PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 2   AN EFFECTIVE DEVELOPMENT TEAM             Emerson Burnett is president of Sea Habitat Hawaii, Inc., dba U-SEA TM "Underseas Systems for Education for America". I propose that the Society, in turn, be headed by the team of (a) Emerson Burnett as President who would ensure that details of construction overseen by the Society matched details of design overseen by Sea Habitat Hawaii Inc., (b) an Executive Director who would be responsible for securing grant funding and, (c) an "Assembly" of marine scientists and many other interested persons who would conduct project development work in various committees. (see "By Laws", Page 12)   An innovator like Emerson needs an effective team to bring a major scientific / tourism project into existence. In my opinion an effective development team needs the following elements: (1) the expertise and grant funding contacts of marine scientists and others who publicly favor U-SEA's TM construction -- "UNDERSEA OBSERVATORY SOCIETY" ASSEMBLY COMMITTEES project devel. staffers & consultants (2) Emerson Burnett's understanding of sea dynamics, and his innovative designs for a divers' lock-in/lock-out elevator and the U-SEA TM vessel (patents pending) - SEA HABITAT HAWAII INC.'s design executive (3) the organizational ability of a qualified executive director, who would work together with the University of Hawaii’s Pacific Business Center, this Society’s president and Assembly, to produce a business plan and grant proposals -- “UNDERSEA OBSERVATORY SOCIETY” grant funding executive (4) ecologically-oriented private investors and/or hotel chain or cruise ship line (5) a contracted Project Coordinator firm and prime contractors (6) recommendations from the Hawaii Ocean Center Planning Council, University of Hawaii's School of Ocean and Earth Sciences and Technology, and the Dept. of Education re: public education component of the U-SEA TM "submerged underseas observatories" PROPOSED LIMITED PARTNERSHIP I propose setting up a limited partnership to bind the above parties into a for-profit and non-profit consortium to build U-SEA TM: Design & permit arm: Sea Habitat Hawaii Inc. + "eco" investors + Hawaii Ocean Center Planning Council, et al + architectural & engineering contractors Construction, audit & publicity arm: “Undersea Observatory Society" + contracted Project Coordinator firm + prime contractors (shipbuilding, etc.)

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 3   PROPOSED LIMITED PARTNERSHIP (cont.)             The vessel itself, I propose, should be registered in the name of the patent holder. The patent holder, Emerson Burnett, and the LP should structure their relationship and carry insurance sufficient to shield the vessel complex from potential tort claims.              When design and construction of the U-SEA TM vessel complex is completed and it commences operations, investors, in Sea Habitat Hawaii Inc. will begin to profit. The Society, will also be entitled to share in net operating profit yet also will have the requirement of disbursing a major part of its share of the profit for educational, humane or scientific purposes. What institutions, in your opinion, should the Society at that time support? Should the Society move to bring the University of Hawaii itself into this consortium, in keeping with incoming UH Pres. Evan Dobelle's advocacy of UH / private business partnerships? Comments:   FUNDING              U-SEA TM construction costs have been estimated variously at $37.8 million (1997 by RE 2 Economic Consultants (Jeff Pietsch, et al), and $43.1 million (E. Burnett and M. Johnson, Dec., 1999). Rounding the latter to $44 million, I recommend this proposed Limited Partnership aim at a capitalization formula such as:   Grants & donations (via the Society):                         $11 million     = 25% Invested capital (via Sea Habitat Hawaii Inc.):          $10 million     = 23% Government appropriations (via the Society)              $ 5.5 million   = 12% Time share sales (a no. of undersea staterooms):        $ 3 million       = 7% Title XI Federal Shipbuilding Loan                             $14.5 million   = 33% (through a local bank)                                                                                        44 million      = 100% A more comprehensive estimate of construction costs, along with an initial reserve for operations, would be generated, of course, in the course of putting together a business plan. We should keep in mind that Title XI Federal Loan proceeds can go all the way up to 87.5% of the vessel's cost, if necessary. For example, if actual costs were to total $60 million, and the above factors of a capitalization formula remain constant, Title XI Loan participation would rise to: Grants & donations                                                        $11 million    = 18% Invested capital                                                              $10 million    = 17% Government appropriations                                            $ 5.5 million  =   9% Time share sales                                                             $ 3 million     =   5% Title XI Federal Shipbuilding Loan                                $30.5 million = 51%                                                                       $60 million 100%

