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EXHIBIT 1.1
AGREEMENT
BRYNE ELEKTRISKE AS (Seller)
and
SIMEX TEC INC. AND SIMEX AS (Buyer)
have hereby entered into the following agreement:
1. PURCHASE OBJECT
1.1 Pursuant to this agreement, the Seller transfers the limited part of
its activities related to electrical installation.
1.2 The Buyer takes over the following assets related to these activities:
1.2.1 Lease, Appendix 1
1.2.2 Leasing agreements, Appendix 2
1.2.3 Tools, fixtures and equipment, Appendix 3
1.2.4 Framework agreements, Appendix 4
1.2.5 Seller's existing order reserve as of 1 June 2001 that has not
been commenced, Appendix 5
1.2.6 Employment contracts with the employees listed in Appendix 6
1.2.7 Current telephone and fax subscriptions used by Seller on the
date when the agreement is signed, Appendix 7
1.2.8 Right to perform work as a contractor in connection with
completion of assignments in progress than have not been
completed by Seller upon takeover, Appendix 8
1.2.9 All customer registers, accounting information, statistics,
etc. linked to the activity being transferred
1.2.10 Exclusive right to use the name "Bryne Elektriske".
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1.3 Conditions
The following conditions apply to the transfer:
1.3.1 That the following key personnel (Key Personnel) agree to
continue their employment with Simex for a period of at least
one year after the takeover:
Leidulf Ims
Xxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxx
Furthermore, that Per Kverneland takes on the consultant
assignment described in detail in Clause 9.2.
1.3.2 That at least 85% of the other employees listed in Appendix 6
agree to continue their employment with Simex.
1.3.3 That financial and legal due diligence do not reveal
circumstances that entail that the preconditions for entering
into the agreement are no longer present, cf. Clause 12 for
further details.
1.3.4 That the contractual parties in Bryne Elektriske AS' order
reserve consent to Bryne Elektriske AS transferring such
orders on the terms agreed with Bryne Elektriske AS, cf.
Clause 2.2 for further details.
2. COMPENSATION
2.1 The maximum limit for compensation is fixed at NOK 15,550,000, which
shall be settled as follows:
2.1.1 NOK 3,000,000 as of 1 July 2001
2.1.2 NOK 1,750,000 as of 1 September 2001. A bank guarantee (on
demand guarantee) shall be furnished for this amount.
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2.1.3 NOK 10,800,000 to be settled through the issuance of shares in
Simex Tec, based on the average price for the last 15 days of
the month of May 2001.
2.1.4 Of the shareholding transferred, shares for a value of up to
NOK 2,500,000 shall be transferred directly to Key Personnel,
on terms specified in a separate agreement between the Buyer
and such personnel. The number of shares may be reduced if the
employment relationship does not last for the period used as a
basis for the award of shares, or curtailment may take place
as a consequence of corrections in compensation as adjusted
for the block of shares mentioned in Clause 2.1.6.
2.1.5 Shares, NOK 6,800,000, shall be issued to the Seller by 1
October 2001.
2.1.6 Shares for up to NOK 1,500,000 shall be issued to the Seller
on 31 January 2002.
2.2 Conditions for compensation
2.2.1 The compensation mentioned in Clause 2.1.1 is based on the
following assumptions:
2.2.1.1 that there is an existing order reserve of at least NOK
10,000,000 as of the takeover date, which the Seller's
contractual partners agree may be transferred to the Buyer.
2.2.1.2 that no errors are uncovered in the calculated contribution
margin 1 (DB1) in connection with the due diligence survey of
the order reserve that would mean that the total calculated
contribution margin would rightfully be less than 60%.
2.2.2 The following shall apply in the event of deviations from the
conditions stated in Clauses 2.2.1.1 and 0.0.0.0:
2.2.2.1 Positive deviations shall not yield compensation consequences
2.2.2.2 Deviations in the order reserve and DB1 shall be corrected in
the shares to be issued to Key Personnel in accordance with a
separate agreement between the Buyer and such personnel.
