<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
MARINE SHUTTLE OPERATIONS INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
NEVADA 1389 91-1913992
(State or Other Jurisdiction of (Primary Standard (I.R.S. Employer
Incorporation or Organization) Industrial Classification Identification No.)
Code Number)
</TABLE>
--------------------------
4410 Montrose Boulevard
Houston, Texas 77006
(713) 529-7498
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
--------------------------
FRANZ EDER, PRESIDENT
MARINE SHUTTLE OPERATIONS INC.
4410 MONTROSE BOULEVARD
HOUSTON, TEXAS 77006
(713) 529-7498
(Name, Address Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
--------------------------
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
LEONARD J. BRESLOW, ESQ.
BRESLOW & WALKER, LLP
100 JERICHO QUADRANGLE, SUITE 230
JERICHO, NEW YORK 11753
TEL: (516) 822-6505
FAX: (516) 822-6544
--------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. /X/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / / ________
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AMOUNT OFFERING MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE PRICE PER AGGREGATE
TO BE REGISTERED REGISTERED SECURITY(2) OFFERING PRICE
<S> <C> <C> <C>
Common Stock, par value $0.001 per share............. 20,000,000 $6.3125 $126,250,000
Common Stock, par value $0.001 per share(1).......... 13,567,609 $6.3125 $85,645,532
Total................................................ $211,895,532
<CAPTION>
AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTRATION
TO BE REGISTERED FEE
<S> <C>
Common Stock, par value $0.001 per share............. $37,244
Common Stock, par value $0.001 per share(1).......... $25,265
Total................................................ $62,509
</TABLE>
(1) Represents shares of Common Stock which may be sold by selling stockholders.
See "Selling Stockholders".
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
as amended. Represents the average of the high and the low prices of the
Common Stock as quoted on the OTC Bulletin Board on June 30, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 2, 1998
PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
33,567,609 SHARES OF COMMON STOCK
------------------
This Prospectus relates to the offering (the "Offering") of 33,567,609
shares of common stock, $0.001 par value per share (the "Common Stock"), of
Marine Shuttle Operations Inc., a Nevada corporation (the "Company"), 20,000,000
of which (the "Shares") are being offered by the Company outside of the United
States on a "best efforts, all or none" basis, and 13,567,609 of which (the
"Selling Stockholder Shares") are being offered by certain selling stockholders
of the Company (the "Selling Stockholders"). The Company will not receive any
proceeds from the sale of the Selling Stockholder Shares by the Selling
Stockholders. The Common Stock currently is quoted on the OTC Bulletin Board
under the symbol "ZSUB". On June 30, 1998, the last reported sale price of the
Common Stock was $6.125 per share. It is anticipated that applications will made
to include the Common Stock for listing on the NASDAQ SmallCap Market, the
Bulletin Board of the Berlin Stock Exchange, and the Bulletin Board of the
Frankfurt Stock Exchange.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK
AND IMMEDIATE SUBSTANTIAL DILUTION. SEE "RISK FACTORS"
COMMENCING ON PAGE 6 AND "DILUTION."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATES SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT(1) COMPANY(2)(3)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total.............................................. $ $ $
</TABLE>
(1) See "Underwriting" for information concerning indemnification arrangements
with the Underwriter.
(2) Before deducting estimated expenses of $800,000 payable by the Company.
(3) The Shares are offered by the Underwriter, as agent for the Company, on a
"best efforts, all or none" basis, for a period of 30 days from the
effective date of the registration statement of which this Prospectus forms
a part (the "Registration Statement"). The offering period may be extended
for an additional 30 days by the mutual agreement of the Company and the
Underwriter, and an additional five days may be added solely for purposes of
allowing checks to clear. All funds received by the Underwriter will be
deposited no later than noon on the next business day following their
receipt by the Underwriter in a separate account, to be held in escrow by
the Underwriter as agent for the subscribers of the Shares. If no closing
takes place during the offering period (or any extension thereof), then all
funds promptly will be returned to the subscribers thereof without any
deduction therefrom or interest therein.
------------------------
The Common Stock is being offered by the Berliner Freiverkehr (Aktien) AG
(the "Underwriter"), as agent for the Company on a "best efforts, all or none"
basis, subject to prior sale, withdrawal, or cancellation of the Offering
without notice. The Underwriter reserves the right to withdraw, cancel, or
modify the Offering and to reject any order for the Common Stock offered hereby,
in whole or in part. It is expected that delivery of the certificates evidencing
the Common Stock offered hereby will be made at the offices of Berliner
Freiverkehr (Aktien) AG, Berlin, Germany, at the closing of the Offering.
BERLINER FREIVERKEHR (AKTIEN) AG
The date of this Prospectus is , 1998
<PAGE>
[PHOTOGRAPHS]
---------------------
The above pictures are computer-generated models of an Offshore Shuttle.
AVAILABLE INFORMATION
The Company intends to furnish its stockholders with annual reports
containing financial statements audited by its independent certified public
accountants and quarterly reports for the first three quarters of each fiscal
year containing unaudited interim financial information.
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS WHICH INVOLVE CERTAIN RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER RISK
FACTORS AND ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES,
THE TERM "COMPANY" AS USED HEREIN INCLUDES MARINE SHUTTLE OPERATIONS INC. AND
ITS SUBSIDIARIES.
THE COMPANY
Marine Shuttle Operations Inc., through its wholly-owned Norwegian
subsidiary, Marine Shuttle Operations AS ("MSOAS"), is seeking to become a
leading player in the market for decommissioning, installing, and transporting
offshore oil and gas structures.
There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. Many different
types of installations exist, each one being uniquely designed based on the
water depth, seabed characteristics, and reservoir, wave, and current conditions
of the site of installation. Of the current installed base of structures, the
vast majority (more than 5,800) are fixed steel installations. Situated almost
exclusively in shallow (i.e., less than 75 meters) and intermediate (i.e., 75 to
200 meters) water depths, fixed steel installations are comprised of two
elements: the "topside" which contains the processing, drilling, and
accommodation facilities, and the substructure or "jacket" which consists of a
lattice-work of steel tubes and can weigh over 30,000 tons with a base dimension
of up to 120 meters. The balance of the installed base of structures includes
concrete gravity base structures (typically found in shallow and intermediate
water depths), various types of floating structures such as tension leg
platforms, floating production platforms, spars, and floating production,
storage and offloading vessels (typically situated in deep waters--i.e., more
than 200 meters) and subsea structures which include the equipment needed to
develop satellite fields and the seabed equipment associated with floating
installations. Over the next 30 years, most of these structures will have to be
decommissioned at an estimated cost of $20 to $40 billion.
The Company initially intends to concentrate its efforts on decommissioning
fixed steel structures, primarily the several hundred large steel installations
situated in intermediate water depths. Presently, the decommissioning of fixed
steel structures typically is accomplished by cutting the particular structure
into many pieces and utilizing crane ships and other support vessels to lift the
pieces onto barges or, in some instances, onto the deck of the crane ships
themselves. The cutting is necessitated by the limited lifting capabilities of
existing crane ships. Theoretically, the largest cranes are capable of lifting
objects up to 14,000 tons. Crane capacity, however, decreases as the required
outreach and/or upreach of the crane boom increases. Moreover, since the maximum
height to which a structure can be lifted is limited to the length of the crane
boom, taller structures must be cut into smaller pieces in order to clear the
barge deck. As a result, although the cutting and lifting procedure may be
adequate for small, shallow water installations, the extensive cutting and
lifting required with respect to the larger platforms in deeper waters makes
decommissioning such installations using such procedure difficult, dangerous,
expensive, and time-consuming.
Offshore Shuttle AS ("OSAS"), a majority-owned Norwegian subsidiary of the
Company, has designed a new generation of vessel (the "Offshore Shuttle") which
it believes will be capable of lifting most of the largest topsides in one piece
and also will be capable of diving partly below the water surface to remove a
complete jacket in one operation. MSOAS has entered into a license agreement
with OSAS which gives MSOAS the exclusive right to build and operate five
Offshore Shuttles, and an exclusive option to build and operate an additional
two Offshore Shuttles thereafter.
The Company has formed strategic alliances to test, develop, manufacture,
and commercialize the Offshore Shuttle concept. In particular, the Company will
rely on OSAS with respect to the pre-
3
<PAGE>
engineering work necessary to construct the Offshore Shuttles. In addition,
MSOAS has entered into an agreement with Thyssen Stahlunion GmbH ("TSU") with
respect to the marketing of its proposed services. TSU is a subsidiary of
Thyssen AG ("Thyssen"), a conglomerate of more than 323 companies operating
worldwide in numerous industries. In its fiscal year ended September 30, 1997,
Thyssen generated sales of approximately $23 billion with a workforce of
approximately 120,000 people. MSOAS also has entered into an agreement with RC
Consultants AS, a Norwegian engineering company with more than 330 skilled
offshore engineers, with respect to its engineering and operational activities,
and has entered into an agreement with Schuller Industrieentsorgung AG (formerly
Schuller Industrieentsorgung GmbH), a service company specializing in waste
management, onshore dismantling, and oil pollution prevention and cleanup, with
respect to the final cleaning, disassembly, and disposal of the platform segment
brought onshore. There can be no assurance that such arrangements will be
successful.
The Company anticipates utilizing a significant portion of the net proceeds
from the Offering to finance the construction of the first Offshore Shuttle. See
"Use of Proceeds."
The Company was incorporated in Nevada in May 1997 under the name Geoteck
International, Inc. On May 29, 1998, it changed its name to Marine Shuttle
Operations Inc. In April, 1998, the Company acquired all of the issued and
outstanding stock of MSOAS in exchange for 7,600,000 shares of Common Stock the
("MSOAS Exchange"). In May, 1998, the Company acquired 3,291,738 shares of OSAS
(approximately 68% of the outstanding OSAS capital stock) in exchange for
4,937,607 shares of Common Stock (the "OSAS Exchanges"). All of such shares are
being held in escrow subject to completion of the Offering. On May 20, 1998, the
Company entered into two agreements to acquire an additional 686,668 shares of
OSAS (approximately 14% of the outstanding OSAS capital stock) in exchange for
1,030,002 shares of Common Stock (the "Additional OSAS Exchanges"). Subject to
the satisfaction of certain conditions precedent, the Company anticipates that
the Additional OSAS Exchanges will close soon after the completion of the
Offering. The Company's principal offices are located at 4410 Montrose
Boulevard, Houston, Texas 77006. Its telephone number is (713) 529-7498.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.......... 20,000,000 shares
Common Stock offered by the Selling 13,567,609 shares
Stockholders...............................
Common Stock Outstanding Prior to the 33,587,609 shares
Offering(1)................................
Common Stock Outstanding After the 53,587,609 shares
Offering...................................
Use of Proceeds.............................. The Company intends to use the net proceeds
of the Offering as follows: (i) construction
of the first Offshore Shuttle, (ii) payment
of license fees, (iii) repayment of
outstanding indebtedness, and (iv) working
capital and general corporate purposes.
Proposed NASDAQ SmallCap Symbol.............. ZSUB
</TABLE>
- ------------------------
(1) Assumes completion of the Additional OSAS Exchanges.
4
<PAGE>
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree of
risk and should be made only by investors who can afford the loss of their
entire investment. Prospective investors should carefully review and consider
the risks presented by the factors listed under "Risk Factors" as well as the
other information set forth in this Prospectus.
SUMMARY FINANCIAL DATA
The following data presents for the periods indicated certain financial
information for the Company. Such data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and related notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
MAY 23, 1997
(INCEPTION)
THROUGH THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
------------------ -------------------
<S> <C> <C>
(UNAUDITED)
STATEMENTS OF OPERATIONS DATA:
Total costs and expenses................................................. $ 162,931 $ 185,217
Net (loss)............................................................... $ (162,931) $ (185,217)
Net (loss) per share..................................................... $ (0.01) $ (0.01)
------------------ -------------------
------------------ -------------------
Pro forma weighted average number of common shares
outstanding............................................................ 20,020,000 20,020,000
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
<S> <C> <C>
(UNAUDITED)
BALANCE SHEET DATA:
Working capital (deficiency)......................................................... $ (10,931) $ (446,928)
Total assets......................................................................... 11,015 280,862
Notes payable........................................................................ 0 401,830
Total liabilities.................................................................... 19,946 475,010
Accumulated deficit.................................................................. (162,931) (348,148)
Stockholders' equity (deficiency).................................................... (8,931) (194,148)
</TABLE>
5
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK AND SHOULD BE MADE ONLY BY INVESTORS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW AND CONSIDER
THE FOLLOWING RISKS AS WELL AS THE OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS.
RECENTLY ORGANIZED COMPANY; NO OPERATING HISTORY; STOCKHOLDERS' AND WORKING
CAPITAL DEFICITS
The Company was incorporated in May, 1997 to serve as a holding company for
one or more unidentified operating subsidiaries. The Company has no operating
history on which an evaluation of its performance and prospects can be made, and
its proposed operations are subject to all of the risks inherent in the
establishment of a new business enterprise. To date, the Company has no
significant assets and it has not generated any revenues from operations. The
Company believes that it will not generate any revenues (other than interest
income derived from the net proceeds of this Offering) until the year 2000, at
the earliest. There can be no assurance, however, that significant revenues will
ever develop. The likelihood of the success of the Company must be considered in
light of the problems, expenses, difficulties, complications, and delays
frequently encountered in connection with a new business, particularly one that
is seeking to develop and commercialize a new product and operate in a
competitive environment.
The Company sustained a net loss of $162,931 for the period from May 23,
1997 (inception) through December 31, 1997, and $185,217 for the quarter ended
March 31, 1998. As of March 31, 1998, the Company had a stockholders' deficit of
$194,148, a working capital deficit of $446,928, and an accumulated deficit of
$348,148. The Company expects to continue to incur losses through at least 2001,
and there can be no assurance that the Company will achieve profitable
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 1 of the Notes to the Financial Statements.
DEPENDENCE ON OSAS AND OFFSHORE SHUTTLE DESIGN
MSOAS, the Company's wholly-owned subsidiary, has entered into a License
Agreement (the "License Agreement") with OSAS, the Company's majority-owned
subsidiary and the holder of all licensing and marketing rights to the Offshore
Shuttle design. Pursuant to the License Agreement, OSAS granted MSOAS the
exclusive right to build and operate five Offshore Shuttles, an exclusive option
to build and operate an additional two Offshore Shuttles thereafter, and a right
of first refusal with respect to any Offshore Shuttle licenses that OSAS may
seek to grant during a specified future period. In addition, based on functional
specifications for each Offshore Shuttle to be agreed upon by MSOAS and OSAS,
OSAS shall provide MSOAS with the pre-engineering work, including designs and
descriptions of operational procedures, necessary to construct the Offshore
Shuttles. In consideration for the licenses granted and services to be provided,
OSAS shall receive a construction fee equal to ten percent of the construction
price of each of the Offshore Shuttles, an operating fee equal to sixteen
percent of the gross profit for each contract concluded by MSOAS involving the
use of an Offshore Shuttle, and an exclusivity fee equal to one percent of the
aggregate construction price of Offshore Shuttles two through five. See
"Business--Strategic Alliances--Offshore Shuttle AS."
The Company's operations are dependent on the rights granted to it pursuant
to the License Agreement and the work to be performed thereunder by OSAS. The
binding nature of the License Agreement is conditioned upon OSAS receiving
$2,000,000 towards the exclusivity fee by September 30, 1998, and MSOAS placing
a firm order for the first Offshore Shuttle with a construction yard by October
31, 1998. Additionally, OSAS has incurred substantial net losses from operations
since its inception. As at March 31, 1998, OSAS had an accumulated deficit of
$1,680,477. If the conditions set forth in the License Agreement are not
satisfied, or if OSAS is unable to perform its obligations under the License
Agreement, it would have a material adverse effect on the Company.
6
<PAGE>
In addition, given OSAS's extensive knowledge of and familiarity with the
Offshore Shuttle design, the Company anticipates that it will rely on OSAS for
the provision of various other services including engineering verification,
technical support, and technical supervision of the construction and testing of
the Offshore Shuttle. If the Company is unable to negotiate acceptable
arrangements with OSAS with respect to such other services, or if any such
arrangements are unsuccessful, the Company could be materially adversely
affected.
POTENTIAL GRANT OF OFFSHORE SHUTTLE LICENSE TO THIRD PARTY
Pursuant to the License Agreement, MSOAS has the right to build and operate
five Offshore Shuttles and an exclusive option to build and operate an
additional two Offshore Shuttles thereafter. MSOAS must place an order for the
first Offshore Shuttle by October 31, 1998. Subject, in each case, to an option
to extend the order date by twelve months upon payment of a $900,000 option
exercise fee, an order for the second Offshore Shuttle must be placed no later
than six months after successful testing of the first Offshore Shuttle, and the
remaining three Offshore Shuttles must be ordered by June 30th of each year
thereafter. If an order is not placed on or before the required date, then for
the twelve-month period thereafter OSAS shall be entitled to grant a license to
build one Offshore Shuttle to a third party. No assurance can be made that each
Offshore Shuttle will be ordered on time or that the Company will have the
financial resources to extend a particular order date. If an Offshore Shuttle
license is granted to a third party, it could have a material adverse effect on
the Company. See "Business--Strategic Alliances-- Offshore Shuttle AS."
POTENTIAL LOSS OF RIGHTS TO OFFSHORE SHUTTLE CONCEPT
The intellectual property rights to the Offshore Shuttle concept (the
"Rights") were transferred to OSAS by Gunnar Foss and Per Bull Haugsen, the
developers of the Offshore Shuttle concept, pursuant to an Agreement Regarding
Intellectual Property dated March 31, 1998 (the "Intellectual Property
Agreement"). The Intellectual Property Agreement provides that if the License
Agreement is terminated and OSAS shall cease to actively engage in its
activities relating to the Offshore Shuttle concept, then, subject to a
six-month cure period, the Rights shall revert back to Messrs. Foss and Haugsen.
In such event, the Company would be unable to obtain any value from the future
sale or exploitation of the Rights.
SUBSTANTIAL TIME LAPSE UNTIL COMMERCIAL PRODUCT INTRODUCTION
Construction of the first Offshore Shuttle is intended to commence soon
after the closing of the Offering. The Company will solicit competitive bids
from at least three construction yards with the capacity and capability to build
an Offshore Shuttle. The Company anticipates that the commercial development of
the first Offshore Shuttle will be completed by August, 2000, at the earliest.
Subject to the receipt of additional financing, construction delays, market
conditions, and other factors, construction of an additional Offshore Shuttle is
anticipated to commence in each of the four years after delivery of the first
Offshore Shuttle, until a total five Offshore Shuttles are in operation. There
can be no assurance, however, as to the time required to complete such
construction efforts or that such efforts can be completed in a cost-effective
manner or at all.
Subject to market demand, performance results, and other factors, the
Company anticipates that each Offshore Shuttle will conduct one commercial
operation in its first year in service, and will perform up to three operations
in each year thereafter. In making the foregoing forecast, the Company has
assumed, among other things, that each commercial operation, including all
pre-engineering work, will take up to one year to complete, with the offshore
portion calculated on average to be four weeks. As a result, the Company does
not anticipate generating any revenues until the year 2000, at the earliest.
There can be no assurance, however, that the Company's assumptions regarding the
number of operations to be performed will prove to be accurate, or that the
Company will ever achieve commercially significant sales. To date, the
7
<PAGE>
Company has not entered into any contracts for the use of its proposed services,
and no assurance can be given that any such contracts will materialize. See
"Business--Business Strategy."
TECHNOLOGICAL RISKS
The Company believes that the technical risks associated with the Offshore
Shuttle concept have been reduced by extensive model testing and rigorous
calculations. As part of the testing process, a 1:50 scale model was tested to
measure motions in different ballast conditions; ballasting/deballasting
sequences were tested without any marine object, with a 7,000 ton jacket, and
with an 8,000 ton topside; and hydrodynamics were tested by examining the
motions of the Offshore Shuttle (with and without a marine object) in different
positions and when subjected to wave forces, as well as its towing resistance in
calm water and storm. In addition, based on engineering documentation,
calculations, and model testing, Det Norske Veritas, an
internationally-recognized society responsible for classification and technical
inspections of merchant vessels, issued a Statement of Approval verifying the
technical feasibility of the Offshore Shuttle for the transport and removal of
certain offshore platform deck structures and jackets.
Despite the significant testing, documentation, and approvals, there can be
no assurance that construction of the Offshore Shuttle will be successfully
completed or that, if constructed, the Offshore Shuttle will function properly,
will be operationally safe and environmentally friendly, or will enable the
Company to provide decommissioning, installation, and transportation services in
an effective manner or at all. In addition, it is anticipated that the Offshore
Shuttle will be equipped with an adjustable lifting frame, and
specially-prepared docking connections will be utilized during removal
operations. To date, neither the lifting frame nor the docking connections have
been engineered, and there can be no assurance such engineering will be
successfully completed. If the Company is unable to engineer the lifting frame
and/or the docking connections, it could have a material adverse effect on the
Company. See "Business-- The Offshore Shuttle."
DEPENDENCE ON OFFERING; POSSIBLE NEED FOR ADDITIONAL FINANCING
The Company is dependent upon the net proceeds of the Offering to finance
its proposed operating activities. Although the Company believes that the
estimated net proceeds from the Offering will enable it to construct the first
Offshore Shuttle, no assurance can be given in that regard. The Company's future
capital requirements could vary significantly and will depend on certain
factors, many of which are not within the Company's control. Such factors
include, but are not limited to, the need for cash to fund the construction of
additional Offshore Shuttles, greater than anticipated expenses, and longer
engineering, development, and construction times than now contemplated. See
"Business--Business Strategy." The Company believes it will be able to fund the
construction of additional Offshore Shuttles from its future operating cash
flows, however no assurance can be given in that regard.
The Company may seek such additional funding through public or private
equity or debt financings, collaborative or other arrangements with strategic
partners, or from other sources. There can be no assurance, however, that
additional funds will be available on acceptable terms, if at all. If additional
funds are raised by issuing equity securities, substantial dilution to existing
stockholders, including purchasers of the shares of Common Stock offered hereby,
may result. If additional capital is raised through a debt financing with
financial institutions, the Company would likely become subject to restrictive
covenants relating to its operations and finances. If adequate funds are not
available, the Company may be required to significantly curtail or cease its
proposed activities. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
COMPETITION; TECHNOLOGICAL OBSOLESCENCE
The Company will face competition from companies which provide
decommissioning, installation, and/or transport services using cranes and
barges. In addition, several companies have offered and/or
8
<PAGE>
proposed solutions for lifting large platforms in one piece. These involve the
use of multiple barges, twin-hull tankers, split-hull tankers, and U-shaped
semi-submersibles. One such solution, known as Versatruss, is comprised of two
barges and an array of booms, rigging, and winches. The components are assembled
together to produce what is essentially a giant scissors jack. The barges are
symmetrically placed around the platform, and the booms from each barge are
placed in receptacles that have been welded to the platform deck. The barges are
pulled together sideways using winches. This causes the angle of inclination of
the booms to increase, forcing the deck upwards. The Company believes that the
utility of Versatruss and most of these other alternative solutions will be
limited to the lifting of topsides in calm waters. Although some of such lifting
systems may be capable of lifting jackets, the Company believes that the
vertical clearance limitations inherent in each of such systems will inhibit
their ability to lift the jackets onshore. Rather, the Company believes that
such systems only will be capable of towing jackets from one installation site
to another. There can be no assurance, however, that the Company's beliefs will
prove to be accurate.
Competition also may arise from vessels, processes, and/or technologies
currently in development, or developed in the future, by other companies. The
development by others of new or improved vessels, processes, or technologies may
make the services to be marketed by the Company less competitive or obsolete.
Many of the Company's current and potential competitors are likely to have
substantially greater financial, managerial, and technical resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the marketplace, if at all. See "Business--Competition."
UNCERTAIN PROPRIETARY PROTECTION
OSAS has eight patent applications pending in Norway with respect to various
aspects of the Offshore Shuttle design and operation. Patent applications also
are pending in various other countries pursuant to the Patent Cooperation Treaty
and separately filed patent applications. There can be no assurance as to
whether patents will issue from any of OSAS's patent applications or, if issued,
as to the range or degree of protection such issued patents will afford. In
addition, no assurance can be given that others will not obtain patents claiming
aspects similar to those covered by such patent applications or patents, as the
case may be, or that such patents, if issued, will not be challenged by third
parties, invalidated, rendered unenforceable, or designed around.
Even if patents issue from such patent applications and a competitor were to
infringe thereon, the costs of enforcing such patent rights may be substantial
or even prohibitive. If OSAS chooses not to defend its patent rights, if any,
then the Company may be forced to expend substantial resources to do so. No
assurance can be given that the Company will be successful in any action for
infringement of the technology licensed to it. In addition, there can be no
assurance that the Offshore Shuttle will not infringe on the patent rights of
others, or that patents do not exist or will not be issued in the future that
would have an adverse effect on the Company's ability to manufacture or operate
the Offshore Shuttle. The Company is aware of the existence of a Norwegian
patent which claims the use of a U-shaped structure designed for removing and/or
installing topsides. Based on the opinion of patent counsel, the Company
believes that the Offshore Shuttle will not infringe on this Norwegian patent
because the Offshore Shuttle utilizes different, uniquely mounted topside
connecting mechanisms. There can be no assurance, however, that infringement
proceedings will not be brought against the Company.
The Company also may desire or be required to obtain licenses from others in
order to further develop, produce, and market the Offshore Shuttle effectively.
There can be no assurance that such licenses will be obtainable on commercially
reasonable terms, if at all, that the patents underlying such licenses will be
valid and enforceable, or that the proprietary nature of the unpatented
technology underlying such licenses will remain proprietary. In addition, the
Company relies on unpatented proprietary know-how and trade secrets, and employs
various methods including confidentiality agreements with
9
<PAGE>
employees, consultants and marketing partners to protect its trade secrets and
know-how. However, such methods may not afford complete protection and there can
be no assurance that others will not independently develop such trade secrets
and know-how or obtain access thereto. See "Business-- Proprietary Protection."
DEPENDENCE ON STRATEGIC PARTNERS
The Company's strategy for testing, developing, manufacturing, and
commercializing the Offshore Shuttle concept is dependent upon forming strategic
alliances and relationships with joint venture partners, contract manufacturers,
or other third parties, and upon the subsequent success of these parties in
performing their responsibilities. In this regard, MSOAS has entered into
agreements with OSAS with respect to the rights to the Offshore Shuttle design
and the pre-engineering work necessary to construct the Offshore Shuttles,
Thyssen Stahlunion GmbH ("TSU") with respect to the marketing of its proposed
services, RC Consultants AS ("RC") with respect to its project management and
engineering and operational activities, and with Schuller Industrieentsorgung AG
(formerly Schuller Industrieentsorgung GmbH) with respect to the final cleaning,
disassembly, and disposal of the platform segment brought onshore. There can be
no assurance that such arrangements will be successful. If any of these
arrangements are cancelled and/or are unsuccessful, and if the Company is unable
to secure new alliances in their place, there would be a material adverse effect
on the Company. See "Business--Strategic Alliances."
In addition, the Company's proposed offshore decommissioning activities may
require the use of large tug boats, unloading docks, subsea specialists, marine
operators, diving support vessels, and various safety and supply boats. The
Company may seek to form strategic alliances and relationships with third
parties who provide these and other services. If the Company is unable to
negotiate acceptable arrangements, or if any of such arrangements are
unsuccessful, it could have a material adverse effect on the Company.
NO MANUFACTURING FACILITIES OR PERSONNEL
Construction of the first Offshore Shuttle is intended to commence soon
after the closing of the Offering. The Company, however, does not have the
ability to manufacture the Offshore Shuttle. The Company will solicit
competitive bids from at least three construction contractors which it believes
have the capacity and capability to build an Offshore Shuttle. There can be no
assurance that bids will be tendered by capable construction contractors, or at
all. In addition, if such bids are tendered, no assurance can be given that the
Company will be able to negotiate acceptable joint venture or contract
manufacturing arrangements, or that any such arrangements will be successful.
If the Company is unable to have third parties manufacture the Offshore
Shuttle pursuant to joint venture or contract manufacturing agreements or
otherwise, or if the Company decides to manufacture the Offshore Shuttle itself,
the Company will be required to establish the necessary manufacturing facility
(which will require substantial additional financing) and employ and train
qualified manufacturing personnel, all of which may result in production delays.
There can be no assurance that the Company will be successful in attracting and
retaining experienced personnel or establishing the necessary manufacturing
facilities or arrangements that will enable the Company to manufacture the
Offshore Shuttle in a cost-effective manner, or at all. The failure to achieve
these objectives would have a material adverse affect on the Company. See
"Business--Business Strategy."
LIMITED MARKETING AND SALES CAPABILITIES
The Company has limited marketing and sales capabilities. If the marketing
agreement with TSU is cancelled or is unsuccessful, the Company will need to
develop a sales force and marketing group with technical expertise, or make
appropriate arrangements with other joint venture partners. There can be no
assurance that such efforts will be successful. In addition, there can be no
assurance that the Company will be able to effectively market or sell its
services through sales representatives, through arrangements with
10
<PAGE>
an outside sales force, or through strategic partners. See "Business--Strategic
Alliances--Thyssen Stahlunion GmbH."
UNCERTAIN MARKET ACCEPTANCE
As with any new technology, there is the risk that the market may not
recognize the benefits or the potential applications of the Offshore Shuttle, or
any future products or technologies developed by the Company. Market acceptance
of the Company's services will depend, in large part, upon the ability of the
Company to demonstrate to prospective customers the potential advantages of the
Offshore Shuttle over other types of vessels and/or technologies performing
similar functions. There can be no assurance that the Company will be successful
in marketing its services to the oil and gas industry or other markets or that
the use of the Offshore Shuttle will be embraced by the oil and gas industry or
other markets. See "Business-- Strategic Alliances."
RISK OF INTERNATIONAL OPERATIONS
The Company intends to market its services in international markets.
International operations entail various risks, including economic instability
and recessions, exposure to currency fluctuations, difficulties of administering
foreign operations generally, and obligations to comply with a wide variety of
foreign laws and other regulatory requirements. It is likely that a substantial
portion of the Company's sales, if any, and expenditures will be collected or
paid, as the case may be, in currencies other than the U.S. dollar. Therefore,
significant exchange rate fluctuations could have a material adverse effect on
the Company's results of operations. In addition, the laws of certain foreign
countries may not protect the Company's proprietary rights to the same extent as
the laws of the United States.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent upon the services of
Franz Eder, the President and Chairman of the Board of the Company. Mr. Eder has
entered into a two-year employment agreement with the Company which provides
that Mr. Eder shall devote only so much (but not less than 75%) of his
professional and business time, attention, and energies to his duties and
responsibilities hereunder as is reasonable to insure the Corporation's proper
conduct. The loss of Mr. Eder's services could have a material adverse effect on
the Company. See "Business--Employees," and "Management."
Management believes that the future success of the Company also will depend
upon the Company's ability to attract and retain highly-skilled managerial and
technical personnel. Competition for such personnel is intense. The Company
competes for such personnel with other companies, academic institutions,
governmental entities and other organizations, some of which may have
substantially greater capital resources than the Company. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel. See "Business--Employees."
SEASONALITY, WEATHER RISKS, AND OTHER FACTORS AFFECTING DEMAND
The offshore decommissioning and installation industry is highly seasonal as
a result of weather conditions and historically as a result of the timing of
capital expenditures by oil and gas companies. Historically, the greatest demand
for marine offshore decommissioning and installation services has been during
the period from May through September. As a result, the Company anticipates that
a disproportionate amount of the Company's future revenues, if any, will be
generated during the second and third quarters of each year. In addition, full
year results are not likely to be a direct multiple of any particular quarter or
combination of quarters. The Company may seek to partially offset the
anticipated seasonality of its operations by pursuing other potential
opportunities such as leasing the Offshore Shuttles to third parties for bridge
building, drydocking ships and floating platforms, and other uses. No assurances
can be
11
<PAGE>
given that such other opportunities, if successful, will result in the
anticipated offset of the seasonality of the Company's operations.
Demand for the Company's services also will be affected by the level of
spending by oil and gas companies for decommissioning, installation, and other
similar activities. The expenditures are influenced by the price of oil and gas,
the discovery rates of new oil and gas reserves in offshore areas, local and
international regulations and political and economic conditions, and the oil and
gas industry's access to capital.
RISK OF OPERATIONS; NO INSURANCE
The Company's proposed operations will be subject to all of the inherent
risks of offshore marine activity, including accidents, environmental mishaps,
mechanical failures, and vessels colliding, capsizing, grounding, or sinking.
These occurrences can result in significant personal injury or loss of life,
severe damage to or destruction of property and equipment, pollution or
environmental damage, and suspension of the Company's proposed operations.
Moreover, litigation arising from any such occurrence may result in the Company
being named as a defendant in lawsuits asserting large claims.
The Company intends to obtain insurance against some of these types of
risks. It also anticipates that it will be adequately protected by the insurance
policies of the companies that utilize the Company's services, and it intends to
further limit its risk by capping its liability exposure in its service
contracts with such companies. There can be no assurance, however, that the
policies of such companies will cover the Company or, if they do, that such
insurance (or the insurance obtained by the Company, if any) will be sufficient
or effective under all circumstances or against all hazards to which the Company
may be subject. In addition, there can be no assurance that any contractual
limits on liability will be enforceable or will adequately and effectively limit
the Company's liability exposure, or that the companies that utilize the
Company's services will nevertheless seek to be indemnified by the Company with
respect to any and all losses or damages they suffer or incur. See
"Business--Insurance."
REGULATORY MATTERS
The Company's operations may be subject to and affected by various types of
national and international regulations. Determining the applicable regulatory
framework will depend, in part, on how the Offshore Shuttles are classified
(e.g., as "ships," "vessels," "installations", etc.), whether (and if so, where)
the Offshore Shuttles are registered or documented, and where the Company's
intended operations are performed. The Company may be required to obtain certain
permits, licenses and certificates with respect to its proposed operations and
to comply with rigorous safety, workplace, and environmental standards.
Moreover, certain employees of the Company may be covered by laws that operate
to make liability limits, if any, established by state workers' compensation
laws inapplicable to these employees and permit the employees and their
representatives to pursue actions against the Company for job related injuries
with generally no limits on the Company's potential liability.
Violations of various statutes and regulations that may be applicable to the
Company's proposed operations can result in, among other things, civil
penalties, remediation expenses, monetary damages, injunctions, cease and desist
orders, and criminal penalties. Some environmental statutes impose strict
liability, rendering a person liable for environmental damage without regard to
negligence or fault on the part of such person. In addition, because such laws
and regulations are changed frequently, it is not possible for the Company to
accurately predict the cost or impact of such laws and regulations on its
planned operations.
12
<PAGE>
CONTROL OF BOARD OF DIRECTORS
Franz Eder, the President and Chairman of the Board of the Company presently
owns 7,600,000 shares of Common Stock. Upon consummation of the Offering, Mr.
Eder will beneficially own approximately 14% of the Common Stock. As such, Mr.
Eder will have a significant voice in the election of the Company's directors.
See "Principal Stockholders."
IMMEDIATE SUBSTANTIAL DILUTION
The offering price per share of Common Stock is substantially higher than
the net tangible book value per share of the Common Stock as at March 31, 1998.
Purchasers of shares of Common Stock offered hereby will experience immediate
and substantial dilution of $3.801, or 66.1%, in the net tangible book value per
share of the Common Stock purchased by them in the Offering. Additional dilution
to future net tangible book value per share may occur upon the exercise of
options or warrants that may be issued by the Company in the future. The current
stockholders of the Company acquired their shares of Common Stock, in most
cases, for nominal consideration or for consideration substantially less than
the public offering price of the shares of Common Stock included in the
Offering. See "Capitalization," "Dilution" and "Certain Transactions."
SUBSTANTIAL NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE
The Company has reserved a total of 2,000,000 shares of Common Stock for
issuance upon exercise of options that may be granted pursuant to the Company's
1998 Stock Option Plan (the "Stock Option Plan"). See "Management--Stock Option
Plan." The issuance of options pursuant to the Stock Option Plan may adversely
affect the Company's ability to consummate future equity financings. Further,
the holders of such options may exercise them at a time when the Company would
otherwise be able to obtain additional equity capital on terms more favorable to
the Company. The exercise and sale of the Common Stock underlying the options
would have a dilutive effect on the Company's stockholders, and may have a
material adverse effect on the market price of the Common Stock.
NO DIVIDENDS
The Company has never declared or paid dividends, and does not intend to pay
any dividends in the foreseeable future on shares of Common Stock. Earnings of
the Company, if any, are expected to be retained for use in expanding the
Company's business. The payment of dividends is within the discretion of the
Board of Directors of the Company and will depend upon the Company's earnings,
if any, capital requirements, financial condition, and such other factors as are
considered to be relevant by the Board of Directors from time to time. See
"Dividend Policy."
NO COMMITMENT TO PURCHASE SECURITIES; ESCROW OF SUBSCRIPTION PROCEEDS
Under the terms of the Offering, the Underwriter is offering the Shares on a
"best efforts, all or none" basis. Unless subscriptions are received for all of
the Shares, none of the Shares will be issued and the Offering will be
withdrawn. No person is committed to purchase any of the Shares. Under the terms
of the Offering, subscribers' funds will be returned to subscribers, without
interest thereon or deduction therefrom, if subscriptions for all of the Shares
are not received during the 30 day offering period (which period may be extended
for an additional 30 days, and an additional 5 days solely for the purpose of
allowing checks to clear). During the Offering, subscribers will have no right
to the return of their subscriptions. See "Underwriting."
13
<PAGE>
LIMITED PUBLIC MARKET FOR THE COMMON STOCK
Prior to the Offering there has been a limited public market for the Common
Stock, and there can be no assurance that a more active public market for the
Common Stock will develop or be sustained after the Offering.
CONFLICTS OF INTEREST; TWO OUTSIDE DIRECTORS
The Board of Directors has the responsibility for fixing the compensation of
the employees of the Company, including the Company's officers. No independent
outside authority reviews or approves the decision of the Board of Directors
concerning compensation. Currently, two of the four directors of the Company are
also officers of the Company and, as a result, have a significant voice in
setting their own compensation.
CERTAIN ANTI-TAKEOVER PROVISIONS
The Company is subject to the provisions of Section 78.411 et seq. of the
Nevada General Corporation Law ("Business Combination Act"). The Business
Combination Act provides, with certain exceptions, that a Nevada corporation may
not engage in any of a broad range of business combinations with a person, or an
affiliate or an associate of such person, who is an "interested stockholder" for
a period of three years from the date that such person became an interested
stockholder, unless the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the board of directors
of the corporation before the person becomes an interested stockholder. The
Business Combination Act further provides that a Nevada corporation may not
engage in such a business combination after the expiration of three years from
the date that such person became an interested stockholder, unless the business
combination is approved by the board of directors of the corporation before the
person became an interested stockholder or by the affirmative vote of a majority
of outstanding votes not beneficially owned by the interested stockholder at a
meeting called not earlier than three years after the interested stockholder's
date of acquiring shares. The Business Combination Act could have the effect of
delaying or preventing a change of control of the Company. See "Description of
Securities--Statutory Business Combination Provisions."
BROAD DISCRETION OVER APPLICATION OF PROCEEDS
The Company intends to utilize the net proceeds of the Offering for
construction the first Offshore Shuttle, payment of license fees, repayment of
indebtedness, and working capital and general corporate purposes. The Company,
however, reserves the right to change the allocation and intended use of such
net proceeds to the extent that management determines that such change is
advisable. Consequently, management of the Company will have broad discretion in
determining the manner in which the net proceeds of the Offering will be
applied.
POSSIBLE VOLATILITY OF STOCK PRICE
From time to time, the stock market has experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of the Common Stock, like
the stock prices of many publicly-traded companies, may prove to be highly
volatile. Announcements of innovations or new commercial products by the Company
or its competitors, developments or disputes concerning proprietary rights, as
well as period-to-period fluctuations in financial results, among other factors,
may have a significant impact on the market price of the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the consummation of the Offering (and the Additional OSAS Exchanges),
the Company will have 53,587,609 shares of Common Stock outstanding. Except for
the 7,600,000 shares of Common Stock
14
<PAGE>
owned by Franz Eder, the President and Chairman of the Board of the Company, all
of the 33,567,609 shares of Common Stock being offered hereby will be
immediately tradeable without restriction or further registration under the
Securities Act of 1933, as amended (the "Securities Act"). Mr. Eder's shares are
being held by a pooling trustee pursuant to the terms of a pooling trust
agreement. Although the disposition of Mr. Eder's shares are covered by the
Registration Statement, pursuant to the pooling trust agreement Mr. Eder cannot
dispose of such shares until they are released to him by the trustee. Mr. Eder
shall receive ten percent of such shares on July 1, 1999, an additional thirty
percent of such shares on July 1, 2000, an additional thirty percent of such
shares on July 1, 2001, and the balance of such shares on July 1, 2002. Subject
to the continued effectiveness of the Registration Statement, such shares shall
be immediately tradeable without restriction or further registration under the
Act upon release of such shares to Mr. Eder. See "Certain Transactions" and
"Shares Eligible for Future Sale."
If the Registration Statement is not in effect at the time such shares are
released to Mr. Eder, such shares may not be resold in a public distribution
except in compliance with the registration requirements of the Securities Act or
pursuant to a valid exemption from registration, including the safe harbor
provided by Rule 144. In general, under Rule 144 as currently in effect, a
person (or persons whose shares are aggregated) who has beneficially owned
restricted shares for at least one year (including the holding period of any
prior owner except an affiliate) would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of (i)
one percent of the number of shares of Common Stock then outstanding
(approximately 535,876 shares immediately after the Offering), or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. No prediction
can be made as to the effect, if any, that sales of such shares of Common Stock
or even the availability of such shares for sale will have on the market prices
prevailing from time to time. The possibility that substantial amounts of Common
Stock may be sold in the public market may adversely affect prevailing market
prices for the Common Stock and could impair the Company's ability to raise
capital through the sale of its equity securities. See "Shares Eligible for
Future Sale."
UNDERWRITER'S INFLUENCE ON THE MARKET
A significant number of the Shares may be sold to customers of the
Underwriter. Such customers subsequently may engage in transactions for the sale
or purchase of such securities through or with the Underwriter. If the
Underwriter participates in the market, it may exert a dominating influence on
the market for the Common Stock. Such marketmaking activity may be discontinued
at any time. The price and liquidity of the Common Stock may be significantly
affected by the degree, if any, of the Underwriter's participation in such
market.
LIMITATION OF LIABILITY; INDEMNIFICATION
The Company's Articles of Incorporation: (i) eliminates the personal
liability of the directors of the Company to the fullest extent permitted by the
General Corporation Law of the State of Nevada (the "GCL") and (ii) provides
that the Company shall indemnify, to the fullest extent permitted by the GCL,
any and all persons whom it shall have the power to indemnify under the GCL from
all expenses, liabilities, or other matters referred to in or covered by the
GCL. The By-Laws of the Company provide that the Company shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the Company to
procure a judgment in its favor) by reason of the fact that such person is or
was an agent of the Company, against expenses,
15
<PAGE>
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with such proceeding to the fullest extent permitted
under the GCL. See "Management--Limitations of Liability; Indemnification."
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
This Prospectus contains certain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Section 27A of the Securities Act. These forward-looking
statements are based on current expectations that involve numerous risks and
uncertainties. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive, and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the results discussed
or implied in such forward-looking statements will prove to be accurate. In
light of the significant uncertainties inherent in such forward-looking
statements, the inclusion of such statements should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved. Words such as "believes," "anticipates,"
"expects," "intends," "may," and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying such
statements. The Company undertakes no obligation to revise any of these
forward-looking statements.
16
<PAGE>
USE OF PROCEEDS
Based on an assumed offering price of $5.75 per Share, the net proceeds to
the Company from the sale of the Shares, after deduction of underwriting
discounts and other estimated offering expenses, are estimated to be
approximately $102,700,000. The Company intends to utilize such net proceeds as
follows:
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
AMOUNT OF NET PERCENTAGE OF NET
PROCEEDS(1) PROCEEDS
-------------- -----------------
<S> <C> <C>
Construction of First Offshore Shuttle (2)..................................... $ 80,000,000 78%
------
License Fees (3)............................................................... $ 8,500,000 8%
------
Repayment of Indebtedness (4).................................................. $ 1,015,000 1%
-------------- ------
Working Capital and General Corporate Purposes................................. $ 13,185,000 13%
-------------- ------
-------------- ------
Total...................................................................... $ 102,700,000 100%
-------------- ------
-------------- ------
</TABLE>
- ------------------------
(1) The amount set forth with respect to each purpose represents the Company's
current estimate of the approximate amount of the net proceeds that will be
used for such purpose. However, the Company reserves the right to change the
amount of such net proceeds that will be used for any purpose to the extent
that management determines that such change is advisable. Consequently,
management of the Company will have broad discretion in determining the
manner in which the net proceeds of the Offering are applied. See "Risk
Factors--Broad Discretion Over Application of Proceeds."
(2) Represents the estimated cost of engineering and building the first Offshore
Shuttle and acquiring the marine equipment necessary for its operations. See
"Business--The Offshore Shuttle."
(3) Represents estimated license fees (i.e., the construction fee, operating
fee, and exclusivity fee) payable to OSAS with respect to the first Offshore
Shuttle pursuant to the License Agreement. See "Business--Strategic
Alliances--Offshore Shuttle AS."
(4) Represents the approximate amount of money (including accrued interest
through June 30, 1998) due under a bridge note issued by the Company, the
proceeds of which were used for general operating purposes. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Certain Transactions."
Based on its current plans and assumptions relating to its proposed
activities, the Company anticipates that the net proceeds of the Offering should
be sufficient to satisfy the Company's cash requirements until construction of
the first Offshore Shuttle is completed. Proceeds not immediately required for
the purposes described above will be invested in short-term, investment grade,
interest bearing government obligations. However, there can be no assurance that
the net proceeds of the Offering will satisfy the Company's requirements for any
particular period of time. If the Company identifies additional opportunities or
new applications for its technology which require additional internal
development efforts, then the Company may require additional financing after the
use of the net proceeds of the Offering to pursue such opportunities. No
assurance can be given that such additional financing will be available when
needed on terms acceptable to the Company, if at all. See "Risk
Factors--Dependence on Offering; Possible Need for Additional Financing."
17
<PAGE>
DIVIDEND POLICY
The Company has never declared or paid dividends, and does not intend to pay
any dividends in the foreseeable future on shares of Common Stock. Earnings of
the Company, if any, are expected to be retained for use in expanding the
Company's business. The payment of dividends is within the discretion of the
Board of Directors of the Company and will depend upon the Company's earnings,
if any, capital requirements, financial condition and such other factors as are
considered to be relevant by the Board of Directors from time to time.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1998 (i) on an actual basis, (ii) on a pro forma basis to give effect to
certain financial events occurring subsequent to March 31, 1998, and (iii) on a
pro forma basis as adjusted to give effect to the sale of the Shares by the
Company.
<TABLE>
<CAPTION>
MARCH 31, 1988
--------------------------------------------
PRO FORMA(1)(2)
ACTUAL PRO FORMA(1) AS ADJUSTED
----------- -------------- ---------------
<S> <C> <C> <C>
Notes payable...................................................... $ 401,830 $ 401,830 $ 0
----------- -------------- ---------------
Stockholder's equity:
Common stock, par value $.001 per
share; 75,000,000 shares authorized;
20,020,000 issued (actual), 33,587,609
(pro forma), 53,587,609 (pro forma as adjusted).................. 20,020 33,587 53,587
Additional paid-in capital......................................... 133,980 40,823,400 143,503,240
-------------- ---------------
Accumulated deficit................................................ (348,148) (348,148) (348,148)
----------- -------------- ---------------
-------------- ---------------
Total stockholders' equity (deficit)............................... $ (194,148) $ (40,508,679) $ 143,208,679
----------- -------------- ---------------
-------------- ---------------
Total capitalization............................................... $ (207,682) $ 40,910,509 $ 143,208,679
----------- -------------- ---------------
----------- -------------- ---------------
</TABLE>
- ------------------------
(1) Adjusted to give pro forma effect to (i) the acquisition of all of the
issued and outstanding stock of MSOAS in exchange for 7,600,000 shares of
Common Stock; (ii) the consummation of the OSAS Exchanges; and (iii) the
consummation of the Additional OSAS Exchanges.
(2) As adjusted to give effect to (i) the sale of the Shares (at an assumed
public offering price of $5.75 per Share), and (ii) the repayment of monies
advanced under the Bridge Note upon completion of the Offering.
18
<PAGE>
DILUTION
The difference between the offering price per share of Common Stock and the
net tangible book value per share after the Offering constitutes the dilution to
investors in the Offering. Net tangible book value per share is determined by
dividing the net tangible book value of the Company (total tangible assets less
total liabilities) by the number of outstanding shares of Common Stock.
At March 31, 1998, the Company had a net tangible book value of $(196,148)
or $(0.01) per share of Common Stock. After giving effect to (i) the MSOAS
Exchange, (ii) the OSAS Exchanges, (iii) the Additional OSAS Exchanges, and (iv)
the sale of the shares of Common Stock offered hereby at an assumed public
offering price of $5.75 per share, and after deducting underwriting discounts
and commissions and estimated offering expenses payable by the Company, the pro
forma net tangible book value of the Company at March 31, 1998 would have been
$104,433,822 or $1.949 per share. This represents an immediate increase in pro
forma net tangible book value of $1.959 per share to the existing stockholders
of the Company and an immediate dilution of $3.801 (66.1%) per share to new
investors. The following table illustrates the foregoing information with
respect to dilution to new investors on a per share basis:
<TABLE>
<S> <C> <C>
Assumed public offering price per share........................ $ $ 5.75
Net tangible book value per share prior to the Offering........ $ (0.01)
Increase per share attributable to the Offering................ $ 1.959
Pro forma net tangible book value per share after the
Offering..................................................... $ 1.949
---------
Dilution to new investors...................................... $ 3.801
---------
---------
</TABLE>
The following table sets forth as of the date of this Prospectus, with
respect to the Company's existing stockholders and new investors, a comparison
of the number of shares of Common Stock acquired from the Company, the
percentage ownership of such shares, the total consideration paid, the
percentage of total consideration paid, and the average price per share paid.
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------------- --------------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
-------------- ----------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Existing Stockholders.............................. 33,587,609(1) 63% $ 40,856,827 26% $ 1.22
New Investors...................................... 20,000,000 37% $ 115,000,000 74% $ 5.75
-------------- --- -------------- ---
Total.............................................. 53,587,609 100% $ 155,856,827 100%
-------------- --- -------------- ---
-------------- --- -------------- ---
</TABLE>
To the extent subsequently granted options or warrants are exercised, there
could be further dilution to new investors. See "Risk Factors--Substantial
Number of Shares of Common Stock Reserved For Issuance" and "Management--Stock
Option Plan."
- ------------------------
(1) Assumes completion of the Additional OSAS Exchanges.
19
<PAGE>
PRICE RANGE OF COMMON STOCK
The Common Stock commenced trading on the OTC Bulletin Board on December 22,
1997 and is traded under the symbol "ZSUB". The following table sets forth for
the periods indicated the high and low bid quotations for the Common Stock as
reported on the OTC Bulletin Board. These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not necessarily
represent actual transactions.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL 1997
Fourth Quarter (from December 22, 1997)......................................................... $ 4 $ 3
FISCAL 1998
First Quarter................................................................................... $ 5.75 $ 3.5
Second Quarter.................................................................................. $ 7.3125 $ 5
</TABLE>
On June 30, 1998, the last sale price of the Common Stock as reported on the
OTC Bulletin Board was $6.125 per share. As of June 25, 1998, there were
approximately 73 holders of record of the Common Stock.
SELECTED FINANCIAL DATA
The following data presents for the periods indicated certain consolidated
financial information for the Company. Such data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and related notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
MAY 23, 1997
(INCEPTION)
THROUGH THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
------------------ -------------------
<S> <C> <C>
(UNAUDITED)
Statements of Operations Data:
Total costs and expenses................................................. 162,931 185,217
Net (loss)............................................................... $ (162,931) $ (185,217)
Net (loss) per share..................................................... $ (0.01) $ (0.01)
------------------ -------------------
------------------ -------------------
Pro forma weighted average number of common shares outstanding........... 20,020,000 20,020,000
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1997 MARCH 31, 1998
----------------- --------------
<S> <C> <C>
(UNAUDITED)
BALANCE SHEET DATA:
Working capital (deficiency).................................................. $ (10,931) $ (446,928)
Total assets.................................................................. 11,015 280,862
Notes payable................................................................. 0 401,830
Total liabilities............................................................. 19,946 475,010
Accumulated deficit........................................................... (162,931) (348,148)
Stockholders' equity (deficiency)............................................. (8,931) (194,148)
</TABLE>
20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Prospectus.
The following information contains forward-looking statements which are subject
to risk and uncertainties. Should one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward looking statements.
As of March 31, 1998, the Company had cash of approximately $17,063, an
accumulated deficit of $348,148, a stockholders' deficit of $194,148, and a
working capital deficit of $446,928. The Company has not generated any revenues
to date. It incurred net losses of $162,931 for the period from May 23, 1997
(inception) through December 31, 1997, and $185,217 for the three-month period
ended March 31, 1998. Management anticipates that the Company will continue to
incur losses at least through the year 2001 and there can no assurance that the
Company will not continue to incur losses thereafter.
Management plans to make substantial expenditures in the future for
engineering and constructing the first Offshore Shuttle. Management believes
that the net proceeds of the Offering will be sufficient to fund the Company's
proposed operations until construction of the first Offshore Shuttle is
completed; however, there can be no assurance in this regard. In addition, there
can be no assurance that the proceeds of the Offering will allow the Company to
become profitable and pay for future development costs.
The likelihood of the success of the Company must be considered in light of
the problems, expenses, difficulties, complications, and delays frequently
encountered in connection with a new business, particularly one that is seeking
to develop and commercialize a new product and operate in a competitive
environment. The continuation of the Company as a going concern is presently,
and may be in future, dependent on obtaining additional financing in amounts
sufficient to satisfy its liabilities as they become due. There can be no
assurance that such additional financing can be obtained on desirable terms or
at all.
21
<PAGE>
BUSINESS
GENERAL
Marine Shuttle Operations Inc., through its wholly-owned Norwegian
subsidiary, Marine Shuttle Operations AS ("MSOAS"), is seeking to become a
leading player in the market for decommissioning, installing, and transporting
offshore oil and gas structures.
The Company intends to focus its initial efforts on decommissioning -- i.e.,
the multi-stage process of removing an offshore oil or gas installation. Removal
typically is accomplished by cutting the particular installation into many
pieces and utilizing crane ships and other support vessels to lift the pieces
onto barges or, in some instances, onto the deck of the crane ships themselves.
Although this procedure may be adequate for the small, shallow water
installations that require relatively little cutting to be removed, the
extensive cutting and lifting required with respect to the larger platforms
situated in deeper waters makes decommissioning such installations using such
procedure difficult, dangerous, time-consuming, and expensive.
Offshore Shuttle AS ("OSAS"), a majority-owned Norwegian subsidiary of the
Company, has designed a new generation of vessel (the "Offshore Shuttle") which
the Company believes will be capable of lifting and carrying most of the largest
installations without extensive cutting or dismantling. MSOAS has entered into a
license agreement with OSAS which gives MSOAS the exclusive right to build and
operate five Offshore Shuttles, and an exclusive option to build and operate an
additional two Offshore Shuttles thereafter. See "Strategic Alliances--Offshore
Shuttle AS."
The Company has formed strategic alliances to test, develop, manufacture,
and commercialize the Offshore Shuttle concept. In particular, the Company will
rely on OSAS with respect to the pre-engineering work necessary to construct the
Offshore Shuttles, Thyssen Stahlunion GmbH with respect to the marketing of its
proposed services, RC Consultants AS with respect to its engineering and
operational activities, and Schuller Industrieentsorgung AG (formerly Schuller
Industrieentsorgung GmbH) with respect to the final cleaning, disassembly, and
disposal of the platform segment brought onshore. See "Strategic Alliances."
THE MARKET
There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. Of these, there
are approximately 4,000 structures in the Gulf of Mexico, 950 in Asia, 700 in
the Middle East, 400 in Europe, and the balance are scattered throughout the
rest of the world. Of the European total, more than 300 are in the North Sea and
the Northeast Atlantic.
Many different types of installations exist, each one being uniquely
designed based on the water depth, seabed characteristics, and reservoir, wave,
and current conditions of the site of installation. Of the current installed
base of structures, the vast majority (more than 5,800) are fixed steel
installations. Although most fixed steel installations are situated in shallow
waters (i.e., less than 75 meters), there are three to four hundred fixed steel
installations situated in intermediate water depths (i.e., 75 to 200 meters).
These deeper water structures tend to be much larger than their shallow water
counterparts.
Fixed steel installations are comprised of two elements: the topside and the
substructure or "jacket." The topside is the above-water portion of the
installation that contains the processing, drilling, and accommodation
facilities. Topsides vary enormously in size and function. Weights range from a
few hundred tons for small topsides in the Gulf of Mexico to over 50,000 tons
for large topsides in the North Sea. Topsides may be built as separate modules,
as an integrated unit, or as a combination of the two (i.e., an integrated deck
containing process facilities topped by individual modules). The choice of
system depends on the facilities required and the method by which the topside is
installed. Topsides are transported offshore either on barges or on the deck of
the crane ships.
22
<PAGE>
A jacket is a lattice-work of steel tubes anchored to the seabed by piles
driven up to 100 meters into the soil. They can weigh over 30,000 tons, and have
a wide base (up to 120 meters across) and taper towards the top. The vast
majority of jackets are transported to their offshore site by barge. Jackets
weighing up to 9,500 tons usually can be lifted off the barge by cranes. Larger
jackets are launched off the barge into the water. Small jackets can be lifted
off the barge and placed in the water vertically. Larger jackets, whether barge
launched or crane lifted, enter the water horizontally and are then ballasted by
controlled flooding to the vertical position before being lowered into place.
Once the jacket is piled into the seabed, the topside generally is installed by
crane.
In addition to fixed steel structures, the installed base includes concrete
gravity base structures (typically found in shallow and intermediate water
depths), various types of floating structures such as tension leg platforms,
floating production platforms, spars, and floating production, storage and
offloading vessels (typically situated in deep waters --i.e., more than 200
meters), and subsea structures which include the equipment needed to develop
satellite fields and the seabed equipment associated with floating
installations.
Over the next 30 years, most of the installed base of structures will have
to be decommissioned at an estimated cost of $20 to $40 billion. A significant
portion of this amount will be spent on the three hundred to four hundred large,
steel, intermediate water depth installations that are substantially more
difficult to remove using existing technology than their shallow water
counterparts. This is most evident in the North Sea and the Northeast Atlantic
where, due the harsh environment and the significant number of large,
intermediate depth steel structures, the anticipated decommissioning costs are
considerably greater than in the rest of the world. Indeed, it is estimated that
approximately fifty to sixty percent of worldwide decommissioning costs will be
spent in the North Sea and the Northeast Atlantic, even though such regions
account for just five percent of the total number of installations. The
Company's initial decommissioning efforts will focus on these large,
intermediate depth steel structures.
