
1997 and the (unaudited) six months ended June 30, 1999 and 1998
Notes to consolidated financial statements
PRO FORMA:
Unaudited pro forma consolidated financial information
Unaudited pro forma consolidated statement of operations for the year ended
December 31, 1998
Notes to unaudited pro forma consolidated statement of operations
NORSK KJOELEINDUSTRI A/S
Independent auditors' report
Consolidated statements of operations for the years ended December 31, 1997 and
1996 and the (unaudited) three months ended March 31, 1998 and 1997
Consolidated Statements of cash flows for the years ended December 31, 1997 and
1996 and the (unaudited) three months ended March 31, 1998 and 1997
Notes to consolidated financial statements
WELD TECH A/S
Independent auditors' report
Statement of profit and loss for the years ended December 31, 1997 and 1996 and
the (unaudited) nine months ended September 30, 1998 and 1997
Reconciliations between NGAAP and US GAAP for the years ended December 31, 1997
and 1996 and the (unaudited) nine months ended September 30, 1998 and 1997
Statement of cash flows for the year ended December 31, 1997 and 1996 and the
(unaudited) nine months ended September 30, 1998 and 1997
General accounting policies
41
<PAGE> 43
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
SIMEX Technologies, Inc.:
We have audited the accompanying consolidated balance sheet of SIMEX
Technologies, Inc. and subsidiaries as of December 31, 1998, and the related
consolidated statements of operations, shareholders' equity and comprehensive
income, and cash flows for each of the years in the two-year period ended
December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SIMEX Technologies,
Inc. and subsidiaries as of December 31, 1998, and the results of their
operations and their cash flows for each of the years in the two-year period
ended December 31, 1998 in conformity with generally accepted accounting
principles.
KPMG LLP
March 26, 1999
Atlanta, Georgia
42
<PAGE> 44
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share data)
<TABLE>
<CAPTION>
DECEMBER 31, June 30,
ASSETS 1998 1999
------------ -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 877 277
Trade accounts receivable, less allowance for
doubtful accounts of $70 in 1998 and $66 in 1999 6,037 6,302
Costs and estimated earnings in excess of billings on
uncompleted contracts (note 3) 1,528 1,846
Inventories 1,515 1,206
Prepaid expenses and other current assets 14 56
------- ------
Total current assets 9,971 9,687
Notes receivable - officers (note 4) 245 230
Investments (note 5) 1,271 1,447
Investments in affiliated companies (note 6) 281 281
Property, plant, and equipment, net (note 7) 5,589 5,546
Goodwill, less accumulated amortization of $128 in 1998
and $172 in 1999 3,589 3,389
------- ------
Total assets $20,946 20,580
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
43
<PAGE> 45
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share data)
<TABLE>
<CAPTION>
DECEMBER 31, June 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
Current liabilities:
Note payable - bank (note 8) $ 1,723 3,613
Current portion of long-term debt (note 9) 2,430 2,611
Accounts payable 2,066 2,104
Accrued salaries and wages 551 335
Accrued taxes other than income 1,251 1,153
Accrued income taxes 397 408
Deferred income taxes (note 10) 127 --
Other current liabilities 867 142
------------- ------------
Total current liabilities 9,412 10,366
Long-term debt, less current portion (note 9) 3,434 3,121
Deferred income taxes (note 10) 437 646
Other liabilities 592 65
------------- ------------
Total liabilities 13,875 14,198
------------- ------------
Shareholders' equity:
Preferred stock, $.001 par value. Authorized 5,000 shares;
none issued or outstanding (note 11) -- --
Common stock, $.001 par value. Authorized 50,000 shares;
12,824 shares issued and outstanding in 1998
and 1999 (note 12) 13 13
Additional paid-in capital 6,465 6,465
Retained earnings 892 525
Accumulated other comprehensive loss - foreign currency
translation adjustment (299) (621)
------------- ------------
Total shareholders' equity 7,071 6,382
------------- ------------
Commitments and contingencies (notes 4, 5, and 9)
Total liabilities and shareholders' equity $ 20,946 20,580
============= ============
</TABLE>
44
<PAGE> 46
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------ --------------------
1998 1997 1999 1998
-------- ------ ----- ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues $ 24,403 13,740 16,174 10,293
Cost of revenues 20,757 12,418 13,107 8,199
-------- ------ ------ ------
Gross profit 3,646 1,322 3,067 2,094
Selling, general, and administrative expenses (note 6) 2,245 765 2,928 1,384
-------- ------ ------ ------
Operating income 1,401 557 139 710
-------- ------ ------ ------
Other income (expense):
Interest income (note 4) 105 31 156 9
Interest expense (385) (207) (415) (87)
Other 7 -- (130) --
-------- ------ ------ ------
Total other expense (273) (176) (389) (78)
-------- ------ ------ ------
Income (loss) before income taxes 1,128 381 (250) 632
Income taxes (note 10) 377 168 117 217
-------- ------ ------- ------
Net income (loss) $ 751 213 (367) 415
======== ====== ====== ======
Earnings (loss) per share (note 13):
Basic $ .06 .02 (.03) .04
======== ====== ====== ======
Diluted $ .06 .02 (.03) .04
======== ====== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
45
<PAGE> 47
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
Years ended December 31, 1998 and 1997 and
Six Months ended June 30, 1999 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
RETAINED
PREFERRED STOCK COMMON STOCK ADDITIONAL EARNINGS
------------------- ---------------- PAID-IN (ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT)
-------- ------ ------ ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1996,
effected for the reorganization (note 2) -- $-- 10,013 $10 425 (25)
Comprehensive income:
Net income -- -- -- -- -- 213
Foreign currency translation adjustments -- -- -- -- -- --
Total comprehensive income
------- --- ------ --- ----- ---
Balances at December 31, 1997 -- -- 10,013 10 425 188
Issuance of preferred stock (note 11) 1,130 1 -- -- 2,055 --
Preferred stock dividends (note 11) -- -- -- -- -- (47)
Conversion of preferred stock to
common stock (note 11) (1,130) (1) 1,130 1 -- --
Issuance of common stock (note 12) -- -- 1,157 1 1,824 --
Issuance of common stock and options in
connection with acquisitions (note 14) -- -- 524 1 2,161 --
Comprehensive income:
Net income -- -- -- -- -- 751
Foreign currency translation adjustments -- -- -- -- -- --
Total comprehensive income
------- --- ------ --- ----- ---
Balances at December 31, 1998 -- -- 12,824 13 6,465 892
Comprehensive loss:
Net loss -- -- -- -- -- (367)
Foreign currency translation adjustments -- -- -- -- -- --
Total comprehensive loss
------- --- ------ --- ----- ---
Balances at June 30, 1999 (unaudited) -- $-- 12,824 $13 6,465 325
======= === ====== === ===== ===
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE
LOSS - FOREIGN
CURRENCY TOTAL
TRANSLATION SHAREHOLDERS'
ADJUSTMENT EQUITY
-------------- -------------
<S> <C> <C>
Balances at December 31, 1996,
effected for the reorganization (note 2) -- 410
Comprehensive income:
Net income -- 213
Foreign currency translation adjustments (24) (24)
-----
Total comprehensive income 189
---- -----
Balances at December 31, 1997 (24) 599
Issuance of preferred stock (note 11) -- 2,056
Preferred stock dividends (note 11) -- (47)
Conversion of preferred stock to
common stock (note 11) -- --
Issuance of common stock (note 12) -- 1,825
Issuance of common stock and options in
connection with acquisitions (note 14) -- 2,162
Comprehensive income:
Net income -- 751
Foreign currency translation adjustments (275) (275)
Total comprehensive income 476
---- -----
Balances at December 31, 1998 (299) 7,071
Comprehensive loss:
Net loss -- (367)
Foreign currency translation adjustments (322) (322)
-----
Total comprehensive loss (689)
---- -----
Balances at June 30, 1999 (unaudited) (621) 6,382
==== =====
</TABLE>
See accompanying notes to consolidated financial statements.
46
<PAGE> 48
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------- --------------------
1998 1997 1999 1998
-------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 751 213 (367) 415
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 538 386 611 231
Earnings from affiliated companies (15) -- -- --
Deferred income taxes 85 96 82 217
Other 75 -- -- --
Changes in operating assets and liabilities, net of
effects of acquisitions:
Accounts receivable (1,594) (747) (265) (3,038)
Inventories and uncompleted contracts 428 (61) (9) 182
Prepaid expenses and other current assets (1,346) 309 (42) (441)
Other assets -- -- -- (12)
Accounts payable (714) 406 38 412
Accrued salaries and wages 477 -- (216) 402
Accrued taxes other than income 651 (27) (98) --
Accrued income taxes 247 72 11 --
Other current liabilities (274) 189 (1,252) 1,360
------- ---- ----- -----
Net cash provided by (used in) operating activities (691) 836 (1,507) (272)
------- ---- ----- -----
Cash flows from investing activities:
Acquisitions of property, plant, and equipment (907) (516) (512) (210)
Proceeds from sale of property, plant, and equipment 180 -- -- --
Acquisitions of businesses, net of cash acquired of $406 (3,925) -- -- (2,549)
Acquisition of investments (117) -- (176) --
Acquisition of investments in affiliated companies (266) -- -- --
Proceeds from investments -- -- -- --
Increase in notes receivable - employees (230) -- 15 --
------- ---- ----- -----
Net cash used in investing activities (5,265) (516) (673) (2,759)
------- ---- ----- -----
Cash flows from financing activities:
Proceeds from (repayments of) note payable - bank, net 203 (273) 1,890 159
Proceeds from long-term debt 5,247 30 -- 658
Payments on long-term debt (2,598) -- (132) --
Issuance of preferred stock 2,056 -- -- 2,056
Issuance of common stock 1,825 -- -- 450
Preferred stock dividends paid (47) -- -- --
------- ---- ----- -----
Net cash provided by (used in) financing activities 6,686 (243) 1,758 3,323
------- ---- ----- -----
Effect of exchange rate changes in cash and cash equivalents (38) (23) (178) (186)
------- ---- ----- -----
Net change in cash and cash equivalents 692 54 (600) 106
Cash and cash equivalents at beginning of period 185 131 877 387
------- ---- ----- -----
Cash and cash equivalents at end of period $ 877 185 277 493
======= ==== ===== =====
</TABLE>
(Continued)
47
<PAGE> 49
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
December 31, June 30,
------------------ -------------------
1998 1997 1999 1998
------- ---- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Supplemental disclosure of cash flows information:
Cash paid during the years for:
Interest $ 361 207 285 87
======= ==== ====== ======
Income taxes $ 56 -- -- --
======= ==== ====== ======
Supplemental disclosure of noncash investing and financing
activities:
Acquisition of investment in exchange for receivable $ 1,154 -- -- --
======= ==== ====== ======
Conversion of preferred stock to common stock $ 1 -- -- --
======= ==== ====== ======
In May 1998, the Company acquired the capital stock of
Norsk Kjoleindustry AS (Norwegian Cooling Industry) (note 14):
Fair value of net assets acquired, net of cash received $11,730 -- -- 6,722
Liabilities assumed (5,643) -- -- 4,173
Common stock and options issued (2,162) -- -- --
------- ---- ------ ------
$ 3,925 -- -- 2,549
======= ==== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
48
<PAGE> 50
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
(A) DESCRIPTION OF BUSINESS
SIMEX Technologies, Inc. and subsidiaries (collectively, the
"Company") principally operates through its wholly owned
subsidiary, Simex AS, located in Norway. The Company is engaged in
construction and services, including design, engineering,
fabrication, production, installation, and maintenance for both
off-shore for the oil and gas industry, and on-shore in
commercial, industrial, and government projects. In addition, the
Company is engaged in concrete post tensioning construction for
off-shore oil and gas drilling platforms. The Company has derived
its revenues primarily from customers in Norway and the United
Kingdom (see note 18).
(B) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial
statements of SIMEX Technologies, Inc. and its subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.
(C) CASH EQUIVALENTS
Cash equivalents of $249 at December 31, 1998 consist of money
market accounts. For purposes of the consolidated statements of
cash flows, the Company considers all highly liquid debt
instruments with original maturities of three months or less to be
cash equivalents.
(D) INVENTORIES
Inventories are stated at the lower of cost or market and consist
principally of raw materials. Cost is determined using the
last-in, first-out method for all inventories other than supplies,
for which the first-in, first-out method is used to determine
cost.
(E) INVESTMENT
Investment in nonmarketable equity security in which the ownership
amount and circumstances do not justify use of the consolidation
or equity methods of accounting is carried at cost.
(F) INVESTMENTS IN AFFILIATED COMPANIES
Investments in the common stock of two affiliated companies are
accounted for by the equity method. The excess of cost of the
stock of those affiliates over the Company's share of their net
assets at the acquisition date is being amortized straight-line
over 20 years.
49 (Continued)
<PAGE> 51
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(G) PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment are stated at cost. Depreciation on
plant and equipment is calculated on the straight-line method over
the estimated useful lives of the assets ranging from five to 39
years. Leasehold improvements are amortized straight-line over the
shorter of the lease term or estimated useful life of the asset.
(H) GOODWILL
Goodwill, which represents the excess of purchase price over fair
value of net assets acquired, is amortized on a straight-line
basis over the expected periods to be benefited, generally 20
years. The Company assesses the recoverability of this intangible
asset by determining whether the amortization of the goodwill
balance over its remaining life can be recovered through
undiscounted future operating cash flows of the acquired
operation. The amount of goodwill impairment, if any, is measured
based on projected discounted future operating cash flows using a
discount rate reflecting the Company's average cost of funds. The
assessment of the recoverability of goodwill will be impacted if
estimated future operating cash flows are not achieved.
(I) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF
The Company accounts for long-lived assets in accordance with the
provisions of SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.
This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to
be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair
value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell.
(J) REVENUE AND COST RECOGNITION
Revenues from fixed-price and modified fixed-price contracts are
recognized on the percentage-of-completion method, measured by
the cost-to-cost method. This method is used because management
considers the cost-to-cost method to be the best available
measure of progress on these contracts. Revenues from
cost-plus-fee contracts are recognized on the basis of costs
incurred during the period plus the fee earned, measured by the
cost-to-cost method.
50 (Continued)
<PAGE> 52
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
Contracts to manage, supervise, or coordinate the construction
activity of others are recognized only to the extent of the fee
revenue. The revenue earned in a period is based on the ratio of
hours incurred to the total estimated hours required by the
contract.
Contract costs include all direct material and labor costs and
those indirect costs related to contract performance, such as
indirect labor, supplies, tools, repairs, and depreciation costs.
Selling, general, and administrative costs are charged to expense
as incurred. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and
estimated profitability, including those arising from contact
penalty provisions, and final contract settlements may result in
revisions to costs and income and are recognized in the period in
which the revisions are determined. Profit incentives are included
in revenues when their realization is reasonably assured. An
amount equal to contract costs attributable to claims is included
in revenues when realization is probable and the amount can be
reliably estimated.
The asset, if any, "Costs and estimated earnings in excess of
billings on uncompleted contracts," represents revenues recognized
in excess of amounts billed. The liability, if any, "Billings in
excess of costs and estimated earnings on uncompleted contracts,"
represents billings in excess of revenues recognized.
(K) INCOME TAXES
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
(L) RESEARCH AND DEVELOPMENT, AND ADVERTISING
Research and development, and advertising costs are expensed as
incurred. Research and development costs amounted to $450 in 1998
and 1997. Advertising costs amounted to $65 and $49 in 1998 and
1997, respectively.
51 (Continued)
<PAGE> 53
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(M) PENSION PLAN
On January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 132, Employers' Disclosures
About Pension and Other Postretirement Benefits. SFAS No. 132
revises employers' disclosures about pension and other
postretirement benefit plans. SFAS No. 132 does not change the
method of accounting for such plans.
The Company has a defined benefit pension plan covering
substantially all of its employees. The benefits are based on
years of service and the employee's compensation before
retirement. The cost of this program is being funded currently.
(N) COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes standards for
reporting and presentation of comprehensive income and its
components in a full set of financial statements. Comprehensive
income consists of net income and foreign currency translation
adjustment and is presented in the consolidated statements of
shareholders' equity and comprehensive income. The Statement
requires only additional disclosures in the consolidated financial
statements; it does not affect the Company's financial position or
results of operations. Prior year financial statements have been
reclassified to conform to the requirements of SFAS No. 130.
(O) FOREIGN CURRENCY TRANSLATION ADJUSTMENT
The Company applies Financial Accounting Standards Board Statement
No. 52, Foreign Currency Translation (FAS 52) for its subsidiaries
outside the United States. Assets and liabilities denominated in
foreign functional currencies are translated at the exchange rate
as of the balance sheet date. Translation adjustments are recorded
as a separate component of shareholders' equity. Revenues, costs,
and expenses are translated at the weighted average exchange rate
for the period.
(P) EARNINGS PER SHARE
The Company applies the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, Earnings Per Share. Basic
earnings per share is computed by dividing net earnings by the
weighted average number of shares of common stock outstanding
during the year. Diluted earnings per share is computed by
dividing net earnings by the sum of (1) the weighted average
number of shares of common stock outstanding during the period,
(2) the dilutive effect, if any, of convertible preferred stock,
(3) the dilutive effect, if any, of stock options using the
treasury stock method, and (4) dilutive effect, if any, of other
potentially dilutive securities.
52 (Continued)
<PAGE> 54
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(Q) USE OF ESTIMATES
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(R) INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial information as
of March 31, 1999 and for the three-month periods ended March 31,
1999 and 1998 have been prepared in accordance with instructions
to interim financial information and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of the Company's management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation have been included. Results for interim periods may
not be indicative for the full year.
(2) REORGANIZATION
On April 28, 1998, Simex AS, the Norwegian principal operating subsidiary
of the Company, acquired Maile International, Inc. ("Maile"), a U.S.
public shell company, in a transaction accounted for as a reverse
acquisition. For accounting purposes, Simex AS was deemed to be the
acquiring company and Maile, the acquiree. Accordingly, the transaction
was accounted for as a reorganization using historical costs and the
consolidated historical financial statements represent those of Simex AS
after giving retroactive effect to the issuance of common stock and a
reverse stock split in connection with the reverse acquisition. In
addition, Maile's name was ultimately changed to SIMEX Technologies, Inc.
and became the U.S. holding company for Simex AS.
53 (Continued)
<PAGE> 55
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(3) COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED
CONTRACTS
Cost and estimated earnings in excess of billings on uncompleted
contracts consists of the following at December 31, 1998:
<TABLE>
<S> <C>
Cost incurred on uncompleted contracts $ 7,912
Estimated earnings 2,139
-------
10,051
Less billings to date 8,523
-------
$ 1,528
=======
Costs and estimated earnings in excess of billings on
uncompleted contracts $ 1,528
Billings in excess of costs and estimated earnings
on uncompleted contracts --
-------
$ 1,528
=======
</TABLE>
(4) NOTES RECEIVABLE
At December 31, 1998, the notes receivable for $270 is due from certain
officers of Simex AS. The annual interest rate is the prime rate
announced from time to time by the Wall Street Journal and the notes are
due the earlier of (a) demand for payment by the Company or (b) August 1,
2003. Interest income for 1998 and 1997 was $5 and $-0-, respectively.
(5) INVESTMENT
At December 31, 1998, the Company has a 16.0% ownership in Geoambiente
Mining Group International, AVV, a coal and mineral mining operation
located in Venezuela. The carrying amount of the investment is $1,175 and
is stated at cost. The fair value of this investment has not been
disclosed since it is impractical to obtain such fair value. The
investment represents a privately held company, and there has not been
any recent sales or appraisals of the investment company's stock.
(6) INVESTMENTS IN AFFILIATED COMPANIES
Investments in affiliated companies consist of 40% of the common stock of
Jotronic Data AS and Unitron Management AS. The shares were acquired in
1998, and the Company has included its share of net income from the date
of acquisition. Such equity in earnings is not significant.
54 (Continued)
<PAGE> 56
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
The unamortized portion of the excess of the cost over the Company's
share of net assets of affiliated companies is $241 at December 31, 1998.
Jotronic Data provides its services for the Company under the terms of a
management services agreement. The cost of these services aggregates $227
in 1998. Fees charged to the Company for these services are set at the
level of fees that Jotronic Data charges to unrelated parties.
(7) PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consists of the following at December 31,
1998:
<TABLE>
<S> <C>
Land $ 445
Buildings and leasehold improvements 3,194
Machinery and equipment 4,108
------
7,747
Less accumulated depreciation and amortization 2,158
------
Net property, plant, and equipment $5,589
======
</TABLE>
The estimated depreciable lives for building and leasehold improvements
are approximately 20-39 years. The estimated depreciable lives for the
machinery and equipment is five years.
(8) NOTE PAYABLE - BANK
Note payable - bank amounted to $1,723 at December 31, 1998. The Company
had amounts outstanding under the note payable - bank which has two
components, a $2,447 overdraft facility which bears interest at NIBOR
(Norwegian) plus .75% (8.97% at December 31, 1998) and a $1,000 overdraft
facility which bears interest at LIBOR plus 1.0% (6.125% at December 31,
1998). Both note payable - bank overdraft facilities are due on demand
and are secured by certain accounts receivable and property, plant and
equipment of the Company.
55 (Continued)
<PAGE> 57
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(9) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1998:
<TABLE>
<S> <C>
Mortgage payable, NIBOR (Norwegian) plus .9% (9.12% at December
31, 1998), payable in 1999 contingent upon sale of certain
buildings with interest due quarterly. Mortgage payable is
secured with accounts receivable and property, plant and
equipment $ 1,187
Mortgage payable, NIBOR (Norwegian) plus 1.0% (9.22% at December
31, 1998), payable in quarterly principal payments of $33
through 2008 with interest due quarterly. Mortgage payable is
secured with accounts receivable and property, plant and
equipment 1,250
Mortgage payable, NIBOR (Norwegian) plus .9% (9.12% at December
31, 1998), payable in monthly principal payments of $33
through 2004 with interest due monthly. Mortgage payable is
secured with accounts receivable and property, plant and
equipment 1,974
Mortgage payable, NIBOR (Norwegian) plus .9% (9.12% at December
31, 1998), payable in 1999 with interest due quarterly.
Mortgage payable is secured with accounts receivable and
property, plant and equipment 1,041
Mortgage payable, NIBOR (Norwegian) plus .9% (9.12% at December
31, 1998), payable in quarterly principal payments of $9
through 2007 with interest due quarterly. Mortgage payable
secured by accounts receivable, inventories, and property,
plant and equipment 278
Mortgage payable, NIBOR (Norwegian) plus .9% (9.12% at December
31, 1998), payable in quarterly principal payments of $2
through 2002 with interest due quarterly. Mortgage payable
secured by accounts receivable, inventories, and property,
plant and equipment 33
11% notes payable, payable in monthly installments of $3 through
2007 with interest due monthly. Note payable secured by
inventories and equipment 101
-------
5,864
Less current portion of long-term debt 2,430
-------
Long-term debt, less current portion $ 3,434
=======
</TABLE>
The aggregate maturities of long-term debt for each of the five years
subsequent to December 31, 1998 are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
----------------
<S> <C>
1999 $ 2,430
2000 599
2001 597
2002 578
2003 568
</TABLE>
56 (Continued)
<PAGE> 58
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(10) INCOME TAXES
Income tax expense attributable to income from continuing operations
consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -----
<S> <C> <C> <C>
Year ended December 31, 1998:
U.S. Federal $ -- -- --
State -- -- --
Foreign 397 (20) 377
---- --- ---
Total $397 (20) 377
==== === ===
Year ended December 31, 1997:
U.S. Federal $ -- -- --
State -- -- --
Foreign 72 96 168
---- --- ---
Total $ 72 96 168
==== === ===
</TABLE>
Income tax expense attributable to income from continuing operations was
$377 and $168 for the years ended December 31, 1998 and 1997,
respectively, and differed from the amounts computed by applying the U.S.
Federal income tax rate of 34% to income before income taxes as a result
of the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Computed "expected" tax expense $384 130
Increase (reduction) in income taxes resulting from:
Difference in U.S. and foreign tax rates (79) (23)
Increase in valuation allowance for deferred
tax assets 75 --
Other (3) 61
---- ----
$377 168
==== ====
</TABLE>
57 (Continued)
<PAGE> 59
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at December 31, 1998
are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Accounts receivable $ 22
Pension 10
Net operating loss carryforward 75
----
Gross deferred tax assets 107
Less valuation allowance 75
----
Net deferred tax assets 32
----
Deferred tax liabilities:
Property, plant, and equipment 447
Cost and estimated earnings in
excess of billings on uncompleted
contracts 149
----
Total deferred tax liabilities 596
----
Net deferred tax liability $564
====
</TABLE>
The valuation allowance for deferred tax assets as of January 1, 1998 and
1997 was $-0-. The net change in the total valuation allowance for the
years ended December 31, 1998 and 1997 was an increase of $75. In
assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized.
At December 31, 1998, the Company has net operating loss carryforwards
for U.S. Federal income tax purposes of $188 which are available to
offset future Federal taxable income, if any, through 2008.
(11) PREFERRED STOCK
The Company issued 1,130 shares of 8% Series A cumulative preferred stock
in April 1998 for $1.90 per share in a private placement. Proceeds to the
Company were $2,056, net of offering expenses of $91. The preferred stock
was convertible into shares of common stock of the Company on a
one-for-one basis after 90 days. The preferred stock accrued dividends of
$47 which were paid in connection with the conversion of all of the
outstanding preferred stock into the Company's common stock in August
1998.
58 (Continued)
<PAGE> 60
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(12) COMMON STOCK AND OPTIONS
In April 1998, the Company issued 357 shares at $1.40 per share pursuant
to a private placement. Proceeds to the Company amounted to $450, net of
offering expenses of $50.
In July 1998, the Company issued 789 shares at $1.90 per share pursuant
to a private placement. Proceeds to the Company amounted to $1,328, net
of offering expenses of $172.
In September and December 1998, the Company issued 10 shares and 5
shares, respectively, at $3.25 per share. Proceeds to the Company
amounted to $47.
In connection with the acquisition of Weld Tech AS, the Company issued
the former owner of Weld Tech AS an option to acquire 200,000 shares of
common stock of the Company at $2.75 per share (see note 14).
(13) EARNINGS PER SHARE
The Company has adopted the provisions of Statements of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share", which is effective
for fiscal years ending after December 15, 1997. Basic earnings per common share
is based on the weighted average number of common shares outstanding during the
period. Diluted earnings per share includes the dilutive effect of common stock
equivalents. For the six months ended June 30, 1999, diluted earnings per share
have not been presented because stock options and warrants comprised common
stock equivalents would have been anti-dilutive.
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31, SIX MONTHS ENDED JUNE 30
------------------------ ------------------------
1998 1997 1999 1998
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Numerator:
Net income (loss) $ 751 213 $ (367) 415
Preferred stock dividends (47) -- -- (32)
------- ------ ------- ------
Numerator for basic and diluted earnings per share $ 704 213 $ (367) 383
======= ====== ======= ======
Denominator:
Denominator for basic earnings per share weighted average
shares outstanding 11,138 10,013 12,824 10,137
Effect of dilutive securities - stock options 11 -- -- --
------- ------ ------- ------
Denominator for diluted earnings per share 11,149 10,013 12,824 10,137
======= ====== ======= ======
</TABLE>
The effect of the "as if" conversion for the preferred stock on the diluted
earnings per share is anti-dilutive and therefore has been excluded.
59 (Continued)
<PAGE> 61
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(14) ACQUISITIONS
In May 1998, the Company acquired all of the outstanding capital stock of
Norsk Kjoleindustri AS ("Norwegian Cooling") located in Norway for $2,683
in cash. The acquisition was accounted for under the purchase method of
accounting and accordingly, the results of operations are included from
the date of acquisition. The acquisition resulted in goodwill of $494
which is being amortized over 20 years using the straight-line method.
In September 1998, the Company acquired certain assets of OIN Sprinklers
AS ("OIN") located in Norway for $144 consisting of $60 in cash and 22
shares of common stock of the Company. The acquisition was accounted for
using the purchase method of accounting and, accordingly, the results of
operations are included from the date of acquisition. The acquisition
resulted in goodwill of $118 which is being amortized over 20 years using
the straight-line method.
In November 1998, the Company acquired all the outstanding stock of Weld
Tech AS ("Weld Tech") located in Norway for $3,237 consisting of $1,349
in cash, 450 shares of common stock of the Company valued at $1,688
and an option to acquire 200 shares of the Company at $2.75 per share
valued at $200. The acquisition was accounted for using the purchase
method of accounting and accordingly, the results of operations are
included from the date of acquisition. The acquisition resulted in
goodwill of $2,545 which is being amortized over 20 years using the
straight-line method.
In November 1998, the Company acquired all the outstanding capital stock
of Vest Norge Doors AS ("Vest Norge") located in Norway for $277
consisting of cash of $135 and 38 shares of common stock of the Company.
The acquisition was accounted for under the purchase method of accounting
and accordingly, the results of operations are included from the date of
acquisition. The acquisition resulted in goodwill of $296 which is being
amortized over 20 years using the straight-line method.
In December 1998, the Company acquired all the outstanding capital stock
of Hordaror AS ("Hordaror") located in Norway for $152 consisting of $104
in cash and 14 shares of common stock of the Company. The acquisition was
accounted for using the purchase method of accounting and accordingly,
the results of operations are included from the date of acquisition. The
acquisition resulted in goodwill of $154 which is being amortized over 20
years using the straight-line method.
60 (Continued)
<PAGE> 62
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
The following represents the summary (unaudited) pro forma results of
operations, for the more significant acquisitions, as if the Norwegian
Cooling and Weld Tech acquisitions had occurred at the beginning of 1997:
<TABLE>
<CAPTION>
1998 1997
-------- ------
<S> <C> <C>
Revenues $ 30,719 28,198
Net income 844 325
Earnings per share:
Basic .07 .03
Diluted .07 .03
</TABLE>
Such pro forma information is not necessarily indicative of the results
of operations which would have occurred or will occur in the future.
(15) LEASES
The Company has noncancelable leases, primarily for transportation
equipment, that expire over the next three years. Rent expense for
operating leases during 1998 and 1997 was $379 and $314, respectively.
Future minimum lease payments under noncancelable operating leases as of
December 31, 1998 are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
------------
<S> <C>
1999 $ 318
2000 214
2001 91
-----
$ 623
=====
</TABLE>
(16) PENSION PLAN
The Company has a defined benefit plan covering substantially all its
employees. The benefits are based upon years of service and the
employees' compensation during the years before retirement. Net pension
costs for the years ended December 31, 1998 and 1997 were $14 and $-0-,
respectively. The plan is unfunded and pension liabilities at December
31, 1998 were $38. The assumptions used to calculate such pension
information were: discount rate of 7% and expected increase in
compensation of 3%.
61 (Continued)
<PAGE> 63
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
(17) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts for cash and cash equivalents, trade accounts
receivable, cost and estimated earnings in excess of billings on
uncompleted contracts, note payable - bank, accounts payable, accrued
salaries and wages, accrued taxes other than income, accrued income
taxes, and other current liabilities approximate fair value because of
the short maturity of these instruments.
The carrying amount for notes receivable - employees approximate fair
value based upon a discounted cash flow analysis. The carrying amount for
long-term debt which bears a variable rate approximates fair value based
upon current borrowing rates for similar instruments.
(18) OPERATING SEGMENTS
The Company adopted SFAS 131, Disclosures about Segments of an Enterprise
and Related Information. SFAS 131 establishes standards for the way that
public business enterprises report information about operating segments
in their financial statements. The standard defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision
makers in deciding how to allocate resources and in assessing the
performance. Based on the quantitative thresholds specified in SFAS 131,
the Company has determined that it has four reportable segments. The four
reportable segments are construction, service, production and post
tensioning.
Construction consists of all of the Company's operations involved in the
design, engineering, installation and maintenance of HVAC, plumbing, and
electrical products and services, both onshore and offshore.
Maintenance and Service consists of operations related to service and
maintenance contracts worldwide.
Production consists of design, engineering and production of various
technical and nontechnical products, such as SIMDUCTS.
Post tensioning consists of construction reinforcing techniques for
concrete oil and gas production platforms, bridges, tunnels and other
post and bolt tensioning operations.
62 (Continued)
<PAGE> 64
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
The accounting policies of the four operating segments are the same as
those described in note 1. The Company evaluates the performance of its
operating segments based upon revenues and gross profit. Intersegment
revenues are not significant.
<TABLE>
<CAPTION>
MAINTENANCE
AND POST OTHER AND
CONSTRUCTION SERVICE PRODUCTION TENSIONING ELIMINATIONS TOTAL
------------ ----------- ---------- ---------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
1998:
Revenues $ 12,302 4,824 3,565 3,850 (138) 24,403
Gross profit 992 381 574 1,282 417 3,646
Total assets 3,723 2,129 5,712 999 8,383 20,946
Long-lived asset expenditures 465 660 4,043 56 3,322 8,546
Depreciation and amortization 192 18 139 13 82 444
1997:
Revenues $ 8,415 1,405 2,779 -- 1,141 13,740
Gross profit 524 162 166 -- 470 1,322
Total assets 1,907 377 1,380 -- 2,004 5,668
Long-lived asset expenditures 73 32 6,730 -- 1,606 1,119
Depreciation and amortization 169 11 130 -- 79 389
Six months ended June 30,
1999 (unaudited):
Revenues $ 8,629 2,130 3,016 1,773 626 16,174
Gross profit 1,394 325 344 670 334 3,067
Six months ended June 30,
1998 (unaudited):
Revenues $ 5,670 1,254 1,077 1,464 828 10,293
Gross profit 1,221 382 189 558 (256) 2,094
</TABLE>
The following table represents revenues by country based upon the
location of domicile:
<TABLE>
<CAPTION>
1998 1997
------- ------
<S> <C> <C>
Norway $20,261 13,626
United Kingdom 3,850 --
United States 292 114
------- ------
$24,403 13,740
======= ======
</TABLE>
63 (Continued)
<PAGE> 65
SIMEX TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998 and 1997 and (Unaudited) June 30, 1999 and 1998
(In thousands, except per share data)
The following table presents long-lived assets by country based on the
location of domicile:
<TABLE>
<CAPTION>
1998 1997
------ -----
<S> <C> <C>
Norway $9,091 2,398
United Kingdom 43 --
United States 44 --
------ -----
$9,178 2,398
====== =====
</TABLE>
64
<PAGE> 66
SIMEX Technologies, Inc.
Unaudited Pro Forma Consolidated Financial Information
(In thousands, except per share data)
In May 1998, SIMEX Technologies, Inc. and subsidiaries (the "Company") acquired
100% of Norsk Kjoleindustri AS ("Norwegian Cooling"), a Norwegian Company
providing refrigeration services in Norway. The transaction was accounted for as
a purchase with consideration of $2,683 in cash.
In November 1998, the Company acquired 100% of WeldTech AS ("Weld Tech"), a
Norwegian Company providing welding services in Norway. The transaction was
accounted for as a purchase with consideration of $1,349 in cash and 450 shares
of the Company's common stock and an option to acquire 200 shares of the Company
at $2.75 per share.
The following unaudited pro forma consolidated statement of operations for the
year ended December 31, 1998 present the consolidated historical accounts of the
Company, adjusted to give effect to the acquisitions of Norwegian Cooling and
Weld Tech as of the beginning of the period presented.
The unaudited pro forma financial data and accompanying notes should be read in
conjunction with the consolidated financial statements of the Company and
related notes, as well as the consolidated financial statements and related
notes of Norwegian Cooling and Weld Tech, all of which are included elsewhere in
this registration statement. The Company believes that the pro forma adjustments
set forth in the related notes provide a reasonable basis on which to present
the pro forma financial data, which is provided for informational purposes only
and should not be construed to be indicative of the Company's result of
operations had the transactions and events described above been consummated on
the dates assumed. The unaudited pro forma financial data is not intended to
project the Company's results of operations for any future period.
65
<PAGE> 67
SIMEX Technologies, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
Year ended December 31, 1998
(In thousands, except per share data)
<TABLE>
<CAPTION>
SIMEX Norwegian Weld Pro forma
Technologies, Inc. Cooling Tech adjustments Pro forma
------------------ --------- ------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenues $ 24,403 5,638 823 (145)(1) 30,719
(145)(1)
Cost of revenues 20,757 1,929 621 49 (2) 26,211
-------- ------ ------- ----- -------
Gross profit 3,646 709 202 (49) 4,508
Selling, general, and
administrative expenses 2,245 447 65 130(2) 2,887
-------- ------ ------- ----- -------
Operating income 1,401 262 137 (179) 1,621
Other expense (273) (38) (10) -- (321)
-------- ------ ------- ----- -------
Income before income taxes 1,128 224 127 (179) 1,300
Income taxes 377 45 34 -- 456
-------- ------ ------- ----- -------
Net income $ 751 179 93 (179) 844
======== ====== ======= ===== =======
Earnings per share:
Basic $ .06 .07
======== =======
Diluted $ .06 .07
======== =======
Weighted average common and
dilutive shares outstanding:
Basic 11,138 396 11,534
======== ===== =======
Diluted 11,149 475 11,624
======== ===== =======
</TABLE>
See accompanying notes to unaudited pro forma consolidated statement of
operations.
66
<PAGE> 68
Simex Technologies, Inc.
Notes to Unaudited Pro Forma Consolidated Statement of Operations
Year ended December 31, 1998
The following explanations describe the unaudited pro forma adjustments
necessary to present the historical results of operations, giving effect to the
acquisitions of Norwegian Cooling and Weld Tech.
(1) Elimination of intercompany sales.
(2) Adjustment relates to depreciation of fair value adjustment for
property, plant and equipment and amortization of the goodwill over 20
years.
67
<PAGE> 69
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and shareholders of Norsk Kjoeleindustri AS:
We have audited the accompanying consolidated statements of operations and of
cash flows of Norsk Kjoeleindustri AS (the Company) for each of the years in the
two-year period ended December 31, 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with standards generally accepted in
Norway, the Company's local standards, that are substantially equivalent to
auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects the results of operations and cash flows of
Norsk Kjoeleindustri AS for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting principles
in Norway.
Accounting principles generally accepted in Norway vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
would have affected results of operations for each of the years in the two-year
period ended December 31, 1997 to the extent summarized in Note 6 to the
financial statements.
