<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 12, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MARINEMAX, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 5551 59-3496957
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
WILLIAM H. MCGILL JR.,
CHAIRMAN OF THE BOARD
18167 U.S. 19 NORTH, SUITE 499
CLEARWATER, FLORIDA 33764
(813) 531-1700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Copies to:
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<S> <C>
ROBERT S. KANT, ESQ. STEPHEN P. FARRELL, ESQ.
MICHELLE S. MONSEREZ, ESQ. CHRISTOPHER T. JENSEN, ESQ.
O'CONNOR, CAVANAGH, ANDERSON, MORGAN, LEWIS & BOCKIUS LLP
KILLINGSWORTH & BESHEARS, P.A. 101 PARK AVENUE
ONE EAST CAMELBACK NEW YORK, NEW YORK 10178
PHOENIX, ARIZONA 85012-1656 (212) 309-6000
(602) 263-2400
</TABLE>
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S AGENT FOR SERVICE)
------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
If any of the securities being registered in this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
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<S> <C> <C>
TITLE OF EACH CLASS OF SECURITIES TO BE PROPOSED MAXIMUM AGGREGATE
REGISTERED OFFERING PRICE(1) AMOUNT OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
Common Stock, par value $.001(2)................. $77,625,000 $22,899.38
=========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(2) Includes shares of Common Stock subject to the Underwriters'
over-allotment option.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
Exhibit Index is located on page . Page 1 of pages.
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 12, 1998
PROSPECTUS
SHARES
[MARINEMAX LOGO]
COMMON STOCK
------------------
All of the shares of common stock, par value $.001 per share (the "Common
Stock"), offered hereby are being sold by MarineMax, Inc. (the "Company"). Prior
to this offering, there has not been a public market for the Common Stock of the
Company. It is currently estimated that the initial public offering price per
share will be between and . See "Underwriting" for
information relating to the factors to be considered in determining the initial
public offering price. Application has been made to list the Common Stock on the
New York Stock Exchange under the symbol "HZO."
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN RISK
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<CAPTION>
=============================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- -------------------------------------------------------------------------------------------------------------
Total(3) $ $ $
=============================================================================================================
</TABLE>
(1) For information regarding indemnification of the several Underwriters,
see "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $ .
(3) The Company has granted the Underwriters a 30-day option to purchase up
to additional shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised
in full, the total Price to Public, Underwriting Discounts and
Commissions, and Proceeds to Company will be $ , $ , and
$ , respectively.
------------------
The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
, 1998 at the office of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001.
------------------
SALOMON SMITH BARNEY WILLIAM BLAIR & COMPANY
March , 1998
<PAGE> 3
[GRAPHICS -- GATEFOLD, SHOWING PRODUCT OFFERINGS, RETAIL FACILITIES, AND MAP
SHOWING LOCATIONS]
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS, AND THE IMPOSITION
OF PENALTY BIDS. FOR A DISCUSSION OF THESE ACTIVITIES, SEE "UNDERWRITING."
THIS PROSPECTUS INCLUDES TRADEMARKS OF COMPANIES OTHER THAN MARINEMAX.
THESE TRADEMARKS ARE THE PROPERTY OF THEIR HOLDERS.
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless the
context otherwise requires, all references to "MarineMax" mean MarineMax, Inc.
prior to the effectiveness of the Mergers and Property Acquisitions
(collectively, the "Combination Transactions"), and all references to the
"Company" mean, as a combined company, MarineMax, Inc., the five recreational
boat dealers (the "Merged Companies") recently acquired by MarineMax in separate
merger transactions (the "Mergers"), and the property companies (the "Property
Companies") recently acquired by MarineMax in separate contribution transactions
(the "Property Acquisitions") and which own real properties used in the
operations of the Merged Companies. Unless otherwise indicated, the information
set forth herein assumes no exercise of the Underwriters' over-allotment option,
and all industry statistics referenced herein are derived from data published by
the National Marine Manufacturers' Association (the "NMMA").
THE COMPANY
MarineMax is the largest recreational boat dealer in the United States.
