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):
February 10, 1998
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-4882 84-0581776
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(State or other jurisdiction of incorporation) (Commission File No.)
(IRS Employer Identification No.)
633 Seventeenth Street, Suite 1600, Denver, Colorado
80202
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(Address of principal executive offices) (Zip Code)
(303) 292-1111
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
<PAGE>
Items 1 - 4. Inapplicable.
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Item 5. Other Events
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Scientific Software-Intercomp, Inc. (SSI) announced on February 12, 1998 that
they have signed a preliminary agreement with LICENERGY, A/S (LIC) of
Birkeroed, Denmark, to sell its Pipeline Simulation Division to LIC. A copy
of the preliminary agreement is attached to this Form 8-K as Exhibit A. The
transaction, a purchase of assets, has been approved by the Board of Directors
of SSI. Consideration for the purchase is a cash payment of U.S. $1.5
million, with the price being adjusted at closing for the value of certain
assets and the amount of certain assumed liabilities.
The preliminary agreement calls for a definitive agreement by 2 March 1998 and
for closing of the transaction by 1 May 1998.
Items 6 Inapplicable.
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Item 7 Financial Statements and Exhibits
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(a) Inapplicable.
(b) Inapplicable.
(c) Exhibits
Preliminary agreement dated February 10, 1998
Item 8. Inapplicable.
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Date: February 13, 1998 SCIENTIFIC SOFTWARE-INTERCOMP, INC.
By: /s/ George Steel
George Steel, President and Chief Executive Officer
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LICENERGY, A/S
February 10, 1998
Page 3
Exhibit A
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
February 10, 1998
VIA FACSIMILE
LICENERGY, A/S
Bregneroedvej 94
DK-3460 Birkeroed
Denmark
Attention: Mr. Gregers Larnaes, Chairman
Gentlemen:
This letter of intent sets forth the terms of our preliminary agreement
for the acquisition by LICENERGY, A/S or an affiliate or subsidiary of
LICENERGY, A/S (collectively, "LIC") of the hereinafter described assets (the
"Subject Assets") of the Pipeline and Facilities Division ("P&F") of
Scientific Software-Intercomp, Inc. ("SSI"). The terms of this letter of
intent have been approved by the Board of Directors of SSI and need not be
approved by the shareholders of SSI. The Board of Directors and principal
shareholders of LIC have authorized the officers of LIC to execute this letter
of intent and negotiate the terms of a mutually satisfactory definitive
agreement governing the acquisition of the Subject Assets (the "Definitive
Agreement").
The Subject Assets to be acquired by LIC shall include all of P&F's
software, certain described personal property (e.g. computers, desks, etc.),
all of P&F's Software Maintenance Contracts, all of P&F's work in progress and
all accounts receivable of P&F except for those accounts receivable associated
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with the following described projects (the "Excluded Projects"): Petronet
(Siemens), VCPPL (ABB Norway) and Enron U.K. (Foxboro); provided, however, if
(i) P&F has not completed its work under an Excluded Project and/or (ii) the
customer under such Excluded Project has not accepted all such work thereunder
by the closing date for the sale of the Subject Assets, all outstanding
accounts receivable associated with each such Excluded Project shall be
included in the Subject Assets and shall be assigned to LIC. The Subject
Assets shall not include any contracts relating to work that has been
completed by P&F prior to LIC's acquisition of the Subject Assets, provided
that LIC shall assume those warranty obligations under previously completed
contracts that are still under warranty and that are mutually agreed to by LIC
and SSI as described in the Definitive Agreement. LIC shall not assume any
liabilities of P&F or SSI except for the following described liabilities
(collectively, the "Assumed Liabilities") (i) current accounts payable
associated with the Subject Assets, (ii) accrued sick leave and accrued annual
leave for those of P&F's existing employees that LIC elects to employ, (iii)
contractual obligations associated with the Software Maintenance Contracts
acquired by LIC and (iv) such other liabilities as may be specifically agreed
to by LIC and set forth in the Definitive Agreement. LIC and SSI shall agree
upon a schedule of the Subject Assets and the Assumed Liabilities that shall
be attached as an Exhibit to the Definitive Agreement. The Definitive
Agreement shall also provide for a purchase price adjustment mechanism whereby
the purchase price shall be adjusted (upward or downward) to the extent of any
changes (upward or downward) between (i) the accounts receivable projected to
be assigned to LIC and the Assumed Liabilities projected to be assumed by LIC
as of the date the Definitive Agreement is executed and (ii) the accounts
receivable actually assigned to LIC and the Assumed Liabilities actually
assumed by LIC as of the date of closing. All of the Subject Assets shall be
assigned to LIC free and clear of all liens and encumbrances of any nature
whatsoever.