DELOITTE and TOUCHE AS
Stavanger, Norway
May 17, 1998
68
<PAGE> 70
NORSK KJOELEINDUSTRI AS
Consolidated Statements of Operations
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ------------------------------------------------------------------------------------- --------------------------
NOTE 1997 1997 1996 1998 1998 1997
- ------------------------------------------------------------------------------------- --------------------------
USD NOK NOK USD NOK NOK
<S> <C> <C> <C> <C> <C> <C> <C>
Sales 12 118 93 649 87 003 3 252 25 131 15 732
Operating expenses
Materials 7 425 57 378 53 476 1 859 14 370 9 869
Personnel costs 2 774 21 439 20 874 752 5 811 6 264
Other operating expenses 1 424 11 005 9 841 424 3 280 1 977
Depreciation and Amortization 3 191 1 478 1 256 31 239 370
Bad debts 2 49 377 129 7 52 0
--------------------------------------------------------------------
Total operating expenses 11 863 91 677 85 576 3 073 23 752 18 480
Operating income (loss) 255 1 972 1 427 179 1 379 -2 748
Financial items
Financial income 12 94 290 0 0 0
Financial expenses -137 -1 063 -1 043 -21 -161 -183
--------------------------------------------------------------------
Net financial items -125 -969 -753 -21 -161 -183
Income (loss) before income taxes 130 1 003 674 157 1 218 -2 931
--------------------------------------------------------------------
Income taxes 4 44 340 317 47 361 -128
Minority interests 15 118 -28 20 156 -2
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) 71 545 385 91 701 -2 801
======================================================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Translation of amounts from Norwegian Kroner (NOK) into U.S. Dollar (USD) for
the convenience of the reader has been made at the noon buying rate by the
Federal Reserve Bank of New York on March 31, 1999 of USD 1 = 7.728.
69
<PAGE> 71
NORSK KJOELEINDUSTRI AS
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- -------------------------------------------------------------------------------------- -------------------------
NOTE 1997 1997 1996 1998 1998 1997
- -------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
USD NOK NOK USD NOK NOK
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) 71 545 385 71 701 -2 801
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 191 1 478 1 256 31 239 370
Gain (loss) on disposal -13 -98 33 0 0 0
Deferred income taxes 35 270 9 0 0 0
Changes in operating assets and
liabilities, net of effects of
acquisitions:
Accounts receivable -104 -807 -1 095 -604 -4 668 -9
Inventories -139 -1 074 -977 -235 -1 819 -3 311
Accounts payable 37 289 -776 897 6 778 6 014
Other current liabilities 208 1 608 1 027 -572 -4 415 1 338
------------------------------------ ------------------------------
Net cash provided by (used in) operating 286 2 211 -138 -412 -3 184 1 601
activities
------------------------------------ ------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of investment 1 10 0 0 0 10
Proceeds from sale of fixed assets 44 340 84 28 219 0
Purchase of fixed assets -108 -834 -1 031 0 0 -458
------------------------------------ ------------------------------
Net cash flow provided by (used in) -63 -484 -947 28 219 -448
investing activities
------------------------------------ ------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of indebtedness -141 -1 090 -140 -77 -590 -578
Proceeds from long-term debt 1 693 162 1 250
Change in temporary bank overdraft 95 734 -121
------------------------------------ ------------------------------
Net cash flow provided by (used in) -141 -1 090 1 553 180 1 394 -699
financing activities
------------------------------------ ------------------------------
Net change in cash and cash equivalents 82 637 468 -204 -1 571 454
Cash and cash equivalents at the beginning 326 2 521 2 053 409 3 158 2 521
of period
------------------------------------ ------------------------------
CASH AND CASH EQUIVALENTS AT THE END OF 408 3 158 2 521 205 1 587 2 975
PERIOD
====================================================================================== ==============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
INFORMATION:
Cash paid during the period for:
Interest 137 1 063 1 043 21 161 183
Income taxes 39 304 788 14 104 0
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Translation of amounts from Norwegian Kroner (NOK) into U.S. Dollar (USD) for
the convenience of the reader has been made at the noon buying rate by the
Federal Reserve Bank of New York on March 31, 1999 of USD 1 = 7.728.
70
<PAGE> 72
NORSK KJOELEINDUSTRI AS
Notes to Consolidated Financial Statements
December 31, 1997 and 1996 and March 31, 1998 and 1997
(In NOK thousands)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statement of Norsk Kjoeleindustri AS (the Company)
and its subsidiaries have been prepared in accordance with accounting principles
generally accepted in Norway.
Consolidation
The consolidated financial statements included Norsk Kjoeleindustri ASA and
subsidiaries owned more than 50 percent. All material intercompany transactions
have been eliminated.
REVENUE RECOGNITION
Revenue is recognized as goods are delivered or services are rendered. Revenue
under fixed price contract is accounted for by the percentage-of-completion
method, whereby income is recognized based on the estimated stage of completion
of the individual contracts. Losses on contract are provided for in the period
in which loss become determinable.
INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets are recognized only to the extent of recognized deferred tax liabilities.
Income tax expense includes both current income tax expense and deferred income
tax expense.
ACCOUNTS RECEIVABLE
Accounts receivable are recorded at its nominal value after deductions of bad
debts.
INVENTORIES
Inventories are valued at the lower of purchased cost and net realizable value.
FIXED ASSETS
Depreciation expense is based on the estimated useful life of the asset.
FOREIGN CURRENCY TRANSACTIONS
Realized and unrealized gains and losses on monetary assets and liabilities are
included in net income.
71
<PAGE> 73
(2) ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Accounts receivable at face value 15 006 14 108
Provision for bad debts -354 -263
------ ------
Accounts receivable - net 14 652 13 845
------ ------
Realized losses 286 49
Change in provision for bed debt 91 80
------ ------
Bad debt expense 377 129
------ ------
</TABLE>
(3) GOODWILL
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Goodwill 2 879 2 879
Accumulated amortization -2 139 -1 851
------ ------
Goodwill - net 740 1 028
------ ------
Amortization expense at 10% 288 288
------ ------
</TABLE>
(4) INCOME TAXES
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Current income tax expense 67 305
Deferred income tax expense 271 9
Other 2 3
--- ---
Income tax expense 340 317
--- ---
</TABLE>
The tax effects of temporary differences and tax loss carryforwards giving rise
to deferred tax assets and liabilities were as follows for December 31, 1997 and
1996.
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Operating loss carryforwards -126 0
Shares in investments -94 -94
Guarantees -750 -700
Inventory -143 -244
Work in progress 1 360 247
Receivables 79 -111
Fixed assets 1 099 1 359
----- -----
Basis for calculation of deferred taxes 1 425 457
Tax rate 28% 28%
----- -----
Deferred taxes 399 128
----- -----
</TABLE>
(5) SUBSEQUENT EVENT
On May 15, 1998, an agreement was reached whereby the Simex AS, a Norwegian
company, acquired all of the outstanding shares of the Company for approximately
NOK 19,999.
72
<PAGE> 74
(6) SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN NORWAY (NGAAP) AND THE UNITED STATES (USGAAP)
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1997 1996 1998 1997
<S> <C> <C> <C> <C>
Net earnings (loss) according to NGAAP 545 385 700 -2 801
None 0 0 0 0
------------ -----------------
Net earnings (loss) according to USGAAP 545 385 700 -2 801
------------ -----------------
</TABLE>
73
<PAGE> 75
To the Annual Shareholders' Meeting of Weld Tech AS
AUDITORS REPORT FOR 1997 AND 1996
We have audited the accompanying statements of profit and loss account and cash
flows of Weld Tech AS for each of the years in the two-year period ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with standards generally accepted in
Norway, the Company's local standards, that are substantially equivalent to
auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Weld Tech AS
for each of the years in the two-year period ended December 31, 1997, in
conformity with generally accepted accounting principles in Norway.
Accounting principles generally accepted in Norway vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
would have affected results of operations for each of the years in the two-year
period ended December 31, 1997 to the extent summarized in the reconciliation
from NGAAP to USGAAP.
Stavanger, Norway, February 25, 1999
ERNST and YOUNG
Bjorn Fossan
State Authorised Public Accountant
74
<PAGE> 76
WELD TECH AS
PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
(USD 1000) Note 1997 1996 30.09.98 30.09.97
- ---------- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C>
Sales 1,217 821 755 941
Operating expenses
Materials 405 258 233 293
Personnel costs 405 426 284 316
Other operating expenses 121 93 70 71
Depreciation 29 40 15 16
Bad debts 5 0 0 0
----- ---- ---- ----
Total operating expenses 965 817 602 696
Operating income 252 4 153 245
Financial items
Financial income 3 5 8 0
Financial expenses 23 27 15 17
----- ---- ---- ----
Net financial items -20 -22 -7 -17
Income (loss) before income taxes 232 -18 146 228
Income taxes 2 67 0 41 64
----- ---- ---- ----
NET INCOME (LOSS) 165 -18 105 164
===== ==== ==== ====
Transferred to dividends 81 0
Transferred to/from legal reserve 84 -11
Transferred from general reserve 0 -7
----- ----
Total transferred 165 -18
----- ----
</TABLE>
75
<PAGE> 77
WELD TECH AS
CASH FLOWS STATEMENT
<TABLE>
<CAPTION>
(USD 1 000) 1997 1996 30.09.98 30.09.97
---- ---- -------- --------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) 165 -18 105 164
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 29 40 15 16
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable -61 11 14 -345
Inventories -1 -3 -14 0
Prepaid expenses and other current assets 12 -10 -17 0
Accounts payable 10 2 -4 32
Accrued taxes other than income 65 -16 53 62
Other current liabilities 12 4 -9 20
---- --- ---- ----
Net cash flow provided by (used in) operating activities 231 10 143 -51
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of tangible fixed assets
Investment in tangible fixed assets -31 -3 -18 -32
---- --- ---- ----
Net cash flow used in investing activities -31 -3 -18 -32
---- --- ---- ----
CASH FLOW FROM FINANCING ACTIVITIES
Payment long term loans -14 -16 -10 -11
Dividends paid 0 -16 -76 0
---- --- ---- ----
Net cash flow used in financing activities -14 -32 -86 -11
---- --- ---- ----
Effect of changes in exchange rates on cash and cash equivalents -32 1 -26 -31
---- --- ---- ----
Net change in cash and cash equivalents 154 -24 13 -125
Cash and cash equivalents at the beginning of period 208 232 362 208
---- --- ---- ----
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 362 208 375 83
---- --- ---- ----
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Interest 23 27 16 17
Income taxes 0 16 0 0
</TABLE>
76
<PAGE> 78
WELD TECH AS
RECONCILIATION FROM NGAAP TO USGAAP
<TABLE>
<CAPTION>
(USD 1 000) 1997 1996 30.09.98 30.09.97
- ----------- ---- ---- -------- --------
<S> <C> <C> <C> <C>
Net earnings according to NGAAP 165 -18 105 164
Change in deferred tax asset not recognized 2 5 2 4
Work in progress -3 4
---- ---- -------- --------
Net earnings according to USGAAP 164 -9 107 168
---- ---- -------- --------
</TABLE>
77
<PAGE> 79
NOTES TO THE FINANCIAL STATEMENTS FOR 1997 AND 1996
NOTE 1 - INVENTORIES/WORK IN PROGRESS
The inventories are valued at the lower of cost and real value. Work in progress
is valued according to percentage completion without profits. The calculated
earned profits at year end is not recognized as revenue.
NOTE 2 - TAX (USD)
Tax expense, deferred tax
Income before income taxes 232.423
Permanent differences 636
Change in temporary differences 8.934
Loss carry forward - 199
---------
Taxable income 241.794
---------
The tax expense for 1997 consist solely of taxes payable.
241.794 x 28% = 67.702
Temporary differences as of 31.12.97
Provision for losses on accounts receivable - 9.568
Fixed assets - 20.386
---------
Net negative temporary differences - 29.954
---------
Deferred tax is calculated on the basis of temporary differences. The company
has net negative temporary differences which leads to a deferred tax asset.
According to the Norwegian company act, it is not allowed to recognize this
deferred tax asset in the balance sheet.
78
<PAGE> 80
PART III
ITEM 1. INDEX TO EXHIBITS.
A. EXHIBITS
(2) 2.1 Certificate of Merger
2.2 Plan of Merger
(3) 3.1 Certificate of Incorporation
3.2 Bylaws
(4) Form of Common Stock Certificate
(10) 10.1 Acquisition Documents
10.1(a) April 28, 1998 Agreement and Plan of Reorganization between
Maile International, Inc. and Simex AS
10.1(b) May 15, 1998 Stock Purchase Agreement between shareholders
of Norsk Kjoleindustri AS and Simex AS
10.1(c) November 17, 1998 Stock Purchase Agreement between
shareholders of Weld Tech AS and Simex AS
10.1(d) December 18, 1998 Stock Purchase Agreement between
shareholders of Hordaror AS and Simex AS
10.1(e) November 17, 1998 Stock Purchase Agreement between
shareholders of Vest Norge Doors AS and Simex AS
10.1(f) September 22, 1998 Stock Purchase Agreement between
shareholders of OIN Sprinkler and Simex AS
10.2 Material Leases
10.2(a) March 26, 1999 Fleet Agreement between Brodrene Kverneland
Bryne AS and Simex AS
10.2(b) November 27, 1998 Lease Agreement between Tjelta Eiendom I
AS (TE) and Simex AS
10.3 Other Material Contracts
10.3(a) License Agreements between subsidiaries of the Company and
HRS Systems, Inc.
<PAGE> 81
10.3(b) April 29, 1999 Loan Agreement between Sparebanken
Rogaland and Simex A/S
10.3(c) August 1, 1998 Promissory Notes between Simex/NK
Technologies, Inc. and shareholders, Elmer Lunde,
Oystein Frajord, and Knut T. Rosvold
10.3(d) July 13, 1999 Resignation Agreement between Kjell I.
Jagelid and the Company
(21) 21.1 List of the Company's Subsidiaries
(27) 27.1 Financial Data Schedules (for SEC use only)
27.2 Restated Financial Data Schedules (for SEC use only)
27.3 Restated Financial Data Schedules (for SEC use only)
27.4 Restated Financial Data Schedules (for SEC use only)
(99) Certification of Translated Foreign Language Documents
<PAGE> 82
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
SIMEX TECHNOLOGIES, INC.
Date September 14, 1999
---------------------------------------
By /s/ Elmer Lunde
---------------------------------------
Chairman of the Board of Directors
President and Treasurer
By /s/ Warren L. Traver
---------------------------------------
Director and Executive Vice-President
80
<PAGE> 1
EXHIBIT 2.1
CERTIFICATE OF MERGER OF
DOMESTIC CORPORATION AND
FOREIGN CORPORATION
Pursuant to Section 252(c) of the Delaware General Corporation Law and
pursuant to Section 92A.200 of the Nevada General Corporation Law, the
undersigned corporations have executed the following Certificate of Merger:
FIRST: The name of the surviving corporation is SIMEX Technologies, Inc., a
Delaware corporation (the "Surviving Corporation"), and the name of the
corporation being merged into this surviving corporation is Simex/NK
Technologies, Inc., a Nevada corporation ("Simex").
SECOND: The Agreement of Merger has been approved, adopted, certified, executed
and acknowledged by each of the constituent corporations. Of the 12,808,580
shares of common stock of Simex issued and outstanding, 6,750,000 shares of
common stock were voted in favor of the Agreement of Merger all in accordance
with the provisions of the Nevada General Corporation Act. Such shares of Simex
common stock were voted as a class; no shares of any class of stock were issued
and outstanding and entitled to vote thereon.
THIRD: The name of the Surviving Corporation is SIMEX Technologies, Inc., a
Delaware corporation.
FOURTH: The Certificate of Incorporation of the surviving corporation shall be
its Certificate of Incorporation which is attached hereto as Exhibit A.
FIFTH: The authorized common stock of Simex is Fifty-Five Million (55,000,000)
with $0.001 par value and the authorized preferred stock of Simex is Five
Million (5,000,000) with $0.001 par value, amounting to an aggregate par value
of Fifty-Five Thousand Dollars ($55,000).
SIXTH: The merger is to become effective on April 8, 1999.
SEVENTH: The Agreement of Merger is on file at Suite 995, 3475 Lenox Road, N.E.,
Atlanta, Georgia 30326, the principal place of business of the Surviving
Corporation.
EIGHTH: A copy of the Agreement of Merger will be furnished by the Surviving
Corporation on request, without cost, to any stockholder of the constituent
corporations.
<PAGE> 2
IN WITNESS WHEREOF, said surviving corporation has caused this
certificate to be signed by an authorized officer, as of the day of April, 1999.
SIMEX TECHNOLOGIES, INC.,
a Delaware corporation
By /s/ Kjell I. Jagelid
------------------------------------
Kjell I. Jagelid
President
Attest /s/ John P. O'Brien
--------------------------------
John P. O'Brien
Secretary
[SEAL]
SIMEX/NK TECHNOLOGIES, INC.,
a Nevada corporation
By /s/ Kjell I. Jagelid
------------------------------------
Kjell I. Jagelid
President
Attest /s/ Warren L. Traver
--------------------------------
Warren L. Traver
Secretary
[SEAL]
2
<PAGE> 3
STATE OF GEORGIA )
) ss.
COUNTY OF FULTON )
On this day of April, 1999, before me, a Notary Public in and for said
county, personally came Kjell I. Jagelid and John P. O'Brien, President and
Secretary, respectively, of Simex Technologies, Inc., a Delaware corporation,
who, being duly sworn each for himself, did depose and say that they are the
above-described officers of said corporation and did acknowledge the execution
of the foregoing instrument as their voluntary act and deed and the voluntary
act and deed of said corporation.
WITNESS my notarial seal this ___ day of April, 1999.
-------------------------------
Notary Public
My commission expires:
---------
[SEAL]
STATE OF GEORGIA )
) ss.
COUNTY OF FULTON )
On this ___ day of April, 1999, before me, a Notary Public in and for
said county, personally came Kjell I. Jagelid and Warren L. Traver, President
and Secretary, respectively, of Simex/NK Technologies, Inc., a Nevada
corporation, who, being duly sworn each for himself, did depose and say that
they are the above-described officers of said corporation and did acknowledge
the execution of the foregoing instrument as their voluntary act and deed and
the voluntary act and deed of said corporation.
WITNESS my notarial seal this ___ day of April, 1999.
-------------------------------
Notary Public
My commission expires:
---------
[SEAL]
3
<PAGE> 1
EXHIBIT 2.2
AGREEMENT OF MERGER
BETWEEN
SIMEX TECHNOLOGIES, INC.,
A DELAWARE CORPORATION,
AND
SIMEX/NK TECHNOLOGIES, INC.,
A NEVADA CORPORATION
THIS AGREEMENT OF MERGER (the "Agreement") is made and entered into as
of the 19th day of April, 1999, by and between SIMEX TECHNOLOGIES, INC.
("SIMEX"), a Delaware corporation, and SIMEX/NK TECHNOLOGIES, INC. ("SNKT"), a
Nevada corporation.
W I T N E S S E T H:
WHEREAS, SIMEX is a corporation organized and existing under the laws
of the State of Delaware, its Certificate of Incorporation having been filed in
the Office of the Secretary of State of the State of Delaware on April 6, 1999;
WHEREAS, SNKT is a corporation organized and existing under the laws of
the State of Nevada;
WHEREAS, the aggregate number of shares of common stock which SNKT has
authority to issue is Fifty Million (50,000,000) shares and the aggregate number
of shares of preferred stock which SKNT has authority to issue is Five Million
($5,000,000); and
WHEREAS, the Board of Directors of each of the constituent corporations
deems it advisable that SNKT be merged into SIMEX on the terms and conditions
hereinafter set forth, in accordance with the applicable provisions of the
statutes of the States of Delaware and Nevada respectively, which permit such
merger.
NOW, THEREFORE, in consideration of the premises and of the agreements,
covenants and provisions hereinafter contained, SIMEX and SNKT by their
respective Boards of Directors, have agreed and do hereby agree, as follows:
ARTICLE I
SURVIVING CORPORATION
SNKT and SIMEX shall be merged into a single corporation, in accordance
with applicable provisions of the laws of the State of Nevada and the State of
Delaware, by SNKT merging into SIMEX, whereby SIMEX shall be the surviving
corporation (the "Surviving Corporation"). SIMEX's name shall not be changed as
a result of the merger.
<PAGE> 2
ARTICLE II
MERGER OF CONSTITUENT CORPORATIONS
Upon the merger becoming effective as provided in the applicable laws
of the State of Nevada and of the State of Delaware (the "Effective Date of the
Merger"):
(a) The two constituent corporations shall be a single
corporation, and the separate existence of SNKT shall cease except to
the extent provided by the laws of the State of Nevada in the case of a
corporation after its merger into another corporation.
(b) The Surviving Corporation shall thereupon and thereafter
possess (i) all rights, privileges, immunities and franchises, of a
public as well as a private nature, of each of the constituent
corporations and (ii) all property, real, personal and mixed, and all
debts due of whatever account, including subscriptions to share, and
all and every other interest, of or belonging to or due to each of the
constituent corporations shall be taken and deemed to be transferred to
and vested in the Surviving Corporation without further act or deed. In
addition, the title to any real estate, or any interest therein, vested
in either constituent corporation shall not revert or be in any way
impaired by reason of the merger, and the Surviving Corporation shall
be responsible and liable for all liabilities and obligations of each
of the constituent corporations. Neither the rights of creditors nor
any liens on the property of either of the constituent corporations
shall be impaired by this merger.
(c) On the Effective Date of the merger, the board of
directors of the Surviving Corporation shall consist of the members of
the board of directors of Surviving Corporation immediately prior to
the merger, to serve thereafter in accordance with the bylaws of the
Surviving Corporation until their respective successors shall have been
duly elected and qualified in accordance with such bylaws and the laws
of the State of Delaware. In addition, on the Effective Date of the
merger, the officers of the Surviving Corporation shall be the officers
of SIMEX immediately prior to the merger, with such officers to serve
thereafter in accordance with the bylaws of the Surviving Corporation
until their respective successors shall have been duly elected and
qualified in accordance with such bylaws and the laws of the State of
Delaware.
ARTICLE III
ARTICLES OF INCORPORATION AND
BYLAWS OF SURVIVING CORPORATION
The Certificate of Incorporation of the Surviving Corporation shall not
be amended in any respect by reason of this Agreement of Merger. The bylaws of
SIMEX, on the merger becoming effective, shall be and constitute the bylaws of
the Surviving Corporation amended in the manner provided by law.
2
<PAGE> 3
ARTICLE IV
CONVERSION OF SHARES
The manner and basis of converting the outstanding shares of each of
the constituent corporations shall be as follows:
(a) Each share of common stock of SNKT outstanding on the
Effective Date of the merger shall, without any action on the part of
the holder thereof, be converted into one fully paid and nonassessable
share of common stock of the Surviving Corporation which shall, on such
conversion, be validly issued and outstanding, fully paid, and
nonassessable, and shall not be liable to any further call, nor shall
the holder thereof be liable for any further payments with respect
thereto. After the Effective Date of the merger, each holder of an
outstanding certificate which prior thereto represented shares of
common stock of SKNT shall be entitled, upon surrender thereof along
with the payment of Fifteen Dollars ($15.00) to SNKT's transfer agent,
Colonial Stock Transfer, 440 East 400 South, Suite 1, Salt Lake City,
Utah, to receive in exchange for a certificate or certificates
representing the number of whole shares of common stock of SNKT a
certificate or certificates evidencing the number of whole shares of
the Surviving Corporation. Until so surrendered, each such outstanding
certificate which represents shares of common stock of SNKT shall for
all purposes evidence the ownership of shares of the Surviving
Corporation into which such shares shall have been converted.
(b) All shares of common stock of SNKT which have been
converted into shares of common stock of the Surviving Corporation
pursuant to this Article IV shall be issued in full satisfaction of all
rights to the shares of common stock of SNKT, as applicable.
(c) If any certificate for shares of the Surviving Corporation
is to be issued in a name other than that in which the certificate
surrendered in exchange therefor is registered, it shall be a condition
of issuance thereof that (i) the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer, (ii) the
transfer be in compliance with applicable federal and state securities
laws and (iii) the person requesting such exchange shall pay to the
Surviving Corporation or any agent designated by it any transfer or
other taxes required by reason of the issuance of a certificate for
shares of the Surviving Corporation in any name other than that of the
registered holder of the certificate surrendered, or establish to the
satisfaction of the Surviving Corporation or any agent designated by it
that such tax has been paid or is not payable.
ARTICLE V
MANNER OF ADOPTION AND VOTE
The manner of adoption and vote by which the Plan of Merger was adopted
and approved by each constituent corporation is as follows:
3
<PAGE> 4
(a) ACTION BY THE SIMEX:
(i) Action by Directors. By unanimous written consent dated
as of April , 1999, the Board of Directors of SIMEX authorized the
merger and approved the substance of this Agreement.
(ii) Action by Shareholders. No shareholder approval was
required pursuant to Section 252 of the Delaware Corporate Code.
(b) ACTION BY SNKT:
(i) Action by Directors. By unanimous written consent dated
as of April 19, 1999, the Board of Directors of SNKT authorized the
merger, approved the substance of this Agreement, recommended the
merger to the shareholders and directed that this Agreement be
submitted to the shareholders entitled to vote in respect thereof to be
approved by a majority vote of the shareholders of SNKT entitled to
vote.
(ii) Action by Shareholders. A majority of the total number of
shares of the issued and outstanding capital stock of SNKT by written
consent dated as of April 19, 1999 authorized the merger and approved
the substance of this Agreement.
(c) COMPLIANCE WITH LEGAL REQUIREMENTS. The manner of the adoption
of this Agreement, and the vote by which it was adopted and approved, constitute
full legal compliance with the provisions of Delaware and Nevada corporate law
and the Articles of Incorporation and Bylaws of each constituent corporation.
[Remainder of page intentionally left blank]
4
<PAGE> 5
IN WITNESS WHEREOF, SIMEX, a Delaware corporation and SNKT, a Nevada
corporation, pursuant to the approval and authority duly given by resolutions
adopted by their respective Boards of Directors have caused this Agreement to be
executed by an authorized officer of each party thereto.
SIMEX TECHNOLOGIES, INC.,
a Delaware corporation
By /s/ Kjell I. Jagelid
---------------------------------------
Kjell I Jagelid
President
SIMEX/NK TECHNOLOGIES, INC.,
a Nevada corporation
By /s/ Kjell I. Jagelid
---------------------------------------
Kjell I Jagelid
President
5
<PAGE> 6
SECRETARY'S CERTIFICATE
I, Warren L. Traver, Secretary of Simex/NK Technologies, Inc., a
corporation organized and existing under the laws of the State of Nevada, hereby
certify, as such Secretary of the said corporation, that the Agreement of Merger
to which this certificate is attached, after having been first duly signed on
behalf of said corporation by an authorized officer of Simex/NK Technologies,
Inc., a corporation of the State of Nevada, was duly approved by a majority of
the shareholders of Simex/NK Technologies, Inc., pursuant to a written consent
dated as of April , 1999, that 12,808,580 shares of common stock of the
corporation were on said date issued and outstanding and that the holder of
6,750,000 shares voted in favor of said Agreement of Merger, the affirmative
vote representing at least a majority of the total number of shares of the
outstanding capital stock of the corporation, and that thereby the Agreement of
Merger was duly adopted as the act of the stockholders of Simex/NK Technologies,
Inc., and the duly adopted agreement of Simex/NK Technologies, Inc.
WITNESS my hand on behalf of Simex/NK Technologies, Inc. on this
day of April, 1999.
By /s/ Warren L. Traver
----------------------------------
Warren L. Traver
Secretary
6
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
CERTIFICATE OF INCORPORATION
OF SIMEX TECHNOLOGIES, INC.
ARTICLE I
NAME
The name of this corporation is SIMEX Technologies, Inc. (the "Corporation")
ARTICLE II
REGISTERED AGENT AND OFFICE
Its registered office in the State of Delaware is to be located at 1209
Orange Street, in the City of Wilmington, County of New Castle, Zip Code 19801.
The registered agent in charge thereof is The Corporation Trust Company.
ARTICLE III
PURPOSES AND POWERS
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "GCL").
ARTICLE IV
CAPITALIZATION, PREEMPTIVE RIGHTS AND VOTING
SECTION 4.01. AUTHORIZED SHARES. The Corporation shall have authority
to issue two classes of shares to be designated respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the Corporation is
authorized to issue is Fifty-Five Million (55,000,000) shares of which Fifty
Million (50,000,000) shall be Common Stock and Five Million (5,000,000) shall be
Preferred Stock. Each share of Common Stock shall have a par value of One
Thousandth of One Cent ($0.001), and each share of Preferred Stock shall have a
par value of One Thousandth of One Cent ($0.001).
The Preferred Stock authorized by the Certificate of Incorporation may
be issued from time to time in one or more series, each of which shall have such
designation(s) or title(s) as may be fixed by the board of directors of the
Corporation (the "Board of Directors") prior to the issuance of any shares
thereof. The Board of Directors is hereby authorized to fix or alter the
dividend rates, conversion rights, rights and terms of redemption, including
sinking fund provisions, the redemption price or prices, voting rights and
liquidation preferences of any wholly unissued series of Preferred Stock, and
the number of shares constituting any such series
<PAGE> 2
and the designation thereof, or any of them. The rights, powers, preferences,
limitations and restrictions, if any, accompanying such shares of Preferred
Stock shall be set forth by resolution of the Board of Directors providing for
the issue thereof prior to the issuance of any shares thereof, in accordance
with the applicable provision of the GCL. Each share of any series of Preferred
Stock shall be identical with all other shares of such series, except as to the
date from which dividends, if any, shall accrue.
SECTION 4.02. PREEMPTIVE RIGHTS. Unless otherwise determined by the
Board of Directors, no holder of shares of capital stock of the Corporation
shall, as such holder, shall have any right to purchase or subscribe for any
capital stock of any class which the Corporation may issue or sell, whether or
not exchangeable for any capital stock of the Corporation of any class or
classes, whether issued out of unissued shares authorized by this Certificate of
Incorporation as originally filed or by any amendment thereof, or out of shares
of capital stock of the Corporation acquired by it after the issue thereof; nor
unless otherwise determined by the Board of Directors in the manner provided
under the GCL, shall any holder of shares of capital stock of the Corporation,
as such holder, have any right to purchase, acquire or subscribe for any
securities which the Corporation may issue or sell whether or not convertible
into or exchangeable for shares of capital stock of the Corporation of any class
or classes, and whether or not such securities have attached or appurtenant
thereto warrants, options or other instruments which entitle the holders thereof
to purchase, acquire or subscribe for shares of capital stock of any class or
classes.
SECTION 4.03. VOTING. In the exercise of voting privileges, each holder
of shares of the capital stock of the Corporation entitled to voting rights
shall be entitled to one vote for each share held in his/her name on the books
of the Corporation. In all elections of Directors (as defined below) of the
Corporation, cumulative voting is expressly prohibited. As such, each holder of
shares of capital stock of the Corporation entitled to vote at the election of
Directors shall have the right to vote, in person or by proxy, all or any
portion of such shares for or against each individual Director to be elected and
shall not be entitled to vote for or against any one Director more than the
aggregate number of shares held by such holder which are entitled to vote on the
election of Directors. With respect to any action to be taken by the holders of
capital stock of the Corporation (the "Shareholders") as to any matter, the
affirmative vote of the holders of a majority of the shares of the capital stock
of the Corporation entitled to vote thereon and represented in person or by
proxy at a meeting of the Shareholders at which a quorum is present shall be
sufficient to authorize, affirm, ratify or consent to such action. Any action
required by the GCL to be taken at any annual or special meeting of Shareholders
may be taken without a meeting, without prior notice, and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of a majority of the outstanding shares of the
capital stock of the Corporation entitled to vote thereon.
ARTICLE V
DIRECTORS
SECTION 5.01. BOARD OF DIRECTORS. The Board of Directors shall consist
of one or more members (the "Directors") who need not be residents of the State
of Delaware or Shareholders of
2
<PAGE> 3
the Corporation. The number of Directors of the Corporation may from time to
time be changed in accordance with the Bylaws of the Corporation (the "Bylaws")
and the GCL.
SECTION 5.02. NAMES AND ADDRESSES. The names and addresses of the
persons who are to serve as Directors until the next meeting of Shareholders or
until their successors are elected and qualified, or until their earlier death,
resignation, or removal are as follows:
Mr. Elmer Lunde
SIMEX A/S
Godesetdalen 24
N-4033 Forrus
Norway
Mr. Kjell I. Jagelid
SIMEX Technologies, Inc.
Suite 995
3475 Lenox Road, NE
Atlanta, GA 30326
Mr. Warren L. Traver
SIMEX Technologies, Inc.
Suite 995
3475 Lenox Road, NE
Atlanta, GA 30326
SECTION 5.03. LIMITATIONS ON LIABILITY OF DIRECTORS. No Director of the
Corporation shall be personally liable to the Corporation or its Shareholders
for monetary damages for an act or omission in the Director's capacity as a
Director; provided, however, that the foregoing provision shall not eliminate or
limit the liability of a Director to the extent a Director is found liable for
(a) a breach of the Director's duty of loyalty to the Corporation or its
Shareholders, (b) an act or omission not in good faith that constitutes a breach
of duty of the Director to the Corporation or an act or omission that involves
intentional misconduct or a knowing violation of the law, (c) a transaction from
which the Director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the Director's office, or (d)
an act or omission for which the liability of the Director is expressly provided
by an applicable statute.
If the GCL or other applicable provision of Delaware law hereafter is
amended to authorize further elimination or limitation of Directors, then the
liability of a Director of the Corporation, in addition to the limitation on the
personal liability provided herein, shall be limited to the fullest extent
permitted by the GCL or other applicable provision of Delaware law as amended.
Any repeal or modification of this Section 5.03 by the Shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a Director of the Corporation existing
at the time of such repeal or modification.
3
<PAGE> 4
ARTICLE VI
SPECIAL POWERS OF BOARD OF DIRECTORS
In furtherance of, and not in limitation of the powers and authorities
conferred under the GCL, the Board of Directors is expressly authorized:
(a) To make, alter, amend and rescind the Bylaws of the
Corporation; to fix, adjust and maintain from time to time the amount
to be reserved as working capital; and to authorize and cause to be
executed mortgages and liens upon the real and personal property of the
Corporation.
(b) From time to time, to determine whether and to what extent
and at what times and places and under what conditions and provisions
the accounts and books of the Corporation shall be maintained and made
available for inspection of any Shareholder, and no Shareholder shall
have any right to inspect any account or books or records of the
Corporation, except as provided by GCL, or authorized by the Board of
Directors.
(c) If the Bylaws so provide, to designate two or more of
their number to constitute an executive committee, which committee
shall, as provided in said resolution or in the Bylaws of the
Corporation, have and exercise any or all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, except to the extent that the GCL requires a particular
matter to be authorized by the Board of Directors.
ARTICLE VII
ADDITIONAL POWERS IN BYLAWS
The Corporation may in its Bylaws confer powers and authorities upon
the Board of Directors in addition to the foregoing and to those expressly
conferred upon them by the GCL.
ARTICLE VIII
TRANSACTIONS WITH DIRECTORS, OFFICERS AND SHAREHOLDERS
The Officers, Directors and Shareholders holding ten percent or more of
the outstanding capital stock of the Corporation ("Insiders") may enter into
business transactions with the Corporation in which they are personally
interested without such transaction being affected or invalidated solely because
of such personal interest; provided, however, that nothing contained herein
shall relieve any Insider from liability for breach of the fiduciary duties of
an Insider or authorize any Insider to enter into any transaction with the
Corporation in which such Insider has a material interest for the purpose of
personal gain to the detriment of the Corporation.
4
<PAGE> 5
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. MANDATORY INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
Each person who was or is made a party or is threatened to be made a party to or
is involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative, any
appeal in such action, suit or proceeding, and any inquiry or investigation that
could lead to such an action, suit, or proceeding ("Proceeding"), by reason of
the fact that he/she is or was a Director or officer of the corporation, or who,
while a Director of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise, shall be indemnified and held harmless by the Corporation to the
fullest extent permitted by the GCL against all judgments, penalties (including
excise and similar taxes), fines, settlements, and reasonable expenses
(including attorneys' fees) actually incurred by such person in connection with
such Proceeding. Such right shall be a contract right and shall include the
right to require advancement by the Corporation of reasonable expenses
(including attorneys' fees) incurred in defending any such Proceeding in advance
of its final disposition; provided, however, that the payment of such expenses
in advance of the final disposition of such Proceeding shall be made by the
Corporation only upon delivery to the Corporation of a written affirmation by
such person of his/her good faith and belief that he/she has met the standard of
conduct necessary for indemnification under the GCL an d a written undertaking,
by or on behalf of such person, to repay all amounts so advanced if it should be
ultimately determined that such person has not satisfied such requirements.
SECTION 9.02. NATURE OF INDEMNIFICATION. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
other rights permitted by law to which a person seeking indemnification may be
entitled under any Bylaw, agreement, vote of Shareholders or disinterested
Directors or otherwise, and shall continue as to a person who has ceased to be a
Director or officer of the Corporation and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 9.03. INSURANCE. The Corporation shall have power to purchase
and maintain insurance or another arrangement on behalf of any person who is or
was a Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another corporation, partnership joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any liability asserted against
him/her and incurred by him/her in any such capacity, or arising out of his/her
status as such, whether or not the Corporation would have the power to indemnity
him/her against such liability under the provisions of this Article Nine or the
GCL.
5
<PAGE> 6
ARTICLE X
AMENDMENT OF BYLAWS
The Shareholders of the Corporation hereby delegate to the Board of
Directors the power to adopt, alter, amend or repeal the Bylaws of the
Corporation. Such power shall be vested exclusively in the Board of Directors
and shall not be exercised by the Shareholders.
ARTICLE XI
POWER TO CALL SPECIAL SHAREHOLDERS' MEETINGS
Special meetings of the Shareholders of the Corporation may be called by
the President of the Corporation, the Board of Directors or holders of not less
than ten percent of all the shares entitled to vote at the proposed special
meeting of the Shareholders.
ARTICLE XII
AMENDMENTS
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation or in its Bylaws in the
manner now or hereafter prescribed by the GCL or this Certificate of
Incorporation, and all rights conferred on Shareholders herein are granted
subject to this reservation.
ARTICLE XIII
INCORPORATOR
The name and mailing address of the incorporator are as follows:
Name: Robert E. Altenbach
Mailing Address: Suite 2100
225 Peachtree Street, NE
Atlanta, GA 30303
[Remainder of page intentionally left blank]
6
<PAGE> 7
I, the undersigned, for the purpose of forming a corporation under the
laws of the State of Delaware, do make, file and record this Certificate, and do
certify that the facts herein stated are true, and I have accordingly hereunto
set my hand this ____ day of April, 1999.
