1,000,000 Shares
American Marine Recreation, Inc.
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1999
Prime Charter Ltd.,
As representative of the
several Underwriters named
in Schedule A hereto
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
American Marine Recreation, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell 1,000,000 shares (the "Firm Shares") of
its authorized but unissued common stock, par value $.01 per share (the "Common
Stock"), to Prime Charter Ltd. (the "Representative") and the other underwriters
listed on Schedule A to this Agreement (the Representative and the other
underwriters being herein collectively called the "Underwriters"). The Company
also proposes to grant to the Underwriters an option to purchase up to an
aggregate of 150,000 additional shares (the "Over-allotment Shares") of Common
Stock on the terms and conditions set forth in Section 3(c). The Firm Shares and
the Over-allotment Shares are hereinafter collectively referred to as the
"Shares."
The Company wishes to confirm as follows its agreements with the
Underwriters in connection with the several purchases by the Underwriters of the
Shares.
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-1 (File No. 333-62699), including a prospectus relating to the Shares
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and each amendment thereto in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"). There have been delivered to the
Representative signed copies of such registration statement and amendments,
together with copies of each exhibit filed therewith. Copies of such
registration statement and amendments and of the related preliminary prospectus
have been delivered to the Representative in such reasonable quantities as the
Representative has requested for each of the Underwriters. If such registration
statement has not become effective, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the Company
with the Commission. If such registration statement has become effective, a
final prospectus containing all Rule 430A Information (as hereinafter defined)
will be filed by the Company with the Commission in accordance with, and if
required by, Rule 424(b) of the rules and regulations of the Act (the "Rules and
Regulations") on or before the second business day after the date hereof (or
such earlier time as may be required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean
such registration statement (including all exhibits and financial statements) at
the time such registration statement becomes or became effective and, if any
post-effective amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as so amended;
provided, however, that such term shall include all Rule 430A Information deemed
to be included in such registration statement at the time such registration
statement becomes effective as provided by Rule 430A of the Rules and
Regulations and shall also mean any registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations with respect to the Shares. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule 430A
Information. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no
filing pursuant to Rule 424(b) of the Rules and Regulations is required, shall
mean the form of final prospectus included in the Registration Statement at the
time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted to
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be omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A of the Rules and Regulations.
2. Representations and Warranties. The Company hereby represents and
warrants as follows:
(a) The Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of any Preliminary
Prospectus, or the institution of proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Rules and Regulations. When the
Registration Statement became or becomes, as the case may be, effective (the
"Effective Date") and at all times subsequent thereto up to and at the Closing
Date (as hereinafter defined), any later date on which Over-allotment Shares are
to be purchased (the "Over-allotment Closing Date") and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, (i) the Registration
Statement and Prospectus, and any amendments or supplements thereto, will
contain all statements which are required to be stated therein by, and will
comply with the requirements of, the Act and the Rules and Regulations and (ii)
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, will include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading. The foregoing representations and
warranties in this Section 2(a) do not apply to any statements or omissions made
in reliance on and in conformity with the information contained in the section
of the Prospectus entitled "Underwriting." The Company has not distributed any
offering material in connection with the offering or sale of the Shares other
than the Registration Statement, the Preliminary Prospectus, the Prospectus or
any other materials, if any, permitted by the Act.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement.
The Company is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure so to qualify would not have a material adverse effect on the business,
properties, prospects, financial condition or results of operations of the
Company (a "Material Adverse Effect").
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As of the date hereof, the Company has no subsidiaries (as
defined in the Rules and Regulations), other than Boat Tree, Inc., a Florida
corporation ("Boat Tree") and American Marine of South Florida, Inc., a Florida
corporation ("AMSF"), and as of the Effective Date, the Company will have no
subsidiaries other than Boat Tree, AMSF and Marine America, Inc., a Florida
corporation ("Marine America" and, together with Boat Tree and AMSF, the
"Subsidiaries"). Unless the context otherwise requires, all references to the
"Company" in this Agreement shall include the Subsidiaries. The Company does not
own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete and
correct copies of the certificates of incorporation and of the bylaws of the
Company and the Subsidiaries and all amendments thereto have been delivered to
the Representative and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Over-allotment Closing
Date.
Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement. All of the outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable. The Company owns all of the outstanding shares of capital
stock of each of the Subsidiaries. None of the outstanding shares of capital
stock of the Subsidiaries owned by the Company are subject to a lien, security
interest, other encumbrance or adverse claim. No options, warrants or other
rights to purchase, agreements or other obligation to issue or other rights to
convert any obligation into shares of capital stock or ownership interests in
the Subsidiaries are outstanding.
(c) The Company has full power and authority (corporate and
other) to enter into this Agreement and the agreement between the Company and
the Representative relating to issuance of the Representative's Warrants (as
hereinafter defined) (the "Representative's Warrant Agreement"), which is being
executed concurrently herewith, and to perform the transactions contemplated
hereby and thereby to be performed by it. Each of this Agreement and the
Representative's Warrant
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Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement on the part of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable laws or equitable principles
and except as enforcement hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles. The
performance of this Agreement and the Representative's Warrant Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, (i) any indenture, mortgage,
deed of trust, loan agreement, bond, debenture, note agreement or other evidence
of indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which its
properties are bound, (ii) the certificate of incorporation or bylaws of the
Company or any of the Subsidiaries or (iii) any law, order, rule, regulation,
writ, injunction or decree of any court or governmental agency or body to which
the Company or any of the Subsidiaries is subject. The Company is not required
to obtain or make (as the case may be) any consent, approval, authorization,
order, designation or filing by or with any court or regulatory, administrative
or other governmental agency or body as a requirement for the consummation by
the Company of the transactions contemplated by this Agreement or the
Representative's Warrant Agreement, except such as may be required under the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
under state securities or blue sky laws or under the rules and regulations of
the American Stock Exchange, Inc. (the "AMEX").
(d) There is not pending or, to the Company's knowledge,
threatened, any action, suit, claim, proceeding or investigation against the
Company or any of the Subsidiaries or any of their respective officers or any of
their respective properties, assets or rights before any court or governmental
agency or body or otherwise which might result in a Material Adverse Effect or
prevent consummation of the transactions contemplated hereby. There are no
statutes, rules, regulations, agreements, contracts, leases or documents that
are required to be described in the Prospectus, or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations that have
not been accurately described in all material respects in the Prospectus or
filed as exhibits to the Registration Statement.
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(e) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. The authorized and outstanding
capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
(and such description correctly states the substance of the provisions of the
instruments defining the capital stock of the Company). The Shares have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment therefor
in accordance with the terms of this Agreement, will be duly and validly issued
and fully paid and nonassessable. No preemptive right, co-sale right, right of
first refusal or other similar rights of security holders exists with respect to
any of the Shares or the issue and sale thereof other than those that have been
expressly waived prior to the date hereof. Except as set forth in the
Prospectus, no holder of securities of the Company has the right to cause the
Company to include such holder's securities in the Registration Statement.
