STOCK OPTION AGREEMENT
THIS
STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into on this March
3, 2009, by and between Brownie’s Marine Group, Inc., a Nevada corporation (the
“Company”), and Xxxxxx Xxxxxxxxxx (“Optionee”).
RECITALS
WHEREAS, the Company has
agreed to issue options to purchase shares of common stock of the Company to
Optionee pursuant to that certain Asset Purchase Agreement dated even
herewith.
NOW, THEREFORE, in
consideration of the foregoing provisions, the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Grant of
Option. The Company
hereby grants, bargains, sells, conveys and delivers unto Optionee an option
(the “Option”) to purchase 315,000 shares of the Company’s common stock (the
“Option Shares”), exercisable at the time and in the manner set forth
below.
1.1. Option
Price. The price that
Optionee shall pay for the Option Shares in the exercise of the Option shall be
One Dollar ($1.00) per share (the “Option Price”).
1.2. Option
Period. The Option may be
exercised at any time and from time to time commencing on the date hereof and
ending ten (10) years from the date hereof (the “Option Period”).
1.3. Vesting
of Option. This right to purchase the Option Shares is
immediately vested.
1.4. Exercise
of Option. The Option to
acquire the Option Shares may be exercised by Optionee during the Option Period
by delivery to the Company of the Option Price in certified or good funds or
other funds as accepted by the Company, along with a written notice,
substantially in the form attached hereto as Exhibit A, indicating that Optionee
is electing to exercise the Option to acquire the Option Shares. This Option may
also be exercised at such time by means of a “cashless exercise” in which the
Optionee shall be entitled to receive a certificate for the number of Option
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
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(A) =
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the
closing price on the trading day immediately preceding the date of such
election;
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(B) =
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the
Option Price of the Options as adjusted; and
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(X) =
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the
number of Option Shares issuable upon exercise of the Option in accordance
with the terms of this
Option.
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2. Termination
of Option. To the extent not exercised, the Option shall
terminate upon the end of the Option Period.
3. Securities
Laws. The Option and
the Option Shares have not been registered under the Securities Act of 1933, as
amended (the “Act”). The Company has no obligations to ever register
the Option or the Option Shares. All shares of common stock acquired
upon the exercise of the Option shall be “restricted securities” as that term is
defined in Rule 144 promulgated under the Act. The certificate representing the
shares shall bear an appropriate legend restricting their
transfer. Such shares cannot be sold, transferred, assigned or
otherwise hypothecated without registration under the Act or unless a valid
exemption from registration is then available under applicable federal and state
securities laws and the Company has been furnished with an opinion of counsel
satisfactory in form and substance to the Company that such registration is not
required.
4. Reclassification,
Consolidation or Merger. If and to the
extent that the number of issued common shares of the Company shall be increased
or reduced by a change in par value, combination, subdivision, reclassification,
distribution of a dividend payable in shares, or the like, the number of shares
subject to Option and the Option Price for them shall be proportionately
adjusted. If the Company is reorganized or consolidated or merged
with another corporation, Optionee shall be entitled to receive options covering
shares of such reorganized, consolidated or merged company in the same
proportion at an equivalent price, and subject to the same
conditions. The new Option or assumption of the old Option shall not
give Optionee additional benefits, which he did not have under the old
Option.
5. Rights
Prior to Exercise of Option. The Option is
nontransferable by Optionee without prior consent of the Company, and during
Optionee’s lifetime is exercisable only by Optionee. In the event of Optionee’s
death, his personal representative may exercise the Option as to any Option
Shares not previously exercised during his lifetime until the end of the Option
Period. Optionee shall have no rights as a shareholder in the Option
Shares until payment of the Option Price and delivery to him of such shares as
herein provided.
6. Consultation
With Counsel. The Optionee has
consulted with such independent legal counsel or other advisory he deems
appropriate to assist him in the consummation of this Agreement.
7. Notices. All notices,
waivers, demands and instructions given in connection with this Agreement shall
be made in writing, with a copy to each party, and shall be deemed to have been
duly given and delivered (a) five (5) days after posting if mailed by U.S. Mail,
certified or registered, return receipt requested, postage prepaid, or (b) upon
receipt if sent by overnight courier maintaining records of receipt by
addresses, by hand or by telecopy, with the original notice being sent the same
day by one of the foregoing methods, addressed as first above written (or to
such other address as a party may from time to time designate by notice to all
other parties as aforesaid).
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8. Further
Assurances. Each of the
parties hereto shall execute such other instruments, documents and papers and
shall take such further actions, as may be reasonably required or appropriate to
carry out the provisions hereof.
9. Entire
Agreement. This Agreement
constitutes the full and complete understanding of the parties with respect to
its subject matter, is an exclusive statement of the terms and conditions of
their agreement in relation hereto, and supersedes all prior negotiations,
understandings and agreements, whether written or oral, between the parties with
respect hereto.
10. Governing
Law. This Agreement
shall be governed by, construed under, and enforced in accordance with the laws
of the State of Nevada without regard to any conflict-of-laws provisions to the
contrary.
11. Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, and all of which, when taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.
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THE
COMPANY:
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BROWNIE’S
MARINE GROUP, INC.
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By:
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/s/Xxxxxx X. Xxxxxxxxxx
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Name:
Xxxxxx X. Xxxxxxxxxx
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Its:
Chief Executive Officer
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OPTIONEE:
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/s/Xxxxxx X. Xxxxxxxxxx
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Xxxxxx
Xxxxxxxxxx
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EXHIBIT
A
NOTICE
OF EXERCISE
The
undersigned hereby elects to exercise the within Option to the extent of
purchasing ____________ shares of Common Stock of Brownie’s Marine Group, Inc.,
a Nevada corporation, and hereby makes payments of $_________ in payment
therefore.
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Signature
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Date
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INSTRUCTIONS FOR ISSUANCE OF
STOCK
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Name:
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(Please
type or print in block
letters.)
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Address:
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Social Security Number:
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