/s/ Robert E. Altenbach
-----------------------
Robert E. Altenbach
Incorporator
7
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
SIMEX TECHNOLOGIES, INC.
ARTICLE I
OFFICES
SECTION 1.01. NAME. The name of the Corporation is SIMEX Technologies,
Inc., hereinafter referred to as the "Corporation."
SECTION 1.02. PRINCIPAL OFFICE. The principal office of the Corporation
in the State of Delaware shall be in the City of Wilmington, County of New
Castle, and the resident agent in charge thereof shall be The Corporation Trust
Company. The Corporation may change its registered office or change its
registered agent, or both, upon the filing in the Office of the Secretary of
State of Delaware of a statement setting forth the facts required by law, and
executed for the Corporation by its President or Vice President.
SECTION 1.03. OTHER OFFICES. The Corporation may have offices at such
other place or places as from time to time the Board of Directors may determine
or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. ANNUAL MEETINGS. The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may come before the meeting shall be held within one hundred twenty (120) days
after the close of the fiscal year of the Corporation on a day during such
period to be selected by the Board of Directors; provided, however, that the
failure to hold the annual meeting within the designated period of time or on
the designated date shall not work a forfeiture or dissolution of the
Corporation.
SECTION 2.02. SPECIAL MEETINGS. Special meetings of the shareholders,
for any purpose or purposes, may be called by the Chairman of the Board of the
President. Special meetings of the shareholders shall be called by the President
or Secretary at the request in writing of a majority of the Board of Directors,
or at the request in writing of a majority of the Board of Directors, or at the
request in writing of shareholders owning ten percent (10%) of the capital stock
of the Corporation issued and outstanding and entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting and the business to
be transacted at any such special meeting of shareholders, and shall be limited
to the purposes stated in the notice therefor.
SECTION 2.03. PLACE OF MEETING. Each meeting of stockholders of the
Corporation, whether annual or special is to be held at the principal offices of
the Corporation or at such other
<PAGE> 2
place either within or without the State of Delaware, as may be, and shall be
held on such date and at such time and place within or specified in the notice
or waiver of notice of said meeting.
SECTION 2.04. NOTICE OF MEETINGS. Except as otherwise provided by law,
notice of each meeting of the stockholders shall be given to each stockholder of
record entitled to vote at such meeting, whether annual or special, not less
than ten (10) nor more than sixty (60) days before the day on which the meeting
is to be held, either personally or by mail, by or at the direction of the
Chairman of the Board or the President, the Secretary or a majority of the
members of the board of Directors calling the meeting. Each such notice shall
state the purpose or purposes for which the meeting is called, and the date and
time when, and the place where such meeting is to be held. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
or Air Mail, with postage thereon prepaid, addressed to the shareholder entitled
thereto at his or her address as it appears on the share transfer records of the
Corporation. Except where expressly required by law, no publication of any
notice of a meeting of stockholders shall be required. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy. Notice of any adjourned meeting of
the stockholders shall not be required to be given, except where expressly
required by law.
SECTION 2.05. QUORUM. At each meeting of the stockholders, the
presence, in person or by proxy, of the holders of record of a majority of the
issued and outstanding stock of the Corporation entitled to vote at such meeting
shall constitute a quorum for the transaction of business except as otherwise
provided by statute, the Certificate of Incorporation or by these Bylaws. In the
absence of a quorum, a majority in interest of the stockholders of the
Corporation present in person or by proxy and entitled to vote or, in the
absence of any stockholder entitled to vote, any officer entitled to preside at,
or act as Secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite amount of
stock shall be present or represented. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally called. If a quorum is present at the
time of commencement of any meeting, the shareholders present at such duly
convened meeting may continue to transact any business which may properly come
before said meeting until adjournment thereof, notwithstanding the withdrawal
from such meeting of sufficient holders of the shares of Capital Stock entitled
to vote thereat to leave less than a quorum remaining.
SECTION 2.06. REQUISITE VOTE. If a quorum is present at any meeting,
the vote of the holders of a majority of the shares of capital stock having
voting power, present in person or represented by proxy, shall determine any
question brought before such meeting, unless the question is one upon which, by
express provision of the Certificate of Incorporation or of these Bylaws, a
different vote shall be required or permitted, in which case such express
provision shall govern and control the determination of such question.
SECTION 2.07. VOTING AT MEETING. Voting at meetings of shareholders
shall be conducted and exercised subject to the following procedures and
regulations:
(a) VOTING POWER. In the exercise of voting power with respect
to each matter properly submitted to a vote at any meeting of
shareholders, each shareholder of the
2
<PAGE> 3
capital stock of the Corporation having voting power shall be entitled
to one (1) vote for each such share held in his or her name on the
records of the Corporation, except to the extent otherwise specified by
the Certificate of Incorporation.
(b) EXERCISE OF VOTING POWER OF PROXIES. At any meeting of the
shareholders, every holder of the shares of capital stock of the
Corporation entitled to vote at such meeting may vote either in person,
or by proxy executed in writing by such shareholder. A telegram, telex,
cablegram, or similar transmission by a shareholder, or a photographic,
photostatic, facsimile, or similar reproduction of a writing executed
by a shareholder, shall be treated as an execution in writing. No proxy
shall be valid after the expiration of eleven (11) months from the date
of its execution, unless otherwise stated therein. A proxy shall be
revocable unless expressly designated therein as irrevocable and
coupled with an interest. Proxies coupled with an interest include the
appointment as proxy of: (i) pledges; (ii) a person who purchased or
agreed to purchase or owns or holds an option to purchase the shares
voted; (iii) a creditor of the Corporation who extended its credit
under terms requiring the appointment; (iv) an employee of the
Corporation whose employment contract requires the appointment; or (v)
a party to a voting agreement created under Section 218 of the Delaware
General Corporation Law, as amended. Each proxy shall be filed with the
Secretary of the Corporation prior to or at the time of the meeting.
Voting for directors shall be in accordance with the provisions of
paragraph (c) below of this Section 2.07. Any vote may be taken by
voice vote or by show of hands unless someone entitled to vote at the
meeting objects, in which case written ballots shall be used.
(c) ELECTION OF DIRECTORS. In all elections of Directors
cumulative voting shall be prohibited.
SECTION 2.08. RECORD DATE FOR MEETINGS; CLOSING TRANSFER RECORDS. As
more specifically provided in Section 8.04 hereof, the Board of Directors may
fix in advance a record date for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such record date
to be not less than ten (10) nor more than sixty (60) days prior to such
meeting, or the Board of Directors may close the share transfer records for such
purpose for a period of not less than ten (10) nor more than sixty (60) days
prior to such meeting. In the absence of any action by the Board of Directors,
the date upon which the notice of the meeting is mailed shall be deemed the
record date.
SECTION 2.09. ACTION WITHOUT MEETINGS. Any action permitted or required
to be taken at a meeting of the shareholders of the Corporation may be taken
without a meeting, without prior notice, and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by all
of the shareholders of the capital stock of the Corporation entitled to vote
with respect to the subject matter thereof, and such written consent shall have
the same force and effect as the requisite vote of the shareholders thereon. Any
such executed written consent, or an executed counterpart thereof, shall be
placed in the minute book of the Corporation. Every written consent shall bear
the date of signature of each shareholder who signs the consent.
3
<PAGE> 4
SECTION 2.10. RECORD DATE FOR ACTION WITHOUT MEETINGS. Unless a record
date shall have previously been fixed or determined by the Board of Directors as
provided in Section 8.04 hereof, whenever action by shareholders is proposed to
be taken by consent in writing without a meeting of shareholders, the Board of
Directors may fix a record date for the purpose of determining shareholders
entitled to consent to that action, which record date shall not precede, and
shall not be more than ten (10) days after, the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If no record date
has been fixed by the Board of Directors and the prior action of the Board of
Directors is not required by statute or the Certificate of Incorporation, the
record date for determining shareholders entitled to consent to action in
writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Corporation by delivery to its registered office, its principal place of
business, or an officer or agent of the Corporation having custody of the books
in which proceedings of meetings of shareholders are recorded. Delivery shall be
by hand or by certified or registered mail, return receipt requested. Delivery
to the Corporation's principal place of business shall be addressed to the
President or principal executive officer of the Corporation. If no record date
shall have been fixed by the Board of Directors and prior action of the Board of
Directors is required by statute, the record date for determining shareholders
entitled to consent to action in writing without a meeting shall be at the close
of business on the date in which the Board of Directors adopts a resolution
taking such prior action.
SECTION 2.11. PREEMPTIVE RIGHTS. Unless otherwise determined by the
Board of Directors in the manner provided under the Delaware General Corporation
Law, as amended, no holder of shares of capital stock of the Corporation shall,
as such holder, have any right to purchase or subscribe for any capital stock of
any class which the Corporation may issue or sell, whether or not exchangeable
for any capital stock of the Corporation of any class or classes, whether issued
out of unissued shares authorized by the Certificate of Incorporation, as
amended, or out of shares of capital stock of the Corporation acquired by it
after the issue thereof; nor, unless otherwise determined by the Board of
Directors in the manner provided under the Delaware General Corporation Law, as
amended, shall nay holder of shares of capital stock of the Corporation, as such
holder, have any right to purchase, acquire or subscribe for any securities
which the Corporation may issue or sell whether or not convertible into or
exchangeable for shares of capital stock of the Corporation of any class or
classes, and whether or not any such securities have attached or appurtenant
thereto warrants, options or other instruments which entitle the holders thereof
to purchase, acquire or subscribe for shares of capital stock of any class or
classes.
SECTION 2.12. LIST OF STOCKHOLDERS. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger, either directly or through a transfer agent or transfer clerk appointed
by the Board of Directors, to prepare and make, at least ten (10) days before
every meeting of the stockholders, a complete list of the stockholders entitled
to vote at such meeting, arranged in alphabetical order and showing the address
of each stockholder and the number of shares registered in the name of each
stockholder which list shall be kept on file at the registered office or
principal place of business of the Corporation for a period of not less than ten
(10) days prior to such meeting and shall be subject to inspection by any
4
<PAGE> 5
shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting during the whole
time thereof and subject to the inspection of any stockholder present at the
meeting. Upon the willful neglect or refusal of the directors to produce such
list at any election, they shall be ineligible for any office at such election.
The original or duplicate stock ledger shall be the only evidence as to the
identity of the stockholders entitled to examine such list or transfer ledger or
the books of the Corporation or to vote in person or by proxy at such election.
SECTION 2.13. JUDGES OF ELECTION. The Board of Directors may appoint
judges of election to serve at any election of directors and at balloting on any
other matter that may properly come before a meeting of stockholders. If no such
appointment shall be made, or if any of the judges so appointed shall fail to
attend, or refuse or be unable to serve, then such appointment may be made by
the presiding officer at the meeting.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. GENERAL POWERS. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors.
SECTION 3.02. NUMBER, ELECTION, QUALIFICATIONS AND TERM OF OFFICE. The
number of directors shall be as fixed from time to time by resolution of the
Board of Directors or stockholders (any such resolution of either the Board of
Directors or stockholders being subject to the later resolution of either of
them) provided, however, no decrease shall have the effect of shortening the
term of any incumbent Director. Directors need not be residents of the State of
Delaware nor shareholders of the Corporation. Until changed as provided herein,
the initial Board of Directors and all subsequent boards of directors shall
consist of that number of directors set forth in the Certificate of
Incorporation. Except as otherwise provided in the Certificate of Incorporation
or in these Bylaws, directors shall be elected by a plurality of the votes of
the stockholders entitled to vote at each meeting of stockholders for the
election of a director or directors. Cumulative voting in the election of
Directors is expressly prohibited. Directors need not be stockholders. Each
director shall hold office until his or her successor shall have been duly
elected and qualified, or until his or her death, or until he or she shall
resign, or until he or she shall have been removed in the manner hereinafter
provided.
SECTION 3.03. RESIGNATION. Any director of the Corporation may resign
at any time by giving written notice to the President or to the Secretary of the
Corporation. The resignation of any director shall take effect at the time
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 3.04. REMOVAL OF DIRECTORS. Any director or the entire Board of
Directors may be removed, either with or without cause, at any time by the
holders of a majority of the shares then entitled to vote at an election of
directors provided notice of intention to act upon such matter shall have been
given in the notice calling such meeting. Any vacancy in the Board of Directors
caused by any such removal may be filled by a plurality of the votes of the
stockholders at such meeting, or, if the stockholders shall fail to fill such
vacancy, by the Board of Directors.
5
<PAGE> 6
SECTION 3.05. VACANCIES. Any vacancy in the Board of Directors caused
by death, resignation, disqualification, removal, an increase in the number of
directors, or any other cause, may be filled by the affirmative vote of a
majority of the remaining directors (though less than a quorum), unless filled
by the stockholders pursuant to Section 3.02 hereof; and each director so chosen
shall hold office until his or her successor shall be duly elected and qualified
or until his or her earlier death, resignation or removal.
SECTION 3.06. NEW DIRECTORSHIPS. Any directorship to be filled by
reason of an increase in the number of Directors actually serving as such shall
be filled by election at an annual meeting of the shareholders or at a special
meeting of shareholders called for that purpose, or by the Board of Directors
for a term of office continuing only until the next election of one or more
Directors by the shareholders, provided that the Board of Directors may not fill
more than two (2) such directorships during the period between any two (2)
successive annual meetings of shareholders.
SECTION 3.07. PLACE OF MEETINGS, ETC. Except as otherwise specifically
provided by law, the Board of Directors may hold its meetings at the principal
office or place of business of the corporation or such place within or without
the State of Delaware as may be specified in the respective notices, or waivers
of notice, thereof.
SECTION 3.08. ANNUAL MEETING. The Board of Directors shall meet each
year immediately after the annual meeting of the shareholders, at the place
where such meeting of the shareholders has been held (either within or without
the State of Delaware), for the purpose of organization, election of officers,
and consideration of any other business that may properly be brought before the
meeting. No notice of any kind to either old or new members of the Board of
Directors for such annual meeting shall be required.
SECTION 3.09. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and such place or places as
shall from time to time be determined.
SECTION 3.10. SPECIAL MEETINGS; NOTICE. Special meetings of the Board
of Directors shall be held whenever called by the President or by the Chairman
of the Board. At least three (3) calendar days before the day on which any
special meeting is to be held, notice of such meeting shall be sent to each
director by first class mail, addressed to him or her at his or her residence or
usual place of business, or shall be sent to him or her at such place via
facsimile or shall be delivered personally or by telephone at least one day
before the day on which the meeting is to be held. Each such notice shall state
the time and place of the meeting but need not state the purposes thereof,
except as otherwise herein expressly provided. Notice of any meeting of the
Board of Directors need not be given to any director who shall be present at
such meeting or who shall, either before or after such meeting, waive notice of
such meeting in writing; and any meeting of the Board of Directors shall be a
legal meeting without any notice thereof having been given if all of the
directors of the Corporation then in office shall be present thereat.
SECTION 3.11. NOTICE AND WAIVER OF NOTICE. Attendance of a Director at
any meeting shall constitute a waiver of notice of such meeting, except where a
Director attends for the express purpose of objecting to the transaction of any
business because the meeting is not
6
<PAGE> 7
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
SECTION 3.12. QUORUM AND MANNER OF ACTING. Except as otherwise provided
by statute or by these Bylaws, a majority of the total number of directors shall
be required to constitute a quorum for the transaction of business at any
meeting, and the act of a majority of the directors present at any meeting at
which a quorum shall be present shall be the act of the Board of Directors. In
the absence of a quorum, a majority of the directors present may adjourn any
meeting from time to time until a quorum be had. Notice of any adjourned meeting
need not be given, except as required by law.
SECTION 3.13. REMUNERATION. By appropriate resolution of the Board of
Directors, the Directors may be reimbursed their expenses, if any, of attendance
at each meeting of the Board of Directors and may be paid a fixed sum (as
determined from time to time by the vote of a majority of the Directors then in
office) for attendance at each meeting of the Board of Directors or a stated
salary as Director. Nothing herein contained shall be construed so as to
preclude any director from serving the Corporation in any other capacity and
receiving remuneration therefor.
SECTION 3.14. ACTION WITHOUT MEETING. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
of such committee, as the case may be, consent thereto in writing and such
writing or writings are filed with the minutes of proceedings of the Board or
committee.
SECTION 3.15. MAINTENANCE OF RECORDS. The Directors may keep the books
and records of the Corporation, except such as are required by law to be kept
within the State, outside the State of Delaware or at such place or places as
they may, from time to time, determine.
SECTION 3.16. INTERESTED DIRECTORS AND OFFICERS. No contract or other
transaction between the Corporation and one or more of its Directors or
officers, or between the Corporation and any firm of which one or more of its
Directors or officers are members or employees, or in which they are interested,
or between the Corporation and any corporation or association of which one or
more of its Directors or officers are shareholders, members, directors,
officers, or employees, or in which they are interested, shall be void or
voidable solely for this reason, solely because of the presence of such Director
or Directors or officer or officers at the meeting of the Board of Directors of
the Corporation, which acts upon, or in reference to, such contract, or
transaction, or solely because his, her or their votes are counted for such
purpose, if (a) the material facts of such relationship or interest shall be
disclosed or known to the Board of Directors and the Board of Directors shall,
nevertheless in good faith, authorize, approve and ratify such contract or
transaction by a vote of a majority of the Directors present, such interested
Director or Directors to be counted in determining whether a quorum is present,
but not to be counted in determining calculating the majority of such quorum
necessary to carry such vote; (b) the material facts of such relationship or
interest as to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by the vote of the shareholders; or (c) the
contract or transaction is fair to the Corporation as of the time it is
authorized, approved or ratified by the
7
<PAGE> 8
Board of Directors, a committee thereof or the shareholders. The provisions of
this Section shall not be construed to invalidate any contract or other
transaction which would otherwise be valid under the common and statutory law
applicable thereto.
SECTION 3.17. TELEPHONIC MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
subsection shall constitute presence in person at such meeting.
ARTICLE IV
COMMITTEES
SECTION 4.01. DESIGNATION OF COMMITTEES, ALTERNATE MEMBERS AND TERM OF
OFFICE. The Board of Directors may, by resolution passed by a majority of the
whole Board, designate one or more committees, including an executive committee,
each committee to consist of one or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any committee, who, in the order specified by the Board, may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification of a member or members of a committee, and in the event there
are not sufficient alternate members present at such meeting, the member or
members thereof, including alternates, present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. The term of
office of the members of each committee shall be as fixed from time to time by
the Board, subject to these Bylaws; provided, however, that any committee member
who ceases to be a member of the Board shall ipso facto cease to be a committee
member. Each committee shall appoint a secretary, who may be the Secretary of
the Corporation or any Assistant Secretary thereof.
SECTION 4.02. POWERS OF COMMITTEES. Any committee designated by the
Board of Directors pursuant to Section 4.01 hereof, to the extent provided in
the resolution of the Board of Directors, shall have and may exercise such of
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation as the Board of Directors may direct and
delegate, except, however, those matters which are required by statute to be
reserved unto or acted upon by the entire Board of Directors.
SECTION 4.03. MEETINGS, NOTICES AND RECORDS. Each committee may provide
for the holding of regular meetings, with or without notice, and may fix the
time and place at which such meetings shall be held. Special meetings of each
committee shall be held upon call by or at the direction of its chairman or, if
there be no chairman, by or at the direction of any two of its members, at the
time and place specified in the respective notices or waivers of notice thereof.
Notice of each special meeting of a committee shall be mailed to each member of
such committee, addressed to him or her at his or her residence or usual place
of business, at least one day before the day on which the meeting is to be held,
or shall be sent by facsimile addressed to him or her at such place, or
telephoned or delivered to him or her personally, not later than the
8
<PAGE> 9
day before the day on which the meeting is to be held. Notice of any meeting of
a committee need not be given to any member thereof who shall attend the meeting
in person or who shall waive notice thereof in writing. Notice of any adjourned
meeting need not be given. Each committee shall keep a record of its proceedings
and report the same to the Board of Directors when required.
SECTION 4.04. ACTION WITHOUT MEETINGS. Any action required or permitted
to be taken at a meeting of any committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all members
of such committee. Such consent shall have the same force and effect as a
unanimous vote at a meeting. The signed consent, or a signed copy, shall become
a part of the record of such committee.
SECTION 4.05. QUORUM AND MANNER OF ACTING. At each meeting of any
committee the presence of one-third of its members then in office shall be
necessary and sufficient to constitute a quorum for the transaction of business,
and the act of a majority of the members present at any meeting at which a
quorum is present shall be the act of such committee; in the absence of a
quorum, a majority of the members present at the time and place of any meeting
may adjourn the meeting from time to time until a quorum shall be present.
Subject to the foregoing and other provisions of these Bylaws and except as
otherwise determined by the Board of Directors, each committee may make rules
for the conduct of its business. Any determination made in writing and signed by
all the members of such committee shall be as effective as if made by such
committee at a meeting.
SECTION 4.06. RESIGNATIONS. Any member of a committee may resign at any
time by giving written notice of such resignation to the Board of Directors, the
President or the Secretary of the Corporation. Unless otherwise specified in
such notice, such resignation shall take effect upon receipt thereof by the
Board or any such officer.
SECTION 4.07. REMOVAL. Any member of any committee may be removed at
any time by the Board of Directors with or without cause.
SECTION 4.08. VACANCIES. If any vacancy shall occur in any committee by
reason of death, resignation, disqualification, removal or otherwise, the
remaining members of such committee, though less than a quorum, shall continue
to act until such vacancy is filled by the Board of Directors.
SECTION 4.09. COMPENSATION. Appropriate compensation for members and
alternate members of any committee appointed pursuant to the authority hereof
may be authorized by the action of a majority of the entire Board of Directors
pursuant to the provisions of Section 3.13 hereof.
SECTION 4.10. RESPONSIBILITY. Notwithstanding any provision to the
contrary herein, the designation and appointment of a committee and the
delegation of authority to it shall not operate to relieve the Board of
Directors, or any member or alternate member thereof, of any responsibility
imposed upon it or him by law.
9
<PAGE> 10
ARTICLE V
NOTICES
SECTION 5.01. METHOD OF NOTICE. Whenever under the provisions of the
Delaware General Corporation Law or of the Certificate of Incorporation or of
these Bylaws, notice is required to be given to any Director or shareholder, it
shall not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such Director or shareholder, at his or her
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States Mail. Notice to Directors or
shareholders may also be given by telegram.
SECTION 5.02. WAIVER. Whenever any notice is required to be given under
the provisions of the Delaware General Corporation Law or under the provisions
of the Certificate of Incorporation or these Bylaws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice. Attendance by such person or persons, whether in person or by proxy, at
any meeting requiring notice shall constitute a waiver of notice of such
meeting, except as provided in Section 3.11 hereof.
ARTICLE VI
OFFICERS
SECTION 6.01. NUMBER. The officers of the Corporation shall be a
President, one or more Vice Presidents, a Secretary, a Treasurer and, if the
Board shall so elect, such other officers and agents as may be appointed by the
Board of Directors pursuant to Section 6.04 hereof. No officer or agent need to
be a shareholder of the Corporation or a resident of Delaware. No officer or
agent is required to be a Director, except the Chairman of the Board. Any two or
more offices may be held by the same person. No officer or agent need to be a
shareholder of the Corporation or a resident of Delaware. No officer or agent is
required to be a Director, except the Chairman of the Board.
SECTION 6.02. ELECTION, TERM OF OFFICE. The officers shall be elected
annually by the Board of Directors and, except in the case of officers appointed
in accordance with the provisions of Section 6.04 hereof, each shall hold office
until the next annual election of officers or until his or her successor shall
have been duly elected and qualified, or until his or her death, or until he or
she shall resign, or until he or she shall have been removed in the manner
hereinafter provided.
SECTION 6.03. AUTHORITY. Officers and agents shall have such authority
and perform such duties in the management of the Corporation as are provided in
these Bylaws or as may be determined by resolution of the Board of Directors not
inconsistent with these Bylaws.
SECTION 6.04. OTHER OFFICERS. The Corporation may have such other
officers and agents as may be deemed necessary by the Board of Directors,
including without limitation one or more
10
<PAGE> 11
Assistant Vice Presidents, one or more Assistant Secretaries and one or more
Assistant Treasurers. Such other officers and agents shall be appointed in such
manner, have such duties and hold their offices for such terms as may be
determined by the Board of Directors. The Board of Directors may delegate to any
officer or agent the power to appoint any such subordinate officers or agents
and to prescribe their respective terms of office, authorities and duties.
SECTION 6.05. RESIGNATIONS. Any officer may resign at any time by
giving written notice of his or her resignation to the Board of Directors, to
the President or to the Secretary of the Corporation. Unless otherwise specified
in such written notice, any such resignation shall take effect at the time of
receipt thereof by the Board of Directors or any such officer.
SECTION 6.06. REMOVAL. Any officer specifically designated in Section
6.0l hereof may be removed, either with or without cause, by a vote of a
majority of the whole Board of Directors. Any officer or agent appointed in
accordance with the provisions of Section 6.03 hereof may be removed, either
with or without cause, by the Board of Directors at any meeting, by the vote of
a majority of the directors present at such meeting, or by any superior officer
or agent upon whom such power of removal shall have been conferred by the Board
of Directors. Such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not itself create contract rights.
SECTION 6.07. VACANCIES. A vacancy in any office by reason of death,
resignation, removal or any other cause shall be filled for the unexpired
portion of the term by the Board of Directors.
SECTION 6.08. COMPENSATION. The compensation of all officers and agents
of the Corporation shall be fixed from time to time by the Board of Directors.
SECTION 6.09. CHAIRMAN OF THE BOARD. If a Chairman of the Board is
elected, he or she shall be chosen from among the Directors and shall be the
chief executive and principal officer of the Corporation. He or she shall have
the power to call special meetings of the shareholders and of the Directors for
any purpose or purposes, and he or she shall preside at all meetings of the
shareholders and of the Board of Directors, unless he or she shall be absent or
unless he or she shall, at his or her election, designate the President to
preside in his or her stead. The Chairman of the Board shall be responsible for
the operations and business affairs of the Corporation and shall possess all of
the powers granted by the Bylaws to the President, including the power to make
and sign contracts and agreements in the name and on behalf of the Corporation.
He or she shall, in general, have supervisory power over the President and all
other officers and the business activities of the Corporation, subject to the
discretion of the Board of Directors.
SECTION 6.10. THE PRESIDENT. Subject to the supervision of the Chairman
of the Board, or in the absence of the election of a Chairman of the Board, the
President shall be the chief executive officer of the Corporation and shall
preside at all meetings of the stockholders and of the Board of Directors and of
the Executive Committee at which he or she shall be present. He or she shall see
that all orders and resolutions of the Board of Directors are carried into
effect. He or she may sign, with the Secretary or any other officer thereunto
duly authorized by the Board of Directors, certificates for shares of stock of
the Corporation, deeds, mortgages, bonds,
11
<PAGE> 12
contracts, agreements or other instruments duly authorized by the Board of
Directors except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent.
From time to time he or she shall report to the Board of Directors all matters
within his or her knowledge which the interests of the Corporation may require
to be brought to their attention. The President shall do and perform all such
other duties and may exercise such other powers as from time to time may be
assigned to him or her by these Bylaws or by the Board of Directors or by the
Executive Committee. The officers of the Corporation shall be responsible to the
President for the proper and faithful discharge of their several duties and
shall make such reports to him or her as he or she may from time to time
require.
SECTION 6.11. THE VICE PRESIDENTS. In the event of the death, absence,
unavailability or disability of the President or at the request of the
President, the Vice President or, in case there shall be more than one Vice
President, the Vice President designated by the President (or in the absence of
such designation, the Vice President designated by the Board of Directors) shall
perform all the duties of the President and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the President. Except
where by law the signature of the President is required, each of the Vice
Presidents shall possess the same power as the President to sign all
certificates, contracts, obligations and other instruments of the Corporation.
Any Vice President shall perform such other duties and may exercise such other
powers as from time to time may be assigned to him or her by these Bylaws or by
the Board of Directors or by the Executive Committee or by the President.
SECTION 6.12. THE ASSISTANT VICE PRESIDENTS. The Assistant Vice
Presidents shall exercise such powers as may be assigned to them from time to
time by the Board of Directors or by the Executive Committee or by the
President.
SECTION 6.13. THE SECRETARY AND THE ASSISTANT SECRETARIES. The
Secretary shall:
(a) Keep the minutes of the meetings of the stockholders, the
Board of Directors and the Executive Committee, and cause the same to
be recorded in books provided for that purpose;
(b) Prepare, or cause to be prepared, and submit to the
Chairman of each meeting of the stockholders a certified list, in
alphabetical order, of the names of the stockholders entitled to vote
at such meeting, together with the number of shares of stock held by
each;
(c) See that all notices are duly given in accordance with
the provisions of these Bylaws or as required by statute;
(d) Be custodian of the records of the Corporation, the Board
of Directors and the Executive Committee, and of the seal of the
Corporation; see that the seal is affixed to all stock certificates
prior to their issuance and to all documents the execution of which on
behalf of the Corporation under its seal shall have been duly
authorized, and attest the seal when so affixed;
12
<PAGE> 13
(e) See that all books, reports, statements, certificates and
the other documents and records required by law to be kept or filed are
properly kept or filed;
(f) In general, perform all duties and have all powers
incident to the office of the Secretary and perform such other duties
and have such other powers as from time to time may be assigned to him
or her by these Bylaws or by the Board of Directors or by the
President;
(g) Whenever any committee shall be appointed in pursuance of
a resolution of the Board of Directors, furnish the chairman of such
committee with a copy of such resolution;
(h) Have charge of the stock and transfer books of the
Corporation, and exhibit such stock book at all reasonable times to
such persons as are entitled by statute to have access thereto; and
(i) Sign (unless the Treasurer or any Assistant Secretary or
an Assistant Treasurer shall sign) certificates representing stock of
the Corporation the issuance of which shall have been duly authorized
(the signature to which may be a facsimile signature).
At the request of the Secretary, or in his or her absence or
disability, any Assistant Secretary shall perform any of the duties of the
Secretary and, when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the Secretary. Except where by law the signature of
the Secretary is required, each of the Assistant Secretaries shall possess the
same power as the Secretary to sign certificates, contracts, obligations and
other instruments of the Corporation, and to affix the seal of the Corporation
to such instruments, and attest the same. In addition, the Board of Directors
may give general authority to any other officer to affix the seal of the
Corporation and to attest the affixing by his or her signature. The Assistant
Secretaries shall perform such other duties as from time to time may be assigned
to them respectively by the Board of Directors, the President or the Secretary.
SECTION 6.14. THE TREASURER AND THE ASSISTANT TREASURERS. The Treasurer
shall:
(a) Have charge of and supervision over and be responsible
for the funds, including the borrowing thereof, the securities,
receipts and disbursements of the Corporation;
(b) Cause all moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or
other depositaries as shall be selected by the Board of Directors or
Executive Committee, or pursuant to authority conferred by the Board of
Directors or Executive Committee;
(c) Cause the funds of the Corporation to be disbursed by
checks or drafts upon the authorized depositaries of the Corporation;
13
<PAGE> 14
(d) Cause to be taken and preserved proper vouchers for all
moneys disbursed;
(e) Cause to be kept correct books of account of all the
business and transactions of the Corporation and upon application cause
such books of account to be exhibited to any director;
(f) Render to the President, the Board of Directors or the
Executive Committee, whenever requested, an account of the financial
conditions of the Corporation and of his or her transactions as
Treasurer;
(g) Be empowered, from time to time, to require from the
officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all
financial transactions of the Corporation;
(h) Sign (unless the Secretary or an Assistant Secretary or
an Assistant Treasurer shall sign) certificates representing stock of
the Corporation the issuance of which shall have been duly authorized
(the signature to which may be a facsimile signature); and
(i) In general, perform all duties and have all powers
incident to the office of Treasurer and perform such other duties and
have such other powers as from time to time may be assigned to him or
her by these Bylaws or by the Board of Directors or by the President.
At the request of the Treasurer or, in his or her absence or
disability, the Assistant Treasurer or, in case there shall be more than one
Assistant Treasurer, the Assistant Treasurer designated by the Board of
Directors or by the Executive Committee or by the President shall perform any of
the duties of the Treasurer and, when so acting, shall have all the powers of,
and be subject to all the restrictions upon, the Treasurer. Except where by law
the signature of the Treasurer is required, each of the Assistant Treasurers
shall possess the same power as the Treasurer to sign all certificates,
contracts, obligations and other instruments of the Corporation. The Assistant
Treasurers shall perform such other duties as from time to time may be assigned
to them respectively by the Board of Directors, the President or the Treasurer.
SECTION 6.15. SALARIES. The salaries of the officers shall be fixed
from time to time by the Board of Directors, except that the Board of Directors
may delegate to any person the power to fix the salaries or other compensation
of any officers or agents appointed in accordance with the provisions of Section
6.04 hereof. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the Corporation.
SECTION 6.16. SURETY BONDS. If the Board of Directors shall so require,
any officer or agent of the Corporation shall execute to the Corporation a bond
in such sum and with such surety or sureties as the Board of Directors may
direct, conditioned upon the faithful discharge of his or her duties, including
responsibility for negligence and for the accounting for all property, funds or
securities of the Corporation which may come into his or her hands.
14
<PAGE> 15
ARTICLE VII
CONTRACTS, CHECKS, LOANS, DEPOSITS AND PROXIES
SECTION 7.01. CONTRACTS, CHECKS, ETC. All contracts and agreements
authorized by the Board of Directors, and all checks, drafts, bills of exchange
or other orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation shall be signed by such
officer or officers, or agent or agents, as may from time to time be designated
by the Board of Directors, which designation may be general or confined to
specific instances. The President or a Vice President and the Treasurer shall
have the power and authority to bind the Corporation by contract or engagement
or to pledge its credit or to render it liable pecuniarily for any purpose or
for any amount; and no other officer, agent or employee of the Corporation shall
have any such power and authority unless so designated by the Board of Directors
or in or pursuant to the provisions of these Bylaws.
SECTION 7.02. PROXIES IN RESPECT OF SECURITIES OF OTHER CORPORATIONS.
Unless otherwise provided by resolution adopted by the Board of Directors, the
President or a Vice President may from time to time appoint an attorney or
attorneys, or an agent or agents, to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the holder
of stock or other securities in any other corporation to vote or to consent in
respect of such stock or other securities; and the President or any Vice
President may instruct the person or persons so appointed as to the manner of
exercising such powers and rights and the President or any Vice President may
execute or cause to be executed in the name and on behalf of the Corporation and
under its corporate seal, or otherwise, all such written proxies, powers of
attorney or other written instruments as he or she may deem necessary in order
that the Corporation may exercise such powers and rights.
SECTION 7.03. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such bankers or other depositaries as the Board of
Directors may select, or as may be selected by any officer or officers or agent
or agents authorized so to do by the Board of Directors. Endorsements for
deposit to the credit of the Corporation in any of its duly authorized
depositaries shall be made in such manner as the Board of Directors from time to
time may determine.
ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 8.01. FORM; SIGNATURE. The shares of the capital stock of the
Corporation shall be represented by certificates in the form approved by the
Board of Directors and signed in the name of the Corporation by the President or
a Vice President and the Secretary or an Assistant Secretary of the Corporation
and sealed with the seal of the Corporation or a facsimile thereof. The
certificates of stock of the Corporation shall be numbered and shall be entered
in the books of the Corporation as they are issued. They shall exhibit the
holder's name and number of shares and class of shares and the designation of
the series, if any, which such certificate represents and such other matters as
required by law. At such time as the Corporation may be authorized to issue
shares of more than one class or any class in series, every certificate shall
set forth upon the
15
<PAGE> 16
face or back of such certificate a statement of the designations, preferences,
limitations and relative rights of the shares of each class or series authorized
to be issued, as required by the laws of the State of Delaware.
SECTION 8.02. DELIVERY. Every holder of the capital stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation by the President or a Vice President and the Secretary or an
Assistant Secretary of the Corporation, certifying the class of capital stock
and the number of shares represented thereby as owned or held by such
shareholder in the Corporation.
SECTION 8.03. TRANSFER. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate or by his or her
attorney, lawfully constituted in writing, and upon surrender of the certificate
therefor.
SECTION 8.04. RECORD DATES. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may, in its discretion, fix, in
advance, a record date, which shall be not more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. If the share transfer records are not closed and no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to receive a
distribution (other than a distribution involving a purchase or redemption by
the Corporation of any of its own shares) or a share dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such distribution or share dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
Only those stockholders of record on the date so fixed shall be entitled to any
of the foregoing rights, notwithstanding the transfer of any such stock on the
books of the Corporation after any such record date fixed by the Board of
Directors. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 8.05. CLOSING OF TRANSFER BOOKS. The Board of Directors may
close the transfer books in its discretion for a period not exceeding sixty (60)
days preceding any meeting, annual or special, of the stockholders or the day
appointed for the payment of a dividend.
SECTION 8.06. RECORD OWNER. Prior to due presentment for registration
of transfer of a certificate evidencing shares of the capital stock of the
Corporation in the manner set forth in Section 8.08 hereof, the Corporation
shall be entitled to recognize the person registered as the owner of such shares
on its records (or the records of its duly appointed transfer agent, as the case
may be) as the person exclusively entitled to vote, to receive notices and
dividends with respect to, and otherwise exercise all rights and powers relative
to such shares; and the Corporation shall not be bound or otherwise obligated to
recognize any claim, direct or indirect,
16
<PAGE> 17
legal or equitable, to such shares by any other person, whether or not it shall
have actual, express or other notice thereof, except as otherwise provided by
the laws of Delaware.
SECTION 8.07. LOST CERTIFICATES. Any person claiming a certificate of
stock to be lost or destroyed shall make an affidavit or affirmation of that
fact and advertise the same in such manner as the Board of Directors may
require, and shall if the directors so require give the Corporation a bond of
indemnity, in form and with one or more sureties satisfactory to the Board of
Directors, in at least double the value of the stock represented by said
certificate, whereupon a new certificate may be issued of the same tenor and for
the same number of shares as the one alleged to be lost or destroyed. In
addition, all requests for replacement certificates must be given before the
Corporation has notice that the certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse claim and any such requests
must satisfy any other reasonable requirements imposed by the Corporation. In
the event a certificate has been lost, apparently destroyed or wrongfully taken,
and the registered owner of record fails to notify the Corporation within a
reasonable time after he or she has notice of such loss, destruction, or
wrongful taking, and the Corporation registers a transfer (in a manner
hereinbelow set forth) of the shares represented by the certificate before
receiving such notification, such prior registered owner of record shall be
precluded from making any claim against the Corporation for the transfer
required hereunder or for a new certificate.