The Representative's Warrant Agreement and the warrants
issuable pursuant thereto (the "Representative's Warrants") conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus. The shares of Common Stock issuable upon exercise
of the Representative's Warrants (the "Warrant Shares") have been duly
authorized for issuance and sale to the holders of the Representative's Warrants
pursuant to the Representative's Warrant Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the terms
of the Representative's Warrant Agreement, will be duly and validly issued and
fully paid and nonassessable. No further approval or authorization of any
security holder, the Board of Directors or any duly appointed committee thereof
or others is required for the issuance and sale or transfer of the Shares or the
Warrant Shares, except as may be required under the Act, the Exchange Act or
blue sky laws. Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company and the related notes thereto included in
the Prospectus, the Company does not have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
stock option and
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other plans or arrangements, and the options or other rights which may be or
have been granted thereunder, set forth in the Prospectus accurately and fairly
presents, in all material respects, the information required to be shown with
respect to such plans, arrangements, options and rights.
(f) BDO Xxxxxxx, LLP (the "Accountants") who have examined the
financial statements, together with the related schedules and notes, of the
Company and Boat Tree filed with the Commission as a part of the Registration
Statement, which are included in the Prospectus, are independent public
accountants within the meaning of the Act and the Rules and Regulations. The
financial statements of the Company and Boat Tree, together with the related
schedules and notes, forming part of the Registration Statement and the
Prospectus, fairly present the financial position and the results of operations
of the Company and Boat Tree at the respective dates and for the respective
periods to which they apply.
(g) Xxxxxxx Xxxxx Xxxxxxx & Co., P.C. (the "Treasure Coast
Accountants") who have examined the financial statements, together with the
related schedules and notes, of Treasure Coast Boating Center, Inc. ("Treasure
Coast") filed with the Commission as a part of the Registration Statement, which
are included in the Prospectus, are independent public accountants within the
meaning of the Act and the Rules and Regulations. The financial statements of
Treasure Coast, together with the related schedules and notes, forming part of
the Registration Statement and the Prospectus, fairly present the financial
position and the results of operations of Treasure Coast at the respective dates
and for the respective periods to which they apply.
(h) All financial statements, together with the related
schedules and notes, filed with the Commission as part of the Registration
Statement have been prepared in accordance with generally accepted accounting
principles as in effect in the United States consistently applied throughout the
periods involved except as may be otherwise stated in the Registration
Statement. The selected and summary financial and statistical data included in
the Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements presented
therein. No other financial statements or schedules are required by the Act or
the Rules and Regulations to be included in the Registration Statement.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
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Prospectus, there has not been (i) any material adverse change, or any
development which, in the Company's reasonable judgment, is likely to cause a
material adverse change, in the business, prospects, properties or assets
described or referred to in the Registration Statement (including, without
limitation, the business, prospects, properties or assets to be purchased by the
Company pursuant to the Asset Purchase Agreement or the Marine America
Acquisition(as hereinafter defined)), or the results of operations, condition
(financial or otherwise), business or operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to the
Company and the Subsidiaries taken as a whole, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent, which
is material to the Company and the Subsidiaries taken as a whole, incurred by
the Company or any of the Subsidiaries, except obligations incurred in the
ordinary course of business, (iv) any change in the capital stock or outstanding
indebtedness of the Company or any of the Subsidiaries or (v) (except as
specifically described in the Prospectus) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company. Neither the
Company nor any of the Subsidiaries has a material contingent obligation which
is not disclosed in the Registration Statement.
(j) Except as set forth in the Prospectus, (A) the Company and
the Subsidiaries have good and marketable title to all material properties and
assets described in the Prospectus as owned by them, free and clear of any
pledge, lien, security interest, charge, encumbrance, claim, equitable interest
or restriction, (B) the agreements to which the Company or any of the
Subsidiaries is a party described in the Prospectus are valid agreements,
enforceable against the Company or the Subsidiaries, as the case may be, in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles and except as rights to indemnity and contribution
thereunder may be limited by applicable laws or equitable principles, and, to
the Company's knowledge, the other contracting party or parties thereto are not
in material breach or default under any of such agreements and (C) each of the
Company and the Subsidiaries has valid and enforceable leases for the properties
described in the Prospectus as leased by it, and such leases conform in all
material respects to the description thereof, if any, set forth in the
Registration Statement.
(k) The Company and the Subsidiaries now hold and at the
Closing Date and any later Over-allotment Closing Date, as
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the case may be, will hold, all licenses, certificates, approvals and permits
from all state, United States, foreign and other regulatory authorities that are
material to the conduct of the business of the Company (as such business is
currently conducted or proposed to be conducted by the Company), except for such
licenses, certificates, approvals and permits the failure of which to hold would
not have a Material Adverse Effect), all of which are valid and in full force
and effect (and there is no proceeding pending or, to the knowledge of the
Company, threatened which may cause any such license, certificate, approval or
permit to be withdrawn, canceled, suspended or not renewed). Neither the Company
nor any of the Subsidiaries is in violation of its certificate of incorporation
or bylaws, or, except for defaults or violations which would not have a Material
Adverse Effect, in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any contract, indenture, mortgage, loan
agreement, joint venture or other agreement or instrument to which it is a party
or by which it or any of its properties are bound, or in violation of any law,
order, rule, regulation, writ, injunction or decree of any court or governmental
agency or body.
(l) The Company and the Subsidiaries have filed on a timely
basis all necessary federal, state and foreign income, franchise and other tax
returns and have paid all taxes shown thereon as due, and the Company has no
knowledge of any tax deficiency which has been or might be asserted against the
Company or the Subsidiaries which might have a Material Adverse Effect. All
material tax liabilities are adequately provided for within the financial
statements of the Company.
(m) Each of the Company and the Subsidiaries maintains
insurance of the types and in the amounts adequate for its business and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, business interruption insurance and
real and personal property owned or leased against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(n) Neither the Company nor any of the Subsidiaries is
involved in any labor dispute or disturbance or, to the knowledge of the
Company, is any such dispute or disturbance threatened.
(o) The Company and the Subsidiaries own or possess adequate
licenses or other rights to use all patents, trademarks,
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service marks, tradenames, copyrights, trade secrets, know-how, franchises, and
other material intangible property and assets (collectively, "Intellectual
Property") necessary to the conduct of their business as conducted and as
proposed to be conducted as described in the Prospectus. The Company has no
knowledge that it or any of the Subsidiaries lacks or will be unable to obtain
any rights or licenses to use any of the Intellectual Property necessary to
conduct the business now conducted or proposed to be conducted by it as
described in the Prospectus. The Prospectus fairly and accurately describes the
Company's rights with respect to the Intellectual Property. The Company has not
received any notice of infringement or of conflict with rights or claims of
others with respect to any Intellectual Property.
(p) Neither the Company nor any of the Subsidiaries is an
"investment company," or a "promoter" or "principal underwriter" for a
registered investment company, as such terms are defined in the Investment
Company Act of 1940, as amended.
(q) The Company has not incurred any liability for a fee or
commission or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than the underwriting discounts and commissions contemplated hereby.