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2.2.2.3 The compensation correction shall be a maximum of NOK
1,500,000.
3. TAKEOVER DATE
The takeover will be implemented with effect from 1 July 2001.
4. ENCUMBRANCES
4.1 The transferred assets shall be transferred free from monetary
encumbrances of any type whatsoever.
4.2 If, upon transfer, it proves that there are encumbrances on property
that the mortgagees are not willing to cancel, an allocation shall be
made from the amount to be disbursed under Clause 2.1.2 which shall be
deposited into a frozen account.
4.2.1 The amount shall either be at the command of the mortgagee, if
the mortgagee declares breach in relation to the Seller, and
gives notice that the lien is being exercised.
4.2.2 The amount shall be successively released to the Seller as the
mortgagee confirms in writing that outstanding amounts related
to the lien have been paid, or declares that it will waive
lien rights in the transferred assets.
4.2.3 Interest on the frozen account shall be for the account of the
Seller unless the mortgagee's claim indicates that earned
interest shall fall to the mortgagee.
5. ORDER RESERVE
5.1 The Seller shall cooperate to ensure that the order reserve of
assignments to be transferred that have not been commenced shall be
transferred to the Buyer by requesting the consent of its contractual
parties.
5.2 The Buyer vouches in relation to the Seller that all obligations
undertaken by the Seller will be fulfilled. If the Buyer does not
fulfil its obligations and the customer declares breach with a demand
for damages or other form of economic compensation as a result of the
breach, the Buyer is obliged to cover the claims presented. If the same
amount is claimed from the Seller, the Seller shall inform the Buyer of
this. Unless the Buyer
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has reasonable objections to the claim(s) presented, and thus instructs
the Seller not to pay, the Seller is entitled to honor such claims in
relation to creditors and then submit a claim for damages against the
Buyer.
6. ASSIGNMENTS IN PROGRESS
6.1 The Seller itself shall conduct the completion of the assignments that
are in progress on the takeover date.
6.2 The Seller is obliged to hire the Buyer to carry out the actual work in
connection with completion of these orders, on the terms stated in the
enclosed framework agreement.
6.3 The Buyer shall not furnish contractors' guarantees to the Seller.
7. EMPLOYEES
7.1 The Buyer shall assume Seller's rights and obligations under the signed
employment contracts with effect from 1 July 2001. The Seller shall
actively cooperate to ensure that the employees transfer their
employment to the Buyer.
7.2 The Seller shall pay wages, holiday pay and other compensation to the
employees up to the takeover date.
8. AFTER THE TAKEOVER
The Buyer is free to reorganize the activities it has taken over
according to its own plans, but shall refrain from dispositions
entailing a risk that the reorganization itself will lead to a danger
that the compensation mentioned in Clause 2.1.1 may disappear.
9. PER KVERNELAND / BRYNE ELEKTRISKE AS
9.1 Per Kverneland shall be a member of the board of directors of Simex AS
for a period of two years, calculated from the takeover date. An
extraordinary general meeting will be called immediately after this
date for his election as a director. His compensation
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for the board post shall be the same as that which applies to other
employed board members.
9.2 Per Kverneland shall be available for consultant services related to
marketing measures as called for by Simex AS. The maximum number of
hours per month to be used for consultancy services is 25 hours.
9.3 As from the takeover date, Per Kverneland shall receive a compensation
of NOK 10,000 per month until the end of 2002.
9.4 For as long as he is a member of the board of Simex AS, Per Kverneland
shall refrain from participating, directly or indirectly, including
through the Seller, in activities in competition with Simex AS, for the
activities that are carried out by Simex AS upon the signing of this
agreement.
The Buyer is aware, and acknowledges, that the activities carried out
by Per Kverneland through the companies Teksal Automasjon AS, Alcon AS
and Dicon AS shall not be deemed to be in competition with the Buyer's
own activities.