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 4   INTERNAL FUNDING The Society would, of course, also need to generate a certain amount of funding for its own operations. Some of these funding avenues would very likely also become major sources of construction funds.             Questions that could be considered at initial organizational meetings include:             * Grants: Is there perhaps an existing grant that could encompass the beginning of work on an undersea observatory? How long would a "fast track" application for an initial operating "technology grant" take? Would the Kamehameha Schools Bishop Estate take an interest in the undersea observatory?             Comments:          * Govt. Appropriations: Which State of Hawaii, C & C of Honolulu, O.H.A., or Federal programs could make an appropriation from a current budget? Could a portion of the $10.5 million appropriation approved by the 1986 Legislature be revived for the U-SEA TM project from Hawaii Tourism Authority funds?              Comments:              * Membership dues: several memberships could be offered, with short-term collections amounting to several thousand dollars. Benefactor, Patron, Contributing and Supporting members could be acknowledged individually.              Benefactor          $2,500           Contributing           $250          Active $35              Patron                 $ 500             Supporting              $ 75           Student / Teacher /                                                               Family                    $ 45           Senior $25              * Donations: an agreement could be made with the Human / Dolphin Foundation (Makawao, Maui) or a similar non-profit group so that donors could receive a tax deduction for donations sent or phoned in to them specifically for the "Ohana No Na Makakilo Malalo O Ke Kai" (my nomination for an "Undersea Observatory Society" name).              Comments:   Funds raised in the first 60 days by a combination of the above strategies could prove sufficient to hire an acting Executive Director and other project development workers, lease office space and purchase hardware to begin planning work in tandem with Sea Habitat Hawaii Inc. Planning work would, of course, include gathering information required by the Pacific Business Center to put together a business plan.              Comments:

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 5 MY ACQUAINTANCE WITH A GENIUS             I first saw Emerson Burnett in 1980 when he was busy establishing San Francisco's Pier 39 tourism attraction. "Pier 39" is Emerson's concept. He started it. He was the one who first imagined the possibilities for a broken-down pier that was on the verge of falling into the Bay, secured a lease on it and breathed life into what has today become one of San Francisco's premier tourism attractions.              Nearly 20 years later I met up with him again in Honolulu, and this time he eagerly showed me an imaginative plan for a stationary vessel, U-SEA TM. He told me that he's lived in several different coastal locations on O'ahu over the past eight years, searching for a marine environment ideal for the U-SEA TM vessel. Now residing beachside at Makaha, he reports swimming with sea turtles and many other species on his weekly butterfly stroke workouts. His accounts of scary encounters with Mano out there make me fearful that someday a shark will have him for lunch, but then again Mano may be leaving him alone just long enough for the U-SEA TM project to reach completion. Pier 39 tourism attraction today, along with Aquarium; a result of the vision of Emerson Burnett's Sea Habitat Corp.

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 7   WHY AN "UNDERSEA OBSERVATORY SOCIETY' IS NEEDED (cont.) (E) to keep U-SEA TM firmly on a scientific / educational track, that is, to       construct and operate U-SEA TM with a view to maximizing its potential to       attract wild dolphins and other friendly marine life. Putting dolphin / human       interaction first, and keeping boat traffic out is, I feel, the path to building       steady and substantial visitor traffic to U-SEA's TM undersea observatories,       hotel component w/ undersea staterooms, unique diving facilities, etc.   REMEMBER THE "GOLDEN RULE" "Whoever has the gold makes the rules" is an old adage of project development. To ensure that no parties introduce any features that would jeopardize wild dolphins' freedom to frequent the U-SEA TM marine life oasis, I propose that the Society work in partnership with or "get the gold" only from ecologically-oriented investors, project development companies, cruise lines, hotel / time share operators, and vendors.            Comments:   (F) to set up a public membership organization that would make available a      low-cost annual pass for the undersea observatory (and perhaps discounts      on admission to other O'ahu attractions) to members; also to put an      "originated by the people of Hawaii" stamp on the U-SEA TM attraction Comments:      (G) to maintain a captivating U-SEA TM preview display / model in a retail store at       Aloha Tower Marketplace as a site to acquaint cruise ship passengers, other       visitors and residents with the coming U-SEA TM attraction. Also possible site       for Sea Habitat Hawaii Inc. to market undersea stateroom time share units. Comments:      (H) to operate an undersea observatory (in the aft end of the U-SEA TM vessel) for       scientific research -- 24 hours a day; providing a unique research and       teaching facility for marine scientists, and graduate / undergraduate students Comments:

