Business Plan ADEPP Version.1

E- training for industrial risk management

Desired funds and purpose: 20MF working capital for rapid expansion to exploit proven products

Project ManagerDr. Fabienne F SALIMI

Address: 9 Rue Paul Gimont

92500 Rueil-Malmaison

Country: France

Phone : 00331-47 51 30 32

Fax : 00331-47 16 74 55

Web : http://www.adepp.com

E-mail : fabienne@adepp.com

_________________________________

Revenues Year- 1 : 1.2 MFRevenues Year- 2 : 10 MFRevenues Year- 3 : 30 MFRevenues Year- 4 : 80 MFRevenues Year- 5 : 130 MF

MissionBe the leading international provider of customised, Internet-based training and expert support on risk management in health, safety, environmental and quality issues to process industries world-wide.

ActivityInternet-based tools and advice that improve and sustain the profitability of customers by: preventing process losses; controlling environmental impacts; improving computer-based maintenance; and assuring compliance with complex regulations and best international design practices.

MarketTarget markets are oil and gas extraction and processing; global power generation; global petrochemicals, other bulk chemicals and pharmaceuticals; railway upgrades and other hazardous operations.

Value is added through an innovative approach to risk management, using interactive dynamic and static modelling, applicable to the whole or parts of a process system. This reduces running costs in existing plants and capital investment in new plants.

Competitive advantages consist of novel and proprietary software features; customisation; versatile and low-cost delivery channels; responsive expert support; competitive pricing; registered copyright, 5 years lead time.

TeamFF Salimi: PhD Chem Eng + 15 years international experience in oil & gas HSEQ.AM Saidi: PhD Petr Eng + 40 years international experience in oil & gas industry.A Salimi: BSc Math + 27 years in software development & technical management.F Salimi: MSc Safety + 20 years international experience in hazardous systems.J Zhang: BSc Econ + 10 years international experience in high-tech marketing.D Hughes: 26 years experience in risk and safety engineering for petrochemicals.M Withers: 28 years international experience in petroleum industry marketing. A Gracey: MA Finance, BSc Eng + 25 years international project experience.

Presentation

Fabienne Salimi - Gen. Director Alfred Gracey - Finance

InvestorsSalimi family.Government subsidies.IFP (technical)

CustomersOil & Gas : Total, Elf, etcPetrochemical plantsChemical plantsAny high risk industry (power generation, etc.)

CompetitorsNo direct competitor for ADEPP conceptSafety: DNV, Item , Primatec, Dynadem, etcDynamic simulation: Hyprothec, AspenTech

1. MISSION

Be the leading international provider of customised, Internet-based training and expert support on risk management in health, safety, environmental and quality issues to process industries world-wide, through the ADEPP Academy's Fail-Safe Remote/Mobile Training programs and ADEPP HSEQ Toolkits.

Achieve revenues of at least FF10M in 2000, FF30M in 2001, FF80M in 2002. Grow at 50% annually thereafter. Average profit before interest and tax at 40% of revenue. Make IPO or trade sale for part of the firm in 2003/2004.

2. DOMAINES D’ACTIVITE / SECTORS OF ACTIVITY

ADEPP sophisticated Internet-based tools and advice that improve and sustain the profitability of customers by:

Preventing process losses and optimising safety measures

Controlling environmental impact in normal operation and emergencies

Improving systems of computer-based maintenance management

Assuring compliance with complex regulations and best international design practices.

Target markets are in oil and gas extraction and processing (buoyant in the Arabian Gulf, static in northern Europe, growing in the Far East); global petrochemicals, other bulk chemicals and pharmaceuticals (generally buoyant); global power generation (buoyant and growing); railway upgrades (growing in Europe).

3. THE NEED

Risk analysis and mitigation is an essential duty in directing a profitable, sustainable business. Company directors and managers in process industries have legal, fiduciary and moral responsibilities to reduce the risks of accident, human error, fatality and environmental pollution in the design and operation of their industrial plants. Therefore directors need to be sure of the competence of technologists and operators, especially in the critical areas of health, safety, quality and environment (HSEQ).

Process industries include power generation; manufacture of pharmaceutics, food products, and petrochemicals; petroleum extraction, oil and gas refining. The complexity of their processes demands that technical staff be highly trained. Many regulatory and insurance-indemnity pressures insist that the training is formal and certified to (inter)national standards. However, removal of key staff from plant operation is disruptive and expensive; many skills are best improved in a hands-on context; and sending expert trainers to scattered sites is expensive and often impractical. Ideally, training should be delivered on-site, customised to the particular plant and the varied needs of staff. It should be available in short modules at convenient times, and progressively accumulate to satisfy recognised standards of competence. Traditional solutions to these needs are unsatisfactory because they entail too much compromise.

ADEPP enable directors, operations managers and technologists to fulfil their HSEQ responsibilities in a highly cost-effective and convenient way, without compromise. ADEPP uses the Internet, company intranets, and mobile "caravans" to deliver instruction and enable new skills to be practised in a local, safe environment. Training and learning is integrated with maintenance and design, to progressively achieve excellence in all aspects of risk management.