(r) The Company and the Subsidiaries (i) are in compliance
with any and all applicable United States, foreign, state and local
environmental laws, rules, regulations, treaties, statutes and codes promulgated
by any and all governmental authorities relating to the protection of human
health and safety, the environment or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their business as currently conducted or proposed to be conducted by the Company
and (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permit licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. No action,
proceeding, revocation proceeding, writ, injunction or claim is pending or
threatened relating to the Environmental Laws or to the Company's or the
Subsidiaries' activities involving Hazardous Materials. "Hazardous Materials"
means any material or substance (A) that is prohibited or regulated by any
environmental law, rule, regulation, order, treaty, statute or code promulgated
by any governmental authority, or any amendment or modification thereto or (B)
that has been designated or regulated by any
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governmental authority as radioactive, toxic, hazardous or otherwise a danger to
health, reproduction or the environment.
(s) Neither the Company nor the Subsidiaries have engaged in
the generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or any of the Subsidiaries' properties or
former properties, except where such use, manufacture, transportation or storage
is in compliance with Environmental Laws. No Hazardous Materials have been
treated or disposed of on any of the Company's or any of the Subsidiaries'
properties or on properties formerly owned or leased by the Company or any of
the Subsidiaries during the time of such ownership or lease, except in
compliance with Environmental Laws. No spills, discharges, releases, deposits,
emplacements, leaks or disposal of any Hazardous Materials have occurred on or
under or have emanated from any of the Company's or any of the Subsidiaries'
properties or former properties.
(t) Neither the Company nor the Subsidiaries have at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation of
law or (ii) made any payment to any foreign, United States or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States.
(u) The Shares have been duly authorized for listing on the
AMEX upon notice of issuance. The Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the AMEX, nor has the
Company received any notification that the Commission or the AMEX is
contemplating terminating such registration or listing.
(v) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at any
later Over-allotment Closing Date, neither the Company nor, to its knowledge,
any of its officers, directors or affiliates will have taken, directly or
indirectly, any action which has constituted, or might reasonably be expected to
constitute, the stabilization or manipulation of the price of sale or resale of
the Shares.
(w) The Company has obtained and delivered to the
Representative agreements (the "Lock-Up Agreements") from each of the persons
and entities listed on Schedule B hereto, representing all of the Company's
officers, directors and
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stockholders (or holders of securities convertible into or exchangeable or
exercisable for equity securities of the Company) who own as of the Effective
Date, any shares of outstanding Common Stock, providing that such person or
entity will not, commencing on the date of the Prospectus and continuing for a
12- month period thereafter, without the Representative's prior written consent,
directly or indirectly, offer to sell, sell, pledge, solicit an offer to buy,
contract to sell, grant any option for the sale thereof, or otherwise encumber,
or cause the transfer or disposition of, any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for, Common Stock, or
exercise any registration rights with respect to any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for any shares of
Common Stock.
(x) The Company has not distributed and, prior to the latest
to occur of (i) the Closing Date, (ii) the Over-allotment Closing Date and (iii)
the completion of the distribution of the Shares, will not distribute any
offering material in connection with the offering and sale of the Shares other
than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or other
materials, if any, as permitted by the Act.
(y) The representations and warranties of the Company, AMSF,
Treasure Coast, Treasure Coast Boating Services, Inc. ("TCBS") and D. Xxxxxx
Xxxxx contained in the Asset Purchase Agreement, dated January 22, 1999, as
amended, by and among the Company, Treasure Coast, TCBS, D. Xxxxxx Xxxxx and
AMSF (the "Asset Purchase Agreement") are true, accurate and complete in all
material respects as of the date hereof and all conditions to the consummation
of the Treasure Coast Acquisition (as defined in the Prospectus) have been
satisfied, except for the delivery of the Purchase Price (as defined in the
Asset Purchase Agreement). The Company has caused all necessary and relevant
documents to be placed in escrow and held by an escrow agent pursuant to an
escrow agreement for delivery on the Closing Date (as defined in the Asset
Purchase Agreement) and has granted an irrevocable power of attorney to the
escrow agent to execute all necessary instruments and documents and to perform
all acts necessary to carry out the provisions of the Asset Purchase Agreement.
(z) The representations and warranties of the Company, Xxxxxx
X. Xxxx, Xx. and Xxxxxx Xxxx Xxxx contained in the Exchange Agreement, dated
September 1, 1998, as amended, by and among the Company, Xxxxxx X. Xxxx, Xx. and
Xxxxxx Xxxx Xxxx(the "Exchange Agreement") are true, accurate and complete in
all material respects as of the date hereof and all conditions to the
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consummation of the Marine America Acquisition (as defined in the Prospectus)
have been satisfied, except for the delivery of payment of a promissory note in
the amount of $100,000 payable to Lakewood Marine International, Ltd.
("Lakewood"). The Company has caused all necessary and relevant documents to be
placed in escrow and held by an escrow agent pursuant to an escrow agreement for
delivery on the Closing Date and has granted an irrevocable power of attorney to
the escrow agent to execute all necessary instruments and documents and to
perform all acts necessary to consummate the Marine America Acquisition.
(aa) The Reorganization (as defined in the Prospectus) has
been completed on the terms described in the Prospectus.
3. Purchase of the Shares by the Underwriters.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Firm Shares to the several Underwriters, and each of the
Underwriters agrees to purchase from the Company the respective aggregate number
of Firm Shares set forth opposite its name on Schedule A, plus such additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to Section 3(b) hereof. The price at which such Firm Shares shall be
sold by the Company and purchased by the several Underwriters shall be $_____
per share. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in Section 3(b) and Section 3(c), the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified on Schedule A.
(b) If for any reason one or more of the Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 10 hereof) to
purchase and pay for the number of Shares agreed to be purchased by such
Underwriter or Underwriters, the non-defaulting Underwriters shall have the
right within 24 hours after such default to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between the Representative and such purchasing Underwriter or Underwriters and
upon the terms herein set forth, all or any part of the Shares which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such Shares
and portion, the number of Shares which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis (as adjusted by the Representative in such manner
as
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the Representative deems advisable to avoid fractional shares) to absorb the
remaining shares and portion which the defaulting Underwriter or Underwriters
agreed to purchase; provided, however, that the non-defaulting Underwriters
shall not be obligated to purchase the Shares and portion which the defaulting
Underwriter or Underwriters agreed to purchase if the aggregate number of such
Shares exceeds 10% of the total number of Shares which all Underwriters agreed
to purchase hereunder. If the total number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company shall have
the right, within 24 hours next succeeding the 24-hour period referred to above,
to make arrangements with other underwriters or purchasers reasonably
satisfactory to the Representative for purchase of such Shares and portion on
the terms herein set forth. In any such case, either the Representative or the
Company shall have the right to postpone the Closing Date determined as provided
in Section 5 hereof for not more than seven business days after the date
originally fixed as the Closing Date pursuant to said Section 5 in order that
any necessary changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made. If the aggregate number of Shares which
the defaulting Underwriter or Underwriters agreed to purchase exceeds 10% of the
total number of Shares which all Underwriters agreed to purchase hereunder, and
if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the 24-hour periods stated above for the purchase of all the
Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall be terminated without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this Section 3(b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase all or any portion of the Over-allotment Shares from the Company at the
same price per share as the Underwriters shall pay for the Firm Shares. Such
option may be exercised only to cover Over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time,
or from time to time, on or before the 45th day after the date of the Prospectus
upon written or telegraphic notice by the Representative to the Company setting
14
forth the aggregate number of Over-allotment Shares as to which the Underwriters
are exercising the option. Delivery of certificates for the Over-allotment
Shares, and payment therefor, shall be made as provided in Section 5 hereof.
