AGREEMENT
This Agreement, dated September 1, 1998, is made by and among Regal
Marine Industries, Inc., a Florida corporation ("Regal"), Boat Tree, Inc., a
Florida corporation ("Boat Tree"), American Marine Recreation, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., an individual resident of
the State of Florida ("Pozo").
RECITALS
A. On June 30, 1992, Boat Tree granted Regal an option (the "Option")
to purchase twenty-five percent (25%) of Boat Tree's outstanding shares for an
aggregate price of Ten Dollars ($10.00).
B. The Option expires on June 30, 2002.
▇. ▇▇▇▇ and the other holders of issued and outstanding shares of Boat
Tree desire to exchange (the "Boat Tree Exchange") all of the issued and
outstanding common stock of Boat Tree for shares of common stock, $.01 par value
per share ("Company Common Stock") of the Company.
D. The Company desires to effect an initial public offering (the "IPO")
of Company Common Stock, pursuant to a Registration Statement on Form SB-2 to be
filed with the Securities Exchange Commission in accordance with the Securities
Act of 1933, as amended (the "Securities Act").
E. In order to consummate the IPO on favorable terms, Boat Tree, Pozo
and the Company have requested that the Option be exercised on and subject to
the terms and conditions described herein.
F. Regal desires to exercise the Option on and subject to the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
conclusively acknowledged, the parties agree as follows:
TERMS
1. Exercise of Option. Subject to and effective upon the consummation of the
Boat Tree Exchange and the IPO, (a) the Option shall be exercised; and (b) in
exchange for the twenty-five percent (25%) of Boat Tree's outstanding shares
upon the exercise of the Option, and in consideration of the Boat Tree Exchange,
the Company shall issue to Regal that number of shares
1
of Company Common Stock equal to Fifteen and Sixty-Five One Hundredths Percent
(15.65%) of its issued and outstanding shares of Company Common Stock after
giving effect to such issuance and calculated after the Boat Tree Exchange and
immediately prior to the issuance of the shares of Company Common Stock sold in
the IPO.
2. Piggy-Back Registration Rights.
(a) General. If the Company proposes, at any time during the two year
period (the "Registration Period") commencing on the closing date of the IPO to
file a registration statement on a general form for registration under the
Securities Act and relating to securities issued or to be issued by it, then it
shall give written notice of such proposal to Regal. If, within 30 days after
the giving of such notice, Regal shall request in writing that all or any
Company Common Stock owned by or issuable to Regal be included in such proposed
registration, the Company will also register such securities as shall have been
requested in writing; provided, however, that:
(i) Regal shall cooperate with the Company in the preparation
of such registration statement to the extent required to furnish information
concerning such owners therein; and
(ii) the Company shall have the right at any such time after
it shall have given written notice pursuant to this Section 2 (irrespective of
whether a written request for inclusion of any Company Common Stock shall have
been made) to elect not to file any such proposed registration statement, or to
withdraw the same after the filing but prior to the effective date thereof. In
such event, Regal shall retain the piggy-back registration rights set forth in
this Section 2.
(b) Possible Reduction in Shares Required To be Registered.
Notwithstanding the provisions of Section 2(a) hereof, if in the written opinion
of the Company's managing underwriter, if any, for the offering contemplated by
such registration statement, the inclusion of all or a portion of the Company
Common Stock requested to be registered, when added to the securities being
registered by the Company will exceed the maximum amount of the Company's
securities which can be marketed (i) at a price reasonably related to their then
current market value, or (ii) without otherwise materially adversely affecting
the entire offering, then the Company may exclude from such offering a pro rata
portion of the Company Common Stock requested to be registered as required by
the managing underwriter. If securities are proposed to be offered for sale
pursuant to such registration statement by other security holders of the Company
and the total number of securities to be offered by Regal and such other selling
security holders is required to be reduced pursuant to a request from the
managing underwriter (which request shall be made only for the reasons and in
the manner set forth above) the aggregate number of Company Common Stock to be
offered by Regal pursuant to such registration statement shall equal the number
which bears the same ratio to the maximum number of securities that the
underwriter believes may be included for all the selling security holders
(including Regal) as the
2
original number of Company Common Stock proposed to be sold by Regal bears to
the total original number of securities proposed to be offered by Regal and the
other selling security holders. In the event the Company exercises the rights
granted under this Section 2(b), Regal shall retain piggy-back registration
rights for its Company Common Stock (to the extent not registered).
(c) Additional Terms. In connection with the filing of a registration
statement pursuant to Section 2 hereof, the Company shall:
(i) notify Regal as to the filing thereof and of all
amendments thereto filed prior to the effective date of said registration
statement;
(ii) notify Regal promptly after it shall have received notice
thereof, of the time when the registration statement becomes effective or any
supplement to any prospectus forming a part of the registration statement has
been filed;
(iii) prepare and file without expense to Regal any necessary
amendment or supplement to such registration statement or prospectus as may be
necessary to comply with section 10(a)(3) of the Securities Act or advisable in
connection with the proposed distribution of Company Common Stock by Regal (but
only during such period as the Company is required to keep the registration
statement effective);
(iv) use its reasonable best efforts to qualify the Company
Common Stock being so registered for sale under the securities or blue sky laws
in such reasonable number of states as Regal may designate in writing and to
register or obtain the approval of any federal or state authority which may be
required in connection with the proposed distribution, except, in each case, in
jurisdictions in which the Company must either qualify to do business or file a
general consent to service of process as a condition to the qualification of
such Company Common Stock;
(v) notify Regal of any stop order suspending the
effectiveness of the registration statement and use its reasonable best efforts
to remove such stop order.