SECTION 8.08. REGISTRATION OF TRANSFERS. Subject to the provisions
hereof, the Corporation shall register the transfer of a certificate evidencing
shares of its capital stock presented to it for transfer if:
(a) ENDORSEMENT. Upon surrender of the certificate to the
Corporation (or its transfer agent, as the case may be) for transfer,
the certificate (or an appended stock power) is properly endorsed by
the registered owner, or by his or her duly authorized legal
representative or attorney-in-fact, with proper written evidence of the
authority and appointment of such representative, if any, accompanying
the certificate; and
(b) GUARANTY AND EFFECTIVENESS OF SIGNATURE. The signature of
such registered owner or his or her legal representative or
attorney-in-fact, as the case may be, has been guaranteed by a national
banking association or member of the New York Stock Exchange, and
reasonable assurance in a form satisfactory to the Corporation is given
that such endorsements are genuine and effective; and
(c) ADVERSE CLAIMS. The Corporation has no notice of an
adverse claim or has otherwise discharged any duty to inquire into such
a claim; and
(d) COLLECTION OF TAXES. Any applicable law (local, state or
federal) relating to the collection of taxes relative to the
transaction has been complied with; and
(e) ADDITIONAL REQUIREMENTS SATISFIED. Such additional
conditions and documentation as the Corporation (or its transfer agent,
as the case may be) shall reasonably require, including without
limitation thereto, the delivery with the surrender of such stock
certificate or certificates of proper evidence of succession,
assignment or other authority to obtain transfer thereof, as the
circumstances may require, and such
17
<PAGE> 18
legal opinions with reference to the requested transfer as shall be
required by the Corporation (or its transfer agent) pursuant to the
provisions of these Bylaws and applicable law, shall have been
satisfied.
SECTION 8.09. RESTRICTIONS ON TRANSFER AND LEGENDS ON CERTIFICATES.
(a) SHARES IN CLASSES OR SERIES. If the Corporation is
authorized to issue shares of more than one class, the certificate
shall set forth, either on the face or back of the certificate, a full
or summary statement of all of the designations, preferences,
limitations, and relative rights of the shares of each such class and,
if the Corporation is authorized to issue any preferred to special
class in series, the variations in the relative rights and preferences
of the shares of each such series so far as the same have been fixed
and determined, and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. In
lieu of providing such a statement in full on the certificate, a
statement on the face or back of the certificate may provide that the
Corporation will furnish such information to any shareholder without
charge upon written request to the Corporation at its principal place
of business or registered office and that copies of the information are
on file in the office of the Secretary of State.
(b) RESTRICTION ON TRANSFER. Any restrictions imposed or
agreed to by the Corporation on the sale or other disposition of its
shares and on the transfer thereof must be copied at length or in
summary form on the face, or so copied on the back and referred to on
the face, of each certificate representing shares to which the
restriction applies. The certificate may, however, state on the face or
back that such a restriction exists pursuant to a specified document
and that the Corporation will furnish a copy of the document to the
holder of the certificate without charge upon written request to the
Corporation at its principal place of business.
(c) PREEMPTIVE RIGHTS. Any preemptive rights of a shareholder
to acquire unissued or treasury shares of the Corporation which are
limited or denied by the Certificate of Incorporation must be set forth
at length on the face or back of the certificate representing shares
subject thereto. In lieu of providing such a statement in full on the
certificate, a statement on the face or back of the certificate may
provide that the Corporation will furnish such information to any
shareholder without charge upon written request to the Corporation at
its principal place of business and that a copy of such information is
on file in the office of the Secretary of State.
(d) UNREGISTERED SECURITIES. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
Common Stock or warrants to purchase Common Stock of the Corporation,
which is issued to any person without registration under the Securities
Act of 1933, as amended, or the Blue Sky laws of any state, shall not
be transferable until the Corporation has been furnished with a legal
opinion of counsel with reference thereto, satisfactory in form and
content to the Corporation and its counsel, to the effect that such
sale, transfer or pledge does not involve a violation of the Securities
Act of 1933, as amended, or the Blue Sky laws of any state having
jurisdiction. The certificate representing the security shall bear
substantially the following legend:
18
<PAGE> 19
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW BUT HAVE BEEN ACQUIRED FOR THE
PRIVATE INVESTMENT OF THE HOLDER HEREOF AND MAY NOT
BE OFFERED, SOLD OR TRANSFERRED UNTIL EITHER (I) A
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR
SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR (II) THE
CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT
REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.
ARTICLE IX
DIVIDENDS
SECTION 9.01. DISTRIBUTIONS. Subject to the provisions of the Delaware
General Corporation Law, as amended, and the Certificate of Incorporation,
distributions of the Corporation shall be declared and paid pursuant to the
following regulations:
(a) DECLARATION OF PAYMENT. Distributions on the issued and
outstanding shares of capital stock of the Corporation may be declared
by the Board of Directors at any regular special meeting and may be
paid in cash, in property, or in shares of capital stock. Such
declaration and payment shall be at the discretion of the Board of
Directors.
(b) RECORD DATE. The Board of Directors may fix in advance a
record date for the purpose of determining shareholders entitled to
receive payment of any distribution, such record date to be not more
than sixty (60) days prior to the payment date of such distribution, or
the Board of Directors may close the stock transfer books for such
purpose for a period of not more than sixty (60) days prior to the
payment date of such distribution. In the absence of action by the
Board of Directors, the date upon which the Board of Directors adopts
the resolution declaring such distribution shall be the record date.
SECTION 9.02. RESERVES. There may be created by resolution of the Board
of Directors out of the surplus of the Corporation such reserve or reserves as
the Directors from time to time, in their discretion, think proper to provide
for contingencies, or to equalize distributions, or to repair or maintain any
property of the Corporation, or for such other purposes as the Directors shall
think beneficial to the Corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created.
SECTION 9.03. BOOKS AND RECORDS. The Corporation shall maintain books
and records of account and shall prepare and maintain minutes of the proceedings
of its shareholders, its
19
<PAGE> 20
Board of Directors and each committee of its Board of Directors. The Corporation
shall keep at its registered office or principal place of business, or at the
office of its transfer agent or registrar, a record of the original issuance of
shares issued by the Corporation and a record of each transfer of those shares
that have been presented to the Corporation for registration of transfer. Such
records shall contain the names and addresses of all past and present
shareholders of the Corporation and the number and class of shares issued by the
Corporation held by each of them.
SECTION 9.04. ANNUAL STATEMENT. The Board of Directors shall present at
or before each annual meeting of shareholders a full and clear statement of the
business and financial condition of the Corporation, including a reasonably
detailed balance sheet and income statement under current date.
SECTION 9.05. CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as otherwise
provided by law or these Bylaws, any contract or other instrument relative to
the business of the Corporation may be executed and delivered in the name of the
Corporation and on its behalf by the Chairman of the Board, the Chief Executive
Officer, or the Chief Operating Officer, if any, or the President of the
Corporation. The Board of Directors may authorize any other officer or agent of
the Corporation to enter into any contract or execute and deliver any contract
in the name and on behalf of the Corporation, and such authority may be general
or confined to specific instances as the Board of Directors may determine by
resolution. All bills, notes, checks or other instruments for the payment of
money shall be signed or countersigned by such officer, officers, agent or
agents and in such manner as are permitted by these Bylaws and/or as, from time
to time, may be prescribed by resolution of the Board of Directors. Unless
authorized to do so by these Bylaws or by the Board of Directors, no officer,
agent or employee shall have any power or authority to bind the Corporation by
any contract or engagement, or to pledge its credit, or to render it liable
pecuniarily for any purpose or to any amount.
ARTICLE X
RELIANCE ON RECORDS AND REPORTS
Each director, officer or member of any committee designated by, or by
authority of, the Board of Directors shall, in the performance of his or her
duties, be fully protected in relying in good faith upon the books of account or
other records of the Corporation or of any of its subsidiaries or upon reports
made to the Corporation or any of its subsidiaries by any official of the
Corporation or of a subsidiary or by an independent certified public accountant
or by an appraiser selected with reasonable care by the Board of Directors or by
any such committee.
ARTICLE XI
CORPORATE SEAL
The corporate seal shall be circular in form and shall bear the name of
the Corporation and words and figures denoting its organization under the laws
of the State of Delaware and otherwise shall be in such form as shall be
approved from time to time by the Board of Directors. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in nay manner
reproduced.
20
<PAGE> 21
ARTICLE XII
FISCAL YEAR
The fiscal year of the Corporation shall be such twelve (12) month
period of each calendar year as may be fixed from time to time by resolution of
the Board of Directors.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given by these Bylaws
or the Certificate of Incorporation of the Corporation or any of the corporate
laws of the State of Delaware, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE XIV
INDEMNIFICATION
SECTION 14.01. MANDATORY INDEMNIFICATION. Each person who was or is
made a party or is threatened to be made a party, or who was or is a witness
without being named a party, to any threatened, pending or completed action,
claim, suit or proceeding, whether civil, criminal, administrative or
investigative, any appeal in such an action, suit or proceeding, and any inquiry
or investigation that could lead to such an action, suit or proceeding (a
"Proceeding"), by reason of the fact that such individual is or was a Director
officer of the Corporation, or while a Director or officer of the Corporation is
or was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another corporation, partnership, trust, employee benefit plan or other
enterprise, shall be indemnified and held harmless by the Corporation from and
against any judgments, penalties (including excise taxes), fines, amounts paid
in settlement and reasonable expenses (including court costs and attorneys'
fees) actually incurred by such person in connection with such Proceeding if it
is determined that he or she acted in good faith and reasonably believed (a) in
the case of conduct in his or her official capacity on behalf of the Corporation
that his or her conduct was in the Corporation's best interests, (b) in all
other cases, that his or her conduct was not opposed to the best interests of
the Corporation, and (c) with respect to any Proceeding which is a criminal
action, that he or she had no reasonable cause to believe his or her conduct was
unlawful; provided, however, that in the event a determination is made that such
person is liable to the Corporation or is found liable on the basis that
personal benefit was improperly received by such person, the indemnification is
limited to reasonable expenses actually incurred by such person in connection
with the Proceeding and shall not be made in respect of any Proceeding in which
such person shall have been found liable for willful or intentional misconduct
and/or gross negligence in the performance of his or her duty to the
Corporation. The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself be determinative of whether the person did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any proceeding which is a
criminal action, had no
21
<PAGE> 22
reasonable cause to believe that his or her conduct was unlawful. A person shall
be deemed to have been found liable in respect of any claim, issue or matter
only after the person shall have been so adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom.
SECTION 14.02. DETERMINATION OF INDEMNIFICATION. Any indemnification
under the foregoing Section 14.01 (unless ordered by a court of competent
jurisdiction) shall be made by the Corporation only upon a determination that
indemnification of such person is proper in the circumstances by virtue of the
fact that it shall have been determined that such person has met the applicable
standard of conduct. Such determination shall be made (a) by a majority vote of
a quorum consisting of Directors who at the time of the vote are not named
defendants or respondents in the Proceeding; (b) if such quorum cannot be
obtained, by a majority vote of a committee of the Board of Directors,
designated to act in the matter by a majority of all Directors, consisting
solely of two (2) or more Directors who at the time of the vote are not named
defendants or respondents in the Proceeding; (c) by special legal counsel (in a
written opinion) selected by the Board of Directors or a committee of the Board
of Directors by a vote as set forth in subsection (a) or (b) of this Section,
or, if such quorum cannot be obtained and such committee cannot be established,
by a majority vote of all Directors (in which Directors who are named defendants
or respondents in the Proceeding may participate, or (d) by the shareholders of
the Corporation in a vote that excludes the shares held by Directors who are
named defendants or respondents in the Proceeding.
SECTION 14.03. ADVANCE OF EXPENSES. Reasonable expenses, including
court costs and attorneys' fees, incurred by a person who was or is a witness or
who was or is named as a defendant or respondent in a Proceeding, by reason of
the fact that such individual is or was a Director or officer of the
Corporation, or while a Director or officer of the Corporation is or was serving
at the request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, trust employee benefit plan or other enterprise, shall
be paid by the Corporation at reasonable intervals in advance of the final
disposition of such Proceeding, and without the determination specified in the
foregoing Section 14.02, upon receipt by the Corporation of a written
affirmation by such person of his or her good faith belief that he or she has
met the standard of conduct necessary for indemnification under this Article 14,
and a written undertaking by or on behalf of such person to repay the amount
paid or reimbursed by the Corporation if it is ultimately determined that he or
she is not entitled to be indemnified by the Corporation as authorized in this
Article 14. Such written undertaking shall be an unlimited obligation of such
person and it may be accepted without reference to financial ability to make
repayment.
SECTION 14.04. PERMISSIVE INDEMNIFICATION. The Board of Directors of
the Corporation may authorize the Corporation to indemnify employees or agents
of the Corporation, and to advance the reasonable expenses of such persons, to
the same extent, following the same determinations and upon the same conditions
as are required for the indemnification of and advancement of expenses to
Directors and officers of the Corporation.
SECTION 14.05. NATURE OF INDEMNIFICATION. The indemnification and
advancement of expenses provided hereunder shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under the
Certificate of Incorporation, these Bylaws, any agreement, vote of shareholders
or disinterested Directors or otherwise, both as to actions taken in an official
capacity and as to actions
22
<PAGE> 23
taken in any other capacity while holding such office, shall continue as to a
person who has ceased to be a Director, officer, employee or agent of the
Corporation and shall inure to the benefit of the heirs, executors and
administrators of such person.
SECTION 14.06. INSURANCE. The Corporation shall have the power and
authority to purchase and maintain insurance or another arrangement on behalf of
any person who is or was a Director, officer, employee or agent of the
Corporation, or who is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise against any liability, claim, damage, loss or risk asserted against
such person and incurred by such person in any such capacity or arising out of
the status of such person as such, irrespective of whether the Corporation would
have the power to indemnify and hold such person harmless against such liability
under the provisions hereof. If the insurance or other arrangement is with a
person or entity that is not regularly engaged in the business of providing
insurance coverage, the insurance or arrangement may provide for payment of a
liability with respect to which the Corporation would not have the power to
indemnity the person only if including coverage for the additional liability has
been approved by the shareholders of the Corporation. Without limiting the power
of the Corporation to procure or maintain any kind of insurance or other
arrangement, the Corporation may, for the benefit of persons indemnified by the
Corporation, (a) create a trust fund; (b) establish any form of self-insurance;
(c) secure its indemnity obligation by grant of a security interest or other
lien on the assets of the Corporation; or (d) establish a letter of credit,
guaranty, or surety arrangement. The insurance or other arrangement may be
procured, maintained, or established within the Corporation or with any insurer
or other person deemed appropriate by the Board of Directors regardless of
whether all or part of the stock or other securities of the insurer or other
person are owned in whole or in part by the Corporation. In the absence of
fraud, the judgment of the Board of Directors as to the terms and conditions of
the insurance or other arrangement and the identity of the insurer or other
person participating in the arrangement shall be conclusive and the insurance or
arrangement shall not be voidable and shall not subject the Directors approving
the insurance or arrangement to liability, on any ground, regardless of whether
Directors participating in the approval are beneficiaries of the insurance or
arrangement.
SECTION 14.07. NOTICE. Any indemnification or advance of expenses to a
present or former director of the Corporation in accordance with this Article 14
shall be reported in writing to the shareholders of the Corporation with or
before the notice or waiver of notice of the next shareholders' meeting or with
or before the next submission of a consent to action without a meeting and, in
any case, within the next twelve (12) month period immediately following the
indemnification or advance.
ARTICLE XV
AMENDMENTS
The Bylaws of the Corporation, regardless of whether made by the
stockholders or by the Board of Directors, may be amended, added to or repealed
at any meeting of the Board of
23
<PAGE> 24
Directors or of the stockholders provided that notice of the proposed
alteration, amendment or repeal be contained in the notice of such meeting. No
change of the time or place for the annual meeting of the stockholders for the
election of directors shall be made except in accordance with the laws of the
State of Delaware.
ADOPTED as the Bylaws of the Corporation on this __ day of April, 1999.
24
<PAGE> 1
EXHIBIT 4
INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE
NUMBER SIMEX SHARES
CUSIP NO.
SIMEX TECHNOLOGIES, INC.
50,000,000 AUTHORIZED SHARES $.001 PAR VALUE NON-ASSESSABLE
This Certifies that
is the register holder of
Shares of SIMEX TECHNOLOGIES, INC. Common Stock
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar:
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Date: May 1, 1999
SECRETARY
Not Valid Unless Countersigned
by Transfer Agent
[SIMEX SEAL]
<PAGE> 1
EXHIBIT 10.1(a)
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
MAILE INTERNATIONAL, INC.
AND
SIMEX A.S.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Plan of Reorganization................................................................................ 1
2. Exchange of Shares ................................................................................... 1
3. Pre-Closing Events.................................................................................... 2
4. Exchange of Securities................................................................................ 2
5. Post Acquisition Events............................................................................... 3
6. Other Matters......................................................................................... 3
7. Delivery of Shares.................................................................................... 4
8. Representations of Simex Shareholders................................................................. 4
9. Representations of Simex.............................................................................. 4
10. Representations of Maile and Mower.................................................................... 6
11. Closing............................................................................................... 8
12. Conditions Precedent to the Obligations of Simex...................................................... 8
13. Conditions Precedent to the Obligations of Maile...................................................... 10
14. Indemnification....................................................................................... 10
15. Nature and Survival of Representations................................................................ 11
16. Documents at Closing.................................................................................. 11
17. Finder's Fees......................................................................................... 12
18. Miscellaneous......................................................................................... 12
19. Signature Page........................................................................................ 13
</TABLE>
Exhibit A - Simex Stockholder Schedule
Exhibit B - Amendment to Articles of Incorporation
Exhibit C - Investment Letter
<PAGE> 3
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (hereinafter the
"Agreement") is entered into effective as of this ___ day of _________________
1998, by and among Maile International, Inc., a Nevada corporation (hereinafter
"Maile"); Clark Mower, the sole officer and director of Maile (hereinafter
"Mower"); Simex A.S., a Norwegian corporation (hereinafter "Simex"), and the
owners of all the outstanding shares of common stock of Simex (hereinafter the
"Simex Stockholders").
RECITALS:
WHEREAS, the Simex Stockholders own all of the issued and outstanding
common stock of Simex which comprises 200 shares (the "Simex Common Stock").
Maile desires to acquire the Simex Common Stock solely in exchange for voting
common stock of Maile, making Simex a wholly-owned subsidiary of Maile; and
WHEREAS, the Simex Stockholders (as set forth on the attached Exhibit
"A") desire to acquire voting common stock of Maile in exchange for the Simex
Common Stock, as more fully set forth herein.
NOW THEREFORE, for the mutual consideration set out herein, and other
good and valuable consideration, the legal sufficiency of which is hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. PLAN OF REORGANIZATION. It is hereby agreed that all of the
Simex Common Stock shall be acquired by Maile in exchange solely for Maile
common voting stock (the "Maile Shares"). It is the intention of the parties
hereto that all of the issued and outstanding shares of capital stock of Simex
shall be acquired by Maile in exchange solely for Maile common voting stock and
that this entire transaction qualify as an organizational exchange under
Section 351 of the Internal Revenue Code of 1986, as amended, and related or
other applicable sections thereunder and/or a corporate reorganization under
Section 368(a)(1)(B).
2. EXCHANGE OF SHARES. Maile and Simex Stockholders agree that
on the Closing Date or at the Closing as hereinafter defirted, the Simex Common
Stock shall be delivered at Closing to Maile in exchange for the Maile Shares,
after giving effect to a 2.21 to 1 reverse stock split (the "Maile Reverse
Stock Split") as to all presently outstanding shares of Maile common stock, as
follows:
(a) At Closing, Maile shall, subject to the conditions set forth
herein, issue an aggregate of 6,000,000 shares of Maile common stock for
immediate delivery to the Simex Stockholders on the basis of 30,000 Maile
Shares for each one Simex share of Simex Common Stock.
(b) At Closing, Maile shall deliver to a mutually acceptable escrow
agent (the "Escrow Agent") 1,500,000 shares of its common stock (the "Escrow
Shares") registered in the names of
<PAGE> 4
the Simex Stockholders on the basis of 7,500 Maile Shares for each outstanding
share of Simex Conunon Stock. The Escrow Shares shall be held by the Escrow
Agent until Simex delivers its year-end consolidated audited financial
statements for the year ended December 3 1, 1998 or 1999 (the "1998 or 1999
Financial Statements"), to Escrow Agent. If said financial statements, prepared
in compliance with all standards imposed by the Securities and Exchange
Commission for reporting companies such as the surviving public company in the
transactions described in this agreement, reflect earnings, before income taxes
and extraordinary items of depreciation as allowed by Norwegian law, in an
amount of at least $1,800,000 USD (based on an exchange rate not to exceed 7.32
NOK per USD), the Escrow Agent shall deliver the Escrow Shares to the Simex
Stockholders and the escrow shall terminate. If however, the 1998 or 1999
Financial Statements do not reflect at least $1,800,000 earnings as described
herein, the Escrow Agent shall deliver the Escrow Shares to Maile's transfer
agent for immediate cancellation.
(c) Each Simex Stockholder shall execute this Agreement.
(d) Unless otherwise agreed by Maile and Simex this transaction shall
close only in the event Maile is able to acquire all of the outstanding Simex
Common Stock.
3. PRE-CLOSING EVENTS. The Closing is subject to the completion
of the following:
(a) Maile shall have authorized 50,000,000 shares of $.001 par value
common stock and 5,000,000 shares of $.001 par value preferred stock. The
preferred stock shall be subject to issuance in such series and with such
rights, preferences and designations as determined in the sole discretion of
the board of directors.
(b) Maile shall have effectuated the Maile Reverse Stock Split at or
prior to Closing, and shall have 2,512,857 shares of its common stock issued
and outstanding and no other shares of capital stock issued or outstanding.
(c) Maile shall demonstrate to the reasonable satisfaction of Simex
that it has no material assets and no liabilities contingent or fixed.
4. EXCHANGE OF SECURITIES. As of the Closing Date each of the
following shall occur:
(a) Each share of Simex Common Stock issued and outstanding
immediately prior to the Closing Date shall be exchanged for (a) 30,000 Maile
Shares to be delivered at Closing, and (b) 7,500 Maile Shares to be delivered
into escrow and held by the Escrow Agent on behalf of the Simex Stockholders.
All such outstanding shares of Sirnex Common Stock shall be deemed, after
Closing, to be owned by Maile. The holders of such certificates previously
evidencing shares of Simex Common Stock outstanding immediately prior to the
Closing Date shall cease to have any rights with respect to such shares of
Simex Common Stock except as otherwise provided herein or by law;
<PAGE> 5
(b) Any shares of Simex Common Stock held in the treasury of Simex
immediately prior to the Closing Date shall automatically be canceled and
extinguished without any conversion thereof and no payment shall be made with
respect thereto;
(c) The 2,512,857 shares of Maile common stock previously issued and
outstanding prior to the Closing will remain outstanding.
5. OTHER EVENTS OCCURRING AT CLOSING. At Closing, the following
shall be accomplished:
(a) Maile shall file an amendment to its Articles of Incorporation
with the Secretary of State of the State of Nevada in substantially the form
attached hereto as Exhibit "B" effecting an amendment to its Articles of
Incorporation, to reflect a name change, authorize the Series A Cumulative
Preferred Stock and to accomplish the Maile Reverse Stock Split, all as set
forth in the attached Exhibit "B".
(b) The resignation of the existing Maile officers and directors and
appointment of new officers and directors as described in Section 12(f) hereof.
(c) Maile shall have completed (i) a private placement of 357,142
shares of its common stock at $1.40 per share and (ii) a private placement of
1, 130,000 shares of Series A Cumulative Preferred Stock at $1.90 per share.
The gross proceeds of these offerings (the "Maile Financing") shall be
$2,647,000, which amount, less $100,000 costs, shall be delivered to the
control of new management of Maile at Closing in good funds. IMe Maile
Financing shall have been completed in compliance with all applicable state and
federal securities laws and the securities sold shall be delivered at Closing
to the investors in the Maile Financing. The terms and conditions of the Series
A Cumulative Preferred Stock are set forth in the attached Exhibit "B", which
is by the reference incorporated herein.
6. OTHER MATTERS.
(a) Except for the recapitalization of Maile, including the Maile
Reverse Stock Split, there shall be no stock dividend, stock split,
recapitalization, or exchange of shares with respect to or rights issued in
respect of, Maile's capital stock after the date hereof and there shall be no
dividends paid on Maile's capital stock after the date hereof, in each case
through and including the Closing Date.
(b) Simex shall have received all requisite director and shareholder
approval of all matters set forth herein, and no shareholder of Simex shall
have exercised any dissenters rights under applicable corporate law.
(c) The acquisition of ownership of all outstanding Simex Common Stock
shall be in compliance with Norwegian law and any applicable Norwegian
regulations governing ownership of stock of a Norwegian corporation.
<PAGE> 6
(d) Maile shall have received all requisite shareholder approval of
the matters set forth herein.
(e) All parties hereto acknowledge and recognize that as an integral
part of the consideration given herein and as an inducement to the investors in
the Maile Financing, Maile has agreed and committed to immediately proceed,
upon Closing, to obtain all necessary audited financial statements and to
commence preparation for filing, as soon as practicable, a registration
statement with the Securities and Exchange Commission ("S.E.C."), registering
for resale the shares of Maile common stock issued or issuable in the Maile
Financing. Therefore Maile, with the complete cooperation of Simex, hereby
agrees to commence preparation of said registration statement for filing with
the S.E.C. and all applicable state jurisdictions and to attempt to file such
registration statement within three months of Closing and to prosecute the same
with all diligence to effectiveness.
7. DELIVERY OF SHARES. On or as soon as practicable after the
Closing Date, Simex will use its best efforts to cause the Simex Stockholders
to surrender for cancellation certificates representing their shares of Simex
Common Stock, against delivery of certificates representing the Maile Shares
for which the shares of Simex Common Stock are to be exchanged at Closing.
8. REPRESENTATIONS OF SIMEX STOCKHOLDERS. Simex Stockholders
hereby represent and warrant each only as to its own Simex Common Stock,
effective this date and the Closing Date as follows:
(a) Except as may be set forth in Exhibit "A", the Simex Common Stock
is free from claims, liens, or other encumbrances, and at the Closing Date
Simex Stockholders will have good title and the unqualified right to transfer
and dispose of such Simex Common Stock.
(b) Each Simex Stockholder, respectively, is the sole owner of the
issued and outstanding Simex Common Stock as set forth in Exhibit "A";
(c) No Simex Stockholder has the present intent to sell or dispose of
the Maile Shares and no Simex Stockholder is under a binding obligation, formal
commitment, or existing plan to sell or otherwise dispose of the Maile Shares.
9. REPRESENTATIONS OF SIMEX. Simex hereby represents and
warrants as follows, which warranties and representations shall also be true as
of the Closing Date:
(a) Except as noted on Exhibit "A", the Simex Stockholders listed on
the attached Exhibit "A" are the sole owners of record and beneficially of the
issued and outstanding common stock of Simex.
(b) Simex has no outstanding or authorized capital stock, warrants,
options or convertible securities other than as described in the Simex
Financial Statements or in Exhibit "A", attached hereto.
<PAGE> 7
(c) The unaudited financial statements as of and for the years ended
December 31, 1996 and 1997, which have been delivered to Maile (hereinafter
referred to as the "Simex Financial Statements") are complete and accurate and
fairly present the financial condition of Simex as of the dates thereof and the
results of its operations for the periods covered. There are no material
liabilities or obligations, either fixed or contingent, not disclosed in the
Simex Financial Statements or in any exhibit thereto or notes thereto other
than contracts or obligations in the ordinary course of business; and no such
contracts or obligations in the ordinary course of business constitute liens or
other liabilities which materially alter the financial condition of Simex as
reflected in the Simex Financial Statements. Simex has good title to all
assets shown on the Simex Financial Statements subject only to dispositions and
other transactions in the ordinary course of business, the disclosures set
forth therein and liens and encumbrances of record. The Simex Financial
Statements have been prepared in accordance with Norwegian generally accepted
accounting principles consistently applied (except as may be indicated therein
or in the notes thereto) and reconciled to U.S. generally accepted accounting
principles.
(d) Since the date of the Simex Financial Statements, there have not
been any material adverse changes in the financial position of Simex except
changes arising in the ordinary course of business, which changes will in no
event materially and adversely affect the financial position of Simex.
(e) Simex is not a party to any material pending litigation or, to its
best knowledge, any governmental investigation or proceeding, not reflected in
the Simex Financial Statements, and to its best knowledge, no material
litigation, claims, assessments or any governmental proceedings are threatened
against Simex.
(f) Simex is in good standing in its jurisdiction of incorporation,
and is in good standing and duly qualified to do business in each jurisdiction
where required to be so qualified except where the failure to so qualify would
have no material negative impact on Simex.
(g) Simex has (or, by the Closing Date, will have filed) all material
tax, governmental and/or related forms and reports (or extensions thereof) due
or required to be filed and has (or will have) paid or made adequate provisions
for all taxes or assessments which have become due as of the Closing Date.
(h) Simex has not materially breached any material agreement to which
it is a party. Simex has previously given Maile copies or access thereto of all
material contracts, commitments and/or agreements to which Simex is a party
including all relationships or dealings with related parties or affiliates.
(i) Simex has no subsidiary corporations except as described in
writing to Maile.
(j) Simex has made all material corporate financial records, minute
books, and other corporate documents and records available for review to
present management of Maile prior to the Closing Date, during reasonable
business hours and on reasonable notice.
<PAGE> 8
(k) The execution of this Agreement does not materially violate or
breach any material agreement or contract to which Simex is a party and has
been duly authorized by all appropriate and necessary corporate action under
Norwegian law and Simex, to the extent required, has obtained all necessary
approvals or consents required by any agreement to which Simex is a party.
(1) All information regarding Simex which is set forth in its
Confidential Business Plan or otherwise delivered to Maile by Simex for use in
connection with the transaction (the "Acquisition") described herein is true,
complete and accurate in all material respects.
10. REPRESENTATIONS OF MAILE AND MOWER. Maile, and Mower to the
best of his knowledge, hereby jointly and severally represent and warrant as
follows, each of which representations and warranties shall continue to be true
as of the Closing Date:
(a) As of the Closing Date, the Maile Shares, (including the Escrow
Shares) to be issued and delivered to the Simex Stockholders hereunder will,
when so issued and delivered, constitute, duly authorized, validly and legally
issued shares of Maile common stock, fully-paid and nonassessable.
(b) Maile has the corporate power to enter into this Agreement and to
perform its respective obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the board of directors of Maile. The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to
which Maile is a party and will not violate any judgment, decree, order, writ,
rule, statute, or regulation applicable to Maile or its properties. The
execution and performance of this Agreement will not violate or conflict with
any provision of the Articles of Incorporation or bylaws of Maile.
(c) Maile has delivered to Simex a true and complete copy of its
audited financial statements for the years ended December 31, 1996 and 1997,
(the "Maile Financial Statements"). The Maile Financial Statements are
complete, accurate and fairly present the financial condition of Maile as of
the dates thereof and the results of its operations for the periods then ended.
There are no material liabilities or obligations either fixed or contingent not
reflected therein except as provided in subparagraph (e) below. The Maile
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present the financial position of
Maile as of the dates thereof and the results of its operations and changes in
financial position for the periods then ended.
(d) Since December 31, 1997, there have not been any material adverse
changes in the financial condition of Maile except with regard to disbursements
to pay reasonable and ordinary expenses in connection with maintaining its
corporate status and pursuing the matters contemplated in this Agreement. Prior
to Closing, all advances payable, all accounts payable and other liabilities of
Maile shall be paid and satisfied in full.
<PAGE> 9
(e) Maile is not a party to or the subject of any pending litigation,
claims, or governmental investigation or proceeding not reflected in the Maile
Financial Statements or otherwise disclosed herein, and there are no lawsuits,
claims, assessments, investigations, or similar matters, to the best knowledge
of Mower, threatened or contemplated against or affecting Maile, its management
or its properties.
(f) Maile is duly organized, validly existing and in good standing
under the laws of the State of Nevada; has the corporate power to own its
property and to carry on its business as now being conducted and is duly
qualified to do business in any jurisdiction where so required except where the
failure to so qualify would have no material negative impact on it.
(g) Maile has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns, forms, or
reports, which are due or required to be filed by it prior to the date hereof,
except where the failure to do so would have no material adverse impact on
Maile, and has paid or made adequate provision in the Maile Financial
Statements for the payment of all taxes, fees, or assessments which have or may
become due pursuant to such returns or pursuant to any assessments received.
Maile is not delinquent or obligated for any tax, penalty, interest,
delinquency or charge.
(h) There are no existing options, calls, warrants, preemptive rights
or commitments of any character relating to the issued or unissued capital
stock or other securities of Maile, except as contemplated in this agreement.
(i) The corporate financial records, minute books, and other documents
and records of Maile have been made available to Simex prior to the Closing.
(j) Maile has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that Maile has breached, any of
the terms or conditions of any agreements, contracts or commitments to which it
is a party or by which it or its assets are is bound. The execution and
performance hereof will not violate any provisions of applicable law or any
agreement to which Maile is subject. Maile hereby represents that it is not a
party to any material contract or commitment other than appointment documents
with its transfer agent, and that it has disclosed to Simex all relationships
or dealings with related parties or affiliates.
(k) Maile common stock is currently approved for quotation on the NASD
Electronic Bulletin Board and there are no stop orders in effect with respect
thereto.
(1) All information regarding Maile which has been provided to Simex
in the Maile Due Diligence Statement dated August 15, 1997 or otherwise
disclosed to the public in connection with the transactions contemplated
herein, is true, complete and accurate in all material respects. Maile and
Mower specifically disclaim any responsibility regarding disclosures as to
Simex or its business.
11. CLOSING. The Closing of the transactions contemplated herein
shall take place on such date (the "Closing") as mutually determined by the
parties hereto when all conditions precedent have been met and all required
documents have been delivered, which Closing shall be
<PAGE> 10
no later than April 30, 1998, unless extended by mutual consent of all parties
hereto. The "Closing Date" of the transactions described herein (the
"Acquisition"), shall be that date on which all conditions set forth herein
have been met and the Maile Shares are issued in exchange for the Simex Common
Stock.
12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SIMEX. All
obligations of Simex under this Agreement are subject to the fulfillment, prior
to or as of the Closing and/or the Closing Date, as indicated below, of each of
the following conditions:
(a) The representations and warranties by or on behalf of Mower and
Maile contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at and
as of the Closing and Closing Date as though such representations and
warranties were made at and as of such time.
(b) Maile shall have performed and complied with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by it prior to or at the Closing.
(c) On or before the Closing, the board of directors, and
shareholders representing a majority interest the outstanding common stock of
Maile, shall have approved in accordance with applicable state corporation law
the execution and delivery of this Agreement and the consummation of the
transactions contemplated herein.
(d) On or before the Closing Date, Maile shall have delivered to
Simex certified copies of resolutions of the board of directors and
shareholders of Maile approving and authorizing the execution, delivery and
performance of this Agreement and authorizing all of the necessary and proper
action to enable Maile to comply with the terms of this Agreement including the
election of Simex's nominees to the Board of Directors of Maile and all matters
outlined herein.
(e) The Acquisition shall be permitted by applicable law and Maile
shall have sufficient shares of its capital stock authorized to complete the
Acquisition.
(f) At Closing, the existing officers and directors of Maile shall
have resigned in writing from all positions as directors and officers of Maile
effective upon the election and appointment of the Simex nominees.
(g) At the Closing, all instruments and documents delivered to Simex
and Simex Stockholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for Simex.
(h) The shares of restricted Maile capital stock to be issued to Simex
Stockholders and in the Maile Financing at Closing will be validly issued,
nonassessable and fully-paid under Nevada corporation law and will be issued in
compliance with all federal, state and applicable corporation and securities
laws.
<PAGE> 11
(i) Simex and Simex Stockholders shall have received the advice of
their tax advisor, if deemed necessary by them, as to all tax aspects of the
Acquisition.
(j) Simex shall have received all necessary and required approvals and
consents from required parties and its shareholders.
(k) Maile shall have $2,547,000 in good funds, at Closing, from the
Maile Financing, for delivery at the direction of Simex.
(1) At the Closing, Maile shall have delivered to Simex an opinion of
its counsel dated as of the Closing to the effect that:
(i) Maile is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by Maile and is a valid and binding obligation of Maile
enforceable in accordance with its terms;
(iii) Maile through its board of directors and stockholders
has taken all corporate action necessary for performance under this
Agreement;
(iv) The documents executed and delivered by Maile to Simex
and Simex Stockholders hereunder are valid and binding in accordance
with their terms and vest in Simex Stockholders, as the case may be,
all right, title and interest in and to the Maile Shares to be issued
pursuant to the terms hereof, and the Maile Shares when issued will be
duly and validly issued, fully-paid and nonassessable;
(v) Maile has the corporate power to execute, deliver and
perform under this Agreement;
(vi) Legal counsel for Maile is not aware of any liabilities,
claims or lawsuits involving Maile;
13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MAILE. All
obligations of Maile under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the following conditions:
(a) The representations and warranties by Simex and Simex
Stockholders contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing as though such representations and warranties
were made at and as of such time.
(b) Simex shall have performed and complied with, in all material
respects, all covenants, agreements, and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing;
<PAGE> 12
(c) Simex shall deliver on behalf of the Simex Stockholders a letter
commonly known as an "Investment Utter," signed by each of said shareholders,
in substantially the form attached hereto as Exhibit "C", acknowledging that
the Maile Shares are being acquired for investment purposes.
(d) Simex shall deliver an opinion of its legal counsel to the effect
that:
(i) Simex is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business in any jurisdiction
where so required except where the failure to so qualify would have no
material adverse impact on Simex;
(ii) This Agreement has been duly authorized, executed and
delivered by Simex.
(iii) The documents executed and delivered by Simex and Simex
Stockholders to Maile hereunder are valid and binding in accordance
with their terms and vest in Maile all right, title and interest in
and to the Simex Common Stock, which stock is duly and validly
issued, fully-paid and nonassessable.
