PUT AND CALL AGREEMENT
This Put and Call Agreement (this "Agreement") is made and entered into
as of November 30, 1998 ("Date of Grant"), by and among Westrec Marina
Management, Inc., a California corporation ("Westrec"), Commercial Assets, Inc.,
a Maryland corporation ("Purchaser"), and Xxxxxxx X. Xxxxx, an individual
("Sachs").
WHEREAS, Purchaser has purchased 326,740 shares of the Class A Common
Stock of Westrec (the "Class A Shares") and 82,351 shares of the Class B Common
Stock of Westrec (the "Class B Shares," and collectively with the Class A
Shares, the "Shares");
WHEREAS, Westrec desires to grant to Purchaser an option to sell to
Westrec the Shares in the manner set forth below;
WHEREAS, Purchaser desires to grant to Westrec an option to purchase
the Shares;
WHEREAS, concurrently herewith Sachs is executing and delivering (i) a
Secured Promissory Note payable to Purchaser in payment of certain indebtedness
previously incurred (the "Note"), and (ii) a Stock Pledge Agreement to secure
Sachs' obligations under the Note and hereunder.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Put Option. Westrec hereby grants to Purchaser, and
Purchaser hereby accepts, as of the Date of Grant, on the terms and conditions
hereinafter set forth, an option (the "Put Option") to sell to Westrec the
Shares.
2. Exercisability of Put Option. Purchaser may exercise the Put Option
as follows: on each of the dates listed on Schedule A hereto (each, a "Put
Option Exercise Date"), Purchaser may sell to Westrec the number of Class A and
Class B Shares appearing opposite that date, in each case for a price equal to
$6.37 per Share (the "Put Exercise Price"). In addition, at any time after (i)
the Note becomes due and payable in full by virtue of having been accelerated,
(ii) Westrec has failed to purchase timely any Shares hereunder as to which
Purchaser has delivered a Put Exercise Notice, (iii) Westrec makes any
distribution to its stockholders which is out of the ordinary course of its
business, (iv) Westrec incurs any additional indebtedness, other than
indebtedness incurred in the ordinary course of its business, or (v) Westrec
sells, transfers or otherwise conveys a material amount of its assets for
consideration which is less than the fair market value of such assets (or a
subsidiary of Westrec sells an amount of its assets which is material to Westrec
for consideration which is less than the fair market value of such assets),
Purchaser may exercise the Put Option in full and cause Westrec to purchase all
remaining Shares by providing written notice in the manner set forth in Section
3 below, and any date specified by Purchaser in such notice in accordance with
Section 3 (which date shall in no event be later than January 31, 2001) shall be
deemed the Put Option Exercise Date for such exercise. Westrec shall give
Purchaser notice promptly upon the occurrence of any event described in (iii)
through (v) above.
3. Exercise of Put Option. Purchaser may exercise the Put Option as of
any Put Option Exercise Date with respect to all or any portion of the Shares
that, under Section 2 of this Agreement, may be sold on such date. Such exercise
shall be effected by the delivery to Westrec not less than thirty (30) days
prior to such Put Option Exercise Date of a written notice of such exercise (the
"Put Exercise Notice") which shall specify the number of Shares required to be
purchased by Westrec pursuant to such Put Exercise Notice (the "Exercised Put
Shares"). In the event that the Put Option is so timely exercised, the parties
shall consummate the sale of the Exercised Put Shares on such Put Option
Exercise Date by (a) the delivery by Purchaser to Westrec or its designee of
stock certificates duly endorsed for transfer to Westrec or its designee
representing the Shares included in the number of Exercised Put Shares and (b)
the delivery by Westrec or its designee to Purchaser by wire transfer or
cashier's or certified check of an amount equal to the number of Exercised Put
Shares times the Put Exercise Price.
4. Guarantee of Put Option. Sachs hereby personally guarantees the
obligations of Westrec to purchase the Exercised Put Shares upon each exercise
of a Put Option in accordance with Sections 2 and 3 of this Agreement. Sachs
hereby waives presentment for payment, demand, notice of demand, notice of
nonpayment or dishonor, protest and notice of protest. No failure to exercise
and no delay in exercising any right, power or privilege under the guaranty
provided herein shall operate as a waiver thereof, nor shall any single or
partial exercise or any right, power or privilege hereunder preclude any other
right, power or privilege. Sachs agrees that this guaranty shall not be
discharged, released or exonerated in any way by any declaration by Purchaser of
default in respect of the obligations guaranteed hereby, the exercise by
Purchaser of any rights against Westrec or the failure of Purchaser to exercise
any rights against Westrec with respect to any default by Westrec. Sachs'
guarantee, as set forth herein, is an absolute and unconditional guarantee and
is a guarantee of payment, not of collection.