DECOMMISSIONING
Decommissioning is the multi-stage process of removing an offshore oil or
gas installation. The process includes planning and engineering the removal of
the installation, obtaining necessary regulatory approvals, removing the
installation, sealing the wells, and transporting the installation for re-use,
recycling, or disposal. Removal costs can range from $2 million for smaller
platforms in shallow waters to more than $140 million for larger ones in deeper
waters.
A number of different methods may be utilized to remove an offshore
installation. Determining which method is most appropriate for a particular
installation is a function of numerous factors, including the installation's
size, weight, construction type, and distance from shore, the water depth,
seabed characteristics, reservoir, wave, and current conditions of the site of
installation, and safety considerations. The typical method of removal involves
cutting the particular structure into many pieces. Crane ships and other support
vessels are used to lift the pieces onto barges or, in some instances, onto the
deck of the crane ships themselves. The cutting is necessitated by the limited
lifting capabilities of existing crane ships. Complications often arise,
however, in determining the safe maximum operation lift capability during
decommissioning operations. The largest cranes theoretically are capable of
lifting objects up to 14,000 tons. During an actual lift, however, various
factors including safety and operational constraints (e.g., vertical and
horizontal clearance, the required outreach and/or upreach of the crane boom,
anchoring requirements, and proximity to other facilities, subsea wellheads, and
pipelines), location characteristics, and the size and structural integrity of
the pieces to be lifted all will significantly reduce the theoretical lift
capability. This is best illustrated by the recent removal of the Odin jacket in
Norway. Two cranes, with a combined maximum theoretical lift capacity of 14,000
tons, were engaged to remove a jacket that weighed approximately 10,000 tons.
Despite the significant disparity between the cranes' maximum theoretical lift
capacity and the weight of the jacket, the jacket had to be cut into four
sections, each of which were lifted separately.
23
<PAGE>
Several companies have offered and/or proposed solutions for lifting large
platforms in one piece. These involve the use of multiple barges, twin-hull
tankers, split-hull tankers, and U-shaped semi-submersibles. One such solution,
known as Versatruss, is comprised of two barges and an array of booms, rigging,
and winches. The components are assembled together to produce what is
essentially a giant scissors jack. The barges are symmetrically placed around
the platform, and the booms from each barge are placed in receptacles that have
been welded to the platform deck. The barges are pulled together sideways using
winches. This causes the angle of inclination of the booms to increase, forcing
the deck upwards. The Company believes that the utility of Versatruss and most
of these other alternative solutions will be limited to the lifting of topsides
in calm waters. Although some of such lifting systems may be capable of lifting
jackets, the Company believes that the vertical clearance limitations inherent
in each of such systems will inhibit their ability to lift the jackets onshore.
Rather, the Company believes that such systems only will be capable of towing
jackets from one installation site to another. There can be no assurance,
however, that the Company's beliefs will prove to be accurate. See "Risk
Factors--Competition; Technological Obsolescence," and "Competition."
Removal of a few of the larger, older jackets that are equipped with
flotation tanks may be attempted by re-floating them. During installation, the
flotation tanks were used to temporarily float the jackets. Foundation piles
were then added to fasten these structures to the seabed, the flotation tanks
were ballasted, and any temporary buoyancy aids were removed. If the flotation
tanks can be deballasted and the foundation piles can be removed or equipped
with temporary buoyancy aids, then it might be possible to refloat the
structure. Given the age of these structures, however, the condition of the
flotation tanks is questionable. Moreover, transporting the large floating
jacket would create a sizeable wake, thus limiting access to coastal locations.
Certain countries also permit the decommissioning of offshore oil and gas
structures by partially removing them or by toppling the structures and leaving
them on the seabed. Indeed, decommissioning guidelines issued by the
International Maritime Organization, a technical arm of the United Nations
dealing with safety of navigation, provide that certain platforms, depending on
their size and water depth, may be partially removed or toppled provided that
the remains are covered by an unobstructed water column at least 55 meters deep
to allow for seagoing traffic. Many countries, however, citing environmental and
other concerns, do not allow these forms of decommissioning in their territorial
waters. Moreover, the owners of such platforms would retain liability for the
unremoved portions in perpetuity.
The Company believes that the Offshore Shuttle will represent a new,
cost-effective alternative for decommissioning offshore oil and gas platforms,
particularly large, intermediate depth structures.
THE OFFSHORE SHUTTLE
OPERATION. The Offshore Shuttle's design is based on the Archimedes
principle: putting water into a floating object will cause it to submerge, and
letting water out will cause it to rise. In essence, the Offshore Shuttle is
designed to be a large buoyancy tank that can be submerged for placement under
or adjacent to an offshore installation and then elevated to lift the
installation.
The Company envisions a typical platform removal operation commencing with
the preparation of the Offshore Shuttle at its home base and the preparation of
the platform for removal. Pre-removal preparations will include conducting a
detailed analysis and preparing a comprehensive method statement of all of the
tasks to be performed in the removal operation, adjusting the Offshore Shuttle's
lifting frame for the installation to be removed, and equipping the topside
support legs or the underside of the topside deck with specially-prepared
docking connections. Upon completion of the pre-removal preparations, the
Offshore Shuttle will be towed (it is not a self-propelled vessel) to the
offshore site by several vessels, one of which will serve as the control center
for the removal operation.
24
<PAGE>
The topside will be removed first. The Offshore Shuttle will be partially
submerged (i.e., ballasted) and guided into position under the topside by the
use of guidance tugs and/or mooring anchors. The tugs and/or the anchors will
keep the Offshore Shuttle in position while the topside is cut from the jacket
(alternatively, the Offshore Shuttle can be moved into position after cutting
the topside from the jacket). Once cut, the topside and the jacket will be
temporarily secured to each other by clamps that will be designed specifically
for the installation being removed. The Offshore Shuttle will be deballasted,
causing it to rise in the water until the lifting frame on the Offshore Shuttle
connects with the docking connections on the topside. The temporary clamps are
unfastened from the jacket. Once the topside is lifted, it can be seafastened to
the Offshore Shuttle for transport to a land site for either dismantling or
refurbishment.
The Offshore Shuttle then will be tugged to the offshore location to perform
the jacket removal. At the site, the Offshore Shuttle will be ballasted at one
end so that it is sitting vertically in the water. It will be maneuvered by tugs
and/or mooring anchors into position and connected with the jacket. The tugs
and/or the anchors will keep the Offshore Shuttle in place while the connection
to the jacket is made. The top of the jacket will be connected by tension
mechanisms to the top of the Offshore Shuttle and the jacket legs will be cut at
the seabed (alternatively, the Offshore Shuttle can be moved into position after
cutting the jacket legs at the seabed). The Offshore Shuttle will "scoop up" the
jacket by deballasting into its original horizontal position. The jacket will be
seafastened to the Offshore Shuttle and transported to the land base for either
dismantling or refurbishment.
The Company believes the Offshore Shuttle will be able to remove most of the
largest topsides in one piece and also will be capable of diving partly below
the water surface to remove a complete jacket in one operation. The maximum
weight of the structures which can be handled is a matter of design, but the
Company believes that a 15,000 ton Offshore Shuttle will be capable of lifting
most of the largest platforms (up to approximately 25,000 tons) in one piece
without the use large crane barges.
Once a structure is removed, the Company believes that the Offshore Shuttle
can be used as a barge for transport. It is anticipated that the removed
structure will lie in project-specific cradles on the Offshore Shuttle to help
prevent damage to the object during transportation. This is particularly
important where reuse of the marine structure is of interest. In addition, the
Company believes that the Offshore Shuttle can be designed to serve as a working
deck. By ballasting the Offshore Shuttle 180 degrees into an upside down
position, it may be possible to create a very large deck 50 to 60 meters above
water level. If so, this working deck could be positioned above structures
(e.g., ships) or beneath structures (e.g., bridges). From the deck, hosting
equipment and other operational equipment could be operated.
The building price for each Shuttle is estimated to be around $80 million
compared to an estimated minimum cost of $200 million to build a crane ship.
Moreover, the Company anticipates that approximately 20 people will be required
for a typical Offshore Shuttle decommissioning operation compared to the typical
crane ship operation that requires up to 200 people. Additional support vessels
are needed for both crane ship or Offshore Shuttle operations.
The Company believes that the Offshore Shuttle's principal advantage over
existing decommissioning methods will be its ability to remove and carry large
structures in one piece. By eliminating the need to cut installations into many
smaller units, offshore operation time, costs, and risks will be significantly
reduced and reuse of the installation will become a more viable alternative. The
Company believes the Offshore Shuttle's anticipated versatility will make it a
unique alternative for handling marine objects both inshore and offshore.
DIMENSIONS. Based on current designs, each Offshore Shuttle will consist of
six longitudinal tubes tied together by four transverse and twelve vertical
tubes. Although the dimensions of each Offshore Shuttle will vary based on the
average size installation a particular Offshore Shuttle is designed to handle,
it is anticipated that the Offshore Shuttles will be 130 to 200 meters long, 70
to 95 meters wide, and 60 meters high. The diameter of each tube will be
approximately 10 meters. Each tube will be ring-stiffened in
25
<PAGE>
order to resist the hydrostatic pressure associated with installation or
retrieval of marine structures. The longitudinal tubes may be ballasted by
letting water in or deballasted by pumping water out.
There may be a fixed, 4,000 ton ballast in the lower transverse tube to
ensure sufficient stability. In addition, there are separate ballasting
compartments at the upper end of the two outer lower tubes. These will enable
the Offshore Shuttle to maintain a horizontal position when the center of
gravity of the object being transported or unloaded is close to the bottom of
the Offshore Shuttle.
It is anticipated that the total weight of each Offshore Shuttle will range
from 8,000 tons to 15,000 tons, depending upon the task for which it is
designed. The main dimensions (as described above) may be subject to change
depending on the Company's determination of the number and types of marine
objects which are to be installed or removed in the foreseeable future. It is
the Company's intention to have each Offshore Shuttle built for a dedicated
region.
TESTING. The Company believes that the technical risks associated with the
Offshore Shuttle concept have been reduced by extensive model testing and
rigorous calculations. As part of the testing process, a 1:50 scale model was
tested to measure motions in different ballast conditions;
ballasting/deballasting sequences were tested without any marine object, with a
7,000 ton jacket, and with an 8,000 ton topside; and hydrodynamics were tested
by examining the motions of the Offshore Shuttle (with and without a marine
object) in different positions and when subjected to wave forces, as well as its
towing resistance in calm water and storm. In addition, based on engineering
documentation, calculations, and model testing, Det Norske Veritas, an
internationally-recognized society responsible for classification and technical
inspections of merchant vessels, issued a Statement of Approval verifying the
technical feasibility of the Offshore Shuttle for the transport and removal of
certain offshore platform deck structures and jackets.
Despite the significant testing, documentation, and approvals, there can be
no assurance that construction of the Offshore Shuttle will be successfully
completed or that, if constructed, the Offshore Shuttle will function properly,
will be operationally safe and environmentally friendly, or will enable the
Company to provide decommissioning, installation, and transportation services in
an effective manner or at all. In addition, it is anticipated that the Offshore
Shuttle will be equipped with an adjustable lifting frame, and
specially-prepared docking connections will be utilized during removal
operations. To date, neither the lifting frame nor the docking connections have
been engineered, and there can be no assurance such engineering will be
successfully completed. If the Company is unable to engineer the lifting frame
and/or the docking connections, it could have a material adverse effect on the
Company.
BUSINESS STRATEGY
Construction of the first Offshore Shuttle is intended to commence soon
after the closing of the Offering. The Company will solicit competitive bids
from at least three construction yards which it believes have the capacity and
capability to build an Offshore Shuttle. The Company anticipates that the
commercial development of the first Offshore Shuttle will be completed by
August, 2000, at the earliest. Subject to the receipt of additional financing,
construction delays, market conditions, and other factors, construction of an
additional Offshore Shuttle is intended to commence in each of the four years
after delivery of the first Offshore Shuttle, until a total five Offshore
Shuttles are in operation. MSOAS has an option to build an additional two
Offshore Shuttles thereafter. There can be no assurance, however, as to the time
required to complete such construction efforts or that such efforts can be
successfully completed at all.
Subject to market demand, performance results, and other factors, the
Company anticipates that each Offshore Shuttle will conduct one commercial
operation in its first year in service, and will perform up to three operations
in each year thereafter. In making the foregoing forecast, the Company has
assumed that each commercial operation, including all pre-engineering work, will
take up to one year to complete, with the offshore portion calculated on average
to be four weeks.
26
<PAGE>
The Company intends to focus its initial efforts on the decommissioning
market in the North Sea, the Northeast Atlantic, and other regions where it
anticipates the advantages of using the Offshore Shuttle to decommission large,
intermediate depth structures will be most prominent. The Company estimates that
300 to 400 of such structures currently exist for which use of the Offshore
Shuttle would be ideal. In the North sea alone, there are approximately 100
steel jackets in water depths greater than 75 meters. The Company ultimately
intends to provide a full range of services, including decommissioning,
installing, transporting, and recycling/disposing of various types of
structures, and well sealing/shutdown.
The offshore decommissioning and installation industry is highly seasonal as
a result of weather conditions and historically as a result of the timing of
capital expenditures by oil and gas companies. Historically, the greatest demand
for marine offshore decommissioning and installation services has been during
the period from May through September. The Company may seek to partially offset
the anticipated seasonality of its operations by pursuing other potential
opportunities such as leasing the Offshore Shuttle to third parties for bridge
building, drydocking ships and floating platforms, and other uses. No assurances
can be given that such other opportunities, if successful, will result in the
anticipated offset of the seasonality of the Company's operations.
STRATEGIC ALLIANCES
The Company's business strategy is dependent upon forming strategic
alliances and relationships with joint venture partners, contract manufacturers,
or other third parties, and upon the subsequent success of these parties in
performing their responsibilities. In this regard, MSOAS has entered into
agreements with OSAS with respect to the rights to the Offshore Shuttle design
and the pre-engineering work necessary to construct the Offshore Shuttles,
Thyssen Stahlunion GmbH ("TSU") with respect to the marketing of its proposed
services, RC Consultants AS ("RC") with respect to its engineering and
operational activities, and Schuller Industrieentsorgung AG (formerly Schuller
Industrieentsorgung GmbH, "Schuller") with respect to the final cleaning,
disassembly, and disposal of the platform segment brought onshore.
OFFSHORE SHUTTLE AS. OSAS was established in November 1996 to develop and
sell specialized technology applicable to the field of marine transportation.
Operating from its premises in Oslo, Norway, OSAS now has four full-time
employees and eight independent consultants. In May, 1998, the Company acquired
3,291,738 shares of OSAS (approximately 68% of the outstanding OSAS capital
stock) in exchange for 4,937,607 shares of Common Stock (the "OSAS Exchanges").
All of such shares are being held in escrow subject to completion of the
Offering. On May 20, 1998, the Company entered into two agreements to acquire an
additional 686,668 shares of OSAS (approximately 14% of the outstanding OSAS
capital stock) in exchange for 1,030,002 shares of Common Stock (the "Additional
OSAS Exchanges"). Subject to the satisfaction of certain conditions precedent,
the Company anticipates that the Additional OSAS Exchanges will close soon after
the completion of the Offering.
OSAS is the holder of all licensing and marketing rights to the Offshore
Shuttle. Pursuant to the License Agreement, MSOAS was granted the exclusive
right to build and operate five Offshore Shuttles, an exclusive option to build
and operate an additional two Offshore Shuttles thereafter, and a right of first
refusal with respect to any Offshore Shuttle licenses that OSAS may seek to
grant during a specified future period. MSOAS must place an order for the first
Offshore Shuttle by October 31, 1998. Subject, in each case, to an option to
extend the order dates by twelve months upon payment of a $900,000 option
exercise fee, an order for the second Offshore Shuttle must be placed no later
than six months after successful testing of the first Offshore Shuttle, and the
remaining three Offshore Shuttles must be ordered by June 30th of each year
thereafter. If an order is not placed on or before the required date, then for
the twelve-month period thereafter OSAS shall be entitled to grant a license to
build one Offshore Shuttle to a third party. Based on functional specifications
for each Offshore Shuttle to be agreed upon by MSOAS and OSAS, OSAS shall
provide MSOAS with the pre-engineering work, including designs and descriptions
of operational procedures, necessary to construct the Offshore Shuttles. In
consideration for the licenses granted and services to be provided, OSAS shall
receive a construction fee equal to ten percent of the
27
<PAGE>
construction price of each of the Offshore Shuttles, an operating fee equal to
sixteen percent of the gross profit for each contract concluded by MSOAS
involving the use of an Offshore Shuttle, and an exclusivity fee equal to one
percent of the aggregate construction price of Offshore Shuttles two through
five ($2,000,000 of which must be remitted to OSAS by September 30, 1998).
In addition to its obligations under the License Agreement, it is
anticipated that OSAS will provide the Company with various other services
including engineering verification, technical support, and technical supervision
of the construction and testing of the Offshore Shuttle.
THYSSEN STAHLUNION GMBH. TSU is a subsidiary of Thyssen AG ("Thyssen"), a
conglomerate of more than 323 companies operating worldwide in numerous
industries. In its fiscal year ended September 30, 1997, Thyssen generated sales
of approximately $23 billion with a workforce of approximately 120,000 people.
In addition to its activities in the steel industry, TSU offers offshore
technology and services to its clients including jacket concepts, platform
abandonment/removal, and waste management. Pursuant to the its agreement with
MSOAS, TSU will market the Offshore Shuttle on a worldwide basis to major oil
companies, offshore contractors, and others as part of its package of offshore
services. In addition, TSU shall act as a procurement service center for the
steel and equipment to be used in constructing the Offshore Shuttle, and shall
have a right of first refusal to lease the Offshore Shuttle if TSU is engaged in
any decommissioning, transportation, or installation project. TSU shall receive
a commission at a rate to be agreed upon for its marketing services, and shall
be precluded from promoting any products or services competitive with those of
the Company.
RC CONSULTANTS AS. RC is a Norwegian engineering company with more than 330
skilled offshore engineers. Pursuant to a personnel agreement with MSOAS, RC
will provide MSOAS with the engineers and technicians needed during the design,
engineering, fabrication, and operation of the Offshore Shuttle. In addition,
pursuant to an accounting services agreement, RC will provide MSOAS with
bookkeeping assistance. Sverre Hanssen, the Chairman of the Board of Directors
of RC, is Chairman of the Board of Directors of MSOAS.
SCHULLER INDUSTRIEENTSORGUNG AG. Schuller is a service company specializing
in waste management, onshore dismantling, and oil pollution prevention and
cleanup. MSOAS and Schuller have entered into a cooperation agreement pursuant
to which Schuller will provide such services to MSOAS, subject to the execution
of a written agreement on a project-specific basis. Franz Eder, the President
and Chairman of the Board of the Company, and Dr. Hubert Besner, a director of
the Company, are members of the Supervisory Board of Schuller.
In addition, the Company's proposed offshore decommissioning activities may
require the use of large tug boats, unloading docks, subsea specialists, marine
operators, diving support vessels, and various safety and supply boats. The
Company may seek to form strategic alliances and relationships with third
parties who provide these and other services.
The Company believes that the use of these outside parties will help
minimize the Company's fixed costs and increase its flexibility by gaining
access to qualified personnel when needed. There can be no assurance, however,
that such arrangements will be successful. If any of these arrangements are
cancelled and/or are unsuccessful, and if the Company is unable to secure new
alliances in their place, there would be a material adverse effect on the
Company.
PROPRIETARY PROTECTION
OSAS has eight patent applications pending in the Norway with respect to
various aspects of the Offshore Shuttle design and operation. Patent
applications also are pending in various other countries pursuant to the Patent
Cooperation Treaty and separately filed patent applications. There can be no
28
<PAGE>
assurance as to whether patents will issue from any of OSAS's patent
applications or, if issued, as to the range or degree of protection such issued
patents will afford. In addition, no assurance can be given that others will not
obtain patents claiming aspects similar to those covered by such patent
applications or patents, as the case may be, or that such patents, if issued,
will not be challenged by third parties, invalidated, rendered unenforceable, or
designed around.
Even if patents issue from such patent applications and a competitor were to
infringe thereon, the costs of enforcing such patent rights may be substantial
or even prohibitive. If OSAS chooses not to defend its patent rights, if any,
then the Company may be forced to expend substantial resources to do so. No
assurance can be given that the Company will be successful in any action for
infringement of the technology licensed to it. In addition, there can be no
assurance that the Offshore Shuttle will not infringe on the patent rights of
others, or that patents do not exist or will not be issued in the future that
would have an adverse effect on the Company's ability to manufacture or operate
the Offshore Shuttle. The Company is aware of the existence of a Norwegian
patent which claims the use of a U-shaped structure designed for removing and/or
installing topsides. Based on the opinion of patent counsel, the Company
believes that the Offshore Shuttle will not infringe on this Norwegian patent
because the Offshore Shuttle utilizes different, uniquely mounted topside
connecting mechanisms. There can be no assurance, however, that infringement
proceedings will not be brought against the Company.
The Company also may desire or be required to obtain licenses from others in
order to further develop, produce, and market the Offshore Shuttle effectively.
There can be no assurance that such licenses will be obtainable on commercially
reasonable terms, if at all, that the patents underlying such licenses will be
valid and enforceable, or that the proprietary nature of the unpatented
technology underlying such licenses will remain proprietary. In addition, the
Company relies on unpatented proprietary know-how and trade secrets, and employs
various methods including confidentiality agreements with employees, consultants
and marketing partners to protect its trade secrets and know-how. However, such
methods may not afford complete protection and there can be no assurance that
others will not independently develop such trade secrets and know-how or obtain
access thereto.
COMPETITION
The Company will face competition from companies which provide
decommissioning, installation, and/or transport services using cranes and
barges. In addition, several companies have offered and/or proposed solutions
for lifting large platforms in one piece. These involve the use of multiple
barges, twin-hull tankers, split-hull tankers, and U-shaped semi-submersibles.
One such solution, known as Versatruss, is comprised of two barges and an array
of booms, rigging, and winches. The components are assembled together to produce
what is essentially a giant scissors jack. The barges are symmetrically placed
around the platform, and the booms from each barge are placed in receptacles
that have been welded to the platform deck. The barges are pulled together
sideways using winches. This causes the angle of inclination of the booms to
increase, forcing the deck upwards. The Company believes that the utility of
Versatruss and most of these other alternative solutions will be limited to the
lifting of topsides in calm waters. Although some of such lifting systems may be
capable of lifting jackets, the Company believes that the vertical clearance
limitations inherent in each of such systems will inhibit their ability to lift
the jackets onshore. Rather, the Company believes that such systems only will be
capable of towing jackets from one installation site to another. There can be no
assurance, however, that the Company's beliefs will prove to be accurate.
Competition also may arise from vessels, processes, and/or technologies
currently in development, or developed in the future, by other companies. The
development by others of new or improved vessels, processes, or technologies may
make the services to be marketed by the Company less competitive or obsolete.
29
<PAGE>
Many of the Company's current and potential competitors are likely to have
substantially greater financial, managerial, and technical resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the marketplace, if at all. See "Risk Factors--Competition;
Technological Obsolescence."
REGULATION
Decommissioning of facilities is governed by national legislation within the
framework of a rigorous international and regional regulatory regime. Although
details differ, most oil and gas producing countries have adopted a similar
approach to decommissioning. All feasible options for removal and disposal of
offshore installations are assessed on a case-by-case basis. The offshore
platform operator is required to prepare a decommissioning and abandonment plan
which identifies the decommissioning and abandonment options, evaluates the
technical feasibility of each option, assesses impacts on the environment and on
society, and minimizes risks to human health and safety. The offshore platform
operator then recommends to the responsible ministry the option which best
balances the factors involved.
In 1989, the International Maritime Organization, a technical arm of the
United Nations dealing with safety of navigation, issued guidelines (the "IMO
Guidelines") dealing with the removal of offshore platforms. Recognizing the
magnitude and complexity of removal operations, the IMO Guidelines took into
account not only the size of the platforms but also the capabilities of the
removal vessels. The IMO Guidelines provide that installations weighing less
than 4,000 tons that are in less than 75 meters of water must be completely
removed, while bigger and deeper structures need be only partially removed
provided the remains are covered by an unobstructed water column at least 55
meters deep. For structures emplaced on the seabed on or after January 1, 1998,
the water depth threshold increases from 75 meters to 100 meters. In addition,
all platforms installed on or after January 1, 1998 must be designed so that
removal is feasible.
The Company's proposed operations may be subject to and affected by various
types of national and international regulations. Determining the applicable
regulatory framework will depend, in part, on how the Offshore Shuttles are
classified (e.g., as "ships," "vessels," "installations", etc.), whether (and if
so, where) the Offshore Shuttles are registered or documented, and where the
Company's intended operations are performed. The Company may be required to
obtain certain permits, licenses and certificates with respect to its proposed
operations and to comply with rigorous safety, workplace, and environmental
standards. Moreover, certain employees of the Company may be covered by laws
that operate to make liability limits, if any, established by state workers'
compensation laws inapplicable to these employees and permit the employees and
their representatives to pursue actions against the Company for job related
injuries with generally no limits on the Company's potential liability.
Violations of various statutes and regulations that may be applicable to the
Company's proposed operations can result in, among other things, civil
penalties, remediation expenses, monetary damages, injunctions, cease and desist
orders, and criminal penalties. Some environmental statutes impose strict
liability, rendering a person liable for environmental damage without regard to
negligence or fault on the part of such person. In addition, because such laws
and regulations are changed frequently, it is not possible for the Company to
accurately predict the cost or impact of such laws and regulations on its
planned operations.
The Company's proposed operations may be affected by numerous international
and national laws and regulations relating to protection of the environment. The
technical requirements of the various laws and regulations are complex and
stringent, and compliance is often difficult and expensive. Certain
environmental laws provide for strict liability for remediation of spills and
releases of hazardous substances and some provide liability for damages to
natural resources or threats to public health and safety. Sanctions for
noncompliance may include revocation of permits, corrective action orders,
administrative or civil penalties, and criminal prosecution.
30
<PAGE>
The Company, however, does not believe that compliance with current
environmental laws and regulations is likely to have a material adverse effect
on the Company. Moreover, the Company anticipates that it will be adequately
protected by the insurance policies of the companies that utilize the Company's
services, and it intends to further limit its risk by capping its liability
exposure in its service contracts with such companies. See "Risk Factors--Risk
of Operations; No Insurance."
INSURANCE
The Company's operations are subject to all of the inherent risks of
offshore marine activity, including accidents resulting in the loss of life or
property, environmental mishaps, mechanical failures, and collisions. The
Company intends to obtain insurance against some of these types of risks. It
also anticipates that it will be adequately protected by the insurance policies
of the companies that utilize the Company's services, and it intends to further
limit its risk by capping its liability exposure in its service contracts with
such companies. There can be no assurance, however, that the policies of such
companies will cover the Company or, if they do, that such insurance (or the
insurance obtained by the Company, if any) will be sufficient or effective under
all circumstances or against all hazards to which the Company may be subject. In
addition, there can be no assurance that any contractual limits on liability
will be enforceable or will adequately and effectively limit the Company's
liability exposure, or that the companies that utilize the Company's services
will nevertheless seek to be indemnified by the Company with respect to any and
all losses or damages they suffer or incur. See "Risk Factors--Risk of
Operations; No Insurance."
EMPLOYEES
Marine Shuttle Operations Inc. employs three people. These employees are not
unionized or employed pursuant to any collective bargaining agreement or any
similar agreement. The Company believes its relationship with its employees is
satisfactory.
The Company's success depends to a significant extent upon a the services of
Franz Eder, the President and Chairman of the Board of the Company. Mr. Eder has
entered into a two-year employment agreement with the Company which provides
that Mr. Eder shall devote only so much (but not less than 75%) of his
professional and business time, attention, and energies to his duties and
responsibilities hereunder as is reasonable to insure the Corporation's proper
conduct. The loss of Mr. Eder's services could have a material adverse effect on
the Company.
Management believes that the future success of the Company also will depend
upon the Company's ability to attract and retain highly-skilled managerial and
technical personnel. Competition for such personnel is intense. The Company
competes for such personnel with other companies, academic institutions,
governmental entities and other organizations, some of which may have
substantially greater capital resources than the Company. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel.
FACILITIES
The Company's corporate headquarters are located in approximately 500 square
feet of office space in Houston, Texas. The Company occupies these premises
pursuant to a six-month lease that is automatically renewed at the end of each
lease period for an additional six months unless either party gives thirty days
prior written notice of cancellation.
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company or its
properties is subject.
31
<PAGE>
MANAGEMENT
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- ---------------------------------------------------- --- ------------------------------------------------------
<S> <C> <C>
Franz Eder.......................................... 38 President and Chairman of the Board
Iqbal Akram......................................... 54 Vice President and a Director
George Wilfred Norman Wareham....................... 45 Treasurer, Chief Financial Officer, and Secretary
Jurgen Ternieden(1)................................. 55 Director
Hubert Besner(1).................................... 35 Director
</TABLE>
- ------------------------
(1) Member of the Audit Committee
FRANZ EDER has been President and the Chairman of the Board of the Company
since April 14, 1998, and a director of MSOAS since December, 1997. He has been
Chairman of the Supervisory Board of Schuller Industrieentsorgung AG (formerly
Schuller Industrieentsorgung GmbH, "Schuller") since May, 1998, and served as
the general manager of Schuller from July, 1997 through May, 1998. From 1992 to
1997, Mr. Eder was General Manager at CETEM Industrieentsorgung und
Wiederverwertung GmbH, a German company engaged in waste management. From 1990
to 1991, he was a consultant to several companies, and from 1989 to 1990, he was
the head of the trade finance department at AMRO Handelsbank AG in Munich,
Germany. Mr. Eder received a Masters of Business degree from Business University
of Vienna in 1985.
IQBAL AKRAM has been a Director of the Company since April 14, 1998. He has
been a Vice President of the Company since February 19, 1998 and served as a
consultant to the Company for a period of approximately two weeks prior thereto.
Since 1992, he has been the managing director and a partner in Peregrine
Consultants, S.A., a Luxembourg management consulting firm. Since 1988, he has
been the sole principal of Peregrine Consultants, United Kingdom. In 1996 and
1997, he served as a group advisor and chief operating officer of the House of
Habib, a Pakastani industrial, manufacturing, and financial services firm. In
1995, he served as group financial advisor to the Southern Electric Group in the
implementation of a power project in Pakistan. He currently is a fellow of the
Institute of Directors and the Institutes of Chartered Accountants in England,
Canada, and Pakistan. He received a Bachelor of Science degree from the London
School of Economics and Political Science in 1965.
GEORGE WILFRED NORMAN WAREHAM has been Treasurer, Chief Financial Officer,
and Secretary of the Company since January 1998, and was a director of the
Company from January 1998 through April 14, 1998. Since May, 1996, Mr. Wareham
has been an owner and operator of Wareham Management Ltd., a management
consulting and accounting services firm servicing a number of American and
Canadian public companies, including the Company. From April 1995 to April 1996,
he was employed on a contract basis as an accountant with Wanzel Sigmund &
Overes, a public practice accounting firm. From April 1993 to February 1995, he
was the President of Global Financial Corporation, an investment company located
in the British West Indies. Mr. Wareham is the Secretary, Treasurer, a director,
and a member of the audit committee of Intercap Resource Management Corp.; the
Chief Financial Officer, Secretary, a director, and a member of the audit and
compensation committees of ZMAX Corporation; the Secretary and a director of
Solar Energy Limited; a director and a member of the audit committee of Orko
Gold Corporation; and a director of Cybernet Internet Services International,
Inc., Pyrocap International Corporation, and Bio-Preserve International
Corporation. Mr. Wareham graduated from Carson Graham High School in Vancouver,
Canada in 1971, and completed a certified general accountants course in 1976.
JURGEN TERNIEDEN has been a director of the Company since April 14, 1998,
Chairman of the Board of Offshore Shuttle AS since March 1998, and a director
and the head of the Pipes, Offshore, Special Products Department of Thyssen
Stahlunion GmbH ("TSU") since 1991. From 1981 to 1990, he was a senior sales
manager and head of the Pipes Department at TSU. Mr. Ternieden received his
intermediate high school certificate from Realschule Muelheim in 1959.
32
<PAGE>
HUBERT BESNER has been a director of the Company since May 6, 1998. Since
1994, he has been a partner in the law firm of Besner Kreifels Weber, Munich,
Germany. From 1992 to 1994, he was the head of the legal department of Schneider
AG, a German real estate development company. He currently is a member of the
supervisory board of Cybernet Internet-Dienstleistungen AG, a director of
Cybernet Internet Services International, Inc., a member of the Supervisory
Board of Schuller, and the head of the supervisory board of PIPECAD Integrierte
Softwaresysteme AG. Dr. Besner received his First State Exam in Law from
Ludwig-Maximilians-Universitat in 1986, and his doctorate magna cum laude from
Ludwig-Maximilians-Universitat in 1988.
No family relationship exists between any director or executive officer and
any other director or executive officer.
EXECUTIVE COMPENSATION
Since its inception through February 19, 1998, no executive officer or
director had received any compensation for services rendered as an executive
officer or director of the Company. Effective as of February 1, 1998, the
Company entered into a six-month consulting agreement with each of Iqbal Akram
and Wareham Management Ltd., a Canadian corporation which is owned and operated
by George Wilfred Norman Wareham. The respective agreements provided for Mr.
Akram to receive $5,000 per month and Wareham Management Ltd. to receive $2,500
per month. On February 19, 1998, Mr. Akram was appointed Vice President of the
Company and his consulting agreement was terminated. On April 14, 1998, the
Company entered into a two-year employment agreement with Mr. Akram (the "Akram
Agreement") pursuant to which Mr. Akram shall devote at least 50% of his
professional and business time to the Company as Vice President and shall
receive a salary of $60,000 per annum. On the same day, the consulting agreement
with Wareham Management Ltd. was terminated. In lieu thereof, the Company
entered into a two-year loan out agreement with Wareham Management Ltd. (the
"Wareham Agreement") for the services of Mr. Wareham. Pursuant to the Wareham
Agreement, Wareham Management Ltd. shall loan out the services of Mr. Wareham to
serve the Company as Chief Financial Officer, Treasurer, and Secretary. In
consideration thereof, Wareham Management Ltd. shall receive an annual fee of
$32,100. See "Certain Transactions."
On June 1, 1998, the Company entered into a two-year employment agreement
with Franz Eder, the President and Chairman of the Board of the Company.
Pursuant to such agreement, Mr. Eder shall devote at least 75% of his
professional and business time to the Company and shall receive a salary of
$100,000 per annum. See "Certain Transactions."
STOCK OPTION PLAN
The purpose of the Company's 1998 Stock Option Plan (the "Stock Option
Plan") is to further the growth and development of the Company by encouraging
and enabling employees, officers, and directors of, and consultants and advisors
to, the Company to obtain a proprietary interest in the Company through the
ownership of stock (thereby providing such persons with an added incentive to
continue in the employ or service of the Company and to stimulate their efforts
in promoting the growth, efficiency, and profitability of the Company), and
affording the Company a means of attracting to its service persons of
outstanding quality. Options granted under the Stock Option Plan may be either
incentive stock options, as defined in Section 422 of the Internal Revenue Code
of 1986, as amended, or non-qualified stock options. The Company has reserved
2,000,000 shares of Common Stock for issuance under the Stock Option Plan. As of
March 31, 1998, no options were outstanding under the Stock Option Plan.
The Stock Option Plan may be administered by the Board of Directors or a
committee of the Board (the "Committee"). The Board of Directors or the
Committee, as the case may be, has the power to determine the terms of any
options granted thereunder, including the exercise price, the number of shares
subject to the option, and the exercisability thereof. Options granted under the
Stock Option Plan generally are not transferable, and each option is exercisable
during the lifetime of the optionee only by such optionee. The exercise price of
all incentive stock options granted under the Stock Option Plan must be at least
equal to 100% (110% in the case of optionees who own more than 10% of the total
combined voting power of all classes of stock of the Company) of the fair market
value of the shares of Common
33
<PAGE>
Stock on the date of grant. The term of any option granted under the Stock
Option Plan may not exceed ten years. The specific terms of each option grant
shall be approved by the Board of Directors or the Committee, as the case may
be, and shall be reflected in a written stock option agreement.
The Plan was adopted by the Board of Directors on May 11, 1998, subject,
with respect to the validation of incentive stock options that may be granted
under the Stock Option Plan, to approval of the Stock Option Plan by the
stockholders of the Company prior to May 11, 1999. If stockholder approval is
not obtained prior to such date, any grants of incentive stock options under the
Stock Option Plan made prior to such date will be rescinded. The Stock Option
Plan shall expire at the end of the day on May 11, 2008 (except as to options
outstanding on that date).
LIMITATION OF LIABILITY; INDEMNIFICATION
The Company's Articles of Incorporation: (i) eliminates the personal
liability of the directors of the Company to the fullest extent permitted by the
General Corporation Law of the State of Nevada (the "GCL") and (ii) provides
that the Company shall indemnify, to the fullest extent permitted by the GCL,
any and all persons whom it shall have the power to indemnify under the GCL from
all expenses, liabilities, or other matters referred to in or covered by the
GCL. The By-Laws of the Company provide that the Company shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the Company to
procure a judgment in its favor) by reason of the fact that such person is or
was an agent of the Company, against expenses, judgments, fines, settlements,
and other amounts actually and reasonably incurred in connection with such
proceeding to the fullest extent permitted under the GCL.
PRINCIPAL STOCKHOLDERS
The following table sets forth, certain information as of June 15, 1998,
regarding beneficial ownership of the Common Stock by (i) each stockholder known
by the Company to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock; (ii) each director of the Company; (iii)
each executive officer of the Company; and (iv) all of the Company's current
executive officers and directors as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF CLASS
NUMBER OF SHARES OF BENEFICIALLY OWNED
COMMON STOCK ----------------------------------------
NAME OF BENEFICIAL HOLDER BENEFICIALLY OWNED BEFORE OFFERING(2) AFTER OFFERING(2)
- -------------------------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
Franz Eder.............................................. 7,600,000(1) 22.6% 14.2%
Iqbal Akram............................................. 0 0% 0%
George Wilfred Norman Wareham........................... 0 0% 0%
Jurgen Ternieden........................................ 332,499(3) * 0%(4)
Hubert Besner........................................... 0 0% 0%
All officers and directors as a group (5 persons)....... 7,932,499 23.6% 14.2%
</TABLE>
- ------------------------
(1) Such shares are being held by a trustee pursuant to the terms of a pooling
trust agreement. Such shares may not be disposed of by Mr. Eder until they
are released to him by the trustee. Mr. Eder shall receive ten percent of
such shares on July 1, 1999, an additional thirty percent of such shares on
July 1, 2000, an additional thirty percent of such shares on July 1, 2001,
and the balance of such shares on July 1, 2002. The trustee shall seek
instructions from Mr. Eder before taking any action as a stockholder with
respect to any of the shares held in trust.
(2) Assumes completion of the Additional OSAS Exchanges.
(3) In connection with the OSAS Exchanges, such shares are being held in escrow
pending completion of the Offering.
(4) Assumes all Selling Stockholder Shares are sold pursuant to the Registration
Statement.
* Less than 1%
34
<PAGE>
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
In April, 1998, the Company acquired all of the issued and outstanding stock
of MSOAS from Franz Eder, the President and Chairman of the Board of the
Company, in exchange for 7,600,000 shares of Common Stock (the "MSOAS
Exchange"). In May, 1998, the Company acquired 3,291,738 shares of OSAS
(approximately 68% of the outstanding OSAS capital stock) in exchange for
4,937,607 shares of Common Stock (the "OSAS Exchanges"). All of such shares are
being held in escrow subject to completion of the Offering. On May 20, 1998, the
Company entered into two agreements to acquire an additional 686,668 shares of
OSAS (approximately 14% of the outstanding OSAS capital stock) in exchange for
1,030,002 shares of Common Stock (the "Additional OSAS Exchanges"). Subject to
the satisfaction of certain conditions precedent, the Company anticipates that
the Additional OSAS Exchanges will close soon after the completion of the
Offering. The Company has agreed to cover the disposition of the shares of
Common Stock issued or to be issued pursuant to the MSOAS Exchange, the OSAS
Exchanges, and the Additional OSAS Exchanges (collectively "the Selling
Stockholder Shares") in the Registration Statement.
The following table sets forth the names and addresses of each of the
Selling Stockholders and the number of shares of Common Stock owned by each of
the Selling Stockholders as of the date of this Prospectus.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- ----------------------------------------------------------------------------- ----------
<S> <C>
Franz Eder(2)................................................................ 7,600,000(3)
4410 Montrose Blvd.
Houston, Texas 77006
SPAX Holding AS.............................................................. 547,500
Stranden 3A
0250 Oslo, Norway
Aasens Trykkerier AS......................................................... 87,600
Hausmannsgt 6
0186 Oslo,Norway
Arne Martinsen............................................................... 223,500
Snnaveien 94
1476 Rasta, Norway
Birger Holten................................................................ 78,900
Rognerudveien 33B
0681 Oslo, Norway
Jochen Schene(4)............................................................. 332,499
Ohlauer Weg 12
40627 Dusseldorf, Germany
Frank Samuels................................................................ 324,999
Konradinstr 20
47058 Duisburg, Germany
Jurgen Ternieden(5).......................................................... 332,499
Saturnweg 26
45478 Mulheim, Germany
Thyssen Stahlunion GmbH(6)................................................... 333,000
Hans Gunter S. str 1
40235 Dusseldorf, Germany
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- ----------------------------------------------------------------------------- ----------
<S> <C>
Thor Stang................................................................... 190,500
Ekebergveien 76
3080 Holmestrand, Norway
Norsk SMB Invest 1........................................................... 339,000
Stranden 3A
0250 Oslo, Norway
Norsk SMB Invest 2........................................................... 498,000
Stranden 3A
0250 Oslo, Norway
Norsk SMB Invest 3........................................................... 186,660
Stranden 3A
0250 Oslo, Norway
Norsk SMB Invest 4........................................................... 119,700
Stranden 3A
0250 Oslo, Norway
Nordas Invest AS............................................................. 250,200
Midttunlia 73
5050 Nestun, Norway
Inger Egeberg Sogstad........................................................ 18,000
Fjordallen 14
0250 Oslo, Norway
Erik Staumo.................................................................. 56,580
Fjordallen 14
0250 Oslo, Norway
Knut Rygh.................................................................... 70,140
Nordhellinga 7
1313 Vyenenga, Norway
Georg Tidemann Andersen...................................................... 10,140
Bjrnstjeme B 21
3000 Drammen, Norway
Arvid Kolle.................................................................. 38,700
Tulipanveien 20
4300 Sandnes, Norway
AS Ineta..................................................................... 1,500
Postboks 2406 Solli
0201 Oslo, Norway
Concordia Capo AS............................................................ 4,500
Postboks 21
5501 Haugesund, Norway
Concordia Foss AS............................................................ 4,500
Postboks 21
5501 Haugesund, Norway
Concordia Star AS............................................................ 4,500
Postboks 21
5501 Haugesund, Norway
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- ----------------------------------------------------------------------------- ----------
<S> <C>
Einar Myklebust.............................................................. 65,100
Fyrgangen 17
1560 Larkollen, Norway
Erik Kristen-Johanssen....................................................... 14,700
Postboks 2406 Solli
0201 Oslo, Norway
Gunnar Greibokk.............................................................. 34,500
4660 Evje, Norway
Gunnar Jrgensen.............................................................. 22,500
Solveien 4
1177 Oslo,Norway
Hannestad Mek AS............................................................. 6,000
Kanalveien 4
3110 Tnsberg, Norway
Jan Krohn-Hansen............................................................. 53,310
Nordasneset 63
5046 Radal, Norway
Jens Holtung................................................................. 90,000
Blakollveien 18
3175 Ramnes, Norway
Johnco AS.................................................................... 30,000
Postboks 229
5501 Haugesund, Norway
Johs Owren................................................................... 40,140
Tllfsrud gard
2600 Lillehammer, Norway
Jon Fosse.................................................................... 11,250
Smebyveien 2
2300 Hamar, Norway
Karlander Invest AS.......................................................... 36,000
Postboks 1785 Vika
0122 Oslo, Norway
Maria Hareide................................................................ 26,700
Dicksvei 13
1324 Lysaker, Norway
Nistad Finans og Eiendom AS.................................................. 207,150
Midttunlia 73
5051 Oslo, Norway
Ole-Johan Olsen.............................................................. 42,300
Fynveien 24
3132 Husysund, Norway
Rolf Ness.................................................................... 41,790
Milje
5593 Skanevik, Norway
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- ----------------------------------------------------------------------------- ----------
<S> <C>
Sigfred Lyngy................................................................ 96,150
Stortingsgaten 28
0161 Oslo, Norway
Terje Rsj.................................................................... 22,500
Van der Weld weg 5
5040 Paradis, Norway
Trade Invest AS.............................................................. 30,000
Postboks 214
1415 Oppegard, Norway
Zaco AS...................................................................... 14,400
Postboks 563
4801 Arendal, Norway
Per Bull Haugsen(7).......................................................... 332,499
Gyldenlvesgt. 12
0260 Oslo, Norway
G. Foss Beheer b.v.(8)....................................................... 697,503
Mezenpelin 11
2566 ZS Den Haag
The Netherlands
</TABLE>
- ------------------------
(1) The number of shares of Common Stock listed indicates both the number of
shares owned by the Selling Stockholder prior to the Offering and the number
of shares to be offered for the Selling Stockholder's account. Assuming all
of the Selling Stockholder Shares are sold, none of the Selling Stockholders
will own any shares of Common Stock after completion of the Offering.
(2) Franz Eder is the President and Chairman of the Board of the Company and a
director of MSOAS.
(3) Such shares are being held by a trustee pursuant to the terms of a pooling
trust agreement. Such shares may not be disposed of by Mr. Eder until they
are released to him by the trustee. Mr. Eder shall receive ten percent of
such shares on July 1, 1999, an additional thirty percent of such shares on
July 1, 2000, an additional thirty percent of such shares on July 1, 2001,
and the balance of such shares on July 1, 2002. The trustee shall seek
instructions from Mr. Eder before taking any action as a stockholder with
respect to any of the shares held in trust.
(4) Jochen Schene is a member of the Board of Directors of OSAS.
(5) Jurgen Ternieden is a director of the Company, Chairman of the Board of
OSAS, and a director and the head of the Pipes, Offshore, Special Products
Department of Thyssen Stahlunion GmbH.
(6) MSOAS has formed a strategic alliance with Thyssen Stahlunion GmbH with
respect to the marketing of the Company's proposed services.
(7) Per Bull Haugsen is an officer of OSAS and one of the developers of the
Offshore Shuttle concept.
(8) G. Foss Beheer b.v. is a Dutch corporation that is owned and operated by
Gunnar Foss, a director of OSAS and one the developers of the Offshore
Shuttle concept.
Each of the Selling Stockholders are entitled to receive all of the proceeds
from the future sale of their Selling Stockholder Shares.
The Selling Stockholders, from time to time, depending on market conditions
and other factors, may offer and/or sell their Selling Stockholder Shares in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated transactions.
Their Selling Stockholder Shares may be sold by one or more methods including,
without
38
<PAGE>
limitation, (i) block trades in which a broker or dealer so engaged will attempt
to sell the Selling Stockholder Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (ii) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (iii) ordinary brokerage transactions and
transactions in which the broker solicits purchases; and (iv) face to face
transactions between sellers and purchasers without a broker or dealer. In
effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from the Selling Stockholders in amounts to be
negotiated. Such brokers, dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act, in
connection with such sales.
The Company will bear all costs and expenses of the registration of the
Selling Stockholder Shares under the Securities Act and certain state securities
laws, other than fees of counsel for the Selling Stockholders and any discounts
or commissions payable with respect to sales of the Selling Stockholder Shares.
Sales of the Selling Stockholder Shares by the Selling Stockholders may have
an adverse effect on the market price of the Common Stock. Moreover, the Selling
Stockholders are not restricted as to the number of Selling Stockholder Shares
that may be sold at any one time, and it is possible that a significant number
of Selling Stockholder Shares could be sold at the same time, which also may
have an adverse effect on the market price of the Common Stock.
39
<PAGE>
CERTAIN TRANSACTIONS
On April 14, 1998, the Company issued 7,600,000 shares of Common Stock to
Franz Eder, the President and the Chairman of the Board of the Company, in
exchange for the 999,000 shares of MSOAS capital stock (constituting all of
MSOAS's issued and outstanding capital stock) held by Mr. Eder. The stock
certificate evidencing the shares of Common Stock that were issued to Mr. Eder
is being held by a trustee pursuant to the terms of a pooling trust agreement.
Such shares may not be disposed of by Mr. Eder until they are released to him by
the trustee. Mr. Eder shall receive ten percent of such shares on July 1, 1999,
an additional thirty percent of such shares on July 1, 2000, an additional
thirty percent of such shares on July 1, 2001, and the balance of such shares on
July 1, 2002. The trustee shall seek instructions from Mr. Eder before taking
any action as a stockholder with respect any of the shares held in trust. The
disposition of Mr. Eder's shares is covered by the Registration Statement.
In May, 1998, the Company acquired 3,291,738 shares of OSAS (approximately
68% of the outstanding OSAS capital stock) in exchange for 4,937,607 shares of
Common Stock. All of such shares are being held in escrow subject to completion
of the Offering. In connection therewith, the 221,666 OSAS shares held by Jurgen
Ternieden, a director of the Company, were exchanged for 332,499 shares of
Common Stock. The disposition of Mr. Ternieden's shares of Common Stock is
covered by the Registration Statement.
The Company entered into a loan agreement (the "Loan Agreement"), dated as
of March 12, 1998, with ValorInvest Ltd., a merchant bank based in Geneva,
Switzerland ("ValorInvest") pursuant to which ValorInvest agreed to lend an
aggregate of up to $1,500,000 to the Company at such times as the Company shall
request; provided, however, advances shall be made in increments of $250,000 and
shall not exceed $500,000 in any single month. Pursuant to the Loan Agreement,
the Company issued a non-negotiable promissory note to ValorInvest in the
principal amount of $1,500,000 (the "Bridge Note"). Any monies advanced to the
Company under the Bridge Note shall bear interest at the rate of 7.5% per annum,
and shall be due and payable upon the earlier of December 31, 1998 or the
completion of a public offering for gross proceeds of at least $100,000,000. As
of the date hereof, an aggregate of $1,000,000 has been advanced to the Company
under the Bridge Note.
The Company currently leases its office space from Intercap Resource
Management U.S., Inc. ("Intercap U.S."), a wholly-owned subsidiary of Intercap
Resource Management Corp. ("Intercap"). Intercap is an oil and gas exploration,
development, and production company traded on the Vancouver Stock Exchange. Jim
Ford, the former President and a former director of the Company, is the
President and a director of Intercap and Intercap U.S.; George Wilfred Norman
Wareham, the Treasurer, Chief Financial Officer, and Secretary of the Company,
is the Secretary, Treasurer, and a director of Intercap and the Treasurer, a
Vice President, and a director of Intercap U.S.; and Shafiq Nazerali, a director
of ValorInvest, is a director of Intercap and, pursuant to a six-month
consulting agreement effective as of February 1, 1998, is a consultant to the
Company at a fee of $10,000 per month.
In 1997, the Underwriter, a minority-owned subsidiary of the Underwriter, an
officer/principal stockholder of the Underwriter, and various parties related to
such officer/principal stockholder acquired an aggregate of 4,750,000 shares of
Common Stock from a founder of the Company for an aggregate purchase price of
$104,500. At the time of such acquisition, there was no public market for the
Common Stock.
Effective as of February 1, 1998, the Company entered into a six-month
consulting agreement with each of Iqbal Akram and Wareham Management Ltd., a
Canadian corporation which is owned and operated by George Wilfred Norman
Wareham. The respective agreements provided for Mr. Akram to receive $5,000 per
month and Wareham Management Ltd. to receive $2,500 per month. On February 19,
1998, Mr. Akram was appointed Vice President of the Company and his consulting
agreement was terminated. On April 14, 1998, the Company entered into a two-year
employment agreement with Mr. Akram (the "Akram Agreement") pursuant to which
Mr. Akram shall devote at least 50% of his
40
<PAGE>
professional and business time to the Company as Vice President and shall
receive a salary of $60,000 per annum. On the same day, the consulting agreement
with Wareham Management Ltd. was terminated. In lieu thereof, the Company
entered into a two-year loan out agreement with Wareham Management Ltd. (the
"Wareham Agreement") for the services of Mr. Wareham. Pursuant to the Wareham
Agreement, Wareham Management Ltd. shall loan out the services of Mr. Wareham to
serve the Company as Chief Financial Officer, Treasurer, and Secretary. In
consideration thereof, Wareham Management Ltd. shall receive an annual fee of
$32,100. See "Certain Transactions."
On June 1, 1998, the Company entered into a two-year employment agreement
with Franz Eder, the President and Chairman of the Board of the Company.
Pursuant to such agreement, Mr. Eder shall devote at least 75% of his
professional and business time to the Company and shall receive a salary of
$100,000 per annum.
As of May 31, 1998, the Company paid approximately $10,350 to Schuller for
marketing research and other services rendered. In addition, MSOAS has entered
into an agreement with Schuller with respect to the final cleaning, disassembly,
and disposal of the platform segment brought onshore. Franz Eder and Dr. Hubert
Besner are members of the Supervisory Board of Schuller.
MSOAS has entered into an agreement with TSU with respect to the marketing
of its proposed services. As of the date of this prospectus, no monies have been
paid to TSU under such agreement. Jurgen Ternieden, a director of the Company,
is a director and the head of the Pipes, Offshore, Special Products Department
of TSU.
As of March 31, 1998, MSOAS has paid approximately $44,000 to the law firm
of Besner Kreifels Weber for legal services rendered. Dr. Hubert Besner, a
director of the Company, is a member of Besner Kreifels Weber.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 75,000,000 shares of
common stock, par value $0.001 per share (the "Common Stock").
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share held on
all matters properly submitted to the stockholders for their vote. Holders of
shares of outstanding Common Stock are entitled to those dividends declared by
the Board of Directors out of legally available funds. Holders of shares of
outstanding Common Stock have no preemptive, conversion, or redemption rights.
All of the issued and outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and nonassessable.
STATUTORY BUSINESS COMBINATION PROVISIONS
The Company is subject to the provisions of Section 78.411 et seq. of the
Nevada General Corporation Law ("Business Combination Act"). The Business
Combination Act provides, with certain exceptions, that a Nevada corporation may
not engage in any of a broad range of business combinations with a person, or an
affiliate or an associate of such person, who is an "interested stockholder" for
a period of three years from the date that such person became an interested
stockholder, unless the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the board of directors
of the corporation before the person becomes an interested stockholder.
The Business Combination Act further provides that a Nevada corporation may
not engage in such a business combination after the expiration of three years
from the date that such person became an interested stockholder, unless the
business combination is approved by the board of directors of the corporation
before the person became an interested stockholder or by the affirmative vote of
a majority of
41
<PAGE>
outstanding votes not beneficially owned by the interested stockholder at a
meeting called not earlier than three years after the interested stockholder's
date of acquiring shares.
Under the Business Combination Act, an "interested stockholder" is defined
as any person that is (i) the owner of 10% or more of the outstanding voting
stock of the corporation or (ii) an affiliate or associate of the corporation
and was the owner of 10% or more of the outstanding voting stock of the
corporation at any time within the three year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
stockholder.
At its option, a corporation may exclude itself from the coverage of the
Business Combination Act by amending its Articles of Incorporation by action of
its stockholders, other than interested stockholders and their affiliates and
associates, to exempt itself from coverage, provided that such charter amendment
may not become effective until 18 months after the date it is adopted and does
not apply to any combination of the corporation with an interested stockholder
whose date of acquiring shares is on or before the effective date of the
amendment. The Company has not adopted such an amendment to its Articles of
Incorporation.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is U.S. Stock Transfer
Corporation, 1745 Gardena Avenue, Glendale, California 91204.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the consummation of the Offering (and the Additional OSAS Exchanges),
the Company will have 53,587,609 shares of Common Stock outstanding. Except for
the 7,600,000 shares of Common Stock owned by Franz Eder, the President and
Chairman of the Board of the Company, all of the 33,567,609 shares of Common
Stock being offered hereby will be immediately tradeable without restriction or
further registration under the Securities Act. Mr. Eder's shares are being held
by a pooling trustee pursuant to the terms of a pooling trust agreement.
Although the disposition of Mr. Eder's shares are covered by the Registration
Statement, pursuant to the pooling trust agreement Mr. Eder cannot dispose of
such shares until they are released to him by the trustee. Mr. Eder shall
receive ten percent of such shares on July 1, 1999, an additional thirty percent
of such shares on July 1, 2000, an additional thirty percent of such shares on
July 1, 2001, and the balance of such shares on July 1, 2002. Subject to the
continued effectiveness of the Registration Statement, such shares shall be
immediately tradeable without restriction or further registration under the Act
upon release of such shares to Mr. Eder.
If the Registration Statement is not in effect at the time such shares are
released to Mr. Eder, such shares may not be resold in a public distribution
except in compliance with the registration requirements of the Securities Act or
pursuant to a valid exemption from registration, including the safe harbor
provided by Rule 144. In general, under Rule 144 as currently in effect, a
person (or persons whose shares are aggregated) who has beneficially owned
restricted shares for at least one year (including the holding period of any
prior owner except an affiliate) would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of (i)
one percent of the number of shares of Common Stock then outstanding
(approximately 535,876 shares immediately after the Offering), or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. No prediction
can be made as to the effect, if any, that sales of such shares of Common Stock
or
42
<PAGE>
even the availability of such shares for sale will have on the market prices
prevailing from time to time. The possibility that substantial amounts of Common
Stock may be sold in the public market may adversely affect prevailing market
prices for the Common Stock and could impair the Company's ability to raise
capital through the sale of its equity securities.
UNDERWRITING
The Company has entered into an underwriting agreement (the "Underwriting
Agreement") with Berliner Freiverkehr (Aktien) AG (the "Underwriter") pursuant
to which it will serve as the underwriter in connection with the Offering. In
accordance with the Underwriting Agreement, the Company has retained the
Underwriter to conduct, as its exclusive agent, an offering of 20,000,000 shares
of Common Stock on a "best efforts, all or none" basis, for a period (the
"Offering Period") of 30 days from the effective date of the Registration
Statement. The Offering Period may be extended for an additional 30 days by the
mutual agreement of the Company and the Underwriter, and an additional five days
may be added to the Offering Period solely for purposes of allowing checks to
clear. All funds received by the Underwriter will be deposited no later than
noon on the next business day following their receipt by the Underwriter in a
separate account, to be held by the Underwriter as agent for the subscribers of
the Shares. Payments shall be made either by check or by wire transfer. All
checks for subscriptions of the shares of Common Stock should be made payable to
"Berliner Freiverkehr (Aktien) AG."