14. INDEMNIFICATION. For a period of one year from the Closing,
Maile and Mower agree to jointly and severally indemnify and hold harmless
Simex, and Simex agrees to indemnify and hold harmless Maile and Mower, at all
times after the date of this Agreement against and in respect of any liability,
damage or deficiency, all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses including attorney's fees incident to any of the
foregoing, resulting from any material misrepresentations made by an
indemnifying party to an indemnified party, an indemnifying party's breach of
covenant or warranty or an indemnifying party's nonfulfillment of any agreement
hereunder, or from any material misrepresentation in or omission from any
certificate furnished or to be furnished hereunder.
15. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for one
year from the Closing. All of the parties hereto are executing and carrying out
the provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement and not
upon any investigation upon which it might have made or any representation,
warranty, agreement, promise or information, written or oral, made by the other
party or any other person other than as specifically set forth herein.
16. DOCUMENTS AT CLOSING. At the Closing, the following
documents shall be delivered:
(a) Simex will deliver, or will cause to be delivered, to Maile the
following:
(i) a certificate executed by the President and Secretary of
Simex to the effect that all representations and warranties made by
Simex under this Agreement are true and correct as of the Closing, the
same as though originally given to Maile on said date;
<PAGE> 13
(ii) a certificate from the jurisdiction of incorporation of
Simex dated at or about the Closing to the effect that Simex is in
good standing under the laws of said jurisdiction;
(iii) Investment Letters in the form attached hereto as
Exhibit "C" executed by each Simex Stockholder;
(iv) such other instruments, documents and certificates, if
any, as are required to be delivered pursuant to the provisions of
this Agreement;
(v) certified copies of resolutions adopted by the
shareholders and directors of Simex authorizing this transaction; and
(vi) all other items, the delivery of which is a condition
precedent to the obligations of Maile as set forth herein.
(vii) the legal opinion required by Section 13(d) hereof.
(b) Maile will deliver or cause to be delivered to Simex:
(i) stock certificates representing the Maile Shares
(including the Escrow Shares) to be issued as a part of the stock
exchange as described herein;
(ii) a certificate of the President of Maile, to the effect
that all representations and warranties of Maile made under this
Agreement are true and correct as of the Closing, the same as though
originally given to Simex on said date;
(iii) certified copies of resolutions adopted by Maile's
board of directors and Maile's Stockholders authorizing the
Acquisition and all related matters described herein;
(iv) certificate from the jurisdiction of incorporation of
Maile dated at or about the Closing Date that Maile is in good
standing under the laws of said state;
(v) opinion of Maile's counsel as described in Section 12(k)
above;
(vi) such other instruments and documents as are required to
be delivered pursuant to the provisions of this Agreement;
(vii) resignation of all of the existing officers and
directors of Maile;
(viii) all corporate and financial records of Maile; and
(ix) all other items, the delivery of which is a condition
precedent to the obligations of Simex, as set forth in Section 13
hereof.
17. FINDER'S FEES. Maile, represents and warrants to Simex, and Simex
represents and warrants to Maile that neither of them, or any party acting on
their behalf, has incurred any liabilities, either express or implied, to any
"broker" of "finder" or similar person in connection
<PAGE> 14
with this Agreement or any of the transactions contemplated hereby. In this
regard, Maile, on the one hand, and Simex on the other hand, will indemnify and
hold the other harmless from any claim, loss, cost or expense whatsoever
(including reasonable fees and disbursements of counsel) from or relating to
any such express or implied liability.
18. MISCELLANEOUS.
(a) Further Assurances. At any time, and from time to time, after the
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the
intent and purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
(c) Termination. All obligations hereunder may be terminated at the
discretion of either party's board of directors if (i) the closing conditions
specified in Sections 12 and 13 are not met by April 30, 1998, unless extended,
or (ii) any of the representations and warranties made herein have been
materially breached.
(d) Amendment. This Agreement may be amended only in writing as
agreed to by all parties hereto.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or
sent by prepaid first class registered or certified mail, return receipt
requested.
(f) Headings. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement and the attached Exhibits
constitute the entire agreement of the parties covering everything agreed upon
or understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof.
(j) Time. Time is of the essence.
<PAGE> 15
(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
(1) Responsibility and Costs. All fees, expenses and out-of-pocket
costs and expenses, including, without limitation, fees and disbursements of
counsel, advisors and accountants, incurred by the parties hereto shall be
borne solely and entirely by the party that has incurred such costs and
expenses.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
MAILE INTERNATIONAL, INC.
By: /s/ Clark Mower
-----------------------------------------
Clark Mower, President and Secretary
/s/ Clark Mower
--------------------------------------------
Clark Mower, individually
SIMEX A.S.
By: /s/ Elmer Lunde By: /s/ Knut T. Rosvold
------------------------ -----------------------------------------
Secretary President
SHAREHOLDERS OF SIMEX A.S.
/s/ Elmer Lunde
-----------------------------------------
/s/ Ogstein Frafjord
-----------------------------------------
/s/ Knut T. Rosvold
-----------------------------------------
<PAGE> 16
-----------------------------------------
<PAGE> 17
EXHIBIT "A"
To Agreement and Plan of Reorganization
List of Simex Stockholders
--------------------------
<TABLE>
<CAPTION>
Simex Maile Shares Maile Shares to be
Name Shares Issued in Escrow Issued as Closing
- ---- ------ ---------------- -----------------
<S> <C> <C> <C>
Elmer Lunde 140.4 1,053,000 4,212,000
2880 Holcomb Bridge Road
Bldg. B-9, Suite 588
Alpharetta, GA 30202
Kjell 1. Jagelid 20.0 150,000 600,000
2880 Holcomb Bridge Road
Bldg. B-9, Suite 588
Alpharetta, GA 30202
Knut T. Rosvold 19.8 148,500 594,000
2880 Holcomb Bridge Road
Bldg. B-9, Suite 588
Alpharetta, GA 30202
Oystein Frafjord 19.8 148,500 594,000
2880 Holcomb Bridge Road
Bldg. B-9, Suite 588
Alpharetta, GA 30202
------ --------- ---------
200 1,500,000 6,000,000
</TABLE>
<PAGE> 18
EXHIBIT "B"
TO AGREEMENT AND PLAN OF REORGANIZATION
Form of Amendment to Articles of Incorporation
<PAGE> 19
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MAILE INTERNATIONAL, INC.
Pursuant to the applicable provisions of the Nevada Business
Corporations Act, Maile International, Inc. (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation:
FIRST: The present name of the Corporation is Maile International,
Inc.
SECOND: The following amendments to its Articles of Incorporation were
adopted by the board of directors and by majority consent of shareholders of
the Corporation in the manner prescribed by applicable law.
The Article entitled ARTICLE I - NAME, is amended to read as follows:
ARTICLE I - NAME
The name of the corporation shall be: Simex/NK Technologies, Inc.
The Article entitled ARTICLE IV - AUTHORIZED SHARES, is amended to
read as follows:
ARTICLE IV - AUTHORIZED SHARES
The Corporation is authorized to issue (a) 5,000,000 shares of
preferred stock having a par value of $0.001 per share (hereinafter referred to
as "Preferred Stock"), (b) 50,000,000 shares of common stock having a par value
$0.001 per share (hereinafter referred to as "Common Stock") and (c) 1,130,000
shares of Series A Cumulative Preferred Stock (hereinafter referred to as
"Series A Preferred Stock"). Shares of any class of stock may be issued,
without shareholder action.
A. General Powers
The board of directors of this Corporation is hereby expressly granted
authority as to the Preferred Stock and Common Stock, without shareholder
action, and within the limits set forth in the Nevada Revised Statutes, to:
1. Designate in whole or in part, the powers, preferences,
limitations, and relative rights, of any class of shares before the issuance of
any shares of that class;
<PAGE> 20
2. Create one or more series within a class of shares, fix the number
of shares of each such series, and designate, in whole or part, the powers,
preferences, limitations, and relative rights of the series, all before the
issuance of any shades of that series;
3. Alter or revoke the powers, preferences, limitations and relative
rights granted to or imposed upon any wholly unissued class of shares or any
wholly unissued series of any class of shares; or
4. Increase or decrease the number of shares constituting any series,
the number of shares of which was originally fixed by the board of directors,
either before or after the issuance of shares of the series; provided that, the
number may not be decreased below the number of shares of the series then
outstanding, or increased above the total number of authorized shares of the
applicable class of shares available for designation as a part of the series.
The allocation between the classes, or among the series of each class,
of unlimited voting rights and the right to receive the net assets of the
Corporation upon dissolution, shall be as designated by the board of directors.
All rights accruing to the outstanding shares of the Corporation not expressly
provided for to the contrary herein or in the Corporation's bylaws or in any
amendment hereto or thereto shall be vested in the Common Stock. Accordingly,
unless and until otherwise designated by the board of directors of the
Corporation, and subject to any superior rights as so designated, the Common
Stock shall have unlimited voting rights and be entitled to receive the net
assets of the Corporation upon dissolution.
B. SERIES A CONVERTIBLE CUMULATIVE PREFERRED STOCK
1. DESIGNATION AND AMOUNT. This series of Preferred Stock shall
be designated "Series A Convertible Cumulative Preferred
Stock" and the authorized number of shares constituting such
series shall be 1,130,000. The par value of the Series A
Preferred Stock shall be $0.001 per share.
2. DIVIDENDS
(a) The holders of shares of Series A Preferred Stock shall
be entitled to receive, out of any assets at the time legally
available therefor and when, as and if declared by the Board of
Directors, cumulative dividends at the rate of eight percent (8%) per
share per annum based on a liquidation value of $1.90 per share, and
no more, payable to holders of record in cash, accruing, without
interest thereon, from the initial date of issuance, and first payable
in arrears, as soon as practicable after December 31, 1998, for the
period ending December 31, 1998, and thereafter for the period ending
December 31 st of each year that any such shares shall be outstanding.
Such dividends on Series A Preferred Stock are prior and in preference
to any declaration or payment of any distribution (as defined below)
on any other outstanding shares of preferred stock or the common stock
of this Corporation. Such dividends shall accrue on each share of
Series A Preferred Stock from day to day from the date of initial
issuance thereof whether or not earned or declared so that if such
dividends with respect to any previous dividend period at the rate
provided for herein have not been paid on, or declared and set apart
for, all shares of Series A
<PAGE> 21
Preferred Stock at the time outstanding, the deficiency shall (without
interest thereon) be fully paid on, or declared and set apart for,
such shares before any distribution shall be paid on, or declared and
set apart for any other outstanding shares of preferred stock or
common stock.
(b) For purposes hereof, unless the context otherwise requires,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable upon shares of
capital stock of the Corporation other than in common stock, or the purchase or
redemption of shares of this Corporation (other than conversions set forth in
Paragraph 2 below or repurchases of common stock held by employees or
consultants of this Corporation upon termination of their employment or
services pursuant to agreements providing for such repurchase) for cash or
property, including any such transfer, purchase or redemption by a subsidiary
of this Corporation.
3. CONVERSION
(a) At any time after the three (3) month anniversary of the initial
issuance of the Series A Preferred Stock, the Corporation may, at the option of
the Board of Directors, convert all or part of the outstanding shares of the
Series A Preferred Stock at the conversion rate set forth in subparagraph (c)
below, provided that the Corporation shall give written notice by mail, postage
prepaid, to the holders of such stock to be converted at least ten (10) days
prior to the date specified for conversion (the "Conversion Date"). Such notice
shall be addressed to each such shareholder at the address of such holder
appearing on the books of the Corporation or given by such holder to the
Corporation for the purpose of notice, or if no such address appears or is so
given, at the place where the principal office of the Corporation is located.
Such notice shall state the Conversion Date, the Conversion Rate (as
hereinafter defined), the number of shares of Series A Preferred Stock of such
holders, to be converted and shall call upon such holder to surrender to the
Corporation on the Conversion Date at the place designated in the notice such
holder's converted stock. On or after the Conversion Date, each holder of
shares of Series A Preferred Stock called for conversion shall surrender the
certificate evidencing such shares to the Corporation at the place designated
in such notice and shall thereupon be entitled to receive shares of the
Corporation's common stock at the Conversion Rate. If less than all of the
outstanding shares of Series A Preferred Stock, treated as one class, are to be
converted, then the Corporation shall convert a pro rata portion from each
holder of such stock according to the respective number of shares of such stock
held by such holder.
(b) At any time, on or after the three (3) month anniversary of the
initial issuance of the Series A Preferred Stock, any holder of outstanding
shares of Series A Preferred Stock may, at its option, convert all or part of
the outstanding shares of the Series A Preferred Stock held by it at the
Conversion Rate set forth in subparagraph (c) below, provided that said holder
shall give written notice by mail, postage prepaid, to the Corporation of such
stock to be converted at least ten (10) days prior to the Conversion Date. Such
notice shall state the Conversion Date, the number of shares of Series A
Preferred Stock of such holders to be converted and the agreement of such
holder(s) to surrender to the Corporation on the Conversion Date at the
Corporation's principal place of business or such other place designated by the
Corporation such holder's
<PAGE> 22
conversion stock. On or after the Conversion Date, each holder of shares of
Series A Preferred Stock requesting conversion shall surrender the certificate
evidencing such shares to the Corporation at the place designated by the
Corporation and shall thereupon be entitled to received shares of common stock
at the Conversion Rate.
(c) The Series A Preferred Stock shall be converted at the rate of one
share of the Corporation's common stock for each share of Series A Preferred
Stock. At the time of conversion all accumulated and unpaid dividends to the
Conversion Date shall be paid in cash.
(d) From and after the Conversion Date the holders of the shares of
the Series A Preferred Stock called for conversion shall cease to have any
rights as Series A Preferred stockholders of the Corporation.
(e) There shall be no conversion of any shares of Preferred Stock of
the Corporation where such action would be in violation of applicable law.
(f) The shares of the Corporation's common stock issued in the
conversion of Series A Preferred stock shall be restricted stock issued
pursuant to an exemption from registration under the Securities Act of 1933.
The recipient of said common stock shall make such representations as are
required by the Corporation so as to qualify for said exemptions from
registration.
(g) The Corporation hereby undertakes, as soon as practicable after
the Conversion Date, to use its best and most diligent efforts to prepare and
file a registration statement under the Securities Act of 1933 (the "Act") to
register for resale said shares of common stock and to pursue the same with
diligence to effectiveness. All costs and expenses associated with the
preparation, filing and completion of such registration statement (other than
brokers' commissions) shall be borne by the Company. The Company will also use
its best efforts to qualify the shares for sale in various state as required by
applicable law.
(h) The number of shares of common stock issuable upon conversion of
the Series A Preferred Stock shall be adjusted to reflect an equivalent number
of shares, as required, to reflect any stock split or similar recapitalization
of the Corporation's outstanding common stock.
(i) The Corporation shall reserve and shall have at all times
available the shares of common stock issuable upon conversion of the Series A
Preferred Stock.
4. PREFERENCES ON LIQUIDATION.
(a) Subject to Paragraph 8 below, in the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation, the
holders of shares of the Series A Preferred Stock then outstanding, shall
be entitled to be paid, out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any payment shall be made in respect of the Corporation's common stock,
an amount equal to $1.90 per share, plus all accrued and unpaid dividends
thereon to the date fixed for distribution. After setting apart or paying in
full the preferential amounts due the
<PAGE> 23
holders of the Series A Preferred Stock, the remaining assets of the
Corporation available for distribution to stockholders, if any, shall be
distributed exclusively to the holders of common stock, each such issued and
outstanding share of common stock entitling the holder thereof to receive an
equal proportion of said remaining assets. If upon liquidation, dissolution, or
winding up of the Corporation, the assets of the Corporation available for
distribution to its shareholders shall be insufficient to pay the holders of the
Series A Preferred Stock the full amounts to which they respectively shall be
entitled, the holders of such stock shall share ratably in any distribution of
assets according to the respective amounts which would be payable in respect of
the shares held by them upon such distribution if all amounts payable on or with
respect to said shares were paid in full.
(b) In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, the Corporation shall, within ten
(10) days after the date the Board of Directors approves such action, or within
twenty (20) days prior to any shareholder's meeting called to approve such
action, or within twenty (20) days after the commencement of any involuntary
proceeding, whichever is earlier, give each holder of shares of Series A
Preferred Stock initial written notice of the proposed action. Such initial
written notice shall describe the material terms and conditions of such proposed
action, including a description of the stock, cash, and property to be received
by the holders of shares of Series A Preferred Stock upon consummation of the
proposed action and the date of delivery thereof. If any material change in the
facts set forth in the initial notice shall occur, the Corporation shall
promptly give written notice to each holder of shares of Series A Preferred
Stock of such material change. The Corporation shall not consummate any
voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation before the expiration of twenty (20) days after the mailing of the
initial notice or ten (10) days after the mailing of any subsequent written
notice, whichever is later; provided that any such twenty-day or ten-day period
may be shortened upon the written consent of the holders of a majority of the
outstanding shares of Series A Preferred Stock.
(c) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the distribution
of assets other than cash, the Corporation shall promptly engage competent
independent appraisers to determine the value of the assets to be distributed to
the holders of shares of Series A Preferred Stock and the holders of shares of
common stock (it being understood that with respect to the valuation of
securities, the Corporation shall engage such appraiser as shall be approved by
the holders of a majority of shares of the Corporation's outstanding Series A
Preferred Stock). The Corporation shall, upon receipt of such appraiser s
valuation, give prompt written notice to each holder of shares of Series A
Preferred Stock of the appraiser's valuation.
5. VOTING RIGHTS
The holders of Series A Preferred Stock shall be entitled to one vote
per share of Series A Preferred Stock outstanding as to all matters upon which
shareholders of common stock are entitled to vote.
<PAGE> 24
6. PREEMPTIVE RIGHTS
The Series A Preferred Stock is not entitled to any preemptive or
subscription rights in respect of any securities of the Corporation.
7. STATUS
In case any outstanding shares of Series A Preferred Stock shall be
converted, the shares so converted shall be deemed to be permanently canceled
and shall not resume the status of authorized but unissued shares of Series A
Preferred Stock.
8. RANKING: CHANGES AFFECTING SERIES A
(a) The Series A Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution,
rank senior to any of the Corporation's common stock and any other
class or series of stock of the Corporation. The approval of the
holders of a majority of the issued and outstanding shares of Series A
Preferred Stock shall be required for the authorization or issuance of
any shares of any class or series of stock of the Company, which is
proposed to rank senior or on a parity with the Series A Preferred
Stock.
(b) So long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not (i) alter or change any of the
powers, preferences, privileges, or rights of the Series A Preferred
Stock; or (ii) amend the provisions of this paragraph (8); or (iii)
create any new class or series of shares having preferences prior to
or being on a parity with the Series A Preferred Stock as to dividends
or liquidations; in each case, without first obtaining the approval by
vote or written consent, in the manner provided by law, of the holders
of at least a majority of the total number of outstanding shares of
the Series A Preferred Stock, as to changes affecting the Series A
Preferred Stock.
THIRD: The Corporation has effectuated, effective with the commencement of
business on Wednesday, April 29, 1998, a 1 for 2.21 reverse stock split as to
its shares of common stock outstanding as of the opening of business on April
28, 1998, which decreases the outstanding shares as of that date from 5,559,291
shares to 2,512,857 shares. The reverse split shall not change the authorized
capital stock of the Corporation.
FOURTH: The number of shares of the Corporation outstanding and entitled to
vote at the time of the adoption of said amendment was 5,559,291.
FIFTH: The number of shares voted for such amendments was 3,000,000 (54%) and
no shares were voted against such amendment.
<PAGE> 25
DATED this _____ day of April, 1998.
MAILE INTERNATIONAL, INC.
By: /s/ Clark Mower
--------------------------------------
Clark Mower, President/Secretary
<PAGE> 26
VERIFICATION
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
The undersigned being first duly sworn, deposes and states: that the
undersigned is the President of Maile International, Inc., that the undersigned
has read the Certificate of Amendment and knows the contents thereof and that
the same contains a truthful statement of the Amendment duly adopted by the
board of directors and stockholders of the Corporation.
/s/ Clark Mower
----------------------------------
Clark Mower, President
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
Before me the undersigned Notary Public in and for the said County and
State, personally appeared the President and Secretary of Maile International,
Inc. a Nevada corporation, and signed the foregoing Articles of Amendment as
their own free and voluntary acts and deeds pursuant to a corporate resolution
for the uses and purposes set forth.
IN WITNESS WHEREOF, I have set my hand and seal this _____ day of April,
1998.
----------------------------------
NOTARY PUBLIC
Notary Seal:
<PAGE> 27
EXHIBIT "C"
TO AGREEMENT AND PLAN OF REORGANIZATION
Form of Investment Letter
<PAGE> 28
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF MAILE INTERNATIONAL, INC. ("CORPORATION")
The undersigned hereby represents to the Corporation, that (1) the
shares of the Corporation's common stock (the "Securities") which are being
acquired by the undersigned are being acquired for his own account and for
investment and not with a view to the public resale or distribution thereof;
(2) the undersigned will not sell, transfer or otherwise dispose of the
securities except in compliance with the Securities Act of 1933, as amended
(the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned hereby agrees to not transfer the Securities or any
interest therein outside of the United States without the express written
permission of the Corporation.
The undersigned acknowledges that he has been afforded access to all
disclosure documents and information regarding the Corporation.
The undersigned further acknowledges that he has had an opportunity to
ask questions of and receive answers from duly designated representatives of
the Corporation concerning the terms and conditions pursuant to which the
Securities are being purchased. The undersigned acknowledges that he has been
afforded an opportunity to examine such documents and other information which
he has requested for the purpose of verifying the information set forth in the
documents referred to above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
The Company is the only person which may register its Securities under
the Act and it currently is not contemplating registering any of its
Securities. Furthermore, the Company has not made any representations,
warranties or covenants to the undersigned regarding registration of the
Securities or compliance with any exemption under the Act.
By reason of my knowledge and experience in financial and business
matters in general, and investments in particular, I am capable of evaluating
the merits and risks of an investment by me in the Securities.
<PAGE> 29
I am capable of bearing the economic risks of an investment in the
Securities. I fully understand the speculative nature of the Securities.
My present financial condition is such that I am under no present or
contemplated future need to dispose of any portion of the Securities to satisfy
any existing or contemplated undertaking, need, or indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear
the following legend, which the undersigned has read and understands:
The shares represented by this Certificate have not
been registered under the Securities Act of 1933 (the "Act")
and are "restricted securities" as that term is defined in Rule
144 under the Act. The shares may not be offered for sale, sold
or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Corporation has informed the undersigned of its intention
to issue such instructions.
Very truly yours,
/s/ Elmer Lunde
-------------------------------------------
Date: ___________________________, 199_____
<PAGE> 30
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF MAILE INTERNATIONAL, INC. ("CORPORATION")
The undersigned hereby represents to the Corporation, that (1) the
shares of the Corporation's common stock (the "Securities") which are being
acquired by the undersigned are being acquired for his own account and for
investment and not with a view to the public resale or distribution thereof;
(2) the undersigned will not sell, transfer or otherwise dispose of the
securities except in compliance with the Securities Act of 1933, as amended
(the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned hereby agrees to not transfer the Securities or any
interest therein outside of the United States without the express written
permission of the Corporation.
The undersigned acknowledges that he has been afforded access to all
disclosure documents and information regarding the Corporation.
The undersigned further acknowledges that he has had an opportunity to
ask questions of and receive answers from duly designated representatives of
the Corporation concerning the terms and conditions pursuant to which the
Securities are being purchased. The undersigned acknowledges that he has been
afforded an opportunity to examine such documents and other information which
he has requested for the purpose of verifying the information set forth in the
documents referred to above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
The Company is the only person which may register its Securities under
the Act and it currently is not contemplating registering any of its
Securities. Furthermore, the Company has not made any representations,
warranties or covenants to the undersigned regarding registration of the
Securities or compliance with any exemption under the Act.
By reason of my knowledge and experience in financial and business
matters in general, and investments in particular, I am capable of evaluating
the merits and risks of an investment by me in the Securities.
<PAGE> 31
I am capable of bearing the economic risks of an investment in the
Securities. I fully understand the speculative nature of the Securities.
My present financial condition is such that I am under no present or
contemplated future need to dispose of any portion of the Securities to satisfy
any existing or contemplated undertaking, need, or indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear
the following legend, which the undersigned has read and understands:
The shares represented by this Certificate have not
been registered under the Securities Act of 1933 (the "Act")
and are "restricted securities" as that term is defined in Rule
144 under the Act. The shares may not be offered for sale, sold
or otherwise transferred except pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Corporation has informed the undersigned of its intention
to issue such instructions.
Very truly yours,
/s/ Oystein Frafjord
----------------------------------------------
Oystein Frafjord
Date: April ______, 1998
<PAGE> 32
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF MAILE INTERNATIONAL, INC. ("CORPORATION")
The undersigned hereby represents to the Corporation, that (1) the
shares of the Corporation's common stock (the "Securities") which are being
acquired by the undersigned are being acquired for his own account and for
investment and not with a view to the public resale or distribution thereof;
(2) the undersigned will not sell, transfer or otherwise dispose of the
securities except in compliance with the Securities Act of 1933, as amended
(the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned hereby agrees to not transfer the Securities or any
interest therein outside of the United States without the express written
permission of the Corporation.
The undersigned acknowledges that he has been afforded access to all
disclosure documents and information regarding the Corporation.
The undersigned further acknowledges that he has had an opportunity to
ask questions of and receive answers from duly designated representatives of
the Corporation concerning the terms and conditions pursuant to which the
Securities are being purchased. The undersigned acknowledges that he has been
afforded an opportunity to examine such documents and other information which
he has requested for the purpose of verifying the information set forth in the
documents referred to above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
The Company is the only person which may register its Securities under
the Act and it currently is not contemplating registering any of its
Securities. Furthermore, the Company has not made any representations,
warranties or covenants to the undersigned regarding registration of the
Securities or compliance with any exemption under the Act.
By reason of my knowledge and experience in financial and business
matters in general, and investments in particular, I am capable of evaluating
the merits and risks of an investment by me in the Securities.
<PAGE> 33
I am capable of bearing the economic risks of an investment in the
Securities. I fully understand the speculative nature of the Securities.
My present financial condition is such that I am under no present or
contemplated future need to dispose of any portion of the Securities to satisfy
any existing or contemplated undertaking, need, or indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear
the following legend, which the undersigned has read and understands:
The shares represented by this Certificate have
not been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is defined
in Rule 144 under the Act. The shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an exemption from registration under the Act, the availability
of which is to be established to the satisfaction of the
Company.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Corporation has informed the undersigned of its intention
to issue such instructions.
Very truly yours,
/s/ Elmer Lunde
-----------------------------------------
Elmer Lunde
Date: April 22, 1998
<PAGE> 34
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF MAILE INTERNATIONAL, INC. ("CORPORATION")
The undersigned hereby represents to the Corporation, that (1) the
shares of the Corporation's common stock (the "Securities") which are being
acquired by the undersigned are being acquired for his own account and for
investment and not with a view to the public resale or distribution thereof;
(2) the undersigned will not sell, transfer or otherwise dispose of the
securities except in compliance with the Securities Act of 1933, as amended
(the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned hereby agrees to not transfer the Securities or any
interest therein outside of the United States without the express written
permission of the Corporation.
The undersigned acknowledges that he has been afforded access to all
disclosure documents and information regarding the Corporation.
The undersigned further acknowledges that he has had an opportunity to
ask questions of and receive answers from duly designated representatives of
the Corporation concerning the terms and conditions pursuant to which the
Securities are being purchased. The undersigned acknowledges that he has been
afforded an opportunity to examine such documents and other information which
he has requested for the purpose of verifying the information set forth in the
documents referred to above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
The Company is the only person which may register its Securities under
the Act and it currently is not contemplating registering any of its
Securities. Furthermore, the Company has not made any representations,
warranties or covenants to the undersigned regarding registration of the
Securities or compliance with any exemption under the Act.
By reason of my knowledge and experience in financial and business
matters in general, and investments in particular, I am capable of evaluating
the merits and risks of an investment by me in the Securities.
<PAGE> 35
I am capable of bearing the economic risks of an investment in the
Securities. I fully understand the speculative nature of the Securities.
My present financial condition is such that I am under no present or
contemplated future need to dispose of any portion of the Securities to satisfy
any existing or contemplated undertaking, need, or indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear
the following legend, which the undersigned has read and understands:
The shares represented by this Certificate have
not been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is defined
in Rule 144 under the Act. The shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an exemption from registration under the Act, the availability
of which is to be established to the satisfaction of the
Company.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Corporation has informed the undersigned of its intention
to issue such instructions.
Very truly yours,
/s/ Knut T. Rosvold
--------------------------------------------
Knut T. Rosvold
Date: April 22, 1998
<PAGE> 36
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF MAILE INTERNATIONAL, INC. ("CORPORATION")
The undersigned hereby represents to the Corporation, that (1) the
shares of the Corporation's common stock (the "Securities") which are being
acquired by the undersigned are being acquired for his own account and for
investment and not with a view to the public resale or distribution thereof;
(2) the undersigned will not sell, transfer or otherwise dispose of the
securities except in compliance with the Securities Act of 1933, as amended
(the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned hereby agrees to not transfer the Securities or any
interest therein outside of the United States without the express written
permission of the Corporation.
The undersigned acknowledges that he has been afforded access to all
disclosure documents and information regarding the Corporation.
The undersigned further acknowledges that he has had an opportunity to
ask questions of and receive answers from duly designated representatives of
the Corporation concerning the terms and conditions pursuant to which the
Securities are being purchased. The undersigned acknowledges that he has been
afforded an opportunity to examine such documents and other information which
he has requested for the purpose of verifying the information set forth in the
documents referred to above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
The Company is the only person which may register its Securities under
the Act and it currently is not contemplating registering any of its
Securities. Furthermore, the Company has not made any representations,
warranties or covenants to the undersigned regarding registration of the
Securities or compliance with any exemption under the Act.
By reason of my knowledge and experience in financial and business
matters in general, and investments in particular, I am capable of evaluating
the merits and risks of an investment by me in the Securities.
<PAGE> 37
I am capable of bearing the economic risks of an investment in the
Securities. I fully understand the speculative nature of the Securities.
My present financial condition is such that I am under no present or
contemplated future need to dispose of any portion of the Securities to satisfy
any existing or contemplated undertaking, need, or indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear
the following legend, which the undersigned has read and understands:
The shares represented by this Certificate have
not been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is defined
in Rule 144 under the Act. The shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an exemption from registration under the Act, the availability
of which is to be established to the satisfaction of the
Company.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Corporation has informed the undersigned of its intention
to issue such instructions.
Very truly yours,
/s/ Kjell I. Jaglid
-----------------------------------------
Kjell I. Jagelid
Date: April 27, 1998
<PAGE> 1
EXHIBIT 10.1(b)
<Translator's note: all of the pages bear three sets of handwritten initials in
the lower right-hand corner.>
AGREEMENT
CONCERNING
STOCK TRANSFER
The following agreement has been entered into as of this date
between
THE NORWEGIAN INDUSTRIAL AND REGIONAL DEVELOPMENT FUND (SND),
STOREBRAND LIVSFORSIKRING AS, SVEIN H. VORMEDAL, GEIR ENOKSEN, MAGNE
WESTERHEIM AND SVEIN NORDBO, hereinafter collectively referred to as
the SELLERS,
and
SIMEX AS, hereinafter referred to as BUYER:
1 INTRODUCTION
1.1 Norsk Kjoleindustri AS, hereinafter referred to as NK,
enterprise number 938803218, has capital stock of NOK
1,400,000 divided among 14,000 shares, each with a face value
of NOK 100.00.
1.2 The Sellers currently own the following shares in NK:
<TABLE>
<S> <C>
SND: 4000 shares
Storebrand ASA: 2000 shares
Svein H. Vormedal: 5849 shares
Geir Enoksen: 100 shares
Magne Westerheim: 230 shares
Svein Nordbo: 500 shares
-------------------------------------------------------
Total: 12,679 shares
-------------------------------------------------------
</TABLE>
1.3 Through this Agreement, the Sellers sell all of the shares
they own in NK to the Buyer under the terms that follow from
this Agreement.
2 PURCHASE PRICE
- Translation from Norwegian -
1
<PAGE> 2
2.1 The shares are sold at a price of NOK 1,428.50 per shares,
which results in the following purchase price to the
individual stockholder:
<TABLE>
<S> <C>
SND: NOK 5,714,000.00
Storebrand ASA: NOK 2,857,000.00
Svein H. Vormedal: NOK 8,355,296.50
Geir Enoksen: NOK 142,850.00
Magne Westerheim: NOK 328,555.00
Svein Nordbo: NOK 714,250.00
----------------------------------------------------
Total: NOK 18,111,951.50
----------------------------------------------------
</TABLE>
2.2 The purchase price has been arrived at after negotiations,
and is based on the information that has been provided
concerning the company. The Buyer reserves the right to let
the auditing firm Deloitte and Touche conduct a legal and
accounting review (due diligence) of NK. The review will be
conducted for the Buyer's own account, and shall be concluded
no later than 1 June 1998. The Sellers shall be immediately
notified concerning the result of the review.
2.3 If the review shows either:
2.3.1 a discrepancy in NK's capital status of more than 10%
in relation to the balance sheet according to the
revised accounts as of 31 December 1996, or
2.3.2 reveals contractual or legal circumstances that are
not evident from the documentation referred to in
Article 7 below, and the value of this discrepancy
exceeds NOK 1 million,
then both parties have the right to demand either an
adjustment of the price, or, if agreement is not reached,
cancellation of this agreement. A demand for adjustment must
be submitted in writing by registered mail within 14 days
after the review is concluded, however, not later than by 14
June 1998. If one of the parties elects to cancel the
agreement on this basis, none of the parties may demand that
their costs be covered or demand compensation.
3 PURCHASE OFFER DUTY
3.1 Since the agreement covers the sale of more than 90% of NK's
stock, the Buyer has a duty to present the same offer to the
other stockholders for purchase of the remaining 1,321 shares
at the same terms as emerge from this agreement.
4 PAYMENT AND TRANSFER
- Translation from Norwegian -
2
<PAGE> 3
4.1 Upon signature of this agreement, the Sellers will deposit
their stock certificates in original and transferred
condition with Attorney Thomas Smedvig.
4.2 By 15 June 1998, the Buyer will pay the purchase price
mentioned in Article 2.1, a total of NOK 18,111,951.50 to
Attorney Thomas Smedvig's client account number 3201.07.48975
in Sparebank 1 SR-Bank.
4.3 When Attorney Thomas Smedsvig has received final settlement
in accordance with Article 4.2 above, he will transfer the
purchase price to the individual seller pursuant to
instructions from the Sellers, and he will simultaneously
send the deposited original stock certificates to the Buyer.
4.4 If payment takes place after the deadline, the Buyer shall
pay a late payment interest of 12% per annum. If the delay
lasts for more than 30 days, the Sellers can cancel this
agreement and demand that Buyer compensate them for their
loss.
5 POSSESSION
5.1 The shares are transferred free of any encumbrance and with
full possession in law for Buyer without other restrictions
than those that follow from NK's articles of association.
5.2 The shares shall be considered as having been transferred
when timely payment has been made pursuant to Article 4.2
above, with full rights and obligations for Buyer from and
including this date.
5.3 The Sellers shall not be entitled to dividends for the 1997
income year.
5.4 As soon as the shares have been transferred, the Buyer shall
hold an extraordinary stockholders' meeting with election of
a new board of directors, and shall thereupon send
notification to the Register of Business Enterprises.
6 EMPLOYMENT
6.1 Simultaneously with this agreement, Svein H. Vormedal shall
sign an employment agreement with NK for a minimum duration
of three years, as emerges from Appendix 2 to this agreement.
7 INFORMATION ABOUT NK
7.1 Prior to signing this agreement, the Buyer has received the
following documentation:
7.1.1 Revised accounts with directors' report and auditor's
report for 1996.
7.1.2 Preliminary, non-audited accounts for 1997.
7.1.3 Copies of the accounts as of 30 February 1998
<??? - Trans.>
- Translation from Norwegian -
3
<PAGE> 4
7.1.4 Adopted budget for 1998.
The Buyer shall have access to continuous accounts as they
become available.
7.2 In addition, Seller has received access to the minutes of the
board meetings of NK and its subsidiaries, minutes of
stockholders' meetings and the stockholder list. The
following are considered to be subsidiaries:
7.2.1 Telefrost Kjoleindustri AS, enterprise no. 830510842,
which is 100% owned by NK and
7.2.2 Gjenvinning Midt-Norge AS, enterprise no. 975999564,
in which NK currently owns 51%, but where NK will
acquire an ownership interest of 78.8% after a
planned share float.
7.3 The Buyer has inspected NK's real estate, and has been
provided with information concerning NK's contractual
commitments.
7.4 Seller has received particular information with regard to the
fact that NK is currently negotiating with Carrier Transicold
for transfer and liquidation of NK's involvement within
transport cooling.
7.5 Buyer has otherwise received all requested information
concerning financial, organizational and staff circumstances.
8 DUTY OF CONFIDENTIALITY
8.1 The parties pledge to keep confidential all information that
they might receive concerning the other party in connection
with entering into and implementation of this agreement.
8.2 If this agreement should lapse or be cancelled, for whatever
reason, this duty of confidentiality shall nevertheless
remain in force for at least three years after the agreement
has lapsed.
9 REPORTING AND PUBLIC ANNOUNCEMENT
9.1 The Buyer is obliged to report the acquisition to the
authorities, and to inform the employees in accordance with
the Act of 23 December 1994, No. 79, relating to acquisition
of activities.
9.2 Announcement of this agreement vis-a-vis the media and to the
public in general shall take place in accordance with an
agreement between the parties.
10 DISPUTES
10.1 In the event of disagreement in connection with this
agreement, the parties agree that Stavanger City Court will
be the legal venue.
- Translation from Norwegian -
4
<PAGE> 5
11 COSTS
11.1 All costs for Attorney Thomas Smedvig in connection with this
agreement shall be covered by Norsk Kjoleindustri AS.
12 THE AGREEMENT
12.1 Deviations from this agreement may only be made in accordance
with a written agreement.
12.2 If any provision of this agreement is or becomes invalid,
illegal or in any other way cannot be implemented, and this
does not significantly change the preconditions of the
agreement, the parties agree that they will cooperate to
arrive at adjustments and changes that repair the relevant
invalidity, etc. in the best manner possible, so that the
agreement as a whole will be in accordance with the original
agreement and its intentions to the greatest degree possible.
12.3 Seven originals of this agreement have been prepared, of
which the parties shall retain one original each.