Each Underwriter shall purchase such percentage of the Over-allotment Shares as
is equal to the percentage of Firm Shares that such Underwriter is purchasing,
the exact number of shares to be adjusted by the Representative in such manner
as the Representative deems advisable to avoid fractional shares.
(d) On the Closing Date, the Company shall issue and deliver
to the Representative, or at the direction of the Representative, to its
designees as provided in the Representative's Warrant Agreement, for a purchase
price of $.001 per Representative's Warrant (an aggregate of $100), the
Representative's Warrants entitling the holder thereof to purchase 100,000
shares of Common Stock on the terms and conditions set forth in the
Representative's Warrant Agreement.
4. Offering by Underwriters.
The terms of the offering of the Shares by the Underwriters
shall be as set forth in the Prospectus.
5. Delivery of and Payment for the Shares and the
Representative's Warrants.
(a) Delivery of certificates for the Firm Shares, the
Over-allotment Shares (if the option granted pursuant to Section 3(c) hereof
shall have been exercised not later than 1:00 p.m., New York City time, on the
date at least two business days preceding the Closing Date) and the
Representative's Warrants, and payment therefor, shall be made at the office of
Proskauer Rose LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 9:00 a.m.,
New York City time, on the fourth business day after the date of this Agreement,
or at such time on such other day, not later than seven full business days after
such fourth business day, as shall be agreed upon in writing by the Company and
the Representative (the "Closing Date").
(b) If the option granted pursuant to Section 3(c) hereof
shall be exercised after 1:00 p.m., New York City time, on the date two business
days preceding the Closing Date, and on or before the 45th day after the date of
this Agreement, delivery of certificates for the Over-allotment Shares, and
payment therefor, shall be made at the office of Proskauer Rose LLP, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 9:00 a.m., New York City time, on the
third business day after the exercise of such option.
15
(c) Payment for the Shares shall be made to the Company (or in
the case of payment under the Asset Purchase Agreement to consummate the
Treasure Coast Acquisition to D. Xxxxxx Xxxxx or in the case of payment of a
$100,000 promissory note to consummate the Marine America Acquisition to
Lakewood), by either a next day funds check or federal funds wire transfer. Such
payment shall be made upon delivery of certificates for the Shares to the
Representative for the respective accounts of the several Underwriters against
receipt therefor signed by the Representative (or, in the case of payment under
the Asset Purchase Agreement and payment to consummate the Marine America
Acquisition, upon delivery by the escrow agent of all the necessary and relevant
documents for the closing of the Asset Purchase Agreement and the Marine America
Acquisition). Certificates for the Shares to be delivered to the Representative
shall be registered in such name or names and shall be in such denominations as
the Representative may request at least three business days before the Closing
Date, in the case of Firm Shares, and at least two business days prior to the
Over-allotment Closing Date, in the case of the Over-allotment Shares. Such
certificates will be made available to the Underwriters for inspection, checking
and packaging at a location in New York, New York, designated by the
Underwriters not less than one full business day prior to the Closing Date or,
in the case of the Over-allotment Shares, by 3:00 p.m., New York City time, on
the business day preceding the Over-allotment Closing Date.
It is understood that the Representative, individually and not
on behalf of the Underwriters, may (but shall not be obligated to) make payment
to the Company for shares to be purchased by any Underwriter whose check shall
not have been received by the Representative on the Closing Date or any later
Over-allotment Closing Date. Any such payment by the Representative shall not
relieve such Underwriter from any of its obligations hereunder.
(d) Payment for the Representative's Warrants shall be made to
the Company or its order, by either a next day funds check or federal funds wire
transfer. Such payment shall be made upon delivery of certificates for the
Representative's Warrants to the Representative against receipt therefor signed
by the Representative. Certificates for the Representative's Warrants to be
delivered to the Representative shall, subject to the terms and provisions of
the Representative's Warrant Agreement, be registered in such name or names as
permitted by the Representative's Warrant Agreement and shall be in such
denominations as the Representative may request at least three business days
before the Closing Date.
16
6. Further Agreements of the Company. The Company covenants and agrees
as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; it will notify the Representative,
promptly after it shall receive notice thereof, of the time when the
Registration Statement or any subsequent amendment to the Registration Statement
has become effective or any supplement to the Prospectus has been filed. If the
Company omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a), the Company will
provide evidence satisfactory to the Representative that the Prospectus contains
such information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission. If for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to the Representative that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed. The Company will notify the Representative promptly of any request
by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information. Promptly upon the
Representative's request, it will prepare and file with the Commission any
amendments or supplements to the Registration Statement or Prospectus which, in
the reasonable opinion of counsel to the Representative, may be necessary or
advisable in connection with the distribution of the Shares by the Underwriters.
The Company will promptly prepare and file with the Commission, and promptly
notify the Representative of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have occurred
as a result of which the Prospectus or any other prospectus relating to the
Shares as then in effect would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. In case
any Underwriter is required to deliver a prospectus within the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of the
17
Shares, the Company will prepare promptly upon request, but at the expense of
such Underwriter, such amendment or amendments to the Registration Statement and
such prospectus or prospectuses as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the Act. The Company will file no
amendment or supplement to the Registration Statement or Prospectus that shall
not previously have been submitted to the Representative a reasonable time prior
to the proposed filing thereof or to which the Representative shall reasonably
object in writing or which is not in compliance with the Act and Rules and
Regulations or the provisions of this Agreement.
(b) The Company will advise the Representative, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the initiation or threat of any
proceeding for that purpose; and it will promptly use its best efforts to
prevent the issuance of any such stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued.
(c) The Company will cooperate with the Representative in
endeavoring to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as the Representative may designate and to continue
such qualifications in effect for so long as may be required for purposes of the
distribution of the Shares, except that the Company shall not be required in
connection therewith or as a condition thereof to qualify as a foreign
corporation, or to execute a general consent to service of process in any
jurisdiction, or to make any undertaking with respect to the conduct of its
business. In each jurisdiction in which the Shares shall have been qualified,
the Company will make and file such statements, reports and other documents in
each year as are or may be reasonably required by the laws of such jurisdictions
so as to continue such qualifications in effect for so long a period as the
Representative may reasonably request for distribution of the Shares, or as
otherwise may be required by law.
(d) The Company will furnish to the Representative, as soon as
available, copies of the Registration Statement (three of which will be signed
and which will include all exhibits), each Preliminary Prospectus, the
Prospectus, and any amendments or supplements to such documents, including any
prospectus prepared to permit compliance with Section 10(a)(3) of the Act, all
in such quantities as the Representative may from time to time reasonably
request.
18
(e) The Company will make generally available to its
stockholders as soon as practicable, but in any event not later than the 45th
day following the end of the fiscal quarter first occurring after the first
anniversary of the Effective Date, an earnings statement (which will be in
reasonable detail but need not be audited) complying with the provisions of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations and covering
a 12-month period beginning after the Effective Date, and will advise the
Representative in writing when such statement has been made available.
