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$____ per share in
consideration for which the Company shall pay BFAG, at the Closing (as defined
below), a commission equal to ten percent ( 10 %) of the aggregate purchase
price of the Securities.
Section 2
Payment and Delivery
2.1. The Company hereby appoints BFAG as its exclusive agent (subject
to BFAG's right to designate selected dealers who may participate in the
Offering) for a period (the "Offering Period") of thirty (30) days from the date
on which the Registration Statement (as hereinafter defined) becomes effective
(the "Effective Date"), to sell the Securities on a "best-efforts, all-or-none"
basis; provided however, the Company and BFAG, by their mutual written consent,
may extend the Offer-
ing Period for an additional period of up to thirty (30) days. An additional
five (5) days may be added solely for the purpose of allowing checks to
clear. The Company and BFAG, at any time, may agree to terminate the Offering
prior to the end of the Offering Period. BFAG, on the basis of the
representations and warranties contained herein, and subject to the terms and
conditions set forth herein, accepts such appointment and agrees to use its
best efforts to find purchasers for the Securities. BFAG, as agent for the
Company, shall offer the shares of Common Stock to the public at a price of
US$ _______ 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
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 XXXX, Xxxxxxxxxxxxxx 000, 00000 Xxxxxx, Xxxxxxx, 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
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 Xxx 0000 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 Xxx 0000 (Investment Advertisements) (Exemption) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
4
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
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
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
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
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 xxxx 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
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.
10
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
11
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.
12
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 Xxxxx'x 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.
13
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
14
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
15
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.
16
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
17
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.
18
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.
19
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.
20
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
21
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
22
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: Xx. Xxxxxx Xxxx
Xxxxxxxxxxxxxx 000, 00000 Xxxxxx, Xxxxxxx
Tel: 49-30-89 02 11 00
Fax: 49-30-89 02 11 99
23
If to the Company: Marine Shuttle Operations, Inc.
Attention: Xx. Xxxxx Xxxx, President
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxxxxx & Xxxxxx, LLP
Attention: Xxxxxxx X. Xxxxxxx, Esq.
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, X.X. 00000
Tel: 000-000-0000
Fax: 000-000-0000
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
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: Xx. Xxxxx Xxxx
Title: President
Berliner Freiverkehr (Aktien) AG
By:
----------------------------
Name: Xxxxxx Xxxx
Title: Vorstandsvorsitzender