The purchase price payable by LIC to SSI for the Subject Assets (the
"Purchase Price") shall be $1,500,000, subject to any adjustments to such
purchase price as may be mutually agreed to by LIC and SSI and set forth in
the Definitive Agreement. The closing of the purchase shall take place no
later than May 1, 1998.
The parties shall work together in good faith to complete LIC's due
diligence and attempt to finalize the Definitive Agreement as expeditiously as
possible, but in any event before March 2, 1998. The Definitive Agreement
shall contain such representations, warranties, covenants, indemnities and
other terms as are customary for transactions of this nature. Specifically,
the Definitive Agreement shall provide that SSI shall indemnify and hold LIC
harmless from any and all liabilities of whatsoever nature arising out of (i)
any claims, actions or suits existing or threatened as of the date of closing,
(ii) any act or omission of SSI prior to the date of closing and (iii) any
breach of the representations, warranties and covenants of SSI contained in
the Definitive Agreement. In the event the Definitive Agreement is executed
by an affiliate or subsidiary of LICENERGY, A/S, all of such affiliate's or
subsidiary's payment obligations under the Definitive Agreement shall be
guaranteed by LICENERGY, A/S. The Definitive Agreement shall also set forth
certain conditions to the obligations of LIC and SSI to close the purchase.
However, such conditions shall not include the absence of any further losses
or other deterioration in the business of P&F except to the extent the same
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result in one or more material adverse changes that materially diminish the
value of the Subject Assets as more particularly defined in the Definitive
Agreement, provided that if LIC and SSI can agree upon a mutually acceptable
purchase price adjustment to account for such diminishment in value (as
provided in paragraph 2 above), LIC and SSI shall close the sale of the
Subject Assets for such adjusted purchase price.
Following the execution of this letter of intent, SSI and LIC shall
enter into one or more teaming agreements on a project by project basis
providing for the working together of P&F with LIC on certain designated
projects for the period prior to the closing. Such teaming agreements shall
be for the purpose of enabling LIC and SSI to obtain as quickly and as much as
possible the mutual benefits to be obtained from the acquisition of the
Subject Assets.
For the period commencing with the execution of this letter of
intent and ending on March 2, 1998 (if LIC and SSI fail to enter into the
Definitive Agreement on or before March 2, 1998) SSI shall terminate
discussions with all other parties for their acquisition of the Subject
Assets. If the Definitive Agreement is not executed by March 2, 1998, this
letter shall terminate and neither party shall have any further liability or
obligation hereunder.
SSI and LIC acknowledge that neither party shall be legally bound to
complete the purchase and sale of the Subject Assets until the execution of
the Definitive Agreement, after which the provisions of the Definitive
Agreement shall govern.
If this letter correctly sets forth our preliminary agreement, please
sign and return the attached copy hereof. Such execution may be accomplished
in counterparts by facsimile.
Very truly yours,
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
By: /s/ George Steel
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President and Chief Executive Officer
LICENERGY, A/S
By: /s/ Gregers Larnaes, Chairman
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Gregers Larnaes, Chairman
By: /s/ C. N. Keating, Jr.
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C. N. Keating, Jr., Director