If, during the Offering Period, subscriptions are received for all of the
Shares, then the Company and the Underwriter may have a closing to accept such
subscriptions. At the closing, all funds received, less the Underwriter's
commissions, will be delivered to the Company and certificates representing the
Shares purchased promptly will be delivered to or for the account of the
subscribers thereof. If no closing takes place during the Offering Period, then
all funds promptly will be returned to the subscribers thereof without any
deduction therefrom or interest thereon. Until such time as funds have been
released from escrow and the Shares have been delivered to or for the account of
the subscribers therefor, such subscribers will not be deemed to be holders of
the Shares.
The Underwriter has advised the Company that it proposes to offer the Shares
to the public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such prices less concessions not in excess
of $ per Share. Such dealers may reallow a concession not in excess of $ per
Share to certain other dealers. After the commencement of the Offering, the
concession and reallowance may be changed by the Underwriter.
The Underwriter has informed the Company that it does not expect sales to
discretionary accounts by the Underwriter to exceed five percent (5%) of the
Shares offered hereby.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act.
The foregoing is a summary of the principal terms of the underwriting
agreement and does not purport to be complete. Reference is made to a copy of
such agreement which is filed as an exhibit to the Registration Statement. See
"Additional Information."
In 1997, the Underwriter, a minority-owned subsidiary of the Underwriter, an
officer/principal stockholder of the Underwriter, and various parties related to
such officer/principal stockholder acquired an aggregate of 4,750,000 shares of
Common Stock from a founder of the Company for an aggregate purchase price of
$104,500. At the time of such acquisition, there was no public market for the
Common Stock.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Breslow & Walker, LLP, New York, New York.
43
<PAGE>
EXPERTS
The Company's financial statements as of December 31, 1997 and for the
period from May 23, 1997 (inception) through December 31, 1997 appearing in this
Prospectus have been audited by Deloitte & Touche, Vancouver, British Columbia,
Canada, independent auditors, as set forth in their report thereon appearing
elsewhere herein, and are included herein in reliance upon the authority of such
firm as experts in accounting and auditing.
The financial statements of MSOAS as of December 31, 1997 and for the period
from December 10, 1997 (inception) through December 31, 1997, and the financial
statements of OSAS as of December 31, 1997 and for the period from November 29,
1996 (inception) through December 31, 1997 appearing in this Prospectus have
been audited by Deloitte & Touche, Oslo, Norway, independent auditors, as set
forth in their reports thereon appearing elsewhere herein, and are included
herein in reliance upon the authority of such firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C., a Registration Statement on Form S-1 under the Securities Act
of 1933, as amended, for the registration of the Offering. This Prospectus,
which is part of the Registration Statement, does not contain all of the
information contained in the Registration Statement. For further information
with respect to the Company and the shares of Common Stock offered hereby,
reference is made to the Registration Statement, including the exhibits thereto,
which may be inspected, without charge, at the office of the Securities and
Exchange Commission, or copies of which may be obtained from the Commission in
Washington, D.C., upon payment of the requisite fees, or from the Commission's
Website at http://www.sec.gov. Statements contained in this Prospectus as to the
intent of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
44
<PAGE>
MARINE SHUTTLE OPERATIONS, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Financial Statements of Marine Shuttle Operations Inc.
Independent Auditor's Report............................................................................. F-2
Balance Sheet as of December 31, 1997 and March 31, 1998 (unaudited)..................................... F-3
Statement of Loss for the period from May 23, 1997 (inception) through December 31, 1997 and for the
three-month period ended March 31, 1998 (unaudited).................................................... F-4
Statement of Cash Flows for the period from May 23, 1997 (inception) through December 31, 1997 and for
the three-month period ended March 31, 1998 (unaudited)................................................ F-5
Statement of Shareholders' Equity (Deficit) for the period from May 23, 1997 (inception) through December
31, 1997 and for the three-month period ended March 31, 1998 (unaudited)............................... F-6
Notes to Financial Statements............................................................................ F-7
Financial Statements of Marine Shuttle Operations AS
Independent Auditor's Report............................................................................. F-12
Balance Sheet as of December 31, 1997 and March 31, 1998 (unaudited)..................................... F-13
Statement of Loss for the period from December 10, 1997 (inception) through December 31, 1997 and for the
three-month period ended March 31, 1998 (unaudited).................................................... F-14
Statement of Cash Flows for the period from December 10, 1997 (inception) through December 31, 1997 and
for the three-month period ended March 31, 1998 (unaudited)............................................ F-15
Statement of Shareholders' Equity for the period from December 10, 1997 (inception) through December 31,
1997 and for the three-month period ended March 31, 1998 (unaudited)................................... F-16
Notes to Financial Statements............................................................................ F-17
Financial Statements of Offshore Shuttle AS
Independent Auditor's Report............................................................................. F-21
Balance Sheet as of December 31, 1997 and March 31, 1998 (unaudited)..................................... F-22
Statement of Loss for the period from November 29, 1996 (inception) through December 31, 1997 and for the
three-month period ended March 31, 1998 (unaudited).................................................... F-23
Statement of Cash Flows for the period from November 29, 1996 (inception) through December 31, 1997 and
for the three-month period ended March 31, 1998 (unaudited)............................................ F-24
Statement of Shareholders' Equity for the period from November 29, 1996 (inception) through December 31,
1997 and for the three-month period ended March 31, 1998 (unaudited)................................... F-25
Notes to Financial Statements............................................................................ F-26
Selected Unaudited Pro Forma Consolidated Financial Information
Explanatory Statement.................................................................................... F-33
Pro Forma Condensed Balance Sheet........................................................................ F-34
Pro Forma Consolidated Statements of Loss
-Three months ended March 31, 1998................................................................... F-35
-Period ended December 31, 1997...................................................................... F-36
Notes to the Pro Forma Consolidated Financial Information................................................ F-37
</TABLE>
F-1
<PAGE>
AUDITORS' REPORT
To the Shareholders of
Marine Shuttle Operations Inc.
(formerly Geoteck International, Inc.)
We have audited the balance sheet of Marine Shuttle Operations Inc. as at
December 31, 1997 and the statements of loss, shareholders' equity (deficit) and
cash flows for the period from the date of incorporation, May 23, 1997, to
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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 1997 and the
results of its operations and its cash flows for the period from the date of
incorporation, May 23, 1997, to December 31, 1997 in accordance with accounting
principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's negative working capital and deficit raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning this matter is also described in Note 1. The financial
statements do not contain any adjustments that might result from the outcome of
this uncertainty.
/s/ Deloitte & Touche
Chartered Accountants
Vancouver, British Columbia
July 2, 1998
F-2
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
BALANCE SHEET
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1998 1997
----------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
CURRENT
Cash................................................................................. $ 17,063 $ 9,015
Prepaid expenses..................................................................... 1,019 --
Investment (Note 3).................................................................. 10,000 --
----------- ------------
Total current assets................................................................. 28,082 9,015
DUE FROM MARINE SHUTTLE OPERATIONS AS (Note 4)......................................... 250,780 --
INCORPORATION COSTS.................................................................... 2,000 2,000
----------- ------------
TOTAL ASSETS $ 280,862 $ 11,015
----------- ------------
----------- ------------
LIABILITIES
CURRENT
Accounts payable..................................................................... $ 73,180 $ 16,092
Due to a related company (Note 8).................................................... -- 3,854
Note payable (Note 5)................................................................ 401,830 --
----------- ------------
Total current liabilities............................................................ 475,010 19,946
----------- ------------
SHAREHOLDERS' EQUITY (DEFICIT)
Authorized
40,000,000 common shares with a par value of $0.001
Issued and outstanding
20,020,000 common shares with a par value of $0.001 at
March 31, 1998 and December 31, 1997............................................. 20,020 20,020
Additional paid-in capital........................................................... 133,980 133,980
Accumulated deficit.................................................................. (348,148) (162,931)
----------- ------------
Total shareholders' equity (deficit)................................................. (194,148) (8,931)
----------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT)....................................................... $ 280,862 $ 11,015
----------- ------------
----------- ------------
</TABLE>
CONTINUING OPERATIONS (Note 1)
F-3
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
STATEMENT OF LOSS
THREE MONTHS ENDED MARCH 31, 1998 AND FROM THE DATE OF INCORPORATION,
MAY 23, 1997, TO DECEMBER 31, 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1998 1997
------------- -------------
<S> <C> <C>
(UNAUDITED)
EXPENSES
Accounting, audit and bookkeeping.................................................. $ 12,350 $ 15,511
Bank charges....................................................................... 149 300
Consulting fees.................................................................... 30,000 30,000
Entertainment...................................................................... 102 3,005
Interest........................................................................... 1,050 --
Legal.............................................................................. 28,346 24,917
Listing and filing fees............................................................ 3,373 31,000
Office and printing................................................................ 653 5,669
Management fees.................................................................... -- 40,000
Miscellaneous...................................................................... (90) --
Telephone.......................................................................... 908 2,347
Transfer agent fees................................................................ 863 2,018
Travel and lodging................................................................. 17,513 8,164
Write-down of investment........................................................... 90,000 --
------------- -------------
185,217 162,931
------------- -------------
NET LOSS FOR THE PERIOD............................................................ $ (185,217) $ (162,931)
------------- -------------
Basic and diluted loss per share................................................... $ (0.01) $ (0.01)
------------- -------------
Weighted average shares Outstanding................................................ 20,020,000 20,000,000
------------- -------------
</TABLE>
F-4
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
STATEMENT OF CASH FLOW
THREE MONTHS ENDED MARCH 31, 1998 AND FROM THE DATE OF INCORPORATION,
MAY 23, 1997, TO DECEMBER 31, 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1998 1997
----------- ------------
<S> <C> <C>
(UNAUDITED)
OPERATING ACTIVITIES
Net loss for the period.............................................................. $(185,217) $ (162,931)
Adjustments to reconcile net loss to net cash provided by operating activities
Write-down of investment........................................................... 90,000 --
Changes in non-cash working capital
Prepaid costs and other............................................................ (1,019) --
Accounts payable................................................................... 57,088 16,092
Due to related party............................................................... (3,854) 3,854
----------- ------------
Net cash used in operating activities.................................................. (43,002) (142,985)
----------- ------------
FINANCING ACTIVITIES
Issuance of capital stock............................................................ -- 170,000
Share of issue costs................................................................. -- (16,000)
Note payable......................................................................... 401,830 --
----------- ------------
Net cash generated by financing activities............................................. 401,830 154,000
----------- ------------
INVESTING ACTIVITIES
Incorporation costs.................................................................. -- (2,000)
Investment........................................................................... (100,000) --
Advance to Marine Shuttle Operations AS.............................................. (250,780) --
----------- ------------
Net cash used in investing activities.................................................. (350,780) (2,000)
----------- ------------
CHANGE IN CASH DURING THE PERIOD....................................................... 8,048 9,015
CASH, BEGINNING OF PERIOD.............................................................. 9,015 --
----------- ------------
CASH, END OF PERIOD.................................................................... $ 17,063 $ 9,015
----------- ------------
----------- ------------
</TABLE>
F-5
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
THREE MONTHS ENDED MARCH 31, 1998 AND FROM THE DATE OF INCORPORATION,
MAY 23, 1997, TO DECEMBER 31, 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
TOTAL
COMMON SHARES SHAREHOLDERS'
----------------------- PAID-IN ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL DEFICIT (DEFICIT)
------------ --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Issued on incorporation....................... 10,000,000 $ 10,000 $ -- $ -- $ 10,000
Private placement............................. 10,020,000 10,020 133,980 -- 144,000
Net loss...................................... -- -- -- (162,931) (162,931)
------------ --------- ---------- ------------ --------------
Balance at December 31, 1997.................. 20,020,000 20,020 133,980 (162,931) (8,931)
Net loss...................................... -- -- -- (185,217) (185,217)
------------ --------- ---------- ------------ --------------
Balance at March 31, 1998 (Unaudited)......... 20,020,000 $ 20,020 $ 133,980 $ (348,148) $ (194,148)
------------ --------- ---------- ------------ --------------
------------ --------- ---------- ------------ --------------
</TABLE>
F-6
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
1. CONTINUING OPERATIONS
Marine Shuttle Operations Inc. (the "Company") was incorporated under the
name Geoteck International, Inc. on May 23, 1997 in Nevada, U.S.A. The Company
changed its name to Marine Shuttle Operations Inc. on May 28, 1998.
The Company was organized with the intent to be a holding company which will
acquire and/or form joint ventures with corporate entities conducting various
types of businesses throughout the world.
The Company has negative working capital and a deficit. The ability for the
Company to continue as a going concern is dependent on the ability of the
Company to obtain additional financing. The Company plans, in conjunction with
the acquisitions outlined in Notes 4 and 6, to raise approximately $100,000,000,
net of commissions and costs of issue in net proceeds.
2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States and reflect the following
significant accounting principles:
(A)ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(B) EARNINGS (LOSS) PER COMMON SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share (SFAS 128), which established new
standards for computing and presenting earnings per share effective for
fiscal years ending after December 15, 1997. With SFAS 128, primary
earnings per share is replaced by basic earnings per share, which is
computed by dividing income available to common shareholders by the
weighted average number of shares outstanding for the period. In
addition, SFAS 128 requires the presentation of diluted earnings per
share, which includes the potential dilution that could occur if dilutive
securities were exercised or converted into common stock. The computation
of diluted EPS does not assume the conversion or exercise of securities
if their effect is anti-dilutive. Common equivalent shares consist of the
common shares issuable upon the conversion of the convertible loan notes
and special warrants (using the if-converted method) and incremental
shares issuable upon the exercise of stock options and share purchase
warrants (using the treasury stock method).
(C) CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or
less.
F-7
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(D) INVESTMENTS
The Company carries its investments in private companies at the lower of
cost and net realizable value.
(E) FINANCIAL INSTRUMENTS
The Company estimates that the carrying values of its cash and cash
equivalents, due from Marine Shuttle Operation AS, accounts payable, due
to related party and note payable approximate fair value at March 31,
1998 and December 31, 1997 due to the short-term to maturity and the
arms-length nature of the transactions.
(F) RECENT PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement
No. 130 (SFAS 130), Reporting Comprehensive Income, which is required to
be adopted for fiscal years beginning on or after December 15, 1997. SFAS
130 establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. Reclassification of financial statements for earlier periods
presented is required. The impact of SFAS 130 on the Company's financial
statements is not expected to be material.
In June 1997, the Financial Accounting Standards Board issued Statement
No. 131 (SFAS 131), Disclosures About Segments of an Enterprise and
Related Information, which is required to be adopted for fiscal years
beginning on or after December 15, 1997. SFAS 131 establishes new
standards for the reporting of segmented information in annual financial
statements and requires the reporting of certain selected segmented
information on interim reports to shareholders. The impact of SFAS 131 on
the Company's financial statements is not expected to be material.
3. INVESTMENT
On December 31, 1997, the Company entered into a Securities Purchase
Agreement ("Agreement") to acquire 50% of the shares of Kaizen Food Corporation
("Kaizen"), a Canadian private company. The Company purchased 100 shares of
Kaizen at $100,000 according to the Agreement. In the Agreement, the Company was
required to raise $500,000 on or before January 20, 1998 to fund Kaizen's
research and development activities. This requirement was not met by the
Company; therefore, Kaizen had the right to repurchase its stock for $10,000
according to the Agreement. Kaizen repurchased the stock subsequent to March 31,
1998, therefore, the investment has been written down to net realizable value.
F-8
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
4. ACQUISITION OF MARINE SHUTTLE OPERATIONS AS
On April 14, 1998, the Company acquired 100% of the issued and outstanding
stock of Marine Shuttle Operations AS, a Norwegian company ("MSOAS") in exchange
for 7,600,000 common shares of the Company.
The acquisition will be accounted for using the purchase method. On March
31, 1998, MSOAS entered into a Head License Agreement with Offshore Shuttle AS
(see Note 6).
5. NOTE PAYABLE
By a Loan Agreement dated March 12, 1998, the Company arranged a loan
facility with ValorInvest Ltd. ("ValorInvest") whereby ValorInvest would advance
up to $1,500,000.
The loan facility is evidenced by a promissory note dated March 12, 1998.
Interest accrues from the date of each advance at 7.5%. The entire balance of
the note shall be due and payable upon the earlier of December 31, 1998 or the
completion of a public offering for gross proceeds of at least $100,000,000.
In addition to the $400,000 advanced as of March 31, 1998, an additional
$100,000 has been advanced as of May 1, 1998.
6. ACQUISITION OF OFFSHORE SHUTTLE AS
In May 1998, the Company acquired 3,291,738 shares of Offshore Shuttle AS, a
Norwegian limited company ("OSAS"), representing approximately 68% of the
outstanding OSAS capital stock, in exchange for 4,937,607 shares of the
Company's common stock. All of such shares are being held in escrow subject to
completion of a financing of at least $105,000,000 in gross proceeds. On May 20,
1998, the Company entered into two agreements to acquire an additional 686,668
shares of OSAS (approximately 14% of the outstanding OSAS capital stock) in
exchange for 1,030,002 shares of Common Stock (the "Additional OSAS Exchanges").
The consummation of the Additional OSAS Exchanges is subject to certain
conditions precedent.
OSAS was established in November 1996, to develop and sell specialized
technology applicable to the field of marine transportation. Through an
agreement, OSAS has exclusive rights to use the technology related to the
shuttle concept. Patents related to the shuttle concept and its technology are
pending approval.
On March 31, 1998, OSAS and MSOAS entered into a Head License Agreement. The
Company acquired MSOAS in April 1998 (see Note 4). Pursuant to the agreement,
OSAS granted MSOAS the exclusive right to build and operate five offshore
shuttles, an exclusive option to build and operate two additional offshore
shuttles thereafter, and a right of first refusal with respect to any offshore
shuttle licenses that OSAS may seek to grant during a specified future period.
In addition, based on functional specifications for each offshore shuttle to be
agreed upon, OSAS shall provide MSOAS with the pre-engineering work, including
designs and descriptions of operational procedures, necessary to construct the
offshore shuttles.
F-9
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
6. ACQUISITION OF OFFSHORE SHUTTLE AS (CONTINUED)
In consideration for the licenses granted and pre-engineering services to be
provided, OSAS shall receive a construction fee equal to ten percent of the
construction price of each of the offshore shuttles, an operating fee equal to
sixteen percent of the gross profit for each contract finalized by MSOAS
involving the use of an offshore shuttle, and an exclusivity fee equal to one
percent of the aggregate construction price of offshore shuttles two through
five. Other services rendered by OSAS will be invoiced to MSOAS on fair market
terms.
The parties have agreed that orders for each of the first five offshore
shuttles shall be placed in specific years in the period between 1998 through
year 2003. The order for the first offshore shuttle is to be placed by October
31, 1998. Subject, in each case, to an option to extend the order dates by
twelve months upon payment of a $900,000 option exercise fee, an order for the
second offshore shuttle must be placed no later than six months after successful
testing of the first offshore shuttle, and the remaining three Offshore Shuttles
must be ordered by June 30th of each year thereafter. If an order is not placed
on or before the required date, then for the twelve-month period thereafter OSAS
shall be entitled to grant a license to build one offshore shuttle to a third
party.
7. INCOME TAXES
The Company has net operating losses which may give rise to future tax
benefits of approximately $340,000 and $160,000 of March 31, 1998 and December
31, 1997, respectively. To the extent not used, net operating loss carryforwards
expire in varying amounts beginning in the year 2012. Based on available
evidence, including the Company's history of operating losses, the uncertainty
of future profitability and the impact of tax laws which may limit the Company's
ability to utilize such loss carryforwards, management has recorded reduction
allowances against the realization of the deferred tax assets.
8. RELATED PARTY TRANSACTIONS
During the period ended December 31, 1997, the Company incurred $40,000 in
management fees to a company related by a common director. Effective February 1,
1998, the Company entered into a six month consulting agreement with an
officer/director of the Company for a monthly fee of $5,000 per month and
entered into a six month consulting agreement with a company controlled by an
officer/former director for a monthly charge of $2,500. These agreements were
terminated on February 19, 1998 and April 14, 1998, respectively. The Company
subsequently entered into a two year employment agreement with the officer/
director for $60,000 per annum and a two year personnel services agreement with
the company controlled by an officer/ former director for $32,100 per annum.
The Company currently leases office space at $750 per month from Intercap
Resource Management U.S., Inc., a wholly-owned subsidiary of Intercap Resource
Management Corp. ("Intercap"). Effective February 1, 1998, the Company entered
into a six month agreement with a director of Intercap to provide consulting
services for $10,000 per month.
The amount due to a related company is non-interest bearing, unsecured, and
has no specific terms of repayment.
F-10
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998 AND DECEMBER 31, 1997
(U.S. DOLLARS)
9. SUBSEQUENT EVENTS
Subsequent to March 31, 1998, the Company:
(a) amended the Company's Articles of Incorporation to increase the
Company's authorized capital stock from 40,000,000 shares of common stock to
75,000,000 shares of common stock and to change the name of the Company to
Marine Shuttle Operations Inc.
(b) filed a registration statement on Form S-1 with the United States
Securities and Exchange Commission for an offering of 20,000,000 of its
common shares. It is anticipated that the net proceeds from this offering
will approximate $100,000,000.
F-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
We have been engaged to complete an audit of the balance sheet of Marine Shuttle
Operations AS as of December 31, 1997 and the related statements of income,
shareholder's equity and of cash flows for the period from December 10, 1997
(inception) to 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 audit. We are not the
elected, statutory auditors of the Company.
We conducted our audit in accordance with International Standards on Auditing.
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 audit provide a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Marine Shuttle Operations AS as of December
31, 1997 and the result of its operations and its cash flows for the period from
December 10, 1997 (inception) to December 31, 1997, in conformity with
accounting principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE
25 June 1998
Oslo, Norway
F-12
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARCH 31, 1998
(UNAUDITED) DECEMBER 31, 1997
----------------------- --------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
----------- ---------- --------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents......................................... 3,178,720 416,635 998,827 136,532
----------- ---------- --------- ---------
TOTAL CURRENT ASSETS.............................................. 3,178,720 416,635 998,827 136,532
----------- ---------- --------- ---------
TOTAL ASSETS...................................................... 3,178,720 416,635 998,827 136,532
----------- ---------- --------- ---------
----------- ---------- --------- ---------
LIABILITIES AND SHAREHOLDERS ' EQUITY
CURRENT LIABILITIES
Funding capital (Note 3).......................................... 1,907,268 249,986 0 0
Other current liabilities......................................... 1,382,871 181,253 0 0
----------- ---------- --------- ---------
TOTAL CURRENT LIABILITIES......................................... 3,290,139 431,239 0 0
----------- ---------- --------- ---------
TOTAL LIABILITIES................................................. 3,290,139 431,239 0 0
----------- ---------- --------- ---------
SHAREHOLDERS' EQUITY
Share capital..................................................... 999,000 130,939 999,000 136,556
Net loss.......................................................... (1,110,419) (145,543) (173) (24)
----------- ---------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY........................................ (111,419) (14,604) 998,827 136,532
----------- ---------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........................ 3,178,720 416,635 998,827 136,532
----------- ---------- --------- ---------
----------- ---------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the closing average rate by the
Norwegian Central Bank on March 31, 1998, and December 31, 1997 of
USD 1 = NOK 7,6295 and USD 1 = NOK 7,3157 respectively.
F-13
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF LOSS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
----------------------- --------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
----------- ---------- --------- ---------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING EXPENSES................................................ 1,109,873 145,978 0 0
FINANCIAL EXPENSES................................................ 373 49 173 24
----------- ---------- --------- ---------
TOTAL OPERATING EXPENSES.......................................... 1,110,246 146,027 173 24
----------- ---------- --------- ---------
NET LOSS BEFORE INCOME TAX (NOTE 4)............................... (1,110,246) (146,027) (173) (24)
----------- ---------- --------- ---------
NET LOSS.......................................................... (1,110,246) (146,027) (173) (24)
----------- ---------- --------- ---------
----------- ---------- --------- ---------
BASIC AND DILUTED LOSS PER SHARE.................................. (1.11) (0.15) 0 0
----------- ---------- --------- ---------
----------- ---------- --------- ---------
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING..................... 999,000 999,000 999,000 999,000
----------- ---------- --------- ---------
----------- ---------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate for the period
from December 10, 1997 to December 31, 1997 by the Norwegian Central Bank, of
USD 1 = NOK 7,2920 and from January 1, 1998 to March 31, 1998 of
USD 1= NOK 7,6030.
F-14
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS FOR THE PERIOD FROM DECEMBER 10, 1997 (INCEPTION)
TO DECEMBER 31, 1997 AND FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998
OPERATING ACTIVITIES
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1998
----------------------- --------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
----------- ---------- --------- ---------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
Net loss.......................................................... (1,110,246) (146,027) (173) (24)
----------- ---------- --------- ---------
Working capital changes that provided (used) cash:
Other current liabilities....................................... 3,290,139 431,239 0 0
----------- ---------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES......................... 2,179,893 285,212 (173) (24)
----------- ---------- --------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of shares.................................. 0 0 999,000 136,556
----------- ---------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES......................... 0 0 999,000 136,556
----------- ---------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS......................... 2,179,893 285,212 998,827 136,532
----------- ---------- --------- ---------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.................. 998,827 131,423 0 0
----------- ---------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........................ 3,178,720 416,635 998,827 136,532
----------- ---------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate for the period
from November 26, 1996 to December 31, 1997, 1 USD = NOK 7,0250 (March 31, 1998:
1 USD = NOK 7,6030) for the Income Statement and at the closing average rate on
December 31, 1997, at USD 1 = NOK 7,3157 (March 31, 1998: 1 USD = NOK 7,6295)
for the Balance Sheet.
F-15
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY FOR THE THREE MONTH PERIOD
ENDED MARCH 31, 1998 AND FOR THE PERIOD FROM DECEMBER 10, 1997 (INCEPTION)
TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
TOTAL
SHAREHOLDERS
NUMBER OF SHARE RESTRICTED DISTRIBUTED EQUITY
SHARES CAPITAL RESERVE RESERVE NOK
----------- --------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Paid-in capital at inception on December 10,
1997............................................. 999,000 999,000 -- -- 999,000
Net loss 1997...................................... -- -- -- (173) (173)
----------- --------- --- ----------- ------------
BALANCE DECEMBER 31, 1997.......................... 999,000 999,000 -- (173) 998,827
NET LOSS JANUARY 1--MARCH 31, 1998................. -- -- -- (1,110,246) (1,110,246)
----------- --------- --- ----------- ------------
BALANCE MARCH 31, 1998 (UNAUDITED)................. 999,000 999,000 -- (1,110,419) (111,419)
----------- --------- --- ----------- ------------
</TABLE>
Marine Shuttle Operations AS had authorized, issued and outstanding ordinary
shares having a par value of NOK 1,- per share for the period ended March 31,
1998.
The accompanying notes are an integral part of these financial statements.
F-16
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 1--NATURE OF BUSINESS
Marine Shuttle Operations AS (the Company) was established December 10,
1997. The Company is seeking to become a leading player in the market for
decommissioning, installing and transporting offshore oil and gas structures.
The Company initially intends to concentrate its efforts on decommissioning
fixed steel structures, primarily the several hundred large steel installations
situated in the intermediate water depths. The Company has formed strategic
alliances to test, develop, manufacture and commercialize the shuttle concept.
In April, 1998, the Company was acquired by Marine Shuttle Operations Inc.,
and is now a wholly owned subsidiary.
See Note 6--Subsequent events.
NOTE 2--ACCOUNTING PRINCIPLES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or less.
INCOME TAXES
The Company accounts for income taxes using the asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
financial statements or tax returns.
ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Marine Shuttle Operations AS' accounting principles are included in the
financial statements for 1997.
NOTE 3--FUNDING CAPITAL
On April 14, 1998, Marine Shuttle Operations Inc. acquired all of the issued
and outstanding capital stock of the Company, consisting of 999,0000 shares of
voting common stock, in exchange for 7,600,000 shares of common voting stock of
Marine Shuttle Operations Inc.
F-17
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 3--FUNDING CAPITAL (CONTINUED)
On May 13, 1998, the Company entered into a Loan Agreement (the Loan
Agreement) with Marine Shuttle Operations Inc. Under the terms of the Loan
Agreement, Marine Shuttle Operations Inc. will provide the Company a loan of up
to USD 1,500,000. The loan bears an interest rate of 6% per annum.
As of March 31, 1998, the Company had borrowed USD 249,986 (NOK 1,907,268)
under the Loan Agreement.
NOTE 4--INCOME TAX
INCOME TAX COMPUTATION
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997
-------------------
<S> <C>
Net loss before tax............................................................................ (173)
---
Tax loss carry forward......................................................................... (173)
---
Current tax payable............................................................................ 0
---
---
</TABLE>
TEMPORARY DIFFERENCES AS OF DECEMBER 31, 1997 AND MARCH 31, 1998
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------
<S> <C>
Tax loss carry forward......................................................................... (173)
---
Net............................................................................................ (173)
---
28% deferred tax asset......................................................................... 48
Valuation allowance............................................................................ (48)
---
Deferred tax asset............................................................................. 0
---
---
</TABLE>
The Company's tax loss carry forward expires in 2007.
NOTE 5--RELATED PARTIES TRANSACTIONS
ENGAGEMENT AGREEMENT, MANAGING DIRECTOR
Mr. Steve Adshead will act as the Managing Director for a limited period
until a permanent person has been hired for that position. For 1998 Mr. Steve
Adshead will be paid based on a daily rate of NOK 6,000, limited to NOK 80,000
per month. He will continue as an executive director after the expiration of
this agreement.
F-18
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 5--RELATED PARTIES TRANSACTIONS (CONTINUED)
ENGAGEMENT AGREEMENT, WORKING CHAIRMAN OF THE BOARD
Mr. Sverre Hansen will act as Working Chairman of the Board of the Company
for a limited period until the General Assembly elects another person. For 1998
Mr. Sverre Hansen will be paid based on a daily rate of NOK 6,000, limited to
NOK 50,000 per month.
AGREEMENT WITH AN ENGENEERING COMPANY
Marine Shuttle Operations AS has entered into a personnel services agreement
and an accounting services agreement with RC Consultants AS. Mr. Sverre Hansen,
the Chairman of the Board of Directors of RC Consultants AS, is the Chairman of
the Board of Directors of Marine Shuttle Operations AS.
AGREEMENT WITH A SERVICE COMPANY
Marine Shuttle Operations AS has entered into an agreement with Schuller
Industrietsordnung GmbH. Mr. Franz Eder, the President and Chairman of the Board
of Marine Shuttle Operations Inc., and Dr. Hubert Besner, a director of Marine
Shuttle Operations Inc., are members fo the Supervisory Board of Schuller
Industrietsordnung GmbH.
NOTE 6--SUBSEQUENT EVENTS
ACQUISITION BY MARINE SHUTTLE OPERATIONS INC.
On April 14, 1998, Marine Shuttle Operations Inc. acquired all of the issued
and outstanding capital stock of the Company in exchange for 7,600,000 shares of
common stock of Marine Shuttle Operations Inc.
HEAD LICENSE AGREEMENT
The Company entered into a Head License Agreement with Offshore Shuttle AS
on March 31, 1998. Pursuant to the Head License Agreement, Offshore Shuttle AS
granted Marine Shuttle Operations AS the exclusive right to build and operate
five offshore shuttles, an exclusive option to build and operate two additional
offshore shuttles thereafter, and a right of first refusal with respect to any
offshore shuttle licenses that Offshore Shuttle AS may seek to grant during a
specified future period.
In addition, based on functional specifications for each offshore shuttle to
be agreed upon, Offshore Shuttle AS shall provide Marine Shuttle Operations AS
with the pre-engineering work, including designs and descriptions of operational
procedures, necessary to construct the offshore shuttles.
In consideration for the licenses granted and pre-engineering services to be
provided, Offshore Schuttle AS shall receive a construction fee equal to ten
percent of the construction price of each of the offshore shuttles, an operating
fee equal to sixteen percent of the gross profit for each contract finalized by
Marine Shuttle Operations AS involving the use of an offshore shuttle, and an
exclusivity fee equal to one percent of the aggregate construction price of
offshore shuttles two through five. Other services rendered by Offshore Shuttle
AS will be invoiced to Marine Shuttle Operations AS on fair market terms.
F-19
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 6--SUBSEQUENT EVENTS (CONTINUED)
The parties have agreed that yard orders for each of the first five offshore
shuttles shall be placed in specific years in the period between 1998 through
year 2003. The order for the first offshore shuttle is to be placed by October
31, 1998. Subject, in each case, to an option to extend the order dates by
twelve months upon payment of $900,000 option exercise fee, an order for the
second offshore shuttle must be placed no later than six months after successful
testing of the first offshore shuttle, and the remaining three offshore shuttles
must be ordered by June 30th of each year thereafter. If an order is not placed
on or before the required date, then for the twelve-month period thereafter
Offshore Shuttle AS shall be entitled to grant a license to build one offshore
shuttle to a third party.
The binding nature of the Head License Agreement is conditional upon
Offshore Shuttle AS having received payment from Marine Shuttle Operations AS of
the first instalment of the exclusivity fee of USD 2,000,000 by September 30,
1998 and Marine Shuttle Operations AS having placed a firm order for offshore
shuttle number one with a construction yard by October 31, 1998.
LEASE AGREEMENTS
In April 1998, Marine Shuttle Operations AS entered into a lease for office
space. The agreement lasts for half a year from April 15, 1998 with an option to
renew the agreement for one year at a time. The rent during such six month
period is NOK 84,000.
THYSSEN STAHLUNION GMBH--STRATEGIC ALLIANCE
Pursuant to a Marketing Aggreement dated April 14, 1998, Thyssen Stahlunion
GmbH will market the Offshore Shuttle on a worldwide basis to major oil
companies, offshore contractors, and others as part of its package of offshore
services. In addition, Thyssen Stahlunion GmbH shall act as a procurement
service center for the steel and equipment to be used in constructing the
Offshore Shuttle, and shall have a right of first refusal to lease the Offshore
Shuttle if Thyssen Stahlunion GmbH is engaged in any decommissioning,
transportation, or installation project. Thyssen Stahlunion GmbH shall receive a
commission at a rate to be agreed upon for its marketing services and shall be
precluded from promoting any products or services competitive with those of the
Company.
RC CONSULTANTS AS--STRATEGIC ALLIANCE
Pursuant to a personnel agreement with Marine Shuttle Operations AS, RC
Consultants AS will provide Marine Shuttle Operations AS with the engineers and
technicians needed during the design, engineering, fabrication, and operation of
the Offshore Shuttle. In addition, pursuant to an accounting services agreement,
RC Consultants AS will provide Marine Shuttle Operations AS with bookkeeping
assistance.
SCHULLER INDUSTRIETSORDNUNG GMBH--STRATEGIC ALLIANCE
Schuller Industrietsordnung GmbH is a service company specializing in waste
management, onshore dismantling and oil pollution prevention and clean-up.
Marine Shuttle Operations AS and Schuller Industrietsordnung GmbH have entered
into a cooperation agreement pursuant to which Schuller Industrietsordnung GmbH
will provide such services to Marine Shuttle Operations AS, subject to the
execution of a written agreement on a project-specific basis.
F-20
<PAGE>
INDEPENDENT AUDITORS' REPORT
We have been engaged to complete an audit of the balance sheet of Offshore
Shuttle AS as of December 31, 1997 and the related statements of income,
shareholders' equity and of cash flows for the period from November 29, 1996
(inception) to 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 audit. We are not the
elected, statutory auditors of the Company.
We conducted our audit in accordance with International Standards on Auditing.
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 audit provide a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Offshore Shuttle AS as of December 31, 1997
and the result of its operations and its cash flows for the period from November
29, 1996 (inception) to December 31, 1997, in conformity with accounting
principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE
25 June 1998
Oslo, Norway
F-21
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET AS OF DECEMBER 31, 1997 AND MARCH 31, 1998
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
------------------------ ------------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
------------ ---------- ------------ ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 3).......................... 17,135,527 2,245,957 22,386,409 3,060,050
Accounts receivable (Note 4)................................ 1,312,698 172,056 100,000 13,669
Other current assets (Note 5)............................... 0 0 897,862 122,731
------------ ---------- ------------ ----------
TOTAL CURRENT ASSETS........................................ 18,448,225 2,418,013 23,384,271 3,196,450
------------ ---------- ------------ ----------
CAPITAL ASSETS (NOTE 6)
Furniture, fixtures and equipment, net of accumulated
depreciation.............................................. 371,095 48,639 398,700 54,499
------------ ---------- ------------ ----------
TOTAL CAPITAL ASSETS........................................ 371,095 48,639 398,700 54,499
------------ ---------- ------------ ----------
TOTAL ASSETS................................................ 18,819,320 2,466,652 23,782,971 3,250,949
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................................ 811,765 106,398 2,193,599 299,848
Social security and employees taxes, accrued salaries....... 269,650 35,343 377,095 51,546
Other current liabilities................................... 21,220 2,781 21,220 2,901
------------ ---------- ------------ ----------
TOTAL CURRENT LIABILITIES................................... 1,102,635 144,522 2,591,914 354,295
------------ ---------- ------------ ----------
SHAREHOLDERS' EQUITY
Share capital............................................... 241,100 31,601 241,100 32,957
Restricted reserve.......................................... 5,650,000 740,547 5,650,000 772,312
Distributable reserve....................................... 11,825,585 1,549,982 15,299,957 2,091,385
------------ ---------- ------------ ----------
TOTAL SHAREHOLDERS' EQUITY.................................. 17,716,685 2,322,130 21,191,057 2,896,654
------------ ---------- ------------ ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................. 18,819,320 2,466,652 23,782,971 3,250,949
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
</TABLE>
Translation of amounts from Norwegian kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the closing average rates by the
Norwegian Central Bank on March 31, 1998 and December 31, 1997 of USD 1 = 7,6295
and USD 1 = 7,3157 respectively.
F-22
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF LOSS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
----------------------- ------------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
----------- ---------- ----------- -----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING REVENUE AND EXPENSES
Fees........................................................ 100,000 13,153 400,000 56,940
----------- ---------- ----------- -----------
TOTAL OPERATING REVENUE..................................... 100,000 13,153 400,000 56,940
----------- ---------- ----------- -----------
Salaries and other personnel expenses....................... 598,325 78,696 1,546,679 220,168
Research and development.................................... 1,854,353 243,897 4,469,455 636,221
General and administrative expenses......................... 1,293,312 170,106 3,954,829 562,965
Depreciation................................................ 27,605 3,631 88,300 12,569
Interest income/expense, net................................ (199,224) (26,203) (312,430) (44,474)
----------- ---------- ----------- -----------
TOTAL OPERATING EXPENSES.................................... 3,574,371 470,127 9,746,833 1,387,449
----------- ---------- ----------- -----------
NET LOSS BEFORE INCOME TAX (NOTE 7)......................... (3,474,371) (456,974) (9,346,833) (1,330,509)
----------- ---------- ----------- -----------
NET LOSS.................................................... (3,474,371) (456,974) (9,346,833) (1,330,509)
----------- ---------- ----------- -----------
Basic and diluted loss per share............................ (0.72) (0.095) (2.67) (0,38)
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
Weighted average number of shares outstanding............... 2,674,000 2,674,000 3,505,000 3,505,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
Translation of amounts from Norwegian kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate by the Norwegian
Central Bank for the periods from January 1, 1998 to March 31, 1998 and from
November 26, 1996 to December 31, 1997of USD 1 = NOK 7,6030 and of USD 1 = NOK
7,0250 respectively.
F-23
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998.
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
--------------------------- -------------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
-------------- ----------- ------------ -----------
<CAPTION>
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss................................................ (3,474,371) (456,974) (9,346,833) (1,330,510)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation.......................................... 27,605 3,631 88,300 12,569
Working capital changes that provided (used) cash:
Accounts receivable................................... (1,212,698) (158,949) (100,000) (13,669)
Other current assets.................................. 897,862 119,258 (897,862) (122,731)
Current liabilities................................... (1,489,280) (195,200) 2,591,914 354,295
-------------- ----------- ------------ -----------
NET CASH USED BY OPERATING ACTIVITIES................... (5,250,882) (688,234) (7,664,481) (1,100,046)
INVESTING ACTIVITIES:
Purchases of furniture, fixtures and equipment.......... 0 0 (487,000) (67,069)
-------------- ----------- ------------ -----------
NET CASH USED IN INVESTING ACTIVITIES................... 0 0 (487,000) (67,069)
FINANCING ACTIVITIES:
Proceeds from issuance of shares, net of offering
costs................................................. 0 0 30,537,890 4,227,165
-------------- ----------- ------------ -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES............... 0 0 30,537,890 4,227,165
-------------- ----------- ------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.... (5,250,882) (688,234) 22,386,409 3,060,050
-------------- ----------- ------------ -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD........ 22,386,409 2,934,191 0 0
-------------- ----------- ------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.............. 17,135,527 2,245,957 22,386,409 3,060,050
-------------- ----------- ------------ -----------
-------------- ----------- ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Translation of amounts from Norwegian kroner (NOK) into U.S. Dollars (USD) for
the convenience of the reader has been made at the average rate from the period
from November 26, 1996 to December 31, 1997, 1 USD = NOK 7,0250 (March 31, 1998:
1 USD = NOK 7,6030) for the Income Statement and at the closing average rate on
December 31, 1997, at USD 1 = NOK 7,3157 (March 31, 1998: 1 USD = NOK 7,6295)
for the Balance Sheet.
F-24
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' EQUITY FOR THE THREE MONTH PERIOD
ENDED MARCH 31, 1998 AND FOR THE PERIOD FROM NOVEMBER 29, 1996 (INCEPTION)
TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF TOTAL
SHARES SHARE RESTRICTED DISTRIBUTABLE SHAREHOLDERS'
OUTSTANDING CAPITAL RESERVE RESERVE EQUITY
----------- --------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Paid-in capital at inception on
November 29, 1996............................. 1,000,000 100,000 100,000
Share issue, January 6, 1997.................... 500,000 50,000 5,950,000 6,000,000
Offering costs.................................. (300,000) (300,000)
Share issue, April 7, 1997...................... 111,000 11,100 1,986,900 1,998,000
Share issue, September 8, 1997.................. 800,000 80,000 23,920,000 24,000,000
Offering costs.................................. (1,260,110) (1,260,110)
Share split, September 9, 1997.................. 2,411,000
Net loss 1997................................... (9,346,833) (9,346,833)
------------ -------------
BALANCE, DECEMBER 31, 1997...................... 4,822,000 241,100 5,650,000 15,299,957 21,191,057
NET LOSS JANUARY 1--MARCH 31, 1998.............. (3,474,371) (3,474,371)
------------ -------------
BALANCE, MARCH 31, 1998 (UNAUDITED)............. 4,822,000 241,100 5,650,000 11,825,586 17,716,686
----------- --------- ---------- ------------ -------------
</TABLE>
Offshore Shuttle AS had authorized, issued and outstanding ordinary shares
having a par value of NOK 0,05 per share for the period ended March 31, 1998.
The accompanying notes are an integral part of these financial statements.
F-25
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 1--NATURE OF BUSINESS
Offshore Shuttle AS (the Company) was established November 29, 1996 in Oslo,
Norway. The purpose of the Company is to commercially exploit the potential of
the Shuttle concept.
Through an agreement with Mr. Gunnar Foss and Mr. Per Bull Haugso/en (see
Note 10), the Company has the exclusive rights to the use of the technology
related to the Shuttle concept. Patents related to the Shuttle concept and its
technology are pending approval.
In April and May, 1998, Marine Shuttle Operations Inc. acquired 82.5% of the
shares of Offshore Shuttle AS.
See Note 10, Subsequent Events, Head License Agreement.
NOTE 2--SIGNIFICANT ACCOUNTING PRINCIPLES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or less.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed when incurred.
FURNITURE, FIXTURES AND EQUIPMENT
Furniture, fixture and equipment are stated at cost. Depreciation is
provided by the declining balance method over the estimated service lives of the
respective assets as follows:
<TABLE>
<S> <C>
Furniture.............................................................. 20%
Computer equipment..................................................... 35%
Office equipment....................................................... 30%
</TABLE>
Management periodically reviews the carrying value of furniture, fixture and
equipment to ensure that any permanent impairment in value is recognized and
reflected in the results from operations.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation using the intrinsic value
based method in accordance with Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees.
F-26
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 2--SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currency are translated to NOK at the
currency rate at the date of the transaction. Realized and unrealized gains or
losses on monetary assets or liabilities denominated in a foreign currency are
included in net income.
INCOME TAXES
The Company accounts for income taxes using the asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
financial statements or tax returns.
PENSION
The Company has a defined benefit retirement plan which covers all
employees.
Plan benefits are based on years of service and final salary level. The plan
is administered by an insurance company.
Based on the short period of operations, no actuarial calculations of the
pension plan status have been performed.
ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
RECENT PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement No.
130 (SFAS 130), REPORTING COMPREHENSIVE INCOME, which is required to be adopted
for fiscal years beginning on or after December 15, 1997. SFAS 130 establishes
standards for the reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. The impact of
SFAS 130 on the Company's financial statements is not expected to be material.
In June 1997, the Financial Accounting Standards Board issued Statement No.
131 (SFAS 131), DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION, which is required to be adopted for fiscal years beginning on or
after December 15, 1997. SFAS 131 establishes new standards for the reporting of
segment information in annual financial statements and requires the reporting of
certain selected segment information on interim reports to shareholders. The
impact of SFAS 131 on the Company's financial statements is not expected to be
material.
F-27
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 3--RESTRICTED CASH
Cash and cash equivalents include taxes withheld from employees of NOK
111,019 (March 31, 1998: 91,969) and rental deposit of NOK 119,608 (March 31,
1998: 119,608) as of December 31, 1997.
NOTE 4--ACCOUNTS RECEIVABLE
Accounts receivable are recorded at net realizable value. No allowance for
doubtful account is deemed necessary.
NOTE 5--OTHER CURRENT ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------
<S> <C>
Prepaid expenses........................................................... 118,627
VAT receivable............................................................. 779,235
-------
897,862
</TABLE>
NOTE 6--FURNITURE, FIXTURE AND EQUIPMENT
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------
<S> <C> <C> <C> <C>
OFFICE COMPUTER
EQUIPMENT EQUIPMENT FURNITURE TOTAL
----------- ----------- ----------- ----------
November 26, 1996................................................. 0
Additions during the period....................................... 60,617 285,839 140,544 487,000
Accumulated depreciation.......................................... (15,917) (49,839) (22,544) (88,300)
----------- ----------- ----------- ----------
Net book value, December 31, 1997................................. 44,700 236,000 118,000 398,700
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
<CAPTION>
MARCH 31, 1998 (UNAUDITED)
-------------------------------------------------
<S> <C> <C> <C> <C>
Cost of March 31, 1998............................................ 60,617 285,839 140,544 487,000
Accumulated depreciation.......................................... (18,152) (69,309) (28,444) (115,905)
----------- ----------- ----------- ----------
Net book value, March 31, 1998.................................... 42,465 216,530 112,100 371,095
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
</TABLE>
F-28
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 7--INCOME TAX
INCOME TAX COMPUTATION
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Net loss before tax............................................................................ (9,346,833)
Offering cost, charged to equity............................................................... (1,560,110)
Other permanent differences.................................................................... 12,805
Change in temporary differences................................................................ (50,772)
-----------------
Tax loss carry forward......................................................................... (10,944,910)
-----------------
Current tax payable............................................................................ 0
-----------------
-----------------
TEMPORARY DIFFERENCES AS OF DECEMBER 31, 1997
Furniture, fixture and equipment............................................................... 50,772
Tax loss carry forward......................................................................... (10,944,910)
-----------------
Net............................................................................................ (10,894,138)
-----------------
28% deferred tax asset......................................................................... 3,050,359
Valuation allowance............................................................................ (3,050,359)
-----------------
Deferred tax asset............................................................................. 0
-----------------
-----------------
</TABLE>
The Company's tax loss carry forward expires in 2007.
NOTE 8--STOCK INCENTIVE PLAN
The Board is authorized to issue options to purchase 120,000 shares of stock
to employees and Board members and options to purchase 100,000 shares of stock
to cooperation partners. As of December 31, 1997, options to purchase 90,000
shares of stock have been issued to employees, Board members and cooperation
partners.
The exercise price for all options granted to date was equal to or in excess
of the fair market value of the Company's stock at the date of grant. The
exercise price for 80,000 and 10,000 options is NOK 12 and NOK 25, respectively.
Under the terms of the option agreements, the exercise price increases 1% per
month from the time of issuance until the date of exercise. The options may be
exercised during a three year period following the date of issuance.
See also Note 10.
F-29
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 9--RELATED PARTIES TRANSACTIONS
RELATED PARTY TRANSACTIONS AND BALANCES INCLUDE:
CONSULTANCY AGREEMENT
The Company has entered into a consultancy agreement with Mr. Gunnar Foss, a
shareholder, Board member, Technical director and the inventor of the Shuttle.
The agreement stipulates that monthly remuneration shall be paid to Mr.
Gunnar Foss for consulting services provided to the Company. For the period
ended December 31, 1997, the Company paid NOK 630,000 in accordance with the
agreement. The agreement requires future minimum payments to Mr. Gunnar Foss of
NOK 65,000 per month for consulting services, if used, for 1998 and 1999. In
January 1998 the Board decided to increase Mr. Gunnar Foss' remuneration to NOK
80,000 per month. The agreement also states that if the Company successfully
sells a license to build a Shuttle or builds a Shuttle itself, the amount of
remuneration payable under the agreement is subject to negotiation. The
Consulting agreement transfers to Offshore Shuttle AS the exclusive rights to
the patents and all other intellectual property related to the shuttle concept.
In 1998 the Company entered into a new agreement regarding Intellectual
Property. See Note 10.
In accordance with a decision made by the General Assembly in January 1997,
the Company paid NOK 650,000 to Mr. Gunnar Foss for costs incurred and services
provided to the Company prior to January 1997.
ENGAGEMENT AGREEMENT, MANAGING DIRECTOR
Mr. Per Bull Haugso/en is engaged as Managing Director for Offshore Shuttle
AS. He is also a shareholder in the Company. The Managing Director has an
engagement agreement based on normal employment terms in Norway. In 1997 his
remuneration was NOK 609.000 with addition of certain welfare benefits. In
January 1998 the annual salary was increased to NOK 900,000 with retroactive
effect from September 1, 1997.
The engagement agreement shall be renegotiated in the case the Company sells
a license or enter into a contract to build the shuttle itself. See Note 10.
AGREEMENT WITH A SHIP BROKERING COMPANY
Offshore Shuttle AS has entered into an agreement with P.F. Basso/e & Co., a
specialised ship brokering and consultancy company. P.F. Basso/e is represented
by its partner, Halvor Sveen on the Board of Directors of Offshore Shuttle AS.
P.F. Basso/e shall render services in connection with contract and
negotiations with yards regarding fabrication of the Offshore Shuttle. As
compensation P.F. Basso/e shall be entitled to a commission of one percent of
the contract price stipulated in a fabrication contract between Offshore Shuttle
AS and a ship
F-30
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 9--RELATED PARTIES TRANSACTIONS (CONTINUED)
yard. Any payment or commission for services rendered in connection with the
conclusion of other contracts shall be agreed separately.
NOTE 10--SUBSEQUENT EVENTS
AGREEMENT REGARDING INTELLECTUAL PROPERTY
On March 31, 1998, the Company entered into an agreement with Mr. Gunnar
Foss and Mr. Per Bull Haugso/en regarding the intellectual property rights
relating to the Offshore Shuttle concept.
The agreement provides for the exclusive transfer of the patent rights and
all other intellectual property rights relating to the Offshore Shuttle Concept
to Offshore Shuttle AS.
The transfer of the rights is subject to the condition that the Offshore
Shuttle Concept be further developed and exploited by the Company. According to
the agreement, the execution of the Head Licence Agreement described in the next
paragraph shall be deemed to constitute such further development and
exploitation.
If Offshore Shuttle AS for any reason whatsoever should cease to continue in
an active manner its activities related to the concept, Mr. Gunnar Foss and Mr.
Per Bull Haugso/en can request that the patent and all other rights concerning
the concept be transferred back to them against certain compensation.
In the event that Offshore Shuttle AS wishes to transfer the rights to a
third party, Mr. Gunnar Foss and Mr. Per Bull Haugso/en shall have the right of
first refusal with respect to such transfer. It is agreed that the Head License
Agreement (see below) shall not be deemed to constitute such transfer.
HEAD LICENSE AGREEMENT
The Company entered into a Head License Agreement with Marine Shuttle
Operations AS on March 31, 1998. Pursuant to the Head License Agreement,
Offshore Shuttle AS granted Marine Shuttle Operations AS the exclusive right to
build and operate five offshore shuttles, an exclusive option to build and
operate two additional offshore shuttles thereafter, and a right of first
refusal with respect to any offshore shuttle licenses that Offshore Shuttle AS
may seek to grant during a specified future period.
Based on functional specifications for each offshore shuttle to be agreed
upon, Offshore Shuttle AS shall provide Marine Shuttle Operations AS with the
pre-engineering work, including designs and descriptions of operational
procedures, necessary to construct the Offshore Shuttles. In addition, Offshore
Shuttle AS will provide other technical services, in excess of pre-engineering,
in connection with the development, building and operation of the Offshore
Shuttles.
In consideration for the Head License Agreement granted and pre-engineering
services to be provided, Offshore Schuttle AS shall receive a construction fee
equal to ten percent of the construction price of each of the offshore shuttles,
an operating fee equal to sixteen percent of the gross profit for each
F-31
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM
NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
(INFORMATION AS OF MARCH 31, 1998 AND FOR THE
THREE MONTHS THEN ENDED IS UNAUDITED)
NOTE 10--SUBSEQUENT EVENTS (CONTINUED)
contract finalized by Marine Shuttle Operations AS involving the use of an
offshore shuttle, and an exclusivity fee equal to one percent of the aggregate
construction price of offshore shuttles two through five. Other services
rendered by Offshore Shuttle AS will be invoiced to Marine Shuttle Operations AS
on fair market terms.
The parties have agreed that yard orders for each of the five offshore
shuttles shall be placed in spesific order years in the period between 1998
through year 2003. In each such order year the order shall be placed within a
defined order expiry date.
The first order shall be placed within October 31, 1998.
In the absence of an order within an order expiry date, Offshore Shuttle AS
will have the right in each such case to market and sell a licence for one
shuttle to any third party during the subsequent 12 month period.
If Marine Shuttle Operations AS fails to meet an order expiry date it will
have the right to extend the order expiry date for a period of up to twelve
months by paying USD 900,000 in each case.
The binding nature of the Head License Agreement is conditional upon
Offshore Shuttle AS having received payment from Marine Shuttle Operations AS of
the first instalment of the exclusivity fee of USD 2,000,000 by September 30,
1998, and Marine Shuttle Operations AS having placed a firm order for offshore
shuttle number one with a construction yard by October 31, 1998.
Marine Shuttle Operations AS and Offshore Shuttle AS are subsidiaries of
Marine Shuttle Operations, Inc..
LEASE AGREEMENT
In March 1998, Offshore Shuttle AS entered into a lease for new office
space. The agreement lasts for three years from May 1, 1998 with a yearly lease
of NOK 652,800 adjusted for the increase in the consumer price index.
STOCK INCENTIVE PLAN
After year end, options to purchase 20,000 and 10,000 shares of stock have
been granted, with an exercise price of NOK 39 and NOK 32, respectively. The
exercise price increases 1% per month from the time of issuance until the date
of exercise. The options may be exercised during a three-year period following
the date of issuance.
On March 31, 1998, the Board was notified of an exercise of 10,000 stock
options at an exercise price of NOK 13.08. As a result, on April 3, 1998, the
Board decided to increase the share capital by NOK 500, from NOK 241,100 to NOK
241,600, by issuing 10,000 shares, par value NOK 0.05 per share.
F-32
<PAGE>
SELECTED UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
The selected unaudited pro forma consolidated financial information for the
Company set forth below gives effect to the acquisition of the shares of Marine
Shuttle Operation AS (MS0AS) and Offshore Shuttle AS (OSAS). The historical
financial information set forth below has been derived from and is qualified by
reference to, the financial statements of the Company, MSOAS and OSAS and should
be read in conjunction with those financial statements and the notes thereto
included elsewhere herein.
The March 31, 1998 pro forma balance sheet has been prepared as if the
transactions described in Note 3 had occurred on March 31, 1998, and represents
the consolidation of the March 31, 1998 balance sheet of MSOAS and OSAS with the
March 31, 1998 balance sheet of the Company.
The pro forma statement of net loss for the three month period ended March
31, 1998 and the period ended December 31, 1997 has been prepared as if the
transactions described in Notes 1 and 2 had occurred on January 1, 1997. They
represent the consolidation of the MSOAS and OSAS statements of loss for the
three months ended March 31, 1998 with the statement of loss of the Company for
the three months ended March 31, 1998, and the consolidation of the MSOAS and
OSAS statements of loss for the year ended December 31, 1997 with the statement
of loss of the Company for the year ended December 31, 1997.
The pro forma consolidated financial statements are not intended to reflect
the results of operations or the financial position of the Company which would
have actually resulted had the proposed transactions described in Note 3 been
effected on the dates indicated. Further, the pro forma financial information is
not necessarily indicative of the results of operations or the financial
position that may be obtained in the future.