For example, in hydrocarbon processing units, ADEPP address the main causes of direct loss (through fire, explosion and toxicity) as follows:

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Cause of Loss Million US$* % of incidents ADEPPOperational error 90 22 ADEPP Remote and Mobile TrainingProcess upset 80 10 ADEPP HSEQ Toolkit - diagnosis and trainingDesign error 80 5 ADEPP HSEQ Toolkit - diagnosis and trainingMechanical Failure 75 45 ADEPP Maintenance Manuals Unknown 70 13 ADEPP Process Data Audit - diagnosis and cureNatural Hazard 55 4 ADEPP HSEQ Toolkit - diagnosis and preparationSabotage/arson 25 1 ADEPP HSEQ Toolkit - diagnosis and protectionTotal 475 100* source: Hydrocarbon Processing Journal, Market Data 2000

Although these costs are huge, they exclude contingent costs - for lost production, injuries and fatalities, damage to the natural environment and disruption of neighbouring communities. The products of ADEPP attack the causes of these indirect costs at their source. Adoption of ADEPP enables a company to win important savings in both direct costs and indirect costs.

The cost of direct losses and contingent liabilities in the power generation and the pharmaceutical and food processing industries are of the same magnitude as in hydrocarbon processing. Thus the overall market that could benefit from ADEPP products is worth around US$1 billion.

The features and benefits of ADEPP products and services are described in sections 6 and 7.

4. TARGET MARKET

Market segmentation and medium-term sales potential

Sector & Location Typical target customers

Value of market, FF Potential ADEPP sales in 5

years

Comments

1. Offshore and onshore petroleum oil and gas installations in the Arabian Gulf, North Sea, USA, central and south America, south-east Asia.

Kvaerner, Bouygues, Aker , Amerada Hess, BP-Amoco. Total, Elf, Doris, Sofresid. ZADCO, ADNOC, ADMA-OPCO. Associated design consultant firms.

250 kF to 25 MF per project.

About 10 000 offshore installations exist world-wide.

25% of the market

Marketing priority #1

2. Chemical, petrochemical, petroleum, Refineries, pharmaceutical, and food-processing companies in European Union states – to enable compliance with EU Directive SEVESO II.

Rhone-Polenc, Hoechst, ICI, Air Liquid, Zeneca, Pfizer.Companies in EU accession candidate states.Associated designers and contractors.

250 kF to 25 MF per project.

Many thousands of chemical and petrochemical and food industry installations world-wide.

10% of the market

Marketing priority #2

3. Any owner or operator of a complicated or risky industrial process that must demonstrate compliance with increasingly strict regulations about health, safety, quality control and/or environmental protection – world-wide.

Storage and handling of hazardous materials. Nuclear industry. Rail & shipping operators. Designers. Insurers. Superintendence surveyors. Quality certification bodies. Infrastructure & environment agencies.

250 kF to 25 MF per project.

5% of the market

Marketing priority #3

4. All of the above As above Generally as above, but ongoing support provided by an ally of ADEPP

500 MF net profit as commission for selling allied software products and services

Medium priority – respond to opportunity arising when marketing ADEPP

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Marketing and sales activities by territory

Territory 1: Arabian Gulf – offshore and onshore petroleum-based installationsInvestigation of Gulf prospects began in 1998. ADEPP rapidly secured three strong advantages: influential local sponsors; a trading licence approved by the Petroleum Council; and tender prequalification certification by most of the oil and gas organisations (ADNOC, ZADCO, GASCO, FERTIL, ADMA-OPCO and ADCO). Intensive marketing and selling efforts continue.

ADEPP has successfully performed one assignment for ZADCO. This proved ADEPP's credibility and a large follow-on assignment is expected in the near future. The ADEPP HSEQ-Toolkit is being considered for the front-end engineering design of a US$30M hazardous-waste management facility. An ADEPP Fail-Safe Remote/Mobile Training Program is being finalised with the Petroleum Institute of Abu Dhabi (PIAD, previously CERT) and two petroleum corporations.

As business becomes well established in the Emirates, Saudi Arabia and Kuwait, attention will shift to Iran and Iraq. ADEPP can provide essential Internet-based training to enable those two countries to get the best performance out of their existing hydrocarbon industry infrastructure, and to support the design-construction-operation system when massive new capital investments are undertaken to modernise their infrastructure. ADEPP's ability to deliver Internet-based training in local languages will be a strong advantage in upgrading local practices to international standards of HSEQ.

Territory 2: North Sea - hydrocarbon-based companiesADEPP is currently establishing a UK branch which will sell and deliver to customers in UK, Norway and Netherlands. The concept was first sold to Phillips Petroleum in 1996 for the Judy and Joanne oil platforms: ADEPP successfully applied ADEPP methodology for Phillips' design engineer Kvaerner. In 1998, Kvaerner used ADEPP for the TRITON FPSO, under a contract with Amerada Hess. ADEPP has been invited to apply to the South Pars project of Total Oil, working with contractors Foster Wheeler (France) and Hyundai.