As Sellers: As Buyer:
Stavanger, 1998 Stavanger, 15 May 1998
Jon Melle (sign.) (illegible signature)
- ----------------------------------- -----------------------------
for Norwegian Industrial and Regional for Simex AS
Development Fund Name:
Name: Jon Melle Title
Title: Branch Manager
Oslo <"Stavanger" is crossed out - Trans.>, 18 May 1998
(illegible signature)
- -----------------------------------
for Storebrand Livsforsikring AS
Name:
Title:
Stavanger, 15 May 1998
Svein H. Vormedal (sign.)
- -----------------------------------
Svein H. Vormedal
- Translation from Norwegian -
5
<PAGE> 6
Stavanger, 15 May 1998
Geir Enoksen (sign.)
- ------------------------------------
Geir Enoksen
Stavanger, 15 May 1998
Magne Westerheim (sign.)
- ------------------------------------
Magne Westerheim
Stavanger, 15 May 1998
Svein Nordbo (sign.)
- ------------------------------------
Svein Nordbo
- Translation from Norwegian -
6
<PAGE> 1
EXHIBIT 10.1(c)
AGREEMENT
Between
SIMEX AS (BUYER)
SIMEX NK/TECHNOLOGIES INC. (SX)
And
THE STOCKHOLDERS OF WELD TECH AS:
BJ0RN DAHLE (170 STOCKS)
REIDAR KINDERVAG (140 STOCKS)
JOHN REIDAR KINDERVAG (140 STOCKS)
GAUTE KINDERVAG (50 STOCKS)
(SELLER)
The following agreement has been entered into:
1. Object
1.1 The Seller will sell and the Buyer will buy 500 stocks in
Weld Tech AS (Company). The block of stock constitutes 100%
of the portfolio of shares in the Company.
1.2 The dividends on the stocks, disbursed after the entering of
this agreement, fall to the Buyer. This also applies to
dividends earmarked in the Company's statement of earnings.
2. Consideration
The consideration for the stocks ("Consideration") is NOK
1.200.000,-is as follows:
2.1 On the time of transfer of the stocks, the Buyer will pay NOK
10.000.000,-.
2.2 SX issues 450.000 stocks in SX to the Seller. The stocks will
be shared among the stockholders according to their described
portfolio of shares.
The transfer is to take place 15.12.98, at the latest.
Of these, 90.000 stocks may be realized immediately.
180.000 may not be realized until after 30. June 1999
180.000 may not be realized until after 1. January 2000.
2.3 Reider Kindervag and John Reidar Kindervag shall have the
right to buy 200.000 options in all in SX for $ 2,75 per
option, with a redemptive deadline of 3 years. The right to
buy options must be claimed within 30.6.2000.
3. Assignment date
The stock transfer will be done with effect from 17 November 1998
(Assignment date).
<PAGE> 2
4. Settlement
4.1 The consideration, as described in item 2.1, Consideration at
stock transfer, the Buyer is to pay NOK 10.000.000,-, paid in
to the client account of lawyer Erik Mauritzen, account
number 3201.07.00360, on the Assignment day. The amount will
be released to the seller towards a signature of transport on
the stocks, free of encumbrances. Thereafter the amount will
be paid into the sellers' accounts.
4.2 Stocks and options issued with reference to items 2.2 and 2.3.
The stocks are to be deposited at a mutually appointed
person, to be released 1.4.99, with the amount of stocks
remaining after a possible deduction as a result of
circumstances described in item 6. The person depositing the
stocks, shall manage these in accordance with mutual
instructions, and are obliged to release these if the Buyer
has not protested within the agreed date of release, if not
by a joint written statement or subsequent to a decision with
legal force among the parties.
5. GUARANTEES FROM THE SELLER
The sellers hereby guarantees the following towards the buyer:
5.1 The Company is a validly founded legal entity, which per the
date of the agreement has performed all registration in
public registers, in accordance with decisions made by the
relevant company organs.
5.2 That the in appendix 1 presented income statements, which are
the basis of the stipulation of the consideration, are
correct and settled in accordance with the law of accounts
and generally accepted accounting principles.
5.3 That the Company per 30.9.98, were not debted or had any other
burdened economical responsibilities, beyond what appears
from the balance per the same date and this agreement with
appendixes.
5.4 That the Company's outstanding claims are recoverable for
their full amount.
5.5 That the stock has a value that is the least equivalent with
the balance sheet, and that the balance sheet does not
include items not relevant for the Company's business
management.
5.6 That the Company per 30.9.98, has not incurred the
responsibility for latent or contingent liabilities of any
kind, which may be triggered after closing.
5.7 That the Company, at the signature of the agreement, has not
performed any actions which may trigger claims from a third
party.
5.8 That all reports to the inland revenue authorities are
correct and have been performed within the fixed dates, and
that the Company per date of the closing of
2
<PAGE> 3
the accounts, is nor responsible for taxes and fees, fines
for neglected reporting, incomplete reporting, or errors in
previous reports to the inland revenue authorities.
5.9 That the income statement, book keeping material, fee- and
tax assessment documents are kept for the last 10 years, and
are made accessible for the Company after the share transfer.
5.10 That no claims from the Company's customers do exist, except
from those mentioned in appendix 2.
5.11 That the Company has not guaranteed or secured for the
Sellers' or any third parties contractual obligations, and
that such guarantees and securities will not be present on
the Assignment day.
5.12 That the statement in appendix 3, concerning the Company's
employees, their wages and conditions of employment is
complete and correct (also concerning pension rights, keeping
a car, telephone, lending terms, stock options and other
advantages, that there is given no promises of raise in wages
or other kinds of improvements in the conditions of
employment to the employees, and that such promises will not
be given till the day of Closing. The statement also contains
employees who have not yet entered their positions, and
persons who are discharged or dismissed with notice and have
objected or may object to this decision.
5.13 That the Company does not have any pension liabilities
towards previous employees or others, except what is stated
in appendix 3.
5.14 That the Company has not entered into agreements which entail
that any of the Company's employees are entitled to
compensation at retirement, exceeding what exists according
to the Working Environment Act.
5.15 That the Company, on the Assignment date, has the ownership
of all assets present in the balancing sheet per 30.9.98, and
that these assets will be in the possession of the Company on
Assignment day.
5.16 That Company's ownership and other rights are, and on the day
of Closing still will be, secured legal protection by
registration, or in other ways as long as this is possible
with reference to the law.
5.17 That neither of the Company's assets or rights are, or on the
day of Closing will be, mortgaged, encumbered with rights of
use, first options or other civil rights/encumbrances
exceeding what appears from this agreement with appendixes,
and that no one has received, or will receive until the day of
Closing, The Company's permission to the use of its firm or
parts of this, or the use of trademarks, patents,
prescriptions/patterns, register of customers, EDB software,
know-how or other immaterial values belonging to the Company.
3
<PAGE> 4
5.18 That the Seller is not acquainted with material errors or
defects on the Company's products, production factors, the
rest of the assets and premises.
5.19 That all production factors owned and used by the company,
hereunder i.e. real estate, machines, vehicles and equipment.
And all methods and processes used by the Company, satisfies
all existing laws and regulations, and that no unfulfilled
duties from the government are present, and that there are no
reason to expect such duties, and that all products which are
produced or sold by the Company, satisfies the laws and
regulations on the markets on which the Company operates.
5.20 That after 31.12.98, no damage has occurred on the Company's
assets, and no liability for damages towards a third party,
which is not fully covered by insurance, has occurred.
5.21 That appendix 4 contains a complete statement of the
Company's running and unfulfilled contracts, and that new
contracts will not be entered into until the Assignment day,
except ordinary contracts which are parts of the day-to-day
management.
5.22 That none of the Company's contracts with third party will be
terminated as a consequence of the entering into and
accomplishment of this agreement.
5.23 That the management of the Company's operations after 30.9.98
have been limited to, and until the Assignment date will be
limited to, what is normal for the Company, and that after
the mentioned date, is not or will not be purchased or
transferred material capital assets, or purchased larger
quantities of goods than what is considered proper.
5.24 That all the Company's current agreements and offers are
entered into or given on ordinary businesslike terms, that
these terms are not less favourable for the Company than the
general terms stated by the Company per 30.9.98, and that
there has not or will not be given completely or partly
gratuitous outputs from the Company after 30.9.98, and that
all agreements and offers existing on the Assignment day will
be entered into/given on ordinary businesslike terms.
5.25 That there do not exist agreements which commits or may
commit the Company to sell assets or services below market
price, or to buy above market price(i.e. options contracts).
5.26 That the Company has got the insurances stated in appendix 5,
and that these will continue to be in force on the day of
Closing.
5.27 That the company is not part in any lawsuit or other legal
disputes, including disputes about taxes and fees, and that
there are no reason to expect such lawsuits or legal disputes
because of circumstances previous to the entering into this
agreement.
4
<PAGE> 5
5.28 That there is not disbursed or decided any dividends, group
contribution or other completely or partly gratuitous outputs
to the stockholders or others after 30.9.98, and that such
disbursements will not be made until the day of Closing
without written approval from the Buyer.
5.29 That the transferred stock are free from encumbrances, and
that there o not exist any stockholder's agreements, and that
nobody has an option to subscribe for stocks in the Company,
or to take over own stocks owned by the Company.
5.30 That the Company's by-laws are identical with appendix 7, and
that the by-laws will not be altered until the Assignment
day.
5.31 That the Company has adequate security for supply/outputs
which are prepaid.
5.32 That the Seller has given the Buyer or his representatives
complete information about all circumstances which the Seller
is acquainted with concerning the Company, which is or may be
of material signification to the to the Company.
6. Deduction from consideration
If the facts differs from item 5,
GUARANTEES FROM THE SELLER
the Buyer may claim a price reduction, NOK by NOK, according to an
actual estimation.
6.1 A price reduction equal to the effect of the discrepancy on
the balance sheet.
6.2 In the calculation, reference shall not be made to the
estimations of the value on assets provable present, except
where the Seller has withheld information the Seller had to
understand would be of great importance in the evaluation of
the values and the decision to take over the Company.
Claims for reduction must be put forward within 30.4.99.
7. Material breach
If the breach is material, the Buyer may cancel the purchase, if it
after an overall evaluation a cancellation seems reasonable.
8. Competition clause, professional secrecy
8.1 Is regulated in separate employment contracts with Reidar
Kindervag and John Reidar Kindervag.
8.2 The Seller is obliged to keep full professional secrecy about
all information concerning the Company and subsidiaries,
which may be harmful if they become exposed to the public.
5
<PAGE> 6
9. Approvement by the board
This agreement is dependent upon approvement from the Seller's board.
Information about the approval from the board must be presented to the
other party within the day of Closing. The statement shall be signed
by persons with subscription rights. If such statements from both
parties do not exist within the Assignment date, none of the parties
are bound by the agreement.
10. Due diligence
10.1 The Buyer may, previous of the day of Closing, undertake a
due diligence of the company, due to a separate "due
diligence" -agreement, which today is entered into by the
Seller end the Buyer.
10.2 If the Buyer fails to carry out this within the Assignment
date, this do not imply that the guarantees given by the
Seller is annulled.
This agreement is issued in duplicate, one to each of the parties.
Stavanger, 17 November 1998
Simex AS Simex NK/Technologies Inc Bjorn Dahle
Elmer Lunde (sign) Elmer Lunde (sign) (sign)
Reidar Kindervag John Reidar Kindervag Gaute Kindervag
(sign) (sign) (sign)
6
<PAGE> 1
EXHIBIT 10.1(d)
AGREEMENT
Between
Simex AS (Buyer)
Simex/NK Technologies Inc. (SX)
And
Odd Helge Henriksen (50 stocks)
Kare Uthe Kongsmark (50 stocks)
Flash AS (50 stocks) (Sellers)
The following agreement has been entered into:
1. Object
1.1 The Seller will sell and the Buyer will buy 150 stocks in
Hordaror AS (Company). The block of stock constitutes 100% of
the portfolio of shares in the Company.
1.2 The dividends on the stocks, disbursed after the entering of
this agreement, fall to the Buyer. This also applies to
dividends earmarked in the Company's statement of earnings.
2. Consideration
The consideration for the stocks ("Consideration") is NOK 1.200.000,-,
which is to be disbursed as follows:
2.1 Cash NOK 800.000,-.
2.2 13.513,- stocks (non-restricted) in SX. The Buyers are
informed about the restrictions attached to the stocks
concerning sales in the USA, compare, Attachment 1
3. Assignment date
The stock transfer will be done with effect from 20.12.98 (Assignment
date).
4. Settlement
4.1 The consideration is to be disbursed as follows, equal share
on each of the sellers:
4.1.1 For stock transfer NOK 800.000,- will be transferred
to the sellers' account.
4.1.2 15.01.99, at the latest, SX-stocks are to be issued,
13.515 stocks in all.
<PAGE> 2
4.1.3 If circumstances, which are covered under the
guarantee given by the sellers, are revealed,
compare item 5, the consideration shall be adjusted
according to the deduction regulation in item 6.
4.2 Wiggo Thornquist owes Hordaror AS NOK 121.798,04. This loan
is to be settled by issuing 4115 stocks, which were supposed
to be issued to Flash AS, to Simex NK technologies Inc. Thus
the following stocks will be issued to the sellers:
4.2.1 Odd helge Henriksen, 4505 stocks.
4.2.2 Kare Kongsmark, 4505 stocks.
4.2.3 Flash AS, 390 stocks.
5. GUARANTEES FROM THE SELLER
The sellers hereby guarantees the following towards the buyer:
5.1 The Company is a validly founded legal entity, which per the
date of the agreement has performed all registration in
public registers, in accordance with decisions made by the
relevant company organs.
5.2 That the statements in appendix 2 presented income
statements, which are the basis of the stipulation of the
consideration, are correct and settled in accordance with the
law of accounts and generally accepted accounting principles.
5.3 That the Company per the closing date of accounts, were nor
debted or had any other burdened economical responsibilities,
beyond what appears from the balance per the same date and
this agreement with appendixes.
5.4 That the Company's outstanding claims are recoverable for
their full amount.
5.5 That the stock has a value that is the least equivalent with
the balance sheet, and that the balance sheet does not
include items not relevant for the Company's business
management.
5.6 That the Company per the closing date of accounts, has not
incurred the responsibility for latent or contingent
liabilities of any kind, which may be triggered after
closing.
5.7 That the Company, at the signature of the agreement, has not
performed any actions which may trigger claims from a third
party.
5.8 That all reports to the inland revenue authorities are
correct and have been performed within the fixed dates, and
that the Company per date of the closing of the accounts, is
nor responsible for taxes and fees, fines for neglected
reporting, incomplete reporting, or errors in previous
reports to the inland revenue authorities.
2
<PAGE> 3
5.9 That the income statement, book keeping material, fee- and
tax assessment documents are kept for the last 10 years, and
are made accessible for the Company after the share transfer.
5.10 That no claims from the Company's customers do exist, except
from those mentioned in appendix 3.
5.11 That the Company has not guaranteed or secured for the
Sellers' or any third parties contractual obligations, and
that such guarantees and securities will not be present on
the Assignment day.
5.12 That the statement in appendix 4, concerning the Company's
employees, their wages and conditions of employment is
complete and correct (also concerning pension rights, keeping
a car, telephone, lending terms, stock options and other
advantages, that there is given no promises of raise in wages
or other kinds of improvements in the conditions of
employment to the employees, and that such promises will not
be given till the Assignment day. The statement also contains
employees who have not yet entered their positions, and
persons who are discharged or dismissed with notice and have
objected or may object to this decision.
5.13 That the Company does not have any pension liabilities
towards previous employees or others, except what is stated
in appendix 5.
5.14 That the Company has not entered into agreements which entail
that any of the Company's employees are entitled to
compensation at retirement, exceeding what exists according
to the Working Environment Act.
5.15 That the Company, on the Assignment date, has the ownership
of all assets present in the balancing sheet per the closing
date of accounts, and that these assets will be in the
possession of the Company on the Assignment day.
5.16 That the Company's ownership and other rights are, and on the
Assignment day still will be, secured legal protection by
registration, or in other ways as long as this is possible
with reference to the law.
5.17 That neither of the Company's assets or rights are, or on the
Assignment day will be, mortgaged, encumbered with rights of
use, first options or other civil rights/encumbrances
exceeding what appears from this agreement with appendixes,
and that no one has received, or will receive until the
Assignment day, The Company's permission to the use of its
firm or parts of this, or the use of trademarks, patents,
prescriptions/patterns, register of customers, EDB software,
know-how or other immaterial values belonging to the Company.
5.18 That the Seller is not acquainted with material errors or
defects on the Company's products, production factors, the
rest of the assets and premises.
3
<PAGE> 4
5.19 That all production factors owned and used by the company,
hereunder i.e. real estate, machines, vehicles and equipment.
And all methods and processes used by the Company, satisfies
all existing laws and regulations, and that no unfulfilled
duties from the government are present, and that there are no
reason to expect such duties, and that all products which are
produced or sold by the Company, satisfies the laws and
regulations on the markets on which the Company operates.
5.20 That after 31.12.98, no damage has occurred on the Company's
assets, and no liability for damages towards a third party,
which is not fully covered by insurance, has occurred.
5.21 That appendix 6 contains a complete statement of the
Company's running and unfulfilled contracts, and that new
contracts will not be entered into until the Assignment day,
except ordinary contracts which are parts of the day-to-day
management.
5.22 That none of the Company's contracts with third party will be
terminated as a consequence of the entering into and
accomplishment of this agreement.
5.23 That the management of the Company's operations after the
closing date of the accounts have been limited to, and until
the day of Closing will be limited to, what is normal for the
Company, and that after the mentioned date, is not or will
not be purchased or transferred material capital assets, or
purchased larger quantities of goods than what is considered
proper.
5.24 That all the Company's current agreements and offers are
entered into or given on ordinary businesslike terms, that
these terms are not less favourable for the Company than the
general terms stated by the Company on the closing date the
accounts, and that there has not or will not be given
completely or partly gratuitous outputs from the Company
after the closing date the accounts, and that all agreements
and offers existing on the Assignment day will be entered
into/given on ordinary businesslike terms.
5.25 That there do not exist agreements which commits or may
commit the Company to sell assets or services below market
price, or to buy above market price (i.e. options contracts).
5.26 That the Company has got the insurances stated in appendix 7,
and that these will continue to be in force on the Assignment
day.
5.27 That the company is not part in any lawsuit or other legal
disputes, including disputes about taxes and fees, and that
there are no reason to expect such lawsuits or legal disputes
because of circumstances previous to the entering into this
agreement.
5.28 That there is not disbursed or decided any dividends, group
contribution or other completely or partly gratuitous outputs
to the stockholders or others after the
4
<PAGE> 5
closing date of the accounts, and that such disbursements
will not be made until the assignment day without written
approval from the Buyer.
5.29 That the transferred stock are free from encumbrances, and
that there do not exist any stockholder's agreements, and
that nobody has an option to subscribe for stocks in the
Company, or to take over own stocks owned by the Company.
5.30 That the Company's by-laws are identical with appendix 8, and
that the by-laws will not be altered until the Assignment
day.
5.31 That the Company has adequate security for supply/outputs
which are prepaid.
5.32 That the Seller has given the Buyer or his representatives
complete information about all circumstances which the Seller
is acquainted with concerning the Company, which is or may be
of material signification to the to the Company.
6. Deduction from consideration
6.1 If the facts differs from what is guaranteed under item 5,
the Buyer may claim a price reduction equal to the effect of
the discrepancy on the balance sheet, or on the Company's
trading result.
6.2 In the calculation, reference shall not be made to the
estimations of the value on assets provable present, except
where the Seller has withheld information the Seller had to
understand would be of great importance in the evaluation of
the values and the decision to take over the Company.
6.3 Claims for reduction must be put forward within 30.4.99.
7. Material breach
If the breach is material, the Buyer may cancel the purchase, if it
after an overall evaluation a cancellation seems reasonable.
8. Competition clause, professional secrecy
8.1 If nothing else is agreed with the Buyer in writing, the
Seller will not be able to engage in, take part in or be
economically interested in operations of any kind which the
Seller or any company in the same concern today operates. The
prohibition also covers indirect involvement via a company or
a group of companies and involvement in the management or
direction on others account. Stocks or parts owned by
underaged children of the Seller or the Seller's spouse,
aqualises with stocks owned by the Seller himself. The
prohibition do not apply to ownership in listed companies.
8.2 The Seller is obliged to keep full professional secrecy about
all information concerning the Company and subsidiaries,
which may be harmful if they become exposed to the public.
5
<PAGE> 6
9. Approvement by the board
This agreement is dependent upon approvement from the Seller's board.
Information about the approval from the board must be presented to the
other party within the day of Closing. The statement shall be signed
by persons with subscription rights. If such statements from both
parties do not exist within the Assignment date, none of the parties
are bound by the agreement.
10. Due diligence
10.1 The Buyer may, prior to the day of Closing, undertake a due
diligence of the company, due to a separate "due diligence"
-agreement, which today is entered into by the Seller and the
Buyer.
10.2 If the Buyer fails to carry this out within the Assignment
date, this does not imply that the guarantees given by the
Seller is annulled.
This agreement is issued in duplicate, one to each of the parties.
Stavanger, 18.12.98
Odd Helge Henriksen (sign) Elmer Lunde (sign)
Flash AS, wiggo thornquist (sign)
Kare Uthe Kongsmark (sign)
6
<PAGE> 1
EXHIBIT 10.1(e)
AGREEMENT
Between
Simex AS (Buyer)
Simex/NK Technologies Inc. (SX)
And
Portsenteret AS
(Seller)
The following agreement has been entered into:
1. Object
1.1 The Seller will sell and the Buyer will buy all stocks in
Vest Norge Doors AS (Company). The block of stock constitutes
100% of the portfolio of shares in the Company.
1.2 The dividends on the stocks, disbursed after the entering of
this agreement, fall to the Buyer. This also applies to
dividends earmarked in the Company's statement of earnings.
2. Consideration
The consideration for the stocks ("Consideration") is as follows:
2.1 On the time of transfer of the stocks, the Buyer will pay NOK
1.000.000,-.
2.2 SX issues 38.000 stocks in SX to the Seller. The transfer is
to take place 15.2.98, at the latest. All stocks may be
realized immediately.
3. Assignment date
The stock transfer will be done with effect from 17 November 1998
(Assignment date).
4. Settlement
4.1 The consideration, as described in item 2.1, Consideration at
stock transfer, the Buyer is to pay NOK 1.000.000,-, paid in
to the account of Portsenteret AS, account number
3201.07.15481, on the Assignment day.
5. GUARANTEES FROM THE SELLER
The sellers hereby guarantees the following towards the buyer:
<PAGE> 2
5.1 The Company is a validly founded legal entity, which per the
date of the agreement has performed all registration in
public registers, in accordance with decisions made by the
relevant company organs.
5.2 That the appendix 1 presented income statements, which are
the basis of the stipulation of the consideration, are
correct and settled in accordance with the law of accounts
and generally accepted accounting principles.
5.3 That the Company per the closing date of accounts, were nor
debted or had any other burdened economical responsibilities,
beyond what appears from the balance per the same date and
this agreement with appendixes.
5.4 That the Company's outstanding claims are recoverable for
their full amount.
5.5 That the stock has a value that is the least equivalent with
the balance sheet, and that the balance sheet does not
include items not relevant for the Company's business
management.
5.6 That the Company per 30.9.98, has not incurred the
responsibility for latent or contingent liabilities of any
kind, which may be triggered after closing.
5.7 That the Company, at the signature of the agreement, has not
performed any actions which may trigger claims from a third
party.
5.8 That all reports to the inland revenue authorities are
correct and have been performed within the fixed dates, and
that the Company per date of the closing of the accounts, is
nor responsible for taxes and fees, fines for neglected
reporting, incomplete reporting, or errors in previous
reports to the inland revenue authorities.
5.9 That the income statement, book keeping material, fee- and
tax assessment documents are kept for the last 10 years, and
are made accessible for the Company after the share transfer.
5.10 That no claims from the Company's customers do exist, except
from those mentioned in appendix 2.
5.11 That the Company has not guaranteed or secured for the
Sellers' or any third parties contractual obligations, and
that such guarantees and securities will not be present on
the Assignment day.
5.12 That the statement in appendix 3, concerning the Company's
employees, their wages and conditions of employment is
complete and correct (also concerning pension rights, keeping
a car, telephone, lending terms, stock options and other
advantages, that there is given no promises of raise in wages
or other kinds of improvements in the conditions of
employment to the employees, and that such promises will not
be given till the day of Closing. The statement also contains
employees who have not yet entered their positions, and
persons who are
2
<PAGE> 3
discharged or dismissed with notice and have objected or may
object to this decision.
5.13 That the Company does not have any pension liabilities
towards previous employees or others, except what is stated
in appendix 4.
5.14 That the Company has not entered into agreements which entail
that any of the Company's employees are entitled to
compensation at retirement, exceeding what exists according
to the Working Environment Act.
5.15 That the Company, on the Assignment date, has the ownership
of al assets present in the balancing sheet per 30.9.98, and
that these assets will be in the possession of the Company on
the Assignment day.
5.16 That the Company's ownership and other rights are, and on the
Assignment day still will be, secured legal protection by
registration, or in other ways as long as this is possible
with reference to the law.
5.17 That neither of the Company's assets or rights are, or on the
day of Closing will be, mortgaged, encumbered with rights of
use, first options or other civil rights/encumbrances
exceeding what appears from this agreement with appendixes,
and that none has received, or will receive until the day of
Closing, The Company's permission to the use of its firm or
parts of this, or the use of trademarks, patents,
prescriptions/patterns, register of customers, EDB software,
know-how or other immaterial values belonging to the Company.
5.18 That the Seller is not acquainted with material errors or
defects on the Company's products, production factors, the
rest of the assets and premises.
5.19 That all production factors owned and used by the company,
hereunder i.e. real estate, machines, vehicles and equipment.
And all methods and processes used by the Company, satisfies
all existing laws and regulations, and that no unfulfilled
duties from the government are present, and that there are no
reason to expect such duties, and that all products which are
produced or sold by the Company, satisfies the laws and
regulations on the markets on which the Company operates.
5.20 That after 30.9.98, no damage has occurred on the Company's
assets, and no liability for damages towards a third party,
which is not fully covered by insurance, has occurred.
5.21 That appendix 5 contains a complete statement of the
Company's running and unfulfilled contracts, and that new
contracts will not be entered into until Assignment day,
except ordinary contracts which are parts of the day-to-day
management.
5.22 That none of the Company's contracts with third party will be
terminated as a consequence of the entering into and
accomplishment of this agreement.
3
<PAGE> 4
5.23 That the management of the Company's operations after 30.9.98
have been limited to, and until the day of Closing will be
limited to, what is normal for the Company, and that after
the mentioned date, is not or will not be purchased or
transferred material capital assets, or purchased larger
quantities of goods than what is considered proper.
5.24 That all the Company's current agreements and offers are
entered into or given on ordinary businesslike terms, that
these terms are not less favourable for the Company than the
general terms stated by the Company per 30.9.98, and that
there has not or will not be given completely or partly
gratuitous outputs from the Company after 30.9.98, and that
all agreements and offers existing on the Assignment day will
be entered into/given on ordinary businesslike terms.
5.25 That there do not exist agreements which commit or may commit
the Company to sell assets or services below market price, or
to buy above market price(i.e. options contracts).
5.26 That the Company has got the insurances stated in appendix 6,
and that these will continue to be in force on the day of
Closing.
5.27 That the company is not part in any lawsuit or other legal
disputes, including disputes about taxes and fees, and that
there are no reason to expect such lawsuits or legal disputes
because of circumstances previous to the entering into this
agreement.
5.28 That there is not disbursed or decided any dividends, group
contribution or other completely or partly gratuitous outputs
to the stockholders or others after 30.9.98, and that such
disbursements will not be made until the day of Closing
without written approval from the Buyer.
5.29 That the transferred stock are free from encumbrances, and
that there o not exist any stockholder's agreements, and that
nobody has an option to subscribe for stocks in the Company,
or to take over own stocks owned by the Company.
5.30 That the Company's by-laws are identical with appendix 7, and
that the by-laws will not be altered until the Assignment
day.
5.31 That the Company has adequate security for supply/outputs
which are prepaid.
5.32 That the Seller has given the Buyer or his representatives
complete information about all circumstances which the Seller
is acquainted with concerning the Company, which is or may be
of material signification to the to the Company.
6. Deduction from consideration
If the facts differ from item 5,
GUARANTEES FROM THE SELLER
4
<PAGE> 5
the Buyer may claim a price reduction, NOK by NOK, according to an
actual estimation.
6.1 A price reduction equal to the effect of the discrepancy on
the balance sheet.
6.2 In the calculation, reference shall not be made to the
estimations of the value on assets provable present, except
where the Seller has withheld information the Seller had to
understand would be of great importance in the evaluation of
the values and the decision to take over the Company.
Claims for reduction must be put forward within 30.4.99.
7. Material breach
If the breach is material, the Buyer may cancel the purchase, if it
after an overall evaluation a cancellation seems reasonable.
8. Competition clause, professional secrecy
8.1 Is regulated in separate employment contracts with Trond
Hoie.
8.2 The Seller is obliged to keep full professional secrecy about
all information concerning the Company and subsidiaries,
which may be harmful if they become exposed to the public.
9. Approvement by the board
This agreement is dependent upon approvement from the Seller's board.
Information about the approval from the board must be presented to the
other party within the Assignment day. The statement shall be signed
by persons with subscription rights. If such statements from both
parties do not exist within the Assignment date, none of the parties
are bound by the agreement.
10. Due diligence
10.1 The Buyer may, previous of the day of Closing, undertake a
due diligence of the company, due to a separate "due
diligence" -agreement, which today is entered into by the
Seller and the Buyer.
10.2 If the Buyer fails to carry out this within the Assignment
date, this do not imply that the guarantees given by the
Seller is annulled.
5
<PAGE> 6
This agreement is issued in duplicate, one to each of the parties.
Stavanger, 17 November 1998
Simex AS Simex NK/Technologies Inc Portsenteret as
Elmer Lunde Elmer Lunde Jostein Tjelta
6
<PAGE> 1
EXHIBIT 10.1(F)
AGREEMENT CONCERNING PURCHASE OF OIN SPRINKLER
1. The agreement concerns purchase of OIN Sprinkler.
The purchase concerns computer equipment, software, leased car
(MB180), premises, etc, and purchase of the OIN Sprinkler goodwill/
know-how.
2. Employment
Odd Inge Nygaard will be an employee of Simex AS, and enters the
position as manager for the Sprinkler department. His superior is
department manager, Piping.
3. The consideration is as follows:
Cash NOK 450.000,-.
Stocks - NOK 22.500,- per piece (Simex NK Technologies Inc.)
4. Quarantine concerning the start-up of competitive activity.
If Odd Inge Nygaard may not, within a period of 3 years estimated from
the date of contract, start up activity concerning Sprinkler.
5. Employment - dismissal with notice
If Odd Inge Nygaard infringes this agreement by dismissal with notice/
resignation, fraud or culpable negligence, Simex may claim
compensation equivalent with the consideration. Reimbursement of the
consideration as follows:
- resignation after 1 year, reimbursement of 3/3 of
consideration.
- resignation after 2 years, reimbursement of 2/3 of
consideration.
- resignation after 3 years, reimbursement of 1/3 of
consideration
- This agreement is binding for 3 years.
6. Termination
By termination because of other reasons than the ones specified in
item 5 from Simex, item 4 and 5 will be annulled.
7. Guarantees and other responsibilities will be take care of by OIN
Sprinkler.
Forus 22.09.98
<TABLE>
<S> <C>
Elmer Lunde (sign) Odd Inge Nygaard (sign)
Simex AS OIN Sprinkler
</TABLE>
<PAGE> 1
EXHIBIT 10.2(a)
FRAMEWORK AGREEMENT, SIMEX AS - BRODRENE KVERNELAND BRYNE AS.
1. THE EXTENT OF THE AGREEMENT.
This agreement concerns company cars, plus employees who present a
written confirmation for driving allowance for a minimum of 6000
kilometers in connection with business - also in 100% owned
subsidiaries/mother companies.
2. VALIDITY
This agreement runs until terminated by one of the parties, after a
three months notice. In case of material breach, the other party has
the right to terminate the agreement without further notice.
Even though the agreement is terminated, the parties' contractual
duties persist to be in force.
Both parties may at any time ask for new negotiations, in order to
alter and amplify the agreement.
This agreement applies to cars from Brodrene Kverneland Bryne AS.
3. MODEL/DISCOUNTS/EQUIPMENT.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
PASSENGER CARS COMPANY CARS CARS WITH DRIVING
ALLOWANCE FOR MIN. 6000
KILOMETERS.
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
KA 12% 9%
- -------------------------------------------------------------------------------------------------------------
FIESTA 13% 10%
- -------------------------------------------------------------------------------------------------------------
ESCORT 13.5% 11%
- -------------------------------------------------------------------------------------------------------------
FOCUS 13.5% 11.5%
- -------------------------------------------------------------------------------------------------------------
MONDEO 14.5% 12%
- -------------------------------------------------------------------------------------------------------------
GALAXY 13% 11%
- -------------------------------------------------------------------------------------------------------------
COUGAR 12% 10%
- -------------------------------------------------------------------------------------------------------------
VANS
- -------------------------------------------------------------------------------------------------------------
COURIER 11% 9%
- -------------------------------------------------------------------------------------------------------------
TRANSIT 15.5% 12.5%
- -------------------------------------------------------------------------------------------------------------
GALAXY 13% 11%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 2
The discount applies to both the cars and equipment installed by the
car manufacturer.
EQUIPMENT INSTALLED BY BRODRENE KVERNELAND AS (NET PRICES).
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
CAR FIESTA/ ESCORT FOCUS FOCUS MONDEO MONDEO GALAXY COURIER Transit
MODEL KA station
5 door wagon 5 door station
wagon
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Winter 4470,- 5674,- 6270,- 6616,- 5795,- 5795,- 7434,- 4140,- 7875,-
wheels
with
spikes
- --------------------------------------------------------------------------------------------------------------------
Winter 4221,- 5776,- 6334,- 6746,- 5846,- 5846,- 7389,- 4029,-
wheels
- --------------------------------------------------------------------------------------------------------------------
Tow 5144,- 3685,- 3450,- 3950,- 3225,- 3931,- 4781,- 3464,- 3098,-
bar
- --------------------------------------------------------------------------------------------------------------------
Roof 1393,-. 1150,- 1266,- 1457,- 1266,- 1457,- 1225,- 1386,- 1138,-
rack
- --------------------------------------------------------------------------------------------------------------------
First 340,- 340,- 340,- 340,- 340,- 340,- 340,- 340,- 340,-
aid kit
- --------------------------------------------------------------------------------------------------------------------
Engine 1426,- 1557,- 1557,- 1557,- 1557,- 1557,- 1695,- 1331,- 1714,-
heater
- --------------------------------------------------------------------------------------------------------------------
Adverti 3950,- 3950,- 3950,-
sement
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
All prices includes installation and VAT.
Advertisements are to be fitted by "Alfabet". The cost of the
advertisement is part of the leasing agreement. Brodrene Kverneland
Bryne AS will not reserve any profit on the invoiced price, but will
claim the real costs connected with the fitting of the advertisement,
covered.
Ahead of delivery to Simex AS, there are to be installed handsfree
sets for mobile phones in all company cars. The invoice for this
equipment and the installation, is to be sent from "Bilradio
Spesialisten" to Simex AS.
Other kinds of equipment delivered and fitted by Brodrene Kverneland
Bryne AS; When delivering a new car, 20% discount is given, based on
the recommended retail price at Brodrene Kverneland.
2
<PAGE> 3
4. ORDER
Simex contact person in matters of ordering company cars, with
reference to this agreement, is Bjorn H. Okland.
Brodrene Kverneland Bryne AS' contact person is sales executive Trond
Olav Salte.
All orders for company cars, with reference to this agreement, are to
be written. The orders are to be signed by the contact person/the
procurist. Employees, with or without a driving allowance, may contact
trond Olav Salte directly.
5. INVOICING AND TERMS OF PAYMENT
The invoice is to be drawn at delivery.
When purchasing cars, the term of payment are cash payment at
delivery.
The service agreements are normally invoiced quarterly. The invoice
becomes due for payment 45 days after the date of invoice.
In cases of late payment, more interest, in accordance with the law on
more interest, will be charged.
6. GUARANTEES
All new Ford models if delivered with a 12 months guarantee,
independent of the mileage.
6 years guarantee against corrosive attack, except Focus which have a
12 years guarantee against corrosive attack.
In addition, the "Kverneland guarantee", which applies to all company
cars which are part of a service and maintenance agreement.
7. SERVICE AND MAINTENANCE AGREEMENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
3 years Km. 60000, Km. 60000, Km 75000, Km 75000, Km 90000, Km 90000,
gas diesel gas diesel gas diesel
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fiesta/ KA 0,20 0,20 0,20
- ---------------------------------------------------------------------------------------------------------
Escort 0,20 0,20 0,20 0,20
- ---------------------------------------------------------------------------------------------------------
Mondeo 0,20 0,20 0,20 0,20 0,20 0,20
- ---------------------------------------------------------------------------------------------------------
Galaxy 0,20 0,24 0,24 0,24 0,24 0,20
- ---------------------------------------------------------------------------------------------------------
Courier 0,20 0,20 0,20 0,20 0,20 0,20
- ---------------------------------------------------------------------------------------------------------
Transit 0,24 0,24 0,24 0,24 0,24 0,24
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The prices are ex. VAT.
3
<PAGE> 4
Enclosed are the detailed service and maintenance agreement.
8. ANNUAL TAXES/REGISTRATION FEE
Annual taxes, settled by the government (1999: NOK 1965,-), and
registration fee, NOK 900,-, for all new cars.
9. RE-PURCHASE RATES/RESTVALUES
Restvalues, passenger cars:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
CARMODEL KM 60000 KM 75000 KM 90000
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Focus 1.6 5d. 59,81% 56,55% 51,11%
- -------------------------------------------------------------------------------------------
Focus 1.6, stw. 61,04% 57,80% 52,32%
- -------------------------------------------------------------------------------------------
Mondeo 1.8, Ghia 60,72% 57,41% 51,89%
4d/5d
- -------------------------------------------------------------------------------------------
Mondeo 1.8 Ghia 61,96% 58,64% 53,11%
4d/5d
- -------------------------------------------------------------------------------------------
</TABLE>
In addition:
Sunroof: NOK 2000,-
Air condition: NOK 2500,-
Radio: NOK 1000,-
Winter wheels with spikes: NOK 1000,-.