F-33
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
MARCH 31, 1998
(IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
MARCH 31, 1998
-------------------------------------------
MARINE PRO FORMA
SHUTTLE MARINE PRO FORMA FINANCIAL
OPERATIONS SHUTTLE OFFSHORE -------------------------- STATEMENT
INC. OPERATIONS AS SHUTTLE AS NOTE 3 ADJUSTMENTS CONSOLIDATED
-------------- ------------- ------------ ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT
Cash............................ $ 17,063 $ 416,635 $ 2,245,957 (a) $ 100,000,000 $ 102,277,825
(c) (401,830)
Accounts receivable............. -- -- 172,056 172,056
Note receivable................. 250,780 -- -- (b) (250,780) --
Other current assets............ 11,019 -- -- 11,019
NET EQUIPMENT..................... -- -- 48,639 48,639
INCORPORATION COSTS............... 2,000 -- -- 2,000
GOODWILL/LICENSING AGREEMENT...... -- -- -- (b) 22,528,885 38,772,857
(b) 16,243,972
-------------- ------------- ------------ --- -------------- --------------
$ 280,862 $ 416,635 $ 2,466,652 $ 141,284,396
-------------- ------------- ------------ --------------
-------------- ------------- ------------ --------------
LIABILITIES
CURRENT
Accounts payable and accrued
liabilities................... $ 73,180 $ 145,520 $ 144,522 $ 363,222
Notes payable................... 401,830 285,719 -- (b) (285,719) --
(c) (401,830)
Non-controlling interest........ -- -- -- (b) 412,495 412,495
-------------- ------------- ------------ --- -------------- --------------
475,010 431,239 144,522 775,717
-------------- ------------- ------------ --------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital..................... 20,020 130,939 31,601 (a) 20,000 53,587
(b) 7,600
(b) (130,939)
(b) 5,967
(b) (31,601)
Restricted reserve................ -- -- 740,547 (b) (740,547) --
Additional paid up capital........ 133,980 -- 3,230,459 (a) 99,980,000 140,803,240
(b) 22,792,400
(b) 17,896,860
(b) (3,230,459)
Deficit........................... (348,148) (145,543) (1,680,477) (b) 145,543 (348,148)
(b) 1,680,477
-------------- ------------- ------------ --- -------------- --------------
(194,148) (14,604) 2,322,130 140,508,679
-------------- ------------- ------------ --------------
$ 280,862 $ 416,635 $ 2,466,652 $ 141,284,396
-------------- ------------- ------------ --------------
-------------- ------------- ------------ --------------
</TABLE>
F-34
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF LOSS
THREE MONTHS ENDED MARCH 31, 1998
(IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MARINE
SHUTTLE MARINE PRO FORMA PRO FORMA
OPERATIONS SHUTTLE OFFSHORE ------------------------ FINANCIAL
INC. OPERATIONS AS SHUTTLE AS NOTE 3 ADJUSTMENTS STATEMENT
-------------- ------------- ----------- ----------- ----------- -------------
FEES.................................... $ -- $ -- $ 13,153 $ 13,153
--
-------------- ------------- ----------- ----------- -------------
EXPENSES
Accounting, audit and bookkeeping....... 12,350 145,978 170,106 328,434
Bank charges............................ 149 49 -- 198
Consulting.............................. 30,000 -- -- 30,000
Depreciation and amortization........... -- -- 3,631 (b) 1,000,000 1,003,631
Entertainment........................... 102 -- -- 102
Interest................................ 1,050 -- (26,203) (25,153)
Legal................................... 28,346 -- -- 28,346
Listing and filing fees................. 3,373 -- -- 3,373
Miscellaneous........................... (90) -- -- (90)
Office and printing..................... 653 -- -- 653
Research and development................ -- -- 243,897 243,897
Salaries................................ -- -- 78,696 78,696
Telephone............................... 908 -- -- 908
Transfer agent fees..................... 863 -- -- 863
Travel and lodging...................... 17,513 17,513
Write-down of investment................ 90,000 -- -- 90,000
-------------- ------------- ----------- -------------
185,217 146,027 470,127 1,801,371
-------------- ------------- ----------- -------------
LOSS FOR THE YEAR....................... $ (185,217) $ (146,027) $ (456,974) $ (1,788,218)
-------------- ------------- ----------- -------------
-------------- ------------- ----------- -------------
LOSS PER SHARE.......................... $ (0.03)
-------------
-------------
WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING........................... 53,767,000
-------------
-------------
</TABLE>
F-35
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF LOSS
YEAR ENDED DECEMBER 31, 1997
(IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MARINE
SHUTTLE MARINE PRO FORMA PRO FORMA
OPERATIONS SHUTTLE OFFSHORE ----------------------- FINANCIAL
INC. OPERATIONS AS SHUTTLE AS NOTE 3 ADJUSTMENTS STATEMENT
-------------- --------------- ------------- --------- ------------ -------------
FEES............................... $ -- $ -- $ 56,940 $ 56,940
-------------- ----- ------------- --------- ------------ -------------
EXPENSES
Accounting, audit and
bookkeeping.................... 15,511 24 562,965 578,500
Bank charges..................... 300 -- -- 300
Consulting....................... 30,000 -- -- 30,000
Depreciation and amortization.... -- -- 12,569 (b) 3,900,000 3,912,569
Entertainment.................... 3,005 -- -- 3,005
Interest......................... -- -- (44,474) (44,474)
Legal............................ 24,917 -- -- 24,917
Listing and filing fees.......... 31,000 -- -- 31,000
Miscellaneous.................... -- -- -- --
Office and printing.............. 5,669 -- -- 5,669
Research and development......... -- -- 636,221 636,221
Salaries......................... -- -- 220,168 220,168
Telephone........................ 2,347 -- -- 2,347
Transfer agent fees.............. 2,018 -- -- 2,018
Travel and lodging............... 8,164 8,164
Write-down of investment......... -- -- -- --
-------------- ----- ------------- --------- ------------ -------------
122,931 24 1,387,449 5,410,404
-------------- ----- ------------- --------- ------------ -------------
LOSS FOR THE YEAR.................. $ (122,931) $ (24) $ (1,330,509) $ (5,353,464)
-------------- ----- ------------- --------- ------------ -------------
-------------- ----- ------------- --------- ------------ -------------
LOSS PER SHARE..................... $ (0.10)
-------------- ----- ------------- --------- ------------ -------------
-------------- ----- ------------- --------- ------------ -------------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING...................... 53,767,000
-------------- ----- ------------- --------- ------------ -------------
-------------- ----- ------------- --------- ------------ -------------
</TABLE>
F-36
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(U.S. DOLLARS)
1. ACQUISITION OF MARINE SHUTTLE OPERATIONS AS
On April 14, 1998, the Company acquired 100% of the issued and outstanding
stock of MSOAS in exchange for 7,600,000 common shares of the Company .
The acquisition has been accounted for using the purchase method. The shares
of the Company's common stock that were issued have been recorded at a deemed
value of $3.00 based on the estimated fair market value of the MSOAS net assets
acquired.
The excess of the purchase price over the fair value of the net assets
acquired has been allocated to goodwill on a preliminary basis, subject to the
final assessment of fair value, and is being amortized on a straight-line basis
over 10 years.
2. ACQUISITION OF OFFSHORE SHUTTLE AS
In May 1998, the Company acquired 3,291,738 shares of OSAS (approximately
68% of the outstanding OSAS capital stock) in exchange for 4,937,607 shares of
the Company's common stock. All of such shares are being held in escrow subject
to completion of a financing of at least $105,000,000 in gross proceeds. On May
20, 1998, the Company entered into two agreements to acquire an additional
686,668 shares of OSAS (approximately 14% of the outstanding OSAS capital stock)
in exchange for 1,030,002 shares of the Company's common stock (the "Additional
OSAS Exhanges"). The consummation of the Additional OSAS Exchanges is subject to
certain conditions precedent.
The acquisition has been accounted for using the purchase method. The shares
of the Company's common stock that have been issued and are to be issued, as the
case may be, have been recorded at a deemed value of $3.00 based on the
estimated fair value of the net assets acquired from OSAS.
The excess of the purchase price over the fair value of the net assets
acquired has been allocated to goodwill on a preliminary basis, subject to the
final assessment of fair value, and is being amortized on a straight-line basis
over 10 years.
3. PRO FORMA TRANSACTIONS
The unaudited pro forma financial statements have been prepared to give
effect to the following summarized transactions. Each transaction can occur or
fail to occur independent of the other transactions. The unaudited pro forma
financial statements, for illustrative purposes, give effect to the adjustments
outlined on the assumption that each transaction is completed.
(a) Completion of financing where the Company issues 20,000,000 common
shares for gross proceeds of at least $105,000,000.
(b) Issuance of 7,600,000 and 5,967,609 of the Company's common stock
for 100% and 82.5% ownership of MSOAS and OSAS respectively.
(c) Repayment of the loan from ValorInvest.
F-37
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO UNDERWRITER, DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 6
Use of Proceeds................................ 17
Dividend Policy................................ 18
Capitalization................................. 18
Dilution....................................... 19
Price Range of Common Stock.................... 20
Selected Consolidated Financial Data........... 20
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 21
Business....................................... 22
Management..................................... 32
Principal Stockholders......................... 34
Selling Stockholders and Plan of
Distribution................................. 35
Certain Transactions........................... 40
Description of Securities...................... 41
Shares Eligible for Future Sale................ 42
Underwriting................................... 43
Legal Matters.................................. 43
Experts........................................ 43
Additional Information......................... 44
Index to Financial Statements.................. F-1
</TABLE>
------------------------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
MARINE SHUTTLE OPERATIONS INC.
33,567,609 SHARES OF COMMON STOCK
---------------------
PROSPECTUS
---------------------
BERLINER FREIVERKEHR (AKTIEN) AG
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Nevada General Corporation Law (the "GCL") authorizes Nevada
corporations to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he or she 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, employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding, including any
appeal thereof, if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or on behalf of a corporation, indemnification may not be made if the
person seeking indemnification is adjudged liable, unless the court in which
such action was brought determines such person is fairly and reasonably entitled
to indemnification. The indemnification provisions of the GCL require
indemnification if a director or officer has been successful on the merits or
otherwise in defense of any action, suit, or proceeding to which he or she was a
party by reason of the fact that he or she is or was a director or officer of
the corporation. The indemnification authorized under the GCL is not exclusive
and is in addition to any other rights granted to officers and directors under
the Articles of Incorporation or By-Laws of a corporation or any agreement
between officers and directors and the corporation. A corporation may purchase
and maintain insurance or furnish similar protection on behalf of any officer or
director against any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising out of the
status of officer or director of the corporation, whether or not the corporation
would have the power to indemnify him or her against such liability under the
GCL.
The Registrant's Articles of Incorporation: (i) eliminates the personal
liability of the directors of the Registrant to the fullest extent permitted by
the GCL and (ii) provides that the Registrant shall indemnify, to the fullest
extent permitted by the GCL, any and all persons whom it shall have the power to
indemnify under the GCL from all expenses, liabilities, or other matters
referred to in or covered by the GCL. The By-Laws of the Registrant provide that
the Registrant shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Registrant to procure a judgment in its favor)
by reason of the fact that such person is or was an agent of the Registrant,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with such proceeding to the fullest extent
permitted under the GCL.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the Registrant in connection with the issuance and
distribution of the securities being registered hereby (other than underwriting
discounts and commissions) are as follows:
<TABLE>
<S> <C>
Registration Fee (Securities and Exchange Commission)............................. $ 62,509
NASDAQ Listing Fee................................................................ $ 10,000
Frankfurt Stock Exchange Listing Fee.............................................. $ 1,000
Printing and Engraving Expenses................................................... $ 100,000
Accounting Fees and Expenses...................................................... $ 150,000
Legal Fees and Expenses........................................................... $ 350,000
Transfer Agent's Fees............................................................. $ 2,500
Miscellaneous Expenses............................................................ $ 123,991
---------
Total......................................................................... $ 800,000
</TABLE>
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since its inception, the Registrant has made the following issuances of
securities, none of which were registered under the Securities Act of 1933, as
amended (the "Securities Act").
On or about June 6, 1997, the Registrant's four founders, all of whom are
foreign residents, contributed $10,000 to the Company in exchange for an
aggregate of 10,000,000 shares of common stock.
On June 15, 1997, the Registrant sold 10,000,000 shares of common stock to
various foreign investors for an aggregate purchase price of $100,000 pursuant
to Rule 504 promulgated under the Securities Act.
On August 8, 1997, the Registrant sold 20,000 shares of common stock to
various foreign investors for an aggregate purchase price of $60,000 pursuant to
Rule 504 promulgated under the Securities Act.
On April 14, 1998, the Registrant issued 7,600,000 shares of common stock
pursuant to Regulation S promulgated under the Securities Act ("Regulation S")
in exchange for all of the issued and outstanding shares of capital stock of
Marine Shuttle Operations AS.
In May, 1998, the Registrant acquired 3,291,738 shares of Offshore Shuttle
AS ("OSAS") in exchange for 4,937,607 shares of common stock pursuant to
Regulation S. All of such shares are being held in escrow subject to completion
of the offering.
On May 20, 1998, the Registrant entered into two agreements to acquire an
additional 686,668 shares of OSAS in exchange for 1,030,002 shares of common
stock pursuant to Regulation S. Subject to the satisfaction of certain
conditions precedent, the Registrant anticipates that the exchange will close
soon after the completion of the offering.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement
2.1 Stock Purchase Agreement, dated February 19, 1998, between the Registrant and Franz Eder
2.2 Agreement Regarding Exchange of Shares between the Registrant, SPAX Holding AS, et. al.
2.3 Form of Agreement Regarding Exchange of Shares between the Registrant and various stockholders of
Offshore Shuttle AS (including schedule of omitted documents pursuant to Item 601(a) of Regulation
S-K)
2.4 Escrow Agreement, dated May 5, 1998, between the Registrant, various stockholders of Offshore Shuttle
AS, and Glad Arn Meyer & Co., as escrow agent
2.5 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and G. Foss Beheer B.V.
2.6 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and Per Bull Haugsen
3.1 Articles of Incorporation of the Registrant, as amended
3.2 Amended and Restated By-laws of the Registrant
4.1 Form of Common Stock Certificate
5. Opinion of counsel to the Registrant concerning the legality of the securities being offered
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.1 Head Licence Agreement between Marine Shuttle Operations AS and Offshore Shuttle AS dated March 31,
1998
10.2 Co-operation Agreement between Marine Shuttle Operations AS and Schuller Industrieentsorgung AG
10.3 Personnel Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated February
26, 1998
10.4 Accounting Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998
10.5 Loan Agreement, dated as of March 12, 1998, between the Registrant and ValorInvest, Ltd.
10.6 Marketing Agreement between Marine Shuttle Operations AS and Thyssen Stahlunion GmbH, dated April 14,
1998
10.7 The Registrant's 1998 Stock Option Plan
10.8 Employment Agreement, dated as of June 1, 1998, between the Registrant and Franz Eder
10.9 Employment Agreement, dated as of April 14, 1998, between the Registrant and Iqbal Akram
10.10 Agreement, dated as of April 14, 1998, between the Registrant, Wareham Management, Ltd., and George
Wilfred Norman Wareham
10.11 Lease, dated as of June 1, 1998, by and between the Registrant and Intercap Resource Management U.S.,
Inc.
21. List of the Registrant's Subsidiaries
23. (a) Consent of Deloitte & Touche, Vancouver, British Columbia, Canada
(b) Consent of Deloitte & Touche, Oslo, Norway
(c) Consent of Breslow & Walker, LLP (contained in the opinion filed as Exhibit 5.)
27. Financial Data Schedule
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by final adjudication of
such issue.
The undersigned Registrant hereby undertakes that it will:
(1) For purposes of determining any liability under the Securities Act,
treat the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon
II-3
<PAGE>
Rule 430A and contained in a form of Prospectus filed by the Registrant
pursuant to Rule 424(b)(1), or (4) or 497(h) under the Securities Act as
part of this Registration Statement as of the time the Commission declared
it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of Prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
(3) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or together,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) Include any material information with respect to the plan of
distribution not previously discussed in the registration statement or
any material change to such information in the registration statement.
(4) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-1 and authorized this Registration
Statement to be signed on its behalf by the undersigned on July 2, 1998.
MARINE SHUTTLE OPERATIONS INC.
By: /S/ FRANZ EDER
-----------------------------------------
Franz Eder
PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER)
By: /S/ GEORGE WILFRED NORMAN WAREHAM
-----------------------------------------
George Wilfred Norman Wareham
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Franz Eder, as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ FRANZ EDER Director
- ------------------------------ July 2, 1998
Franz Eder
/s/ IQBAL AKRAM Director
- ------------------------------ July 2, 1998
Iqbal Akram
/s/ JURGEN TERNIEDEN Director
- ------------------------------ July 2, 1998
Jurgen Ternieden
/s/ HUBERT BESNER Director
- ------------------------------ July 2, 1998
Hubert Besner
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
1.1 Form of Underwriting Agreement
2.1 Stock Purchase Agreement, dated February 19, 1998, between the Registrant and Franz Eder
2.2 Agreement Regarding Exchange of Shares between the Registrant, SPAX Holding AS, et. al.
2.3 Form of Agreement Regarding Exchange of Shares between the Registrant and various stockholders
of Offshore Shuttle AS (including schedule of omitted documents pursuant to Item 601(a) of
Regulation S-K)
2.4 Escrow Agreement, dated May 5, 1998, between the Registrant, various stockholders of Offshore
Shuttle AS, and Glad Arn Meyer & Co., as escrow agent
2.5 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and G. Foss Beheer B.V.
2.6 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and Per Bull Haugsen
3.1 Articles of Incorporation of the Registrant, as amended
3.2 Amended and Restated By-laws of the Registrant
4.1 Form of Common Stock Certificate
5. Opinion of counsel to the Registrant concerning the legality of the securities being offered
10.1 Head Licence Agreement between Marine Shuttle Operations AS and Offshore Shuttle AS dated March
31, 1998
10.2 Co-operation Agreement between Marine Shuttle Operations AS and Schuller Industrieentsorgung AG
10.3 Personnel Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998
10.4 Accounting Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998
10.5 Loan Agreement, dated as of March 12, 1998, between the Registrant and ValorInvest, Ltd.
10.6 Marketing Agreement between Marine Shuttle Operations AS and Thyssen Stahlunion GmbH, dated
April 14, 1998
10.7 The Registrant's 1998 Stock Option Plan
10.8 Employment Agreement, dated as of June 1, 1998, between the Registrant and Franz Eder
10.9 Employment Agreement, dated as of April 14, 1998, between the Registrant and Iqbal Akram
10.10 Agreement, dated as of April 14, 1998, between the Registrant, Wareham Management, Ltd., and
George Wilfred Norman Wareham
10.11 Lease, dated as of June 1, 1998, by and between the Registrant and Intercap Resource Management
U.S., Inc.
21. List of the Registrant's Subsidiaries
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
23. (a) Consent of Deloitte & Touche, Vancouver, British Columbia, Canada
(b) Consent of Deloitte & Touche, Oslo, Norway
(c) Consent of Breslow & Walker, LLP (contained in the opinion filed as Exhibit 5.)
27. Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 1.1
Draft
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT (this "Agreement") is entered into as of
_________, 1998, among Marine Shuttle Operations Inc., a Nevada corporation (the
"Company"), and Berliner Freiverkehr (Aktien) AG, a German corporation ("BFAG").
Background
The Company proposes to issue and sell through BFAG 20,000,000 shares
(the "Securities") of its common stock par value $ 0.001 per share ("Common
Stock") on a "best efforts, all-or-none" basis (the "Offering").
In furtherance of the foregoing, the Company and BFAG hereby agree as
follows:
Section 1
Sale of Securities
The Company proposes to issue and sell the Securities to the public
through BFAG, as underwriter, at an offering price of US$____ per share in
consideration for which the Company shall pay BFAG, at the Closing (as defined
below), a commission equal to ten percent ( 10 %) of the aggregate purchase
price of the Securities.
Section 2
Payment and Delivery
2.1. The Company hereby appoints BFAG as its exclusive agent (subject
to BFAG's right to designate selected dealers who may participate in the
Offering) for a period (the "Offering Period") of thirty (30) days from the date
on which the Registration Statement (as hereinafter defined) becomes effective
(the "Effective Date"), to sell the Securities on a "best-efforts, all-or-none"
basis; provided however, the Company and BFAG, by their mutual written consent,
may extend the Offer-
<PAGE>
ing Period for an additional period of up to thirty (30) days. An additional
five (5) days may be added solely for the purpose of allowing checks to
clear. The Company and BFAG, at any time, may agree to terminate the Offering
prior to the end of the Offering Period. BFAG, on the basis of the
representations and warranties contained herein, and subject to the terms and
conditions set forth herein, accepts such appointment and agrees to use its
best efforts to find purchasers for the Securities. BFAG, as agent for the
Company, shall offer the shares of Common Stock to the public at a price of
US$ _______ per share. If, at or prior to the end of the Offering Period,
subscriptions are received aggregating more than the Securities, then BFAG in
its sole and absolute discretion, may allocate the Securities among the
subscribers in such manner as it shall see fit.
2.2 Until all of the Securities have been subscribed and paid for, all
subscription amounts shall be deposited no later than noon on the business day
next following their receipt by BFAG or any participating Selected Dealer (as
hereinafter defined), directly into a separate account (the "Escrow Account") to
be held by BFAG in escrow as agent for the subscribers. All such subscription
amounts shall be held in the Escrow Account until disbursed as hereinafter
provided.
2.3 Promptly after the Effective Date, (i) the Company shall deliver to
U.S. Stock Transfer Corporation (the "Transfer Agent") certificates which will
be used to represent the Securities to be sold hereunder through BFAG; and (ii)
the Company shall instruct the Transfer Agent to deliver a certificate
evidencing the Securities to Depositary Trust Company for deposit into the
account of BFAG's clearing firm on behalf of BFAG. The Securities shall be
held by BFAG pursuant to a "safe-keeping" letter until the Closing.
2.4 If all of the Securities are not sold within the Offering Period,
this Agreement automatically shall terminate, the Securities held by BFAG shall
be returned to the Transfer Agent, and all amounts in the Escrow Account
promptly shall be returned to the subscribers without interest thereon or
deduction therefrom.
2.5 If all of the Securities have been subscribed for and payment
therefor has been tendered prior to the expiration of the Offering Period, BFAG
promptly shall give written notice (the "Notice") to the Company and the
Transfer Agent so indicating and setting forth (i) the amount of BFAG's
commission, (ii) the time and date (which date shall be no later than sixty-five
(65) days
2
<PAGE>
after the Effective Date) on which the closing (the "Closing") shall take place
(the "Closing Date"), and (iii) a written statement reflecting each subscription
which identifies, among other things, the name and address of each subscriber,
the number of Securities allocated to each subscriber, the amount tendered as
payment therefor, and, if the provisions of Section 2.7 below are applicable,
the amount equal to the aggregate price of that number of Securities for which
such subscription its not being accepted. The Closing shall take place at the
offices of BFAG, Kurfurstendamm 119, 10711 Berlin, Germany, or at such other
place as BFAG and the Company shall agree.
2.6 At the Closing, (i) BFAG shall deliver to each purchaser
certificates representing the Securities sold to each of such purchaser (or
shall electronically transfer evidence of ownership to such purchaser), and (ii)
BFAG shall deliver and remit to the Company from the Escrow Account the purchase
price of such Securities, less BFAG's commission.
2.7 If, prior to the end of the Offering Period, subscriptions are
received aggregating more than the Securities, then (i) BFAG, in its sole and
absolute discretion, may allocate the Securities among the subscribers in such
manner as it shall see fit, and (ii) BFAG shall remit to those subscribers whose
subscriptions are not being accepted, in whole or in part, an amount of money
equal to the price of that number of Securities for which such subscription is
not being accepted.
Section 3
Offering of the Securities on Behalf of the Company
3.1. In offering the Securities for sale, BFAG shall offer the
Securities solely as agent for the Company, and such offering shall be made upon
the terms and subject to the conditions set forth in the Registration Statement
and Prospectus (each as hereinafter defined). BFAG shall commence offering the
Securities for sale as agent for the Company as soon after the Effective Date as
BFAG may deem advisable; provided, however, if BFAG does not commence such
offering within three (3) business days after the Effective Date, it promptly
shall so advise the Company and the Securities and Exchange Commission (the
"Commission").
3.2. In accordance with the applicable provisions of the Registration
Statement (as hereinafter defined) and this Agreement, BFAG may offer and sell
the Securities for the account of
3
<PAGE>
the Company through registered dealers selected by BFAG (the "Selected
Dealers"), and may allow such concessions (out of the underwriting commission)
to the Selected Dealers as BFAG may determine. All sales by Selected Dealers
shall be on behalf of the Company. BFAG shall have the authority to appoint
Selected Dealers as agents for the Company; provided, however, no Selected
Dealer shall be appointed by BFAG unless such Selected Dealer has duly executed
and delivered to BFAG a Selected Dealers Agreement in the form filed as an
exhibit to the Registration Statement. In no event shall Selected Dealers be
agents or sub-agents of BFAG. Except as herein provided, the Company shall not
appoint any other agents in offering the Securities for sale.
3.3. BFAG represents, warrants, and covenants that, as part of the
distribution of the Securities, it has not offered or sold, and will not, offer,
sell, or deliver, directly or indirectly, any of the Securities or distribute
any prospectus relating to the offering of the Securities within the United
States or to any U.S. Person (as defined below). In addition, BFAG has agreed
that it will offer to sell Securities only in compliance with all relevant
requirements of any applicable laws. As used herein, the term "U.S. Person"
means any resident or national of the United States, any corporation,
partnership, or other entity created or organized in or under the laws of the
United States, or any estate or trust the income of which is subject to United
States income taxation regardless of the source of its income (other than the
foreign branch of any U.S. Person), and includes any United States branch of a
person other than a U.S. Person.
3.4. BFAG agrees that (i) it will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of the Securities Regulations
1995 ("the Regulations"); (ii) it will comply with all applicable provisions of
the Financial Services Act 1986 and the Regulations with respect to anything
done by it in relation to the Securities in, from, or otherwise involving the
United Kingdom; and (iii) it will only issue or pass on to any person in the
United Kingdom any document received by it in connection with the offer of the
Securities if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemption) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
4
<PAGE>
Section 4
Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with that:
4.1. A registration statement (File No. _______________) on Form S-1
relating to the Offering, including a form of prospectus subject to completion,
copies of which have heretofore been delivered to BFAG has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations promulgated thereunder by the
Commission (the "Rules and Regulations"), and has been filed with the Commission
under the Act. In addition, one or more amendments to such registration
statement may have been so filed. After the execution of this Agreement, (i) if
the Commission has declared such registration statement (as it may have been
amended) to be effective under the Act, then the Company, if required, will file
with the Commission a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions as
are required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act, and as has been furnished to and approved by BFAG prior to the execution of
this Agreement; or (ii) if the Commission has not declared such registration
statement (as it may have been amended) to be effective under the Act, then the
Company will file with the Commission an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by BFAG prior to the execution of this Agreement. As
used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto, and including
any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as defined below); the term "Preliminary Prospectus"
means each prospectus subject to completion, filed with such registration
statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any amendment
thereto at the time it was or is declared effective); and the term "Prospectus"
means the prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act, or, if no prospectus is required to be filed pursuant to said
Rule 424(b), such term means the Prospectus included in the Registration
Statement; except that if such registration statement or prospectus is amended
or such prospectus is supplemented after the effective date of such registration
statement and prior to the Closing Date,
5
<PAGE>
then the term "Registration Statement" shall include such registration statement
as so amended, and the term "Prospectus" shall include such prospectus as so
amended or supplemented, or both, as the case may be.
4.2. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
4.3. The Company and its subsidiaries, Marine Shuttle Operation AS and
Offshore Shuttle AS (collectively, "Subsidiaries"), each has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with full power and authority
(corporate and other) to own or lease its properties and to conduct its business
as described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing as a foreign corporation in all
other jurisdictions in which the nature of its businesses or the character or
location of its properties requires such qualification, except where failure to
so qualify will not materially affect the Company's business, properties, or
financial condition.
4.4. The authorized, issued, and outstanding capital stock of the
Company as of March 31, 1998 is as set forth in the Prospectus under the heading
"Capitalization", and the shares of issued and outstanding capital stock of the
Company set forth thereunder have been duly authorized, validly issued, and are
fully paid and non-assessable. Except as set forth in the Prospectus, no
options, warrants, or other rights to purchase, agreements or other obligations
to issue, or agreements or other rights to convert any obligation into, any
shares of capital stock of the Company have been granted or entered into by the
Company. The capital stock of the Company conforms to all statements relating
thereto contained in the Registration Statement and Prospectus.
4.5. The Securities are duly authorized, and when issued, delivered,
and paid for pursuant to this Agreement, shall be validly issued, fully paid and
non-assessable, and free of pre-emptive rights of any security holder of the
Company. Except as described in the Registration Statement, neither the filing
of the Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of the sale
or transfer of any shares of Common Stock.
6
<PAGE>
4.6. This Agreement has been duly and validly authorized, executed, and
delivered by the Company. The Company has full power and lawful authority to
authorize, issue, and sell the Securities to be sold by it hereunder on the
terms and conditions set forth herein. No consent, approval, authorization, or
other order of any governmental authority is required in connection with the
authorization, execution, and delivery of this Agreement or with the
authorization, issuance, and sale of the Securities, except as may be required
under the Act or state securities laws.
4.7. Except as described in the Prospectus, (i) neither the Company nor
its Subsidiaries are in violation, breach, or default of or under, and the
consummation of the transactions herein contemplated and the fulfilment of the
terms of this Agreement shall not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge, or encumbrance upon
any of the property or assets of the Company or its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement, or other
agreement or instrument to which the Company or its Subsidiaries are a party or
by which the Company or its Subsidiaries may be bound or to which any of the
property or assets of the Company or its Subsidiaries is subject; and (ii) the
consummation of the transactions contemplated herein and the fulfilment of the
terms of this Agreement shall not result in any violation of the provisions of
the articles of incorporation or the by-laws of the Company or its Subsidiaries,
or any statute, or any applicable order, rule, or regulation of any court,
regulatory authority, or other governmental body having jurisdiction over the
Company or its Subsidiaries.
4.8. Subject to the qualifications stated in the Prospectus, the
Company and its Subsidiaries have good and marketable title to all properties
and assets described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances, or restrictions, except such as are not materially
significant or important in relation to their business. All of the material
leases and subleases under which the Company or its Subsidiaries are the lessor
or sublessor of properties or assets, or under which the Company or its
Subsidiaries hold properties or assets as lessee or sublessee as described in
the Prospectus, are in full force and effect; except as described in the
Prospectus, neither the Company nor its Subsidiaries are in default in any
material respect with respect to any of the terms or provisions of any of such
leases or subleases, and no claim has been asserted by anyone adverse to the
rights of the Company or its Subsidiaries as lessor, sublessor, lessee, or
sublease under any of such leases or subleases; and the Company or its
Subsidiaries owns or leases all such properties described
7
<PAGE>
in the Prospectus as are necessary to its operations as now conducted and,
except as otherwise stated in the Prospectus, as proposed to be conducted as set
forth in the Prospectus.
4.9. Deloitte & Touche, LLP has given its reports on certain financial
statements filed and to be filed with the Commission as a part of the
Registration Statement which are incorporated in the Prospectus; with respect to
the Company and its Subsidiaries, Deloitte & Touche, LLP is an independent
public accounting firm as required by the Act and the Rules and Regulations.
4.10. The financial statements, together with related notes and
schedules, if any, set forth in the Prospectus and the Registration Statement
fairly present the financial position and results of operations and changes in
cash flow position of the Company and its Subsidiaries on the basis stated in
the Registration Statement at the respective dates and for the respective
periods to which they apply. Said statements and related notes and schedules
have been prepared in accordance with generally accepted accounting principles
applied on a basis which is consistent during the periods involved.
4.11. Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth in
or contemplated by the Prospectus (i) neither the Company nor its Subsidiaries
have incurred any liabilities or obligations, direct or contingent, not in the
ordinary course of business, or entered into any transaction not in the ordinary
course of business, which is material to the business of the Company or its
Subsidiaries; (ii) there has not been any change in the capital stock of the
Company or its Subsidiaries, any incurrence of short-term or long-term debt by
the Company or its Subsidiaries, any issuance of options, warrants, or other
rights to purchase the capital stock of the Company or its Subsidiaries, or any
adverse change or any development involving, so far as the Company can now
reasonably foresee, a prospective adverse change in the condition (financial or
other), net worth, results of operations, business, key personnel or properties
of the Company or its Subsidiaries which would be material to the business or
financial condition of the Company; and (iii) neither the Company nor its
Subsidiaries have become a party to, and neither the business nor the property
of the Company or its Subsidiaries have become the subject of, any material
litigation, whether or not in the ordinary of business.
4.12. Except as set forth in the Prospectus, there is not now pending
or threatened any action, suit, or proceeding in which the Company or its
Subsidiaries is a party, before or by any court or
8
<PAGE>
governmental agency or body, which might result in any material adverse change
in the condition (financial or other), business, net worth, or properties of the
Company or its Subsidiaries, nor are there any pending or threatened actions,
suits, or proceedings related to environmental matters or discrimination on the
basis of age, sex, religion, or race; and no labour disputes involving the
employees of the Company or its Subsidiaries exist or are imminent which might
be expected to adversely affect the conduct of the business, property, or
operations of the Company or its Subsidiaries or the financial condition or
results of operations of the Company or its Subsidiaries.
4.13. Except as disclosed in the Prospectus, the Company and its
Subsidiaries have sufficient licenses, permits, and other governmental
authorizations currently required for the conduct of their business or the
ownership of their properties as described in the Prospectus and are in all
material respects complying therewith. In addition, except as otherwise
described in the Prospectus, the Company and its Subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade-names, trademark registrations, service mark registrations,
copyrights, and licenses necessary for the conduct of such business, and have
not received any notice of conflict with the asserted rights of others in
respect thereof. None of the activities or businesses of the Company or its
Subsidiaries are in violation of, or cause the Company or its Subsidiaries to
violate, any law, rule, regulation, or order of the United States or any state,
county, or locality, or any agency or body of the United States or any state,
county, or locality, the violation of which would have a material adverse impact
upon the condition (financial or otherwise), business, property, results of
operations, or net worth of the Company or its Subsidiaries.
4.14. Neither the Company nor its Subsidiaries, directly or indirectly,
(i) in violation of law, have made any contributions to any candidate for
political office or failed to disclose fully any such contributions, or (ii)
have made any payment to any state, federal, or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments or contributions required or allowed by applicable law. The
Company's internal accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
9
<PAGE>
4.15. All contracts and other documents of the Company and its
Subsidiaries which are, under the Rules and Regulations, required to be filed as
exhibits to the Registration Statement have been so filed.
4.16. The Company and its Subsidiaries, directly or indirectly, have
not taken and shall not take any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Securities hereby.
4.17. Except for Marine Shuttle Operations AS and Offshore Shuttle AS,
the Company has no subsidiaries or investments in, and has not made any loans or
advances to, any other corporation, partnership, or other entity.
4.18. The Company has not entered into any agreement or understanding
pursuant to which any person, either directly or indirectly, is entitled to
compensation from the Company or any principal stockholders, officers, or
directors of the Company for services as a finder in connection with the
offering of Securities contemplated by this Agreement.
Section 5
Covenants of the Company
The Company covenants and agrees with BFAG that:
5.1. The Company shall use its best efforts to cause the Registration
Statement to become effective. If required, the Company shall file the
Prospectus and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rule 424(b) under the Act. Upon
notification from the Commission that the Registration Statement has become
effective, the Company shall so advise BFAG. The Company, at no time, whether
before or after the Effective Date, shall file any amendment to the Registration
Statement or amendment or supplement to the Prospectus without first advising
BFAG of such filing and without furnishing BFAG with a copy thereof. No such
amendment or supplement shall be filed if BFAG or BFAG's counsel has objected in
writing to such filing or if such filing is not in compliance with the Act and
the Rules and Regulations.
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At the request of BFAG, made any time prior to the expiration of the Offering
Period, the Company shall prepare and file with the Commission, promptly upon
BFAG's request, any amendments or supplements to the Registration Statement or
Prospectus in compliance with the Act which, in BFAG's opinion, may be necessary
or advisable in connection with the sale of the Securities.
5.2. As soon as the Company is advised thereof, the Company shall
advise BFAG and confirm such advice in writing (i) of the receipt of any
comments of the Commission with respect to any filing in connection with the
Registration Statement or supplement to the Prospectus, (ii) of the
effectiveness of any post-effective amendment to the Registration Statement,
(iii) of the filing of any supplement to the Prospectus or any amended
Prospectus, (iv) of any request made by the Commission for amendment of the
Registration Statement, for supplementing of the Prospectus, or for additional
information with respect thereto, or (v) of the issuance (or threat thereof) by
the Commission or any state or regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or suspending the
qualification of the Securities for offering in any jurisdiction, or of the
institution of any proceedings for any of such purposes. The Company shall use
its best efforts to prevent the issuance of any such order and, if issued, to
obtain the lifting thereof as soon as possible.
5.3. The Company has caused to be delivered to BFAG copies of each
Preliminary Prospectus, and the Company has consented and hereby consents to the
use of such copies for the purposes permitted by the Act. The Company authorizes
BFAG and the Selected Dealers (collectively, the "Dealers") to use the
Prospectus in connection with the sale of the Securities for such period as, in
the opinion of counsel to BFAG, the use thereof is required to comply with the
applicable provisions of the Act and the Rules and Regulations. If, at any time
within such period as a Prospectus is required under the Act to be delivered in
connection with sales by any of the Dealers, (i) it shall be necessary to amend
or supplement the Prospectus to comply with law or with the Rules and
Regulations, or (ii) any event happens of which the Company has knowledge and
which materially affects the Company or the securities of the Company, or which,
in the opinion of counsel for the Company or counsel for BFAG, should be set
forth in an amendment to the Registration Statement or an amendment or
supplement to the Prospectus in order to make the statements therein, in light
of the circumstances existing at the time the Prospectus is required to be
delivered to a purchaser of the Securities, not then misleading in any material
respect, then the Company promptly will notify BFAG and forthwith
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prepare and furnish to BFAG copies of such amended Registration Statement or
Prospectus or of such supplement to be attached to the Prospectus, in such
quantities as BFAG may reasonably request, in order that the Registration
Statement and Prospectus, as so amended or supplemented, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements in the Registration Statement and Prospectus, in
the light of the circumstances under which they are made, not misleading in any
material respect. The preparation and furnishing of any such amendment or
supplement to the Registration Statement or Prospectus shall be without expense
to BFAG.
5.4. The Company shall comply with the Act, the Rules and Regulations,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder, in connection with the offering
and issuance of the Securities.
5.5. On the Effective Date and at all times subsequent thereto up to
the Closing Date, (i) the Registration Statement and Prospectus shall conform in
all material respects to the requirements of the Act and the Rules and
Regulations; and (ii) neither the Registration Statement nor the Prospectus
shall include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make statements
therein not misleading; provided, however, the Company makes no representations,
warranties, or agreements as to information contained in or omitted from the
Registration Statement of Prospectus in reliance upon, and in conformity with,
information furnished to the Company by or on behalf of BFAG.
5.6. The Company shall use its best efforts to assist BFAG and its
counsel in order to qualify or register the Securities for sale under (or obtain
an exemption from the application of) the securities or "blue sky" laws of such
jurisdictions as BFAG may designate, and shall make such applications and
furnish such information as may be required for that purpose and to comply with
such laws; provided, however, the Company shall not be required to qualify as a
foreign corporation or a dealer in securities or to execute a general consent of
service of process in any jurisdiction in any action other than one arising out
of the offering or sale of the Securities. The Company, from time to time, shall
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for so long a period as BFAG may
reasonably request.
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5.7. The Company shall use its best efforts (i) to cause a registration
statement under the Exchange Act to be declared effective concurrently with the
completion of the Offering and shall notify BFAG, in writing, immediately upon
the effectiveness of such registration statement, and (ii) if requested by BFAG,
to obtain and keep current a listing in the Standard & Poor's Corporation
Records, Standard and Poor's Monthly Stock Guide, and Moody's Industrial OTC
Manual, and to have the Company listed in such reports for a period of not less
than ten (10) years from the Closing Date.
5.8. For so long as the Company is a reporting company under either
Section 12(g) or 15(d) of the Exchange Act, the Company, at its expense, shall
furnish to its stockholders an annual report (including financial statements
audited by independent public accountants) in reasonable detail and, at its
expense, shall furnish to BFAG during the period ending five (5) years from the
date hereof, (i) as soon as practicable after the end of each fiscal year, a
balance sheet of the Company and any of its subsidiaries, as of the end of such
fiscal year, together with statements of income, surplus, and cash flow of the
Company and any subsidiaries for such fiscal year, all in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
accountants; (ii) as soon as practicable after the end of each of the first
three (3) fiscal quarters of each fiscal year, consolidated summary financial
information of the Company for each such quarter in reasonable detail; (iii) as
soon as they are available, a copy of all reports (financial or other) mailed to
security holders; (iv) as soon as they are available, a copy of all reports and
financial statements furnished to or filed with the Commission or any securities
exchange or automated quotation system on which any class of securities of the
Company is listed, except such reports and financial statements which may have
been granted "confidential treatment" under the Exchange Act or under any other
applicable law, rule, or regulation; and (v) such other information as BFAG,
from time to time, may request, but only to the extent such information is not
material, non-public information. In the event the Company has an active
subsidiary or subsidiaries, such financial statements referred to above will be
on a consolidated basis to the extent the accounts of the Company and its
subsidiary or subsidiaries are consolidated in reports furnished to its
stockholders generally.
5.9. The Company shall comply with all periodic reporting and proxy
solicitation requirements under the Exchange Act.
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5.10. The Company shall deliver to BFAG on or before the Closing Date
two (2) signed copies of the Registration Statement, including all financial
statements and exhibits filed therewith and all amendments thereto, and shall
deliver to BFAG such number of conformed copies of the Registration Statement,
including such financial statements (but without exhibits) and all amendments
thereto, as BFAG may request. The Company shall deliver to or upon the order of
BFAG from time to time until the Effective Date, as many copies of any
Preliminary Prospectus filed with the Commission prior to the Effective Date as
BFAG may request. The Company shall deliver to BFAG on the Effective Date and
thereafter for so long as a Prospectus is required to be delivered under the
Act, as many copies of the Prospectus, in final form or as thereafter amended or
supplemented, as BFAG from time to time may request.
5.11. The Company shall apply the net proceeds from the sale of the
Securities for the purposes set forth in the Prospectus under the heading "Use
of Proceeds", and shall file such reports with the Commission with respect to
the sales of the Securities and the application of the proceeds therefrom as may
be required under the Act.
5.12. Upon the Effective Date, the Company shall make all filings
required, including registration under the Exchange Act, to obtain the listing
of the Common Stock in the NASDAQ System and on the Frankfurt Stock Exchange and
the Berlin Stock Exchange, and shall use its best efforts to maintain such
listings for at least ten (10) years from the date of this Agreement.
5.13. The Company shall not take, directly or indirectly, any action
designed to, or which constitutes, or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of the
Securities.
5.14. The Company shall not effect a change in its accounting firm,
except to a nationally recognized accounting firm, for a period of five (5)
years from the Effective Date without the prior written consent of BFAG.
5.15. During the Offering Period and for a twenty-five (25) day period
thereafter, the Company shall not issue press releases or engage in other
publicity without the prior written consent of
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BFAG which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, the Company may issue such press releases to comply with its
obligations under applicable securities laws.
5.16. On the Closing Date, all transfer or other taxes (including
franchise, capital stock, or other tax, other than income taxes, imposed by any
jurisdiction), if any, which are required to be paid in connection with the sale
and transfer of the Securities through BFAG hereunder shall have been fully paid
or provided for by the Company and all laws imposing such taxes will have been
fully complied with.
Section 6
Conditions to the Obligations of BFAG
The obligations of BFAG to act as agent of the Company hereunder, to
find purchasers for the Securities, and to consummate the transactions
contemplated on the Closing Date, are subject to the accuracy of (as of the date
hereof and as of the Closing Date) and compliance with the covenants,
representations and warranties of the Company contained herein, the performance
by the Company of its obligations hereunder, and the following conditions:
6.1. BFAG shall have received notice of the effectiveness of the
Registration Statement not later than 9:30 a.m., New York time, on the day
following the date of this Agreement, or at such later time or on such later
date as to which BFAG may agree in writing; on or prior to the Closing Date, no
stop order denying or suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that or a similar purpose shall
have been instituted or shall be pending or, to BFAG's knowledge or to the
knowledge of the Company, shall be contemplated by the Commission; and any
request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of BFAG. If required, the
Prospectus shall have been filed with the Commission in the manner and within
the time period required by Rule 424(b) under the Act.
6.2. Prior to the Effective Date and again on and as of the Closing
Date, BFAG shall have received a letter from Deloitte & Touche, LLP, independent
public accountants for the Company, substantially in the form approved by BFAG,
which sets forth for the period from the last unaudited
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<PAGE>
balance sheet included in the Registration Statement to a date not more than
five (5) business days prior to the date of such letter (i) changes in the
Company's capital stock, (ii) changes in the Company's net assets, and (iii)
changes in the Company's long term debt.
6.3. At the Closing Date, (i) the representations and warranties of the
Company contained in this Agreement shall be true and correct with the same
effect as if made on and as of the Closing Date, and the Company shall have
performed all of its obligations hereunder and satisfied all the conditions on
its part to be satisfied at or prior to the Closing Date; (ii) the Registration
Statement, the Prospectus, and any amendments or supplements thereto shall
contain all statements which are required to be stated therein in accordance
with the Act and the Rule and Regulations and shall conform to the requirements
thereof in all material respects, and neither the Registration Statement, the
Prospectus, nor any amendment or supplement thereto shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; (iii)
since the respective dates as of which information is given, there shall have
been no material adverse change, or any development involving a prospective
material adverse change, in the business, properties, condition (financial or
otherwise), results of operations, capital stock, long-term or short-term debt,
or general affairs of the Company from that set forth in the Registration
Statement and the Prospectus, except changes which the Registration Statement
and Prospectus indicate might occur after the Effective Date, and the Company
shall not have incurred any material liabilities or entered into any agreement
not in the ordinary course of business, other than as referred to in the
Registration Statement and Prospectus; (iv) except as set forth in the
Prospectus, no action, suit, or proceedings, at law or in equity, shall be
pending or threatened against the Company which would be required to be set
forth in the Registration Statement, and no proceedings shall be pending or
threatened against the Company before or by any commission, board, or
administrative agency, in the United States or elsewhere, wherein an
unfavourable decision, ruling, or finding would materially and adversely affect
the business, property, condition (financial or otherwise), results of
operations, or general affairs of the Company, and (v) on the Closing Date, BFAG
shall have received a certificate, signed by the principal financial officer of
the Company and by either the Chairman of the Board or the President of the
Company, dated as of the Closing Date, evidencing compliance with the provisions
of this Section 6.3.
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6.4. All proceedings taken at or prior to the Closing Date in
connection with the issuance and sale of the Securities shall be satisfactory in
form and substance to BFAG and BFAG shall have been furnished with all such
documents, certificates, and opinions as BFAG may reasonably request in
connection with this transaction in order to evidence the accuracy and
completeness of any of the representations, warranties, or statements of the
Company, or its compliance with any of the covenants or conditions contained
herein.
Section 7
Conditions to the Obligations of the Company
The obligation of the Company to sell and deliver the Securities is
subject to the following conditions:
7.1. The Registration Statement shall have become effective no later
than 9:30 a.m., New York time, on the day following the date of this Agreement,
or on such later date as the Company and BFAG may agree in writing.
7.2. At the Closing Date, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued under the Act, and no
proceedings therefor shall have been initiated or threatened by the Commission.
Section 8
Indemnification
8.1. The Company agrees to indemnify and hold harmless BFAG against any
losses, claims, damages, or liabilities (which, for all purposes of this
Agreement, shall include, but shall not be limited to, all reasonable costs of
defense and investigations and all reasonable attorneys' fees and disbursements)
(collectively, "Liabilities"), to which BFAG may become subject under the Act or
otherwise, and shall reimburse, as incurred, BFAG for any legal or other
expenses reasonably incurred in connection with investigating, defending
against, or appearing as a third party witness in connection with any
Liabilities, insofar as such Liabilities (or actions in respect thereof) (i)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained
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in (1) the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or (2) any blue sky application or other
document executed by the Company in connection with such application, or written
information furnished by the Company, filed in any state or other jurisdiction
in order to qualify any or all of the Securities under the securities laws
thereof (any such application, document, or information being hereinafter called
a "Blue Sky Application"), or (ii) arise out of or are based upon the omission
or alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendment or supplement thereto, or in any Blue
Sky Application, a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, the Company shall
not be liable in any such case to the extent, but only to the extent, that any
such Liability arises out of or is based upon an untrue statement, an alleged
untrue statement, an omission, or an alleged omission, made in reliance upon and
in conformity with information furnished to the Company by or on behalf of BFAG
for use in the preparation of the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendments or supplement thereto, or any Blue
Sky Application. This indemnity will be in addition to any liability which the
Company may otherwise have.
8.2. BFAG will indemnify and hold harmless the Company, each of its
directors, each nominee for director named in the Prospectus (if any), each of
its officers who have signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, against any
Liabilities to which the Company or any such director, nominee, officer, or
controlling person may become subject under the Act or otherwise, insofar as
such Liabilities (or actions in respect thereof) arise out of or are based upon
(i) a breach of the provisions of Sections 3.3 and 3.4 hereof, or (ii) any
untrue statement, or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, BFAG shall be liable only to the extent that such untrue statement,
alleged untrue statement, omission, or alleged omission contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, was made in reliance upon and in conformity
with information furnished to the Company by BFAG for use in the preparation
thereof. This indemnity will be in addition to any liability which BFAG may
otherwise have.
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8.3. If, after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, a claim in respect thereof is to be
made against the indemnifying party under this Section 8, then such indemnified
party promptly shall notify the indemnifying party in writing of the
commencement thereof; however, the omission to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party, subject to the
provisions stated herein, shall be entitled to participate in, and to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, other than for reasonable costs of investigation. The
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such separate counsel shall not be at the expense of the indemnifying party if
the indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the indemnified party; provided, however, the fees
and expenses of such separate counsel shall be at the expense of the
indemnifying party if (i) the employment of such separate counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the
defendants in any such action include both the indemnified and the indemnifying
party, and the indemnified party reasonably has concluded that (1) there may be
a conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action, or (2) there may be legal
defences available to the indemnified party and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party or parties). It
is understood, however, that the indemnifying party, in connection with any one
such action, or in connection with any separate but substantially similar or
related action in the same jurisdiction arising out of the same general
allegations or circumstances, shall not be liable for the fees and expenses of
more than one such separate counsel for the indemnified party in all such
actions, which counsel shall be designated in writing by the indemnified party.
No settlement of any action against an indemnified party shall be made without
the consent of the indemnified party, which consent shall not be unreasonably
withheld.
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Section 9
Cost and Expenses.
9.1. Whether or not the sale of the Securities through BFAG is
consummated, the Company shall pay all costs and expenses incident to the
performance of this Agreement by the Company including, but not limited to: the
fees and expenses of counsel to the Company and of the Company's accountants;
the costs and expenses incident to the preparation, printing, filing, and
distribution under the Act of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, and the Prospectus, as amended or supplemented; all
expenses, fees, and disbursements of counsel to BFAG in connection with the
qualification or registration of the Securities (or the exception from such
requirements) under the securities or "blue sky" laws of the states which BFAG
shall designate; the cost of printing and furnishing to BFAG copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Selling Agreement, the Selected
Dealers Agreement, the Underwriter's Questionnaire and Power of Attorney, and
the Blue Sky Memorandum; any fees relating to the listing of the Securities on
NASDAQ, on the Frankfurt Stock Exchange and the Berlin Stock Exchange or any
other securities exchange; the cost of printing the certificates representing
the Securities; the fees of the transfer agent; and the cost of publication of a
"tombstone" of the Offering. The Company shall pay any and all taxes (including
any transfer, franchise, capital stock, or other tax imposed by any
jurisdiction) on sales through BFAG hereunder. The Company also shall pay all
costs and expenses incident to the furnishing of any amended Prospectus or any
supplement to be attached to the Prospectus as called for in Section 5.1 of this
Agreement.
9.2. If the transactions contemplated hereby are not consummated by
reason of any action of BFAG (except an action based upon the Company's breach
of any covenant, representation, or warranty contained herein, or because any
other condition to BFAG's obligations hereunder which is required to be
fulfilled by the Company is not fulfilled), the Company shall be liable for the
out-of-pocket expenses of BFAG up to $25,000, including the legal fees of, and
disbursements incurred by, BFAG's counsel.
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9.3. If the transactions contemplated hereby are not consummated by
reason of a breach by the Company of any covenant, representation, or warranty
herein, or (ii) if the Registration Statement is not declared effective by the
Commission within six (6) months after the date of the filing of the
Registration Statement with the Commission, and the Company elects to
discontinue the Offering through BFAG, then the Company shall be liable for all
out-of-pocket expenses of BFAG actually incurred (including the legal fees of
and disbursements incurred by BFAG's counsel) in connection with the Offering.
9.4. Except as set forth in the Prospectus, (i) no person, directly or
indirectly, is entitled to compensation from the Company, BFAG or any other
person for services as a finder in connection with the Offering, and (ii) the
Company agrees to indemnify and hold harmless BFAG against any Liabilities to
which BFAG may become subject, insofar as such Liabilities (or actions in
respect thereof) arise out of or are based upon the claim of any person (other
than an employee of the party claiming indemnity) or entity that he or it is
entitled to a finder's fee in connection with the Offering by reason of such
person's or entity's influence or prior contact with the indemnifying party.
Section 10
Termination
10.1. BFAG may terminate this Agreement, except for Sections 8, 9 and
11.1, at any time prior to the Closing Date, if, in its sole judgement, it is
impracticable to offer for sale or to enforce contracts made by BFAG for the
sale of the Securities hereunder by reason of (i) the Company having sustained a
material loss, whether or not insured, by reason of fire, earthquake, flood,
accident, or other calamity, or from any labour dispute or court or government
action, order, or decree, (ii) trading in securities on the New York Stock
Exchange or the American Stock Exchange having been suspended or limited, (iii)
material governmental restrictions having been imposed on trading in securities
generally (not in force and effect on the date hereof), (iv) a banking
moratorium having been declared by German state authorities, (v) an outbreak of
major international hostilities, or other national or international calamity
having occurred, (vi) a pending or threatened legal or governmental proceeding
or action relating generally to the Company's business, or a notification having
been received by the Company of the threat of any such proceeding or action,
which could materially adversely affect the Company; (vii) except as
contemplated by the Prospectus, the Company being merged or
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consolidated into, or acquired by another company or group, or the existence of
a binding legal commitment for the foregoing, or any other material change of
ownership or control occurs; (viii) the passage of any act or measure by the
Congress of the United States or by any state legislative body of similar
impact, or the adoption of any orders, rules, or regulations by any governmental
body, authoritative accounting institute or board, or any governmental
executive, which is reasonably believed by BFAG to have a material impact on the
business, financial condition, or financial statements of the Company or any
subsidiary of or successor to the Company; (ix) any material adverse change in
the financial or securities markets, beyond normal market fluctuations, having
occurred since the date of this Agreement, or (x) any material adverse change
having occurred, since the respective dates as of which information is given in
the Registration Statement and Prospectus, in the earnings, business prospectus,
or general condition of the Company, financial or otherwise, whether or not
arising in the ordinary course of business.
10.2. If, at the Closing Date, any of the conditions provided for in
Section 6 shall not have been fulfilled, BFAG may terminate this Agreement and
all of its obligations hereunder, by notifying the Company of such termination,
in writing or by telefax, at or prior to the Closing Date.
10.3. If BFAG elects to terminate this Agreement as provided in this
Section 10, the Company promptly shall be notified by BFAG by telephone or
telefax, followed by confirmation by letter.
Section 11
Miscellaneous
11.1. The respective indemnities, agreements, representations,
warranties, and other statements of and by the Company and BFAG, and the
undertakings set forth in or made pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation made by or on behalf of
BFAG, the Company or any of its officers or directors or any controlling person,
and shall survive delivery of and payment of the Securities and the termination
of this Agreement.
11.2. Each of the parties hereto will cooperate with the other and
execute and deliver to the other party hereto such other instruments and
documents and take such other actions as may be reasonably
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requested from time to time by the other party hereto as necessary to carry out,
evidence, and confirm the intended purposes of this Agreement.
11.3. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
11.4. This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersede all prior arrangements
and understandings, both written and oral, expressed or implied, with respect
thereto.
11.5. It is the desire and intent of the parties that the provisions of
this Agreement be enforced to the fullest extent permissible under the law and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, will be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it will, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
11.6. All notices and other communications required or permitted under
to this Agreement must be in writing and will be deemed given if sent by
personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):
If to BFAG: Berliner Freiverkehr (Aktien) AG
Attention: Mr. Holger Timm
Kurfurstendamm 119, 10711 Berlin, Germany
Tel: 49-30-89 02 11 00
Fax: 49-30-89 02 11 99
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If to the Company: Marine Shuttle Operations, Inc.
Attention: Mr. Franz Eder, President
4410 Montrose Boulevard
Houston, Texas 77006
Tel: 713-529-7498
Fax: 713-529-3332
With a copy to: Breslow & Walker, LLP
Attention: Leonard J. Breslow, Esq.
100 Jericho Quadrangle
Suite 230
Jericho, N.Y. 11753
Tel: 516-822-6505
Fax: 516-822-6544
All such notices and other communications will be deemed to have been
received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery, (iii) in the case of delivery by
internationally-recognized overnight courier, on the business day following
dispatch and (iv) in the case of mailing, on the third business day following
mailing.
11.7. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
11.8. None of the provisions of this Agreement is or will be construed
as for the benefit of or enforceable by any person not a party to this
Agreement.
11.9. This Agreement may not be assigned by any party, by operation of
law or otherwise.
11.10. This Agreement will be governed by and construed in accordance
with the laws of the State of Nevada applicable to contracts made and to be
performed therein, without regard to conflicts of laws principles.
11.11. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against any party. Any reference to any
federal, state, local, or foreign statute or law will be deemed also to refer
24
<PAGE>
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. The parties intend that each representation, warranty, and covenant
contained herein will have independent significance. If any party has breached
any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the party has not breached will not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
11.12. This Agreement may be executed in one or more counterparts, all
of which will be considered one and the same agreement and will become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
11.13. This Agreement may be executed by delivery of executed signature
pages by fax and such fax execution will be effective for all purposes.
Marine Shuttle Operations Inc.
By:
----------------------------
Name: Mr. Franz Eder
Title: President
Berliner Freiverkehr (Aktien) AG
By:
----------------------------
Name: Holger Timm
Title: Vorstandsvorsitzender
<PAGE>
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of
February 19, 1998, among
GEOTECK INTERNATIONAL, INC., a Nevada corporation ("MSO Inc."), and
FRANZ EDER, resident of Germany,
being the holder of all the issued and outstanding capital stock of Marine
Shuttle Operation AS, a Norwegian corporation ("MSO") ("MSO Stockholder").
BACKGROUND:
All of the issued and outstanding capital stock consisting of 999,000
shares of voting common stock, par value 1 NOK of MSO (the "MSO Stock") is owned
by the MSO Stockholder.
The MSO Stockholder has agreed to sell to MSO Inc. and MSO Inc. has agreed
to purchase the MSO Stock from the MSO Stockholder on the terms and conditions
set forth in this Agreement.
In consideration of the mutual representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
STATEMENT OF TERMS:
SECTION 1
PURCHASE AND SALE OF STOCK
1.1 PURCHASE AND SALE OF STOCK. MSO Stockholder will sell to MSO Inc. and
MSO Inc. will purchase from MSO Stockholder all of the MSO Stockholder's right,
title and interest in the MSO Stock.
<PAGE>
1.2 CONSIDERATION; STOCK EXCHANGE. At the Closing (as defined in Section
2.1 below), upon surrender of the certificates evidencing 999,000 shares of the
MSO Stock duly endorsed for transfer to MSO Inc., MSO Inc. will cause 7,600,000
shares of the common voting stock, par value $0.001 of MSO Inc. (the "MSO Inc.
Stock") (the "Consideration") to be issued to the MSO Stockholder pursuant to
Section 1.3 of this Agreement. As a result of the sale of the MSO Stock and the
payment of the Consideration, MSO will be a wholly-owned subsidiary of MSO Inc.
1.3 ISSUANCE OF MSO INC. STOCK TO STOCKHOLDERS. At the Closing, the
Pooling Trustee (as defined in Section 2.2 lit. f below) will receive stock
certificates evidencing shares which amount to an aggregate of 7,600,000 and
being the number of shares of MSO Inc. for the MSO Stockholder.