Intensive marketing since 1997 has evoked strong interest from companies such as BP, AGIP, Marathon Oil, ASCO, Shell, Elf, Victoria Oilfield Development, Texaco, Oryx, etc. AEA Technology has recently evaluated ADEPP and intends to use it for life-cycle appraisal of safety integrity in a project with a current client. Multiplan is also introducing ADEPP to major engineering consultants such as WS Atkins, Brown & Root, Ove Arup, Cremer Warner, Foster Wheeler UK, and John Brown. Their onerous responsibilities during infrastructure design and construction supervision makes ADEPP attractive as a means of reducing technology risks, professional indemnity fees and cost/time overruns.

Territory 3: European Union - Compliance with European Commission directives The ADEPP HSEQ Toolkit is a perfect tool for helping companies meet the demands of EC Directive 96/82/EC ("SEVESO II") on the control of major chemical accident hazards, and similar environmental protection regulations (summary at http://europa.eu.int/comm/environment/seveso/index.htm and EUR-Lex document 399Y1012(01)). ADEPP is therefore beginning to market ADEPP to the chemical, petrochemical, petroleum, pharmaceutical and food-processing industries across the EU. A related market exists in the accession candidates of central Europe. These states must demonstrate that their HSEQ regulations, practices and industrial plants comply with the EU's body of law (the acquis communautaire). The products of ADEPP provide a systematic framework for demonstrating compliance at plant level, reducing the risks that are feared to exist in the process plants of accession candidates.

Territory 4: North AmericaAll the contacts with USA-owned oil companies gained from the marketing effort in UK could be the target of ADEPP. Many of the North Sea companies also operate offshore platforms in the USA, under safety regulations different from those of the UK. Therefore they need a tailored ADEPP approach. ADEPP has been already registered to trade in the USA and Mr. Frederic Salimi holds a work/residence permit. Therefore ADEPP in USA could become operational at short notice, with its first marketing base in Houston. An office in Canada (probably at Calgary) would be set up to serve companies based there.

Territory 5: Central & South America and south-east AsiaShareholder and international consultant Dr. Saidi has provided introductions in Mexico. A preliminary training proposal to PEMEX generated considerable interest. ADEPP is well positioned to submit a full proposal for introducing ADEPP Fail-Safe Remote/Mobile Training programs to cover the whole oil and gas industry of Mexico.

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Zone de commerce en % du CA ht / Annual sales by territoryTerritory T1 T2 T3 T4 T5 CA / Revenue

Year - 1 80 % 10 % 10 % 0 % 0 % 10 M FFYear - 2 50 20 25 5 0 30Year - 3 30 30 30 10 0 80Year - 4 25 20 30 25 0 130Year - 5 25 10 30 30 5 200

5. COMPETITION

ADEPP has three types of competitors, but none offers a close substitute for ADEPP:

Companies expert in dynamic simulation of processes. Leaders are:Hyprotech (http://www.hyprotech.com) - strong in the oil & gas market. AspenTech (http://www.aspentech.com) - strong in the chemical industries market.

Companies expert in risk analysis and safety engineering, such as :DNV (http://www.dnv.com/technical ) Primatech (http://www.primatech.com )Isograph (http://www.isograph.com)Arthur D. Little (http://www.process-safety.com/software/softhome.htm )Dynadem (http://www.dynadem.com )

Companies expert in computer-based training products, such as :ATR (http://www.atrco.com/)Gulf Publishing (http://www.gulfpub.com/videos/videos.html)GeoLearning (http://www.geolearning.com/ ) Lab Volt (http://www.labvolt.com/ha.html)A. Palmer Animated Training (http://www.apalmertraining.com/)

Typical partial competitors are tabulated below.

Company Product / Service Prices – licences and typical support fee

Comments

DNV Software – Risk Management (part of Det Norsk Veritas AS), Norway

PHAST, WHASAN, OHRAT, etc.

Licensed at £500 to £30000. Fee rate 6000-8000FF/manday

Various Quantitative Risk Analysis software packages. Lacks integrated dynamic simulation.

Hyprotech, (member of AEA Technology plc)

HYSIM, HYSYS $67000 for 1 site licence. Fee 6000-8000 FF/man-day.

Software package for dynamic simulation of chemical processes. No Risk Assessment built in.

Aspen Technology Inc, USA

PLANTELLIGENCEsuite

$67M licence revenue in 9m till 3/99, typically $20k-25k per package. Fees $1500-2000/manday.

Optimises manufacturing operations.

Primatech Inc, USA PHAWorks Licences $3500 single-user, $12000 site (6), $30000 (multi-user).Fee 6000-8000 FF/man-day

Software for specific aspects of hazard analysis, risk assessment and regulatory compliance. Not tightly integrated.

Risk Decisions Ltd, UK

Predict! Risk Analyser & Controller

£995 (1 station) to £25000 (50 stations). Annual support at 18% of licence.

Mainly for project management. Not specific to industrial processes.

Distinguishing featuresADEPP differs from competitors because of the innovative characteristics of its software packages, by versatile delivery methods, and by responsive support services. Computer-based training in technological processes is still relatively novel, and ADEPP's capabilities for on-line simulation and customisation make it unique. ADEPP does not need to compete on price. The collective skills, experience and dynamism of the entrepreneurial team at ADEPP are unmatched. Competitive advantages are detailed at section 7.