5. Call Option. Purchaser hereby grants to Westrec as of the Date of
Grant, on the terms and conditions set forth herein, an option (the "Call
Option") to purchase all or any portion of the Shares.
6. Exercisability of Call Option. The Call Option shall be exercisable
by Westrec or its designee, from time to time, on or before January 31, 2001 at
$6.37 per Share (the "Call Exercise Price").
7. Exercise of Call Option. Westrec or its designee may exercise the
Call Option or any portion thereof by the delivery to Purchaser of a written
notice of such exercise (the "Call Exercise Notice"), which Call Exercise Notice
shall specify the number of Shares to be purchased by Westrec or its designee
pursuant to such Call Exercise Notice (the "Exercised Call Shares") and the date
on which such purchase shall be consummated (the "Call Option Exercise Date"),
which shall be not earlier than ten days after the Call Exercise Notice is
provided and in any event not later than January 31, 2001. In the event that the
Call Option is so timely exercised, the parties shall consummate the sale of the
Exercised Call Shares on such Call Option Exercise Date by (a) the delivery by
Purchaser to Westrec or its designee of stock certificates duly endorsed for
transfer to Westrec or its designee representing the Shares included in the
number of Exercised Call Shares and (b) the delivery by Westrec or its designee
to Purchaser by wire transfer or cashier's or certified check of an amount equal
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to the number of Exercised Call Shares times the Call Exercise Price.
8. Adjustments. The number of shares of Class A Common Stock and Class
B Common Stock of Westrec comprising the Class A Shares and Class B Shares,
respectively, shall be adjusted from time to time as follows:
(a) If Westrec shall at any time or from time to time declare
or pay a dividend, or make a distribution, on outstanding shares of
Class A Common Stock or Class B Common Stock in shares of capital stock
of Westrec or subdivide the outstanding shares of Class A Common Stock
or Class B Common Stock into a greater number of shares of Class A
Common Stock or Class B Common Stock, or combine the outstanding shares
of Class A Common Stock or Class B Common Stock into a smaller number
of shares of Class A Common Stock or Class B Common Stock, or issue by
reclassification of shares of Class A Common Stock or Class B Common
Stock any shares of its capital stock, then, in each such case:
(i) the number of Shares subject to an exercise of
the Put Option and Call Option thereafter shall be adjusted
proportionately to reflect the increase or decrease in the
number of Shares held by Purchaser as a result of that
dividend, distribution, subdivision, combination, or issuance,
so that, notwithstanding that event, by exercising the Put
Option in full on each remaining Put Exercise Date Purchaser
shall remain able to cause Westrec to purchase all Shares
owned by Purchaser and by exercising the Call Option in full
prior to its expiration Westrec shall remain able to cause
Purchaser to sell all of the Shares not previously purchased
under this Agreement; and
(ii) an adjustment made pursuant to this Section 8(a)
shall become effective for purposes of subclause (i) of this
Section 8(a), (A) in the case of any such dividend or
distribution, immediately after the close of business on the
record date for the determination of holders of Class A Common
Stock or Class B Common Stock entitled to receive such
dividend or distribution, or (B) in the case of any
subdivision, combination or reclassification, at the close of
business on the day upon which such corporate action becomes
effective.
(b) The number of shares of Class A Common Stock and Class B
Common Stock comprising the Class A Shares and Class B Shares,
respectively, adjusted as herein provided, shall remain in effect until
further adjustment as required herein.
9. Legal Fees. Westrec shall pay any reasonable fees incurred by
Purchaser and payable to Purchaser's legal counsel for the review of this
Agreement, the Note and the Stock Pledge Agreement.
10. Representations and Warranties of Purchaser. Purchaser represents
and warrants that:
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(a) Authority. Purchaser has the right and power to enter
into, execute, deliver and perform this Agreement.