1.4 NO FURTHER OWNERSHIP RIGHTS IN MSO STOCK. The issuance of the
7,600,000 shares of MSO Inc. to be delivered to the Pooling Trustee at Closing
will be deemed to have been given in full satisfaction of all rights pertaining
to the MSO Stock.
1.5 FINANCING. MSO Inc. will have executed with Berliner Freiverkehr AG
an Underwriting Agreement on or before the Closing providing for to arrange on a
best efforts basis a financing to MSO Inc. to be used to finance MSO in the
amount of US$ 100,000,000 net of all costs, expenses, fees and commissions
related to such financing through the issuance of 20,000,000 common shares of
MSO Inc. pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act") (the "Financing").
1.6 BRIDGE FINANCING. MSO Inc. provides a bridge financing to MSO up to
US$ 1,500,000 payable in accordance with the need of capital of MSO mutually
agree upon by MSO Inc. and MSO. The amounts paid to MSO shall be deducted from
the amount of US$ 100,000,000 (as defined in Section 1.5 above).
<PAGE>
SECTION 2
CLOSING; CLOSING CONDITIONS
2.1 CLOSING. The parties to this Agreement will hold a closing (the
"Closing") for the purpose of confirming the transactions contemplated by this
Agreement at 10:00 am on March 27, 1998 or such other date and time mutually
agreed upon by the parties. The Closing will be held at the offices of BESNER
KREIFELS WEBER, Widenmayerstr. 41, 80538 Munich, Germany, or such other place
mutually agreed upon by the parties. The date on which the Closing actually
occurs is hereinafter referred to as the "Closing Date." At the Closing, the
parties will execute and exchange the following documents, items, certificates
and instruments described in this Section 2.
2.2. CONDITIONS TO CLOSING OF MSO INC. MSO Inc.'s obligation to consummate
the transactions contemplated by this Agreement is subject to the satisfaction
of the conditions set forth below and/or the delivery of all of the documents,
items, certificates and instruments described below, all of which documents,
items, certificates and instruments must be in form and substance satisfactory
to MSO Inc., unless such condition is waived by MSO Inc. at the Closing. The
Closing of the transactions contemplated by this Agreement will be deemed to
mean a waiver of all conditions to Closing.
(a) TRANSACTION DOCUMENTS. The MSO Stockholder will have executed this
Agreement and delivered the shares of MSO stock as provided in Section 1.2
above.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the MSO Stockholder set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and as of the
Closing Date. The MSO Stockholder will have given such representation and
warranties as MSO Inc. or its counsel may reasonably require to assure
compliance with applicable securities laws, including without limitation
Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
(c) NO ACTION. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge would (1)
prevent consummation of any of the transactions contemplated by this Agreement;
(2) cause any of the transactions contemplated by this Agreement to be rescinded
fol-
<PAGE>
lowing consummation; or (3) adversely affect the right of MSO to own, operate or
control the business or assets of MSO.
(d) CONSENTS. MSO Inc. will have received duly executed copies of all
third-party consents and approvals contemplated by this Agreement.
(e) SHAREHOLDER APPROVAL. The acquisition of the shares of MSO as
provided in this Agreement will have been approved by the shareholders of MSO
Inc.
(f) POOLING TRUST AGREEMENT. The MSO Stockholder will have executed a
pooling trust agreement (the "Pooling Trust Agreement"), substantially
acceptable to MSO Inc., with Dr. Hubert Besner or such other person or entity
mutually agreed upon by the parties (the "Pooling Trustee") providing that the
MSO Inc. shares making up the Purchase Price shall be held by the Pooling
Trustee and not sold until released by the Pooling Trustee, that ten percent
(10%) of such MSO Inc. shares shall be released on July 1, 1999, that an
additional thirty percent (30%) of such shares shall be released on July 1,
2000, , that an additional thirty percent (30%) of such shares shall be released
on July 1, 2001 and that the remainder of such shares shall be released on July
1, 2002.
(g) NO MATERIAL ADVERSE CHANGE. Since December 31, 1997, no MSO Material
Adverse Effect will have occurred.
(h) OPINION OF COUNSEL. The MSO Stockholder will furnish MSO Inc. with an
opinion, dated the Closing Date, of its counsel satisfactory in form and
substance to MSO Inc. and its counsel.
(i) FINANCING. MSO Inc. and Berliner Freiverkehr AG will have executed an
Underwriting Agreement providing for to arrange a financing as set forth in
Section 1.5 above.
(j) LICENSE AGREEMENT. MSO and Offshore Shuttle AS, a Norwegian
corporation ("OSAS"), will have executed a Head License Agreement providing for
an exclusive License for MSO to build and operate five Offshore Shuttles and
based on the Letter of Intent as of February 19, 1998 (a copy is attached to
this agreement in Disclosure Schedule 3.10).
<PAGE>
(k) ACQUISITION OF MAJOR INTEREST IN OSAS. MSO Inc. and stockholders of
OSAS will have executed Stock Purchase Agreements providing for the Purchase and
Transfer of at least 51% of all of the issued and outstanding shares of OSAS and
which will be closed simultaneously.
(l) DUE DILIGENCE REVIEW. MSO Inc. will be satisfied in all respects with
its due diligence investigation of MSO.
2.3 CONDITIONS TO CLOSING OF THE MSO STOCKHOLDER. The MSO Stockholder's
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the conditions set forth below and/or the
delivery of all of the documents, items, certificates and instruments described
below, all of which documents, items, certificates and instruments must be in
form and substance satisfactory to the MSO Stockholder, unless such condition is
waived by the MSO Stockholder at the Closing. The Closing of the transactions
contemplated by this Agreement will be deemed to mean a waiver of all conditions
to Closing.
(a) TRANSACTION DOCUMENTS. MSO Inc. will have executed this Agreement and
delivered the shares of MSO Inc. as provided in Section 1.3 above.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
MSO Inc. set forth in this Agreement will be true, correct and complete in all
respects as of the Closing Date, as though made on and as of the Closing Date.
(c) NO ACTION. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge would (1)
prevent consummation of any of the transactions contemplated by this Agreement;
(2) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation; or (3) adversely affect the right of MSO Inc. to own,
operate or control the business or assets of MSO Inc.
(d) POOLING TRUST AGREEMENT. The MSO Stockholder will have executed a
pooling trust agreement (the "Pooling Trust Agreement"), substantially
acceptable to MSO Inc., with Dr. Hubert Besner or such other person or entity
mutually agreed upon by the parties (the "Pooling Trustee") providing that the
MSO Inc. shares making up the Purchase Price shall be held by the Pooling
Trustee
<PAGE>
and not sold until released by the Pooling Trustee, that ten percent (10%) of
such MSO Inc. shares shall be released on July 1, 1999, that an additional
thirty percent (30%) of such shares shall be released on July 1, 2000, , that an
additional thirty percent (30%) of such shares shall be released on July 1, 2001
and that the remainder of such shares shall be released on July 1, 2002.
(e) OPINION OF COUNSEL. MSO Inc. will furnish the MSO Stockholder with an
opinion, dated the Closing Date, of its counsel, in form and substance
satisfactory to the MSO Stockholder and its counsel.
(f) COPIES OF RESOLUTIONS. MSO Inc. will have furnished the MSO
Stockholder with certified copies of resolutions duly adopted by the Board of
Directors and the shareholders of MSO Inc. approving the execution and delivery
of this Agreement and the other documents to be executed and delivered in
connection with this Agreement and consummation of the transactions contemplated
hereby and thereby.
(g) FINANCING. MSO Inc. and Berliner Freiverkehr AG will have executed an
Underwriting Agreement providing for to arrange a financing as set forth in
Section 1.5 above.
(h) LICENSE AGREEMENT. MSO and OSAS will have executed a Head License
Agreement providing for an exclusive License for MSO to build and operate five
Offshore Shuttles and based on the Letter of Intent as of February 19, 1998 (a
copy is attached to this agreement in Disclosure Schedule 3.10).
(i) ACQUISITION OF MAJOR INTEREST IN OSAS. MSO Inc. and stockholders of
OSAS will have executed Stock Purchase Agreements providing for the Purchase and
Transfer of at least 51% of all of the issued and outstanding shares of OSAS and
which will be closed simultaneously.
(j) DUE DILIGENCE REVIEW. The MSO Stockholder will be satisfied in all
respects with its due diligence investigation of MSO Inc.
<PAGE>
2.4 Directors and Officers
(a) DIRECTORS AND OFFICERS OF MSO INC. Effective immediately after the
Closing, any person other than those listed below who are directors or officers
of MSO Inc. on the Closing will immediately elect or confirm the election of the
following individuals as directors of MSO Inc. (the "New Directors") and resign:
Franz Eder
One person to be named by MSO Stockholder prior to the Closing
One person to be named by MSO Inc. prior to the Closing
Immediately thereafter, the New Directors will appoint or confirm the
appointment of the following individuals as officers of MSO Inc.:
Franz Eder, Chairman, President and Chief Executive Officer
One person each named by MSO Inc. as Vice President and
Secretary/Treasurer
(b) Board of Directors of MSO. Following the Closing, Sverre Hansen,
Stephen Adshead and Franz Eder shall remain the members of the Board of
Directors of MSO; provided that prior to the Closing, MSO Inc. may designate one
person to serve as a member of the Board of Directors.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE MSO STOCKHOLDER
The MSO Stockholder represents and warrants to MSO Inc.:
3.1 CORPORATE ORGANIZATION AND GOOD STANDING. MSO is a corporation duly
organized, validly existing and in good standing under the laws of Norway, with
all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted. MSO is
qualified or licensed to do business and is in good standing in each
jurisdiction in which the ownership or leasing of property by it or the conduct
of its business requires such licensing or qualification, except where the
failure to be so qualified or licensed or in good standing
<PAGE>
will not have a MSO Material Adverse Effect. MSO has no subsidiaries. For
purposes of this Agreement, "MSO Material Adverse Effect" means any materially
adverse change in or effect on the business, operations, properties, assets,
liabilities, financial condition, results of operations or prospects of MSO or
its ability to carry out its obligations under this Agreement, but does not mean
any losses, adverse developments or other conditions suffered by MSO arising
from normal operations or market, political or economic conditions affecting the
Offshore industry as a whole.
3.2 DUE EXECUTION; ENFORCEABILITY. This Agreement has been, and all other
documents, agreements and instruments to be executed in connection with the
consummation of the transactions contemplated by this Agreement (collectively,
the "MSO Transaction Documents") will be, duly executed and delivered by the MSO
Stockholder and this Agreement is, and the other MSO Transaction Documents when
executed and delivered by the MSO Stockholder as contemplated by this Agreement
will be, the valid and binding obligation of the MSO Stockholder enforceable in
accordance with their respective terms, except (1) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (2) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
3.3 CAPITALIZATION. The entire authorized capital stock and other equity
securities of MSO consists of 999,000 shares of 1 NOK par value stock (the "MSO
Shares") all of which shares are issued and outstanding. All of the issued and
outstanding MSO Shares have been duly authorized, are validly issued, were not
issued in violation of any preemptive rights and are fully paid and
nonassessable, are not subject to preemptive rights and were issued in full
compliance with all federal, state and local laws, rules and regulations. The
MSO Stockholder owns beneficially and of record all of the shares of MSO Shares
issued to such Stockholder as set forth on the MSO share transfer ledger. There
are no outstanding options, warrants, subscriptions, conversion rights, or other
rights, agreements, or commitments obligating MSO to issue any additional MSO
Shares, or any other securities convertible into, exchangeable for, or
evidencing the right to subscribe for or acquire from MSO any MSO Shares. There
are no agreements purporting to restrict the transfer of the MSO Shares, no
voting agreements, voting trusts, or other arrangements restricting or affecting
the voting of the MSO Shares.
<PAGE>
3.4 TITLE TO MSO STOCK. The MSO Stock is lawfully owned by the MSO
Stockholder free of preemptive rights and free and clear of all claims, liens,
charges, security interest, encumbrances and other restrictions or limitations
of any kind. The MSO Stockholder has the full power, right, and authority to
transfer the MSO Stock held by him pursuant to this Agreement.
3.5 FINANCIAL STATEMENTS. Attached to this Agreement as Disclosure
Schedule 3.5 are true, correct, and complete copies of (i) an unaudited MSO
Balance sheet as of December 31, 1997, and (ii) an unaudited MSO Income
Statement for the period ending December 31, 1997 (collectively, the "MSO
Financial Statements"). The MSO Financial Statements (a) are in accordance with
the books and records of MSO and (b) present fairly the financial condition of
MSO as of the respective dates indicated and the results of operations for such
periods. MSO has not received any advice or notification from its independent
certified public accountants that MSO has used any improper accounting practice
that would have the effect of not reflecting or incorrectly reflecting in the
MSO Financial Statements or the books and records of MSO, any properties,
assets, liabilities, revenues, or expenses. The books, records, and accounts of
MSO accurately and fairly reflect, in reasonable detail, the transactions,
assets, and liabilities of MSO. MSO has not engaged in any transaction,
maintained any bank account, or used any funds of MSO, except for transactions,
bank accounts, and funds which have been and are reflected in the normally
maintained books and records of MSO.
3.6 ABSENCE OF CERTAIN CHANGES. Since the date of the MSO Reference
Balance Sheet, except as set forth in Disclosure Schedule 3.6, MSO has not
suffered any MSO Material Adverse Effect.
3.7 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws and as otherwise set forth on Disclosure Schedule
3.7, no filing or registration with, no notice to and no permit, authorization,
consent, or approval of any public or governmental body or authority or any
other person or entity is necessary for the consummation by the MSO Stockholder
of the transactions contemplated by this Agreement or to enable MSO to continue
to conduct its business after the Closing Date in a manner consistent with that
in which it is presently conducted.
3.8 NONCONTRAVENTION. Neither the execution, delivery and performance of
the MSO Transaction Documents, nor the consummation of the transactions
contemplated thereby nor compliance with the provisions thereof, will:
<PAGE>
(1) Except as set forth in Disclosure Schedule 3.8, conflict with,
result in a violation of, cause a default under (with or without notice,
lapse of time or both) or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of
any material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties or
assets of MSO under any term, condition or provision of any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to MSO or its properties or
assets;
(2) Violate any provision of the articles of incorporation or bylaws
of MSO; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority applicable
to MSO or any of its properties or assets.
3.9 LITIGATION. There is no claim, charge, arbitration, grievance,
action, suit, investigation or proceeding by or before any court, arbiter,
administrative agency or other governmental authority now pending or, to the MSO
Stockholder's knowledge, threatened against MSO or which involves any of the
business, or the properties or assets of MSO that, if adversely resolved or
determined, would have a MSO Material Adverse Effect. There is no reasonable
basis for any claim or action that, based upon the likelihood of its being
asserted and its success if asserted, would have a MSO Material Adverse Effect.
3.10 MATERIAL CONTRACTS AND TRANSACTIONS. Disclosure Schedule 3.10
contains copies of all material contracts, agreements, licenses, leases for real
property or personal property, permit, arrangements, commitments, instruments,
understanding or contracts, whether written or oral, express or implied,
contingent, fixed or otherwise, to which MSO is a party (collectively, the "MSO
Contracts"). Except as shown on Disclosure Schedule 3.10, MSO is not a party to
any written or oral:
(1) contract for the purchase, sale or lease of any material capital
assets, or continuing contracts for the purchase or lease of any material
supplies, materials, equipment or services;
<PAGE>
(2) agreement to pay material commissions or sales representative
agreements;
(3) agreement for the employment or consultancy or any person or
entity except those routinely entered into with employees and contracts
with members of the Board of Directors and Officers of MSO;
(4) note, debenture, bond, trust agreement, letter of credit
agreement, loan agreement, or other contract or commitment for the
borrowing or lending of money, or agreement or arrangement for a line of
credit or guarantee, pledge, or undertaking of the indebtedness of any
other person;
(5) agreement, contract, or commitment for any charitable or
political contribution;
(6) agreement, contract, or commitment limiting or restraining MSO in
its business or any successor thereto from engaging or competing in any
manner or in any business or from hiring any employees, nor, to the
Stockholders' knowledge, is any employee or independent contractor of MSO
subject to any such agreement, contract, or commitment;
(7) material agreement, contract, or commitment not made in the
ordinary course of business;
(8) agreement establishing or providing for any joint venture,
partnership, or similar arrangement between MSO and any other person or
entity; or
(9) power of attorney or similar authority to act for MSO.
Each MSO Contract is in full force and effect, and there exists no material
breach or violation of or default by MSO under any MSO Contract nor, to the
Stockholder's knowledge, by any other party to a MSO Contract, or any event that
with notice or the lapse of time, or both, will create a material breach or
violation thereof or default under any MSO Contract by MSO nor, to the
Stockholder's knowledge, by any other party to a MSO Contract. Except as set
forth on Disclosure Schedule 3.10,
<PAGE>
the continuation, validity, and effectiveness of each MSO Contract will in no
way be affected by this Agreement. Except as indicated on Disclosure Schedule
3.10, there exists no actual or, to the Stockholder's knowledge, any threatened
termination, cancellation, or limitation of, or any amendment, modification, or
change to any MSO Contract, which would have a MSO Material Adverse Effect. A
true, correct and complete copy (and if oral, a description of material terms)
of each MSO Contract, as amended to date, is contained in Disclosure Schedule
3.10.
3.11. Real Property and Real Property Leases. MSO does not own any
real property. Disclosure Schedule 3.11 sets forth the name, parties, and date
of each lease and sublease of real property that is occupied by MSO ("MSO
Leases"), and the address of each parcel of leased real property and a list of
all amendments to such MSO Leases. Each MSO Lease is in full force and effect
and there is no default asserted thereunder by any party thereto and, to the
Stockholders' knowledge, there are no unasserted defaults (including any events
which with the passage of time or giving of notice or both would constitute a
default). True, correct and complete copies of all the MSO Leases, as amended to
date, have been delivered to MSO Inc. MSO has not been notified that the use and
operation of any of the real properties leased by MSO does not conform to
applicable building, zoning, safety, environmental, and other laws, ordinances,
regulations, codes, permits, licenses, and certificates and all restrictions and
conditions affecting title, except where the failure to conform would not have
an MSO Material Adverse Effect.
3.12 Personal Property and Personal Property Leases. Except as set forth
on Disclosure Schedule 3.12, MSO owns or leases the use of, all material
equipment, furniture, fixtures and other material tangible personal property and
assets necessary for the continued operation of the business of MSO as presently
conducted and where the absence of such property and assets would have a MSO
Material Adverse Effect. All of such personal properties are in good operating
condition (normal wear and tear excepted), and are reasonably fit for the
purposes for which the such personal property is presently used.
3.13 Compliance with Law. MSO holds and is in compliance with all permits,
certificates, licenses, approvals, registrations and authorizations necessary
for the conduct of its business or the ownership of its properties or assets,
except where the failure to hold or comply could not have a MSO Material Adverse
Effect, and all of such permits, certificates, licenses, approvals,
registrations, and authorizations are in full force and effect. MSO is in
compliance with all applicable laws, stat-
<PAGE>
utes, ordinances, rules and regulations (including without limitation those
relating to environmental protection, occupational safety and health, and equal
employment practices) and all orders, judgments and decrees, except where the
failure to comply would not have a MSO Material Adverse Effect.
3.14 TAXES. Except as set forth in Disclosure Schedule 3.14, MSO has
timely filed with the appropriate taxing authorities all returns required to be
filed on or prior to the date hereof in respect of all taxes of MSO, and has
paid all such taxes, including interest, penalties, and additions in connection
therewith shown to have become due on such returns or for which a notice of
assessment or demand for payment has been received. All such returns have been
prepared in accordance with all applicable laws and requirements. Any accruals
for such taxes reflected in the MSO Reference Balance Sheet are sufficient to
satisfy the accrued liability for such taxes as of the date of the MSO Reference
Balance Sheet. No material tax issues have been raised by the competent tax
authorities in connection with any of the tax returns referred to above, and no
waivers of statutes of limitations or extensions of time within which to file
any tax return or with respect to a tax assessment or deficiency have been given
or requested with respect to MSO.
3.15 LABOR RELATIONS. None of MSO's employees is represented by any union
or other labor organization in regard to its employment by MSO. There is no
unfair labor practice charge or other labor related grievance pending or, to the
Stockholders' knowledge, threatened against MSO that might have a MSO Material
Adverse Effect.
3.16 PENSION AND EMPLOYEE BENEFIT PLANS AND COMPENSATION. MSO maintains no
employee pension benefit plans, welfare benefit plans, bonus, stock purchase,
stock ownership, stock option, deferred compensation, incentive, severance,
termination or other compensation plan or arrangement, and other material
employee fringe benefit plans. No salary or other payment due to the Stockholder
remains unpaid by MSO and the salaries have been completely paid for past
services rendered to MSO, other than current unpaid salary and current business
expenses not to exceed 200,000 NOK in the aggregate to be paid or reimbursed by
MSO in the ordinary course of business.
3.17 OTHER INTELLECTUAL PROPERTY. MSO has no registered or unregistered,
foreign or Norwegian trademarks, trade names, trade styles, and service marks
and copyrights; trade secrets or know-how, except as listed on Disclosure
Schedule 3.17.
<PAGE>
3.18 INSURANCE. Set forth in Disclosure Schedule 3.18 is a list of all
insurance policies that relate to MSO's business. The coverage under each such
policy is in full force and effect, and no notice of cancellation or non renewal
with respect to, or disallowance of any claim under, any such policy has been
received by MSO. The Stockholders have no knowledge of any facts or the
occurrence of any event that reasonably might form the basis of any claim
against MSO relating to its business or operations or any of its assets or
properties covered by any of such policy that may materially increase the
insurance premiums payable under any such policy
3.19 AFFILIATE TRANSACTIONS. Except as disclosed in Disclosure Schedule
3.19, no officer, director, stockholder or affiliate of MSO provides any assets,
services or facilities used or held for use in connection with MSO's business
and MSO does not provide or cause to be provided any assets, services or
facilities to any such officer, director, stockholder or affiliate.
3.20 CORRECTNESS OF REPRESENTATIONS. No representation or warranty of MSO
Stockholder in this Agreement or in any exhibit, certificate, or schedule
attached to this Agreement or furnished pursuant to this Agreement contains, or
at the Closing Date will contain, any untrue statement of fact or omits, or at
the Closing Time will omit, to state any material fact necessary in order to
make the statements contained therein not misleading, and all such statements,
representations, warranties, exhibits, certificates, and schedules shall be true
and complete in all material respects on and as of the Closing Time as though
made on that date.
SECTION 4
REPRESENTATIONS AND WARRANTIES
OF MSO INC.
MSO Inc. represents and warrants to the MSO Stockholder as follows:
4.1 ORGANIZATION AND GOOD STANDING. MSO Inc. is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. MSO Inc. has no
validly existing subsidiaries.
<PAGE>
4.2 CAPITAL STRUCTURE. The entire authorized capital stock and other
equity securities of MSO Inc. consists of 40,000,000 shares of $0.001 par value
common stock of which 20,020,000 shares are issued and outstanding. All of the
issued and outstanding shares of MSO Inc. Stock have been duly authorized, are
validly issued fully paid and nonassessable and, are not subject to preemptive
rights. Disclosure Schedule 4.2 sets forth the percentage holdings of the
Stockholders in MSO Inc. after giving effect to the transactions contemplated by
this Agreement and certain proposed issuances of MSO Inc. Stock.
4.3 AUTHORITY. MSO Inc. has all requisite corporate power and authority
to enter into this Agreement and the Transaction Documents to which it is a
party and to perform its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery of this Agreement
and each of the Transaction Documents to which it is a party by MSO Inc. and the
consummation by MSO Inc. of the transactions contemplated thereby, have been
duly authorized by the board of directors of MSO Inc. and no other corporate
proceedings on the part of MSO Inc. are necessary to authorize such documents or
to consummate the transactions contemplated thereby. This Agreement has been,
and all the other Transaction Documents to which it is a party when executed and
delivered by MSO Inc. as contemplated by this Agreement will be, duly executed
and delivered by MSO Inc. and this Agreement is, and the other Transaction
Documents when executed and delivered by MSO Inc. as contemplated hereby will
be, the valid and binding obligation of MSO Inc. enforceable in accordance with
their respective terms, except (1) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, and (2) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
4.4 FINANCIAL STATEMENTS. Attached to this Agreement as Disclosure
Schedule 4.4 are true, correct, and complete copies of (i) unaudited MSO Inc.
Balance Sheet as of December 31, 1997; and (ii) unaudited MSO Inc. Statement of
Operations for the period ending December 31, 1997, (collectively, the "MSO Inc.
Financial Statements"). The MSO Inc. Financial Statements are in accordance with
the books and records of MSO Inc. and present fairly the financial condition of
MSO Inc. as of the respective dates indicated and the results of operations for
such periods. MSO Inc. has not received any advice or notification from its
independent certified public accountants that MSO Inc. has used any improper
accounting practice that would have the effect of not reflecting or incorrectly
reflecting in the MSO Inc. Financial Statements or the books and records of MSO
Inc., any properties,
<PAGE>
assets, liabilities, revenues, or expenses. The books, records, and accounts of
MSO Inc. accurately and fairly reflect, in reasonable detail, the transactions,
assets, and liabilities of MSO Inc. MSO Inc. has not engaged in any transaction,
maintained any bank account, or used any funds of MSO Inc., except for
transactions, bank accounts, and funds which have been and are reflected in the
normally maintained books and records of MSO Inc.
4.5 NONCONTRAVENTION. Neither the execution, delivery and performance of
the Transaction Documents, nor the consummation of the transactions contemplated
thereby nor compliance with the provisions thereof, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of MSO Inc. under any term, condition or
provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to MSO Inc.
or its material properties or assets;
(2) Violate any provision of the articles or certificate of
incorporation or by-laws of MSO Inc.; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regula tion of any court or governmental or regulatory authority applicable
to MSO Inc. or any of its properties or assets.
4.6 LITIGATION. There is no claim, charge, arbitration, grievance,
action, suit, investigation or proceeding by or before any court, arbiter,
administrative agency or other governmental authority now pending or, to MSO
Inc.'s knowledge, threatened against MSO Inc., or which involves any of the
business, or the properties or assets of MSO Inc. that, if adversely resolved or
determined, would have a material adverse effect on MSO Inc. There is no
reasonable basis for any claim or action that, based upon the likelihood of its
being asserted and its success if asserted, would have a material adverse
effect.
<PAGE>
4.7 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws, no filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body
or authority or other person or entity is necessary for the consummation by MSO
Inc. of the transactions contemplated by this Agreement or to enable MSO Inc. to
continue to conduct its business after the Closing Date in a manner which is
con sis tent with that in which it is presently conducted.
SECTION 5
SURVIVAL AND INDEMNIFICATION
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and covenants made by the parties shall survive the Closing for a
period of six (6) months from the Closing Date.
5.2 INDEMNIFICATION BY MSO STOCKHOLDER. The MSO Stockholder agrees to
indemnify MSO Inc. and its officers, directors, shareholders, employees, agents
and affiliates (other than the Stockholders themselves) in respect of, and hold
each of them harmless from and against, any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without limitation
interest, court costs, fees of attorneys, accountants and other experts or other
expenses of litigation or other proceedings or of any claim, default or
assessment) suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the MSO Stockholder contained in this
Agreement.
5.3 INDEMNIFICATION BY MSO INC. MSO Inc. agrees to indemnify the MSO
Stockholder in respect of, and hold him harmless from and against, any and all
damages, fines, fees, penalties, deficiencies, losses and expenses (including
without limitation interest, court costs, fees of attorneys, accountants and
other experts or other expenses of litigation or other proceedings or of any
claim, default or assessment) suffered, incurred or sustained by any of them or
to which any of them becomes subject, resulting from, arising out of or relating
to any misrepresentation, breach of warranty
<PAGE>
or nonfulfillment of or failure to perform any covenant or agreement on the part
of MSO Inc. contained in this Agreement.
5.4 PROCEDURES FOR INDEMNIFICATION FOR THIRD PARTY CLAIMS. Whenever
indemnification is sought under this Section 5 in connection with a claim or
demand brought by a third party, the party seeking indemnification (the
"Indemnitee") will promptly notify the party from whom indemnification is sought
(the "Indemnitor"), specifying the nature of such claims, the amount or
estimated amount of such claim and attaching copies of all relevant information
concerning the underlying claim of liability. Within ten days of receipt of such
notice, the Indemnitor will notify the Indemnitee promptly whether it disputes
its indemnification obligation. If the indemnification obligation is not so
disputed, the Indemnitor, at the option of the Indemnitee, will, at the
Indemnitor's cost and expense, defend any such claim. If the Indemnitee so
elects for the Indemnitor to defend any claim, the Indemnitor will have full
control over the conduct of such proceeding, although the Indemnitee will have
the right to retain legal counsel at its own expense and will have the right to
approve any settlement of any claim, provided that such approval may not be
withheld unreasonably. If the Indemnitee does not elect for the Indemnitor to
assume the defense of such claim, the Indemnitee will have the right to defend
the claim at the reasonable cost and expense of the Indemnitor. The Indemnitor
will not be obligated to indemnify the Indemnitee with respect to such third
party claim to the extent that the Indemnitor's ability to defend has been
irreparably prejudiced by the failure or delay of the Indemnitee to give
Indemnitor the notice required by this Section 5.4 Any dispute of an
indemnification obligation under this Agreement may be resolved by litigation in
a court of competent jurisdiction.
5.5 PROCEDURES FOR INDEMNIFICATION FOR NON-THIRD PARTY CLAIMS. If any
Indemnitee has a claim under Section 5 against any Indemnitor that does not
involve a third party claim as described in Section 5.4 above, the Indemnitee
will promptly notify the Indemnitor of such claim, specifying the nature of such
claim and the amount of any loss incurred by the Indemnitee. The failure by any
Indemnitee to give such notice will not impair such party's rights under this
Agreement except to the extent that the Indemnitor demonstrates that it has been
irreparably prejudiced thereby. If the Indemnitor notifies the Indemnitee that
it does not dispute the claim described in such notice or fails to notify the
Indemnitee within 30 days its receipt of such notice, the loss in the amount
specified in the notice will be conclusively deemed a liability of the
Indemnitor under Section 5 and the Indemnitor will pay the amount of such loss
to the Indemnitee on demand. If the Indemnitor has timely disputed its liability
with respect to such claim, the Indemnitor and the Indemnitee will proceed in
good faith
<PAGE>
to negotiate a resolution of such dispute, and if not resolved through
negotiations within 60 days after the Indemnitor's receipt of the initial claim
notice, such dispute may be resolved by litigation in a court of competent
jurisdiction.
5.6 INDEMNIFICATION FOR FEES AND COMMISSIONS. Each party to this
Agreement is responsible for paying any broker, finder or investment banker that
is entitled to receive any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of such party and indemnifies and holds
harmless the other parties from any such fees or commissions.
SECTION 6
MISCELLANEOUS PROVISIONS
6.1 EFFECTIVENESS OF REPRESENTATIONS. Each party is entitled to rely on
the representations, warranties and agreements of each of the other parties and
all such representation, warranties and agreement will be effective regardless
of any investigation that any party has undertaken or failed to undertake.
6.2 TERMINATION. This Agreement may be terminated at any time prior to
the Closing of the transactions contemplated hereby by:
(a) Mutual agreement of MSO Inc. and MSO Stockholder;
(b) MSO Inc., if there has been a breach by MSO Stockholder of any
material representation, warranty, covenant or agreement set forth in this
Agreement on the part of MSO Stockholder that is not cured, to the
reasonable satisfaction of MSO Inc., within ten business days after notice
of such breach is given by MSO Inc. (except that no cure period will be
provided for a breach by MSO Stockholder that by its nature cannot be
cured);
(c) MSO Stockholder, if there has been a breach by MSO Inc. of any
material representation, warranty, covenant or agreement set forth in this
Agreement on the part of MSO Inc. that is not cured by the breaching party,
to the reasonable satisfaction of MSO
<PAGE>
Stockholders, within ten business days after notice of such breach is given
by MSO Stockholder (except that no cure period will be provided for a
breach by MSO Inc. that by its nature cannot be cured);
(d) MSO Inc. or MSO Stockholder, if the transactions contemplated by
this Agreement has not been consummated prior to August 31, 1998, unless
the parties agree to extend such date; or
(e) MSO Inc. or MSO Stockholder if any permanent injunction or other
order of a governmental entity of competent authority preventing the
consummation of the transactions contemplated by this Agreement has become
final and nonappealable.
6.3 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 6.2, this Agreement will be of no further force
or effect, provided, however, that no termination of this Agreement will relieve
any party of liability for any breaches of this Agreement that are based on a
wrongful refusal or failure to perform any obligations. Upon termination of this
Agreement, each party will, upon request, destroy all documents, work papers and
other materials of the other parties relating to the transaction contemplated by
this Agreement, whether obtained before or after execution of this Agreement.
6.4 FURTHER ASSURANCES. Each of the parties hereto will cooperate with
the other and execute and deliver to the other parties hereto such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party hereto as necessary to carry out,
evidence, and confirm the intended purposes of this Agreement.
6.5 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
<PAGE>
6.6 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated hereby will be
issued, if at all, at such time and in such manner as MSO Inc. and the MSO
Stockholder mutually determine. Unless consented to by MSO Inc. in advance or
required by law, prior to the Closing MSO Stockholder will keep this Agreement
strictly confidential and may not make any disclosure of this Agreement to any
person or entity. MSO Stockholder and MSO Inc. will consult with each other
concerning the means by which the MSO's employees, customers, and suppliers and
others having dealings with the MSO will be informed of the transactions
contemplated by this Agreement, and MSO Inc. will have the right to be present
for any such communication.
6.7 CONFIDENTIALITY. Between the date of this Agreement and the Closing
Date, MSO Inc., the MSO Stockholder will maintain in confidence, and will cause
the directors, officers, employees, agents, and advisors of MSO Inc. and MSO to
maintain in confidence, and not use to the detriment of another party or MSO any
written, oral, or other information obtained in confidence from another party or
MSO in connection with this Agreement or the transactions contemplated hereby,
unless (a) such information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the transactions contemplated hereby,
or (c) the furnishing or use of such information is required by legal
proceedings. If the Closing is not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request.
6.8 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
6.9 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement and (c) waive
compliance with any of the agreements or conditions contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver will be
valid only if set forth in a written instrument and signed by the party granting
such extension or waiver.
<PAGE>
6.10 ENTIRE AGREEMENT. This Agreement, the Exhibits, Schedules attached
hereto and the other Transaction Documents contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto. The Offer to Purchase between Geoteck International, Inc.,
(now, MSO Inc.) and the MSO Stockholder dated January, 1998 is expressly
superseded and terminated by this Agreement.
6.11 SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, will be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it will,
as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
6.12 NOTICES. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent by
personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):
If to MSO Stockholder: Marine Shuttle Operation AS
Attention: Mr. Franz Eder
Luramyrveien 23, 4300 Sandnes, Norway
Tel: 47-51-63 88 00
Fax: 47-51-63 16 20
With a copy to: BESNER KREIFELS WEBER
Attention: Dr. Hubert Besner
<PAGE>
Widenmayerstr. 41, 80538 Munich, Germany
Tel: 49-89-21 99 92 0
Fax: 49-89-21 99 92 33
If to MSO Inc.: Geoteck International, Inc,
Attention: Mr. Iqbal Akram
1177 West Hastings Street, Suite 1818
Vancouver, B. C. V6E 2K3
Tel: 604-683-9161
Fax: 604-687-6755
With a copy to: Walker & Breslow
Attention Mr. Howard Breslow, Esq.
767 Third Avenue
New York, NY 10017
Tel: 212-832-1930
Fax: 212-888-4955
All such notices and other communications will be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a fax, when the party sending such fax has received electronic
confirmation of its delivery, (c) in the case of delivery by
internationally-recognized overnight courier, on the business day following
dispatch and (d) in the case of mailing, on the third business day following
mailing.
6.13 HEADINGS. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
6.14 BENEFITS. None of the provisions of this Agreement is or will be
construed as for the benefit of or enforceable by any person not a party to this
Agreement.
6.15 ASSIGNMENT. This Agreement may not be assigned by any party, by
operation of law or otherwise.
<PAGE>
6.16 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of Nevada applicable to contracts made and to be
performed therein, without regard to conflicts of laws principles.
6.17 CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Any reference to
any federal, state, local, or foreign statute or law will be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
6.18 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
6.19 FAX EXECUTION. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
EXECUTED on February 19, 1998.
Geoteck International, Inc.
By:
----------------------------
Name: Mr. Iqbal Akram
Title: Vice President
- -------------------------------
Franz Eder
<PAGE>
Exhibit 2.2
Translation from Norwegian
AGREEMENT REGARDING EXCHANGE OF SHARES
The following agreement has been entered into between Geoteck International,
Inc., a company registered in Nevada, USA, which is in the process of changing
its name to Marine Shuttle Operation Inc., hereinafter referred to as "MSO
Inc.", as the first party, and the shareholders mentioned below in the
Norwegian registered company Offshore Shuttle AS, hereinafter referred to as
"OS AS":
Spax Holding AS,
Aasens Trykkerier AS,
Arne Martinsen,
Birger Holten,
Jochen Schene, German national,
Frank Samuels, German national,
Jurgen Terniden, German national,
Thyssen Stahlunion GmbH, German company,
Thor Stang,
Norsk SMB Invest 1 AS,
Norsk SMB Invest 2 AS,
Norsk SMB Invest 3 AS,
Norsk SMB Invest 4 AS,
Einar Nistad,
Inger Egeberg Sogstad,
Erik Staumo,
Knut Rygh and
GTA
as the second party, which in total represents 52.97 % of the share capital in
OS AS, hereinafter referred to as "the OS AS shareholders":
1. Background of the agreement
The Norwegian registered company Marine Shuttle Operation AS, hereinafter
referred to as "MSO", is in the process of entering into a licensing
agreement with OS AS to acquire the exclusive rights to build and operate an
offshore shuttle, based upon the rights and the concept which have been drawn up
by OS AS, as well as the option to build and operate a further four - 4 -
offshore shuttles. It is a condition of the current agreement that the
above-mentioned licensing agreement is entered into.
In the same way as the parties in this agreement, the MSO shareholders, Franz
Eder and Sverre Hansen, have entered into an agreement regarding the exchange of
their shares in MSO for shares in MSO Inc. The original intention of the parties
was that the OS AS shareholders would also have been incorporated in the same
agreement which has been entered into between MSO Inc. and the MSO shareholders.
However, as that agreement is extremely comprehensive (31 pages long),
complicated and contains a number of details which are not found to be necessary
to include in such an agreement as this current agreement which falls under
Norwegian law, the parties agreed to enter into this current briefer agreement.
The OS AS shareholders own a total of 2,551,398 shares of the total 4,822,000
shares in OS AS.
<PAGE>
2. Terms of the exchange
The parties have hereby agreed that 1.5 shares in MSO Inc. shall be exchanged
for one share in OS AS. This means that for their total of 2,551,398 shares in
OS AS, the OS AS shareholders shall receive 3,827,097 shares in MSO Inc.
In connection with expanding capital with new share capital, MSO Inc. shall
apply for listing on Nasdaq's main list and for listing on the Frankfurt stock
exchange. The company is currently listed on the Nasdaq Bulletin Board.
After the transactions regarding the exchange of shares between MSO Inc., the
MSO shareholders and the OS AS shareholders have been finalised, MSO Inc. will
have 100% ownership of MSO and will own 53.03% of the shares in OS AS.
3. MSO Inc.'s obligations
MSO Inc. shall finance MSO in the amount of US $ 100,000,000, excluding the
costs, commissions and other fees related to the financing through the issue of
20,000,000 new shares in MSO Inc. MSO Inc. has entered into an agreement with
the German brokerage firm Berliner Freiverkehr (Aktien) AG which will be
responsible for carrying out the issue.
MSO Inc. may need up to 180 days to obtain the above-mentioned financing. During
this interval MSO Inc. shall ensure the temporary financing of MSO to the amount
of US $1,500,000 to cover MSO's daily operating expenses.
MSO Inc. shall also issue 3,827,097 shares in MSO Inc. to the OS AS shareholders
which shall be distributed among the OS AS shareholders as indicated in Appendix
1 of the current agreement.
4. OS AS shareholder's obligations
All the shareholders declare that they shall assign their shares in OS AS to MSO
Inc., free of encumbrances. The number of shares each shareholder owns is shown
in Appendix 2 of the current agreement. The OS AS shareholders shall not sell,
mortgage or in any other way dispose of their shares.
5. Due Diligence
In addition to exchanging official documents, such as the audited accounts for
1997, confirmation that MSO Inc. and OS AS are properly registered with the
indicated share capital, the necessary judicial company documentation showing
that MSO Inc. has the legal competence to enter into the current agreement, as
well as to complete the transactions which the current agreement covers, it is
up to the parties' advisors to demand further documentation on MSO Inc. and OS
AS respectively.
2
<PAGE>
6. Right to appoint members of the board and employees in MSO Inc.
The board of MSO Inc. shall consist of the following persons:
Franz Eder.
A person appointed by MSO Inc.
A person appointed by the MSO and OS AS shareholders.
The MSO Inc. board shall employ the necessary personnel in the company in the
normal way.
7. Transfer/assignment of shares
The parties shall transfer the shares to each other at the same time. If this
cannot be executed in practice, the shares shall be deposited with a third
party, preferably a Norwegian lawyer or an authorised stockbroker. The OS AS
shareholders shall transfer/deposit their shares in assigned condition to MSO
Inc. MSO Inc. shall transfer/deposit the shares in the company to each of the OS
AS shareholders pursuant to Appendix 1.
The shares in MSO Inc. which OS AS receives cannot be traded before the issue
has been finalised (finalisation expected in June 1998)
8. Voting rights for shares in OS AS until the transaction has been finalised
The OS AS shareholders give MSO Inc., or the person the company appoints, the
right to vote for the OS AS shares at shareholders' meetings as of the moment
the current agreement is signed.
9. Costs
The OS AS shareholders shall not incur any costs from the exchange of the
shares.
10. Confidentiality
The parties shall keep the current agreement and transaction fully confidential,
however, the parties can jointly agree on something else.
11. Resolving disputes/legal venue
This agreement shall fall under Norwegian law with Oslo serving as the legal
venue.
Should there be any dispute concerning the interpretation of the current
agreement, the parties shall strive to solve this through negotiations. In this
connection the parties shall agree to hold a meeting no later than 10 days after
it is clear that such a dispute has arisen.
If it proves to be impossible to solve the dispute through negotiations, the
dispute shall be decided by arbitration in Oslo in accordance with the rules in
Chapter 32 of the Norwegian Civil Procedure Code. The Arbitration Court shall
consist of three - 3 - members, whereof each of the parties shall appoint their
own member, and these shall jointly appoint the third member. If it proves to be
impossible to appoint a
3
<PAGE>
third member, he or she shall be appointed by the chairman of Den Norske
Advokatforening [the Norwegian Bar Association]. The parties may agree to
appoint 1 arbitrator only who, if agreement cannot be reached, shall be
appointed by the chairman of Den Norske Advokatforening [the Norwegian bar
Association].
There are nineteen - 19 - copies of the current agreement, one for Geoteck
International, Inc., and one for each of the OS AS shareholders, a total of
eighteen - 18.
Tom Tidemann signs the agreement on behalf of all the Offshore Shuttle AS
shareholders in accordance with the written authorisation from each of the
shareholders.
Date:
Geoteck International Inc. ....................................
Spax Holding AS ....................................
Aasens Trykkerier AS ....................................
Arne Martinsen ....................................
Birger Holten ....................................
Jochen Schene ....................................
Frank Samuels ....................................
Jurgen Terniden ....................................
Thyssen Stahlunion GmbH ....................................
Thor Stang ....................................
Norsk SMB Invest 1 AS ....................................
Norsk SMB Invest 2 AS ....................................
Norsk SMB Invest 3 AS ....................................
Norsk SMB Invest 4 AS ....................................
Einar Nistad ....................................
Inger Egeberg Sogstad ....................................
Erik Staumo ....................................
Knut Rygh ....................................
GTA ....................................
True translation certified
Government Authorized Translator
4
<PAGE>
Exhibit 2.3
Translation from Norwegian
AGREEMENT REGARDING EXCHANGE OF SHARES
The following agreement has been entered into between Geoteck International,
Inc., a company registered in Nevada, USA, which is in the process of changing
its name to Marine Shuttle Operation Inc., hereinafter referred to as "MSO
Inc.", as the first party, and the shareholder(s) mentioned below in the
Norwegian registered company Offshore Shuttle AS, hereinafter referred to as
"OS AS":
- --------------------------------------------------------------------------------
Shareholder No. of shares in OS AS (fill in)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
as the second party, hereinafter referred to as "the OS AS shareholders":
1. Background of the agreement
The Norwegian registered company Marine Shuttle Operation AS, hereinafter
referred to as "MSO", is in the process of entering into a licensing
agreement with OS AS to acquire the exclusive rights to build and operate an
offshore shuttle, based upon the rights and the concept which have been drawn up
by OS AS, as well as the option to build and operate a further four - 4 -
offshore shuttles. It is a condition of the current agreement that the
above-mentioned licensing agreement is entered into.
In the same way as the parties in this agreement, the MSO shareholders, Franz
Eder and Sverre Hansen, have entered into an agreement regarding the exchange of
their shares in MSO for shares in MSO Inc. The original intention of the parties
was that the OS AS shareholders would also have been incorporated in the same
agreement which has been entered into between MSO Inc. and the MSO shareholders.
However, as that agreement is extremely comprehensive (31 pages long),
complicated and contains a number of details which are not found to be necessary
to include in such an agreement as this current agreement which falls under
Norwegian law, the parties agreed to enter into this current briefer agreement.
2. Terms of the exchange
The parties have hereby agreed that 1.5 shares in MSO Inc. shall be exchanged
for one share in OS AS.
In connection with expanding capital with new share capital, MSO Inc. shall
apply for listing on Nasdaq's main list and for listing on the Frankfurt stock
exchange. The company is currently listed on the Nasdaq Bulletin Board.
After the transactions regarding the exchange of shares between MSO Inc., the
MSO shareholders and the OS AS shareholders have been finalised, MSO Inc. will
have 100% ownership of MSO and will own a majority of the shares in OS AS.
3. MSO Inc.'s obligations
MSO Inc. shall finance MSO in the amount of US $ 100,000,000, excluding the
costs, commissions and other fees related to the financing through the issue of
20,000,000 new shares in MSO Inc. MSO Inc. has
<PAGE>
entered into an agreement with the German brokerage firm Berliner Freiverkehr
(Aktien) AG which will be responsible for carrying out the issue.
MSO Inc. may need up to 180 days to obtain the above-mentioned financing. During
this interval MSO Inc. shall ensure the temporary financing of MSO to the amount
of US $ 1,5 mill to cover MSO's daily operating expenses.
MSO Inc. shall also issue shares in MSO Inc. to the OS AS shareholders as
indicated in the current agreement.
4. OS AS shareholder's obligations
All the shareholders declare that they shall assign their shares in OS AS to MSO
Inc., free of encumbrances. The OS AS shareholders shall not sell, mortgage or
in any other way dispose of their shares.
5. Due Diligence
In addition to exchanging official documents, such as the audited accounts for
1997, confirmation that MSO Inc. and OS AS are properly registered with the
indicated share capital, the necessary judicial company documentation showing
that MSO Inc. has the legal competence to enter into the current agreement, as
well as to complete the transactions which the current agreement covers, it is
up to the parties' advisors to demand further documentation on MSO Inc. and OS
AS respectively.
6. Right to appoint members of the board and employees in MSO Inc.
The board of MSO Inc. shall consist of the following persons:
Franz Eder.
A person appointed by MSO Inc.
A person appointed by the MSO and OS AS shareholders.
The MSO Inc. board shall employ the necessary personnel in the company in the
normal way.
7. Transfer/assignment of shares
The parties shall transfer the shares to each other at the same time. If this
cannot be executed in practice, the shares shall be deposited with a third
party, preferably a Norwegian lawyer or an authorised stockbroker. The OS AS
shareholders shall transfer/deposit their shares in assigned condition to MSO
Inc. MSO Inc. shall transfer/deposit the shares in the company to each of the OS
AS shareholders.
The shares in MSO Inc. which OS AS receives cannot be traded before the issue
has been finalised (finalisation expected in June 1998)
2
<PAGE>
8. Voting rights for shares in OS AS until the transaction has been finalised
The OS AS shareholders give MSO Inc., or the person the company appoints, the
right to vote for the OS AS shares at shareholders' meetings as of the moment
the current agreement is signed.
9. Costs
The OS AS shareholders shall not incur any costs from the exchange of the
shares.
10. Confidentiality
The parties shall keep the current agreement and transaction fully confidential,
however, the parties can jointly agree on something else.
11. Resolving disputes/legal venue
This agreement shall fall under Norwegian law with Oslo serving as the legal
venue.
Should there be any dispute concerning the interpretation of the current
agreement, the parties shall strive to solve this through negotiations. In this
connection the parties shall agree to hold a meeting no later than 10 days after
it is clear that such a dispute has arisen.
If it proves to be impossible to solve the dispute through negotiations, the
dispute shall be decided by arbitration in Oslo in accordance with the rules in
Chapter 32 of the Norwegian Civil Procedure Code. The Arbitration Court shall
consist of three - 3 - members, whereof each of the parties shall appoint their
own member, and these shall jointly appoint the third member. If it proves to be
impossible to appoint a third member, he or she shall be appointed by the
chairman of Den Norske Advokatforening [the Norwegian Bar Association]. The
parties may agree to appoint 1 arbitrator only who, if agreement cannot be
reached, shall be appointed by the chairman of Den Norske Advokatforening [the
Norwegian bar Association].
Date/ place: Date/ place:
.......................... ..............................
Signature: Signature:
.......................... ..............................
Geotech Int. Inc. (MSO Inc.)
3
<PAGE>
SCHEDULE OF OMITTED DOCUMENTS
Exhibit 2.3 to the Registration Statement is a form of the Agreement
Regarding Exchange of Shares that was entered into by Marine Shuttle
Operations Inc. ("MSO") and various stockholders of Offshore Shuttle AS
("OSAS"). Each individual agreement was omitted from the
Registration Statement pursuant to Item 601(a) of Regulation S-K. Information
regarding the omitted documents is set forth below.
<TABLE>
<CAPTION>
Name and Address No. of OSAS No. of MSO
of OSAS Stockholder Shares Exchanged Shares Acquired Date of Execution
- ------------------- ---------------- --------------- -----------------
<S> <C> <C> <C>
Arne Martinsen 20,800 223,500 May 16, 1998
Sonnaveien 94
1476 Rasta, Norway
Arvid Kolle 25,800 38,700 April 15, 1998
Tulipanveien 20
4300 Sandnes, Norway
AS Ineta 1,000 1,500 April 15, 1998
Postboks 2406 Solli
0201 Oslo, Norway
Concordia Capo AS 3,000 4,500 April 15, 1998
Postboks 21
5501 Haugesund, Norway
Concordia Foss AS 3,000 4,500 April 15, 1998
Postboks 21
5501 Haugesund, Norway
Concordia Star AS 3,000 4,500 April 15, 1998
Postboks 21
5501 Haugesund, Norway
Einar Myklebust 43,400 65,100 April 15, 1998
Fyrgangen 17
1560 Larkollen, Norway
Erik Kristen-Johanssen 9,800 14,700 April 15, 1998
Postboks 2406 Solli
0201 Oslo, Norway
Erik Staumo 19,720 56,580 April 15, 1998
Fjordallen 14
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
0250 Oslo, Norway
Georg Tidemann Andersen 760 10,140 May 16, 1998
Bjornstjeme B 21
3000 Drammen, Norway
Gunnar Greibokk 23,000 34,500 April 15, 1998
4660 Evje, Norway
Gunnar Jorgensen 15,000 22,500 April 15, 1998
Solveien 4
1177 Oslo, Norway
Hannestad Mek AS 4,000 6,000 April 15, 1998
Kanalveien 4
3110 Tonsberg, Norway
Inger Egeberg Sogstad 4,000 18,000 April 15, 1998
Fjordallen 14
0250 Oslo, Norway
Jan Krohn-Hansen 35,540 53,310 April 15, 1998
Nordasneset 63
5046 Radal, Norway
Jens Holtung 60,000 90,000 April 15, 1998
Blakollveien 18
3175 Ramnes, Norway
Johnco AS 20,000 30,000 April 15, 1998
Postboks 229
5501 Haugesund, Norway
Johs Owren 26,760 40,140 April 15, 1998
Tollofsrud gard
2600 Lillehammer, Norway
Jon Fosse 7,500 11,250 April 15, 1998
Smebyveien 2
2300 Hamar, Norway
Karlander Invest AS 24,000 36,000 April 15, 1998
Postboks 1785 Vika
0122 Oslo, Norway
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C>
Knut Rygh 21,760 70,140 April 15, 1998
Nordhellinga 7
1313 Voyenenga, Norway
Maria Hareide 17,800 26,700 April 15, 1998
Dicksvei 13
1324 Lysaker, Norway
Nistad Finans og Eiendom AS 138,100 207,150 April 15, 1998
Midttunlia 73
5051 Oslo, Norway
Norsk SMB Invest 3 40,000 186,660 May 16, 1998
Stranden 3A
0250 Oslo, Norway
Norsk SMB Invest 4 25,800 119,700 April 15, 1998
Stranden 3A
0250 Oslo, Norway
Ole-Johan Olsen 28,200 42,300 May 16, 1998
Foynveien 24
3132 Husoysund, Norway
Rolf Ness 27,860 41,790 May 16, 1998
Milje
5593 Skanevik, Norway
Sigfred Lyngoy 64,100 96,150 April 15, 1998
Stortingsgaten 28
0161 Oslo, Norway
Terje Rosjo 15,000 22,500 April 15, 1998
Van der Weld weg 5
5040 Paradis, Norway
Thor Stang 22,000 190,500 April 15, 1998
Ekebergveien 76
3080 Holmestrand, Norway
Trade Invest AS 20,000 30,000 April 15, 1998
Postboks 214
1415 Oppegard, Norway
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
Zaco AS 9,600 14,400 April 15, 1998
Postboks 563
4801 Arendal, Norway
</TABLE>
4
<PAGE>
Exhibit 2.4
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is made on May 5, 1998, between
A. Geoteck International Inc., a Nevada corporation ("MSO Inc."),
and
B. 1. Spax Holding AS
2. Aasens Trykkerier AS
3. Arne Martinsen
4. Birger Holten
5. Jochen Schene
6. Frank Samuels
7. Jurgen Ternieden
8. Thyssen Stahlunion GmbH
9. Thor Stang
10. Norsk SMB Invest 1 AS
11. Norsk SMB Invest 2 AS
12. Norsk SMB Invest 3 AS
13. Norsk SMB Invest 4 AS
14. Einar Nistad/Nordas Invest AS
15. Inger Egeberg Sogstad
16. Erik Staumo
17. Knut Rygh
18. Georg Tidemann-Andersen
19. Arvid Kolle
20. AS Ineta
21. Concordia Capo
22. Concordia Foss
23. Concordia Star
<PAGE>
24. Einar Myklebust
25. Erik Kristen-Johanssen
26. Gunnar Greibrokk
27. Gunnar Jorgensen
28. Hannestad Mek
29. Jan Krohn-Hansen
30. Jens Holtung
31. Johnco AS
32. Johs Owren
33. Jon Fosse
34. Karlander Invest AS
35. Maria Hareide
36. Nistad Finans og Eiendom AS
37. Ole-Johan Olsen
38. Rolf Ness
39. Sigfred Lyngoy
40. Terje Rosjo
41. Trade Invest AS
42. Zaco AS
(individually, a "OSAS Stockholder" and collectively, the OSAS "Stockholders")
and
C. Glad Arno Meyer & Co. (the "Escrow Agent").
<PAGE>
BACKGROUND
The OSAS Stockholders are the holders of 68,26% of the issued and outstanding
capital stock of Offshore Shuttle AS, a Norwegian corporation ("OSAS"), i. e.
3,291,738 shares (the "OSAS Stock") of the issued and outstanding capital stock
consisting of 4,822,000 shares of voting common stock, par value 0.1 NOK of
OSAS.
The OSAS Stockholders have sold and MSO Inc. has purchased the OSAS Stock by
several Stock Exchange Agreements dated February 19, 1998 and March/April 1998
(the "Stock Exchange Agreements").
At the Closing of the Stock Exchange Agreements upon transfer of OSAS Stock to
MSO Inc., MSO Inc. will cause 4,937,607 shares of common stock, par value U$
0.001 of MSO Inc. (the "MSO Inc. Stock") to be issued and delivered to OSAS
Stockholders.
The OSAS Stockholders and MSO Inc. intend to establish an escrow arrangement
through which the OSAS Stockholders will deliver the OSAS Stock to MSO Inc. and
MSO Inc. will deliver the MSO Inc. Stock to the OSAS Stockholders.
In consideration of the mutual representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
STATEMENT OF TERMS
1. APPOINTMENT OF ESCROW AGENT
The OSAS Stockholders and MSO Inc. hereby appoint Glad Arno Meyer & Co. as
Escrow Agent, and Escrow Agent agrees to such appointment, all pursuant to
the terms of this Agreement.
<PAGE>
2. DELIVERY OF OSAS STOCK TO ESCROW AGENT
The OSAS Stockholders have already delivered the OSAS Stock to a client
account of the Escrow Agent as shown in the Norwegian Share Registry (VPS)
as attached in Exhibit 1. Upon Execution of this Agreement by the parties,
Escrow Agent shall transfer the OSAS Stock to a client account of the
Escrow Agent for the benefit of MSO Inc. Escrow Agent thereafter will hold,
administer, and disburse the OSAS Stock in accordance with the terms and
conditions of this Agreement.
3. DELIVERY OF MSO INC. STOCK BY MSO INC.
Upon execution of this Agreement MSO Inc. will cause the Stock Transfer
Agent of MSO Inc. to issue share certificates pursuant to Regulation S of
the Securities Act of 1933, as amended, in the name of each OSAS
Stockholder and in the amount of MSO Inc. shares as shown next to its name
at the end of this Agreement (the "Regulation S Certificates") and to
deliver the Regulation S Certificates to the Escrow Agent.
Prior to or on September 30, 1998, MSO Inc. will cause the shares
underlying the Regulation S Certificates to be registered under the
Securities Act of 1933, as amended.
Escrow Agent will hold, administer, and disburse the MSO Inc. Stock and the
Regulation S Certificates, in accordance with the terms and conditions of
this Agreement.
4. DELIVERY OF SHARES
Escrow Agent shall hold and disburse the OSAS Stock and the MSO Inc. Stock
and give notice in regard thereto as follows:
a) Promptly following receipt of notice from MSO Inc. that MSO Inc.
has raised funds in the gross amount of not less than US$
105,000,000 (accompanied by evidence of the funds received
reasonably satisfactory to Escrow Agent), Escrow Agent will
simultaneously (i) deliver the Regulation S Certificates to the
related OSAS Stockholders and (ii) deliver the OSAS Stock to MSO
Inc. Alternatively, Escrow Agent may deliver the Regulation S
Certificates to the Stock Transfer Agent for the MSO Inc.