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Market research since 1994 has not discovered any direct competitor to ADEPP products. ADEPP was first developed to fill a gap identified by its creators during their previous decade of experience in the petroleum industry and after extensive consultation with other experts in the petroleum and allied process industries. ADEPP is currently not aware of any competition, actual or threatened, in its target niche. ADEPP continues to be unique because of its integrated application of dynamic simulation in risk management, its comprehensiveness and its adaptability. It is truly innovative product, responding to a serious range of needs.

Outside the niche identified for ADEPP, several other packages claim to do part of what ADEPP can do. A few firms are expert in dynamic simulation software. Other firms have expertise in risk management. No competitors combine risk management with dynamic simulation of processes. As far as ADEPP can ascertain, no other package achieves the integration, efficiency, robustness and profit enhancement of ADEPP. Many of the sellers of those packages do not offer the strong support that ADEPP provides. Unlike ADEPP, no apparent competitor offers a fresh paradigm for risk management that drives a step change in process efficiency and economy.

The lead-time for a competitor package to come to market is probably five years after ADEPP has proven its market niche. Intending competitors are further constrained by the legal protection that ADEPP holds over its intellectual property in ADEPP, through its registration at the APP (Agence pour la Protection des Programmes). The products of ADEPP are market-tested and ready for widespread release. By the time any competitor becomes able to sell a "copy" of today's version of ADEPP, ADEPP will have developed improved versions. In addition, ADEPP will have acquired unique experience with its approach, extensive case studies and benefit/cost examples, and an irreplaceable store of customer confidence. Once a customer has built ADEPP into its internal procedures and begun to capture its benefits, inertia and entry costs will deter substitutes.

6. PRODUCTS AND SERVICES OFFERED

The core product is a unique, sophisticated suite of risk-management software known as ADEPP ™ (acronym for Analysis and Dynamic Evaluation of Project Processes). This operates in a Windows ™ environment. It identifies and analyses the state of any process function, applying static and dynamic simulations, and elucidates the risk envelope for a particular function or the whole process. Users interact with the software to investigate various risk mitigation scenarios, comparing feasible outcomes against criteria such as cost and regulatory compliance, and are guided towards optimised solutions. ADEPP can be used in both stand-alone mode or integrated with customers' other programs. It can import their data and feed back results from its simulations. This gives the user a comprehensive and comprehensible understanding of highly complex industrial situations. It enables intelligence-based decisions about optimal levels of risk, cost and monetary benefit.

Customers may increase and sustain their profitability by applying ADEPP products to manage their assets in many ways. For example: Train or retrain technicians in proper, safe operation of complex equipment more efficient production. Troubleshoot during process operations cost savings, less downtime, less maintenance. Reduce the probability and scale of accidents fewer and smaller incidents, cheaper insurance. Demonstrate compliance with regulations rapid licensing, earlier production, better cash flow. Enable designs to be more efficient and cost-effective faster design, lower indemnity charges. Simplify and speed decisions during procurement, construction, test-runs earlier production.

Several products are derived from ADEPP to suit particular needs. The leading product is ADEPP Fail-Safe Remote/Mobile Training. This is combined with the training components of other ADEPP products, and background R&D, to yield a platform called the ADEPP Academy. Products that address specific technical applications are currently: ADEPP Maintenance Manuals, ADEPP Process Data Audit, and a series of ADEPP Toolkits - for Design, HSEQ, SIL, and HIPS 1.

ADEPP Fail-Safe TrainingADEPP Fail-Safe Remote/Mobile Training Programs provide skill drills, quizzes, and interactive games that increase employees' understanding of equipment, process relationships, and other aspects of their jobs. A Troubleshooting module enables a tutor to set up scenarios with customised diagrams and graphics, then drill operators on process-specific risks. This enables senior staff to assess an employee's baseline competence in troubleshooting, and then to

1 Abbreviations abound in the target markets, and customers recognise these labels.HSEQ = Health, Safety, Quality, Environment - compliance with standards, procedures and regulations.SIL = Safety Integrity Level assessment, including determination of safety-critical elements (SCE) HIPS = High Integrity Protective System, a complex control procedure for high-pressure vessels.

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enhance those skills. Staff should take refresher and upgrade training every three years or so, adapting to change in staff composition and equipment. This generates repeat business for ADEPP.

Training modules are delivered through a combination of three channels: Internet access: to the generally-applicable modules on protected areas of the computer system at ADEPP The intranet of a customer: for modules that have been customised for that customer's plant(s) A mobile training centre: a specially-equipped vehicle that tours around the plant sites of one or more customers,

carrying computers loaded with ADEPP training software (connected through the Internet to the best training centres), a laboratory or small-scale rig, and a tutor.

Each channel has its strengths and weaknesses. For example, the mobile programme suits countries in the Arabian Gulf, where there are many remote sites, whose staff cannot easily be detached for a week's training off-site. ADEPP Abu Dhabi has successfully proposed a US$5M project to PIAD/CERT, ADMA-OPCO and Total. Delivery is planned to begin in September 2000. The "mobile" concept has been proven in a related context, by INTERGRAPH. It uses a mobile classroom for delivering 30 technical training modules on sites. ADEPP's Internet channels extend and enrich the basic concept. The purely remote version suits trainees who have good telecommunications links, appropriate self-discipline, and (for example) some time available between work-shifts on a residential oil/gas rig or other remote site.