(vi) undertake to keep said registration statement and
prospectus effective until such time as all the shares of Company Common Stock
are sold or become available for public sale without registration under the
Securities Act; and
(vii) furnish to Regal as soon as available, copies of any
such registration statement and each preliminary or final prospectus and any
supplement or amendment required to be prepared pursuant to the foregoing
provisions of Section 2 hereof, all in such quantities as Regal may from time to
time reasonably request. Upon written request, the Company shall also furnish to
Regal, without cost, one set of the exhibits to such registration statement.
3
(d) Expenses. Regal agrees to pay all of the underwriting discounts and
commissions, and transfer taxes with respect to Company Common Stock owned by it
and being registered. The Company agrees that the costs and expenses which it is
obligated to pay in connection with a registration statement to be filed
pursuant to Section 2 hereof include, but are not limited to, the fees and
expenses of counsel for the Company, the fees and expenses of its accountants
and all other costs and expenses incident to the preparation, printing and
filing under the Securities Act of any such registration statement, each
prospectus and all amendments and supplements thereto, the costs incurred in
connection with the qualification of such Shares for sale in a reasonable number
of states, including fees and disbursements of counsel for the Company,
registration fees and the costs of supplying a reasonable number of copies of
the registration statement, each preliminary prospectus, final prospectus and
any supplements or amendments thereto to Regal.
(e) Indemnification. The Company shall indemnify and hold harmless
Regal and each underwriter, within the meaning of the Securities Act, who may
purchase from or sell for any Regal any Company Common Stock, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement of a material fact contained in the registration statement, any other
registration statement under the Securities Act, any post-effective amendment to
the registration statement or any such registration statement, or any prospectus
included therein required to be filed or furnished by reason of this Section 2
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or alleged untrue statement or omission or alleged
omission based upon information furnished or required to be furnished in writing
to the Company by Regal or such underwriter expressly for use therein, which
indemnification shall include such person, if any, who controls any such
underwriter within the meaning of the Securities Act and each officer, director,
employee and agent of such underwriter; provided, however, that the Company
shall not be obligated to so indemnify any Regal or such underwriter or other
person referred to above unless Regal or such underwriter or other person, as
the case may be, shall at the same time indemnify the Company, its directors,
each officer signing the registration statement and each person, if any who
controls the Company within the meaning of the Securities Act, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or any prospectus required to be filed or furnished by
reason of this Section 2 or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission based
upon information furnished in writing to the Company by Regal or such
underwriter expressly for use therein. If for any reason the indemnification set
forth above is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, claim, damage, liability or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
the indemnified party as a result of such loss,
4
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations.
3. Notices. Unless otherwise specifically stated herein, all notices,
requests, demands and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given, made,
and received when delivered against receipt, twelve (12) hours after being sent
by facsimile, or seventy-two (72) hours after being sent by registered or
certified mail, postage prepaid, addressed as set forth below:
(i) If to the Company, Boat Tree or Pozo:
American Marine Recreation, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Regal:
Regal Marine Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 220
With a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 286
Any party may alter the address to which communications or
copies are to be sent by giving notice of that change of address in conformity
with the provisions of this Section for the giving of notice.
4. Applicable Law; Binding Effect; Jurisdiction and Venue. This
Agreement shall be construed under and governed by the laws of the State of
Florida and shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, legal representatives, successors and assigns.
Jurisdiction of and venue for any action or proceeding arising out of or
connected with this Agreement shall lie exclusively in the state courts of
competent jurisdiction in and for Orange County, Florida. Each party expressly
waives all other jurisdiction and venue and agrees that he or it shall be
subject personally to the jurisdiction of the agreed-upon court(s).
5. Severability. The provisions of this Agreement are independent of
and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part. Further, if
a court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable as written, such court may interpret,
construe, rewrite or revise such provision, to the fullest extent allowed by
law, so as to make it valid and enforceable consistent with the intent of the
parties hereto.
6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party hereto whose signature appears hereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
7. Entire Agreement. This Agreement contains the entire understanding
among the parties as to the subject matter hereof and supersedes any prior
understanding and agreements among them respecting the within subject matter.
8. Attorney Fees. In connection with any litigation arising out of,
concerning or related to this Agreement, the prevailing party or parties shall
be entitled to recover from the non-prevailing party or parties all reasonable
attorney fees, court costs and other expenses, even if they are not taxable as
court costs (including, without limitation, all such fees, costs and expenses
incident to appeals), incurred by the prevailing party or parties in connection
with such action or proceeding, in addition to any other relief to which such
prevailing party or parties may be entitled in such action or proceeding.
6
9. Termination. If the Boat Tree Exchange and the IPO have not occurred
by the one year anniversary hereof, this Agreement shall terminate, and the
Option shall continue in full force and effect in accordance with its terms.
[SIGNATURES ON FOLLOWING PAGE]
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
REGAL MARINE INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
BOAT TREE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: President
AMERICAN MARINE RECREATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
8