9.5 Bryne Elektriske AS shall be maintained as a company for at least three
years after the takeover date, and no capital dispositions shall be
made that can lead to a limited opportunity for the Buyer to submit
claims against the Seller for circumstances that represent a breach of
the agreement. However, Bryne Elektriske AS may be merged into the
parent company.
9.6 Immediately after the transfer, the Seller shall execute a name change
so as to eliminate the danger of confusion with the transferred
activities.
10. BRYNE ELEKTRISKE AS' DECLARATION
The Seller declares the following on the occasion of the transfer,
which shall also be used as a basis for the Buyer's assumptions for
entering into the agreement. The Seller has provided the Buyer with all
information the Seller has had, and which the Seller believes is of
significance for the Buyer's decision to enter into the agreement at
hand in accordance with the negotiated prices. The Seller declares that
it accepts identification with the knowledge the company's management
possesses regarding the company such that, to the extent that the
company's management possesses factual
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knowledge or is invited to obtain such knowledge, the Seller shall be
judged accordingly.
10.1 There are no pension agreements of any kind, or agreements regarding
pension obligations, that are to be paid by the company upon the
employee's resignation, in relation to employees that are transferred
to the Buyer.
10.2 The Seller is not aware of any circumstances that would indicate that
complaints should be expected in relation to any of the company's
deliveries that have been invoiced as of the takeover date.
10.3 All of the company's assets, including design / intangible rights, etc.
are free of any and all encumbrances, including free from a third-party
right to demand compensation for use, production, etc.
10.4 There are no running service agreements related to the property taken
over beyond that which is normal within the business sector and related
to prudent maintenance and service, that cannot be carried out by the
company's own employees, nor represent a value disparity with the
actual benefit, compared with the cost level of the agreement.
10.5 There are no agreements of any nature that oblige the company to
purchase products, production equipment, etc. at terms that are
anything other than of a businesslike nature, which can bind the Buyer.
10.6 The Seller declares that the transfer at hand does not trigger any
right by any third party that would entail that such third party would
be entitled to invoke the right to purchase shares in the Buyer as a
consequence of the transfer.
11. BUYER'S RIGHT TO INVESTIGATE
11.1 The Buyer is granted full access to carry out expert examination of all
relevant circumstances related to the components incorporated in the
purchase object, cf. Clause 1 with associated appendices.
11.2 The company's buildings and operations facilities have been inspected
by the Buyer, and are transferred in the state and condition that they
were in upon inspection. The Seller declares, however, that it is not
aware of any hidden faults or defects of any kind
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that would entail necessary costs for repair. In the event that
circumstances arise prior to the transfer date that would entail breach
of the lease, and thus a duty of improvement for the tenant, all costs
associated therewith shall be covered by the Seller.
11.3 The company's stock has been inspected and is transferred in the state
and condition it was in upon inspection.
11.4 Machinery and equipment related to the activities have been inspected
and are transferred in the state and condition they were in upon
inspection. The Seller is not aware of circumstances that may have
significance for the evaluation of the condition of the equipment that
could not be uncovered in connection with the inspection made.
11.5 The Seller has put the company's accounting material, customer
register, etc. at the disposal of the Buyer for the Buyer's inspection.
This material is representative for judging the profitability of the
activities, and for calculating the amount of compensation.
12. "DUE DILIGENCE" - SURVEY, RIGHT TO REFRAIN
Furthermore, during the period up to the takeover date, the Buyer shall
be given the opportunity, together with Seller's Key Personnel, to
perform a complete review of the activities with a view towards
confirming that the described preconditions for the
purchase/compensation do exist.
If the preconditions in Clause 1.3, or if the Buyer uncovers negative
deviations in connection with its review, that exceed a total value of
NOK 1,500,000, the Buyer shall be entitled to declare itself free of
this agreement. Written notification of this must take place by the
takeover date on 1 July 2001.
This agreement has been signed in 2 - two - identical originals, one for each of
the parties.
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Stavanger, 18 June 2001
BRYNE ELEKTRISKE AS SIMEX TEC INC. SIMEX AS
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