In illustration of market potential, the world-wide hydrocarbon processing industry is forecast to spend US$ 145 million in 2000 on training. ADEPP aims to capture a small portion of this, and a growing proportion in subsequent years.

ADEPP Maintenance ManualsPlant maintenance is a strategic contributor to a process plant's productivity and thus to the financial health of the business enterprise. Preventative Maintenance is a proactive response to environmental and safety regulations (and contingent liabilities), rising labour costs, and global competitor threats. However, cost-optimising decisions about what to fix, and when to fix it, requires collection and manipulation of an enormous amount of data. Therefore a company must integrate all its computer programs that handle plant data.

A growing number of companies also use Risk-Based Inspection to improve the mechanical integrity of their plants. This methodology systematically prioritises risk levels in pressure equipment, so that leak detection and repair can focus on higher-risk equipment.

Another trend is towards greater out-sourcing of maintenance work. Specialist contractors in preventative maintenance must win appointments under highly competitive terms, then control costs tightly during their contract's tenure.

ADEPP responds to all these trends. It integrates data from diverse origins, and extends the RBI approach, by simulating risks and forecasting outcomes based on more than the simple history of a particular plant. Hence maintenance decisions can be made in a more intelligent way, and costs reduced. For a contractor, ADEPP provides a sophisticated platform for planning, and winning profit from, planned maintenance. ADEPP has agreements with French firms IOSYS and P2I regarding integration of their expert system products with ADEPP. The ADEPP Maintenance Manuals enable a step change in rational asset management.

To illustrate market potential, the hydrocarbon processing industry is forecast to spend $40 billion on maintenance in 2000 - an increase of $1.5 billion over the previous year. 60% of maintenance costs are on labour, with costs in 2000 expected to increase by $900 million over the previous year.

ADEPP Process Data AuditThe electronic archiving capabilities of ADEPP can prepare a comprehensive record of input forces and resources, processing responses, and all kinds of outputs. ADEPP dynamic simulation can analyse this accumulated data, then identify, characterise and cure previously "unknown" causes of large losses. The ADEPP Process Data Audit is analogous to the examination of an aircraft's flight recorder ("black box") by accident investigators. By adopting ADEPP Process Data Audit, the hydrocarbon processing industry could save up to US$70M.

ADEPP ToolkitsWhen a process plant is being designed, risk assessments should be an integral part of the design process. But in practice, many design engineers perform risk assessments as an afterthought - a formality required by regulations. Many process-engineering customers complain that assessments of risks and certification of quality and safety levels are done too late - when a plant's design is almost completed and many procurement orders have already been issued. Tardy assessment increases costs: a industry "rule of thumb" says that if fixing a mistake during design costs $1, fixing it during construction costs $10, and during operation $100. In hydrocarbon processing, the cost of loss attributed to design errors and associated upsets is estimated to be US$160M.

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ADEPP Toolkits give engineers firm guidelines for assessing risks as design evolves and construction proceeds. Toolkit models respond to design changes that are suggested during procurement, construction, commissioning and initial test runs. Toolkits inform decision-makers of the consequences of changes, enabling risks to stay consistent with primary design parameters and regulations. Therefore intelligent application of the ADEPP Toolkits will save a considerable proportion of the losses resulting from current practices, and provide evidence of compliance with regulations.

End-users process plant operators (technicians and managers) maintenance engineers and technicians (employed by plant owners and contractors) troubleshooting engineers (owners, contractors and consultants) design engineers and technicians (in consulting engineer firms and plant manufacturers) inspectors and specialists with special responsibilities for health, safety, quality assurance and environmental

protection (plant owners, consultants, regulatory agencies, insurers, certification agents).

Product readinessThe products are in a deliverable state. The Toolkit was delivered successfully to the TRITON project for North Sea oil in 1998. Simple "taster" training is available through our website. A full Remote/Mobile Training Programme is being prepared for delivery in Abu Dhabi later this year. Further sales are being negotiated.

PricesRevenue is currently earned in two ways: Licence fees for software packages.

Risk Analysis with Dynamic Simulation 100 000 USD for a single licenceRisk Analysis without Dynamic Simulation 40 000 USD for a single licence

Consulting fees, for advising and helping customers apply the package profitably. Minimum fee rates achieved 85-120 USD per person-hour.

The advice includes initial set-up and training, customisation for particular plants, assistance with interpretation of initial results and evaluation of risk mitigation scenarios, and additional training of experienced and new users

This combination of one-off licence fee and ongoing consulting fees gives ADEPP a front-loaded and continuing income stream. The combination reduces customer resistance to initial price, maintains product reputation, builds customer satisfaction, and gains feedback for product enhancement.

In the future, a third income stream is possible: by negotiating a share of the financial benefits a customer gains from applying ADEPP products. Emergency situations (such as disasters or salvaging a poor maintenance contract) could be exploited.

7. COMPETITIVE ADVANTAGES

ADEPP is a new kind of product, albeit with some antecedents that help potential users appreciate its potential. ADEPP addresses existing markets for technical training and risk management in a mixture of modern and novel ways. ADEPP also creates a new market - for comprehensive and integrated mitigation of risks throughout the value chain - by its dynamic modelling of process hazards in a fail-safe way.