ALL PERCENTAGES ARE CALCULATED ON BASIS OF THE INVOICED PRICE ON THE
CAR ONLY, AFTER THE DISCOUNTS ARE DRAWN. EQUIPMENT, WHICH ENTITLES AN
INCREASE IN THE RE-PURCHASE RATE, ARE TO BE ADDED TO THE CALCULATED
RESTVALUE.
Restvalues, vans:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
CARMODEL 3 yrs/ 3 yrs/ 3 yrs/ 3 yrs/ 3 yrs/ 3 yrs/
30000 km 40000 km 50000 km 60000 km 75000 km 90000 km
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Courier, diesel 47,49% 46,43% 45,38% 44,32% 41,16% 36,94%
- ----------------------------------------------------------------------------------------------------------
Courier, gas 47,10% 46,05% 45,01% 43,96% 40,82% 36,63%
- ----------------------------------------------------------------------------------------------------------
Transit 100 S diesel 41,66% 40,56% 39,47% 38,37% 35,08% 30,70%
- ----------------------------------------------------------------------------------------------------------
Transit 120 S T 42,00% 40,89% 39,79% 38,68% 35,37% 30,95%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
<TABLE>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
diesel
- ----------------------------------------------------------------------------------------------------------
Galaxy 2.0i Flight 56,01% 54,93% 53,85% 51,70% 46,85% 43,08%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
In addition:
Air condition: NOK 2500,-
Radio: NOK 600,-
Winter wheels with spikes: NOK 1000,-.
ALL PERCENTAGES ARE CALCULATED ON BASIS OF THE INVOICED PRICE ON THE
CAR ONLY, AFTER THE DISCOUNTS ARE DRAWN. EQUIPMENT, WHICH ENTITLES AN
INCREASE IN THE RE-PURCHASE RATE, ARE TO BE ADDED TO THE CALCULATED
RESTVALUE.
All restvalues may be adjusted in accordance with price regulations or
change in the state of the market for re-purchase cars. This applies
to future purchases only, not existing agreements. Simex are to be
notified immediately if adjustments are to be carried out.
10. EVALUATION/RE-PURCHASE
In connection with handing in cars, Brodrene Kverneland Bryne AS will
evaluate the car. A neutral valuer may be appointed on own account.
This evaluation will be evaluated against the evaluation carried out
by Brodrene Kverneland Bryne AS. Any discrepancies on this point may
be solved by negotiations. If the evaluation from the neutral valuer,
differs from the evaluation from Brodrene Kverneland Bryne AS, this
evaluation is to be considered as the basis for the calculation of
pakost
If the car, at delivery, has been driven further than the agreed
mileage, either NOK 0,80 per km for passenger cars and 0,40 per km for
vans, will be invoiced, or Brodrene Kverneland Bryne and Simex agree
upon an amount which is to be paid by the user, based on the exceeded
mileage. A sensible evaluation is to be made, on the basis of a
realistic evaluation of the cars' decrease in value and the exceeded
mileage.
The part exchange price is determined by that all services have been
observed at a certified Ford-distributor. Necessary repairs in order
to maintain damage beyond normal wear and tear, is to be subtracted
from the re-purchase value according to rate.
SERVICE- AND MAINTENANCE AGREEMENT WHEN HANDING IN LEASED CARS
When the cars are handed in to Brodrene Kverneland Bryne AS, a
calculation is to be made in order to find out whether Simex has paid
to little/much in proportion to the mileage of the individual car.
Simex has to pay for a minimum of 45000 km.
A settlement will be prepared annually, regarding the difference
between agreed and actual mileage. This applies to rest values and
service-and maintenance agreements.
5
<PAGE> 6
11. COURTESY CAR
In cases of service/damage/claims at our workshops, a courtesy car
will be at the disposal for all users of cars with service, and
maintenance agreements. A reservation in advance is required.
12. FORD BUSINESS PARTNER
Ford Credit has developed a system for the administration of cars,
which includes finance, service, insurance and gascard, with reference
to the need.
By leasing through Ford Credit, Simex is offered the best conditions
available.
13. FOR BUSINESS PARTNER FINANCING
For users with mileage allowance, this will be a very favourable
offer. Users with mileage allowance exceeding 6000 km. per year is
offered a 0% cash loan. The user is secured a guaranteed re-purchase
value/part exchange guarantee, which renders a good overview of the
car costs possible.
14. FORCE MAJEURE
Circumstances beyond a party's control, and which occurs after the
entering of the agreement and impede its fulfillment, are to be
considered a cause for exception. The party who wish to plead such a
circumstance, shall, without intermission, notify the other party in
writing.
15. DELIVERY
Order from factory: 8-12 weeks
Order form own storehouse: 2-3 weeks
The car is delivered with 1/2 tank of gas, warning triangle and rubber
mats. The car is marked with Simex-dekaler in accordance with the
regulations.
If the cars are delayed from the factory, Brodrene Kveneland Bryne
shall notify Simex without intermission.
Brodrene Kverneland Bryne AS delivers all new cars to Simex AS' main
office at Forus.
On delivery to other places in Norway, i.e. bergen, Brodrene
Kverneland Bryne AS, will bring the car to the port of Sandnes. The
cars are transported by ship to bergen, where he car is picked up by
the buyer. (vice verse when handing inn leased cars).
Freight charge (boat/car/train from Sandnes to Bergen) for the cars
to and from i.e. Bergen, is in its entirety charged Simex AS.
16. FINANCING
All cars are to be financed through Westbroker Finans AS, contact
person is Bernt Lie.
17. LEASED CARS BOUGHT BY SIMEX AS AFTER EXPIRATION OF LEASING AGREEMENT.
Brodrene Kverneland Bryne AS will add 10% profit to the restvalue on
cars which restvalue are less than NOK 100000,-.
6
<PAGE> 7
Brodrene Kverneland Bryne AS will add 7% profit to the restvalue on
cars which restvalue exceed NOK 100000,-.
When the individual leasing agreement expires, Simex AS is free to
prolong the leasing period. If the leasing period is prolonged, it
shall apply for a minimum of 1 year, after the expiration of the
leasingperiod of 3 years. If the leasingperiod is prolonged, the rest
value guarantee from Brodrene Kverneland Bryne AS no longer applies.
In cases of resale, Brodrene Kverneland Bryne AS has a right of
preemption, based on normal writedown, which is 15% per year, the
basis for the writedown is the restvalue after 3 years.
18. OTHER
All adjustments or circumstances that may affect this agreement, shall
immediately be notified to the suffering party (the party which is
affected by the amendment). This point is mutual.
19. LAW
Norwegian law is applicable among the parties. If a dispute appears,
with reference to this agreement, the dispute shall seek a settlement
through negotiations. If negotiations do not lead anywhere within 1
month, the dispute is to be referred to arbitration. The fact that a
dispute has been referred to arbitration, does not solely decharge the
parties from fulfilling their contractual duties.
...26...March 1999
(sign) (sign)
------------------------------- ---------------------------
Brodrene Kverneland Bryne AS Simex AS
Trond Olav Salte Bjorn Hilleroy Okland
(sign) (sign)
------------------------------- ---------------------------
Brodrene Kverneland Bryne AS Simex As
Arve Edland Elmer Lunde
7
<PAGE> 8
SERVICE/MAINTENANCE AGREEMENT
SS.1. TERMS OF PAYMENT
Agreed sum is to be paid in arrears quarterly, net per 45 days. If
payment fails to appear, the agreement may be terminated with
immediate effect.
SS.2. THE EXTENT OF THE AGREEMENT.
The agreed price for maintenance covers:
a) Service in accordance with the instructionbook FORD MOTOR NORGE
A/S, which is present in all cars.
b) Repairs as a result of normal wear and tear.
c) Free rental car ex. gas for the duration of the service.
d) If Simex' cars (Ford) are in need of temporary expedient,
independent of the time of day/night, available temporary
expedient shall be contacted. Any disbursement will be covered by
Brodrene Kverneland A/S.
TEMPORARY EXPEDIENT TELPH. 51583644 (Stavanger) or 91620200 (Bryne).
e) Users of cars in Hordaland shall have the service etc. done at
Ford-dealer Mathisen Laksevag.
The contact person at Mathisen Laksevag is Terje Paulsen.
SS.3. USE AND MAINTENANCE.
The seller's obligations according to this agreement is dependent upon
that the buyer shows normal caution and follows the instructions set
out for the use of the vehicle, according to the instructionbook and
directions given by FORD NORGE A/S, on oiling and change of oil.
The vehicle must be used in normal operating condition, and must not
be overloaded. The vehicle must mainly be used in the part of the
country and to the purposes agreed upon. It is a condition that the
vehicle at all times is in a condition according to the regulations,
and that the seller is contacted as soon as an error is uncovered, in
order to avoid unnecessary damage.
The sellers workshop is to be used to the extent possible. If this is
not possible, the closest Ford dealer is to be contacted.
In Bergen the Ford dealer Mathisen Laksevag (Terje Paulsen Tlph.
55942200) shall/ought to be contacted, in order to carry out normal
maintenance without requisition from Br. Kverneland.
No repairs made outside Brodrene Kvernelands divisions will be paid,
without an approved requisition from Br. Kverneland.
SS.4. COSTS PAID BY THE BUYER.
Unless other is specifically agreed upon, this maintenance agreement
does not cover i.e.:
- Gas, diesel
- Daily maintenance, i.e. wash, polish
- Filling oil and rinsing fluid, in between the services
- Change of wheels according to normal wear and tear and
damage.
- Maintenance and repairs on unspecified equipment
8
<PAGE> 9
- Finish on chrome and paint
- Damaged caused by car crash, collision, careless use etc. In
these cases the sellers car body workshop is to be used.
- Traffic damage and damage caused by natural disasters
- Salavage costs and towing
- Maintenance and repair as a result of irregular use of the
car.
SS.5. EXCHANGE PARTS
All items replaced, fall to the seller.
SS.6. SETTLEMENT
If the agreement is terminated before the agreed time of expiration,
the settlement will be based on the actual mileage.
HAND IN OF LEASED CAR:
When the car is delivered to Br. Kverneland bryne AS, a calculation is
to be made in order to find out whether Simex has paid too little/
much in proportion to the mileage of the individual car. Simex has to
pay for a minimum of 45000 km. The settlement is to be made annually.
SS.7. FORCE MAJEURE
The seller may plead force majeure when circumstances beyond his
control makes him unable to fulfil the duties set down in this
agreement. Alterations in toll and taxes i.e. according to government
regulations will entail similar amendments of the prices set down in
this agreement. If the agreed prices hereby is changed substantially,
The buyer has the right to terminate the agreement with immediate
effect.
SS.8. DELEGATION
The agreement may not be transferred to a third party, without written
approval from the seller.
SS.9. LAW
Norwegian law is applicable among the parties. If a dispute appears,
with reference to this agreement, the dispute shall seek a settlement
through negotiations. If negotiations do not lead anywhere within 1
month, the dispute is to be referred to arbitration. The fact that a
dispute has been referred to arbitration, does not solely decharge the
parties from fulfilling their contractual duties.
...26...March 1999
(sign) (sign)
-------------------------- ----------------------------
Brodrene Kverneland Bryne AS Simex AS
Trond Olav Salte Bjorn Hilleroy Okland
9
<PAGE> 1
EXHIBIT 10.2(b)
LEASE AGREEMENT WITH RIGHT OF PREEMPTION
Lesser:
Tjelta Eiendom 1 AS (TE)
Org.no: 976907884
Lessee:
Simex AS (SX)
Org.no: 937454104
TE are erecting a new building on the site gnr.35 brn 250, Forus, Sola county,
size of property ca. 5000 - 20000 m2, according to the building- and enterprise
plan, with reference to the agreement with SX.
SX and TE participates in the project management, which main object is to erect
an industrial building as cheap and functional as possible. All calculations
and markups shall be unconcealed.
SX projects and supplies all technical installations in the building,
cooperating with the general contractor. Remunerations to SX, are to be
invoiced directly to TE, without markups from the general contractor.
The projects' estimated costs are appr. NOK 30 000 000,-, for the building, and
appr. NOK10 000 000,-, for the property.
SX has the right to claim an extension of the building, on the same conditions
as for the rest of the project.
The leasing period shall be 20 years, estimated from the day of take-over,
15.09.99. SX has the right of preemption (first option) if the building is to
be sold prior to the expiration of the leasing period.
SX has the right to renegotiate the leasing agreement after the expiration of
the leasing period.
SX and TE shall together decide upon the project finance. SX is to decide what
kind of project finance and which finance institution to choose.
SX has the right to refinance the project whenever required, and may, after 10
years, claim their deposit reimbursed.
Costs in connection with the refinancing, is to be carried by SX.
TE is to invest NOK 2 000 000,- as capital ownership in the project. SX invests
NOK
5 000 000,-, as a deposit. TE is to reimburse this deposit after 20 years at
the latest. The deposit is to be indexed in accordance with the Central Bureau
of Statistics.
SX receives a mortgage bond with priority after the projects main source of
finance.
The rent is to be estimated as follows:
1
<PAGE> 2
SX pays the current interest rates on the current loans.
TE shall pay off the loans annually with equal amounts, for 20 years, except
for the value of the property.
SX pays 5% of the amount invested in production and storerooms per year.
SX pays 2% of the amount invested in office premises per year.
SX pays 2% of the total investments in the building per year, this is adjusted
in accordance with the Central Bureau of Statistics price index.
The building loan interest is to be added to the value of the building, and
depreciated over the same period of time.
SX is responsible for maintenance, except normal wear and tear. SX is
responsible for
Municipal taxes and contents insurance. Sx is also responsible for the window
insurance.
TE is responsible for the building insurance and the property tax.
This agreement is to be edited when all numbers are known.
TE is to bye SX' current buildings, according to separate agreement.
Disputes concerning this agreement shall seek a solution among the parties. If
this fails, an impartial person (company) shall be appointed by the parties.
This agreement is issued in two copies, one copy to each of the parties.
Forus 271198
(sign) (sign)
Elmer Lunde Jostein Tjelta
Simex NK/ Technologies Inc Tjelta Eiendom 1 as
Simex as Portsenteret as
2
<PAGE> 1
EXHIBIT 10.3(a)
Agreement No. 50120539
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE (WINDOWS)
HRS SYSTEMS, INC., 4792 LaVista Road, Tucker, Georgia 30084 (hereinafter
referred to as "LICENSOR") agrees to grant and SIMEX AS (hereinafter referred
to as "LICENSEE") agrees to accept, on the following terms and conditions, and
for the fee designated herein, a non-exclusive license to use each Licensed
Program on Designated Equipment as set forth in this Agreement:
1. DEFINITIONS: The following terms are defined for the purposes of this
Agreement as follows:
1.1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and
any updated program or program portion hereinafter furnished to
LICENSEE by LICENSOR in connection with a Licensed Program or any DOS
substitute.
1.2 "Designated Equipment" shall be the central processing unit and
any other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from
storage units or media into equipment for processing, or using any
Licensed Program in the course of operation or using any Licensed
Program in printed form in support of the use of any Licensed
Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted herein
shall be for a period of five (5) years, except in the case of DOS-to-Windows
Switchover which period shall begin JANUARY 21, 1999; said period shall extend
for five (5) years, except in the case of DOS-to-Windows Switchover which
period shall extend to the end of the immediately previous DOS agreement ending
DECEMBER 6, 2000 . This Agreement and the license may be terminated by LICENSEE
at any time by giving written notice of termination to LICENSOR or by LICENSOR
in the event:
(1) LICENSEE fails to make any payment required to be made to
LICENSOR hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10)
days after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after
any adjudication that the LICENSEE is bankrupt or insolvent, or after
the filing by the LICENSEE of any petition or answer seeking
reorganization, readjustment or arrangement of the LICENSEE's
business under any federal law relating to bankruptcy of insolvency,
of after the appointment of a receiver for any of the property of the
LICENSEE, or after the making by the LICENSEE of any assignment for
the benefit of creditors, or after the institution of any proceedings
for the liquidation of the LICENSEE's business for the termination of
its corporate charter.
Early termination of LICENSEE's license shall occur when LICENSOR deposits the
notice of termination with the U.S. Mail and is effective whether or not said
notice is delivered to LICENSEE.
<PAGE> 2
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
Any failure or delay in the exercise of the LICENSOR's right of termination for
any default shall not prejudice the LICENSOR's right of termination for such or
any other default.
Within five (5) days' after termination by either LICENSOR or LICENSEE,
LICENSEE shall deliver to LICENSOR a written certification to the effect that
the original and any copies of all or any portions of any Licensed Program
affected by the termination have been destroyed or, if LICENSOR so requests,
LICENSEE shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program, in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of the Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non-transferable.
5. COPIES: Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs, in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify bad never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement. LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
"This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. 1his software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS, INC."
<PAGE> 3
6. PROTECTION OF LICENSED PROGRAM: LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without, prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specifically related to LICENSEE'S use of the Licensed
Program. LICENSEE agrees that he will take appropriate action by instruction,
agreement, or otherwise with his employees or other persons permitted access to
Licensed Programs to satisfy his obligations under this Agreement with respect
to use, copying modification, and protection and security of Licensed Programs.
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed Program upon one
month's notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
month after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been an injunction or the claim has been withdrawn, and agrees to undertake at
LICENSEE's expense the defense of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no liability
for any claim of copyright of patent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF.
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The LICENSOR is the sole owner of all right, title and interest
in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title
or interest in and to the Licensed Program and that LICENSEE shall
have the right to use the Licensed Programs as herein provided.
8.5 That the LICENSOR has the full power to grant the rights and
privileges herein granted to the Licensee pursuant to the Agreement.
<PAGE> 4
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO
WARRANTIES, EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM,
INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND THE STATED EXPRESS WARRANTY IS IN LIEU OF ALL
LIABILITIES OR OBLIGATIONS OF LICENSOR FOR DAMAGES INCLUDING, BUT NOT
LIMITED TO CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN CONNECTION
WITH THE USE OR PERFORMANCE OF LICENSED PROGRAMS.
9. LIMITATION OF LIABILITY: LICENSEE agrees that LICENSOR's liability hereunder
for damages shall not exceed the charges paid by LICENSEE for the particular
Licensed Program or related materials for any lost profits, or for any claim or
demand against the LICENSEE by any other party, No action, regardless of form
arising out of the transactions under this Agreement, may be brought by either
party more than one year after the cause of action has accrued, except that an
action for nonpayment may be brought within one year after the date of last
payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the license
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
<TABLE>
<CAPTION>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
<S> <C>
Name: HASS' WINDOWS VERSION CPU (Make and Model)
--------------------- -------------
Switchover payment: $250.00 (January 1, 1999 - December 6, 2000) Number of Disk Drives
------------------------------------------- -----------
Next payment: $750.00 (December 7, 2000 - December 6, 2005)
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LICENSEE:
- --------
<S> <C>
Company Name:
SIMEX AS Officer Name: Odd Inge Nygaard
-------------------
GODESETDALEN 24 Signature: /s/ Odd Inge Nygaard
---------------------
N-4011 FORUS NORWAY Title:
---------------------------
Date: 03.03.99
---------------------------
(Corporate Seal)
LICENSOR:
- ---------
HRS SYSTEMS, INC. Officer Name: Hal R. Sanders
-------------------
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
4792 LaVista Road Signature:
------------------------
Tucker, Georgia 30084 Title: President
--------------------------
Date:
----------------------------
</TABLE>
(Corporate Seal)
*The provisions of this agreement include updating in METRIC units at no
additional charge.
<PAGE> 6
Agreement No.007L589
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE
HRS SYSTEMS, INC., 2193 Ranchwood Drive, N.E., Atlanta, Georgia 30345
(hereinafter referred to as "LICENSOR") agrees to grant and Oin Sprinkler
(hereinafter referred to as "LICENSEE") agrees to accept, on the following terms
and conditions, and for the fee designated herein, a non-exclusive license to
use each Licensed Program on Designated Equipment as set forth in this
Agreement:
1. DEFINITIONS: The following terms are defined for the purposes of this
Agreement as follows:
1.1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and any
updated program or program portion hereinafter furnished to LICENSEE by
LICENSOR in connection with a Licensed Program.
1.2 "Designated Equipment" shall be the central processing unit and any
other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from storage
units or media into equipment for processing. or using any Licensed
Program in the course of operation or using any Licensed Program in
printed form in support of the use of any Licensed Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted
herein shall be for a period of five (5) years beginning December 7, 1990.
This Agreement and the license may be terminated by LICENSEE at any time by
giving written notice of termination to LICENSOR or by LICENSOR in the event
(1) LICENSEE fails to make any payment required to be made to LICENSOR
hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10) days
after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after any
adjudication that the LICENSEE is bankrupt or insolvent, or after the
filing by the LICENSEE of any petition or answer seeking reorganization,
readjustment or arrangement of the LICENSEE's business under any federal
or state law relating to bankruptcy of insolvency, or after the
appointment of a receiver for any of the property of the LICENSEE, or
after the making by the LICENSEE of any assignment for the benefit of
creditors, or after the institution of any proceedings for the
liquidation of the LICENSEE's business or for the termination of its
corporate charter.
Termination of LICENSEE's license shall occur when LICENSOR deposits the notice
of termination with the U. S. Mail and is effective whether or not said notice
is delivered to LICENSEE.
<PAGE> 7
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
Any failure or delay in the exercise of the LICENSOR's right of termination for
any default shall not prejudice the LICENSOR's right of termination for such or
any other default.
Within five (5) days after termination by either LICENSOR or LICENSEE, LICENSEE
shall deliver to LICENSOR a written certification to the affect that the
original and any copies of all or any portions of any Licensed Program affected
by the termination have been destroyed or if LICENSOR so requests, LICENSEE
shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of that Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non-transferable.
5. COPIES. Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs. in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify had never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include the HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
"This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. This software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS. INC."
<PAGE> 8
6. PROTECTION OF LICENSED PROGRAM: LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specific-ally related to
LICENSEE's use of the Licensed Program. LICENSEE agrees that he will take
appropriate action by instruction, agreement, or otherwise with his employees
or other persons permitted access to Licensed Programs to satisfy his
obligations under this Agreement with respect to use, copying modification, and
protection and security of Licensed Programs.
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed program upon one
month's written notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
mouth after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been in injunction or the claim has been withdrawn. and agrees to undertake at
LICENSEE's expense the defense of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no liability
for any claim of copyright or parent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF.
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The Licensor is the sole owner of all the right, title and interest
in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title or
interest in and to the Licensed Program and that LICENSEE shall have
the right to use the Licensed Programs as herein provided.
<PAGE> 9
8.5 That the LICENSOR has the full Power to grant the rights and
privileges herein granted to the LICENSEE pursuant to the Agreement.
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. AND THE
STATED EXPRESS WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF
LICENSOR FOR DAMAGES INCLUDING, BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES
OCCURRING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF LICENSED
PROGRAMS.
9. LIMITATION OF LIABILITY-LICENSEE agrees that LICENSOR's Liability
hereunder for damages shall not exceed the charges paid by LICENSEE for the
particular Licensed Program or related materials for any lost profits. or for
any claim or demand against the LICENSEE by any other parry. No action,
regardless of form arising out of the transactions under this Agreement, may be
brought by either parry more than one year after the cause of action has
accrued, except that an action for nonpayment may be brought within one year
after the date of last payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or Listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the License
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
TERMS: $3400-00 Net 30 days.
<TABLE>
<CAPTION>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
<S> <C>
Name: HASS 5.4 CPU (Make and Model)
-------- ---------
Fee:* $4250-20%=$3400 (12/07/90-12/07/95) Number of Disk Drives
----------------------------------
Five (5) Year Renewal Fee: $250.00 (12/07/95-12/07/00) --------
--------------------------
</TABLE>
<TABLE>
<CAPTION>
LICENSEE:
<S> <C>
Company Name:
Oin Sprinkler Officer Name: Odd Inge Nygaard
--------------------
Verksgt. 42 Signature: /s/ Odd Inge Nygaard
----------------------
4013 Stavanger NORWAY Title: Manager
---------------------------
Date: 22. mars 1991
---------------------------
</TABLE>
(Corporate Seal)
<PAGE> 10
<TABLE>
<CAPTION>
LICENSOR:
- --------
<S> <C>
HRS SYSTEMS, INC. Officer Name: Hal R. Sanders
----------------------
2193 Ranchwood Drive, N.E. Signature: /s/ Hal R. Sanders
------------------------
Atlanta, Georgia 30345 Title: President
----------------------------
Date: 4/17/91
----------------------------
</TABLE>
(Corporate Seal)
*The provisions of the agreement shall include all updating at no additional
charge other than a $50.00 handling charge for each update.
<PAGE> 11
Agreement No. R071L5890
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE
HRS SYSTEMS, INC., 4792 LaVista Road, Tucker, Georgia 30084 (hereinafter
referred to as "LICENSOR") agrees to grant and SIMEX AS (hereinafter referred
to as "LICENSEE") agrees to accept, on the following terms and conditions, and
for the fee designated herein, a non-exclusive license to use each Licensed
Program on Designated Equipment as set forth in this Agreement:
1. DEFINITIONS: The following terms are defined for the purposes of
this Agreement as follows:
1. 1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and
any updated program or program portion hereinafter famished to
LICENSEE by LICENSOR in connection with a Licensed Program.
1.2 "Designated Equipment" shall be the central processing unit and
any other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from
storage units or media into equipment for processing, or using any
Licensed Program in the course of operation or using any Licensed
Program in printed form in support of the use of any Licensed
Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted herein
shall be for a period of five (5) years beginning DECEMBER 7, 1995. This
Agreement and the license may be terminated by LICENSEE at any time by giving
written notice of termination to LICENSOR or by LICENSOR in the event:
(1) LICENSEE fails to make any payment required to be made to
LICENSOR hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10)
days after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after
any adjudication that the LICENSEE is bankrupt or insolvent, or after
the filing by the LICENSEE of any petition or answer seeking
reorganization, readjustment or arrangement of the LICENSEE's
business under any federal law relating to bankruptcy of insolvency,
of after the appointment of a receiver for any of the property of the
LICENSEE, or after the making by the LICENSEE of any assignment for
the benefit of creditors, or after the institution of any proceedings
for the liquidation of the LICENSEE's business for the termination of
its corporate charter.
Early termination of LICENSEE's license shall occur when LICENSOR deposits the
notice of termination with the U.S. Mail and is effective whether or not said
notice is delivered to LICENSEE.
<PAGE> 12
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
9.[sic] LIMITATION OF LIABILITY: LICENSEE agrees that LICENSOR's liability
hereunder for Any failure or delay-in the exercise of the LICENSOR's right of
termination for any default shall not prejudice the LICENSOR's right of
termination for such or any other default.
Within five (5) days after termination by either LICENSOR or LICENSEE, LICENSEE
shall deliver to LICENSOR a written certification to the effect that the
original and any copies of all or any portions of any Licensed Program affected
by the termination have been destroyed or, if LICENSOR so requests, LICENSEE
shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program, in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of the Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non-transferable.
5. COPIES: Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs, in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify had never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement. LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
"This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. This software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS, INC."
<PAGE> 13
6. PROTECTION OF LICENSED PROGRAM: LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specifically related to LICENSEE'S use of the Licensed
Program. LICENSEE agrees that he will take appropriate action by instruction,
agreement, or otherwise with his employees or other persons permitted access to
Licensed Programs to satisfy his obligations under this Agreement with respect
to use, copying modification, and protection and security of Licensed Programs.
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed Program upon one
month's notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
month after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been an injunction or the claim has been withdrawn, and agrees to undertake at
LICENSEE's expense the defense of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no liability
for any claim of copyright of patent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF.
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The LICENSOR is the sole owner of all right, title and interest
in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title
or interest in and to the Licensed Program and that LICENSEE shall
have the right to use the Licensed Programs as herein provided.
8.5 That the LICENSOR has the full power to grant the rights and
privileges herein granted to the Licensee pursuant to the Agreement.
<PAGE> 14
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO
WARRANTIES, EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM,
INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND THE STATED EXPRESS WARRANTY IS IN LIEU OF ALL
LIABILITIES OR OBLIGATIONS OF LICENSOR FOR DAMAGES INCLUDING, BUT NOT
LIMITED TO CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN CONNECTION
WITH THE USE OR PERFORMANCE OF LICENSED PROGRAMS.
9. LIMITATION OF LIABILITY: LICENSEE agrees that LICENSOR's liability hereunder
for damages shall not exceed the charges paid by LICENSEE for the particular
Licensed Program or related materials for any lost profits, or for any claim or
demand against the LICENSEE by any other party, No action, regardless of form
arising out of the transactions under this Agreement, may be brought by either
party more than one year after the cause of action has accrued, except that an
action for nonpayment may be brought within one year after the date of last
payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the license
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
TERMS: NET 30 DAYS
<TABLE>
<CAPTION>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
<S> <C>
Name: HASS HOUSE(R) WINDOWS VERSION CPU (Make and Model)
----------------------------- ------------------------
Fee: $350.00 (December 7, 1995 - December 6, 2000) Number of Disk Drives
----------------------
Next payment: $350.00 (December 7, 2000 - December 6, 2005)
LICENSEE:
Company Name:
SIMEX AS Officer Name: Odd Inge Nygaard
-----------------------------
P. Box 42 Signature: /s/ Odd Inge Nygaard
-------------------------------
N-4011 FORUS NORWAY Title:
-------------------------------------
Date: 29.03.99
</TABLE>
(Corporate Seal)
<PAGE> 15
<TABLE>
<CAPTION>
LICENSOR:
- --------
<S> <C>
HRS SYSTEMS, INC. Officer Name: Hal R. Sanders
-----------------
4792 LaVista Road Signature: /s/ Hal R. Sanders
--------------------
Tucker, Georgia 30084 Title: President
-------------------------
Date: 5/7/99
-------------------------
</TABLE>
(Corporate Seal)
*The provisions of this agreement include updating in METRIC units at no
additional charge.
<PAGE> 16
Agreement No.007L589
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE
HIRS SYSTEMS, INC., 2193 Ranchwood Drive, N.E., Atlanta, Georgia 30345
(hereinafter referred to as "LICENSOR") agrees to grant and Oin Sprinkler
(hereinafter referred to as LICENSEE") agrees to accept, on the following terms
and conditions, and for the fee designated herein, a non-exclusive license to
use each Licensed Program on Designated Equipment as set forth in this
Agreement.
1. DEFINITIONS: The following terms are defined for the purposes of this
Agreement as follows:
1.1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and any
updated program or program portion hereinafter furnished to LICENSEE by
LICENSOR in connection with a Licensed Program.
1.2 "Designated Equipment" shall be the central processing unit and any
other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from storage
units or media into equipment for processing, or using any Licensed
Program in the course of operation or using any Licensed Program in
printed form in support of the use of any Licensed Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted herein
shall be for a period of five (5) years beginning December 7, 1990 . This
Agreement and the license may be terminated by LICENSEE at any time by giving
written notice of termination to LICENSOR or by LICENSOR in the event
(1) LICENSEE fails to make any payment required to be made to LICENSOR
hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10) days
after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after any
adjudication that the LICENSEE is bankrupt or insolvent, or after the
filing by the LICENSEE of any petition or answer seeking reorganization,
readjustment or arrangement of the LICENSEE's business under any federal
or state law relating to bankruptcy of insolvency, or after the
appointment of a receiver for any of the property of the LICENSEE, or
after the making by the LICENSEE of any assignment for the benefit of
creditors, or after the institution of any proceedings for the
liquidation of the LICENSEE's business or for the termination of its
corporate charter.
Termination of LICENSEE's license shall occur when LICENSOR deposits the notice
of termination with the U. S. Mail and is effective whether or not said notice
is delivered to LICENSEE.
<PAGE> 17
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
Any failure or delay in the exercise of the LICENSOR's right of termination for
any default shall not prejudice the LICENSOR's right of termination for such or
any other default.
Within five (5) days after termination by either LICENSOR or LICENSEE, LICENSEE
shall deliver to LICENSOR a written certification to the effect that the
original and any copies of all or any portions of any Licensed Program affected
by the termination have been destroyed or, if LICENSOR so requests, LICENSEE
shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program, in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of that Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non- transferable.
5. COPIES: Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs, in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify had never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement. LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include the HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. This software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS. INC."
<PAGE> 18
6. PROTECTION OF LICENSED PROGRAM:- LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specifically related to
LICENSEE's use of the Licensed Program. LICENSEE agrees that he will take
appropriate action by instruction, agreement, or otherwise with his employees
or other persons permitted access to Licensed Programs to satisfy his
obligations under this Agreement with respect to use, copying modification, and
protection and security of Licensed Program .
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed program upon one
month's written notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
month after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been an injunction or the claim has been withdrawn, and agrees to undertake at
LICENSEE's expense the defense' of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no Liability
for any claim of copyright or patent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The LICENSOR is the sole owner of all the right, title and
interest in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title
or interest in and to the Licensed Program and that LICENSEE
shall have the right to use the Licensed Programs as herein
provided.
<PAGE> 19
8.5 That the LICENSOR has the full power to grant the rights and
privileges herein granted to the LICENSEE pursuant to the
Agreement.
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM, INCLUDING ALL IMPLIED
WARRANTIES OF AND FITNESS FOR A PARTICULAR PURPOSE, AND THE STATED EXPRESS
WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF LICENSOR FOR DAMAGES
INCLUDING, BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN
CONNECTION WITH THE USE OR PERFORMANCE OF LICENSED PROGRAMS.
9. LIMITATION OF LIABILITY.- LICENSEE agrees that LICENSOR's liability
hereunder for damages shall not exceed the charges paid by LICENSEE for the
particular Licensed Program or related materials for any lost profits, or for
any claim or demand against the LICENSEE by any other party. No action,
regardless of form arising out of the transactions under this Agreement, may be
brought by either party more than one year after the cause of action has
accrued, except that an action for nonpayment may be brought within one year
after the date of last payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the license
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
TERMS: $1500.00 Net 30 days.
<TABLE>
<CAPTION>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
<S> <C>
Name: HASSCAD 1.0 CPU (Make and Model)
--------------------------------------------------------------- -----------------
Fee:* $1500.00 (12/07/90-12/07/95) Number of Disk Drives
--------------------------------------------------------------- ----------------
Five (5) Year Renewal Fee: $150.00 (12/07/95-12/07/00)
------------------------------------------
LICENSEE:
Company Name:Oin Sprinkler Officer Name :Odd Inge Nygaard
------------------------------------------------ --------------------------------
Address: Verksgt. 42 Signature:
------------------------------------------------ -----------------------------------
4013 Stavanger NORWAY Title: Manager
------------------------------------------------ -----------------------------------
Date: 22 mars 1991
-----------------------------------
</TABLE>
(Corporate Seal)
<PAGE> 20
<TABLE>
<CAPTION>
LICENSOR:
- --------
HRS SYSTEMS, INC. Officer Name: Hal R. Sanders
--------------------------
<S> <C>
2193 Ranchwood Drive, N.E Signature:
--------------------------
Atlanta, Georgia 30345 Title: President
--------------------------
Date: 4/17/91
--------------------------
</TABLE>
(Corporate Seal)
*The provisions of the agreement shall include all updating at no additional
charge other than a $50.00 handling charge for each update.
<PAGE> 21
Agreement No.C121L5890
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE
HIRS SYSTEMS, INC., 2193 Ranchwood Drive, N.E., Atlanta, Georgia 30345
(hereinafter referred to as "LICENSOR") agrees to grant and Oin Sprinkler
(hereinafter referred to as LICENSEE") agrees to accept, on the following terms
and conditions, and for the fee designated herein, a non-exclusive license to
use each Licensed Program on Designated Equipment as set forth in this
Agreement.
1. DEFINITIONS: The following terms are defined for the purposes of this
Agreement as follows:
1.1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and any
updated program or program portion hereinafter furnished to LICENSEE by
LICENSOR in connection with a Licensed Program.
1.2 "Designated Equipment" shall be the central processing unit and any
other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from storage
units or media into equipment for processing, or using any Licensed
Program in the course of operation or using any Licensed Program in
printed form in support of the use of any Licensed Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted herein
shall be for a period of five (5) years beginning December 7, 1990 . This
Agreement and the license may be terminated by LICENSEE at any time by giving
written notice of termination to LICENSOR or by LICENSOR in the event
(1) LICENSEE fails to make any payment required to be made to LICENSOR
hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10) days
after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after any
adjudication that the LICENSEE is bankrupt or insolvent, or after the
filing by the LICENSEE of any petition or answer seeking reorganization,
readjustment or arrangement of the LICENSEE's business under any federal
or state law relating to bankruptcy of insolvency, or after the
appointment of a receiver for any of the property of the LICENSEE, or
after the making by the LICENSEE of any assignment for the benefit of
creditors, or after the institution of any proceedings for the
liquidation of the LICENSEE's business or for the termination of its
corporate charter.
Termination of LICENSEE's license shall occur when LICENSOR deposits the notice
of termination with the U. S. Mail and is effective whether or not said notice
is delivered to LICENSEE.
<PAGE> 22
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
Any failure or delay in the exercise of the LICENSOR's right of termination for
any default shall not prejudice the LICENSOR's right of termination for such or
any other default.
Within five (5) days after termination by either LICENSOR or LICENSEE, LICENSEE
shall deliver to LICENSOR a written certification to the effect that the
original and any copies of all or any portions of any Licensed Program affected
by the termination have been destroyed or, if LICENSOR so requests, LICENSEE
shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program, in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of that Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non- transferable.
5. COPIES: Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs, in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify had never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement. LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include the HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. This software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS. INC."
<PAGE> 23
6. PROTECTION OF LICENSED PROGRAM:- LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specifically related to
LICENSEE's use of the Licensed Program. LICENSEE agrees that he will take
appropriate action by instruction, agreement, or otherwise with his employees
or other persons permitted access to Licensed Programs to satisfy his
obligations under this Agreement with respect to use, copying modification, and
protection and security of Licensed Program.
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed program upon one
month's written notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
month after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been an injunction or the claim has been withdrawn, and agrees to undertake at
LICENSEE's expense the defense of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no Liability
for any claim of copyright or patent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The LICENSOR is the sole owner of all the right, title and
interest in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title
or interest in and to the Licensed Program and that LICENSEE
shall have the right to use the Licensed Programs as herein
provided.
<PAGE> 24
8.5 That the LICENSOR has the full power to grant the rights and
privileges herein granted to the LICENSEE pursuant to the
Agreement.
