SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported):
September 11, 1996
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-4882 84-0581776
(State or other jurisdiction of incorporation) (Commission File No.)
(IRS Employer Identification No.)
1801 California Street, Suite 295, Denver, Colorado
80202
(Address of principal executive offices) (Zip Code)
(303) 292-1111
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
Items 1 - 4. Inapplicable.
Item 5. Other Events
Scientific Software-Intercomp, Inc. announced 11 September 1996 that they have
signed a Letter of Intent with Smedvig a.s. (Oslo, Norway) for the acquisition
of substantially all of the assets of Scientific Software-Intercomp by
Smedvig. A copy of the Letter of Intent is attached to this Form 8-K as
Exhibit A. The transaction will involve the payment of $23 million cash by
Smedvig and its assumption of liabilities other than those for long-term debt,
for settlement of the class action against Scientific Software-Intercomp, Inc.
and for resolution of the rights of its outstanding preferred stock. The
letter of intent also provides for Scientific Software-Intercomp, Inc. to
retain its presently existing accounts receivable from clients in Nigeria.
The letter of intent is subject to due diligence, execution of a definitive
contract and resolution of the class action and preferred stock matters.
Completion of the acquisition is also subject to Scientific
Software-Intercomp, Inc.'s receipt of a fairness opinion from Johnson Rice &
Company and to approval by a majority of its outstanding voting shares.
Item 6
Item 7 Financial Statements and Exhibits
(a) Inapplicable.
(b) Inapplicable.
(c) Exhibits
Letter of Intent dated September 10, 1996
Item 8. Inapplicable.
Date: September 19, 1996 SCIENTIFIC SOFTWARE-INTERCOMP, INC.
By: /s/ George Steel
George Steel, Chairman and Chief Executive Officer
<PAGE>
September 10, 1996
VIA FACSIMILE
Smedvig Technology a.s.
Gamle Forusvei 17
PO Box 172
N-4033 Forus, Norway
Attention: Mr. Torkell Gjerstad
Gentlemen:
This letter will set forth the terms of our preliminary agreement
for the acquisition of Scientific Software-Intercomp, Inc. ("SSI") by Smedvig
Technology a.s. ("Smedvig"). These preliminary terms have been approved by
the Board of Directors of SSI and discussed with the principal investors in
SSI.
Smedvig shall acquire all of the assets of SSI other than its
presently existing accounts receivable from clients in Nigeria. In addition,
Smedvig shall assume all of the liabilities of SSI other than liabilities (i)
to Lindner Dividend Fund, A Series of Lindner Investments, Renaissance Capital
Partners II, Ltd. and Bank One, Colorado, N.A., (ii) to Halliburton Company
with respect to its preferred stock of SSI, (iii) to the members of the class
in the Wolf class action litigation and (iv) which may not have been disclosed
to Smedvig pursuant to customary contractual disclosure provisions.
The consideration payable by Smedvig to SSI shall be
$23,000,000 in cash due at the closing of the acquisition.
Smedvig's obligation to complete the acquisition of SSI is
conditioned upon execution of a customary definitive acquisition contract with
SSI containing conventional representations and warranties and appropriate
disclosure schedules, together with the satisfactory completion of Smedvig's
due diligence in connection with such disclosure schedules, and upon the
subsequent satisfaction of the conventional covenants and conditions set forth
in such contract.
SSI's obligation to complete the sale to Smedvig is conditioned
upon:
(i) execution of a customary definitive acquisition contract with
Smedvig;
(ii) completion of the pending settlement in the Wolf class action
litigation against SSI;
(iii) the receipt of an opinion from Johnson Rice & Company that the
acquisition of SSI by Smedvig is fair to the shareholders of SSI from a
financial point of view; and
(iv) approval of the acquisition by a majority of SSI's outstanding
voting shares.
If the acquisition is not completed because a higher bid is
made and accepted for the acquisition of SSI by a third party, SSI shall pay
to Smedvig the greater of five percent of the $23,000,000 Smedvig price or
one-third of the extent to which such higher bid exceeds the Smedvig price,
but with the foregoing in no event to exceed 15 percent of the Smedvig price.
If the acquisition of SSI by Smedvig is not completed because
it is not approved by SSI shareholders for a reason other than the existence
of a higher bid, or if the acquisition is not completed because of a breach of
the definitive acquisition contract by SSI, SSI will issue to Smedvig an
option to purchase 1,721,151 shares of SSI common stock (19.9% of 8,649,000
total shares outstanding as of June 30, 1996 per SSI's Form 10-Q) at a price
of $1.00 per share. The option will have a term of nine months following any
such disapproval or breach; will be protected by customary anti-dilution
provisions; and the shares acquired by exercise of the option will be entitled
to conventional registration rights.
SSI and Smedvig shall endeavor in good faith to complete a
definitive acquisition contract on or before October 14, 1996. The
acquisition shall be closed as rapidly as practicable and in that respect
Smedvig recognizes that it may not be possible for SSI to hold the meeting of
its shareholders to approve the acquisition until the availability and
circulation of its audited financial statements for some portion or all of
1996.
Except for the commitments and obligations set forth in
paragraphs 9 and 10 of this letter, SSI and Smedvig acknowledge that neither
party shall be legally bound to complete the acquisition until the execution
of the definitive acquisition contract, after which the provisions of such
contract shall govern. Prior to such definitive contract, and as a condition
thereto, SSI shall enter into a mutually acceptable agreement with Halliburton
Company for the retirement of the SSI preferred stock held by it.
SSI and Smedvig shall hold the contents of this letter in
confidence until they mutually agree to disclosure, except as disclosure may
otherwise be required by applicable law. SSI and Smedvig shall also
reasonably cooperate with one another on the contents of such disclosure. In
addition to the foregoing, SSI and Smedvig shall shortly after the execution
of this preliminary agreement execute mutually acceptable confidentiality
agreements of general application in connection with the acquisition and the
information to be exchanged with respect thereto.
Until the earlier of October 14, 1996 or the execution of the
definitive acquisition contract, SSI will not directly or indirectly, through
any officer, director or agent of SSI or otherwise, (i) solicit, initiate or
encourage the submission of inquiries, proposals or offers from any
corporation, partnership, person or other entity or group relating to any
acquisition or purchase of assets of, or any equity interest in, SSI or any
subsidiary thereof or any merger, consolidation or business combination
involving SSI or any subsidiary thereof (each an "Acquisition Proposal"), (ii)
participate in any discussions or negotiations regarding the foregoing or
furnish to any person or entity information concerning SSI or any of the
foregoing or (iii) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person to do or seek any of the foregoing, unless with respect to clauses (ii)
and (iii) the Board of Directors of SSI believes, on the basis of advice of
counsel, that the failure to take such actions would constitute a breach of
applicable fiduciary duties. SSI further agrees that it will suspend any
pre-existing discussions involving any Acquisition Proposal.
If this letter correctly sets forth our preliminary agreement,
please sign and return the attached copy thereof.
Very truly yours,
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
By: /s/ George Steel
Chairman of the Board of Directors
SMEDVIG TECHNOLOGY a.s.
By: /s/ Torkell Gjerstad