Innovative software features ADEPP is the only package that uses dynamic simulation of the process for hazard identification and consequence

analysis in risk assessment. Simulations can be based on rich historic data and /or probabilistic scenarios. ADEPP uses a combination of Fault Tree and Event Tree analysis for Safety Critical Element determination. All

the competitive packages use only one method (such as Fault Tree analysis for the criticality test). In its computer-based training programs, ADEPP supports interactive multimedia interfaces with sophisticated

calculations. This capacity to introduce "virtual reality" makes ADEPP training uniquely interesting and effective. Most competitors use only crude animation and pre-simulated cases.

ADEPP can integrate with other software packages for dynamic simulation and risk assessment depending on client preference. In this case, competition is neutralised by making other software packages complementary to ADEPP, and lowering any switching cost barrier. For example, ADEPP is negotiating a partnership with Hyprotech for its dynamic simulation software (HYSYS), to service customers that currently use HYSYS.

Versatile delivery and responsive support Training is delivered by Internet, company Intranet, mobile training caravans, or on-site PCs.

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Preventative Maintenance Manuals and Process Data Logs are assembled, amended and analysed on a customer's computer system - retaining customer security over commercially sensitive data.

Computers at the offices of ADEPP can interrogate distant plant computers to diagnose problems and offer solutions.

Support by ADEPP experts is available at all times, using fast telecommunication links; and on-site at short notice. Staff in various time zones ensure that responses are prompt. The range and quality of expertise in ADEPP and (where appropriate) its allies is uniquely powerful.

Competitive pricing Prices for ADEPP products are currently in line with industry expectations. Customisation gives great scope for

increasing revenue above base prices, at marginal cost to ADEPP. Product and service features mean that undercutting competitors on price is not necessary. When products become more established and case studies demonstrate their high returns on investment, there will

be scope for additional revenue by negotiating shares of the cost-savings generated.

SWOT analysis

Internal ExternalSTRENGTHS WEAKNESSES OPPORTUNITIES THREATS

Proven technology and initial sales. Moderate switching cost can generate huge benefit.Skilled experienced personnel.Strong presence in Abu Dhabi, France, UK.Alliances established in USA, Canada, Italy etc.Scope for product customisation and enhancement.

Inadequate finance to support rapid growth and retain key members of current entrepreneurial team.

Market is almost limitless, driven by best practice and stricter enforcement of regulations.Versatile range of customised products.Enforcement of HSEQ regulations in target countries.Ensuring the cost-effective methods of training and re-certifying the employees.

Slow adoption of Internet links on some sites. Low training budgets in some companies. (These obstacles cannot be sustained, because they place those candidates at a competitive disadvantage through needless exposure to avoidable risks.)

8. BACKGROUND OF THE FIRM

1993/4 Design of ADEPP program architecture. Identification of contractor to prepare software code. Formulation of initial business concept.

1994 Multiplan Recherche et Formation s.a.r.l. registered to trade. SIRET number 394 485 213.1995 Preparation and testing of software code, integration of software modules.1996 Market research, initial marketing, preparation of sales aids.1996 ADEPP USA registered. Dormant because the US oil and gas market then entered a downturn.1997 Intensive marketing and sales proposals in EU. Began marketing in Middle East.1998 Sold an ADEPP licence to Kvaener, for TRITON project for North Sea oil and gas rigs.

Sold consultancy support.Began website development as publicity and sales tool.Established ADEPP Abu Dhabi 11/98.

1999 Intensive marketing and sales proposals in Middle East and western Europe. Secured intent to purchase, from CERT/PIAD.Negotiations with allies for cross-selling, and formation of consortium for training system.Began search for investors to supplement equity and fund expansion.Negotiations to establish ADEPP UK.

2000 Marketing. Investor search. Close the deals on recent proposals. Deliver contracts won.

In mid-1988, ADEPP R&F began to market ADEPP in to countries in the Middle East. In November 1998, ADEPP (Abu Dhabi) was established with the sponsorship of two influential local businessmen. It is licensed by the Petroleum Council and is pre-qualified for contracts involving HSEQ issues. By late 1999, ADEPP had been demonstrated to most of the oil and gas companies and related organisations in Abu Dhabi, arousing keen interest. Depressed prices for oil and gas during much of 1999 delayed their decisions to purchase ADEPP, but the recent rise in prices is clearing the way for new investments. The R&D-based Petroleum Institute of Abu Dhabi (PIAD, till recently known as CERT)

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wants to use ADEPP as a training tool to secure efficiencies over the complete life cycles of capital-intensive oil and gas exploitation projects. This will radically improve the intrinsic profitability of its industrial sponsors.

In mid 1999, ADEPP (France) started negotiations with several complementary firms, with the purpose of jointly creating a complete training system for oil & gas operators. The consortium consists of three core firms and some specialist suppliers:

ADEPP - project manager, expertise in health, safety and environmental management systems.

AEA Technology plc (Cadcentre & Risk Assessment units) - virtual reality programming for PDMS and 3D simulation of installations.