(f) During a period of five years after the date hereof, the
Company, as soon as practicable after the end of each respective period, will
furnish to its stockholders annual reports (including financial statements
audited by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the first
three quarters of the fiscal year, and will, upon request, furnish to the
Representative and the other several Underwriters hereunder (i) concurrently
with making such reports available to its stockholders, statements of operations
of the Company for each of the first three quarters in the form made available
to the Company's stockholders; (ii) concurrently with the furnishing thereof to
its stockholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of stockholders' equity and of
cash flow of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent certified
public accountants; (iii) concurrently with the furnishing of such reports to
its stockholders, copies of all reports (financial or other) mailed to
stockholders; (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or automated quotation system by the Company (except for documents for
which confidential treatment is requested); and (v) every material press release
and every material news item or article in respect of the Company or its affairs
which was generally released to stockholders or prepared for general release by
the Company. During such five-year period, if the Company shall have any active
subsidiaries, the foregoing financial statements shall be on a consolidated
basis to the extent that the accounts of the Company are consolidated with any
subsidiaries, and shall be accompanied by similar financial statements for any
significant subsidiary that is not so consolidated.
(g) The Company shall not, during the 12 months following the
Effective Date, except with the Representative's
19
prior written consent, file, or announce an intent to file, a registration
statement covering any of its shares of capital stock, except that one or more
registration statements on Form S-8 may be filed at any time following the
Effective Date covering the 200,000 shares of Common Stock reserved for issuance
to employees or directors of the Company pursuant to the 1998 Stock Option Plan.
(h) The Company shall not, during the 12 months following the
Effective Date, except with the prior written consent of the Representative, in
its individual capacity and not in its capacity as representative of the
Underwriters, issue, sell, offer or agree to sell, grant, distribute or
otherwise dispose of, directly or indirectly, any shares of Common Stock, or any
options, rights or warrants with respect to shares of Common Stock, or any
securities convertible into or exchangeable for Common Stock, other than the
issuance of (i) the Over- allotment Shares, (ii) the Representative's Warrants,
(iii) 200,000 shares of Common Stock reserved for issuance to employees or
directors of the Company pursuant to the 1998 Stock Option Plan and (iv) shares
of Common Stock upon exercise of outstanding options and warrants provided that
such shares are also restricted pursuant to the Lock-up Agreements or the
Existing Lock-up Agreements.
(i) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will maintain a transfer agent and a registrar
(which may be the same entity as the transfer agent) for the Common Stock.
(k) The Company will use its best efforts to maintain listing
of its shares of Common Stock on the AMEX.
(l) The Company is familiar with the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such a
manner so as to ensure that the Company was not and will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(m) The Company will, at the option of the Representative,(i)
during a period of five years from the Effective Date, appoint a designee of the
Representative to the Board of Directors of the Company, and use its best
efforts to
20
nominate and cause to be reelected to the Board of Directors of the Company such
designee or any other designee of the Representative or (ii) during a period of
three years from the Effective Date, permit an agent of the Representative to
attend all meetings of the Board of Directors of the Company as a non-voting
observer. The Company will give such agent or designee notice of all meetings of
the Board of Directors at the same time and in the same manner that directors
are notified and will reimburse such agent for all expenses incurred in
attending such meetings, including, but not limited to food, transportation and
lodging.
(n) During a period of three years from the Effective Date,
the Company and its affiliates, shall grant the Representative, individually and
not as representative of the Underwriters, the right of first refusal to act as
sole underwriter or as agent, as the case may be, with respect to any public or
private offering of the Company's securities, or any secondary offering of the
Company's securities by the principal stockholders of the Company. If during
such three-year period, the Company and the principal stockholders or its
affiliates intends to make any sale of securities, the Company shall notify the
Representative of such intention and of the proposed terms of the sale and shall
thereafter promptly furnish the Representative with information concerning the
operations, business, properties, or assets of the Company as the Representative
may reasonably request. The Company and the principal stockholders shall consult
with the Representative with regard to any such offering and will offer the
Representative exclusively the opportunity to purchase, sell, or act as
underwriter or placement agent for the purchase or sale of any such securities.
If within 20 business days after such notice the Representative does not accept
in writing the offer, the Company shall be free to enter into discussions with
other underwriters or agents with respect to such offering; provided, however,
that such financing is consummated on the identical terms as originally was
proposed to the Representative in the notice. Before the Company shall accept
any proposal less favorable to it than that conveyed to the Representative, the
rights set forth in this Section 6(n) shall be reinstated and the same procedure
as provided above shall be adopted with respect to the modified proposal. In
connection with any public offering, the Representative may include other
persons as underwriters or dealers.
The Company acknowledges that violation of the
Representative's right of first refusal granted under this Section 6(n) would
cause irreparable harm to the Representative and agrees that the Representative
would be entitled to injunctive
21
relief to prevent any violation of this provision without the necessity of
posting a bond. The Company represents and warrants that no other person or
entity has any rights to participate in any offer, sale or distribution of
securities or possesses any pre-emptive or similar rights. The failure of the
Representative to exercise the right of first refusal granted under this Section
6(n) in any particular instance shall not affect in any way such right with
respect to any subsequent offering of securities.
7. Expenses.
The Company agrees with each Underwriter that:
(a) The Company is responsible for and will pay and bear all
costs, fees and expenses relating to the public offering. Such expenses include,
without limitation, all filing fees and other expenses relating to the
registration of the Shares (including the Over-allotment Shares and the
Representative's Warrants) with the Commission and the filing of the offering
materials with the National Association of Securities Dealers, Inc., including
fees and expenses of the Representative's counsel with respect to such filings;
all fees and expenses relating to the listing of the Shares (including the
Over-allotment Shares) on the AMEX (or other national exchange) and such other
stock exchange as may be mutually agreed to by the Company and the
Representative; all fees, expenses and disbursements relating to the
registration or qualification of the Shares under the securities laws of the
states and other jurisdictions as the Representative may reasonably designate
(including, without limitation, all filing and registration fees and fees and
disbursements of the Representative's counsel in connection with such blue sky
matters) and the costs of the roadshow presentation; expenses relative to the
Representative's due diligence investigation upon the closing of the public
offering; the costs of mailing and printing of the underwriting documents
(including the Underwriting Agreement, any blue sky surveys and memoranda and,
if appropriate, any Agreement Among Underwriters, Selected Dealers Agreement,
Underwriter's Questionnaire and Power of Attorney), the Registration Statements
and all amendments, supplements and exhibits thereto and as many preliminary and
final prospectuses as the Representative may reasonably deem necessary; and the
costs of delivering such prospectuses, the costs of preparing, printing and
delivering certificates representing Shares; fees and expenses of the transfer
agent for the Shares; stock transfer taxes, if any, payable upon the transfer of
securities from the Company to the Representative; the fees and expenses of the
Company's accountants and the Company's and the Representative's counsel
22
and the fees and expenses of the Representative's counsel (including fees and
expenses relating to such due diligence investigation, other than blue sky
filing and registration fees payable to applicable blue sky authorities, all of
which shall be paid by the Company) upon the closing of the public offering.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, the Company
will, in addition to paying the expenses described in Section 7(a), reimburse
the several Underwriters for all out-of-pocket expenses (including fees and
disbursements of Underwriters' counsel) incurred by the Underwriters in
reviewing the Registration Statement and the Prospectus and in otherwise
investigating, preparing to market or marketing the Shares.