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 8   WHO FAVORS THE U-SEA TM APPROACH The following leading marine scientists have expressed a definite interest in conducting ongoing research in the U-SEA TM undersea scientific observatory:   Dr. Alexander Malahoff            Univ. of Hawaii Manoa                                                                      Director, Hawaii Undersea Research Lab - including                                                      undersea research in deep diving vehicles   Dr. Ricky Grigg                         Univ. of Hawaii - Manoa, Oceanography                                                              & leading authority on coral reef systems   Michael Hyson, PhD                  Sirius Institute, Pahoa Hawaii (research re:                                                             human / dolphin communication & effects                                                             of Navy sonar) www.interpac.net/~plntpuna   Others in human / cetacean communication research, marine life research and ocean exploration have expressed enthusiastic approval of the U-SEA TM approach (of bringing people safely down into the sea, rather than bringing sea mammals up to a land-sited aquarium). Included are:   Paradise Newland                       Founder of Sirius Institute, Pahoa, Hawaii                                                      (research re: human / dolphin communica-                                                      tion and healing) www.interpac.net/~plntpuna   Jean-Michel Cousteau               Principal of the Cousteau Society; has                                                      spoken publicly in favor of U-SEA TM   Dr. Robert D. Ballard                 Pres. of salvage firm that found the Titanic                                                      in 1987; author of Discovery of the Titanic   Dr. Sylvia Earle                          former director of NOAA (U.S. Govt.) &                                                      pioneer in research w/ deep diving vehicles   Dr. John C. Lilly                         Founder of Human / Dolphin Foundation,                                                      Makawao, Maui; author & leading authority                                                      on human / cetacean communication   Terry O'Halloran                       VP, Atlantis Submarines, Honolulu   Robert K Overlock, MD            Med. Director, Hyperbaric Treatment Center                                                      Univ. of Hawaii - Manoa

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 9   WHO FAVORS THE U-SEA TM APPROACH (cont.) Many others in government, business, labor and the non-profit sector have expressed enthusiasm for the U-SEA TM project in "get acquainted with U-SEA TM" sessions conducted by Emerson Burnett. He has successfully acquainted hundreds of individuals and small groups with the U-SEA TM concept, including, perhaps, you the esteemed reader of this proposal. Do you agree that the moment has arrived for each one of us who favor this project to direct our individual enthusiasm for an undersea observatory toward working together in an effective and responsive development organization? If you are answering "Yes, let's work together", and even if you only have time to offer occasional input to this effort, then I encourage your careful consideration of PAGE 14. HISTORY OF THE U-SEA TM PROJECT $23.5 MILLION APPROPRIATION PASSED BY HAWAII STATE LEGISLATURE            Several sessions of the Legislature have, over the past 15 years, passed resolutions and appropriations bills mandating the establishment of Hawaiian Ocean Awareness Centers, of which the U-SEA TM project was recognized as a key part (SCR No. 237, '90).   1986 appropriation Act 285, totaling $10.5 million for the FY 19585-87 biennium, for the design and construction of a Hawaii Ocean Awareness Center, and an additional $13 million for FY 1985-87 for a Hawaiian Ocean Awareness Center - Sea Life Park facility ("to include submerged observatories for ocean exhibits and displays in the actual marine environment" -- referring to the project headed by Emerson Burnett)   1987 H.R. 402 called for the establishing of a Hawaii Ocean Center Planning Council   1988 HRC No. 208 (or No. 267) "requesting a study of the feasibility of expanding the Hawaii Ocean Center concept by including major ocean exhibits and displays in the actual marine environment."   1990 SCR No. 237 "requesting the Office of State Planning, the University of Hawaii, and the Dept. of Education to coordinate with the U-SEA submerged underseas observatory project developer to formulate recommendations for the development of a public education component for the project."   1990 H.B. 3140   "making an appropriation ($100,000) for the Hawaii Ocean Center Program"          H.B. 278     (same as SCR No. 237 / SCR No. 220)            Sea Habitat Hawaii Inc., headed by Emerson Burnett, did not receive a disbursement of funds authorized by Act 285 (1986). The company proceeded with planning for a Maui site for the U-SEA TM project using private capital.