<PAGE>
Stock in exchange for new certificates which do not bear any
Regulation S legend (the "Registered Certificates") and thereafter
deliver the Registered Certificates to the OSAS Stockholders. The
OSAS Stockholders and MSO Inc. agree that the gross proceeds of not
less than US$ 105,000,000 constitutes an acceptable change from the
US$ 100,000,000 of net proceeds provided for in the Stock Exchange
Agreements.
b) If by the close of business (Oslo time) on September 30, 1998, 6:00
o'clock p.m., Escrow Agent has not received the notice specified in
lit. a) above, then Escrow Agent shall return to each OSAS
Stockholder the OSAS Stock deposited by such OSAS Stockholder and
return to MSO Inc. the Regulation S Certificates deposited by MSO
Inc.
5. VOTING RIGHTS OF OSAS STOCK AND MSO INC. STOCK
Upon execution of this Agreement MSO Inc. is entitled to vote the OSAS
Stock and vice versa the OSAS Stockholders are entitled to vote the MSO
Inc. Stock. Additionally, upon execution of this Agreement the Escrow Agent
is entitled to vote the OSAS Stock as instructed by MSO Inc. and vice versa
the Escrow Agent is entitled to vote the MSO Inc. Stock as instructed by
the OSAS Shareholders.
6. RIGHTS AND DUTIES OF ESCROW AGENT
6.1 Escrow Agent will not be liable for any actions taken or omitted upon the
advice of counsel or upon a reasonable interpretation of any instructions
or documents provided to it by MSO Inc. or the OSAS Stockholders that it
reasonably believes to be genuine or duly authorized. Escrow Agent may
decline to act if it is in doubt as to its duties under this Agreement and
will not be liable for such failure to act.
6.2 If Escrow Agent shall incur any liability, damage or expense arising out of
or resulting from any claim that Escrow Agent has improperly distributed
any of the OSAS or MSO Inc. Stock under this Agreement, other than as a
result of Escrow Agent's gross negligence or willful misconduct, MSO Inc.
and OSAS Stockholders will indemnify and hold Escrow Agent harmless
therefrom. If Escrow Agent deems it necessary to seek counsel for any
matter concerning its duties hereunder, MSO Inc. and OSAS Stockholders will
reimburse Escrow Agent
<PAGE>
for such actual and reasonable costs. Escrow Agent is not responsible for
the genuineness of any signature and may rely conclusively upon, and shall
be protected in acting upon, any list, advice, judicial order or decree,
certificate, notice, request, consent, statement, instruction or other
instrument believed by it in good faith to be genuine or to be signed or
presented by the proper party, or duly authorized or properly made.
6.3 Escrow Agent is not responsible for any of the agreements referenced in
this Agreement except for the performance of its duties as expressly set
forth in this Agreement. Escrow Agent's duties and obligations under this
Agreement will be governed solely by the provisions of this Agreement, and
Escrow Agent will not have any duties other than the duties expressly
imposed in this Agreement and will not be required to take any action other
than in accordance with the terms of this Agreement.
6.4 Escrow Agent will not be bound by any notice of, or demand with respect to
any waiver, modification, amendment, termination, cancellation, rescission
or other action under or with respect to this Agreement, unless duly
executed by the MSO Inc. and OSAS Stockholders and, if Escrow Agent's
rights or duties are affected thereby, unless Escrow Agent has given its
prior written consent thereto.
6.5 In the event of any controversy or dispute under this Agreement, or with
respect to any question as to the construction of this Agreement, of any
action to be taken by Escrow Agent under this Agreement, Escrow Agent will
incur no liability for any actions taken or omitted in good faith in
accordance with the advice and the opinion of its counsel or its own
reasonable judgment. In the event of any controversy or dispute under this
Agreement, or with respect to any question as to the construction of this
Agreement, of any action to be taken by Escrow Agent under this Agreement,
Escrow Agent may request written instructions by MSO Inc. and OSAS
Stockholders or may commence an interpleader action or seek any other
appropriate relief from a court of competent jurisdiction. The parties
hereto consent to jurisdiction and venue in such court.
6.6 Escrow Agent's liability under this Agreement will be limited in all
respects solely to gross negligence or willful misconduct on its part.
<PAGE>
7. TERMINATION
This Agreement will terminate upon the Escrow Agent's release of all of the
OSAS Stock and MSO Inc. Stock to the appropriate parties pursuant to this
Agreement.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Kingdom of Norway.
9. ENFORCEMENT
Each party to this Agreement (i) submits to personal jurisdiction in the
Kingdom of Norway for the enforcement of this Agreement or in connection
with this Agreement, and (ii) waives any and all rights under the laws of
any state to object to jurisdiction within the Kingdom of Norway for the
purposes of litigation to enforce this Agreement or in connection with this
Agreement.
10. ARBITRATION
Except as otherwise provided herein, any dispute arising under this
Agreement will be submitted to a single arbitrator selected by the
Norwegian Bar Association in accordance with Chapter 32 of the Norwegian
Civil Procedure.
11. ASSIGNMENT
This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. BENEFITS; NO THIRD PARTY BENEFICIARIES
This Agreement is specifically for the benefit of the parties hereto. None
of the provision of this Agreement is or shall be construed as for the
benefit of or enforceable by any person not a party to this Agreement.
<PAGE>
13. NOTICE; DELIVERIES
Any notice required to be given hereunder shall be in writing and except
when notice by facsimile is specifically authorized herein, each notice or
other item to be delivered hereunder shall be either hand delivered or sent
by Federal Express, DHL or other recognized courier service that provides
receipt of delivery, to the party to whom it is to be delivered at the
addresses set forth below for the parties to this Agreement. Notice
authorized herein to be given by facsimile shall be given to the "FAX"
numbers provided below and the electronic confirmation of the sender shall
be evidence of receipt.
If to OSAS Stockholders: Venture Invest AS
Attention: Mr. Tom Tidemann
Stranden 3, N-0250 Oslo, Norway
Tel: 47-22-833212
Fax: 47-22-833213
If to MSO Inc.: Geoteck International, Inc.
Attention: Mr. Iqbal Akram
1177 West Hastings Street, Suite 1818
Vancouver, B. C. V6E 2K3
Tel: 604-683-9161
Fax: 604-687-6755
With a copy to: Breslow & Walker
Attention Mr. Howard Breslow, Esq.
767 Third Avenue
New York, NY 10017
Tel: 212-832-1930
Fax: 212-888-4955
If to Escrow Agent: Glad, Arno, Meyer & Co.
Attention: Mr. Cato Myhre
Fritjof Nansenplass 9, N-0160 Oslo, Norway
<PAGE>
Tel: 47-22-424610
Fax: 47-22-412019
14. ENTIRE AGREEMENT
This Agreement and the Exhibits attached hereto constitute the entire
Agreement among the parties hereto relating to the escrow arrangements
described herein and supersedes all prior arrangements and understandings,
both written and oral, expressed or implied, with respect thereto. In
particular, the Escrow Agreement between OSAS Stockholders and the Escrow
Agent dated February 1998 is expressly superseded and terminated by this
Agreement.
15. COUNTERPARTS
This agreement may be executed in one or more counterparts each of which
shall be deemed to be an original. In order for this Agreement to be
effective, it shall not be necessary for all counterparts to be signed by
each party hereto, provided that at least one counterpart of this Agreement
is signed by each of the parties hereto.
16. FAX EXECUTION
This Agreement may be executed by delivery of a signed signature page by
fax and such fax execution will be effective in all respect, but has to be
followed by an exchange of copies by one of the methods provided for notice
under this Agreement.
Executed on May 5, 1998.
A. Geoteck International, Inc.
By:
----------------------
Name:
Title:
<PAGE>
- ----------------------------- ---------------------- ---------------------------
B. OSAS STOCKHOLDERS SHARES SHARES OF
OF OSAS STOCK MSO INC. STOCK
- ----------------------------- ---------------------- ---------------------------
SPAX Holding AS
By: 365,000 547,500
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
Aasens Trykkerier AS
By: 58,400 87,600
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 149,000 223,500
Arne Martinsen
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 52,600 78,900
Birger Holten
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 221,666 332,499
Joachim Schene
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 216,666 324,999
Frank Samuels
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 221,666 332,499
Jurgen Ternieden
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
Thyssen Stahlunion GmbH
By: 222,000 333,000
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 127,000 190,500
Thor Stang
- ----------------------------- ---------------------- ---------------------------
Norsk SMB Invest 1 AS
By: 226,000 339,000
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
Norsk SMB Invest 2 AS
By: 332,000 498,000
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
Norsk SMB Invest 3 AS
By: 124,440 186,660
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
Norsk SMB Invest 4 AS
By: 79,800 119,700
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
EinarNistad/Nordas Invest AS
By: 124,440 186,660
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 12,000 18,000
Inger Egeberg Sogstad
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 37,720 56,580
Erik Staumo
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 46,760 70,140
Knut Rygh
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 6,760 10,140
Georg Tidemann-Andersen
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 25,800 38,700
Arvid Kolle
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 1,000 1,500
AS Ineta
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
Concordia Capo
By: 3,000 4,500
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
Concordia Foss
By: 3,000 4,500
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
Concordia Star
By: 3,000 4,500
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 43,400 65,100
Einar Myklebust
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 9,800 14,700
Erik Kristen-Johanssen
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 23,000 34,500
Gunnar Greibrokk
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 15,000 22,500
Gunnar Jorgensen
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 4,000 6,000
Hannestad Mek
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 35,540 53,310
Jan Krohn-Hansen
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 60,000 90,000
Jens Holtung
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 20,000 30,000
Johnco AS
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 26,760 40,140
Johs Owren
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 7,500 11,250
Jon Fosse
- ----------------------------- ---------------------- ---------------------------
Karlander Invest AS
By: 24,000 36,000
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 17,800 26,700
Maria Hareide
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
Nistad Finans og Eiendom AS
By: 138,100 207,150
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 28,200 42,300
Ole-Johan Olsen
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 27,860 41,790
Rolf Ness
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 64,100 96,150
Sigfred Lyngoy
- ----------------------------- ---------------------- ---------------------------
- ------------------------- 15,000 22,500
Terje Rosjo
- ----------------------------- ---------------------- ---------------------------
Trade Invest AS
By: 20,000 30,000
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
<PAGE>
- ----------------------------- ---------------------- ---------------------------
Zaco AS
By: 9,600 14,400
----------------------
Name:
Title:
- ----------------------------- ---------------------- ---------------------------
C. Glad, Arno, Meyer & Co.
By:
---------------------------
Name: Cato Myhre
<PAGE>
Exhibit 2.5
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is entered into as of May
20, 1998, between
GEOTECK INTERNATIONAL, INC., a Nevada corporation ("MSO Inc."),
and
G. FOSS BEHEER B.V., a Dutch corporation (the "OSAS Stockholder")
being the holder of 9,64% of the issued and outstanding capital stock of
Offshore Shuttle AS, a Norwegian corporation ("OSAS"),
BACKGROUND
The OSAS Stockholder owns 465,002 shares (the "OSAS Stock") of the issued
and outstanding capital stock consisting of 4,822,000 shares of voting common
stock, par value 0.1 NOK of OSAS.
The OSAS Stockholder has agreed to sell to MSO Inc. and MSO Inc. has agreed
to purchase the OSAS Stock from the OSAS Stockholder on the terms and conditions
set forth in this Agreement.
In consideration of the mutual representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
STATEMENT OF TERMS:
SECTION 1
PURCHASE AND SALE OF STOCK
<PAGE>
1.1 PURCHASE AND SALE OF STOCK. OSAS Stockholder will sell to MSO Inc. and
MSO Inc. will purchase from OSAS Stockholder all of the MSO and OSAS
Stockholder's right, title and interest in the OSAS Stock.
1.2 STOCK EXCHANGE. At the Closing (as defined in Section 2.1 below), (i)
MSO Inc. will receive stock certificates evidencing 465,002 shares of the OSAS
Stock duly endorsed for transfer to MSO Inc., and (ii) MSO Inc. will cause
697,503 shares of the common voting stock, par value $0.001 of MSO Inc. (the
"MSO Inc. Stock") (the "Consideration") to be issued and delivered to the OSAS
Stockholder pursuant to Section 1.3 of this Agreement.
1.3 ISSUANCE OF MSO INC. STOCK TO OSAS STOCKHOLDERS. At the Closing, the
OSAS Stockholder will receive stock certificates evidencing shares which amount
to an aggregate of 697,503.
1.4 NO FURTHER OWNERSHIP IN OSAS STOCK. The issuance of the 697,503
shares of MSO Inc. to be delivered to the OSAS Stockholder will be deemed to
have been given in full satisfaction of all rights pertaining to the OSAS Stock.
SECTION 2
CLOSING; CLOSING CONDITIONS
2.1 CLOSING. The parties to this Agreement will hold a closing (the
"Closing") for the purpose of confirming the transactions contemplated by this
Agreement within two months after a registration statement as described in this
Section 2 has become effective. The date on which the Closing actually occurs is
hereinafter referred to as the "Closing Date." At the Closing, the parties will
execute and exchange the following documents, items, certificates and
instruments described in this Section 2.
2.2. CONDITIONS TO CLOSING OF MSO INC. MSO Inc.'s obligation to consummate
the transactions contemplated by this Agreement is subject to the satisfaction
of the conditions set forth below and/or the delivery of all of the documents,
items, certificates and instruments described below, all of which documents,
items, certificates and instruments must be in form and substance satisfactory
to
<PAGE>
MSO Inc., unless such condition is waived by MSO Inc. at the Closing. The
Closing of the transactions contemplated by this Agreement will be deemed to
mean a waiver of all conditions to Closing.
(a) Transaction Documents. The OSAS Stockholder will have executed this
Agreement and delivered the shares of OSAS stock as provided in Section 1.2
above.
(b) Representations and Warranties. The representations and warranties of
the OSAS Stockholder set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and as of the
Closing Date.
c) Effective Registration Statement. A registration statement relating
to the MSO Inc. Stock to be issued to OSAS Stockholders has become effective
under the Securities Act of 1933, as amended.
(d) Shareholder Approval. The acquisition of OSAS Stock as provided in
this Agreement will have been approved by the shareholders of MSO Inc.
2.3 CONDITIONS TO CLOSING OF THE OSAS STOCKHOLDERS. The OSAS
Stockholder's obligation to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the conditions set forth below
and/or the delivery of all of the documents, items, certificates and instruments
described below, all of which documents, items, certificates and instruments
must be in form and substance satisfactory to the OSAS Stockholder, unless such
condition is waived by the MSO and OSAS Stockholders at the Closing. The Closing
of the transactions contemplated by this Agreement will be deemed to mean a
waiver of all conditions to Closing.
(a) Transaction Documents. MSO Inc. will have executed this Agreement and
delivered the shares of MSO Inc. as provided in Section 1.3 above.
(b) Representations and Warranties. The representations and warranties of
MSO Inc. set forth in this Agreement will be true, correct and complete in all
respects as of the Closing Date, as though made on and as of the Closing Date.
<PAGE>
(c) Effective Registration Statement. A registration statement relating
to the MSO Inc. Stock to be issued to OSAS Stockholder has become effective
under the Securities Act of 1933, as amended.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE OSAS STOCKHOLDER
The OSAS Stockholder represent and warrant to MSO Inc.:
3.1 CORPORATE ORGANIZATION AND GOOD STANDING. To the best knowledge of
OSAS stockholder, OSAS is a corporation duly organized, validly existing and in
good standing under the laws of Norway, with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted.
3.2 CAPITALIZATION. The entire authorized capital stock and other equity
securities of OSAS consists of 4,822,000 shares of 0,1 NOK par value stock all
of which shares are issued and outstanding.
3.3 TITLE TO OSAS STOCK. The OSAS Stock is lawfully owned by the OSAS
Stockholder in the respective amounts set forth opposite his or its name by its
signature below, free of preemptive rights and free and clear of all claims,
liens, charges, security interest, encumbrances and other restrictions or
limitations of any kind. The OSAS Stockholder has the full power, right, and
authority to transfer the OSAS Stock held by him pursuant to this Agreement.
3.4 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws, no filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body
or authority or any other person or entity is necessary for the consummation by
the OSAS Stockholder of the transactions contemplated by this Agreement or to
enable OSAS to continue to conduct its business after the Closing Date in a
manner consistent with that in which it is presently conducted.
<PAGE>
3.5 NONCONTRAVENTION. Neither the execution, delivery and performance of
the OSAS Transaction Documents, nor the consummation of the transactions
contemplated thereby nor compliance with the provisions thereof, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of OSAS under any term, condition or
provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to OSAS or
its properties or assets;
(2) Violate any provision of the articles of incorporation or bylaws
of OSAS; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority applicable
to OSAS or any of its properties or assets.
SECTION 4
REPRESENTATIONS AND WARRANTIES
OF MSO INC.
MSO Inc. represents and warrants to the OSAS Stockholder as follows:
4.1 ORGANIZATION AND GOOD STANDING. MSO Inc. is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
4.2 CAPITAL STRUCTURE. The entire authorized capital stock and other
equity securities of MSO Inc. consists of 40,000,000 shares of $0.001 par value
common stock of which 20,020,000 shares are issued and outstanding. All of the
issued and outstanding shares of MSO Inc. Stock have been duly authorized, are
validly issued fully paid and nonassessable and, are not subject to preemp-
<PAGE>
tive rights. Disclosure Schedule 4.2 sets forth the percentage holdings of the
Stockholders in MSO Inc. after giving effect to the transactions contemplated by
this Agreement and certain proposed issuances of MSO Inc. Stock.
4.3 AUTHORITY. MSO Inc. has all requisite corporate power and authority
to enter into this Agreement and the Transaction Documents to which it is a
party and to perform its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery of this Agreement
and each of the Transaction Documents to which it is a party by MSO Inc. and the
consummation by MSO Inc. of the transactions contemplated thereby, have been
duly authorized by the board of directors of MSO Inc. and no other corporate
proceedings on the part of MSO Inc. are necessary to authorize such documents or
to consummate the transactions contemplated thereby except the approval of the
shareholders of MSO Inc. as described in Section 2.2 lit. (e) above. This
Agreement has been, and all the other Transaction Documents to which it is a
party when executed and delivered by MSO Inc. as contemplated by this Agreement
will be, duly executed and delivered by MSO Inc. and this Agreement is, and the
other Transaction Documents when executed and delivered by MSO Inc. as
contemplated hereby will be, the valid and binding obligation of MSO Inc.
enforceable in accordance with their respective terms, except (1) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(2) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
4.4 NONCONTRAVENTION. Neither the execution, delivery and performance of
the Transaction Documents, nor the consummation of the transactions contemplated
thereby nor compliance with the provisions thereof, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of MSO Inc. under any term, condition or
provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to MSO Inc.
or its material properties or assets;
<PAGE>
(2) Violate any provision of the articles or certificate of
incorporation or by-laws of MSO Inc.; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regula tion of any court or governmental or regulatory authority applicable
to MSO Inc. or any of its properties or assets.
4.5 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws, no filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body
or authority or other person or entity is necessary for the consummation by MSO
Inc. of the transactions contemplated by this Agreement or to enable MSO Inc. to
continue to conduct its business after the Closing Date in a manner which is
consistent with that in which it is presently conducted.
SECTION 5
SURVIVAL AND INDEMNIFICATION
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and covenants made by the parties shall survive the Closing for a
period of six (6) months from the Closing Date.
5.2 INDEMNIFICATION BY OSAS STOCKHOLDER. The OSAS Stockholder agrees to
indemnify MSO Inc. and its officers, directors, shareholders, employees, agents
and affiliates (other than the Stockholders themselves) in respect of, and hold
each of them harmless from and against, any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without limitation
interest, court costs, fees of attorneys, accountants and other experts or other
expenses of litigation or other proceedings or of any claim, default or
assessment) suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the OSAS Stockholder contained in this
Agreement.
<PAGE>
5.3 INDEMNIFICATION BY MSO INC. MSO Inc. agrees to indemnify the OSAS
Stockholder in respect of, and hold him harmless from and against, any and all
damages, fines, fees, penalties, deficiencies, losses and expenses (including
without limitation interest, court costs, fees of attorneys, accountants and
other experts or other expenses of litigation or other proceedings or of any
claim, default or assessment) suffered, incurred or sustained by him or to which
he becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of MSO Inc. contained in this Agreement.
SECTION 6
MISCELLANEOUS PROVISIONS
6.1 EFFECTIVENESS OF REPRESENTATIONS. Each party is entitled to rely on
the representations, warranties and agreements of the other party and all such
representation, warranties and agreement will be effective regardless of any
investigation that any party has undertaken or failed to undertake.
6.2 TERMINATION. This Agreement may be terminated at any time prior to
the Closing of the transactions contemplated hereby by:
(a) OSAS Stockholder;
(b) MSO Inc., if there has been a breach by OSAS Stockholder of any
material representation, warranty, covenant or agreement set forth in this
Agreement on the part of OSAS Stockholder that is not cured, to the
reasonable satisfaction of MSO Inc., within ten business days after notice
of such breach is given by MSO Inc.;
(d) MSO Inc., if the transactions contemplated by this Agreement has
not been consummated prior to September 30, 1998, unless the parties agree
to extend such date; or
(e) MSO Inc., if any permanent injunction or other order of a
governmental entity of competent authority preventing the consummation of
the transactions contemplated by this Agreement has become final and
nonappealable.
<PAGE>
6.3 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
6.4 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
6.5 ENTIRE AGREEMENT. This Agreement, the Exhibits, Schedules attached
hereto and the other Transaction Documents contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto.
6.6 SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, will be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it will,
as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
6.7 NOTICES. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent by
personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):
<PAGE>
If to OSAS Stockholder: G. Foss Beheer b. v.
Attention: _________________
_________________
_________________
Tel. ____________
Fax _____________
With a copy to: Arntzen Underland & Co.
Attention: Mr. Christian F. Michelet
Karl Johans gt. 39
N-0376 Oslo, Norway
Tel. 47-22-42 42 27
Fax 47-22-42 48 51
If to MSO Inc.: Geoteck International, Inc,
Attention: Mr. Iqbal Akram
1177 West Hastings Street, Suite 1818
Vancouver, B. C. V6E 2K3
Tel: 604-683-9161
Fax: 604-687-6755
With a copy to: Breslow & Walker
Attention: Mr. Howard Breslow, Esq.
767 Third Avenue
New York, NY 10017
Tel: 212-832-1930
Fax: 212-888-4955
All such notices and other communications will be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a fax, when the party sending such fax has received electronic
confirmation of its delivery, (c) in the case of delivery by
internationally-recognized overnight courier, on the business day following
dispatch and (d) in the case of mailing, on the third business day following
mailing.
<PAGE>
6.8 HEADINGS. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agree ment.
6.9 BENEFITS. None of the provisions of this Agreement is or will be
construed as for the benefit of or enforceable by any person not a party to this
Agreement.
6.10 ASSIGNMENT. This Agreement may not be assigned by any party, by
operation of law or otherwise.
6.11 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the Kingdom of Norway applicable to contracts made
and to be performed therein, without regard to conflicts of laws principles.
6.12 CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Any reference to
any federal, state, local, or foreign statute or law will be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
6.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
6.14 FAX EXECUTION. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.
<PAGE>
EXECUTED on May 20, 1998.
Geoteck International, Inc.
By:
--------------------------
Name: Iqbal Akram
Title: Vice President
G. Foss Beheer b.v.
By:
--------------------------
Name:
Title:
<PAGE>
Exhibit 2.6
STOCK EXCHANGE AGREEMENT
THIS STOCK Exchange AGREEMENT (the "Agreement") is entered into as of May
20, 1998, between
GEOTECK INTERNATIONAL, INC., a Nevada corporation ("MSO Inc."),
and
Per Bull Haugsoen, a resident of Norway (the "OSAS Stockholder"),
being the holder of 4,60 % of the issued and outstanding capital stock of
Offshore Shuttle AS, a Norwegian corporation ("OSAS"),
BACKGROUND
The OSAS Stockholder owns 221,666 shares (the "OSAS Stock") of the issued
and outstanding capital stock consisting of 4,822,000 shares of voting common
stock, par value 0.1 NOK of OSAS.
The OSAS Stockholder has agreed to sell to MSO Inc. and MSO Inc. has agreed
to purchase the OSAS Stock from the OSAS Stockholder on the terms and conditions
set forth in this Agreement.
In consideration of the mutual representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
STATEMENT OF TERMS:
SECTION 1
PURCHASE AND SALE OF STOCK
<PAGE>
1.1 PURCHASE AND SALE OF STOCK. OSAS Stockholder will sell to MSO Inc. and
MSO Inc. will purchase from OSAS Stockholder all of the MSO and OSAS
Stockholder's right, title and interest in the OSAS Stock.
1.2 STOCK EXCHANGE. At the Closing (as defined in Section 2.1 below), (i)
MSO Inc. will receive stock certificates evidencing 221,666 shares of the OSAS
Stock duly endorsed for transfer to MSO Inc., and (ii) MSO Inc. will cause
332,499 shares of the common voting stock, par value $0.001 of MSO Inc. (the
"MSO Inc. Stock") (the "Consideration") to be issued and delivered to the OSAS
Stockholder pursuant to Section 1.3 of this Agreement.
1.3 ISSUANCE OF MSO INC. STOCK TO OSAS STOCKHOLDERS. At the Closing, the
OSAS Stockholder will receive stock certificates evidencing shares which amount
to an aggregate of 332,499.
1.4 NO FURTHER OWNERSHIP IN OSAS STOCK. The issuance of the 332,499 shares
of MSO Inc. to be delivered to the OSAS Stockholder will be deemed to have been
given in full satisfaction of all rights pertaining to the OSAS Stock.
SECTION 2
CLOSING; CLOSING CONDITIONS
2.1 CLOSING. The parties to this Agreement will hold a closing (the
"Closing") for the purpose of confirming the transactions contemplated by this
Agreement within two months after a registration statement as described in this
Section 2 has become effective. The date on which the Closing actually occurs is
hereinafter referred to as the "Closing Date." At the Closing, the parties will
execute and exchange the following documents, items, certificates and
instruments described in this Section 2.
2.2. CONDITIONS TO CLOSING OF MSO INC. MSO Inc.'s obligation to consummate
the transactions contemplated by this Agreement is subject to the satisfaction
of the conditions set forth below and/or the delivery of all of the documents,
items, certificates and instruments described below, all of which documents,
items, certificates and instruments must be in form and substance satisfactory
to
<PAGE>
MSO Inc., unless such condition is waived by MSO Inc. at the Closing. The
Closing of the transactions contemplated by this Agreement will be deemed to
mean a waiver of all conditions to Closing.
(a) Transaction Documents. The OSAS Stockholder will have executed this
Agreement and delivered the shares of OSAS stock as provided in Section 1.2
above.
(b) Representations and Warranties. The representations and warranties of
the OSAS Stockholder set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and as of the
Closing Date.
(c) Effective Registration Statement. A registration statement relating
to the MSO Inc. Stock to be issued to OSAS Stockholders has become effective
under the Securities Act of 1933, as amended.
(d) Shareholder Approval. The acquisition of OSAS Stock as provided in
this Agreement will have been approved by the shareholders of MSO Inc.
2.3 CONDITIONS TO CLOSING OF THE OSAS STOCKHOLDERS. The OSAS
Stockholder's obligation to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the conditions set forth below
and/or the delivery of all of the documents, items, certificates and instruments
described below, all of which documents, items, certificates and instruments
must be in form and substance satisfactory to the OSAS Stockholder, unless such
condition is waived by the MSO and OSAS Stockholders at the Closing. The Closing
of the transactions contemplated by this Agreement will be deemed to mean a
waiver of all conditions to Closing.
(a) Transaction Documents. MSO Inc. will have executed this Agreement and
delivered the shares of MSO Inc. as provided in Section 1.3 above.
(b) Representations and Warranties. The representations and warranties of
MSO Inc. set forth in this Agreement will be true, correct and complete in all
respects as of the Closing Date, as though made on and as of the Closing Date.
<PAGE>
(c) Effective Registration Statement. A registration statement relating
to the MSO Inc. Stock to be issued to OSAS Stockholder has become effective
under the Securities Act of 1933, as amended.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE OSAS STOCKHOLDER
The OSAS Stockholder represent and warrant to MSO Inc.:
3.1 CORPORATE ORGANIZATION AND GOOD STANDING. To the best knowledge of
OSAS stockholder, OSAS is a corporation duly organized, validly existing and in
good standing under the laws of Norway, with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted.
3.2 CAPITALIZATION. The entire authorized capital stock and other equity
securities of OSAS consists of 4,822,000 shares of 0,1 NOK par value stock all
of which shares are issued and outstanding.
3.3 TITLE TO OSAS STOCK. The OSAS Stock is lawfully owned by the OSAS
Stockholder in the respective amounts set forth opposite his or its name by its
signature below, free of preemptive rights and free and clear of all claims,
liens, charges, security interest, encumbrances and other restrictions or
limitations of any kind. The OSAS Stockholder has the full power, right, and
authority to transfer the OSAS Stock held by him pursuant to this Agreement.
3.4 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws, no filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body
or authority or any other person or entity is necessary for the consummation by
the OSAS Stockholder of the transactions contemplated by this Agreement or to
enable OSAS to continue to conduct its business after the Closing Date in a
manner consistent with that in which it is presently conducted.
<PAGE>
3.5 NONCONTRAVENTION. Neither the execution, delivery and performance of
the OSAS Transaction Documents, nor the consummation of the transactions
contemplated thereby nor compliance with the provisions thereof, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of OSAS under any term, condition or
provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to OSAS or
its properties or assets;
(2) Violate any provision of the articles of incorporation or bylaws
of OSAS; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority applicable
to OSAS or any of its properties or assets.
SECTION 4
REPRESENTATIONS AND WARRANTIES
OF MSO INC.
MSO Inc. represents and warrants to the OSAS Stockholder as follows:
4.1 ORGANIZATION AND GOOD STANDING. MSO Inc. is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
4.2 CAPITAL STRUCTURE. The entire authorized capital stock and other
equity securities of MSO Inc. consists of 40,000,000 shares of $0.001 par value
common stock of which 20,020,000 shares are issued and outstanding. All of the
issued and outstanding shares of MSO Inc. Stock have been duly authorized, are
validly issued fully paid and nonassessable and, are not subject to preemp-
<PAGE>
tive rights. Disclosure Schedule 4.2 sets forth the percentage holdings of the
Stockholders in MSO Inc. after giving effect to the transactions contemplated by
this Agreement and certain proposed issuances of MSO Inc. Stock.
4.3 AUTHORITY. MSO Inc. has all requisite corporate power and authority
to enter into this Agreement and the Transaction Documents to which it is a
party and to perform its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery of this Agreement
and each of the Transaction Documents to which it is a party by MSO Inc. and the
consummation by MSO Inc. of the transactions contemplated thereby, have been
duly authorized by the board of directors of MSO Inc. and no other corporate
proceedings on the part of MSO Inc. are necessary to authorize such documents or
to consummate the transactions contemplated thereby except the approval of the
shareholders of MSO Inc. as described in Section 2.2 lit. (e) above. This
Agreement has been, and all the other Transaction Documents to which it is a
party when executed and delivered by MSO Inc. as contemplated by this Agreement
will be, duly executed and delivered by MSO Inc. and this Agreement is, and the
other Transaction Documents when executed and delivered by MSO Inc. as
contemplated hereby will be, the valid and binding obligation of MSO Inc.
enforceable in accordance with their respective terms, except (1) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(2) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
4.4 NONCONTRAVENTION. Neither the execution, delivery and performance of
the Transaction Documents, nor the consummation of the transactions contemplated
thereby nor compliance with the provisions thereof, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of MSO Inc. under any term, condition or
provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to MSO Inc.
or its material properties or assets;
<PAGE>
(2) Violate any provision of the articles or certificate of
incorporation or by-laws of MSO Inc.; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regula tion of any court or governmental or regulatory authority applicable
to MSO Inc. or any of its properties or assets.
4.5 FILINGS, CONSENTS AND APPROVALS. Except for any filings required by
applicable securities laws, no filing or registration with, no notice to and no
permit, authorization, consent, or approval of any public or governmental body
or authority or other person or entity is necessary for the consummation by MSO
Inc. of the transactions contemplated by this Agreement or to enable MSO Inc. to
continue to conduct its business after the Closing Date in a manner which is
consistent with that in which it is presently conducted.
SECTION 5
SURVIVAL AND INDEMNIFICATION
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and covenants made by the parties shall survive the Closing for a
period of six (6) months from the Closing Date.
5.2 INDEMNIFICATION BY OSAS STOCKHOLDER. The OSAS Stockholder agrees to
indemnify MSO Inc. and its officers, directors, shareholders, employees, agents
and affiliates (other than the Stockholders themselves) in respect of, and hold
each of them harmless from and against, any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without limitation
interest, court costs, fees of attorneys, accountants and other experts or other
expenses of litigation or other proceedings or of any claim, default or
assessment) suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the OSAS Stockholder contained in this
Agreement.
<PAGE>
5.3 INDEMNIFICATION BY MSO INC. MSO Inc. agrees to indemnify the OSAS
Stockholder in respect of, and hold him harmless from and against, any and all
damages, fines, fees, penalties, deficiencies, losses and expenses (including
without limitation interest, court costs, fees of attorneys, accountants and
other experts or other expenses of litigation or other proceedings or of any
claim, default or assessment) suffered, incurred or sustained by him or to which
he becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of MSO Inc. contained in this Agreement.
SECTION 6
MISCELLANEOUS PROVISIONS
6.1 EFFECTIVENESS OF REPRESENTATIONS. Each party is entitled to rely on
the representations, warranties and agreements of the other party and all such
representation, warranties and agreement will be effective regardless of any
investigation that any party has undertaken or failed to undertake.
6.2 TERMINATION. This Agreement may be terminated at any time prior to
the Closing of the transactions contemplated hereby by:
(a) OSAS Stockholder;
(b) MSO Inc., if there has been a breach by OSAS Stockholder of any
material representation, warranty, covenant or agreement set forth in this
Agreement on the part of OSAS Stockholder that is not cured, to the
reasonable satisfaction of MSO Inc., within ten business days after notice
of such breach is given by MSO Inc.;
(d) MSO Inc., if the transactions contemplated by this Agreement has
not been consummated prior to September 30, 1998, unless the parties agree
to extend such date; or
(e) MSO Inc., if any permanent injunction or other order of a
governmental entity of competent authority preventing the consummation of
the transactions contemplated by this Agreement has become final and
nonappealable.
<PAGE>
6.3 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
6.4 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
6.5 ENTIRE AGREEMENT. This Agreement, the Exhibits, Schedules attached
hereto and the other Transaction Documents contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto.
6.6 SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, will be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it will,
as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
6.7 NOTICES. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent by
personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):
<PAGE>
If to OSAS Stockholder: Per Bull Haugsoen
--------------------
Tel. 47-22-830940
Fax. 47-22-830949
With a copy to: Arntzen Underland & Co.
Attention: Mr. Christian F. Michelet
Karl Johans gt. 39
N-0376 Oslo, Norway
Tel. 47-22-42 42 27
Fax 47-22-42 48 51
If to MSO Inc.: Geoteck International, Inc,
Attention: Mr. Iqbal Akram
1177 West Hastings Street, Suite 1818
Vancouver, B. C. V6E 2K3
Tel: 604-683-9161
Fax: 604-687-6755
With a copy to: Breslow & Walker
Attention: Mr. Howard Breslow, Esq.
767 Third Avenue
New York, NY 10017
Tel: 212-832-1930
Fax: 212-888-4955
All such notices and other communications will be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a fax, when the party sending such fax has received electronic
confirmation of its delivery, (c) in the case of delivery by
internationally-recognized overnight courier, on the business day following
dispatch and (d) in the case of mailing, on the third business day following
mailing.
<PAGE>
6.8 HEADINGS. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agree ment.
6.9 BENEFITS. None of the provisions of this Agreement is or will be
construed as for the benefit of or enforceable by any person not a party to this
Agreement.
6.10 ASSIGNMENT. This Agreement may not be assigned by any party, by
operation of law or otherwise.
6.11 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the Kingdom of Norway applicable to contracts made
and to be performed therein, without regard to conflicts of laws principles.
6.12 CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Any reference to
any federal, state, local, or foreign statute or law will be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
6.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
6.14 FAX EXECUTION. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.
<PAGE>
EXECUTED on May 20, 1998.
Geoteck International, Inc.
By:
------------------------
Name: Iqbal Akram
Title: Vice President
- ---------------------------
Per Bull Haugsoen
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
GEOTECK INTERNATIONAL, INC.
I, the person hereinafter named as incorporator, for the purpose of
associating to establish a corporation under the provisions and subject to
the requirements of Title 7, Chapter 78 of Nevada Revised Statutes, and the
acts amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the
following Articles of Incorporation.
ARTICLE I.
NAME
----
The name of this corporation is Geoteck International, Inc.
ARTICLE II.
AGENT FOR SERVICE OF PROCESS
----------------------------
The name of this corporation's initial agent in the State of Nevada for
service of process is CSC Services of Nevada, Inc. The address of the agent
is 502 East John Street, Carson City, Nevada 89706.
ARTICLE III.
STOCK
-----
The corporation is authorized to issue only one class of shares of stock,
to known as "common stock." The total number of shares that the corporation
is authorized to issue is Twenty Five Million (25,000,000), all of which are
of a par value of $.001 each.
ARTICLE IV.
DIRECTORS
---------
The governing board of the corporation shall be styled as a "Board of
Directors," and any member of the Board shall be styled as a "Director."
<PAGE>
The number of members constituting the first Board of Directors of the
corporation is two (2). The names and post office boxes or street addresses,
either residence or business, of said members are as follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
David Ho 1409 Forbes Ave.
North Vancouver, B.C.
Canada VZM 242
Terry Woo 745 E. 50th Ave.
Vancouver, B.C.
Canada V5X 1B4
</TABLE>
The number of directors of the corporation may be increased or decreased
in the manner provided in the Bylaws of the corporation; provided, that the
number of directors shall never be less than one. In the interim between
elections of directors by stockholders entitled to vote, all vacancies,
including vacancies caused by an increase in the number of directors and
including vacancies resulting from the removal of directors by the
stockholders entitled to vote which are not filled by said stockholders, may
be filled by the remaining directors, though less than a quorum.
ARTICLE V.
LIMITATION OF DIRECTOR LIABILITY
--------------------------------
The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permissible under the General Corporation
Law of the State of Nevada, as the same may be amended and supplemented.
ARTICLE VI.
INDEMNIFICATION
---------------
The corporation shall, to the fullest extent permitted by the General
Corporation Law of the State of Nevada, as the same may be amended and
supplemented (the "Law"), indemnify any and all persons whom it shall have
power to indemnify under the Law from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by the Law.
The indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
-2-
<PAGE>
ARTICLE VIL.
INCORPORATOR
------------
The name and post office box or street address, either residence or
business, of the incorporator signing these Articles of Incorporation are as
follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Kellie E. Davidson c/o Jones, Day, Reavis & Pogue
555 West 5th Street, Suite 4600
Los Angeles, California 90013
</TABLE>
IN WITNESS THEREOF, I do hereby execute these Articles of Incorporation
on May 23, 1997.
/s/ Kellie E. Davidson
--------------------------------
Kellie E. Davidson, Incorporator
-3-
<PAGE>
State of California )
) ss
County of Los Angeles )
On May 23, 1997 before me, the undersigned a notary public personally
appeared Kellie E. Davidson, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name(s) is/are
subscribed to the within instrument and acknowledged to as that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Joyce Rooks
- ----------------------
Name of Notary Public
Notary Expiration Date: 3-3-2000 [SEAL]
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
GEOTECK INTERNATIONAL, INC.
Kellie E. Davidson certifies that:
1. She constitutes the sole original incorporator of Geoteck
International, Inc. a Nevada corporation.
2. The original Articles of Incorporation of the corporation were filed
in the office of the Secretary of State on May 23, 1997.
3. As of the date of this certificate, no stock of the corporation has
been issued.
4. She hereby adopts the following amendment to the Articles of
Incorporation of the corporation.
Article III is amended to read as follows:
"The corporation is authorized to issue only one class of shares of
stock, to be known as "common stock." The total number of shares that
the corporation is authorized to issue is Forty Million (40,000,000),
all of which are of a par value of $.001 each."
IN WITNESS WHEREOF, the undersigned has executed this certificate on
this 5th day of June, 1997.
/s/ Kellie E. Davidson
-------------------------------
Kellie E. Davidson
<PAGE>
State of California )
) ss
County of Los Angeles )
On June 5, 1997 before me, the undersigned a notary public personally
appeared Kellie E. Davidson, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Joyce Rooks
- ----------------------
Name of Notary Public
Notary Expiration Date: 3-3-2000 [SEAL]
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
GEOTECK INTERNATIONAL, INC.
The undersigned, Jim Ford and George Wilfred Norman Wareham, being the
President and Secretary, respectively, of Geoteck International, Inc., a Nevada
corporation (the "Corporation"), do hereby certify as follows:
1. The original Articles of Incorporation of the Corporation were filed
in the office of the Secretary of State on May 23, 1997, and were amended on
June 5, 1997.
2. The Board of Directors of the Corporation, by their unanimous written
consent dated April 9, 1998, duly adopted resolutions amending the Corporation's
Articles of Incorporation as currently in effect (the "Charter") as follows:
Article I of the Charter is hereby amended and substituted in its entirety
so that it shall now read as follows:
"The name of the corporation is Marine Shuttle Operations Inc."
Article III of the Charter is hereby amended and substituted in its
entirety so that it shall now read as follows:
"The total number of shares of stock which the Corporation shall have
authority to issue is seventy five million (75,000,000), all of which
shall be shares of common stock, $0.001 par value per share."
3. The number of shares of the Company outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 20,020,000, and the
foregoing amendments have been consented to and approved by a majority vote of
the stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
IN WITNESS WHEREOF, the undersigned have executed this certificate as of
the 9th day of April, 1998.
----------------------------------------
Jim Ford, President
----------------------------------------
George Wilfred Norman Wareham, Secretary
<PAGE>
State of _________________________)
County of ________________________)
On _______________________, personally appeared before me, a Notary Public,
Jim Ford, President of Geoteck International, Inc., who acknowledged that he
executed the attached instrument.
--------------------------------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
<PAGE>
Exhibit 3.2
BYLAWS
OF
GEOTECK INTERNATIONAL, INC.
(a Nevada corporation)
*******************
Amended and Restated as of May 6, 1998
*******************
ARTICLE I. OFFICES.
Section 1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office
of the Corporation shall be fixed and located at such place as the Board of
Directors (the "Board") shall determine. The Board is granted full power and
authority to change said principal executive office from one location to
another.
Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.
ARTICLE II. STOCKHOLDERS.
Section 1. PLACE OF MEETINGS. Meetings of stockholders shall be held
at the principal executive office of the Corporation unless another place within
or without the State of Nevada is designated by the Board.
Section 2. ANNUAL MEETINGS. The annual meetings of stockholders shall
be held on the fourth Friday in May of each year, at 10:00 A.M., local time, or
such other date or such other time as may be fixed by the Board; provided,
however, should said day fall upon a Saturday, Sunday or legal holiday observed
by the Corporation at its principal executive office, then any such annual
meeting of stockholders shall be held at the same time and place on the next day
thereafter ensuing which is a business day. At such meetings, directors shall
be elected and any other proper business may be transacted.
Section 3. SPECIAL MEETINGS. Special meetings of the stockholders may
be called at any time by the Board, the Chairman of the Board, the President or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting.
Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of stockholders shall be given not less than 10
nor more than 60
<PAGE>
days before the date of the meeting to each stockholder entitled to vote
thereat.
Such notice shall be given either personally or by first-class mail,
postage prepaid, or by other means of written communication, addressed to the
stockholder at the address of such stockholder appearing on the books of the
Corporation or given by the stockholder to the Corporation for the purpose of
notice, or if no such address appears or is given, at the place where the
principal executive office of the Corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. After notice is given by mail, the
Secretary or the Assistant Secretary, if any, or transfer agent, shall execute
an affidavit of mailing in accordance with this section.
The notice shall state the place, date and hour of the meeting and (i) in
the case of a special meeting, the general nature of the business to be
transacted, and no other business may be transacted, or (ii) in the case of the
annual meeting, those matters which the Board, at the time of the mailing of the
notice, intends to present for action by the stockholders, but, subject to the
provisions of applicable law, any proper matter may be presented at the meeting
for such action. The notice of any meeting at which directors are to be elected
shall include the names of nominees intended at the time of notice to be
presented by the Board for election.
Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
the stockholders. Subject to the Articles of Incorporation of the Corporation
(the "Articles of Incorporation"), the stockholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum, if any action taken (other than adjournment) is approved by at
least a majority of the shares required to constitute a quorum.
Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any meeting of
stockholders, whether or not a quorum is present, may be adjourned from time to
time by the vote of a majority of the shares, the holders of which are either
present in person or represented by proxy thereat, but in the absence of a
quorum (except as provided in Section 5 of this Article) no other business may
be transacted at such meeting.
It shall not be necessary to give any notice of the time and place of the
adjourned meeting, or of the business to be transacted thereat, other than by
announcement at the meeting, at which such adjournment is taken; provided,
however, when any stockholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.
Section 7. VOTING. The stockholders entitled to notice of any meeting
or to vote at any such meeting shall be only those persons in whose names shares
are registered in the stock records of the Corporation on the record date
determined in accordance with Section 8 of this Article.
2
<PAGE>
Except as provided below and except as may be otherwise provided in the
Articles of Incorporation, each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote of shareholders.
Any holder of shares entitled to vote on any matter may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares or
vote them against the proposal, other than elections to office, but, if the
stockholder fails to specify the number of shares such stockholder is voting
affirmatively, it will be conclusively presumed that the stockholder's approving
vote is with respect to all shares such stockholder is entitled to vote.
Elections for directors need not be by ballot unless a stockholder demands
election by ballot at the meeting and before the voting begins.
Provided that the quorum requirements of Section 5 above are satisfied, the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the stockholders, unless the vote of a greater number or voting by classes is
required by the Nevada General Corporation Law or the Articles of Incorporation,
provided that whenever, under the Nevada General Corporation Law, shares are
disqualified from voting on any matter, they shall not be considered outstanding
for purposes of the determination of a quorum at any meeting to act upon, or the
required vote to approve action upon, any matter. In any election of directors,
the candidates receiving the highest number of affirmative votes of the shares
entitled to be voted for them, up to the number of directors to be elected by
such shares, are elected. Votes against the director and votes withheld shall
have no legal effect.
Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the stockholders entitled to notice of, or to vote at,
any meeting, of the stockholders, or the stockholders entitled to receive
payment of any dividend or other distribution, or any allotment of rights, or to
exercise rights in respect of any other lawful action. The record date so fixed
shall be not more than 60 days nor less than 10 days prior to the date of the
meeting, nor more than 60 days prior to any other action.
If no record date is fixed by the Board, (i) the record date for
determining stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held, and (ii) the record date for determining stockholders entitled to give
consent to corporate action in writing, without a meeting, when no prior action
by the Board has been taken, shall be the day on which the first written consent
is given.
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
unless the Board fixes a new record date for the adjourned meeting. The Board
shall fix a new record date if the meeting is
3
<PAGE>
adjourned for more than 45 days from the date set for the original meeting.
Section 9. CONSENT OF ABSENTEES. The transactions of any meeting of
stockholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting, or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Neither the business to be transacted at, nor the
purpose of, any annual or special meeting of stockholders need be specified in
any written waiver of notice, except as provided in the Nevada General
Corporation Law.
Section 10. ACTION WITHOUT MEETING. Subject to the applicable section
of the Nevada General Corporation Law, any action which, under any provision of
the Nevada General Corporation Law, may be taken at any annual or special
meeting of stockholders, may be taken without a meeting, and without prior
notice if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Section 11. PROXIES. Every person entitled to vote shares shall have
the right to do so either in person or by one or more persons authorized by a
valid written proxy signed by such person or such person's attorney in fact and
filed with the Secretary. Subject to the provisions of this bylaw and
applicable law, any duly executed proxy continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto.
Section 12. INSPECTORS OF ELECTION. Prior to any meeting of
stockholders, the Board may appoint inspectors of election to act at the meeting
or any adjournment thereof. If inspectors of election are not so appointed, or
if any persons so appointed fail to appear or refuse to act, the chairman of the
meeting may, and on the request of any stockholder or his proxy shall, appoint
inspectors of election or persons to replace those who fail to appear or refuse
to act at the meeting. The number of inspectors shall be either one or three.
If appointed at a meeting, on the request of one or more stockholders or
proxies, the holders of a majority of shares or their proxies present at the
meeting shall determine whether one or three inspectors are to be appointed.
The inspectors of election shall (i) determine the number of shares outstanding
and the voting power of each share, the number of shares represented at the
meeting, the existence of a quorum and the authenticity, validity and effect of
proxies, (ii) receive votes, ballots or consents, (iii) hear and determine all
challenges and questions in any way arising in connection with the right to
vote, (iv) count and tabulate all votes or consents, (v) determine when the poll
shall close and the election result and (vi) do any other acts that may be
proper to conduct the election or vote with fairness to all stockholders.
4
<PAGE>
The inspectors of election shall perform their duties impartially, in good
faith, to the best of their ability and as expeditiously as practicable. If
there are three inspectors of election, the decision, act or certificate of
majority is effective in all respects as the decision, act or certificate of
all.
ARTICLE III. DIRECTORS.
Section 1. POWERS. Subject to limitations of the Articles of
Incorporation, these Bylaws and the Nevada General Corporation Law relating to
actions required to be approved by the stockholders or by the outstanding
shares, the business and affairs of the Corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the Board.
Section 2. COMMITTEES. The Board may, by resolution adopted by a
majority of the entire Board, designate one or more committees, each consisting
of two or more directors, to serve at the pleasure of the Board. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent member of the committee. The appointment of members or
alternate members of a committee requires the vote of a majority of the
authorized number of directors. Any such committee, to the extent provided in
the resolution of the Board, shall have all the authority of the Board, except
with respect to (i) the approval of any action required to be approved by the
stockholders or by the outstanding shares under the Nevada General Corporation
Law, (ii) the filling of vacancies on the Board or in any committee, (iii) the
fixing of compensation of the directors for serving on the Board or on any
committee, (iv) the adoption, amendment or repeal of Bylaws, (v) the amendment
or repeal of any resolution of the Board which by its express terms is not so
amendable or repealable, (vi) a distribution to the stockholders, except at a
rate or in a periodic amount or within a price range determined by the Board and
(vii) the appointment of other committees of the Board or the members thereof.
Section 3. NUMBER OF DIRECTORS. The number of directors constituting
the entire Board may be fixed from time to time by the Board or the
stockholders, but shall not be less than one nor more than nine. Directors need
not be stockholders of the Company.
Section 4. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the stockholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of stockholders held for that purpose. Subject to
Section 5 of this Article, each director shall hold office until a successor has
been elected and qualified.
Section 5. VACANCIES. A vacancy or vacancies in the Board shall be
deemed to exist in case of the death, resignation or removal of any director, if
the authorized number of directors be increased or if the stockholders fail at
any annual or special meeting of stockholders at which any directors are elected
to elect the full authorized number of directors to be voted at that meeting.
5
<PAGE>
Vacancies in the Board, except those existing as a result of a removal of a
director, may be filled by a majority of the remaining directors, or, if the
number of remaining directors is less than a quorum, by (i) the unanimous
written consent of the remaining directors, (ii) the affirmative vote of a
majority of the remaining directors at a meeting held pursuant to notice or
waivers of notice complying with the applicable section of the Nevada General
Corporation Law, or (iii) by a sole remaining director, and each director so
elected shall hold office until such director's successor has been elected and
qualified.
Vacancies in the Board created by the removal of a director may be filled
only by the affirmative vote of a majority of the shares represented and voting
at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) or by
the unanimous written consent of all shares entitled to vote for the election of
directors.
The stockholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. Any such election by written
consent, other than to fill a vacancy created by removal, requires the consent
of a majority of the outstanding shares entitled to vote.
Section 6. RESIGNATION. Any director may resign effective upon giving
written notice to the President, the Secretary or the Board, unless the notice
specifies a later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected to take
office when the resignation becomes effective.
Section 7. PLACE OF MEETINGS. Regular or special meetings of the Board
shall be held at any place within or without the State of Nevada which has been
designated in the notice of the meeting or, if not stated therein, as designated
by resolution of the Board. In the absence of such designation, meetings shall
be held at the principal executive office of the Corporation.
Section 8. ANNUAL MEETINGS. Immediately following each annual meeting
of stockholders, the Board may, but shall not be required to, hold an annual
meeting at the same place, or at any other place that has been designated by the
Board, for the purpose of organization, election of officers or transaction of
other business as the Board may determine. Call and notice of this meeting of
the Board shall be in the manner for the conduct of special meetings as provided
in Section 9 unless the Board has determined by resolution to conduct a regular
meeting at such time and place, in which event call and notice of this meeting
of the Board shall not be required unless some place other than the place of the
annual stockholders' meeting has been designated.
Section 9. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, the Secretary or by any two directors upon four days' notice by mail
or 48 hours' notice given personally or by telephone, telegraph, telex or other
similar means of communication. Any such
6
<PAGE>
notice shall be addressed or delivered to each director at such director's
address as it is shown upon the records of the Corporation or as may have been
given to the Corporation by the director for purposes of notice.
Section 10. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the Board for the transaction of business, except to
adjourn a directors' meeting as hereinafter provided. Every act or decision
done or made by a majority of the directors present at a meeting duly held at
which a quorum is present shall be regarded as the act of the Board, unless a
greater number be required by the Articles of Incorporation. A meeting at which
a quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.
Section 11. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.
Section 12. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, either prior thereto or at its
commencement, the lack of notice to such director. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Section 13. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. If a meeting is adjourned for more than 24 hours, notice of any
adjournment to another time or place shall be given prior to the time of the
adjourned meeting to the directors that were not present at the time of
adjournment.
Section 14. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.
Section 15. ACTION WITHOUT MEETING. Any action required or permitted to
be taken by the Board may be taken without a meeting if all members of the Board
shall individually or collectively consent in writing to such action. Such
written consent or consents shall be filed with the minutes of the proceedings
of the Board. Such action by written consent shall have the same effect as a
unanimous vote of the members of the Board.
7
<PAGE>
ARTICLE IV. OFFICERS.
Section 1. OFFICERS. The officers of the Corporation shall be a
President, a Secretary and a Chief Financial Officer. The Corporation may also
have, at the discretion of the Board, a Chairman, one or more Vice Presidents,
one or more Assistant Secretaries, one or more Assistant Financial Officers and
such other officers as may be elected or appointed in accordance with the
provisions of Section 3 of this Article.
Section 2. ELECTION. The officers of the Corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen by, and shall serve at
the pleasure of, the Board, and shall hold their respective offices until their
resignation, removal or other disqualification from service, or until their
respective successors shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the Corporation
may require, each of whom shall hold office for such period, have such authority
and perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.
Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time. Any officer may resign at any
time upon written notice to the Corporation without prejudice to the rights, if
any, of the Corporation under any contract to which the officer is a party.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.
Section 6. PRESIDENT. The President is the general manner and chief
executive officer of the Corporation and has, subject to the control of the
Board, general supervision, direction and control of the business and officers
of the Corporation. The President shall preside at all meetings of the
stockholders and, subject to Section 10 of this Article, at all meetings of the
Board. The President has the general powers and duties of management usually
vested in the office of president and general manager of a corporation and such
other powers and duties as may be prescribed by the Board.
Section 7. VICE PRESIDENTS. In the absence or disability of the
President, unless a Chairman has been elected, the Vice Presidents in order of
their rank as fixed by the Board or, if not ranked, the Vice President
designated by the Board, 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. The Vice Presidents shall have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the Board.
8
<PAGE>
Section 8. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of stockholders and the Board, with the time and
place of holding, whether regular or special, and if special, how authorized,
the notice thereof given, the names of those present or represented at meetings
of stockholders, and the proceedings thereof. The Secretary shall keep, or
cause to be kept, a copy of the Bylaws of the Corporation at the principal
executive office or business office in accordance with the applicable section of
the Nevada General Corporation Law.
The Secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the Corporation's transfer agent or registrar, if one
be appointed, a share register, or a duplicate share register, showing the names
of the stockholders and their addresses, the number and classes of shares held
by each, the number and date of certificates issued for the same, and the number
and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the Board required by these Bylaws or by law to be
given, shall keep the seal of the Corporation in safe custody, and shall have
such other powers and perform such other duties as may be prescribed by the
Board.
Section 9. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained, adequate and correct
accounts of the properties and business transactions of the Corporation, and
shall send or cause to be sent to the stockholders of the Corporation such
financial statements and reports as are by law or these Bylaws required to be
sent to them. The books of account shall at all times be open to inspection by
any director.
The Chief Financial Officer shall deposit all moneys and other valuables in
the name and to the credit of the Corporation with such depositories as may be
designated by the Board. The Chief Financial Officer shall disburse the funds
of the Corporation as may be ordered by the Board, shall render to the President
and directors, upon their request, an account of all transactions as Chief
Financial Officer and of the financial condition of the Corporation, and shall
have such other powers and perform such other duties as may be prescribed by the
Board.
Section 10. CHAIRMAN OF THE BOARD. If such an officer be elected, the
Chairman of the Board shall preside at meetings of the board of directors and
exercise and perform such other powers and duties as may be from time to time
assigned to him by the board of directors or prescribed by the Bylaws. In the
absence of the President, or if there is no President, the Chairman of the Board
shall, in addition, be the chief executive officer of the Corporation and shall
have the powers and duties described in Section 6 above.
9
<PAGE>
ARTICLE V. OTHER PROVISIONS.
Section 1. INSPECTION OF CORPORATE RECORDS. The record of stockholders
shall be open to inspection and copying, and the accounting books and records
and minutes of proceedings of the stockholders and the Board and committees of
the Board, if any, shall be open to inspection, upon written demand on the
Corporation of any stockholder at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
stockholder.
Section 2. INSPECTION OF BYLAWS. The Corporation shall keep at its
principal executive office in the State of Nevada, or if its principal executive
office is not in Nevada, at its principal business office in Nevada, the
original or a copy of these Bylaws as amended to date, which shall be open to
inspection by the stockholders at all reasonable times during office hours. If
the principal executive office of the Corporation is outside Nevada and the
Corporation has no principal business office in Nevada, it shall upon the
written request of any stockholder furnish to such stockholder a copy of these
Bylaws as amended to date.
Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, initial transaction statement or written statement,
conveyance or other instrument in writing and any assignment or endorsement
thereof executed or entered into between the Corporation and any other person
shall be valid and binding on the Corporation, when signed by the Chairman, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Financial Officer of the Corporation
unless the other party knew that the signing officers had no authority to
execute the same. Any such instruments may be signed by any other person or
persons and in such manner as from time to time shall be determined by the
Board, and, unless so authorized by the Board, no officer, agent or employee
shall have any power or authority to bind the Corporation by any contract or
engagement of, to pledge its credit or to render it liable for any purpose or
amount.
Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation by the President or a Vice President and by the Chief Financial
Officer or an Assistant Financial officer or the Secretary or an Assistant
Secretary, certifying the number of shares and the class or series of shares
owned by the stockholder. Any or all of the signatures on the certificate may
be facsimile.
Except as provided in this Section, no new certificate for shares shall be
issued in lieu of an old one unless the latter is surrendered and cancelled at
the same time. The Board may, however, if any certificate for shares is alleged
to have been lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, and the Corporation may require that the
Corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.
10
<PAGE>
Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or by the
President are each authorized to vote, represent and exercise on behalf of the
Corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the Corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.
Section 6. ANNUAL REPORT TO STOCKHOLDERS. The requirement of sending
an annual report to stockholders which is set forth in the Nevada General
Corporation Law is expressly waived, but nothing herein shall be interpreted as
prohibiting the Board from issuing annual or other periodic reports to
stockholders.
Notwithstanding the immediately preceding paragraph, if the Corporation has
100 or more holders of record of its shares (determined as provided in the
Nevada General Corporation Law), the Board shall cause an annual report to be
sent to the stockholders not later than 120 days after the close of the fiscal
year. Such report, in addition to such information as may be required by the
Nevada General Corporation Law, shall contain a balance sheet as of the end of
that fiscal year and an income statement and statement of changes in financial
position for that fiscal year, accompanied by any report thereon of independent
accountants or, if there is no such report, the certificate of an authorized
officer of the Corporation that the statements were prepared without audit from
the books and records of the Corporation. The requirement of sending such
report to the stockholders at least 15 (or, if sent by third-class mail, 35)
days prior to the annual meeting of stockholders to be held during the next
fiscal year is expressly waived.
Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the Nevada Corporations Code and in the
Nevada General Corporation Law shall govern the construction of these Bylaws.
Section 8. COMPENSATION. The salaries of all officers and agents of the
Corporation
shall be fixed by the Board.
Section 9. INDEMNIFICATION OF AGENTS OF THE CORPORATION; PURCHASE OF
LIABILITY INSURANCE. For purposes of this Section 9, "agent" means any person
who is or was a director, officer, employee or other agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, or was a director, officer, employee or
agent of a foreign or domestic corporation which was a predecessor corporation
of the Corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative; and
"expenses" includes without limitation, attorneys' fees and any expenses of
establishing a right to indemnification under this Section 9.
11
<PAGE>
The Corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Corporation to procure a judgment in its favor)
by reason of the fact that such person is or was an agent of the Corporation,
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding to the fullest extent
permitted under the General Corporation Law of the State of Nevada, as amended
from time to time.
Section 10. CORPORATE LOANS AND GUARANTEES TO DIRECTORS AND OFFICERS.
The Corporation shall not make any loan of money or property to, or guarantee
the obligation of, any director or officer of the Corporation or of its parent,
if any, unless the transaction, or an employee benefit plan authorizing the
loans or guarantees after disclosure of the right under such a plan to include
officers or directors, is approved by a majority of the stockholders entitled to
act thereon.
The Corporation shall not make any loan of money or property to, or
guarantee the obligation of, any person upon the security of shares of the
Corporation or of its parent, if any, if the Corporation's recourse in the event
of default is limited to the security for the loan or guaranty, unless the loan
or guaranty is adequately secured without considering these shares, or the loan
or guaranty is approved by a majority of the stockholders entitled to act
thereon.
Notwithstanding the first paragraph of this Section 10, the Corporation may
advance money to a director or officer of the Corporation or of its parent, if
any, for any expenses reasonably anticipated to be incurred in the performance
of the duties of the director or officer, provided that in the absence of the
advance the director or officer would be entitled to be reimbursed for the
expenses by the Corporation, its parent, or subsidiary, if any.
The provisions of the first paragraph of this Section 10 do not apply to
the payment of premiums in whole or in part by the Corporation on a life
insurance policy on the life of a director or officer so long as repayment to
the Corporation of the amount paid by it is secured by the proceeds of the
policy and its cash surrender value.
The provisions of this Section 10 do not apply to any transaction, plan or
agreement permitted under the applicable section of the Nevada General
Corporation Law relating to employee stock purchase plans.
For the purposes of this Section, "approval by a majority of the
stockholders entitled to act" means either (i) written consent of a majority of
the outstanding shares without counting as outstanding or as consenting any
shares owned by any officer or director eligible to participate in the plan or
transaction that is subject to this approval, (ii) the affirmative vote of a
majority of the shares present and voting at a duly held meeting at which a
quorum is otherwise present, without counting for purposes of the vote as either
present or voting any shares owned by any officer or director eligible to
participate in the plan or transaction that is subject to the approval, or (iii)
the unanimous vote or written consent of the stockholders. If the Corporation
has more
12
<PAGE>
than one class or series of shares outstanding, the "stockholders entitled to
act" within the meaning of this Section includes only holders of those classes
or series entitled under the Articles of Incorporation to vote on all matters
before the stockholders or to vote on the subject matter of this Section, and
includes a requirement for separate class or series voting, or for more or less
than one vote per share, only to the extent required by the Articles of
Incorporation.
ARTICLE VI. AMENDMENTS.
The Bylaws may be altered, amended, supplemented, or repealed, or new
Bylaws may be adopted, by vote of a majority of the shares entitled to vote in
the election of directors. Unless otherwise provided in the Bylaws, the Board
may alter, amend, supplement, or repeal the Bylaws or may adopt new Bylaws;
provided, however, the Board may not alter, amend, supplement, or repeal any
Bylaw (or adopt any new Bylaw which would have such an effect) that has been
adopted by the stockholders (unless the Bylaw to be altered, amended,
supplemented, or repealed provides otherwise). Any Bylaws adopted, altered,
amended, or supplemented by the Board may be altered, amended, supplemented, or
repealed by the stockholders entitled to vote thereon.
13
<PAGE>
Exhibit 4.1
COMMON STOCK COMMON STOCK
NUMBER MARINE SHUTTLE OPERATIONS INC. SHARES
MSO
INCOPORATED UNDER THE LAWS SEE REVERSE FOR CERTAIN DEFINITIONS
OF THE STATE OF NEVADA CUSIP 56844D 10 3
This Certifies that
SPECIMEN
is the record holder of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.001 PAR VALUE, OF
- -------------------------MARINE SHUTTLE OPERATIONS INC.------------------------
transferable on the books of the Corporation in person or by duly authorized
attorney on surrender of this certificate properly endorsed. This certificate
shall not be valid until countersigned and registered by the Transfer Agent
and Registrar.
WITNESS the facsimile seal of the Corporation and the signatures of its
duly authorized officers.
Dated:
SPECIMEN [SEAL] SPECIMEN
PRESIDENT
<PAGE>
The Corporation will furnish to any stockholder, upon request and
without charge, a statement of the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights, so far as the same shall have been fixed,
and of the authority of the Board of Directors to designate and fix any
preferences, rights and limitations of any wholly unissued series. Any such
request should be addressed to the Secretary of the Corporation at its
corporate headquarters.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR
DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties ------------ ----------------
JT TEN - as joint tenants with right of (Cust) (Minor)
survivorship and not as tenants under Uniform Gifts to Minors
in common Act
----------------------------------
(State)
UNIF TRF MIN ACT - Custodian (until age )
------------ ----
(Cust)
under Uniform Transfers
-------------
(Minor)
to Minors Act
-----------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares
- -------------------------------------------------------------------------
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
- ----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
----------------------------
X
-------------------------------------------
X
-------------------------------------------
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By
-----------------------------------------------------
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 5
BRESLOW & WALKER, LLP
100 JERICHO QUADRANGLE
SUITE 230
JERICHO, NEW YORK 11753
JULY 2, 1998
Board of Directors
Marine Shuttle Operations Inc.
4410 Montrose Blvd.
Houston, Texas 77006
Gentlemen:
It is our opinion that the securities being registered with the Securities
and Exchange Commission pursuant to the Registration Statement of Marine Shuttle
Operations Inc. on Form S-1 will, when sold, be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the aforesaid
Registration Statement and further consent to the reference made to us under the
caption "Legal Matters" in the Prospectus constituting part of such Registration
Statement.
Very truly yours,
/s/ Breslow & Walker, LLP
Breslow & Walker, LLP
<PAGE>
Exhibit 10.1
HEAD LICENCE AGREEMENT
This Agreement is made on 31 March 1998, by and between
OFFSHORE SHUTTLE AS, a Norwegian limited company having its registered
office at Stranden 3, 0250 Oslo (hereinafter referred to as "OSAS")
and
MARINE SHUTTLE OPERATIONS AS, a Norwegian limited company having its
registered office at Luramyrveien 23, c/o RC-Gruppen ASA, 4300 Sandnes
(hereinafter referred to as "MSO")
Hereinafter jointly referred to as the "Parties";
WHEREAS OSAS has developed a novel technical concept for the transport,
installation and removal of marine structures, by using a floating barge (the
"Offshore Shuttle") specifically designed to move heavy loads (hereinafter
referred to as the "Offshore Shuttle Concept"); and to which OSAS is the sole
owner of all intellectual property rights.
WHEREAS MSO has offered a proposal for MSO to acquire from OSAS a license for
building and operating five Offshore Shuttles with an option to acquire another
two further licenses;
WHEREAS OSAS on this background started negotiations and entered into a Letter
of Intent dated 19 February 1998 which sets out certain main principles
regarding a co-operation between the Parties;
WHEREAS the Letter of Intent provides that the parties shall negotiate in good
faith in order to obtain a Head License regarding the details of the Letter of
Intent and any other provision applying to the rights and obligations of MSO and
OSAS;
WHEREAS the Parties have negotiated and reached a Head License and now wish to
set out in writing the terms and conditions agreed upon,
NOW THEREFORE it is agreed as follows:
1. The Offshore Shuttle
1.1 The Offshore Shuttle comprises a novel concept for the purpose of
moving heavy loads in marine environments. The Offshore Shuttle can
transport loads both on and below the surface of the water and is able
to shift from horizontal to vertical position in the sea at various
depths. OSAS has applied for patent protection for various features of
the Offshore Shuttle.
<PAGE>
2. Head License
2.1 MSO acquires from OSAS an exclusive license (hereinafter referred to as
the "Head License") to build and operate 5 (five) Offshore Shuttles,
with an additional option to acquire another 2 (two) licenses, each
comprising 1 Offshore Shuttle.
The Head License shall include the right to use:
(i) OSAS' know-how, drawings, plans, specifications, computer
programs and technical data, and
(ii) patent and trademark rights which OSAS has or may acquire.
2.2 The licence granted herein does not include any rights to sell the
Offshore Shuttle or to grant sub-licences without the prior written
approval of OSAS, such approval not to be unreasonably withheld.
2.3 MSO shall use the names "Offshore Shuttle" and "Offshore Shuttle Concept" in
all external relations.
3. Offshore Shuttle Order Schedule
3.1 The Parties have agreed that yard orders for each of the 5 Offshore
Shuttles shall be placed in the following years (hereinafter referred
to as the "Order Years") in the period between 1998 and 2003 and
subject to the terms hereof:
<TABLE>
No. of Offshore
Shuttles
<S> <C>
1998 1
1999 0
2000 1
2001 1
2002 1
2003 1
-
Total 5
-
</TABLE>
In each such Order Year, the Order shall be placed with the yard by MSO
no later than on 30 June for each Order Year with the exception of (i)
Offshore Shuttle no. 1 for which the Order Expiry Date shall be 31
October 1998 subject to due delivery of OSAS as described in Article 6
hereinafter (pre-engineering package) and (ii) Offshore Shuttle no. 2
for which the Order shall be placed no later than 6 months after the
successful testing of Offshore Shuttle no. 1 (hereinafter referred to
as "Order Expiry Date"). In the event a third party wishes to build a
Offshore Shuttle before Offshore Shuttle no. 1 is successfully tested,
however, the Parties shall seek to exploit such opportunity.
3.2 In the absence of an Order by MSO within the Order Expiry Date for each
Order Year, OSAS shall, subject to the MSO Option of Article 4 below,
have the right in each such case to market and sell a license for one
Offshore Shuttle to any third party during the subsequent 12 months
period.
<PAGE>
3.3 In the event that MSO should fail to meet the respective Order Expiry
Dates as defined herein, MSO shall have the right to execute the MSO
Option as specified in Article 4 below.
4. MSO Option
4.1 In the event as described above under item 3.3, MSO shall have the
right for Offshore Shuttle no. 2-5 to extend the respective Order
Expiry Date(s) for a period of up to twelve months, respectively
(hereinafter referred to as the "MSO Option").
4.2 The MSO Option shall be exercised by MSO by notifying OSAS in writing
prior to the respective Order Expiry Date(s). MSO shall further and no
later than on the respective Order Expiry Date(s) make an unconditional
payment to OSAS in the amount of USD 900,000 in each case of the MSO
Option being exercised.
5. Right of First Refusal
5.1 In addition to the license rights granted under Article 2 above, MSO
shall have the right of first refusal (hereinafter referred to as the
"Right of First Refusal") for future Offshore Shuttle licenses to be
granted by OSAS to potential licensees in the period between 30 June
2003 and 30 June 2007, or if the MSO option is exercised, the period
between 30 June 2004 and 30 June 2007 on terms to be agreed between the
Parties.
6. Scope of Delivery of OSAS and MSO and the Relationship between OSAS and MSO
6.1 The Parties agree that in order to achieve the objectives under this
Head Licence it is of the highest importance to establish a close and
effective co-operation between the Parties.
6.2 MSO and OSAS shall agree functional specifications (hereinafter
referred to as "Client Specification") for the Offshore Shuttles MSO
wish to build pursuant to its licence rights hereof.
For the purpose of this Agreement Client Specification shall include,
but not be limited to, the following criterias:
- Water depths to operate
- Topside weights, c.o.g etc.
- Jacket weights, c.o.g etc.
- Geometry of topsides to be removed
- Geometry of jackets to be removed
- Operational wave height criteria with range of Tz/Tp/current/wind
- Storm criteria
- Time history of waves for fatigue calculations
- Maximum operational criteria for support vessels and specific
operations
- Specific codes (optional)
<PAGE>
MSO shall ultimately decide the extent and format of the Client
Specification, which specifications shall be delivered to OSAS not
later than 30 April 1998 for Offshore Shuttle no. 1.
6.3 On the basis of the Client Specification, OSAS shall deliver to MSO
design of the Offshore Shuttle including all systems and description of
basic operation procedures up to pre-engineering level, which for the
purpose of this Agreement shall be defined as principle descriptions
including necessary drawings (such delivery of OSAS hereinafter to be
referred to as "Pre-engineering").
Pre-engineering will include, but not be limited to the following:
- Structural interfaces/hull
- Mechanical outfitting hull for ballasting
- Basic lifting structure/topside
- Details on lifting structure/topside
- Fastening system/topside
- Sliding frame/jacket
- Lifting structure/jacket
- Fastening system/jacket
- Basic principles for cutting jacket
- Basic principles for cutting topside
- Special units at shore for receptor units
- Other mechanical outfitting(safety/gangways/winches/
instrumentation)
- Functional specification of powe unit
- Functional specification of control module/simulation module
- Specification or description of other systems/procedures
- General marine operations
- Painting and cathodic protection
- Design brief (in co-operation with MSO)
- Preliminary project description
- Preliminary material take-off
- Basic operation procedures
- Preliminary concept and safety evaluation
Payment for Pre-engineering shall be covered by the Construction Fee
as defined in Article 8 below.
The date of delivery of the complete Pre-engineering package on the
hull from OSAS to MSO shall be no later than 3 months after delivery of
Client Specification from MSO for Offshore Shuttle no. 1.
6.4 MSO recognises the importance of OSAS' role in securing that the
Offshore Shuttle technology as developed by OSAS is maintained in all
phases of further development and building of the Offshore Shuttle.
OSAS and MSO shall consult in order to resolve the extent to which OSAS
shall supply to MSO services in excess of Pre-engineering, which may
include but not be limited to, i.a.:
a) Detail engineering for the construction of the Offshore
Shuttle.
<PAGE>
b) Services in connection with contract negotiations with, and
nomination of, building contractors for the construction of
the Offshore Shuttle, including contractors for equipping the
Offshore Shuttle.
c) Services in connection with other technical work that must be
performed in connection with the construction of the Offshore
Shuttle.
d) Services in connection with the supervision of the
construction of the Offshore Shuttle and the subsequent
testing of the Offshore Shuttle.
e) Services in connection with the preparation of tenders and the
performance of contract work where the Offshore Shuttle is
utilised.
f) Services in connection with the operation of the Offshore
Shuttle.
g) Technical marketing of the Offshore Shuttle-concept, including
performance of studies.
6.5 OSAS shall have the right to review all technical work and to make
recommendations to MSO which recommendations MSO will take into
consideration.
6.6 MSO and OSAS will co-operate with respect to exploitation of business
opportunities in new markets. A market strategy and a market plan shall
be agreed between the parties in this respect, including the scope of
OSAS' services.
6.7 For assistance rendered by OSAS under this Article 6.2, 6.4, 6.5 and
6.6, OSAS will invoice MSO based on fair market terms.
For the services rendered by OSAS itself, OSAS will present monthly
statements, which shall be payable within thirty (30) days.
7. Organisation of MSO and OSAS
7.1 The managing director of OSAS shall be a member of the Board of
Directors of MSO, and the managing director of MSO shall be a member of
the Board of Directors of OSAS.
8. Construction Fee and Operating Fee
8.1 As compensation for the Head License being granted to MSO, MSO shall
pay to OSAS a construction fee and an operating fee, (hereinafter
referred to as the "Construction Fee" and the "Operating Fee",
respectively).
8.2 The Construction Fee shall constitute 10 % of the construction price
for each of the Offshore Shuttles.
The Construction Fee shall be calculated on the basis of the
Construction Price, defined as the total sum payable, directly and
indirectly, for all engineering (in excess of the Pre-
<PAGE>
engineering) and construction of each Offshore Shuttle, fully equipped
and delivered, (hereinafter referred to as the "Construction Price"),
excluding any sales tax, VAT or similar tax imposed on the payment by
MSO of the Construction Price.
8.3 The Parties will seek to agree on a mutually beneficial incentive
arrangement.
8.4 The Operating Fee shall constitute 16% of the gross profit for each and
any contract concluded by MSO (or any of its successors) involving the
use of the Offshore Shuttle. The gross profit shall be defined as
(1) The total sum to be paid by the client to MSO for marine
operations (including engineering) in connection with the work
where the Offshore Shuttle is utilized. All aspects of such
marine operations shall be included, e.g. the use of tugs,
support vessels, cutting and diving services. Any VAT or
similar tax imposed on the payment to be made by the customer
shall be excluded,
less
(2) All direct costs which can be attributed to the performance of
the work where the Offshore Shuttle is utilized. The capital
cost of the Offshore Shuttle is not considered a direct cost
which can be deducted (with the exception of a fixed and
agreed depreciation for this purpose of 5% of the Construction
Price, and actual paid project interest costs). The same
applies to any administrative and/or overhead cost of MSO or
any other indirect cost, which may not be deducted.
8.5 With respect to the construction Fee and Operation Fee relating to the
two option licenses referred to in Article 2.1, the size of such fees
shall be similar to those applying to the Offshore Shuttles no 1 to 5.
9. Payment
9.1 Payment by MSO of each of the Construction Fee and the Operating Fee
shall take place as follows:
(1) Ten per cent (10%) of the assumed Construction Fee for
Offshore Shuttle no. 1 shall be paid within 30 September 1998.
Fifty per cent (50%) of the assumed Construction Fee for
Offshore Shuttle no. 1 shall be paid within fourteen (14) days
after an Order has been signed for the construction and
delivery of Offshore Shuttle no. 1.
Sixty per cent (60%) of the assumed Construction Fee for
Offshore Shuttle no. 2, 3, 4 and 5 shall be paid fourteen (14)
days after an Order has been signed for the construction and
delivery of each Offshore Shuttle.
Thirty per cent (30%) of the assumed Construction Fee for all
Offshore Shuttles shall be paid within fourteen (14) days
after the completion certificate or another document acceptin
delivery of each Offshore Shuttle has been signed.
<PAGE>
The remaining amount of the Construction Fee for all Offshore
Shuttles shall be paid within fourteen (14) days after the
Construction Price has been finally determined in accordance
with the final accounts.
(2) The Operation Fee shall be paid within fourteen (14) days
after payment has been received or should have been received
from the client. In case of payment installments, the
proportionate share of the Operation Fee shall be paid within
fourteen (14) days after the receipt of any such installment
or when it should have been received.
9.2 Payment of the Construction Fee and the Operation Fee shall be made in
the same currency as the contract price constituting the basis for the
calculation of the fee to such bank as may from time to time be
designated by OSAS, provided that any necessary government permissions
are granted. All such payments shall be made without any deduction for
taxes, except such withholding tax as may be imposed by governmental
authorities on OSAS.
9.3 MSO shall at the time of payment supply OSAS with accounts of the
actual basis for the calculation of the fees as aforesaid, certified by
MSO's chief financial officer as being true and accurate in all
respects. MSO shall permit its records and books to be examined upon
reasonable notice by an internationally recognised auditor appointed by
OSAS to enable OSAS to have the payment of the fees verified.
10. Exclusivity Fee
10.1 In addition to the fees referred to in Article 9 above, OSAS shall be
eligible to an Exclusivity Fee of 1 % of the aggregate Construction
Price of Offshore Shuttles no. 2, 3, 4 and 5, the payment of which
shall take place as follows:
(1) USD 2 mill shall be paid within 30 September 1998, and
(2) the remaining amount shall be paid when the Construction Price
for Offshore Shuttle no 5 has been finally determined.
10.2 A final settlement of the Exclusivity Fee - through a payment to or a
repayment from OSAS - shall take place as soon as the aggregate
Construction Price for the Offshore Shuttles have been determined, and
subject also to the provision of Article 9, third paragraph.
11. Intellectual Property Rights
11.1 Any and all patents, intellectual property rights or know-how
(hereinafter referred to as "Intellectual Property Rights") relating to
the Offshore Shuttle Concept is the sole property of OSAS. The Parties
are both informed, however, about the Agreement between Gunnar Foss and
Per Hull Haugs0en on the one part and OSAS on the other part with
respect to certain rights for Gunnar Foss and Per Bull Haugs0en. The
Agreement is enclosed hereto as exhibit 1.
<PAGE>
11.2 OSAS shall be under the obligation not to transfer to any third party
between 31 August 1998 to 30 June 2003 or, if the MSO Option is
exercised, to 30 June 2004 the title to such Intellectual Property
Rights, or any licence relating hereto with respect to the Offshore
Shuttle Concept unless such transfer or licence is provided for in this
Agreement.
11.3 In the event that OSAS should fail to observe the obligations
undertaken by OSAS under item 11.2 hereof, OSAS shall have forfeited
any and all rights to receive payments of Construction Fee, Operating
Fee and Exclusivity Fee as contained herein. It is further agreed that
notwithstanding any financial loss on the part of MSO, OSAS shall in
such case be under unconditional obligation to repay 50% of any such
fees as may already have been paid by MSO on the date when OSAS's
failure to observe its obligation under item 11.2 becomes known to MSO.
12. Patent Infringement
12.1 In case any such patent or other intellectual property right as
referred to herein is infringed by a third party, MSO shall immediately
notify OSAS of its knowledge of such infringement. OSAS has an
obligation to act against the infringer. Any damages awarded or agreed
upon shall belong to OSAS. If OSAS fails within reasonable time to take
action, MSO shall have the right and be authorised to act against the
infringer and OSAS shall cover all costs of such action. Any damages
awarded or agreed upon shall first be used to cover the costs of OSAS
relating to the action and the remaining part shall belong to MSO. In
any case OSAS and MSO shall co-operate in exchanging information, etc.
in order to stop the infringement as soon as possible.
12.2 OSAS shall indemnify MSO from and against claims resulting from
infringement of patent or other intellectual property rights in
connection with MSO's construction and use of the Offshore Shuttle.
Nevertheless, this does not apply where the infringement results from
the use of such improvement, modification or technical information as
referred to in Sub-Article 13.2 and 13.3 hereof. OSAS' liability shall
be limited to the aggregate amount paid by MSO to OSAS in respect of
Construction Fee, Operating Fee and Exclusivity Fee as defined in this
Agreement.
12.3 MSO shall promptly notify OSAS if its receives a claim that OSAS is
obligated to indemnify and shall give OSAS authority, information and
assistance (at OSAS' expense) for the defense and handling of the
claim. MSO may be represented by its own counsel and may participate in
proceedings to which it and OSAS are defendants, provided, however,
OSAS shall control the defense thereof. MSO shall not, without the
consent of OSAS, approve of or settle a claim which shall be
indemnified by OSAS.
13. Improvements and Modifications
13.1 OSAS will during the course of this Agreement inform MSO of and make
available to MSO for the fees stipulated herein all improvements or
modifications in the Offshore Shuttle design and concept as soon as
OSAS is satisfied that such improvements or modifications can be used
and will be accepted by the certifying authorities. MSO shall have the
right to use such improvements and modifications under the licence
granted herein.
<PAGE>
13.2 MSO shall promptly disclose to OSAS any improvement, modification or
other technical information concerning the Offshore Shuttle Concept,
including the utilization of the concept, which it may develop or which
otherwise may come to the knowledge of MSO. OSAS will have the right to
use such information and/or intellectual property rights without
payment of any royalty.
13.3 Patent rights or other intellectual property rights in respect of any
improvement, modification or other technical information concerning the
Offshore Shuttle Concept, including the utilization of the concept,
made or developed by MSO shall belong to MSO subject, however, to the
last sentence of Article 13.2 hereof which shall apply equally.
14. Confidential Information
14.1 The parties agree to maintain in confidence any and all technical
information exchanged between the Parties under this Agreement,
provided, however, that the following information shall not be
considered as confidential hereunder:
a. Information already known to receiving Party at the time the
information was received.
b. Information which is or becomes part of the public domain
other than through an act or failure by the receiving Party.
c. Information rightfully received by the receiving Party from a
third party without an obligation of confidentiality.
14.2. Confidential information under this Agreement shall not be disclosed to
a third party without written permission of the Party which has given
the confidential information in question, except that the Party having
received the confidential information may disclose confidential
information on terms of strict confidence
(i) to such of its officers and employees whose course of
employment necessitates such disclosure,
(ii) to the building contractor and other suppliers necessary for
the engineering, construction and testing of the Offshore
Shuttle,
(iii) to any government or certifying authority to the extent
necessary to secure approval for the use of the Offshore
Shuttle,
(iv) to prospective clients as far as necessary in order to tender
for or negotiate a contract involving the use of the Offshore
Shuttle,
(v) to suppliers and to subcontractors as far as necessary in
order to receive the delivery or have the work done, and
<PAGE>
(vi) to persons and/or institutions which MSO or its parent company
may from time to time approach as far as necessary in order to
secure a viable finance base for its level of activity.
14.3 The Parties' obligations under this Article 14 shall remain in force
after the termination of this Agreement.
15. Term and Termination
15.1 Either party hereto may terminate this Agreement immediately on written
notice to the other in case such other party (i) becomes insolvent or
goes into liquidation, bankruptcy or receivership or becomes a party to
any procedure for the settlement of its debts or to dissolution
proceedings, or (ii) breaches any term of this Agreement and fails to
remedy such default within forty-five (45) days after receipt of
written notice of the default. This right of termination shall be
without prejudice to any other rights which the parties may have under
this Agreement or at law.
15.2 If a tender is outstanding or if a binding contract involving the
Offshore Shuttle has not been finally discharged when this Agreement is
terminated, all provisions of this Agreement which have relevance for
the fulfillment of the said contract shall remain in force until the
contract work has been completed and all the MSO's obligations have
been fulfilled.
15.3 In the event of termination of this Agreement, MSO shall have the right
only to continue to operate the Offshore Shuttle(s) already constructed
or under construction when termination becomes effective provided,
however, that MSO shall fulfill its obligations towards OSAS with
respect to construction and operation of the Offshore Shuttle(s).
16. Assignment
16.1 OSAS may assign its rights related to earnings under this Agreement to
third parties.
16.2 MSO may not assign its rights under this Agreement to any third party,
other than to a wholly-owned subsidiary, without the written approval
of OSAS, such approval not to be unreasonably withheld.
16.3 In case of assignment, OSAS or MSO will remain fully responsible to the
other party for the fulfillment of its obligations under this
Agreement.
17. Severability, Amendments
17.1 All modifications and amendments to this Agreement must be made in
writing and signed by an authorised representative of each of the
parties hereto.
17.2 Every provision of this Agreement is intended to be severable. If any
term or provision hereof is illegal or invalid for any reason
whatsoever, such invalidity shall not affect the validity of the
remainder of this Agreement.
<PAGE>
18. Notices
18.1 Any notice required or permitted to be given under the provisions of
this Agreement shall be sent to the parties as follows:
To: Offshore Shuttle AS
Stranden 3
N-0250 Oslo
To: Marine Shuttle Operations AS
Luramyrveien 23
N-4300 Sandnes
or to such other addresses as either of the parties may from time to
time designate by notice in writing to the other party.
19. Miscellaneous
19.1 The Letter of Intent between the Parties dated 19 February 1998 is
expressly superseded and terminated by this Agreement.
20. Conditions
20.1 The binding nature of this Agreement shall be conditional upon
(i) OSAS having received payment from MSO of the first installment
of the Exclusivity Fee in the amount of USD 2 mill within 30
September 1998. With respect to this payment, the grace period
in Article 15.1 shall not apply.
and
(ii) MSO having placed a firm Order for Offshore Shuttle no. 1 with
a yard within 31 October 1998.
21. Governing Law and Disputes
21.1 This Agreement shall be governed by and construed in accordance with
the laws of Norway.
21.2 Disputes arising out of, or in connection with, this Agreement which
are not settled by mutual Agreement of the Parties shall be settled by
arbitration in Oslo according to chapter 32 of the Norwegian Civil
Procedure Act.
Each Party shall appoint an arbitrator and these two arbitrators shall
together appoint the chairman. A Party shall appoint an arbitrator
within 14 days after having received written notification of the
arbitrator appointed by the other Party. If no such appointment is made
within
<PAGE>
14 days, the other Party may also appoint the second arbitrator and the
two arbitrators shall together appoint the chairman.
- ---------------------------- ----------------------------
Offshore Shuttles AS Marine Shuttle Operations AS
<PAGE>
EXHIBIT 1
AGREEMENT
REGARDING
INTELLECTUAL PROPERTY
This Agreement, made this 31. day of March 1998 in Oslo, Norway by and between
Offshore Shuttle AS, a Norwegian company having its registered office
at Stranden 3, 0250 Oslo (hereinafter referred to as "OSAS");
and
Gunnar Foss, a Norwegian citizen resident in Mezen Plein 11, 2566 ZS
Den HAAG, The Netherlands, (hereinafter referred to as "FOSS"); and Per
Bull Haugs0en, a Norwegian Citizen, registered at Gyldenl0vesgt. 12,
0260 Oslo, (hereinafter referred to as "Haugs0en").
WHEREAS Foss and Haugs0en have developed a novel technical concept for the
transport, installation and removal of marine structures, by using a floating
barge (the "Offshore Shuttle") specifically designed to move heavy loads
(hereinafter referred to as the "Offshore Shuttle Concept");
WHEREAS an agreement executed 26 November 1996 between Thyssen Stahl Union
GmbH, Foss and Spax Management AS which provides that all intellectual
property rights pertaining to the Offshore Shuttle Concept shall be
transferred to OSAS after the establishment of OSAS;
WHEREAS there is in existence a Consultancy Agreement dated 20 March 1997
between OSAS on the one part and Foss on the other part (exhibited hereto as
Exhibit 1), which provides that patent rights and all other Intellectual
Property Rights relating to the Offshore Shuttle Concept (hereinafter
collectively referred to as the "Rights") and developed by Foss shall be the
property of OSAS as long as OSAS is in a position to make commercial use of the
Offshore Shuttle Concept;
<PAGE>
WHEREAS the Parties to this Agreement have felt it to be appropriate that their
respective contractual rights and obligations pertaining to the Offshore Shuttle
Concept should be contained in a separate contractual document, and also for the
purpose of regulating the position of Haugs0en in respect of the Offshore
Shuttle Concept;
NOW THEREFORE it is agreed as follows:
1. It is acknowledged by the Parties that subject to Clause 2 below, the
Rights have been transferred exclusively to OSAS by Foss and Haugs0en.
Notwithstanding any other agreement that may previously have been
entered into between the Parties, it is mutually agreed that the
execution of this Agreement shall constitute such exclusive transfer of
the Rights to OSAS as further regulated in this Agreement.
2. The Parties to this Agreement mutually agree that the transfer of the
Rights to OSAS is subject to the condition that the Offshore Shuttle
Concept will be further developed and exploited by OSAS. In this
respect, it is also agreed that the execution of a Head Licence
Agreement dated 31.03.1998 between OSAS and Marine Shuttle Operations
AS (hereinafter referred to as the HLA) pursuant to a Letter of Intent
dated 19.02.1998 between OSAS and Marine Shuttle Operations AS
(hereinafter referred to as the "LOI") shall be deemed to constitute
such further development and exploitation of the Offshore Shuttle
Concept by OSAS.
If the HLA is terminated, OSAS will investigate other solutions to
develop and exploit the Offshore Shuttle Concept. If OSAS for any
reason whatsoever should cease to continue in an active manner its
activities related to the Offshore Shuttle Concept and should not have
resumed such activities within 6 (six) months from date of written
notice to that effect from Foss and Haugs0en, then the Rights together
with the Proprietary right to any know-how developed or acquired by
OSAS in connection with the Offshore Shuttle Concept at the request of
Foss and Haugs0en shall be transferred back from OSAS to them or to any
person designated by them. Such transfer shall be
<PAGE>
made free of charge, except that OSAS for the transfer of any rights to
know-how developed or acquired by OSAS as aforesaid shall be paid a
reasonable compensation taking into account the costs of OSAS in
connection with such development and/or acquisition and the market
value of such know-how when used in conjunction with the Offshore
Shuttle Concept. The compensation amount shall be fixed by agreement
between OSAS and Gunnar Foss or if failing such agreement, by
arbitration in accordance with Clause 9 below.
3. The Parties to this Agreement agree to sign any such document(s) as may
from time to time be required in connection with the transfer of the
Rights, including patent rights as referred to herein.
4. The Parties agree to keep in strict confidence all information related
to the Offshore Shuttle Concept and shall not disclose any such
information to a third party, except as may from time to time be
required in connection with the development and commercial exploitation
of the Offshore Shuttle Concept as described herein.
5. In the event that OSAS wishes to assign the Rights to a third party,
Foss and Haugs0en shall have the right of first refusal to acquire the
Rights. It is agreed between the Parties that the execution of the HLA
shall not be deemed to constitute such transfer of the Rights. It is
further agreed that a future agreement to merge OSAS with Marine
Shuttle Operations AS shall not be deemed to constitute such assignment
of the Rights, subject to the merged Company accepting this Agreement
as binding to itself, hereunder Article 2, first sentence.
6. It is mutually agreed between the Parties that Foss and Haugs0en shall
continue to be involved in the future efforts by OSAS to further
develop the Offshore Shuttle Concept. The terms for this involvement at
the date of execution of this Agreement shall remain in force, or be
renegotiated between the Parties.
<PAGE>
OSAS shall use the names "Offshore Shuttle" and "Offshore Shuttle
Concept" in all external relations in accordance with the definitions
in the first recital.
7. It is agreed that with the execution of this Agreement, all other
Agreements in existence between the Parties pertaining to the Rights
are to be regarded as null and void.
8. If OSAS for any reason should sell or transfer the Rights to anyone
other than Foss or Haugs0en, the Rights and obligations under this
Agreement shall be assigned and transferred together with the Rights.
9. This Agreement shall be governed by and construed in accordance with
the laws of the Kingdom of Norway. Any dispute between the Parties
arising out of or in relation to this Agreement that cannot be settled
by mutual agreement, shall be finally settled by Arbitration in Oslo in
accordance with the provisions of the Norwegian Civil Procedure Act of
13.08.1915, Chapter 32. The Arbitration proceedings shall be conducted
in the English language, unless otherwise agreed between the Parties.
For and on behalf of
Offshore Shuttle AS
-------------------------
Gunnar Foss
-------------------------
Per Buss Haugs0en
<PAGE>
Exhibit 10.2
CO-OPERATION AGREEMENT
between
Marine Shuttle Operations AS
c/o Rogaland Consultants AS
Luramyrveien 23
N-4301 Sandnes
Norway
- hereinafter referred to as "MSO" -
and
Schuller Industrieentsorgung GmbH
Rotherstrasse 7
10245 Berlin
Germany
hereinafter referred to as "Schuller" -
Whereas MSO intends to build and operate marine vessels specially designed for
the installation, transport and decommissioning of Offshore platforms
(hereinafter referred to as "Offshore Shuttle"),
Whereas MSO is about to enter into a Head License Agreement with Offshore
Shuttle AS providing for the exclusive license to build and operate five
Offshore Shuttles,
Whereas Schuller and its affiliates are engaged in the Waste Management
Business, and
whereas Schuller intends to co-operate with MSO within the Offshore Shuttle
Project in the areas of Waste Management, Oil Pollution Prevention and Clean-up
and Onshore Dismantling,
<PAGE>
the parties hereby agree as follows:
I. SERVICES OF SCHULLER
Provided that Schuller and MSO agree by signing a seperate written contract that
Schuller becomes involved in a certain project of the Offshore Shuttle Schuller
will render the following services to MSO:
1. WASTE MANAGEMENT
Schuller will act as Waste Manager whose services include but are not
limited to
- Inspection of the installation and inventory of all major wastes;
- Development of a workable concept for the environmentally friendly and
economically sensible disposal of all wastes, using the priority
scale: reuse - recycling - disposal, and keeping the necessary energy
input and resulting level of emissions as low as reasonably possible
(ALARP principle);
- Execution of waste disposal activities as the decommissioning work is
being carried out. This includes negotiations with and choice of
qualified subcontractors as well as accepting the responsibility for
and performing inspections of the quality of the work being done by
the chosen subcontractors during the decommissioning activities;
- Drafting of the documentation required by law for tracing the disposal
routes for each waste from the time of removal of the waste from the
installation to the date of final disposal. This also includes
negotiations with public officials and acquisition of permits
necessary for waste management activities.
2. OIL POLLUTION PREVENTION AND CLEAN-UP
Schuller will provide MSO with a draft concept consisting of measures to be
taken to prevent the pollution of the sea from accidental oil releases and
measures to be taken to expedite the clean-up of such pollution in the
event of a release. This includes the provision, installation and final
disposal of equipment for oil containment and adsorption, such as oil
booms, adsorption mats, etc.
<PAGE>
3. ONSHORE DISMANTLING
Schuller will provide MSO with an offer to perform the work required to
dismantle, on land, sections of offshore installations removed and brought
onshore by the Shuttle. This includes identification of and negotiations
with suitable ship yards, hiring of the foremen for and coordination of the
dismantling work, as well as provision of the waste management services
described in section I. 1.of this Agreement for the dismantling of the
sections on land.
II. COMPENSATION OF SCHULLER
1. For services rendered under this Agreement Schuller will receive a
compensation in NOK (plus VAT if applicable) to be calculated as follows:
Labor
-----
Type of Work 1st Shift 2nd Shift 3rd Shift
------------ --------- --------- ---------
Onshore work 340
Inshore work 385 + 10% + 20%
Offshore work 460
MANAGEMENT AND STAFF
Shift Group 1 Group 2 Group 3 Group 4
----- ------- ------- ------- -------
Senior engineer Exp. Engineer Engineers Administration
Senior Staff Staff personnel Secretaries Junior personnel
Foreman
1st 620 560 480 410
2nd -------------------------- + 10 % ------------------------------
3rd -------------------------- + 20 % ------------------------------
2. The hourly rates for labor, management and staff will be adjusted annually
to reflect inflation.
<PAGE>
3. In addition Schuller will be reimbursed for the travel expenses,
accommodations, meals and any additional fees incurred from the relocation
or ordering of management personnel to locations outside the Stavanger area
during a project period.
III. FURTHER OBLIGATIONS OF THE PARTIES
1. Once Schuller becomes involved in a certain Offshore Shuttle project the
parties will co-operate in good faith and keep each other informed about
all relevant project information. MSO therefore will to the best of its
knowledge provide Schuller with copies of all relevant documents necessary
for Schuller to perform the services as described in section I. of this
Agreement. Schuller will return any of these documents to MSO 10 (ten) days
after having received a written notice by MSO to do so.
2. Schuller guarantees to perform the services as described in section I. of
this Agreement carefully, to the best of its knowledge and each time
carefully considering the actual standards of the latest techniques.
3. Any subcontracting of services as described in section I. of this Agreement
by Schuller needs the prior written consent of MSO. Additional costs
incurred by any subcontracted work will be invoiced separately to MSO.
There will be no mark-up on subcontracted work except for a management fee
of 5%.
IV. TERM AND TERMINATION
This Agreement shall be in effect for a period of five years. Thereafter this
Agreement shall renew for successive periods of one year unless terminated by
either party upon three months prior written notice.
V. MISCELLANEOUS
1. The parties may not assign any rights or delegate any duties they have
assumed hereunder without the prior written consent of the other party.
This Agreement is personal to the parties.
2. This Agreement will be governed by and construed in accordance with the
internal laws of Germany. The parties agree that any appropriate court
located in Munich will have exclusive jurisdiction of any case or
controversy arising under or in connection with this Agreement and will be
a proper forum in which to adjudicate such case or controversy. The parties
expressly consent to personal jurisdiction and venue in such courts.
3. This Agreement embodies the entire agreement of the parties hereto relating
to the subject matter hereof and supersedes all oral agreements, and to the
extent inconsistent with the terms hereof, all other written agreements.
This Agreement may not be modified, amended, supplemented or terminated
except by a written instrument executed by all parties hereto.
4. Each of the covenants and agreements herein above contained will be deemed
separate, severable and independent covenants, and in the event that any
covenant will be declared invalid by any court of competent jurisdiction,
such invalidity will not in any manner affect or impair the validity or
enforceability of any other part or provision of such covenant or of any
other covenant contained herein.
5. Captions and section headings used herein are for convenience only and are
not a part of this Agreement and will not be used in construing it.
6. This Agreement may be executed by delivery of executed signature pages by
fax and such fax execution will be effective for all purposes.
EXECUTED AS OF _______________.
SCHULLER
- -----------------------------------
By:
--------------------------------
Title:
-----------------------------
<PAGE>
MSO
- -----------------------------------
By:
--------------------------------
Title:
-----------------------------
<PAGE>
Exhibit 10.3
CONTRACT FOR THE PROVISION OF
PERSONNEL SERVICES
BY
RC CONSULTANTS A.S
TO
MARINE SHUTTLE OPERATIONS A.S
<PAGE>
CONTRACT
Following contract is agreed between
Marine Shuttle Operations a.s, (MSO) with address Luramyrveien 23, hereinafter
referred to as MSO
and
RC Consultants a.s, Luramyrveien 23, hereinafter referred to as Contractor,
for the provision of project, site, and operation personnel.
Now therefore, the parties agree as follows:
Clause 1
The objective of this frame agreement is for Contractor to assist MSO
during the design, engineering, fabrication and operation of the
Offshore Shuttle.
Clause 2
MSO shall pay to Contractor the rate as defined in Exhibit 1.
Clause 3
Contractor commit itself to supply MSO with personnel as defined in
Exhibit 2. Contractor has further stated that he is capable of
providing the Work and shall perform the Work in a professional and
workmanlike manner in accordance with this contract, and shall proceed
with due diligence until all work is completed.
Clause 4
The rate shall include all taxes, levies and royalties. (handwritten in
original - excluding V.A.T.)
Clause 5
The following services are not included in the rate:
- Travel, i.e. flight, taxies
- Travel expenses and living allowances as per
Norwegian State Regulation (Statens Reiseregulativ)
- Accommodation
Clause 6
Invoice - Payment
All services will be invoiced on a monthly bases and MSO will pay
invoices 30 days upon receipt.
Clause 7
All and any disputes arising in connection with the contract shall be
finally settled before the Courts in Stavanger. The Parties agree that
Norwegian law shall apply. The language of arbitration shall be
Norwegian.
<PAGE>
Clause 8
The validity of the above contract will depend on contract award to a
construction yard.
AS WITNESS the hands of the duly authorised representative of MSO and the
Contractor the day and year first above written.
Signed: Steve Adshead Signed: _____________________
For and on behalf of the MSO For and on behalf of the Contractor
Date: 24.01.98 Date: 25.02.98
<PAGE>
EXHIBIT 1
Contractor shal provide personnel in the categories and classification of
personnel listed below.
MSO will compensate Contractor according to following reimbursable rates:
<TABLE>
<CAPTION>
Personnel Category Hourly Rate
<S> <C>
Specialist/Leader NOK 690,-
Senior Engineer NOK 640,-
Engineer NOK 590,-
Junior Engineer NOK 425,-
</TABLE>
For the purpose of classification of personnel following criteria will apply:
Specialist/Leader The person assigned shall be qualified in
the specific discipline with a university degree
and/or recognised professional qualification with at
least 10 years of management/supervisory experience
and have over 10 years discipline experience. An
individual in this category will hold a supervisory
position during the assignement period.
Senior Engineer The person assigned shall be qualified in
the specific discipline with a university degree
and/or recognised professional qualification with at
least 10 years discipline experience.
Engineer The person assigned shall be qualified in the
specific discipline required and have between 4 and
10 years discipline experience.
Junior Engineer The person assigned shall be qualified in
the specific discipline required and have up to 3
years discipline experience.
<PAGE>
EXHIBIT 2
2.1 Contractor's Personnel Provisions
Contractor shall provide all necessary personnel and shall assign only
those of its personnel who are fully competent, certified, experienced,
qualified and capable of properly performing the Work.
MSO shall approve all contractor's personnel to be assigned to or
employed on reimbursable work by contractor under the terms of this
Contract, and their personnel categories. Personnel not approved shall
not be reimbursed by MSO.
2.2 Project Status
One mulitdiscipline engineer (2 weeks) to review the project, and
define project status. Define scope for further verifications and
analyses to be performed.
2.3 Verification
Contractor will perform verification and execute analyses as per
Section 1.
2.4 Project Team/Management
Following personnel may be required:
- Project Manager
- QA Manager
- Cost control
- Planning/Contract
- Construction Manager
- Engineering Manager
2.5 Site Team
- Site Manager
- Structural Engineer
- Welding Engineer
- MC/Commissioning
- Site Planner
- Cost/Contract
- QA/QC
2.6 Operation Team
Contractor will have first right of refusal to submit operation
personnel which is not part of Marine Shuttle Operations a.s own
organisation.
<PAGE>
Exibit 10.4
CONTRACT FOR THE PROVISION OF
ACCOUNTING SERVICES
BY
RC CONSULTANTS A.S
TO
MARINE SHUTTLE OPERATIONS A.S
<PAGE>
CONTRACT
Following contract is agreed between
Marine Shuttle Operations a.s, (MSO) with address Luramyrveien 23, hereinafter
referred to as MSO
and
RC Consultants a.s, Luramyrveien 23, hereinafter referred to as Contractor,
for the provision of accounting services.
Now therefore, the parties agree as follows:
Clause 1
The objective of this frame agreement is for Contractor to assist MSO
during the start-up phase assisting in performing various accounting
assistance.
Clause 2
MSO shall pay to Contractor the rate as defined in Exhibit 1. If the
services include bookkeeping assistance, there shall be paid an
additional NOK 1,50 per transaction as "EDP-expences".
Clause 3
The rate shall include all taxes, levies and royalties.
Clause 4
The following services are not included in the rate:
- Travel, i.e. flight, taxies
- Travel expenses and living allowances as per Norwegian State
Regulation (Statens Reiseregulativ)
- Accommodation
Clause 5
Accounting services will be invoiced on a monthly basis. MSO will pay
invoices 30 days upon receipt.
Clause 6
All and any disputes arising in connection with the contract shall be
finally settled before the Courts of Stavanger. The Parties agree that
Norwegian law shall apply. The language of arbitration shall be
Norwegian.
Clause 7
The validity of the above contract will depend on contract award to a
construction yard.
AS WITNESS the hands of the duly authorised representative of MSO and the
Contractor the day and year first above written.
Signed: Steve Adshead Signed: Njaal Arne Vathne
-------------------------------
For and on behalf of the MSO For and on behalf of the Contractor RC
Consultants a.s
Date: 26.02.98 Date: 26.02.98
<PAGE>
EXHIBIT 1
Contractor shal provide personnel in the categories and classification of
personnel listed below.
MSO will compensate Contractor according to following reimbursable rates:
<TABLE>
<CAPTION>
Personnel Category Hourly Rate
<S> <C>
Specialist/Leader NOK 690,-
Senior Accountant NOK 600,-
Accountant NOK 300,-
</TABLE>
For the purpose of classification of personnel following criteria will apply:
Specialist/Leader The person assigned shall be qualified in
the specific discipline with a university degree
and/or recognised professional qualification with at
least 10 years of management/supervisory experience
and have over 10 years discipline experience. An
individual in this category will hold a supervisory
position during the assignement period.
Senior Accountant The person assigned shall be qualified in
the specific discipline with a university degree
and/or recognised professional qualification with at
least 10 years discipline experience.
Accountant The person assigned shall be qualified in the
specific discipline required and have up tp 3 years
discipline experience.
<PAGE>
Exhibit 10.5
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is dated as of March 12, 1998,
between ValorInvest Ltd., an Irish Corporation ("Lender"), and Geoteck
International, Inc., a Nevada corporation ("Borrower").
The parties agree as follows:
1. Loan. Lender will provide the Borrower with a loan in the amount of
up to US$1,500,000 (the "Loan") payable to the Borrower in installments as
mutually agreed upon by the parties in $250,000 increments not to exceed
$500,000 per month unless agreed to by the Lender. The Loan shall be evidenced
by Borrower's non-negotiable promissory note containing terms mutually agreed to
by the parties.
2. Interest. The Loan shall bear interest at a rate of seven and one
half percent (7.5 %) per annum.
3. Term and Termination. The term of the Loan shall commence on the
date of the first payment of the Loan to Borrower and will be due and payable
upon the earlier of December 31,1998 or the consummation of a public offering
for gross proceeds of at least US$100,000,000, unless extended by the Lender.
4. Notice. All notices, requests, demands and other communications
required or permitted hereunder must be in writing and shall be effective (a)
five (5) days after being mailed by first class and certified or registered
mail, return receipt requested, with proper postage prepaid or (b) two (2)
business days after being delivered to an established over-night delivery
service, with costs for "next day" delivery prepaid, addressed in either case to
the following addresses (or at such other addresses as will be given in writing
by the parties to one another):
<PAGE>
To the Borrower: Geoteck International Inc.
Attention: Mr. Franz Eder
1177 West Hastings Street, Suite 1818.
Vancouver, B. C. V6E 2K3
Tel: 001-604-683-9161
Fax: 001-604-687-6755
with copy to:
Dr. Hubert Besner
Widenmayerstr. 41
80538 Munich - Germany
Fax: 0049-89-21999233
To the Lender: ValorInvest Ltd.
Attention: Mr. Pierre Besuchet
29 Quai des Bergues
1201 Geneva
Switzerland
Fax: 0041-1-9238807
with copy to:
Michael H. Chanin, Esquire
Powell, Goldstein, Frazer & Murphy LLP
1001 Pennsylvania Avenue, NW., Suite 600
Washington, DC 20004
Tel: (202) 624-7235
Fax: (202) 624-7222
5. Miscellaneous.
(a) Assignment. The parties may not assign any rights or
delegate any duties they have assumed hereunder without the prior written
consent of the other party. This Agreement is personal to the parties.
<PAGE>
(b) Governing Law and Choice of Forum. This Agreement will be
governed by and construed in accordance with the internal laws of Switzerland.
The parties agree that any appropriate court located in Geneva will have
exclusive jurisdiction of any case or controversy arising under or in connection
with this Agreement and will be a proper forum in which to adjudicate such case
or controversy. The parties expressly consent to personal jurisdiction and venue
in such courts.
(c) Entire Agreement/Amendment. This Agreement embodies the
entire agreement of the parties hereto relating to the subject matter hereof and
supersedes all oral agreements, and to the extent inconsistent with the terms
hereof, all other written agreements. This Agreement may not be modified,
amended, supplemented or terminated except by a written instrument executed by
all parties hereto.
(d) Severability. Each of the covenants and agreements herein
above contained will be deemed separate, severable and independent covenants,
and in the event that any covenant will be declared invalid by any court of
competent jurisdiction, such invalidity will not in any manner affect or impair
the validity or enforceability of any other part or provision of such covenant
or of any other covenant contained herein.
(e) Captions and Section Headings. Captions and section
headings used herein are for convenience only and are not a part of this
Agreement and will not be used in construing it.
(h) Fax Execution. This Agreement may be executed by
delivery of executed signature pages by fax and such fax execution will be
effective for all purposes.
SIGNATURES APPEAR ON THE FOLLOWING PAGE
<PAGE>
EXECUTED AS OF MARCH 12, 1998
VALORINVEST LTD.
------------------------------------
By:
Title:
GEOTECK INTERNATIONAL, INC.
------------------------------------
By:
Title:
<PAGE>
Exhibit 10.6
MARKETING AGREEMENT
between
Marine Shuttle Operation AS
c/o Rogaland Consultants AS
Luramyrveien 23
N-4301 Sandnes
Norway
- hereinafter referred to as "MSO" -
and
Thyssen Stahlunion GmbH
Hans-Gunther-Sohl-Str. 1
40235 Dusseldorf
Germany
- hereinafter referred to as "TSU" -
Whereas MSO intends to build and operate marine vessels specially designed for
the installation, transport and decommissioning of Offshore platforms
(hereinafter referred to as "Offshore Shuttle" or "Product"),
Whereas MSO is about to enter into a Head License Agreement with Offshore
Shuttle AS providing for the exclusive license to build and operate five
Offshore Shuttles,
Whereas TSU and its affiliates are worldwide engaged in the Offshore Business,
and
<PAGE>
whereas TSU intends to market and promote the Product on a worldwide basis,
the parties hereby agree as follows:
I. OBLIGATIONS OF TSU
1. To the best of their knowledge TSU shall market and promote the Product on
behalf of and in cooperation with MSO. Both, TSU and MSO intend that third
parties sign up to
- lease the Offshore Shuttle;
- install, decommission or transport platforms and other structures by
using the Offshore Shuttle; and
- provide other services by the using of or in connection with the
Offshore Shuttle.
2. For its marketing and promotion activities TSU shall receive a commission
based upon a rate to be agreed upon case by case.
3. TSU shall not market or promote competitive products or services.
4. All marketing and promotion activities shall be conducted in accordance
with a marketing and promotion plan to be agreed upon by the parties. The
parties shall keep each other informed about their respective activities.
II. RIGHTS OF TSU
1. TSU shall have a right of first refusal to lease the Offshore Shuttle if
TSU is engaged in any project of installation, decommission or transport of
Offshore platforms.
2. TSU shall act as procurement service center for steel and equipment for the
construction of the Offshore Shuttle. TSU shall receive a commission to be
agreed upon case by case.
<PAGE>
III. OBLIGATIONS AND RIGHTS OF MSO
1. MSO shall provide appropriate technical support for TSU's marketing and
promotion activities.
2. MSO may market and promote the Product also by itself and through third
parties.
IV. TERM AND TERMINATION
This Agreement shall be in effect for a period of five years. Thereafter this
Agreement shall renew for successive periods of one year unless terminated by
either party upon six months prior written notice.
V. MISCELLANEOUS.
1. The parties may not assign any rights or delegate any duties they have
assumed hereunder without the prior written consent of the other party.
This Agreement is personal to the parties.
2. This Agreement will be governed by and construed in accordance with the
internal laws of Germany. The parties agree that any appropriate court
located in Dusseldorf will have exclusive jurisdiction of any case or
controversy arising under or in connection with this Agreement and will be
a proper forum in which to adjudicate such case or controversy. The parties
expressly consent to personal jurisdiction and venue in such courts.
3. This Agreement embodies the entire agreement of the parties hereto relating
to the subject matter hereof and supersedes all oral agreements, and to the
extent inconsistent with the terms hereof, all other written agreements.
The Marketing Agreement between TSU and Offshore Shuttle AS dated
______________ is expressly superseded and terminated by this Agreement.
This Agreement may not be modified, amended, supplemented or terminated
except by a written instrument executed by all parties hereto.
<PAGE>
4. Each of the covenants and agreements herein above contained will be deemed
separate, severable and independent covenants, and in the event that any
covenant will be declared invalid by any court of competent jurisdiction,
such invalidity will not in any manner affect or impair the validity or
enforceability of any other part or provision of such covenant or of any
other covenant contained herein.
5. Captions and section headings used herein are for convenience only and are
not a part of this Agreement and will not be used in construing it.
6. This Agreement may be executed by delivery of executed signature pages by
fax and such fax execution will be effective for all purposes.
EXECUTED AS OF _______________.
TSU
- ---------------------------------
By:
--------------------------
Title:
-----------------------
MSO
- ---------------------------------
By:
--------------------------
Title:
-----------------------
<PAGE>
Exhibit 10.7
MARINE SHUTTLE OPERATIONS INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF PLAN. The purpose of this 1998 Stock Option Plan (the "Plan")
is to further the growth and development of Marine Shuttle Operations Inc. (the
"Company") by encouraging and enabling employees, officers, and directors of,
and consultants and advisors to, the Company to obtain a proprietary interest in
the Company through the ownership of stock (thereby providing such persons with
an added incentive to continue in the employ or service of the Company and to
stimulate their efforts in promoting the growth, efficiency, and profitability
of the Company), and affording the Company a means of attracting to its service
persons of outstanding quality.
2. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section
12 hereof, an aggregate of 2,000,000 shares of the Company's common stock, par
value $.001 per share (the "Common Stock") shall be reserved for issuance upon
the exercise of options which may be granted from time to time in accordance
with the Plan. Such shares may be, in whole or in part, authorized but unissued
shares or issued shares which have been reacquired by the Company. If, for any
reason, an option shall lapse, expire, or terminate without having been
exercised in full, the unpurchased shares underlying such option shall (unless
the Plan shall have been terminated) again be available for issuance pursuant to
the Plan.
3. ADMINISTRATION.
(a) The Board of Directors of the Company (the "Board of Directors") shall
administer the Plan and, subject to the provisions of the Plan, shall have
authority to determine and designate from time to time those persons eligible
for a grant of options under the Plan, those persons to whom options are to be
granted, the number of shares of Common Stock underlying each option (the
"Option Shares"), the exercise price and the duration of each option, the time
or times at which options shall be granted, and the manner in which said options
are exercisable. In making such determination, the Board of Directors may take
into account the nature of the services rendered by the respective persons,
their present and potential contributions to the Company's success, and such
other factors as the Board of Directors in its sole discretion shall deem
relevant. Subject to the express provisions of the Plan, the Board of Directors
also shall have authority to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the instruments by which options shall be evidenced (which shall
not be inconsistent with the terms of the Plan), and to make all other
determinations necessary or advisable for the administration of the Plan, all of
which determinations shall be final, binding, and conclusive.