(c) The Representative, in its individual capacity and not as
representative of the Underwriters, shall also be entitled to a non-accountable
expense allowance equal to 3% of the aggregate offering price of the Shares.
8. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters to purchase and pay for the
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and the Closing Date and any later Over-allotment Closing Date, as the
case may be, of the representations and warranties of the Company herein and to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not
later than 9:00 a.m., New York City time, on the day immediately following the
date of this Agreement, or such later time or date as shall be consented to in
writing by the Representative. If the filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b) and Rule 430A of the
Rules and Regulations, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) and Rule 430A of the Rules and
Regulations. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have
23
been complied with to the reasonable satisfaction of counsel to
the Underwriters.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issue, sale and delivery of the
Shares shall have been reasonably satisfactory to counsel to the Underwriters,
and such counsel shall have been furnished with such papers and information as
they may reasonably have requested to enable them to pass upon the matters
referred to herein.
(c) The Representative shall have received, at no cost to it,
on the Closing Date and on any later Over-allotment Closing Date, as the case
may be, the opinion of XxXxxxxxxx & Xxxxx, LLP, counsel to the Company, dated
the Closing Date or such later Over-allotment Closing Date, in the form attached
hereto as Appendix A, addressed to the Underwriters and with reproduced copies
of signed counterparts thereof for the Representative.
(d) The Representative shall have received from Proskauer Rose
LLP, Underwriters' counsel, an opinion or opinions, dated the Closing Date or on
any later Over-allotment Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Representative, with respect to certain legal
matters as the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as it may have reasonably requested for
the purpose of enabling it to pass upon such matters.
(e) The Representative shall have received on the Effective
Date, Closing Date and on any later Over-allotment Closing Date, as the case may
be, a letter from the Accountants addressed to the Company and the Underwriters,
dated the Effective Date, Closing Date or such later Over-allotment Closing
Date, as the case may be, confirming that it is an independent certified public
accountant with respect to the Company within the meaning of the Act and the
Rules and Regulations thereunder and based upon the procedures described in its
letter delivered to the Representative concurrently with the execution of this
Agreement (herein called the "Original Letter"), but carried out to a date not
more than three days prior to the Closing Date or any such later Over-allotment
Closing Date, as the case may be, (i) confirming that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing Date
or such later Over-allotment Closing Date, as the case may be; and (ii) setting
forth any revisions and additions to the statements
24
and conclusions set forth in the Original Letter that are necessary to reflect
any changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial statements, data
or information. The letter shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company which, in the Representative's reasonable judgment, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In addition, the Representative shall have
received from the Accountants a letter addressed to the Company and made
available to the Representative for the use of the Underwriters stating that its
review of the Company's system of internal accounting controls, to the extent it
deemed necessary in establishing the scope of its latest examination of the
Company's financial statements, did not disclose any weaknesses in internal
controls that it considered to be material weaknesses. All such letters shall be
in a form reasonably satisfactory to the Representative and its counsel.
(f) The Representative shall have received on the Closing Date
and on any later Over-allotment Closing Date, as the case may be, a letter from
the Treasure Coast Accountants addressed to the Company and the Underwriters,
dated the Closing Date or such later Over-allotment Closing Date, as the case
may be, confirming that it is an independent certified public accountant with
respect to Treasure Coast within the meaning of the Act and the Rules and
Regulations thereunder and based upon the procedures described in its letter
delivered to the Representative concurrently with the execution of this
Agreement, but carried out to a date not more than three days prior to the
Closing Date or any such later Over-allotment Closing Date, as the case may be,
(i) confirming that the statements and conclusions set forth in the letter are
accurate as of the Closing Date or such later Over-allotment Closing Date, as
the case may be; and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the letter that are necessary to reflect
any changes in the facts described in the letter since the date of such letter,
or to reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties of
Treasure Coast which, in the Representative's reasonable judgment, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In addition, the Representative shall have
received from the Treasure Coast Accountants a letter addressed to the Company
and made available to the Representative
25
for the use of the Underwriters stating that its review of Treasure Coast's
system of internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of Treasure Coast's financial
statements, did not disclose any weaknesses in internal controls that it
considered to be material weaknesses. All such letters shall be in a form
reasonably satisfactory to the Representative and its counsel.
(g) The Representative shall have received on the Closing Date
and on any later Over-allotment Closing Date, as the case may be, a certificate
of the President and the Chief Financial Officer of the Company, dated the
Closing Date or such later date, to the effect that as of such date (and the
Representative shall be satisfied that as of such date):
(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made on and as of the
Closing Date or any later Over-allotment Closing Date, as the case may be; and
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at or prior to the Closing
Date or any later Over-allotment Closing Date, as the case may be;
(ii) The Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Prospectus has
been issued, and no proceedings for that purpose have been instituted or are
pending or, to the best of their knowledge, threatened under the Act;
(iii) They have carefully reviewed the Registration
Statement, and the Prospectus; and, when the Registration Statement became
effective and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus and any amendments or
supplements thereto contained all statements and information required to be
included therein or necessary to make the statements therein not misleading; and
when the Registration Statement became effective, and at all times subsequent
thereto up to the delivery of such certificate, none of the Registration
Statement, the Prospectus or any amendment or supplement thereto included any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and, since the Effective Date, there has occurred no event required
to be set forth in an amended or supplemented Prospectus that has not been so
set forth; and
26
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been (A) any material adverse change in the properties or assets
described or referred to in the Registration Statement and the Prospectus or in
the condition (financial or otherwise), operations, business or prospects of the
Company (including, without limitation, the business, prospects, properties or
assets to be purchased by the Company pursuant to the Asset Purchase Agreement
or the Marine America Acquisition),(B) any transaction which is material to the
Company and the Subsidiaries, (C) any obligation, direct or contingent, incurred
by the Company, which is material to the Company, except obligations incurred in
the ordinary course of business in accordance with past practices,(D) any change
in the capital stock or outstanding indebtedness of the Company which is
material to the Company or (E) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, in each case, except
as specifically described in the Prospectus.
(h) The Company shall have furnished to the Representative
such further certificates and documents as the Representative shall reasonably
request as to the accuracy of the representations and warranties of the Company
herein, as to the performance by the Company of its obligations hereunder and as
to the other conditions precedent to the obligations of the Underwriters
hereunder.
(i) The Firm Shares and the Over-allotment Shares, if any,
shall have been approved for listing upon notice of issuance on the AMEX.
(j) The consummation of the Treasure Coast Acquisition and the
Marine America Acquisition shall have occurred.
(k) As of the date hereof, the Company will have delivered to
the Underwriters the Lock-Up Letters.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to counsel to the Underwriters. The Company will furnish the Representative with
such number of conformed copies of such opinions, certificates, letters and
documents as the Representative shall reasonably request.