(b) Due Execution; Validity. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal, valid
and binding obligation of Purchaser, enforceable against it in
accordance with its terms. Purchaser is not a party to, subject to or
bound by any agreement, contract, lease, license, indenture, law,
regulation or commitment of any kind or any judgment, order, writ,
prohibition, injunction or decree of any court or other governmental
body that would prevent, or that would be breached or violated by, the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(c) Regulatory Approvals. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained or made
by Purchaser in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) Brokerage. Purchaser has not dealt with, and is not
obligated to make any payment to, any finder, broker, investment banker
or financial advisor in connection with any of the transactions
contemplated by this Agreement or the negotiations looking toward the
consummation of such transactions.
(e) Ownership of Shares. Purchaser owns the Shares to be
transferred to Westrec or its designee by Purchaser pursuant hereto
free of any adverse claims and any and all covenants, conditions,
restrictions, voting trust arrangements, liens, charges, encumbrances,
options and adverse claims or rights whatsoever, other than any thereof
that may exist under that certain Stockholders Agreement dated as of
March 28, 1998.
(f) Absence of Prior Transfers. There has been no sale,
assignment or other transfer or conveyance of any interest in any of
the Shares.
11. Representations and Warranties of Westrec. Westrec hereby
represents and warrants that:
(a) Authority. Westrec has the right and power to enter into,
execute, deliver and perform this Agreement.
(b) Due Execution; Validity. This Agreement has been duly
executed and delivered by Westrec and constitutes the legal, valid and
binding obligation of Westrec, enforceable against it in accordance
with its terms. Westrec is not a party to, subject to or bound by any
agreement, contract, lease, license, indenture, law, regulation or
commitment of any kind or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body that would
prevent, or that would be breached or violated by, the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
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(c) Regulatory Approvals. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained or made
by Westrec in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) Brokerage. Westrec has not dealt with, and is not
obligated to make any payment to, any finder, broker, investment banker
or financial advisor in connection with any of the transactions
contemplated by this Agreement or the negotiations looking toward the
consummation of such transactions.
12. Notices. All notices and other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be deemed
given if delivered personally or five days after mailing by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
If to Westrec or Sachs, to:
Westrec Marina Management, Inc.
00000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser, to:
Commercial Assets, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
or at such other address of any party as such party shall specify by written
notice so given, and such notice shall be deemed to have been delivered as of
the date so personally delivered or mailed.
13. Nontransferability. Neither the Put Option nor any interest therein
may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than to an affiliate of Purchaser.
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14. Maintenance of Shares. Purchaser shall not assign, transfer or in
any way dispose of the Shares, or any other security received as a holder of
Shares in any transaction contemplated by Section 8 of this Agreement, other
than to an affiliate of Purchaser and other than to Westrec or its designee
pursuant to this Agreement, except after January 31, 2001 to the extent that the
Put Option and the Call Option are not fully exercised.
15. Shareholder Rights. Unless and until either the Put Option or the
Call Option is exercised fully and the Shares sold to Westrec or its designee
hereunder, Purchaser shall retain all rights as a shareholder of Westrec,
including all voting rights and rights to receive any and all dividends and
other distributions. Purchaser shall be entitled to vote, receive dividends and
be deemed for any purpose the holder of the Shares (or any other securities to
which Purchaser may be entitled, pursuant to Section 8 of this Agreement) until
the Put Option or Call Option shall have been duly exercised, either in whole or
in part, in accordance with the provisions of this Agreement.
16. Governing Law. This Agreement and the Option granted hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of California.
17. Effective Date. This Agreement shall become effective at the time
of the execution hereof.
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IN WITNESS WHEREOF, Westrec, Purchaser and Sachs have duly executed
this Agreement as of the Date of Grant.
WESTREC MARINA MANAGEMENT, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
COMMERCIAL ASSETS, INC.
a Maryland corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
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SCHEDULE A
PUT OPTION EXERCISE SCHEDULE
Put Option
Exercise Date Class A Shares Class B. Shares Total Shares Put Exercise Price
------------- -------------- --------------- ------------ ------------------
Aug. 31, 2000 5,912 1,490 7,402 $47,163.00
Sep. 30, 2000 17,879 4,474 22,371 142,539.00
Oct. 31, 2000 17,758 4,440 22,198 141,437.00
Nov. 30, 2000 17,620 4,405 22,025 140,334.00
Dec. 31, 2000 17,701 4,425 22,126 140,978.00
Jan. 31, 2001 250,375 62,594 312,969 1,994,113.00
-------- -------- -------- ------------
TOTAL 327,245 81,828 409,091 $2,606,564.00
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