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 10   HISTORY OF THE U-SEA TM PROJECT (cont.) MAUI PHASE             In 1977 Emerson Burnett obtained permits to construct a U-SEA TM vessel and pier at Maalaea, Maui. He, as president of Sea Habitat Hawaii Inc., signed a 65-year lease with the State of Hawaii for a parcel of seabed and fronting land at the Maalaea site. The resulting permits and lease, no small accomplishment by any measure, were put in abeyance when it was determined that U-SEA TM should be located on O'ahu rather than Maui, so as to tap into O'ahu's far greater annual number of visitors.             Success in obtaining all needed permits and a lease for that Maui site was due, no doubt, to Emerson's considerable skill in dealing with county, State, and Federal permit and planning offices. Much of this admittedly political skill was garnered in his years spent working in Gov. Jack Burns' campaigns and also while serving as U.S. Rep. Patsy Mink's chief of staff in Congress. In the 1970's in San Francisco he proved that getting a lease and permits for his Pier 39 / floating aquarium concept in 18 months was due in large part to location; he and associates of Sea Habitat Corp. leased an office at Pier 5 on San Francisco's waterfront, right next to the Port Commission!   O'AHU PHASE             In 1996 Sea Habitat Hawaii Inc. entered into a working agreement with a prominent Honolulu architecture firm to produce drawings, auto-cads and engineering studies of the proposed U-SEA TM vessel / pier complex. Work continued until early 1998 when an impasse over who should be included in a project development team led to a breakdown of the working agreement.              A front-page article in the Feb. 7, 1998 Honolulu Star-Bulletin banner-headlined, "Will O'ahu Undersea Hotel Float?", incorrectly stated that several personalities that had been brought in from California were officers of Sea Habitat Hawaii Inc. The Honolulu Star-Bulletin later printed a correction.              In Feb., 1999 officers of Sea Habitat Hawaii Inc. attended an initial meeting with the principals of the firm that is developing the Ko 'Olina section of leeward O'ahu. The principals, after expressing their fascination with the U-SEA TM concept, agreed to hold further discussions about locating the U-SEA TM pier and vessel at Ko 'Olina.              In 1999 - 2001 Emerson Burnett, assisted by various artists and with input from engineers, has been conducting significant re-design work on several aspects of the vessel, the undersea observatory and a shore-side salt-water adventure park / wild dolphin attraction. Various private investors are being approached to enter into a working agreement with Sea Habitat Hawaii Inc. to bring in capital sufficient to progress through final design and the obtaining of all permits and leases for a Ko 'Olina U-SEA TM site.