27
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Act from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified parties or any of them may become subject under the Act,
the Exchange Act, the common law or otherwise, and the Company agrees to
reimburse each such Underwriter and controlling person for any legal or other
out-of-pocket expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any 462(b)
registration statement) or any post-effective amendment thereto (including any
462(b) registration statement), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
the Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) or the omission
or alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreements of
the Company contained in this Section 9(a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission is
contained in the section of the Prospectus entitled "Underwriting" or the last
paragraph of text on the cover page of the Prospectus, and (2) the indemnity
agreement contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written confirmation
of the sale of such Shares a copy of the Prospectus (or the Prospectus as
amended or supplemented) was not sent or delivered to such person (excluding any
documents incorporated therein by reference) and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented)
unless the failure is the
28
result of noncompliance by the Company with Section 6(a) hereof. The indemnity
agreements of the Company contained in this Section 9(a) and the representations
and warranties of the Company contained in Section 2 hereof shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of any
payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its executive officers, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Act, the Exchange Act, the common law
or otherwise and to reimburse each of them for any legal or other expenses
including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any 462(b)
registration statement) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that in the cases of clauses (i) and (ii) above,
such statement or omission is contained in the Section of the Prospectus
entitled "Underwriting" or the last paragraph on the cover page of the
Prospectus. The indemnity agreement of each Underwriter contained in this
Section 9(b) shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Shares.
29
(c) Each party indemnified under the provision of Section 9(a)
or (b) agrees that, upon the service of a summons or other initial legal process
upon it in any action or suit instituted against it or upon its receipt of
written notification of the commencement of any investigation or inquiry of, or
proceeding against it, in respect of which indemnity may be sought on account of
any indemnity agreement contained in such paragraphs, it will promptly give
written notice (a "Notice") of such service or notification to the party or
parties from whom indemnification may be sought hereunder. No indemnification
provided for in such Section 9(a) or (b) shall be available to any party who
shall fail so to give the Notice if the party to whom such Notice was not given
was unaware of the action, suit, investigation, inquiry or proceeding to which
the Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or parties of any
such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceeding against, or investigation or inquiry
of, an indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (the "Notice of Defense") to the indemnified party, to assume (alone or
in conjunction with any other indemnifying party or parties) the entire defense
of such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i) if
the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. It is understood that the indemnifying parties shall not,
in respect of the legal defenses of any
30
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all of the Underwriters and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act, and (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under Section 9(a), (b) or (c) for any legal
or other expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear the
legal and other expenses incurred in connection with the conduct of the defense
as referred to in clause (i) of the proviso to the preceding sentence and (B)
the indemnifying party or parties shall bear such other expenses as it or they
have authorized to be incurred by the indemnified party or parties. If, within a
reasonable time after receipt of the Notice, no Notice of Defense has been
given, the indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or (b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
Section 9(a) or (b),(i) in such proportion as is appropriate to reflect the
relative benefits received by each indemnifying party from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
each indemnifying party in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, or
31
actions in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares received
by the Company and the total underwriting discount received by the Underwriters,
as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Shares. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to Section 9(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this Section
9(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities or actions in respect thereof, referred to in the first
sentence of this Section 9(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparation to defend or defense against any action or claim
which is the subject of this Section 9(d). Notwithstanding the provisions of
this Section 9(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 9(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in Section 9(c)).
32
(e) The Company will not, without the prior written consent of
each Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
or any person who controls such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 9 and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 9 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions of
said Section 9, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Shares from any of the several Underwriters.
(a) Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Prime Charter Ltd., 000 Xxxx Xxx. - 00xx
Xxxxx Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xx. Xxxxxx X. Xxxxxx; and if to the
Company, shall be mailed, telegraphed or delivered to it at its office, American
Marine Recreation, Inc., 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxxx X. Xxxx, Xx.
33
(b) Jurisdiction; Venue; Service of Process. Each of the Representative
and the Company (a) agrees that any legal suit, action or proceeding arising out
of or relating to this letter shall be instituted exclusively in New York State
Supreme Court, County of New York or in the United States District Court for the
Southern District of New York, (b) waives any objection to the venue of any such
suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of
the New York State Supreme Court, County of New York, and the United States
District Court for the Southern District of New York, in any such suit, action
or proceeding. Each of the Representative and the Company further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York State Supreme Court, County of
New York, or in the United States District Court for the Southern District of
New York. Each of the Representative and the Company further agrees that service
of process upon it mailed by certified mail to its address shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its respective directors or
officers and (ii) delivery of and payment for the Shares under this Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO RULES GOVERNING THE
CONFLICT OF LAWS.
34
Please sign and return to the Company the enclosed duplicate of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
AMERICAN MARINE RECREATION, INC.
By ______________________________
Xxxxxx X. Xxxx, Xx.
Chairman of the Board
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
PRIME CHARTER LTD.
By ______________________________
Xxxxxx X. Xxxxxx
Managing Director
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
35
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
1. Prime Charter Ltd...........................................................
Total 1,000,000
=========
SCHEDULE B
Lock-up Agreements
------------------
Name
----
1.
APPENDIX A
----------
(i) The Registration Statement has become effective under the
Act and, to such counsel's knowledge after due inquiry, no stop order suspending
the effectiveness of the Registration Statement or suspending or preventing the
use of the Prospectus has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act; any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules and Regulations has been made in the manner and within the time period
required by such Rule 424(b).
(ii) The Registration Statement, all Preliminary Prospectuses,
the Prospectus, and each amendment or supplement thereto (other than the
financial statements, financial data and supporting schedules included therein,
as to which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the applicable Rules and
Regulations and to such counsel's knowledge after due inquiry, there are no
agreements, contracts, leases or documents of a character required to be
described in, or filed as an exhibit to, the Registration Statement which are
not described or filed as required by the Act and the applicable Rules and
Regulations.
(iii) The Company is duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(iv) The Company and the Subsidiaries have full corporate
power and authority to own, lease and operate their properties and to conduct
its business as described in the Registration Statement.
(v) To such counsel's knowledge after due inquiry, other than
the Subsidiaries the Company does not own or control, directly or indirectly,
any shares of stock or any other equity interest in any firm, partnership, joint
venture, association or other entity.
(vi) The Subsidiaries were duly incorporated and are validly
existing as Corporations in good standing under the laws of the State of
Florida. The Company owns all of the issued and outstanding shares of capital
stock of each of the Subsidiaries, free and clear of any security interests,
liens, encumbrances,
A-1
claims or charges, and all of such shares have been duly authorized, validly
issued, fully paid and nonassessable.
(vii) The Company has full corporate power and authority to
enter into the Underwriting Agreement and the Representative's Warrant Agreement
and to issue, sell and deliver the Firm Shares and the Over-allotment Shares in
accordance with the terms of the Underwriting Agreement and the Representative's
Warrants in accordance with the terms of the Representative's Warrant Agreement.
(viii) The Underwriting Agreement and the Representative's
Warrant Agreement have been duly authorized by all necessary corporate action on
the part of the Company, have been duly executed and delivered by the Company
and the Representative's Warrant Agreement is a valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws of general applicability relating to or affecting
creditors' rights or by general principles of equity, whether considered at law
or in equity, and except as rights to indemnity and contribution thereunder may
be limited by federal or state securities laws or the public policies underlying
such laws.