(b) The Board of Directors, at its discretion, in accordance with the
provisions of Article 4 of the Company's By-Laws, may appoint from among its
members a Stock Option or Compensation Committee (the "Committee"). The
Committee shall be composed of two or more directors and shall have and may
exercise any and all of the powers relating to the administration of the Plan
and the grant of options hereunder as are set forth above in Section 3(a), as
the Board of Directors shall confer and delegate. The Board of Directors shall
have the power at
<PAGE>
any time to fill vacancies in, to change the membership of, or to discharge, the
Committee. The Committee shall select one of its members as its Chairman and
shall hold its meetings at such time and at such places as it shall deem
advisable. A majority of the Committee shall constitute a quorum and such
majority shall determine its action. The Committee shall keep minutes of its
proceedings and shall report the same to the Board of Directors at the meeting
next succeeding. No director or member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
option granted thereunder.
4. PERSONS TO WHOM SHARES MAY BE GRANTED.
(a) Options may be granted to persons who are, at the time of the grant,
employees (including part-time employees), officers, and directors of, or
consultants or advisors to, the Company or any subsidiary corporation (as
defined in Section 425 of the Internal Revenue Code of 1986, as amended (the
"Code"), a "Subsidiary") as the Board of Directors (or Committee) shall select
from time to time from among those nominated by the Board of Directors (or
Committee). For the purposes of the Plan, options only may be granted to those
consultants and advisors who shall render bona fide services to the Company and
such services must not be in connection with the offer or sale of securities in
a capital raising transaction. Subject to the provisions hereinafter set forth,
options granted under the Plan shall be designated either (i) "Incentive Stock
Options" (which term, as used herein, shall mean options intended to be
"incentive stock options" within the meaning of Section 422 of the Code) or (ii)
"Non-Incentive Stock Options" (which term, as used herein, shall mean options
not intended to be incentive stock options" within the meaning of Section 422 of
the Code). Each option granted to a person who is solely a director of, or
consultant or advisor to, the Company or a Subsidiary on the date of the grant
shall be designated a Non-Incentive Stock Option.
(b) The Board of Directors (or Committee) may grant, at any time, new
options to a person who has previously received options, whether such prior
options are still outstanding, have previously been exercised in whole or in
part, have expired, or are cancelled in connection with the issuance of new
options. The exercise price of the new options may be established by the Board
of Directors (or Committee) without regard to the existing option exercise
price.
5. EXERCISE PRICE.
(a) The exercise price of each option shall be determined by the Board of
Directors (or Committee), which determination shall be final, binding, and
conclusive; provided, however, in no event shall the exercise price of Incentive
Stock Options be less than 100% (110% in the case of optionees who own more than
10% of the total combined voting power of all classes of stock of the Company)
of the fair market value of the Common Stock on the date the option is granted.
In determining such fair market value, the Board of Directors (or Committee)
shall consider (i) the last sale price of the Common Stock on the date on which
the option is granted or, if no such reported sale takes place on such day, the
last reported bid price on such day, on NASDAQ or on the principal national
securities exchange on which the Common Stock is admitted to trading or listed,
or (ii) if not listed or admitted to trading on NASDAQ or a national securities
exchange, the closing bid price as quoted by the National Quotation Bureau or a
2
<PAGE>
recognized dealer in the Common Stock on the date of grant. If the Common Stock
is not publicly traded at the time an option is granted, the Board of Directors
(or Committee) shall deem fair market value to be the fair value of the Common
Stock after taking into account appropriate factors which may be relevant under
applicable federal tax laws and Internal Revenue rules and regulations
including, without limitation, recent sale and offer prices of the Common Stock
in private transactions negotiated at arm's length. For purposes of the Plan,
the date of grant of an option shall be the date specified by the Board of
Directors (or Committee) at the time it grants such option; provided, however,
such date shall not be prior to the date on which the Board of Directors (or
Committee) acts to approve the grant.
(b) The aggregate fair market value (determined at the time the Incentive
Stock Options are granted) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by an employee during any
calendar year shall not exceed $100,000. Non-Incentive Stock Options shall not
be subject to the limitations of this paragraph 5(b).
6. EXERCISE OF OPTIONS.
(a) The number of shares of Common Stock which are issued pursuant to the
exercise of an option shall be charged against the maximum limitations on shares
set forth in Section 2 hereof.
(b) The exercise of an option shall be made contingent upon receipt by the
Company from the holder thereof of (i) if deemed necessary by the Company, a
written representation and acknowledgement that (1) at the time of such exercise
it is the holder's then present intention to acquire the Option Shares for
investment and not with a view to distribution or resale thereof, (2)the holder
knows that the Company is not obligated to register the sale or transfer of the
Option Shares and that the Option Shares may have to be held indefinitely unless
an exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Act"), is available or the Company has registered the sale or
transfer of the Option Shares, and (3) the Company may place a legend on the
certificate(s) evidencing the Option Shares reflecting the fact that they were
acquired for investment and cannot be sold or transferred unless such sale or
transfer is registered under the Act, and (ii) payment in full of the purchase
price of the Option Shares being purchased. Payment may be made in cash; by
certified check payable to the order of the Company in the amount of such
purchase price; by delivery to the Company of shares of Common Stock having a
fair market value equal to such purchase price; by irrevocable instructions to a
broker to sell shares of Common Stock to be issued upon exercise of the option
(provided such shares are registered and transferable) and to deliver to the
Company the amount of sale proceeds necessary to pay such purchase price and to
deliver the remaining cash proceeds, less commissions and brokerage fees, to the
optionee; or by any combination of such methods of payment.
7. TERM OF OPTIONS. The period during which each option granted hereunder
shall be exercisable shall be determined by the Board of Directors (or
Committee); provided, however,
3
<PAGE>
no option shall be exercisable for a period exceeding ten (10) years from the
date such option is granted.
8. NON-TRANSFERABILITY OF OPTIONS. No option granted pursuant to the Plan
shall be subject to anticipation, sale, assignment, pledge, encumbrance, or
charge, or shall be otherwise transferable except by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order (as defined
by the Code or Title I of the Employee Retirement Income Security Act or the
rules thereunder), and an option shall be exercisable during the lifetime of the
holder thereof only by such holder.
9. TERMINATION OF SERVICES. If an employee, officer, or director to whom an
option has been granted under the Plan shall cease to be an employee, officer,
or director of the Company or a Subsidiary by reason of a termination of such
relationship without cause and other than by reason of death or disability, such
holder may exercise such option at any time prior to the expiration date of the
option or within three months after the date of termination, whichever is
earlier, but only to the extent the holder had the right to exercise such option
on the date of termination. If an employee, officer, or director to whom an
option has been granted under the Plan shall cease to be an employee, officer,
or director of the Company or a Subsidiary by reason of a termination of such
relationship for cause and other than by reason of death or disability, such
options shall terminate, lapse, and expire forthwith and automatically. So long
as the holder of an option shall continue to be in the employ, or continue to be
a director, of the Company or one or more of its Subsidiaries, such holder's
option shall not be affected by any change of duties or position. Absence on
leave approved by the employing corporation shall not be considered an
interruption of employment for any purpose under the Plan. The granting of an
option in any one year shall not give the holder of the option any rights to
similar grants in future years or any right to be retained in the employ or
service of the Company or any of its Subsidiaries or interfere in any way with
the right of the Company or any such Subsidiary to terminate such holder's
employment or services at any time. Notwithstanding the foregoing, no option
may be exercised after ten years from the date of its grant.
10. DISABILITY OF HOLDER OF OPTION. If any employee, officer, or director to
whom an option has been granted under the Plan shall cease to be an employee,
officer, or director of the Company or a Subsidiary by reason of disability,
such holder may exercise such option at any time prior to the expiration date of
the option or within one year after the date of termination for such reason,
whichever is earlier, but only to the extent the holder had the right to
exercise such option on the date of termination. Notwithstanding the foregoing,
no option may be exercised after ten years from the date of its grant. For the
purposes of the Plan, "disability" shall mean "permanent and total disability"
as defined in Section 22(e)(3) of the Code.
11. DEATH OF HOLDER OF OPTION. If any employee, officer, or director to whom
an option has been granted under the Plan shall cease to be an employee,
officer, or director of the Company or a Subsidiary by reason of death, or such
holder of an option shall die within three months after termination, or in the
case of the death of an advisor or consultant to whom an option has been granted
under the Plan, the option may be exercised by the person or persons to whom the
optionee's rights under the option are transferred by will or by the laws of
descent and
4
<PAGE>
distribution at any time prior to the expiration date of the option or, in the
case of an employee, officer, or director, within three months from the date of
death, whichever is earlier, but only to the extent the holder of the option had
the right to exercise such option on the date of such termination.
Notwithstanding the foregoing, no option may be exercised after ten years from
the date of its grant.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) If the shares of Common Stock outstanding are changed in number, kind,
or class by reason of a stock split, combination, merger, consolidation,
reorganization, reclassification, exchange, or any capital adjustment, including
a stock dividend, or if any distribution is made to stockholders other than a
cash dividend and the Board of Directors (or Committee) deems it appropriate to
make an adjustment, then (i) the aggregate number and class of shares that may
be issued or transferred pursuant to Section 2,(ii) the number and class of
shares which are issuable under outstanding options, and (iii) the purchase
price to be paid per share under outstanding options, shall be adjusted as
hereinafter provided.
(b) Adjustments under this Section 12 shall be made in a proportionate and
equitable manner by the Board of Directors (or Committee), whose determination
as to what adjustments shall be made, and the extent thereof, shall be final,
binding, and conclusive. In the event that a fraction of a share results from
the foregoing adjustment, said fraction shall be eliminated and the price per
share of the remaining shares subject to the option adjusted accordingly.
(c) In the event of a liquidation of the Company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, any unexercised options
theretofore granted under the Plan shall be deemed cancelled unless the
surviving corporation in any such merger, reorganization, or consolidation
elects to assume the options under the Plan or to issue substitute options in
place thereof; provided, however, if such options would otherwise be cancelled
in accordance with the foregoing, the optionee shall have the right, exercisable
during a ten-day period immediately prior to such liquidation, merger, or
consolidation, to exercise the option, in whole or in part, as to shares vested
as of the date of such liquidation, merger, or consolidation. The granting of
an option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reorganizations, reclassifications, or changes
of its capital or business structure or to merge, consolidate, dissolve,
liquidate, or sell or transfer all or any part of its business or assets.
13. VESTING OF RIGHTS UNDER OPTIONS. Nothing contained in the Plan or in any
resolution adopted or to be adopted by the Board of Directors (or Committee) or
the stockholders of the Company shall constitute the vesting of any rights under
any option. The vesting of such rights shall take place only when a written
agreement shall be duly executed and delivered by and on behalf of the Company
to the person to whom the option shall be granted.
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<PAGE>
14. RIGHTS AS A STOCKHOLDER. A holder of an option shall have no rights of a
stockholder with respect to any shares of Common Stock covered by such holder's
option until the date of issuance of a stock certificate to such holder for such
shares.
15. TERMINATION AND AMENDMENT. The Plan was adopted by the Board of Directors
on May 11, 1998, subject, with respect to the validation of Incentive Stock
Options granted under the Plan, to approval of the Plan by the stockholders of
the Company at the next meeting of stockholders or, in lieu thereof, by written
consent. If the approval of stockholders is not obtained prior to May 11, 1999,
any grants of Incentive Stock Options under the Plan made prior to that date
will be rescinded. The Plan shall expire at the end of the day on May 11, 2008
(except as to options outstanding on that date). Options may be granted under
the Plan prior to the date of stockholder approval of the Plan. The Board of
Directors (or Committee) may terminate or amend the Plan in any respect at any
time, except that, without the approval of the stockholders obtained within 12
months before or after the Board of Directors (or Committee) adopts a resolution
authorizing any of the following actions, (a) the total number of shares that
may be issued under the Plan may not be increased (except by adjustment pursuant
to paragraph 12); (b) the provisions regarding eligibility for grants of
Incentive Stock Options may not be modified; (c) the provisions regarding the
exercise price at which shares may be offered pursuant to Incentive Stock
Options may not be modified (except by adjustment pursuant to paragraph 12), and
(d) the expiration date of the Plan may not be extended. Except as otherwise
provided in this paragraph 15, in no event may action of the Board of Directors
(or Committee) or stockholders impair the rights of an optionee, without such
optionee's consent, under any option previously granted to such optionee.
16. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the Plan, the Board of Directors (or
Committee) may modify, extend, or renew outstanding options granted under the
Plan, or accept the surrender of outstanding options (to the extent not
theretofore exercised) and authorize the granting of new options in substitution
therefor. Notwithstanding the foregoing, no modification of an option shall,
without the consent of the holder thereof, impair any rights or obligations
under any option theretofore granted under the Plan.
17. CONVERSION OF INCENTIVE STOCK OPTIONS INTO NON-QUALIFIED OPTIONS. Without
the prior written consent of the holder of an Incentive Stock Option, the Board
of Directors (or Committee) shall not alter the terms of such Incentive Stock
Option (including the means of exercising such Incentive Stock Option) if such
alteration would constitute a modification within the meaning of Section
424(h)(3) of the Code. The Board of Directors (or Committee), at the written
request or with the written consent of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's Incentive Stock
Options (or any installments or portions of installments thereof) that have not
been exercised on the date of conversion into Non-Incentive Stock Options at any
time prior to the expiration of such Incentive Stock Options, regardless of
whether the optionee is an employee of the Company at the time of such
conversion. Such actions may include, but shall not be limited to, extending
the exercise period or reducing the exercise price of the appropriate
installments of such Incentive Stock Options. At the time of such conversion,
the Board of Directors (or Committee) (with the
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<PAGE>
consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Incentive Stock Options as the Board of Directors (or Committee)
in its discretion may determine, provided that such conditions shall not be
inconsistent with the Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee's Incentive Stock Options converted
into Non-Incentive Stock Options, and no such conversion shall occur until and
unless the Board of Directors (or Committee) takes appropriate action.
18. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Incentive Stock Option, the transfer of a Non-Incentive Stock Option
pursuant to an arm's length transaction, the making of a Disqualifying
Disposition (as described in Sections 421, 422 and 424 of the Code and
regulations thereunder), the vesting of transfer of restricted stock or
securities acquired on the exercise of an option hereunder, or the making of a
distribution or other payment with respect to such stock or securities, the
Company may withhold taxes in respect of amounts that constitute compensation
includible in gross income. The Board of Directors (or Committee) in its
discretion may condition the exercise of an option, the transfer of a
Non-Incentive Stock Option, or the vesting or transferability of restricted
stock or securities acquired by exercising an option on the optionee's making
satisfactory arrangement for such withholding. Such arrangement may include
payment by the optionee in cash or by check of the amount of the withholding
taxes or, at the discretion of the Board of Directors (or Committee), by the
optionee's delivery of previously held shares of Common Stock or the withholding
from the shares of Common Stock otherwise deliverable upon exercise of Option
Shares having an aggregate fair market value equal to the amount of such
withholding taxes.
19. INDEMNIFICATION. In addition to such other rights of indemnification as
they may have as members of the Board of Directors (or Committee), the members
of the Board of Directors (or Committee) administering the Plan shall be
indemnified by the Company against reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
action, suit, or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit, or
proceeding that such member is liable for negligence or misconduct in the
performance of his duties, and provided that within 60 days after institution of
any such action, suit, or proceeding, the member shall in writing offer the
Company the opportunity, at its own expense, to handle and defend the same.
20. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing options shall be governed by the laws of the State of
Nevada, or the laws of any jurisdiction in which the Company or its successors
in interest may be organized.
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<PAGE>
Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made effective as of the 1st day of
June, 1998, by and between Marine Shuttle Operations, Inc., a Nevada corporation
(the "Corporation"), and Franz Eder (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee desires to be employed by the
Corporation as President upon the terms and conditions hereinafter set forth,
and the Corporation desires that the Employee be so employed.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to be
legally bound, agree as follows:
I. Term of Employment. Subject to the terms and conditions of this
Employment Agreement, the Corporation hereby employs the Employee as President,
and the Employee hereby agrees to serve the Corporation in such capacity for the
period commencing on the date hereof (the "Effective Date") and ending on the
second anniversary of the Effective Date (the "Employment Period"), unless
sooner terminated as hereinafter provided.
2. Scope of Duties. The Employee shall serve as President of the
Corporation, subject to the direction and control of the Board of Directors of
the Corporation (the "Board"). In such capacity, the Employee shall have the
customary powers, responsibilities and authority of presidents of corporations
of the size, type, and nature of the Corporation as it exists from time to time.
The Employee shall undertake such other duties as the Board from time to time
shall reasonably designate, including, without limitation, serving as a
consultant to affiliates of the Corporation and serving on the Board.
3. Time to be Devoted to Employment. Except during vacation periods or
absences due to temporary illness, the Employee shall devote so much (but not
less than 75%) of his professional and business time, attention, and energies to
his duties and responsibilities hereunder as is reasonable to insure the
Corporation's proper conduct. In performing such services, the Employee shall
use his best efforts to promote the interests of the Corporation pursuant to and
in accordance with reasonable business policies and procedures, as fixed from
time to time by the Board. The Employee covenants and agrees that he will
faithfully adhere to and fulfill such policies, consistent with this Agreement,
as are established from time to time by the Board. Nothing contained herein
shall prevent or be construed as preventing the Employee from holding or
purchasing up to five percent (5%) of any class of stock or securities of a
corporation which is listed on a national securities exchange or regularly
traded in the over-the-counter market, or making other investments or
participating in business ventures not involving decommissioning, installing,
and/or transporting offshore oil or gas structures, provided that such
investments and business ventures do not conflict with his duties or obligations
to the Corporation as provided in this Employment Agreement.
<PAGE>
4. Compensation. As total compensation for all services to be rendered
by the Employee during the Employment Period, the Employee shall receive a
salary at the rate of One Hundred Thousand Dollars ($100,000) per annum ("Base
Salary"), which Base Salary shall be subject to federal, state, and other tax
withholdings, and which shall be paid monthly in arrears or on such other basis
as other employees of the Corporation generally are paid and which shall be
subject to applicable US-taxes or taxes in the Employee's country of residence.
5. Fringe Benefits. The Employee shall be entitled to participate in
any and all fringe benefits and/or plans made available to other executives of
the Corporation (to the extent the Employee qualifies therefor under the
specific terms and conditions of each such benefit or plan), including, without
limitation, dental/medical insurance and employee benefit plans which are or
which may become available generally to senior management of the Corporation.
The Employee shall be entitled to 25 working days vacation during each year of
the Employment Period, to be taken at such time or times as the reasonable needs
of the Corporation's business shall allow.
6. Reimbursement of Expenses. The Corporation shall reimburse the
Employee for all reasonable expenses incurred in connection with the promotion
of the business of the Corporation, including expenses for travel,
entertainment, and similar expenses incurred by the Employee on the
Corporation's behalf; provided, however, no such reimbursement shall be made
except upon the presentation by the Employee of an itemized account or other
evidence of those expenses for which reimbursement then is being sought, all in
form reasonably satisfactory to the Corporation.
7. Termination of Employment. The Employee's employment shall terminate
upon the Employee's resignation or death, and may be terminated by the Board on
account of the Employee's Disability (as defined below), for Cause (as defined
below), or without Cause.
(a) If the Employee dies during the term of his employment
hereunder, the Corporation shall be obligated to pay to the Employee's estate
all earned but unpaid Base Salary through the date of his death.
(b) If the Employee shall become physically or mentally
disabled ("Disability") during the term of this Employment Agreement such that
(i) in the Board's good faith judgement, he is permanently incapable of properly
performing each of the duties customarily performed by him hereunder, or (ii)
such Disability lasts for a period of 60 consecutive days or for 90 days in any
six-month period and the Corporation elects to treat such Disability as being
permanent in nature, then the Corporation shall be obligated to pay to the
Employee all earned but unpaid Base Salary due to the Employee hereunder through
the date of such termination.
(c) If the Employee is terminated by the Corporation without
Cause, then,
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provided that the Employee has not breached the provisions of Sections 8, 9, or
10 hereof, the Employee shall be entitled to receive his Base Salary in equal
monthly installments for a period of twelve months from the date of such
termination.
(d) If the Employee is terminated for Cause or the Employee
resigns, the Employee shall be entitled to receive only his Base Salary through
the date of termination.
(e) As used herein, "Cause" shall mean:
i) the willful failure by the Employee to
substantially perform his duties hereunder
(including, without limitation, the
Employee's refusal to carry out the
directives of the Board provided that such
directives do not offend against a law), for
reasons other than death or disability;
ii) a material breach of this Employment
Agreement by the Employee (including,
without limitation, the breach of any
provision of Sections 8 and/or 9 hereof);
iii) the willful engaging by the Employee in
misconduct materially injurious to the
Corporation;
iv) a breach of the Employee's duty of loyalty
to the Corporation or any act of dishonesty
or fraud with respect to the Corporation; or
v) the commission of a felony, a crime
involving moral turpitude or other act
causing material harm to the Corporation's
standing and reputation.
8. Disclosure of Information.
(a) All memoranda, notes, records, and other documents made or
compiled by the Employee or made available to him during the term of his
employment concerning the business of the Corporation or any affiliate of the
Corporation (for purposes of this Section 8, the "Corporation"), shall be the
Corporation's property and shall be delivered to the Corporation on the
termination of the Employee's employment. The Employee shall not use for himself
or others, or divulge to others, any proprietary or confidential information of
the Corporation obtained by him as a result of his employment, unless authorized
by the Corporation. For purposes of this Section 8, the term "proprietary or
confidential information" shall mean all information which is known only to the
Employee or to the Employee and the employees, former employees, consultants, or
others in a confidential relationship with the Corporation, and relates to
specific matters such as trade secrets, customers, potential customers, vendor
lists, pricing and credit techniques, research and development activities,
private processes, business plans,
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<PAGE>
technical information, books and records, and any other information which the
Corporation is obligated to keep confidential pursuant to the Corporation's
contractual obligations to third parties, as they may exist from time to time,
which the Employee may have acquired or obtained by virtue of work heretofore or
hereafter performed for or on behalf of the Corporation, or which he may acquire
or may have acquired knowledge of during the performance of said work, and which
is not in the public domain.
(b) In the event of a breach or a threatened breach by the
Employee of the provisions of this Section 8, the Corporation shall be entitled
to an injunction, without being required to post any bond, restraining the
Employee from disclosing, in whole or in part, the aforementioned proprietary or
confidential information of the Corporation, or from rendering any services to
any person, firm, corporation, association, or other entity to whom such
proprietary or confidential information, in whole or in part, has been disclosed
or is threatened to be disclosed. Nothing contained herein shall be construed as
prohibiting the Corporation from pursuing any other remedies available to the
Corporation for such breach or threatened breach, including the recovery of
damages from the Employee.
9. Restrictive Covenants.
(a) In light of the unique and valuable services it is
expected the Employee will render to the Corporation, the Employee's knowledge
of the business of the Corporation and proprietary information relating to the
business of the Corporation and similar knowledge regarding the Corporation it
is expected the Employee will obtain during the course of his employment with
the Corporation, and in consideration of this Agreement and the compensation to
be received by the Employee hereunder, the Employee agrees that for so long as
he is employed by the Corporation and for a period of one year thereafter (the
"Covenant Period"), he will not compete, directly or indirectly, with the
Corporation or any of its subsidiaries now owned or hereafter acquired (for
purposes of this Section 9, the "Corporation") or, directly or indirectly
(except as permitted by Section 3 hereof), own, manage, operate, control, loan
money to, or participate in the ownership, management, operation or control of,
or be connected with as a director, officer, employee, partner, consultant,
agent, independent contractor or otherwise, or acquiesce in the use of his name
in, any other business or organization which competes, directly or indirectly,
with the Corporation, in any geographical area in which the Corporation is then
conducting business or any geographical area in which, to the knowledge of the
Employee, the Corporation plans to conduct business within a six (6) month
period.
(b) During the Covenant Period, the Employee will not,
directly or indirectly, either individually or on behalf of any other person or
entity (i) solicit customers, suppliers, or other business relations of the
Corporation for the purpose of interfering with or encouraging them to terminate
their relationship with the Corporation, or (ii) encourage other employees
(full-time or part-time) of the Corporation to terminate their employment with
the Corporation.
(c) It is acknowledged and agreed that the restrictions
contained in this Section
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<PAGE>
9, including, without limitation, the time periods and the geographical areas of
the restrictions, are fair and reasonable and do not place any undue hardship on
the Employee, and are reasonably required for the protection of the goodwill,
the business, and the interests of the Corporation and its officers, directors,
and other employees.
(d) It is the desire and intent of the parties that the
provisions of this Section 9 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this Section
9 shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable. Such deletion shall apply only with respect to the operation of
such provisions of this Section 9 in the particular jurisdiction in which such
adjudication is made. In addition, if the scope of any restriction contained in
this Section 9 is too broad to permit enforcement thereof to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by law,
and the Employee hereby consents and agrees that such scope may be judicially
modified in any proceeding brought to enforce such restriction.
(e) In the event of a breach or threatened breach by the
Employee of the provisions of this Section 9, the Corporation shall be entitled
to an injunction and such other equitable relief as may be necessary or
desirable to enforce the restrictions contained herein. Nothing herein contained
shall be construed as prohibiting the Corporation from pursuing any other
remedies available for such breach or threatened breach or any other breach of
this Employment Agreement.
10. Representations.
(a) The Employee represents and warrants to the Corporation
that (i) the execution, delivery and performance of this Employment Agreement by
the Employee does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Employee is a party or by which he is bound, (ii) the Employee is not
a party to or bound by any employment agreement, non-compete agreement or
confidentiality agreement with any other person or entity, and (iii) upon the
execution and delivery of this Employment Agreement by the Employee, this
Employment Agreement shall be the valid and binding obligation of the Employee,
enforceable against him in accordance with its terms.
(b) The Corporation represents and warrants to the Employee
that (i) the execution, delivery, and performance of this Employment Agreement
by the Corporation does not and will not conflict with, breach, violate or cause
a default under any contract, agreement, instrument, order, judgment or decree
to which the Corporation is a party or by which he is bound, and (ii) upon the
execution and delivery of this Employment Agreement by the Corporation, this
Employment Agreement shall be the valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms.
5
<PAGE>
11. Miscellaneous.
(a) Notices. All notices required or permitted to be given
under the provisions of this Employment Agreement shall be in writing and
delivered personally or by certified or registered mail, return receipt
requested, postage prepaid, to the following persons at the following addresses,
or to such other persons at such other addresses as any party may request by
notice in writing to the other party to this Employment Agreement.
If to the Employee:
Mr. Franz Eder
Pariser Str. 61
10719 Berlin, Germany
If to the Corporation:
Marine Shuttle Operations, Inc.
4410 Montrose Blvd.
Houston, Texas 77006
(b) Successors and Assigns. This Employment Agreement shall be
binding upon the successors and assigns of the Corporation, and shall inure to
the benefit of and be enforceable by and against its successors and assigns.
This Employment Agreement is personal in nature and may not be assigned or
transferred by the Employee without the prior written consent of the
Corporation.
(c) Entire Agreement. This instrument contains the entire
understanding and agreement between the parties relating to the subject matter
hereof, and neither this Employment Agreement nor any provision hereof may be
waived, modified, amended, changed, discharged, or terminated, except by an
agreement in writing signed by the party against whom enforcement of any waiver,
modification, change, amendment, discharge, or termination is sought.
(d) Counterparts. This Employment Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, and
all of which counterparts shall together constitute a single agreement.
(e) Illegality. If any one or more of the provisions of this
Employment Agreement shall be invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
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<PAGE>
(f) Captions. The captions of the sections hereof are for
convenience only and shall not control or affect the meaning or construction of
any of the terms or provisions of this Employment Agreement.
(g) Governing Law. This Employment Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada, without
giving any effect to any doctrine pertaining to the conflict of laws. The
parties hereto irrevocably (i) submit to the jurisdiction of any Nevada state or
federal court in any action or proceeding arising out of or relating to this
Employment Agreement, (ii) agree that all claims with respect to such action or
proceeding shall be heard and determined in such a Nevada state or federal
court, and (iii) waive, to the fullest extent possible, the defense of an
inconvenient forum. The parties hereby consent to and grant any such court
jurisdiction over the persons of such parties and over the subject matter of any
such dispute and agree that delivery or mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
11 hereof or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Employment Agreement on the day and year first above written.
MARINE SHUTTLE OPERATIONS INC.
By:
--------------------------
--------------------------
Franz Eder
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<PAGE>
Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made effective as of the 14th day of
April, 1998, by and between Geoteck International, Inc., a Nevada corporation
(the "Corporation"), and Iqbal Akram (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee desires to be employed by the
Corporation as Vice President upon the terms and conditions hereinafter set
forth, and the Corporation desires that the Employee be so employed.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to be
legally bound, agree as follows:
I. Term of Employment. Subject to the terms and conditions of this
Employment Agreement, the Corporation hereby employs the Employee as Vice
President, and the Employee hereby agrees to serve the Corporation in such
capacity for the period commencing on the date hereof (the "Effective Date") and
ending on the second anniversary of the Effective Date (the "Employment
Period"), unless sooner terminated as hereinafter provided.
2. Scope of Duties. The Employee shall serve as Vice President of the
Corporation, subject to the direction and control of the Board of Directors of
the Corporation (the "Board"). In such capacity, the Employee shall have the
customary powers, responsibilities and authority of vice presidents of
corporations of the size, type, and nature of the Corporation as it exists from
time to time. The Employee shall undertake such other duties as the Board from
time to time shall reasonably designate, including, without limitation, serving
as a consultant to affiliates of the Corporation and serving on the Board.
3. Time to be Devoted to Employment. Except during vacation periods or
absences due to temporary illness, the Employee shall devote so much (but not
less than 50%) of his professional and business time, attention, and energies to
his duties and responsibilities hereunder as is reasonable to insure the
Corporation's proper conduct. In performing such services, the Employee shall
use his best efforts to promote the interests of the Corporation pursuant to and
in accordance with reasonable business policies and procedures, as fixed from
time to time by the Board. The Employee covenants and agrees that he will
faithfully adhere to and fulfill such policies, consistent with this Agreement,
as are established from time to time by the Board. Nothing contained herein
shall prevent or be construed as preventing the Employee from holding or
purchasing up to five percent (5%) of any class of stock or securities of a
corporation which is listed on a national securities exchange or regularly
traded in the over-the-counter market, or making other investments or
participating in business ventures not involving decommissioning, installing,
and/or transporting offshore oil or gas structures, provided that such
investments and business ventures do not conflict with his duties or obligations
to the Corporation as provided in this Employment Agreement.
<PAGE>
4. Compensation. As total compensation for all services to be rendered
by the Employee during the Employment Period, the Employee shall receive a
salary at the rate of Sixty Thousand Dollars ($60,000) per annum ("Base
Salary"), which Base Salary shall be paid monthly in arrears or on such other
basis as other employees of the Corporation generally are paid and which shall
be also subject either to applicable US-taxes or taxes in the Employee's country
of residence.
5. Fringe Benefits. The Employee shall be entitled to participate in
any and all fringe benefits and/or plans made available to other executives of
the Corporation (to the extent the Employee qualifies therefor under the
specific terms and conditions of each such benefit or plan), including, without
limitation, dental/medical insurance and employee benefit plans which are or
which may become available generally to senior management of the Corporation.
The Employee shall be entitled to 25 working days vacation during each year of
the Employment Period, to be taken at such time or times as the reasonable needs
of the Corporation's business shall allow.
6. Reimbursement of Expenses. The Corporation shall reimburse the
Employee for all reasonable expenses incurred in connection with the promotion
of the business of the Corporation, including expenses for travel,
entertainment, and similar expenses incurred by the Employee on the
Corporation's behalf; provided, however, no such reimbursement shall be made
except upon the presentation by the Employee of an itemized account or other
evidence of those expenses for which reimbursement then is being sought, all in
form reasonably satisfactory to the Corporation.
7. Termination of Employment. The Employee's employment shall terminate
upon the Employee's resignation or death, and may be terminated by the Board on
account of the Employee's Disability (as defined below), for Cause (as defined
below), or without Cause.
(a) If the Employee dies during the term of his employment
hereunder, the Corporation shall be obligated to pay to the Employee's estate
all earned but unpaid Base Salary through the date of his death.
(b) If the Employee shall become physically or mentally
disabled ("Disability") during the term of this Employment Agreement such that
(i) in the Board's good faith judgement, he is permanently incapable of properly
performing each of the duties customarily performed by him hereunder, or (ii)
such Disability lasts for a period of 60 consecutive days or for 90 days in any
six-month period and the Corporation elects to treat such Disability as being
permanent in nature, then the Corporation shall be obligated to pay to the
Employee all earned but unpaid Base Salary due to the Employee hereunder through
the date of such termination.
(c) If the Employee is terminated by the Corporation without
Cause, then,
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<PAGE>
provided that the Employee has not breached the provisions of Sections 8, 9, or
10 hereof, the Employee shall be entitled to receive his Base Salary in equal
monthly installments for a period of twelve months from the date of such
termination.
(d) If the Employee is terminated for Cause or the Employee
resigns, the Employee shall be entitled to receive only his Base Salary through
the date of termination.
(e) As used herein, "Cause" shall mean:
i) the willful failure by the Employee to
substantially perform his duties hereunder
(including, without limitation, the
Employee's refusal to carry out the
directives of the Board provided that such
directives do not offend against a law), for
reasons other than death or disability;
ii) a material breach of this Employment
Agreement by the Employee (including,
without limitation, the breach of any
provision of Sections 8 and/or 9 hereof);
iii) the willful engaging by the Employee in
misconduct materially injurious to the
Corporation;
iv) a breach of the Employee's duty of loyalty
to the Corporation or any act of dishonesty
or fraud with respect to the Corporation; or
v) the commission of a felony, a crime
involving moral turpitude or other act
causing material harm to the Corporation's
standing and reputation.
8. Disclosure of Information.
(a) All memoranda, notes, records, and other documents made or
compiled by the Employee or made available to him during the term of his
employment concerning the business of the Corporation or any affiliate of the
Corporation (for purposes of this Section 8, the "Corporation"), shall be the
Corporation's property and shall be delivered to the Corporation on the
termination of the Employee's employment. The Employee shall not use for himself
or others, or divulge to others, any proprietary or confidential information of
the Corporation obtained by him as a result of his employment, unless authorized
by the Corporation. For purposes of this Section 8, the term "proprietary or
confidential information" shall mean all information which is known only to the
Employee or to the Employee and the employees, former employees, consultants, or
others in a confidential relationship with the Corporation, and relates to
specific matters such as trade secrets, customers, potential customers, vendor
lists, pricing and credit techniques, research and development activities,
private processes, business plans,
3
<PAGE>
technical information, books and records, and any other information which the
Corporation is obligated to keep confidential pursuant to the Corporation's
contractual obligations to third parties, as they may exist from time to time,
which the Employee may have acquired or obtained by virtue of work heretofore or
hereafter performed for or on behalf of the Corporation, or which he may acquire
or may have acquired knowledge of during the performance of said work, and which
is not in the public domain.
(b) In the event of a breach or a threatened breach by the
Employee of the provisions of this Section 8, the Corporation shall be entitled
to an injunction, without being required to post any bond, restraining the
Employee from disclosing, in whole or in part, the aforementioned proprietary or
confidential information of the Corporation, or from rendering any services to
any person, firm, corporation, association, or other entity to whom such
proprietary or confidential information, in whole or in part, has been disclosed
or is threatened to be disclosed. Nothing contained herein shall be construed as
prohibiting the Corporation from pursuing any other remedies available to the
Corporation for such breach or threatened breach, including the recovery of
damages from the Employee.
9. Restrictive Covenants.
(a) In light of the unique and valuable services it is
expected the Employee will render to the Corporation, the Employee's knowledge
of the business of the Corporation and proprietary information relating to the
business of the Corporation and similar knowledge regarding the Corporation it
is expected the Employee will obtain during the course of his employment with
the Corporation, and in consideration of this Agreement and the compensation to
be received by the Employee hereunder, the Employee agrees that for so long as
he is employed by the Corporation and for a period of one year thereafter (the
"Covenant Period"), he will not compete, directly or indirectly, with the
Corporation or any of its subsidiaries now owned or hereafter acquired (for
purposes of this Section 9, the "Corporation") or, directly or indirectly
(except as permitted by Section 3 hereof), own, manage, operate, control, loan
money to, or participate in the ownership, management, operation or control of,
or be connected with as a director, officer, employee, partner, consultant,
agent, independent contractor or otherwise, or acquiesce in the use of his name
in, any other business or organization which competes, directly or indirectly,
with the Corporation, in any geographical area in which the Corporation is then
conducting business or any geographical area in which, to the knowledge of the
Employee, the Corporation plans to conduct business within a six (6) month
period.
(b) During the Covenant Period, the Employee will not,
directly or indirectly, either individually or on behalf of any other person or
entity (i) solicit customers, suppliers, or other business relations of the
Corporation for the purpose of interfering with or encouraging them to terminate
their relationship with the Corporation, or (ii) encourage other employees
(full-time or part-time) of the Corporation to terminate their employment with
the Corporation.
(c) It is acknowledged and agreed that the restrictions
contained in this Section
4
<PAGE>
9, including, without limitation, the time periods and the geographical areas of
the restrictions, are fair and reasonable and do not place any undue hardship on
the Employee, and are reasonably required for the protection of the goodwill,
the business, and the interests of the Corporation and its officers, directors,
and other employees.
(d) It is the desire and intent of the parties that the
provisions of this Section 9 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this Section
9 shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable. Such deletion shall apply only with respect to the operation of
such provisions of this Section 9 in the particular jurisdiction in which such
adjudication is made. In addition, if the scope of any restriction contained in
this Section 9 is too broad to permit enforcement thereof to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by law,
and the Employee hereby consents and agrees that such scope may be judicially
modified in any proceeding brought to enforce such restriction.
(e) In the event of a breach or threatened breach by the
Employee of the provisions of this Section 9, the Corporation shall be entitled
to an injunction and such other equitable relief as may be necessary or
desirable to enforce the restrictions contained herein. Nothing herein contained
shall be construed as prohibiting the Corporation from pursuing any other
remedies available for such breach or threatened breach or any other breach of
this Employment Agreement.
10. Representations.
(a) The Employee represents and warrants to the Corporation
that (i) the execution, delivery and performance of this Employment Agreement by
the Employee does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Employee is a party or by which he is bound, (ii) except for certain
consulting arrangements, the Employee is not a party to or bound by any
employment agreement, non-compete agreement or confidentiality agreement with
any other person or entity, and (iii) upon the execution and delivery of this
Employment Agreement by the Employee, this Employment Agreement shall be the
valid and binding obligation of the Employee, enforceable against him in
accordance with its terms.
(b) The Corporation represents and warrants to the Employee
that (i) the execution, delivery, and performance of this Employment Agreement
by the Corporation does not and will not conflict with, breach, violate or cause
a default under any contract, agreement, instrument, order, judgment or decree
to which the Corporation is a party or by which he is bound, and (ii) upon the
execution and delivery of this Employment Agreement by the Corporation, this
Employment Agreement shall be the valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms.
5
<PAGE>
11. Miscellaneous.
(a) Notices. All notices required or permitted to be given
under the provisions of this Employment Agreement shall be in writing and
delivered personally or by certified or registered mail, return receipt
requested, postage prepaid, to the following persons at the following addresses,
or to such other persons at such other addresses as any party may request by
notice in writing to the other party to this Employment Agreement.
If to the Employee:
Mr. Iqbal Akram
4 Cressy House Queen's Ride Barnes
London SW 13 OHZ, U.K.
If to the Corporation:
Geoteck International, Inc.
4410 Montrose Blvd.
Houston, Texas 77006
(b) Successors and Assigns. This Employment Agreement shall be
binding upon the successors and assigns of the Corporation, and shall inure to
the benefit of and be enforceable by and against its successors and assigns.
This Employment Agreement is personal in nature and may not be assigned or
transferred by the Employee without the prior written consent of the
Corporation.
(c) Entire Agreement. This instrument contains the entire
understanding and agreement between the parties relating to the subject matter
hereof, and neither this Employment Agreement nor any provision hereof may be
waived, modified, amended, changed, discharged, or terminated, except by an
agreement in writing signed by the party against whom enforcement of any waiver,
modification, change, amendment, discharge, or termination is sought.
(d) Counterparts. This Employment Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, and
all of which counterparts shall together constitute a single agreement.
(e) Illegality. If any one or more of the provisions of this
Employment Agreement shall be invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
(f) Captions. The captions of the sections hereof are for
convenience only
6
<PAGE>
and shall not control or affect the meaning or construction of any of the terms
or provisions of this Employment Agreement.
(g) Governing Law. This Employment Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada, without
giving any effect to any doctrine pertaining to the conflict of laws. The
parties hereto irrevocably (i) submit to the jurisdiction of any Nevada state or
federal court in any action or proceeding arising out of or relating to this
Employment Agreement, (ii) agree that all claims with respect to such action or
proceeding shall be heard and determined in such a Nevada state or federal
court, and (iii) waive, to the fullest extent possible, the defense of an
inconvenient forum. The parties hereby consent to and grant any such court
jurisdiction over the persons of such parties and over the subject matter of any
such dispute and agree that delivery or mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
11 hereof or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Employment Agreement on the day and year first above written.
GEOTECK INTERNATIONAL, INC.
By:
--------------------------
--------------------------
Iqbal Akram
7
<PAGE>
Exhibit 10.10
AGREEMENT
THIS AGREEMENT made effective as of the 14th day of April,
1998, by and between Geoteck International, Inc., a Nevada corporation (the
"Corporation"), Wareham Management Ltd. ("WML"), and George Wilfred Norman
Wareham ("Wareham").
W I T N E S S E T H:
WHEREAS, Wareham is the President of WML;
WHEREAS, WML is a consultant to the Corporation pursuant to a
consulting agreement (the "Consulting Agreement");
WHEREAS, in lieu of such consulting relationship, (a) the
Corporation desires to engage Wareham as the Chief Financial Officer, Treasurer,
and Secretary of the Corporation, (b) WML desires to lend out to the Corporation
the services of Wareham, and (c) Wareham desires to serve as the Chief Financial
Officer, Treasurer, and Secretary of the Corporation, upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to be
legally bound, agree as follows:
1. Termination of Consulting Agreement; Term.
(a) WML and the Corporation hereby terminate the
Consulting Agreement.
(b) Subject to the terms and conditions of this Agreement, WML
hereby agrees to loan out the services of Wareham to the Corporation, the
Corporation hereby engages Wareham as Chief Financial Officer, Treasurer, and
Secretary, and Wareham hereby agrees to serve the Corporation as Chief Financial
Officer, Treasurer, and Secretary for the period commencing on the date hereof
(the "Effective Date") and ending on the second anniversary of the Effective
Date (the "Engagement Period"), unless sooner terminated as hereinafter
provided.
2. Scope of Wareham's Duties. Wareham shall serve as Chief Financial
Officer, Treasurer, and Secretary of the Corporation, subject to the direction
and control of the Board of Directors of the Corporation (the "Board"). In such
capacity, Wareham shall have the customary powers, responsibilities and
authority of chief financial officers, secretaries and treasurers of
corporations of the size, type, and nature of the Corporation as it exists from
time to time. Wareham shall undertake such other duties as the Board from time
to time shall reasonably designate, including, without limitation, serving as a
consultant to affiliates of the Corporation and serving on the Board.
3. Time to be Devoted to by Wareham. Wareham shall devote so much of
his professional and business time, attention, and energies to his duties and
responsibilities hereunder as is reasonable to insure the Corporation's proper
conduct. In performing such
<PAGE>
services, Wareham shall use his best efforts to promote the interests of the
Corporation pursuant to and in accordance with reasonable business policies and
procedures, as fixed from time to time by the Board. Wareham covenants and
agrees that he will faithfully adhere to and fulfill such policies, consistent
with this Agreement, as are established from time to time by the Board. Nothing
contained herein shall prevent or be construed as preventing Wareham from
holding or purchasing up to five percent (5%) of any class of stock or
securities of a corporation which is listed on a national securities exchange or
regularly traded in the over-the-counter market, or making other investments or
participating in business ventures not involving decommissioning, installing,
and/or transporting offshore oil or gas structures, provided that such
investments and business ventures do not conflict with his duties or obligations
to the Corporation as provided in this Agreement.
4. Fee. As total consideration for lending out the services of Wareham
and the rendering of such services during the Engagement Period, WML shall
receive a fee of Thirty Two Thousand Two Hundred Fifty Dollars ($32,100) per
annum (inclusive of a 7.0% Canadian Goods and Services Tax, the "Fee"), which
shall be paid semi-monthly in arrears or on such other basis as Corporation and
WML shall agree.
5. Reimbursement of Expenses. The Corporation shall reimburse Wareham
for all reasonable expenses incurred in connection with the services to be
rendered hereunder, including expenses for travel, entertainment, and similar
expenses incurred by Wareham on the Corporation's behalf; provided, however, no
such reimbursement shall be made except upon the presentation of an itemized
account or other evidence of those expenses for which reimbursement then is
being sought, all in form reasonably satisfactory to the Corporation.
6. Termination. This Agreement shall terminate upon Wareham's
resignation or death, and may be terminated by the Board on account of Wareham's
Disability (as defined below), for Cause (as defined below), or without Cause.
(a) If Wareham dies during the term of this Agreement, the
Corporation shall be obligated to pay to WML all earned but unpaid Fees through
the date of his death.
(b) If Wareham shall become physically or mentally disabled
("Disability") during the term of this Agreement such that (i) in the Board's
good faith judgement, he is permanently incapable of properly performing each of
the duties customarily performed by him hereunder, or (ii) such Disability lasts
for a period of 60 consecutive days or for 90 days in any six-month period and
the Corporation elects to treat such Disability as being permanent in nature,
then the Corporation shall be obligated to pay to WML all earned but unpaid Fees
due to WML hereunder through the date of such termination.
2
<PAGE>
(c) If Wareham is terminated by the Corporation without Cause,
then, provided that Wareham has not breached the provisions of Sections 8, 9, or
10 hereof, WML shall be entitled to receive the Fee in equal monthly
installments for the twelve-month period from the date of such termination or
for the remainder of the Engagement Period, whichever is shorter.
(d) If Wareham is terminated for Cause or Wareham resigns, WML
shall be entitled to receive the Fee only through the date of termination.
(e) As used herein, "Cause" shall mean:
i) the willful failure by Wareham to
substantially perform his duties hereunder
(including, without limitation, Wareham's
refusal to carry out the directives of the
Board), for reasons other than death or
Disability;
ii) a material breach of this Agreement by
Wareham (including, without limitation, the
breach of any provision of Sections 8 and/or
9 hereof);
iii) the willful engaging by Wareham in
misconduct materially injurious to the
Corporation;
iv) a breach of Wareham's duty of loyalty to the
Corporation or any act of dishonesty or
fraud with respect to the Corporation; or
v) the commission of a felony, a crime
involving moral turpitude or other act
causing material harm to the Corporation's
standing and reputation.
7. Disclosure of Information.
(a) All memoranda, notes, records, and other documents made or
compiled by Wareham or made available to Wareham during the term of this
Agreement concerning the business of the Corporation or any affiliate of the
Corporation (for purposes of this Section 8, the "Corporation"), shall be the
Corporation's property and shall be delivered to the Corporation on the
termination of this Agreement. Wareham shall not use for himself or others, or
divulge to others, any proprietary or confidential information of the
Corporation obtained by him as a result of his engagement hereunder, unless
authorized by the Corporation. For purposes of this Section 8, the term
"proprietary or confidential information" shall mean all information which is
known only to Wareham, or to Wareham and the employees, former employees,
consultants, or others in a confidential relationship with the Corporation, and
relates to specific matters such as trade secrets, customers, potential
customers, vendor lists, pricing and credit techniques, research and development
activities, private processes, business plans, technical information,
3
<PAGE>
books and records, and any other information which the Corporation is obligated
to keep confidential pursuant to the Corporation's contractual obligations to
third parties, as they may exist from time to time, which Wareham may have
acquired or obtained by virtue of work heretofore or hereafter performed for or
on behalf of the Corporation, or which he may acquire or may have acquired
knowledge of during the performance of said work, and which is not in the public
domain.
(b) In the event of a breach or a threatened breach by Wareham
of the provisions of this Section 8, the Corporation shall be entitled to an
injunction, without being required to post any bond, restraining Wareham from
disclosing, in whole or in part, the aforementioned proprietary or confidential
information of the Corporation, or from rendering any services to any person,
firm, corporation, association, or other entity to whom such proprietary or
confidential information, in whole or in part, has been disclosed or is
threatened to be disclosed. Nothing contained herein shall be construed as
prohibiting the Corporation from pursuing any other remedies available to the
Corporation for such breach or threatened breach, including the recovery of
damages from WML and/or Wareham.
8. Restrictive Covenants.
(a) In light of the unique and valuable services it is
expected Wareham will render to the Corporation, Wareham's knowledge of the
business of the Corporation and proprietary information relating to the business
of the Corporation and similar knowledge regarding the Corporation it is
expected Wareham will obtain during the course of his engagement by the
Corporation, and in consideration of this Agreement and the Fees to be paid by
the Corporation hereunder, Wareham agrees that for so long as this Agreement is
in effect and for a period of one year thereafter (the "Covenant Period"), he
will not compete, directly or indirectly, with the Corporation or any of its
subsidiaries now owned or hereafter acquired (for purposes of this Section 9,
the "Corporation") or, directly or indirectly (except as permitted by Section 3
hereof), own, manage, operate, control, loan money to, or participate in the
ownership, management, operation or control of, or be connected with as a
director, officer, employee, partner, consultant, agent, independent contractor
or otherwise, or acquiesce in the use of his name in, any other business or
organization which competes, directly or indirectly, with the Corporation, in
any geographical area in which the Corporation is then conducting business or
any geographical area in which, to the knowledge of Wareham, the Corporation
plans to conduct business within a six (6) month period.
(b) During the Covenant Period, Wareham will not, directly or
indirectly, either individually or on behalf of any other person or entity (i)
solicit customers, suppliers, or other business relations of the Corporation for
the purpose of interfering with or encouraging them to terminate their
relationship with the Corporation, or (ii) encourage other employees (full-time
or part-time) of the Corporation to terminate their employment with the
Corporation.
(c) It is acknowledged and agreed that the restrictions
contained in this Section 9, including, without limitation, the time periods and
the geographical areas of the restrictions,
4
<PAGE>
are fair and reasonable and do not place any undue hardship on Wareham, and are
reasonably required for the protection of the goodwill, the business, and the
interests of the Corporation and its officers, directors, and other employees.
(d) It is the desire and intent of the parties that the
provisions of this Section 9 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this Section
9 shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable. Such deletion shall apply only with respect to the operation of
such provisions of this Section 9 in the particular jurisdiction in which such
adjudication is made. In addition, if the scope of any restriction contained in
this Section 9 is too broad to permit enforcement thereof to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by law,
and Wareham hereby consents and agrees that such scope may be judicially
modified in any proceeding brought to enforce such restriction.
(e) In the event of a breach or threatened breach by Wareham
of the provisions of this Section 9, the Corporation shall be entitled to an
injunction and such other equitable relief as may be necessary or desirable to
enforce the restrictions contained herein. Nothing herein contained shall be
construed as prohibiting the Corporation from pursuing any other remedies
available for such breach or threatened breach or any other breach of this
Agreement.
9. Representations.
(a) WML and Wareham each represent and warrant to the
Corporation that (i) the execution, delivery and performance of this Agreement
by does not and will not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which WML or
Wareham is a party or by which WML or Wareham is bound, and (ii) upon the
execution and delivery of this Agreement by WML and Wareham, this Agreement
shall be the valid and binding obligation of WML and Wareham, respectively,
enforceable against each of them in accordance with its terms.
(b) Wareham represents and warrants to the Corporation that
Wareham is not a party to or bound by any employment agreement, non-compete
agreement or confidentiality agreement with any other person or entity.
(c) The Corporation represents and warrants to WML and Wareham
that (i) the execution, delivery, and performance of this Agreement by the
Corporation does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Corporation is a party or by which it is bound, and (ii) upon the
execution and delivery of this Agreement by the Corporation, this Agreement
shall be the valid and binding obligation of the Corporation, enforceable
against it in accordance with its terms.
5
<PAGE>
10. Miscellaneous.
(a) Notices. All notices required or permitted to be given
under the provisions of this Agreement shall be in writing and delivered
personally or by certified or registered mail, return receipt requested, postage
prepaid, to the following persons at the following addresses, or to such other
persons at such other addresses as any party may request by notice in writing to
the other party to this Agreement.
If to WML or Wareham:
1177 West Hastings Street
Suite 1818
Vancouver, BC V6E2K3
If to the Corporation:
c/o Schuller Industrieentsorgung GmbH
Rother Street 7
Berlin, Germany D-10245
Attn: Franz Eder, President
(b) Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Corporation, and shall inure to the
benefit of and be enforceable by and against its successors and assigns. This
Agreement is personal in nature and may not be assigned or transferred by
Wareham or WML without the prior written consent of the Corporation.
(c) Entire Agreement. This instrument contains the entire
understanding and agreement between the parties relating to the subject matter
hereof, and neither this Agreement nor any provision hereof may be waived,
modified, amended, changed, discharged, or terminated, except by an agreement in
writing signed by the party against whom enforcement of any waiver,
modification, change, amendment, discharge, or termination is sought.
(d) Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, and
all of which counterparts shall together constitute a single agreement.
(e) Illegality. If any one or more of the provisions of this
Agreement shall be invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
6
<PAGE>
(f) Captions. The captions of the sections hereof are for
convenience only and shall not control or affect the meaning or construction of
any of the terms or provisions of this Agreement.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without giving any
effect to any doctrine pertaining to the conflict of laws. The parties hereto
irrevocably (i) submit to the jurisdiction of any Nevada state or federal court
in any action or proceeding arising out of or relating to this Agreement, (ii)
agree that all claims with respect to such action or proceeding shall be heard
and determined in such a Nevada state or federal court, and (iii) waive, to the
fullest extent possible, the defense of an inconvenient forum. The parties
hereby consent to and grant any such court jurisdiction over the persons of such
parties and over the subject matter of any such dispute and agree that delivery
or mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 10(a) hereof or in such other
manner as may be permitted by law, shall be valid and sufficient service
thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Agreement on the day and year first above written.
GEOTECK INTERNATIONAL, INC.
By:
--------------------------
WAREHAM MANAGEMENT LTD.
By:
--------------------------
G.W. Norman Wareham
--------------------------
G.W. Norman Wareham
7
<PAGE>
Exhibit 10.11
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Agreement") is made effective as of the 1st
day of June, 1998 by and between Intercap Resource Management U.S., Inc.,
Houston, Texas ("Lessor") and Marine Shuttle Operations Inc., a Nevada
corporation ("Lessee").
AGREEMENT
In consideration of the mutual agreements hereinafter set forth, the
parties agree as follows:
1. Lease. The Lessor herewith leases to Lessee for the business use of
the Lessee a furnished office of approximately 500 square foot at 4410 Montrose
Boulevard, Houston, Texas 77006.
2. Rent. The Lessee shall pay to the Lessor a monthly rent of US
$750.00 payable in advance on the first business day of each month to the
account as indicated by the Lessor to the Lessee.
3. Term and Termination. The term of the Lease shall commence on June
1, 1998 and will continue for six months thereafter (the "Term"). At the end of
each expiring Term, the Term shall automatically renew for an additional six
months, unless either the Lessor or the Lessee gives (30) days prior written
notice of termination to the other.
4. Notice. All notices, requests, demands and other communications
required or permitted hereunder must be in writing and deemed given and
effective when personally delivered or sent by facsimile with confirmation of
receipt or when deposited in the mail with postage prepaid to the party to which
the same is directed at the following addresses (or at such other addresses as
will be given in writing by the parties to one another):
To the Lessor: Intercap Resource Management U.S., Inc.
Attn.: Mr. Jim D. Ford,
4410 Montrose Boulevard
Houston, Texas 77006
<PAGE>
To the Lessee: Marine Shuttle Operations, Inc.
Attn.: Mr. Franz Eder, President
4410 Montrose Boulevard
Houston, Texas 77006
6. Miscellaneous.
(a) Assignment. The parties may not assign any rights or
delegate any duties they have assumed hereunder without the prior written
consent of the other party. This Agreement is personal to the the parties. The
Lessee is not entitled to grant a sublease to any third party.
(b) Governing Law and Choice of Forum. This Agreement will be
governed by and construed in accordance with the internal laws of the State of
Texas. The parties agree that any appropriate court located in Houston, Texas,
will have exclusive jurisdiction of any case or controversy arising under or in
connection with this Agreement and will be a proper forum in which to adjudicate
such case or controversy. The parties expressly consent to personal jurisdiction
and venue in such courts.
(c) Entire Agreement/Amendment. This Agreement embodies the
entire agreement of the parties hereto relating to the subject matter hereof and
supersedes all oral agreements, and to the extent inconsistent with the terms
hereof, all other written agreements. This Agreement may not be modified,
amended, supplemented or terminated except by a written instrument executed by
all parties hereto.
(d) Severability. Each of the covenants and agreements herein
above contained will be deemed separate, severable and independent covenants,
and in the event that any covenant will be declared invalid by any court of
competent jurisdiction, such invalidity will not in any manner affect or impair
the validity or enforceability of any other part or provision of such covenant
or of any other covenant contained herein.
(e) Captions and Section Headings. Captions and section
headings used herein are for convenience only and are not a part of this
Agreement and will not be used in construing it.
<PAGE>
(f) Fax Execution. This Agreement may be executed by delivery
of executed signature pages by fax and such fax execution will be effective for
all purposes.
EXECUTED AS OF JUNE 1, 1998
[Lessor]
------------------------------------
By: Tom Holder
Title: Vice President
[Lessee]
------------------------------------
By: Franz Eder
Title: President
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF MARINE SHUTTLE OPERATIONS INC.
1. Marine Shuttle Operations AS, a Norwegian limited company.
2. Offshore Shuttle AS, a Norwegian limited company.
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report relating to the Marine Shuttle Opertions Inc. (formerly
Geoteck International, Inc.) dated July 2, 1998, in the Registration
Statement on Form S-1 and related Prospectus of Marine Shuttle Operations
Inc. (formerly Geoteck International, Inc.)
/s/ Deloitte & Touche
Chartered Accountants
Vancouver, British Columbia, Canada
July 2, 1998
<PAGE>
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Marine Shuttle
Operations Inc. (formerly Geoteck International, Inc.) on Form S-1 of (i) our
report relating to Marine Shuttle Operations AS dated June 25, 1998, and (ii)
our report relating to Offshore Shuttle AS dated June 25, 1998, each of which
appear in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Deloitte & Touche
DELOITTE & TOUCHE
Oslo, Norway
July 2, 1998
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