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page11   ABOUT THE AUTHOR OF THIS PROPOSAL              I,"Marcos" Mark Johnson, originally from Seattle, have resided in Hawaii and Samoa since 1982. As a business consultant I've been assisting Emerson Burnett with aspects of U-SEA's TM business planning since Sept., 1998, bringing some 25 years of accounting and practical business experience to the task. My day job as an educational map designer with "Planet Earth Adventure Maps LLC" is getting busy, though, and at night I turn into a pop singer / songwriter. Setting up a "non-profit that will turn a profit" to work with Sea Habitat Hawaii Inc. will therefore allow me to return my focus to my own unique product lines while continuing to offer my consulting services to an "Undersea Observatory Society" Ways & Means Committee.   BY-LAWS              I suggest that an "incorporation committee", that includes an attorney, compose a set of by laws, submitting them to an initial meeting of an "Assembly" for adoption. Here's a few idea of my own for such a committee to consider: ASSEMBLY              A "democratic-style" development organization, where working committees serve in place of "departments", and an open forum "Assembly" gathers community as well as expert input, will help meet the U-SEA TM project's greatest challenge: that the local community feels that they have been heard, that individual's concerns and suggestions, even positions of outright opposition, have been addressed all throughout the project's development.              My suggestions for an "Assembly" format: (1) the Assembly could number up to 80 persons, convening semi-monthly -- one daytime session followed by an evening session two weeks or so later (2) proceedings would be carried by intranet and/or Webcast (using, for example, RealNetworks' RealPresenter Plus 8 -- converts PowerPoint presentations into Webcasts) (3) the Chair of each committee would summarize that committee's recent work and detail committee decisions reached by consensus; other members could present views (4) the Assembly itself would make decisions by consensus. Any member of the Society could offer a modification, ask for clarifications, raise an objection, etc. to committee decisions presented. The Assembly moderator could send the topic raised back to a committee for reconsideration of a decision. If no requests or objections are raised concerning a committee's decision, then the Executive Director should sign the committee's decision / plans, announce such and list approvals on the Society's intranet. (5) the moderator of the Assembly could be the Executive Director, the President, or another qualified person, for a term or else in rotation

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 12   BY LAWS (cont.) EXECUTIVE DIRECTOR, PRESIDENT AND BOARD (6) Directors named on the application to become a non-profit organization would constitute an initial Board of Directors. I propose that the Board should eventually include the Chair of each committee. The Board, though, should meet only in the form of the "Assembly", even if that means that the Assembly must convene every week. Ad hoc meetings of Board members, the President, the Executive Director, etc. could be held at any time. Agreements and agendas stemming from these ad hoc meetings should be reported at Assembly sessions. (7) Directors should be compensated with either a stipend or a consulting fee. (8) The President should be nominated by any member and confirmed by the Board for a 5 year term. (I will nominate Emerson Burnett for first President of the Society.) (9) The duties of the President include making sure that details of construction overseen by the Society match details of design overseen by Sea Habitat Hawaii Inc., et al. The President must sign (or else send back - "not approved" ) all agendas, contract proposals, etc. forwarded from the Assembly. (10) The President should be empowered to suspend an Executive Director for cause, requesting within 3 working days a Board decision to reinstate or remove the E.D. The Board and Exec. Dir. together must initiate any other suspensions / removals for cause. (11) A list of candidates for Executive Director should be presented to the Assembly by the personnel committee. The Board of Directors, meeting in the Assembly format, should select the finalist by consensus. The President must sign this selection. The Executive Director's employment contract should be for a 3 year term. The Executive Director must not be an officer, director or more-than-5% shareholder in Sea Habitat Hawaii Inc. (12) The duties of the Executive Director include meeting frequently with the President and all parties to reach working project development and funding strategies. The Executive Director holds organizational authority and works closely with the personnel committee to seek out and hire the best personnel and contractors for the project. The Executive Director must keep up with the work of each Assembly committee. (13) The Executive Director may not suspend the President, but may request that the Board convene to question the President's positions, actions or agreements. (14) The Ways & Means committee is empowered to hire an audit firm to conduct a "perpetual audit" of the Society's books. The contract with the auditor(s) would call for daily monitoring of cash receipts, expenditures, bank balances and other necessary data.

