STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into on
October 30, 2013, by and between Brownie’s Marine Group, Inc., a Nevada
corporation (the “Company”) and Mikkel Pitzner (“Optionee”).

 

RECITALS

 

WHEREAS, the Company has agreed to issue options to purchase shares of common
stock of the Company to Optionee pursuant to that certain Loan Agreement dated
even herewith (the “Loan Agreement”).

 

NOW, THEREFORE, in consideration of the foregoing provisions, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

 

1. Grant of Option. The Company hereby grants, bargains, sells, conveys and
delivers unto Optionee an option (the “Option”) to purchase One Million Eight
Hundred Two Thousand Five Hundred Sixty-Five (1,802,565) shares of the Company’s
common stock (the “Option Shares”), exercisable at the time and in the manner
set forth below.

 

1.1. Option Price. The price that Optionee shall pay for the Option Shares in
the exercise of the Option shall be One Cent ($0.01) per share (the “Option
Price”), as adjusted.

 

1.2. Option Period. The Option may be exercised at any time and from time to
time commencing on the effective date of the Loan Agreement and ending two (2)
years from the date hereof (the “Option Period”).

 

1.3. Vesting of Option. This right to purchase the Option Shares is immediately
vested.

 

1.4. Exercise of Option. The Option to acquire the Option Shares may be
exercised by Optionee during the Option Period by delivery to the Company of the
Option Price in certified or good funds or other funds as accepted by the
Company, along with a written notice, substantially in the Exercise Form
attached hereto, indicating that Optionee is electing to exercise the Option to
acquire the Option Shares. This Option may also be exercised at such time by
means of a “cashless exercise” in which the Optionee shall be entitled to
receive a certificate for the number of Option Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the closing price on the trading day immediately preceding the date of
such election;

 

(B) = the Option Price of the Options as adjusted; and

 

(X) = the number of Option Shares issuable upon exercise of the Option in
accordance with the terms of this Option.

 

 

 

 

2. Termination of Option. To the extent not exercised, the Option shall
terminate upon the end of the Option Period.

 

3. Securities Laws. The Option and the Option Shares have not been registered
under the Securities Act of 1933, as amended (the “Act”). The Company has no
obligations to ever register the Option or the Option Shares. All shares of
common stock acquired upon the exercise of the Option shall be “restricted
securities” as that term is defined in Rule 144 promulgated under the Act. The
certificate representing the shares shall bear an appropriate legend restricting
their transfer. Such shares cannot be sold, transferred, assigned or otherwise
hypothecated without registration under the Act or unless a valid exemption from
registration is then available under applicable federal and state securities
laws and the Company has been furnished with an opinion of counsel satisfactory
in form and substance to the Company that such registration is not required.

 

4. Reclassification, Consolidation or Merger. If and to the extent that the
number of issued common shares of the Company shall be increased or reduced by a
change in par value, combination, subdivision, reclassification, distribution of
a dividend payable in shares, or the like, the number of shares subject to
Option and the Option Price for them shall be proportionately adjusted. If the
Company is reorganized or consolidated or merged with another corporation,
Optionee shall be entitled to receive options covering shares of such
reorganized, consolidated or merged company in the same proportion at an
equivalent price, and subject to the same conditions. The new Option or
assumption of the old Option shall not give Optionee additional benefits, which
he did not have under the old Option.

 

5. Rights Prior to Exercise of Option. The Option is nontransferable by Optionee
without prior consent of the Company, and during Optionee’s lifetime is
exercisable only by Optionee. In the event of Optionee’s death, his personal
representative may exercise the Option as to any Option Shares not previously
exercised during his lifetime until the end of the Option Period. Optionee shall
have no rights as a shareholder in the Option Shares until payment of the Option
Price and delivery to him of such shares as herein provided.

 

6. Consultation With Counsel. The Optionee has consulted with such independent
legal counsel or other advisory he deems appropriate to assist him in the
consummation of this Agreement.

 

7. Notices. All notices, waivers, demands and instructions given in connection
with this Agreement shall be made in writing, with a copy to each party, and
shall be deemed to have been duly given and delivered (a) five (5) days after
posting if mailed by U.S. Mail, certified or registered, return receipt
requested, postage prepaid, or (b) upon receipt if sent by overnight courier
maintaining records of receipt by addresses, by hand or by telecopy, with the
original notice being sent the same day by one of the foregoing methods,
addressed provided under the Loan Agreement (or to such other address as a party
may from time to time designate by notice to all other parties as aforesaid).

 

8. Further Assurances. Each of the parties hereto shall execute such other
instruments, documents and papers and shall take such further actions, as may be
reasonably required or appropriate to carry out the provisions hereof.

 

2

 

 

9. Entire Agreement. This Agreement constitutes the full and complete
understanding of the parties with respect to its subject matter, is an exclusive
statement of the terms and conditions of their agreement in relation hereto, and
supersedes all prior negotiations, understandings and agreements, whether
written or oral, between the parties with respect hereto.

 

10. Governing Law. This Agreement shall be governed by, construed under, and
enforced in accordance with the laws of the State of Florida without regard to
any conflict-of-laws provisions to the contrary. All questions concerning the
construction, validity, enforcement and interpretation of this Option shall be
determined in accordance with the provisions of the Loan Agreement.

 

11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when taken together
shall constitute one and the same instrument.

 

12. Effectiveness. This Agreement shall be deemed effective upon the Effective
Date of the Loan Agreement (as defined therein).

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

THE COMPANY:

 

BROWNIE’S MARINE GROUP, INC.

 

By:  /s/ROBERT CARMICHAEL

Name:  Robert Carmichael

Its:   Chief Executive Officer

 

OPTIONEE:

 

/s/MIKKEL PITZNER

Mikkel Pitzner

 

3

 

 

 

EXERCISE FORM

 

Brownie’s Marine Group, Inc.

940 N.W. 1st Street

Fort Lauderdale, Florida 33311

 

The undersigned, pursuant to the provisions set forth in the attached Option,
hereby irrevocably elects to purchase (check applicable box):

 

o __________ shares of the Common Stock covered by such Option; or

 

othe maximum number of shares of Common Stock covered by such Option pursuant to
the cashless exercise procedure set forth in the Option.

 

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Option, which is $_________.
Such payment takes the form of (check applicable box or boxes):

 

o$___________ in lawful money of the United States; and/or

 

othe cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 1.4 to exercise this Option
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 1.4.

 

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to ___________________________________________, whose
address is _______________________________________________.

 

The undersigned requests and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Option shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”) or pursuant to an exemption from
registration under the Securities Act.

 

Dated:                 (Signature must conform to name of holder as        
Specified on the face of the Option)                                      
(Address)