Kvaerner - owner and operator of onshore and offshore process plants; uses PDMS. Source of simulation case studies, test cases, and prototype data.

Suppliers are likely to include Century Dynamics (3D explosion and impact models), Mobius Dynamics (CFD Modelling), SIRIA Technology (visualisation of CFD modelling results), Robotel (Internet and Remote training tools), RSI (subsidiary of IFP; dynamic simulation of processes and advanced control systems).

This ADEPP Fail-Safe Remote/Mobile Training Program uses ADEPP to integrate software from the other partners. It provides comprehensive training in HSEQ. It uses the Internet for remote interaction with trainees, and a truck equipped with 15 PCs and a tutor for the mobile element. The truck will travel around sites such as oil refineries, gas liquefaction plants, and petro/chemical plants, and delivering training to site-based operators. The Institute of Petroleum of Abu Dhabi is the first customer.

9. KEY STAFF

In France:

Dr. Fabienne-Fariba SalimiPhD in Chemical Engineering (Paris). Member of AICHE, ISA and SFC. Born 1962. Founder and General Director of ADEPP. 31% shareholder. Architect and co-author of ADEPP. More than twelve years of experience as a chemical process safety engineer in chemical, oil and gas sectors. Expert in dynamic simulation of chemical processes, and in using quantitative risk-analysis to model and predict the consequences of accidents. Has worked in Iran, France and UK.

Dr. Ali M Saïdi PhD in Petroleum Engineering (Stanford). Born 1933. Board Adviser to ADEPP. 5% shareholder. Non-executive. Brings over 40 years of international experience in the petroleum industry. Held senior positions for research, exploration and production in various international joint ventures and Iranian companies for 17 years. Subsequently adviser on reservoir engineering to TOTAL, IFP, ELF, Bahrain NIOC, STATOIL (Norway), BP, Texaco, PEMEX and other petroleum institutions. Has a wide range of contacts from his work in many countries.

M. Askari SalimiOne year of M.Sc. in Applied Mathematics and Management (Colombia, NY). BSc in Mathematics and Economics (Kara, Iran). Born 1954. R&D adviser to ADEPP. 10% shareholder. Has 27 years of experience in software development for managing distribution of natural gas and for achievement of quality standards. 10 years as entrepreneur and 9 years as technical consultant in Iran.

In Abu Dhabi:

ZIRAK L.L.C.

M. Frédéric Salimi MSc in Safety and Reliability (Paris). Member AICHE. Born 1955. Co-author of ADEPP. Principal safety consultant and Middle East area manager of ADEPP. Twenty years of experience as safety and loss-prevention engineer in petrochemical, oil and gas sectors. Special expertise in identification of safety-critical systems, in performance standards, and in quality rating assessments. Worked in IRAN, France, Japan, Korea, Arabian Gulf states and UK.

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Mrs. Raquel IruzubiataCompany Secretary of Multiplan Abu Dhabi, responsible for administration and legal issues. 27% shareholder in ADEPP s.a.r.l. Expert in Internet communications, and electronic archiving using ADEPP Toolkit.

Mrs. Jackie ZhangBSc Economics. 5% shareholder in ADEPP Abu Dhabi. Manages its Far East Trade & Distribution Division. Expert on E-Marketing. 10 years international experience in high-tech marketing, in the Middle East and China.

Mr. Syed Hussain AhmedMA Economics. Fluent English and Arabic. Marketing and sales co-ordinator of Multiplan Abu Dhabi. Thoroughly familiar with local industry and decision-makers from 20 years employment. Experience includes: Store Management and Purchasing for the Water & Electricity Department of Government of Abu Dhabi; Procurement Manager for pipeline equipment in service companies; Personnel Manager & Public Relations Executive in manpower contracts with major oil companies ADMA-OPCO, ADNOC and BUNDUC; Sales Executive and Administrative Manager of Al Futtaim Tower Scaffolding.

In UK:

Mr. David HughesMember, Institution of Mechanical Engineers UK. Nominee Managing Director, ADEPP UK. Born 1947. Has 26 years experience of fire and safety engineering and loss control, of which 18 years in senior rôles with offshore and onshore petrochemical installations. Wide experience of commercial practice in procurement, quality assessment, HSEQ regulations and industrial standards. Established entrepreneur and consultant in related areas.

Mr. Murray WithersFellow of Chartered Institute of Marketing (UK). Member, Institute of Petroleum. Nominee Marketing Director, UK. 28 years of international experience in marketing connected with the petroleum industry. Fluent linguist (8 European languages, Arabic and Japanese). Wide experience in growing young companies and achieving sales targets. Recent employers include Swisslog Digitron, Munck Autech and Selantic Industrier (Norway), Government of Canada.

Mr. Alfred GraceyMA Finance (Kingston). BSc Engineering (Newcastle). Chartered Engineer. Member, Institute of Management. Member, International Consulting Economists Association. Born 1950. Financial advisor, nominee financial director (UK). Has 25 years of international experience in financial analysis, business and project planning, procurement and implementation of capital construction projects spanning private and public sectors. Previous employers and clients include Mouchel Consulting, EBRD, European Commission, World Bank, the British government (DTI and DFID), Reeves & Neylan (chartered accountants), Proctor & Gamble.