(ix) The execution, delivery and performance of the
Underwriting Agreement and the Representative's Warrant Agreement by the Company
and the consummation of the transactions therein contemplated do not and will
not (a) conflict with or result in a violation or breach of any of the terms or
provisions of, or constitute a default under (i) any material indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument known to such counsel after due inquiry to which the Company or any
of the Subsidiaries is a party or by which its respective properties are bound
(including, without limitation, properties to be purchased by the Company
pursuant to the Asset Purchase Agreement and the Marine America Acquisition),
(ii) the Certificate of Incorporation or Bylaws (or other organizational
documents) of the Company, (iii) any statute, rule or regulation applicable to
the Company or (iv) any applicable license, authorization, approval, permit,
judgment, franchise, order, writ, injunction or decree of any court or
governmental agency or body known to such counsel after due inquiry and to which
the Company is subject.
(x) The Company and the Subsidiaries are not required to
obtain or make any consent, approval, authorization, order,
A-2
designation or declaration of or filing by or with any court or regulatory,
administrative or other governmental agency or body in connection with the
execution and delivery of the Underwriting Agreement or the Representative's
Warrant Agreement by the Company and the consummation of the transactions
therein contemplated except such as have been obtained under the Act and the
Rules and Regulations or such as may be required under state securities laws,
blue sky laws or by the rules and regulations of the AMEX in connection with the
purchase and distribution of the Shares by the Underwriters.
(xi) To such counsel's knowledge after due inquiry, there are
no pending or threatened actions, suits, claims, proceedings or investigations
before any court, regulatory body, administrative agency or any other
governmental agency or body, domestic or foreign against the Company or the
Subsidiaries or any of their respective officers or any of their respective
properties, assets or rights (including, without limitation, the properties or
assets to be purchased by the Company pursuant to the Asset Purchase Agreement
and the Marine America Acquisition) that could reasonably be expected to have a
Material Adverse Effect or would limit, revoke, cancel, suspend, or cause not to
be renewed any existing license, certificate, registration, approval or permit
that is material to the conduct of the business of the Company as presently
conducted, or that is of a character otherwise required to be disclosed in the
Registration Statement or the Prospectus under the Act or the applicable Rules
and Regulations.
(xii) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, of which there are outstanding 998,750 shares
and 1,500,000 shares of Preferred Stock. All the issued and outstanding shares
of Common Stock have been duly authorized and validly issued, are fully paid and
non-assessable, have been issued in compliance with the registration
requirements of applicable federal and state securities laws and were not issued
in violation of any preemptive right, resale right, registration right, right of
first refusal or other similar right known to such counsel.
(xiii) The issuance and sale of the Shares and the
Representative's Warrants have been duly authorized by the Company. Upon
issuance and delivery against payment therefor in accordance with the terms of
the Underwriting Agreement, the Shares will be validly issued, fully paid and
non-assessable, and, to such counsel's knowledge after due inquiry, the
stockholders of the Company do not have any preemptive right, resale right,
registration right, right of first refusal or other
A-3
similar right, in connection with the purchase or sale of any of the Shares.
Shares of Common Stock have been duly and validly authorized and reserved for
issuance upon exercise of the Representative's Warrants and, when issued and
delivered by the Company against payment therefor in the manner set forth in the
Representative's Warrant Agreement, the Warrant Shares will be duly and validly
issued, fully paid, non-assessable and free of preemptive rights. To such
counsel's knowledge after due inquiry, there are no outstanding warrants,
options or other rights granted by the Company to purchase shares of its Common
Stock or other securities, other than as described in the Prospectus.
(xiv) The terms and provisions of the Common Stock conform in
all material respects to the description thereof contained in the Registration
Statement and the Prospectus, and the information in the Prospectus under the
caption "Description of Securities," to the extent that it constitutes matters
of law or legal conclusions, has been reviewed by such counsel and is correct,
and the form of certificate evidencing the Common Stock complies with the
applicable provisions of Delaware law.
(xv) The statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations, including the Delaware
General Corporation Law and the description of the Certificate of Incorporation
and Bylaws of the Company are accurate and fairly and correctly present the
information required to be presented by the Act or the Rules and Regulations in
all material respects; and there are no statutes, rules or regulations required
to be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required.
(xvi) The statements under the captions "Risk Factors - Shares
Eligible for Future Sale; Registration Rights," "Shares Eligible for Future
Sale," "Management - Employment and Consulting Agreements," "Management - Stock
Options," and "Certain Transactions" in the Prospectus, insofar as such
statements constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly and correctly present, in all material
respects, the information called for with respect to such documents and matters.
(xvii) The information required to be set forth in the
Registration Statement in answer to Item 509 of Regulation S-K insofar as it
relates to such counsel is accurately and adequately set forth therein in all
material respects or no response is required with respect to such Item.
A-4
(xviii) The Company is not in violation of its Certificate of
Incorporation or Bylaws, and to such counsel's knowledge after due inquiry, the
Company is not in breach of or in default with respect to any provision of any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument known to such counsel after due inquiry, by which it or any
of its properties may be bound or affected.
(xix) To such counsel's knowledge after due inquiry, except as
set forth in the Registration Statement and Prospectus, no holders of shares of
Common Stock or other securities of the Company have registration rights with
respect to securities of the Company.
(xx) No transfer taxes are required to be paid in connection
with the sale or delivery to the Underwriters of the Firm Shares or the
Over-allotment Shares.
(xxi) The Company is not and will not, upon consummation of
the transactions contemplated by the Underwriting Agreement, be an "investment
company," or a "promoter" or "principal underwriter" for, a "registered
investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(xxii) The Shares have been approved for listing on the AMEX,
subject to official notice of issuance.
(xxiii) The Reorganization, the Treasure Coast Acquisition,
the Marine America Acquisition and the capitalization of the Company have been
duly and validly consummated under the terms set forth in the Prospectus. The
Company is not required to obtain or make, as the case may be, any consent,
approval, authorization, order, designation or declaration of or filing by or
with any court or regulatory, administrative or other governmental agency or
body as a requirement for the consummation by the Company of the Reorganization,
the Treasure Coast Acquisition, the Marine America Acquisition and the
capitalization of the Company.
(xxiv) Counsel for the Company have participated in
conferences with officials and other representatives of the Company, the
Representative, counsel for the Representative and the independent public
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed,
and although such counsel have not verified the accuracy or completeness of the
statements contained in the Registration Statement or the
A-5
Prospectus, nothing has come to the attention of such counsel which caused them
to believe that, at the time the Registration Statement became effective the
Registration Statement (except as to financial statements, financial and
statistical data and supporting schedules contained therein, as to which such
counsel need express no opinion) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or at the Closing Date
or any later Over-allotment Closing Date, as the case may be, the Registration
Statement or the Prospectus (except as aforesaid) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
fact upon representations or certificates of officers of the Company and of
governmental officials, as the case may be, in which case its opinion is to
state that it is so doing and that it has no actual knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificates,
and that such counsel believes that it and the Underwriters are justified in
relying on such opinions, representations or certificates. Copies of any
opinion, representation or certificate so relied upon shall be delivered to the
Representative, and to the Representative's counsel.
A-6