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND THE
STATED EXPRESS WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF
LICENSOR FOR DAMAGES INCLUDING, BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES
OCCURRING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF LICENSED
PROGRAMS.
9. LIMITATION OF LIABILITY.- LICENSEE agrees that LICENSOR's liability
hereunder for damages shall not exceed the charges paid by LICENSEE for the
particular Licensed Program or related materials for any lost profits, or for
any claim or demand against the LICENSEE by any other party. No action,
regardless of form arising out of the transactions under this Agreement, may be
brought by either party more than one year after the cause of action has
accrued, except that an action for nonpayment may be brought within one year
after the date of last payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the license
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
TERMS: $1750.00 Net 30 days.
<TABLE>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
Name: HASS-ESTIMATOR 2.0 CPU (Make and Model)
------------------- -------------------------
<S> <C>
Fee:* $2750.00-1000.00= $1750.00 (12/07/90-12/07/95) Number of Disk Drives
--------------------------------------------- -----------------------
Five (5) Year Renewal Fee: $100.00 (12/07/95-12/07/00)
LICENSEE:
Company Name:Oin Sprinkler Officer Name: Odd Inge Nygaard
------------------------------------------------ ----------------------------------
Address: Verksgt. 42 Signature:
------------------------------------------------ ----------------------------------
4013 Stavanger NORWAY Title: Manager
------------------------------------------------ ----------------------------------
Date: 22 mars 1991
----------------------------------
</TABLE>
(Corporate Seal)
<PAGE> 25
<TABLE>
<CAPTION>
LICENSOR:
- --------
<S> <C>
HRS SYSTEMS, INC. Officer Name: Hal R. Sanders
------------------------------
2193 Ranchwood Drive, N.E Signature:
------------------------------
Atlanta, Georgia 30345 Title: President
------------------------------
Date: 4/17/91
</TABLE>
(Corporate Seal)
*The provisions of the agreement shall include all updating at no additional
charge other than a $50.00 handling charge for each update.
<PAGE> 26
Agreement No. R071L5890
HRS SYSTEMS, INC.
PROGRAM LICENSE AGREEMENT FOR COMPUTER SOFTWARE
HIRS SYSTEMS, INC., 2193 Ranchwood Drive, N.E., Atlanta, Georgia 30345
(hereinafter referred to as "LICENSOR") agrees to grant and Oin Sprinkler
(hereinafter referred to as LICENSEE") agrees to accept, on the following terms
and conditions, and for the fee designated herein, a non-exclusive license to
use each Licensed Program on Designated Equipment as set forth in this
Agreement.
1. DEFINITIONS: The following terms are defined for the purposes of this
Agreement as follows:
1.1 "Licensed Program" shall be each program enumerated below
incorporated in this Agreement including basic and related materials
pertinent to said program, in machine readable or printed form, and any
updated program or program portion hereinafter furnished to LICENSEE by
LICENSOR in connection with a Licensed Program.
1.2 "Designated Equipment" shall be the central processing unit and any
other enumerated equipment located at the business address of the
LICENSEE designated herein.
1.3 "Use" means copying any portion of any Licensed Program from storage
units or media into equipment for processing, or using any Licensed
Program in the course of operation or using any Licensed Program in
printed form in support of the use of any Licensed Program.
1.4 "Fee": Payment due from LICENSEE to LICENSOR for the Licensed
Program.
2. TERM; TERMINATION: The term of this Agreement and the license granted herein
shall be for a period of five (5) years beginning December 7, 1990 . This
Agreement and the license may be terminated by LICENSEE at any time by giving
written notice of termination to LICENSOR or by LICENSOR in the event
(1) LICENSEE fails to make any payment required to be made to LICENSOR
hereunder when the same is due; or
(2) LICENSEE fails to observe, perform or comply with any term or
condition hereunder and such failure is not cured within ten (10) days
after written notice of such failure; or
(3) LICENSEE files a petition in bankruptcy or insolvency, or after any
adjudication that the LICENSEE is bankrupt or insolvent, or after the
filing by the LICENSEE of any petition or answer seeking reorganization,
readjustment or arrangement of the LICENSEE's business under any federal
or state law relating to bankruptcy of insolvency, or after the
appointment of a receiver for any of the property of the LICENSEE, or
after the making by the LICENSEE of any assignment for the benefit of
creditors, or after the institution of any proceedings for the
liquidation of the LICENSEE's business or for the termination of its
corporate charter.
Termination of LICENSEE's license shall occur when LICENSOR deposits the notice
of termination with the U.S. Mail and is effective whether or not said notice
is delivered to LICENSEE.
<PAGE> 27
The LICENSEE shall not be released from any of its pre-existing obligations
under this agreement by any termination of this agreement, and neither party
shall have the right to rescind any acts performed or payments made prior to
the date of termination.
Any failure or delay in the exercise of the LICENSOR's right of termination for
any default shall not prejudice the LICENSOR's right of termination for such or
any other default.
Within five (5) days after termination by either LICENSOR or LICENSEE, LICENSEE
shall deliver to LICENSOR a written certification to the effect that the
original and any copies of all or any portions of any Licensed Program affected
by the termination have been destroyed or, if LICENSOR so requests, LICENSEE
shall deliver such original and any copies to LICENSOR.
3. LICENSE: The license granted under this Agreement authorizes LICENSEE, on a
non-exclusive basis, to use any Licensed Program, in any machine readable form,
only on the particular Designated Equipment. A separate License Agreement is
required for use of each Licensed Program on equipment other than Designated
Equipment. If more than one item of equipment is enumerated as Designated
Equipment for a particular Licensed Program, then the license granted hereunder
is limited to the use of that Licensed Program in connection with all items of
Designated Program on less than all of the Designated Equipment.
4. SUB-LICENSES: This Agreement is non-transferable.
5. COPIES: Two copies of Licensed Program may be made by the Licensee for
back-up use.
Any Licensed Program provided in machine readable form, pursuant to this
Agreement, may be copied by LICENSEE, in whole or in part, in printed or
machine readable form, for LICENSEE's use only, provided, however, that no more
than two printed copies and two machine readable copies will be in existence
under a license with respect to any Licensed Program at any time without prior
written consent from LICENSOR, other than copies resident in Designated
Equipment itself. All copies of the Licensed Program provided hereby and
intended solely for the use of LICENSEE.
The original and any copies of Licensed Programs, in whole or in part, which
are made by LICENSEE, are agreed by the LICENSEE to be proprietary information
and trade secrets of HRS Systems, Inc. whose title and full ownership rights
remain with the LICENSOR. LICENSEE may modify any Licensed Program in machine
readable forms for its own use and merge it into other program material to form
an updated work, provided that, upon termination of the license for such
Licensed Program, the Licensed Program will be completely removed from the
updated work and treated as if permission to modify had never been granted. Any
portion of the Licensed Program included in an updated work shall be used only
on Designated Equipment, and shall remain subject to all other terms of this
Agreement. LICENSEE agrees, when it reproduces any portion of the Licensed
Program, it will include the HRS Systems, Inc. proprietary rights notice on all
copies, in whole or in part, in any form, including partial copies and
modifications of Licensed Programs.
This software is the property of HRS Systems, Inc. and has been
supplied by HRS Systems, Inc. to LICENSEE pursuant to a Program
Licensee Agreement for Computer Software. This software is furnished
by HRS Systems, Inc. subject to the following restrictions: IT SHALL
NOT BE REPRODUCED, COPIED OR USED IN WHOLE OR IN PART ON EQUIPMENT
OTHER THAN ON THE DESIGNATED EQUIPMENT WITH WHICH IT WAS FURNISHED
WITHOUT THE EXPRESS WRITTEN PERMISSION OF HRS SYSTEMS. INC."
<PAGE> 28
6. PROTECTION OF LICENSED PROGRAM:- LICENSEE agrees not to provide or otherwise
make available any Licensed Program, including but not limited to flow charts,
logic diagrams and source codes, in any form, to any person other than
LICENSEE's or LICENSOR's employees without prior consent from LICENSOR, except
during the period any such person is on LICENSEE's premises with LICENSEE's
permission for purposes specifically related to
LICENSEE's use of the Licensed Program. LICENSEE agrees that he will take
appropriate action by instruction, agreement, or otherwise with his employees
or other persons permitted access to Licensed Programs to satisfy his
obligations under this Agreement with respect to use, copying modification, and
protection and security of Licensed Program .
7. PATENT AND COPYRIGHT INDEMNIFICATION: LICENSOR at its own expense will
defend any action brought against LICENSEE to the extent that it is based on a
claim that any Licensed Program used within the scope of the license hereunder
infringes a United States patent or copyright, provided: LICENSEE notifies
LICENSOR promptly in writing of the action (and all prior claims relating to
such action) and LICENSOR has sole control of the defense and all negotiations
for the settlement or compromise. In the event any Licensed Programs become, or
in LICENSOR's opinion are likely to become, the subject of a claim of
infringement of a patent or copyright, LICENSOR may at its option either secure
the LICENSEE's right to continue using the Licensed Programs, replace or modify
them to make them non-infringing, or if neither of the foregoing alternatives
is reasonably available to LICENSOR, discontinue the Licensed program upon one
month's written notice.
If, however, the Licensed Program is not the subject of a claim of patent or
copyright infringement, LICENSEE may notify LICENSOR in writing during the one
month after LICENSOR's notice of discontinuance that LICENSEE elects to
continue to be licensed with respect to the Licensed Program until there has
been an injunction or the claim has been withdrawn, and agrees to undertake at
LICENSEE's expense the defense' of any action against LICENSEE and to indemnify
LICENSOR with respect to all costs, damages, and attorney's fees attributable
to such continued use after such notice is given to LICENSOR; it being
understood that LICENSOR may participate at its expense in the defense of any
such action if such claim is against LICENSOR. LICENSOR shall have no Liability
for any claim of copyright or patent infringement based on use of other than a
current unaltered release of the Licensed Program available from LICENSOR if
such infringement would have been avoided by the use of a current unaltered
release of the Licensed Program available from LICENSOR. THE FOREGOING STATES
THE ENTIRE LIABILITY OF LICENSOR WITH RESPECT TO INFRINGEMENT OF ANY COPYRIGHTS
OF PATENTS BY THE LICENSED PROGRAMS OR ANY PARTS THEREOF
8. WARRANTY: LICENSOR warrants and represents to the LICENSEE the following:
8.1 That each Licensed Program will conform to LICENSOR's prevailing
published Program Specifications when delivered to LICENSEE.
8.2 The LICENSOR is the sole owner of all the right, title and
interest in and to the Licensed Programs.
8.3 That the Licensed Programs do not infringe upon any patent(s)
theretofore issued in the United States or upon any other patent
application pending.
8.4 That no other persons, firm or corporation has any right, title
or interest in and to the Licensed Program and that LICENSEE
shall have the right to use the Licensed Programs as herein
provided.
<PAGE> 29
8.5 That the LICENSOR has the full power to grant the rights and
privileges herein granted to the LICENSEE pursuant to the
Agreement.
EXCEPT FOR THE EXPRESS WARRANTY STATED ABOVE, LICENSOR GRANTS NO WARRANTIES,
EITHER EXPRESS OR IMPLIED, ON ANY LICENSED PROGRAM, INCLUDING ALL IMPLIED
WARRANTIES OF AND FITNESS FOR A PARTICULAR PURPOSE, AND THE STATED EXPRESS
WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF LICENSOR FOR DAMAGES
INCLUDING, BUT NOT LIMITED TO CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN
CONNECTION WITH THE USE OR PERFORMANCE OF LICENSED PROGRAMS.
9. LIMITATION OF LIABILITY.- LICENSEE agrees that LICENSOR's liability
hereunder for damages shall not exceed the charges paid by LICENSEE for the
particular Licensed Program or related materials for any lost profits, or for
any claim or demand against the LICENSEE by any other party. No action,
regardless of form arising out of the transactions under this Agreement, may be
brought by either party more than one year after the cause of action has
accrued, except that an action for nonpayment may be brought within one year
after the date of last payment.
10. The provisions of this Agreement shall control over the terms of any
present or future order from LICENSEE. Acceptance by LICENSEE of any Licensed
Program or optional materials, such as source tapes or listings from LICENSOR
shall be deemed conclusive evidence of LICENSEE's agreement that the license
for such Licensed Program or optional materials is governed by this Agreement.
11. This Agreement represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations of agreements,
either written or oral.
12. If any of the provisions of this Agreement are invalid under any applicable
statute or rule of law, they are, to that extent, deemed omitted.
13. This Agreement shall be governed by the laws of the State of Georgia.
14. This contract may be withdrawn by Seller if not accepted within thirty (30)
days.
TERMS: $500.00 Net 30 days.
<TABLE>
<CAPTION>
PROGRAMS PROVIDED: DESIGNATED EQUIPMENT:
<S> <C>
Name: HASS HOUSE (R ) 1.3 CPU (Make and Model)
--------------------------------------------------------------- --------------------
Fee:* $1000.00 - 500.00 = $500.00 (12/07/90-12/07/00) Number of Disk Drives
-------------------------------------------------------------- -------------------
Five (5) Year Renewal Fee: $200.00 (12/07/95-12/07/00)
---------------------------
LICENSEE:
Company Name:Oin Sprinkler Officer Name :Odd Inge Nygaard
-------------------------------------------------------- ------------------------------
Address: Verksgt. 42 Signature:
------------------------------------------------ -------------------------------
4013 Stavanger NORWAY Title: Manager
------------------------------------------------ -------------------------------
Date: 22 mars 1999
-------------------------------
</TABLE>
(Corporate Seal)
<PAGE> 30
<TABLE>
<CAPTION>
LICENSOR
- --------
HRS SYSTEMS, INC. Officer Name: Hal R.
------
<S> <C>
Sanders
- ----------------------------------------------------------------------------
2193 Ranchwood Drive, N.E Signature:
--------------------------------
Atlanta, Georgia 30345 Title: President
--------------------------------
Date: 4/17/91
--------------------------------
</TABLE>
(Corporate Seal)
*The provisions of the agreement shall include all updating at no additional
charge other than a $50.00 handling charge for each update.
<PAGE> 1
EXHIBIT 10.3(b)
SPARE BANK 1 SR-BANK
Simex A/S
Godesetdalen 24
4033 Forus
Stavanger, 06.10.98
REF.: OFFER REGARDING LOAN
With reference to your inquiry about financing, we are pleased to offer you the
following:
1. Loan
Amount : NOK 12.000.000,-
Interest Rate : P.t. 3 month NIBOR + 1,0% p.a. Interest
will be capitalized every quarter.
Installment fee : NOK 40,-
Type of loan : Serial loan
Loan period : No repayment until 31.12.98, afterwards
repayment in 20 periods, quarterly over 5 years.
Loan purpose : Financing purchase of companies/activities.
2. Overdraft facility/guarantee limit
Limit : USD 700.000,-
Interest Rate : P.t. 3 month LIBOR + 1,0% p.a.
Commitment fee : P.t. NOK 5.000, - quarterly
Loan purpose : Financial operations in USA.
Duration : Yearly renewal.
Alternatively
guarantee
commission : P.t. 0,125% quarterly per guarantee.
Interest and commitment fee will be capitalized
every quarter.
Collaterals : Existing securities, and reservation about
possible extension of existing securities.
SPAREBANK1 SR-BANK N/ERINGSLIV
<PAGE> 2
SPARE BANK 1 SR-BANK
Arrangement fee : 0,1% of granted amount.
Additional registration expenses to the
authorities.
Other terms:
- - Serial loan NOK 12.000.000,-will be paid in parts in accordance with
agreements made concerning purchase of companies/activities.
- - By the purchase of stock companies it is a term that shares in the
purchased company will be deposited as security until merge with Simex
A/S is executed.
- - Sale of fixed assets extending NOK 1.000.---, -shall be used as
repayment of loan in SR-Bank.
- - Overdraft facility/guarantee limit USD 700.000,- will be opened after
establishing acceptable routines between Simex A/S in Norway and
companies in USA.
- - 25% equity capital in the Simex Group adjusted for goodwill.
- - Payment of dividend shall not be done without permission from SR-Bank
in writing.
- - Possible purchase of other companies/activities shall be cleared with
SR-Bank before closing of deal.
- - The companies board should be strengthened with external members.
We hope you will find our offer attractive and look forward to receiving your
accept.
By accept of our offer, the necessary documents will be drawn up for signing by
the person(s) in your company who according to the company certificate holds
the necessary powers of attorney.
The offer is valid in one -1- month from today.
Yours sincerely,
for Sparebanken Rogaland
Rasmus Kvassheim Atle Nilsen
General Manager Corporate Account Manager
Forus,..................................
- ----------------------------------------
The offer is accepted
2
<PAGE> 3
SPARE BANK 1 SR-BANK
Simex A/S
Postboks 5
4033 Forus
Stavanger, 14.01.99
REGARDING SUMMERY OF LOANS AND OVERDRAFT FACILITIES
As agreed upon we send you a summary of the company's loans and overdraft
facilities pr. 14.01.99:
<TABLE>
<CAPTION>
LOANS
- -----------------------------------------------------------------------------------------------
Company Loan number Balance
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Simex A/S * 3201.78.21058 NOK 9.022.000,-
- -----------------------------------------------------------------------------------------------
Simex A/S 3201.78.21066 NOK 9.500.000,-
- -----------------------------------------------------------------------------------------------
Simex A/S 3201.78.81700 NOK 15.000.000,-
- -----------------------------------------------------------------------------------------------
Norsk Kjoleindustri A/S * 3201.75.69979 NOK 3.817.062,-
- -----------------------------------------------------------------------------------------------
Norsk Kjoleindustri A/S * 3201.84.00501 NOK 4.097.210,-
- -----------------------------------------------------------------------------------------------
Weld-Tech A/S 3201.84.00366 NOK 1.580.000,-
- -----------------------------------------------------------------------------------------------
Weld-Tech A/S 3201.84.01907 NOK 525.000,-
- -----------------------------------------------------------------------------------------------
Vest Norge Doors A/S 3201.76.60720 NOK 246.974,-
- -----------------------------------------------------------------------------------------------
Total NOK 43.788.246,-
- -----------------------------------------------------------------------------------------------
</TABLE>
*) Loans concerning real estate
<TABLE>
<CAPTION>
OVERDRAFT FACILITIES
- ------------------------------------------------------------------------------------------------------------
Company Account number Limit Balance
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Simex A/S 3201.05.53899 NOK 12.000.000,- NOK -7.762.100,23
- ------------------------------------------------------------------------------------------------------------
Simex A/S 3185.05.26799 USD 700.000,- USD - 557.690,24
- ------------------------------------------------------------------------------------------------------------
Norsk Kjoleindustri A/S 3201.053.13544 NOK 6.000.000,- NOK -1.162.460,97
- ------------------------------------------------------------------------------------------------------------
Vest Norge Doors A/S 3201.05.00477 NOK 600.000,- NOK -5.379,43
- ------------------------------------------------------------------------------------------------------------
</TABLE>
SPAREBANK1 SR-BANK N/ERINGSLIV
<PAGE> 4
SPARE BANK 1 SR-BANK
If you choose to reduce the company's loans and overdraft facilities
extraordinarily, SpareBank 1 SR-Bank is willing to reorganize the original
financial package, based on still healthy group accounts.
The above mentioned to your information.
Please don't hesitate contacting the undersignees for further information.
Yours sincerely,
for Sparebanken Rogaland
Rasmus Kvassheim Atle Nilsen
General Manager Corporate Account Manager
<PAGE> 5
SPARE BANK 1 SR-BANK
Simex A/S
Telefax: 51578686
Att.: Elmer Lunde
Stavanger, 27.04.99
INFORMATION - THE SIMEX GROUP'S LOAN CONTRACTS WITH SPAREBANKEN ROGALAND
SIMEX A/S/Norsk Kjoleindustri A/S
<TABLE>
<CAPTION>
Loan no. Amount in NOK Interest p.t.
<S> <C> <C>
3201.78.21058 9.022.000,- NIBOR (3 months) + 0,90%
3201.75.69979 3.817.062,- "
3201.84.00501 4.097.210,- "
3201.78.21066 9.000.000,- "
3201.78.81700 15.000.000,- NIBOR (3 months) + 1,00%
</TABLE>
Loan no. 3201.78.21058, 3201.75.69979 and 3201.84.00501 are to be paid back by
sale of the companies properties.
Loan no. 3201.78.21066 (was originally NOK 10,0 mill. by june 1998) has a
repayment period of totally 10 years.
Loan no. 3201.78.81700 had no repayment until 31.12.98, afterwards repayment in
20 periods, quarterly over 5 years.
Overdraft facilities:
Limit NOK 18.000.000,-
Limit USD 700.000,-
Bank guarantees:
Limit NOK 10.000.000,-
SPAREBANK1 SR-BANK N/ERINGSLIV
<PAGE> 6
SPARE BANK 1 SR-BANK
Collaterals for both companies: :
In Simex A/S:
- -Mortgage NOK 20.000.000,- in Godesetdalen 24, Stavanger
- -Mortgage NOK 40.000.000,- in claims
- -Mortgage NOK 40.000.000,- in stock
- -Mortgage NOK 5.000.000,- in motorvehicles and construction machines
- -Shares in Weld-Tech A/S and Vest Norge Doors A/S
In Norsk Kjoleindustri A/S:
- -Mortgage NOK 15.000.000,- in Fabrikkvn. 28, Stavanger
- -Mortgage NOK 10.000.000,- in claims
- -Mortgage NOK 6.000.000,- in stock
- -Mortgage NOK 1.000.000,- i motorvehicles and construction machines
- -Shares in Telefrost A/S
<TABLE>
<CAPTION>
WELD TECH A/S
Loan no. Amount in NOK Interest p.t.
<S> <C> <C>
3201.84.00366 1.540.500,- NIBOR (3 months) + 0,90%
3201.84.01907 516.250,- "
</TABLE>
By 31.12.98 the loan saldo for loan no. 3201.84.00366 was NOK 1.580.000,-. This
loan has a quarterly repayment of NOK 26.250,-.
Collaterals:
- -Mortgage NOK 4.400.000,- in Godesetdalen 24, Stavanger
- -Mortgage NOK 1.500.000,- in claims
<TABLE>
<CAPTION>
VEST NORGE DOORS A/S
Loan no. Amount in NOK Interest p.t.
<S> <C> <C>
3201.76.60720 240.724,- NIBOR (3 months) + 0,90%
</TABLE>
By 31.12.98 the loan saldo for loan no. 3201.76.60720 was NOK 253.224,-. This
loan has a quarterly repayment of NOK 18.750,-.
Overdraft facility:
Limit NOK 600.000,-
Bank guarantees:
Limit NOK 500.000,-
SPAREBANK1 SR-BANK N/ERINGSLIV
<PAGE> 7
SPARE BANK 1 SR-BANK
Collaterals:
- -Mortgage NOK 900.000,- in stock
- -Mortgage NOK 900.000,- in claims
- -Mortgage NOK 500.000,- in motorvehicles and construction machines
- -Mortgage NOK 500.000,- in leasing facilities and working equipment
If further information is required please contact the undersigned.
Yours sincerely,
for Sparebanken Rogaland
Atle Nilsen
Credit Manager
<PAGE> 1
EXHIBIT 10.3(c)
PROMISSORY NOTE
AMOUNT: $150,000.00 DATE: AUGUST 1, 1998
FOR VALUE RECEIVED, the undersigned, ELMER LUNDE, a resident of the
Country of Norway, the "Maker") promises to pay to the order of SIMEX/NK
TECHNOLOGIES, INC. (a Nevada corporation, the "Holder") at the Suite 995, Lenox
Road, N.E., Atlanta, Georgia 30326, or at such other place as Holder may from
time to time designate in writing, the sum of ONE HUNDRED FIFTY THOUSAND
DOLLARS ($150,000.00) in one payment of principal and accrued but unpaid
interest ON DEMAND by the Holder hereof. Beginning on the date hereof simple
interest shall accrue on the unpaid principal balance and be payable quarterly
in arrears at the rate published by the Wall Street Journal (or any successor
thereto) as the prime rate as such rate may change from time to time until all
principal and accrued interest due under this Note is paid in full. All
principal and interest shall be payable together with all costs of collection,
including reasonable attorney's fees, if collected by or through an attorney at
law.
In the absence of a demand by Holder for the payment of principal and
unpaid interest as herein provided, all such principal and interest shall be
due and payable on the fifth anniversary of the date of this Note.
In the event any default occurs in making any payments provided for
hereunder which is not cured within sixty (60) days of the date the payment was
due (provided Maker has been given written notice of the default, and the
default remains uncured for a period of ten (10) days from the date of the
notice or sixty (60) days from the date of default, whichever is greater), then
the balance of principal and interest then owing hereunder shall be accelerated
and become immediately due and payable without further notice.
<PAGE> 2
This Note may be prepaid in whole or in part without premium or
penalty and with applicable reduction in interest due provided written notice
of the amount to be prepaid is given to the holder thirty (30) days in advance
thereof and such prepayment is made within forty-five (45) days of such written
notice.
The rights of the Holder evidenced by this note may not be assigned
without the written consent of the Maker hereof.
IN WITNESS WHEREOF the Maker has hereunto set his hand and seal the
date first above written.
/s/ Elmer Lunde
---------------------------------
2
<PAGE> 3
PROMISSORY NOTE
AMOUNT: $40,000.00 DATE: AUGUST 1, 1998
FOR VALUE RECEIVED, the undersigned, OYSTEIN FRAFJORD, a resident of
the Country of Norway, the "Maker") promises to pay to the order of SIMEX/NK
TECHNOLOGIES, INC. (a Nevada corporation, the "Holder") at the Suite 995, Lenox
Road, N.E., Atlanta, Georgia 30326, or at such other place as Holder may from
time to time designate in writing, the sum of FORTY THOUSAND DOLLARS
($40,000.00) in one payment of principal and accrued but unpaid interest ON
DEMAND by the Holder hereof. Beginning on the date hereof simple interest shall
accrue on the unpaid principal balance and be payable quarterly in arrears at
the rate published by the Wall Street Journal (or any successor thereto) as the
prime rate as such rate may change from time to time until all principal and
accrued interest due under this Note is paid in full. All principal and
interest shall be payable together with all costs of collection, including
reasonable attorney's fees, if collected by or through an attorney at law.
In the absence of a demand by Holder for the payment of principal and
unpaid interest as herein provided, all such principal and interest shall be
due and payable on the fifth anniversary of the date of this Note.
In the event any default occurs in making any payments provided for
hereunder which is not cured within sixty (60) days of the date the payment was
due (provided Maker has been given written notice of the default, and the
default remains uncured for a period of ten (10) days from the date of the
notice or sixty (60) days from the date of default, whichever is greater), then
the balance of principal and interest then owing hereunder shall be accelerated
and become immediately due and payable without further notice.
<PAGE> 4
This Note may be prepaid in whole or in part without premium or
penalty and with applicable reduction in interest due provided written notice
of the amount to be prepaid is given to the holder thirty (30) days in advance
thereof and such prepayment is made within forty-five (45) days of such written
notice.
The rights of the Holder evidenced by this note may not be assigned
without the written consent of the Maker hereof.
IN WITNESS WHEREOF the Maker has hereunto set his hand and seal the
date first above written.
/s/ Oystein Frafjord
------------------------------------
2
<PAGE> 5
PROMISSORY NOTE
AMOUNT: $40,000.00 DATE: AUGUST 1, 1998
FOR VALUE RECEIVED, the undersigned, KNUT T. ROSVOLD, a resident of
the Country of Norway, the "Maker") promises to pay to the order of SIMEX/NK
TECHNOLOGIES, INC. (a Nevada corporation, the "Holder") at the Suite 995, Lenox
Road, N.E., Atlanta, Georgia 30326, or at such other place as Holder may from
time to time designate in writing, the sum of FORTY THOUSAND DOLLARS
($40,000.00) in one payment of principal and accrued but unpaid interest ON
DEMAND by the Holder hereof. Beginning on the date hereof simple interest shall
accrue on the unpaid principal balance and be payable quarterly in arrears at
the rate published by the Wall Street Journal (or any successor thereto) as the
prime rate as such rate may change from time to time until all principal and
accrued interest due under this Note is paid in full. All principal and
interest shall be payable together with all costs of collection, including
reasonable attorney's fees, if collected by or through an attorney at law.
In the absence of a demand by Holder for the payment of principal and
unpaid interest as herein provided, all such principal and interest shall be
due and payable on the fifth anniversary of the date of this Note.
In the event any default occurs in making any payments provided for
hereunder which is not cured within sixty (60) days of the date the payment was
due (provided Maker has been given written notice of the default, and the
default remains uncured for a period of ten (10) days from the date of the
notice or sixty (60) days from the date of default, whichever is greater), then
the balance of principal and interest then owing hereunder shall be accelerated
and become immediately due and payable without further notice.
<PAGE> 6
This Note may be prepaid in whole or in part without premium or
penalty and with applicable reduction in interest due provided written notice
of the amount to be prepaid is given to the holder thirty (30) days in advance
thereof and such prepayment is made within forty-five (45) days of such written
notice.
The rights of the Holder evidenced by this note may not be assigned
without the written consent of the Maker hereof.
IN WITNESS WHEREOF the Maker has hereunto set his hand and seal the
date first above written.
/s/ Knut T. Rosvold
-----------------------------------------
2
<PAGE> 7
EXHIBIT 10.3(c)
AMENDED AND RESTATED PROMISSORY NOTE
AMOUNT: $40,000.00 ORIGINAL DATE: AUGUST 1, 1998
FOR VALUE RECEIVED, the undersigned, KJELL I. JAGELID, a resident of
the State of Georgia, the "Maker") promises to pay to the order of SIMEX
TECHNOLOGIES, INC. (a Delaware corporation, the "Holder") as successor to
SIMEX/NK TECHNOLOGIES, INC. (a Nevada corporation, the "Holder") at Suite 995,
Lenox Road, N.E., Atlanta, Georgia 30326, or at such other place as Holder may
from time to time designate in writing, the sum of FORTY THOUSAND DOLLARS
($40,000.00) in one payment of principal and accrued but unpaid interest ON
DEMAND by the Holder hereof. Beginning on the date hereof simple interest shall
accrue on the unpaid principal balance and be payable quarterly in arrears at
the rate published by the Wall Street Journal (or any successor thereto) as the
prime rate as such rate may change from time to time until all principal and
accrued interest due under this Note is paid in full. All principal and
interest shall be payable together with all costs of collection, including
reasonable attorney's fees, if collected by or through an attorney at law.
In the absence of a demand by Holder for the payment of principal and
unpaid interest as herein provided, all such principal and interest shall be
due and payable on the fifth anniversary of the date of this Note.
In the event any default occurs in making any payments provided for
hereunder which is not cured within sixty (60) days of the date the payment was
due (provided Maker has been given written notice of the default, and the
default remains uncured for a period of ten (10) days from the date of the
notice or sixty (60) days from the date of default, whichever is greater), then
the balance of principal and interest then owing hereunder shall be accelerated
and become immediately due and payable without further notice.
<PAGE> 8
This Note may be prepaid in whole or in part without premium or
penalty and with applicable reduction in interest due provided written notice
of the amount to be prepaid is given to the holder thirty (30) days in advance
thereof and such prepayment is made within forty-five (45) days of such written
notice.
The rights of the Holder evidenced by this note may not be assigned
without the written consent of the Maker hereof. IN WITNESS WHEREOF
the Maker has hereunto set his hand this 4th day of August , 1999,
affirming the effective
date hereof as the date first above written and consenting to the transfer and
assignment of all of Holder's right, title, and interest from SIMEX/NK
Technologies, Inc. to SIMEX Technologies, Inc.
/s/ Kjell I. Jagelid
-------------------------
<PAGE> 1
EXHIBIT 10.3(d)
TELEFAKS
TIL : SIMEX TECHNOLOGIES, INC.
ATTN : WARREN
FAX NO : 001404812322 DATE : 13 JULY 1999
ERA : ELMER LUNDE
V5/8R REF : ANTALL SIDER: (INKL. DENNE SIDE)
VEDR.: MEETING BETWEEN ELMER AND KJELL 6 JULI 1999
This is a direct translation of our minutes of meeting, done by me, if there is
any misspelling It's my fault.
Attended: Elmer Lunde and Kjell Jagelid
The following cases were discuss, and there was a full agreement between the
parties.
Kjell Jagelid resign as president of Simex Technologies Inc from today 060799.
Kjell Jagelid resign as board member of Simex Technologies Inc from today
060799.
Kjell Jagelid engage as president of Simex Energies Services from today 060799.
The employment contract shall be in the same legal way as it is today.
The conditions shall be negotiated with in 30 days and shall include a monthly
payment plus A percentage of the net profit in the division.
Kjell Jagelid shall prepare a budget for Simex Energies, witch the board shall
accsept.
The Eurocard in Simex as name shall be handed back as soon as possible.
The rest of the minutes are regarding documents i have asked for several times.
Give me a call.
[Elmer Lunde signature]
<PAGE> 1
EXHIBIT 21.1
LIST OF SUBSIDIARIES
OF
SIMEX TECHNOLOGIES, INC.
- - SIMEX Capital Corp., a corporation duly organized on October 27, 1998,
and validly existing under the laws of the State of Georgia.
- - SIMEX Resources Group, Inc., a corporation duly organized on August 24,
1998, and validly existing under the laws of the State of Georgia.
- - SIMEX Energy Services Group, Inc., a corporation duly organized on
August 24, 1998, and validly existing under the laws of the State of Georgia.
- - SIMEX AS, Organization No. 937 454 104, a limited company duly
organized and validly existing under the laws of Norway.
- SIMEX AS is the sole shareholder of the following entities:
- Hordaror AS, Organization No. 963 070 098, a limited
company duly organized and validly existing under the
laws of Norway.
- Weld Tech AS, Organization No. 961 931 681, a limited
company duly organized and validly existing under the
laws of Norway.
- Vest Norge Doors AS, Organization No. 977 054 370, a
limited company duly organized and validly existing
under the laws of Norway.
- Simex Simcom UK, a limited company duly organized and
validly existing under the laws of the United
Kingdom.
- SIMEX AS is the minority shareholder of the following
entities:
- Fifty-six percent (56%) shareholder of Jotronic Data
AS, Organization No., 963 530 323, a limited company
duly organized and validly existing under the laws of
Norway.
- Forty percent (40%) shareholder of Unitron Data AS,
Organization No. 965 513 280, a limited company duly
organized and validly existing under the laws of
Norway.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1999, UNAUDITED FINANCIAL STATEMENTS OF SIMEX TECHNOLOGIES, INC., AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS IN FORM
10-QSB FOR THE QUARTER ENDED JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 277
<SECURITIES> 0
<RECEIVABLES> 6,302
<ALLOWANCES> 64
<INVENTORY> 3,052
<CURRENT-ASSETS> 9,687
<PP&E> 8,226
<DEPRECIATION> 2,682
<TOTAL-ASSETS> 20,580
<CURRENT-LIABILITIES> 10,366
<BONDS> 3,121
0
0
<COMMON> 13
<OTHER-SE> 6,369
<TOTAL-LIABILITY-AND-EQUITY> 20,580
<SALES> 16,174
<TOTAL-REVENUES> 16,174
<CGS> 13,107
<TOTAL-COSTS> 13,107
<OTHER-EXPENSES> (130)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 415
<INCOME-PRETAX> (250)
<INCOME-TAX> 117
<INCOME-CONTINUING> (367)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (367)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SIMEX TECHNOLOGIES FOR THE YEAR ENDED DECEMBER 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 877
<SECURITIES> 0
<RECEIVABLES> 6,037
<ALLOWANCES> 70
<INVENTORY> 3,043
<CURRENT-ASSETS> 9,971
<PP&E> 7,747
<DEPRECIATION> 2,158
<TOTAL-ASSETS> 20,946
<CURRENT-LIABILITIES> 9,412
<BONDS> 3,434
0
0
<COMMON> 13
<OTHER-SE> 7,058
<TOTAL-LIABILITY-AND-EQUITY> 20,946
<SALES> 24,403
<TOTAL-REVENUES> 24,403
<CGS> 20,757
<TOTAL-COSTS> 20,757
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 105
<INCOME-PRETAX> 1,128
<INCOME-TAX> 377
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 751
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SIMEX TECHNOLOGIES, INC. FOR THE SIX MONTHS ENDED JUNE
30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 10,293
<TOTAL-REVENUES> 10,293
<CGS> 8,199
<TOTAL-COSTS> 8,199
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> 632
<INCOME-TAX> 217
<INCOME-CONTINUING> 415
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 415
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SIMEX TECHNOLOGIES FOR THE YEAR ENDED DECEMBER 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 13,740
<TOTAL-REVENUES> 13,740
<CGS> 12,418
<TOTAL-COSTS> 12,418
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31
<INCOME-PRETAX> 381
<INCOME-TAX> 168
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 213
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
<PAGE> 1
EXHIBIT 99
CERTIFICATION
OF
TRANSLATED FOREIGN DOCUMENTS
Simex Technologies, Inc., a Delaware corporation (the "Company"),
hereby acknowledges and certifies that said Company has engaged the law firm of
Selmer, Mauritzen and Co., located in Stavanger, Norway, to translate the
following documents (the "Foreign Documents") from Norwegian to English for the
sole purpose of filing the Foreign Documents with the Securities and Exchange
Commission (the "SEC") as exhibits to the Company's Registration Statement on
Form 10-SB under the Securities Exchange Act of 1934:
- May 15, 1998 Stock Purchase Agreement between shareholders
of Norsk Kjoleindustri AS and Simex AS
- November 17, 1998 Stock Purchase Agreement between
shareholders of Weld Tech AS and Simex AS
- December 18, 1998 Stock Purchase Agreement between
shareholders of Hordaror AS and Simex AS
- November 17, 1998 Stock Purchase Agreement between
shareholders of Vest Norge Doors AS and Simex AS
- September 22, 1998 Stock Purchase Agreement between
shareholders of OIN Sprinkler and Simex AS
- March 26, 1999 Fleet Agreement between Brodrene Kverneland
Bryne AS and Simex AS
- November 27, 1998 Lease Agreement between Tjelta Eiendom I
AS (TE) and Simex AS
Pursuant to Rule 306 of Regulation S-T, the Company hereby further
certifies that to the best knowledge of each of the Company's officers, the
translated Foreign Documents as filed with the SEC are fair and accurate
translations and representations of each of the original Foreign Documents,
respectively.
SIMEX TECHNOLOGIES, INC.
/s/ Warren L. Traver
-----------------------------------
Warren L. Traver,
Executive Vice-President and
General Counsel