Full CVs are available on request. Further staff details are given on www.multiplan.co.ae/publication.htm.

Organisation of the ADEPP groupADEPP s.a.r.l. (France) is wholly owned by the founding entrepreneur and family. This firm owns 43% of ADEPP Abu Dhabi Ltd. The wholly-owned USA company is currently dormant. ADEPP s.a.r.l. is currently setting up a trading company in UK, in which a British entrepreneurial team will invest and have shares. Discussions are being held with some private and trade investors, with a view to widening the shareholder base in all the companies, injecting further working capital, and improving access to market niches.

10. BUSINESS MODEL

The core product is the ADEPP risk management modelling suite of software. Derivative products aim at specialist segments of the market in complex infrastructure for process industries and other hazardous operations, and are customised for each customer's needs.

ADEPP invoices each customer directly.

Sources of revenue & profit are:1. Licence fees from sales of ADEPP and its derivatives.2. Consultancy fees from sale of experts' time, to customise the product and advise on its initial and extended use by the customer.

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3. Commission from cross-sale of allied products, materials and labour.

Price levels are consistent with industry expectations, currently 40 K USD – 100 K USD for licences and about 85-120 USD/man-day for experts. There is scope for raising these as product reputation strengthens with experience.

Distribution channels are direct to customer, from ADEPP and its branch offices and networks. Products are delivered worldwide using Internet and other computing channels, supported by experts at remote bases and on-site.

Customers are reached by: Websites of ADEPP, and links from the websites of allies, provide initial promotional information. Conferences and trade exhibitions, which generate contacts. Sales seminars, with demonstration and hands-on trial of the product by potential customers. Personal visits to potential customers, to demonstrate and sell the product to decision-makers. Formal proposals in response to a client's stated needs or request, with follow-up selling contact.

11. INTERNATIONAL DEVELOPMENT STRATEGY

ADEPP has always had an international perspective, because most of its potential customers operate outside France and many are global players, and because of the international experience of key persons in the firm. Five territories within the global market will be served by subsidiary companies (rather than agents). This enables ADEPP to control the software's intellectual property, maintain the quality of services at a high level and protect the firm's reputation, and ensure the commitment of staff. Subsidiary companies will have some local shareholders, as sponsors and key staff. Previous sections give details.

ADEPP works closely with advanced-technology companies and institutes in France and abroad, to mutual benefit. These include AEA Technology and Century Dynamics (UK); SIRIA Technologies, RSI, ZEDAF, IOSYSNet and Acoustique Serial (France); TECSA (Italy, Spain); RISC (USA), ROBOTEL (Canada), ATEEQ and PST (UAE).

ADEPP and its allies have access to a specialised industrial safety and fire protection library of over 7000 documents and several computer programs for use in hazard modelling and acute risk assessment. ADEPP and its allies are leading members of international and national professional associations, e.g. NFPA, AICHE, API, CCPS, ISA, EURODATA, ELTA, EUROPEX, NETT, EUROSAFETY, SFC, and ISDF. These international links ensure that ADEPP is kept promptly informed of relevant industry developments, and stimulate R&D to ensure that ADEPP retains its competitive advantage.

12. FINANCE

To date ADEPP has been financed by the following investors:

1. Personal resources of its founding shareholders.2. Approximately 1000 kF in grants, soft loans and tax refunds from French government sources. ANVAR, CRITT-CCST, SOFARIS and COFACE have backed ADEPP since its foundation.3. Institute Français du Pétrole (IFP), which contributed 100 kF to assist the development of ADEPP. In return, IFP is entitled to 7% of the value of licences sold up till 8/2000. IFP is keen to continue collaboration with ADEPP thereafter.

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13. THE DEAL ON OFFER

Financing demand: 20 MFFor Capital of company: 20%Face Value: 100 MF

Projected internal rate of return (IRR): >50%.

14. FINANCIAL PROJECTIONS

Year 1999 2000 2001 2002 2003 turnover, million FF

0.33 * (1999)1.2 (1998)

10 30 80 130

growth rate, annual ~10x 3x 2.7x 1.7xMarge brute, % 30% 40% 50% 50%Marge nette, % 24% 32% 40|% 40%breakeven 2001Number of customers or contracts 2 5 10 20 40-50WHO ? ZADCO*

SARA**PIAD/CERT**

ADMA-OPCO, AEA Technology, Bouygues, Foster Wheeler, Technip, Total or Elf.

See section 4

Target Market – France :International, % 0:100 5:95 15:85 15:85 15:85Nomber of shareholders 5 8? 8? 8? 8?WHO ? In ADEPP France (MRFF) F Salimi 31%.

R Iruzubieta 27%. D Salimi 27%.A Salimi 10%.M Saidi 5%

Venture capital fund or business angel(s) 20%. Trade partner 10%.

Prepare for exit of venture capital / angels in Year-5.

In branches of ADEPP outside France, local shareholders

Abu Dhabi: MRFF 49%.M Yousi 51%.

UK: 49% to 4 key staff & business angel. Grant.51% MRFF. Abu Dhabi: 10% to a trade partner.

USA: 49% to private investors &/or trade partners.51% to MRFF.

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