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 13   LOCATION OF OFFICES Sea Habitat Hawaii Inc. will shortly be opening a site office at Ko 'Olina, O'ahu. The company would also lease a "town" office nearby an anticipated Honolulu location for the Society's offices. It would be ideal to lease office space on or near Honolulu's waterfront.   NETWORKING WITH RELATED ORGANIZATIONS & BUSINESSES           One committee's work would center on staying in contact with existing tourism attractions and research organizations such as: * Pacific Whale Foundation's Eco Adventures                           Maalaea & Lahaina, Maui * Ultimate Whale Watch                                                             Lahaina, Maui * Maui Ocean Center                                                                  Maalaea, Maui * Human / Dolphin Foundation                                                   Makawao, Maui * Sirius Institute                                                                          Pahoa, Hawaii * Atlantis Submarines                                                                 Honolulu * Paradise Cove Luau                                                                 Ko 'Olina, O'ahu * Sea Life Park                                                                            Honolulu * Waikiki Aquarium                                                                    Honolulu * Hawaiian Waters Adventure Park                                            Kapolei, O'ahu * American Cetacean Society                                                      Seattle, WA * A Na Pali Eco Adventure                                                         Port Allen, Kauai * various dive operators all islands * Polynesian Voyaging Society                                                    Honolulu * Hawaii Undersea Research Lab (UH-Manoa)                          Honolulu * marine science teachers' associations * Intl. Assn. of Amusement Parks & Attractions                          Alexandria, VA * National Oceanic & Atmospheric Admin.                                Washington, D.C.   A 2nd TYPE OF PUBLIC TO VISIT U-SEA TM             Dolphins, whales, sea turtles and a fascinating variety of other sea creatures will be regular visitors at the U-SEA TM marine life oasis. These visitors, I believe, constitute an "aquatic public" on par with the human public in visiting the undersea observatory / saltwater adventure park. If you are in the field of cetacean research you may already be among the first humans to succeed in carrying on an intelligible exchange of thoughts and feelings with dolphins, porpoises and whales. (See - Sirius Institute at www.interpac.net/~plntpuna ) In view of these successful exchanges, how might one go about inviting Peter Dolphin (an actual "talking" dolphin) and his wild dolphin friends to the inauguration of an undersea, two-way / interspecies observatory? I ask myself, will this become a place cetaceans love to visit, a dual playground / dolphin first aid center, an oasis from human harm where they can come to view us, and where they can teach us a trick or two? Or will many of them shy away from, avoid our $44 million dollar facility because they're bothered by small boat traffic? What might your input on all this be?

PROPOSAL FOR AN "UNDERSEA OBSERVATORY SOCIETY" Page 14   Or sign on as a co-sponsor of this proposal at: www.interpac.net/~plntpuna   FAX BACK / MAIL-IN PAGE ___Yes!     I'm in favor of establishing an "Undersea Observatory Society".   ___________________________ ________________________ _________________ Name / Title                                        Affiliation                                     Phone # ___________________________ ___________________ ______________________ Street / P.O. Box                                 City                                            E-mail 3 ways to help out now: 1. Tell us the best date and time for you to join us in an initial organizational session: ___________      _________          ____________     _________ Date (1st choice)     Time (1st choice)      Date (2nd choice)    Time (2nd choice) __________________________     ___________________________ Suggestion for meeting site   2. Indicate the team / committee that would benefit from your professional consultations, part or full-time work, volunteer assistance, or occasional input:   ___ Cetacean / human communication attractions            ___ Marine engineering /architecture ___ Diving / swimming attractions                                   ___ Membership ___ Financial planning / internal audit                              ___ Personnel ___ Government appropriations                                        ___ Related-organization networking ___ Grant sources & writing                                             ___ Undersea scientific observatory ___"Grass roots" community / media relations                 ___ Vendor opportunity ___ Hotel / theme park design review                               ___"Ways & Means" ___ Incorporation & by laws                                             ___ Web presence   Please list your qualifications:_______________________________________________ _______________________________________________________________________ 3. Refer to us persons / organizations that you believe would be interested: _________________________ _____________________ _______________ Name / Organization                  Affiliation                           Phone #   _________________________ _________________ ___________________ Street / P.O. Box                       City                           E-mail   Fax to: "Undersea Observatory Society" (808) 521-2912 (fax) Mail to: George Emerson Burnett (808) 696-8734                84-965 Harrington Highway #902, Honolulu, Hawai'i 96792