Through 24 retail locations in Florida, Texas, California, and Arizona, the
Company sells new and used recreational boats, including pleasure boats (such as
sport boats, sport cruisers, sport yachts, and yachts), fishing boats, bass
boats, pontoon boats, and high-performance boats, with a focus on premium brands
in each segment. The Company also sells related marine products, including
engines, trailers, parts, and accessories. In addition, the Company arranges
related boat financing, insurance, and extended service contracts, provides
repair and maintenance services, and offers boat brokerage services. The Company
is the nation's largest retailer of Sea Ray, Boston Whaler, and other boats
manufactured by Brunswick Corporation ("Brunswick"), which is the world's
largest manufacturer of recreational boats. Sales of new Brunswick boats
accounted for 84% of the Company's new boat sales in calendar 1997, which the
Company believes represented approximately 20% of all new Sea Ray boat sales and
approximately 5% of all Brunswick marine product sales during that period. In
March 1998, the Company acquired the Merged Companies and the Property Companies
in the Combination Transactions. See "Formation of the Company." For the 12
months ended December 31, 1997, the Company had pro forma revenue of
$233,779,000, pro forma operating income of $22,744,000, and pro forma net
income of $13,561,000 (assuming the acquisition of Stovall Marine as described
herein and other adjustments had occurred as of January 1, 1997). See "Summary
Consolidated Financial Data." The Company's same-store sales increased by
approximately 19% in calendar 1997, following 16% and 15% increases in calendar
1996 and 1995, respectively.
The combination of the five Merged Companies permits the Company to
capitalize on the experience and success of each of the Merged Companies in
order to establish a new national standard of customer service and
responsiveness in the highly fragmented retail boating industry. The Merged
Companies were organized between 1971 and 1983, and each is the exclusive dealer
of Sea Ray boats in its geographic market and ranks in the top 15 Sea Ray
dealers in the United States. While the average new boat retailer generates less
than $3 million in annual sales, the retail locations of the Merged Companies
averaged $10 million in annual sales in 1997. As a result of the Company's
emphasis on premium brand boats, the Company's average selling price for a new
boat in 1997 was approximately $39,000 compared to the industry average selling
price of approximately $14,000. The senior executives of the Merged Companies
have an average of 21 years of experience in the recreational boat industry and
have maintained long-term business and personal relationships with each other.
The Company is adopting the best practices of the Merged Companies as
appropriate to enhance its ability to attract more customers, foster an overall
enjoyable boating experience, and offer boat manufacturers stable and
professional retail distribution. The Company believes that its prime retail
locations, extensive facilities, full range of services, MarineMax Value-Price
sales approach, and emphasis on customer service and satisfaction before and
after a boat sale are competitive advantages and enable it to be more responsive
to the needs of existing and prospective customers.
The recreational boating industry generated approximately $17.8 billion in
retail sales in 1996, including sales of new and used boats; marine products,
such as engines, trailers, equipment, and accessories; and related
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<PAGE> 5
expenditures, such as fuel, insurance, docking, storage, and repairs. Retail
sales of new boats, engines, and trailers accounted for approximately $9.2
billion of such sales in 1996. The boat retailing industry includes more than
4,000 boat retailers, most of which are small retailers that operate in a single
market and provide varying degrees of merchandising, professional management,
and customer service. Many dealers are finding it increasingly difficult to make
the managerial and capital commitments necessary to achieve higher customer
service levels and upgrade systems and facilities as required by boat
manufacturers, particularly during a period of stagnant industry growth. Many
dealers also lack an exit strategy for their owners.
STRATEGY
The Company's goal is to enhance its position as the leading operator of
recreational boat dealerships. Key elements of the Company's operating and
growth strategies include the following:
Operating Strategies
Implementing Best Practices. The Company is implementing the "best
practices" of each of the Merged Companies as appropriate throughout its
dealerships. In particular, the Company is phasing in throughout its dealerships
the MarineMax Value-Price sales approach, recently implemented at certain of its
dealerships. Under the MarineMax Value-Price approach, the Company sells its
boats at posted prices, generally representing a discount from the
manufacturer's suggested retail price, without further price negotiation,
thereby eliminating the anxieties of price negotiations that occur in most boat
purchases. The Company also generally includes two years of free boat
maintenance, as recommended in the manufacturer's maintenance guidelines, to
eliminate boat maintenance concerns from the customer's boating experience. In
addition, the Company will adopt, where beneficial, the best practices of each
Merged Company in terms of location design and layout, product purchases,
maintenance and repair services (including extended service hours and mobile or
dockside services), product mix, employee training, and customer education and
services.
Achieving Operating Efficiencies and Synergies. The Company plans to
increase the operating efficiencies of and achieve certain synergies among its
dealerships in order to enhance internal growth and profitability. The Company
is centralizing certain administrative functions at the corporate level, such as
accounting, finance, insurance coverage, employee benefits, marketing, strategic
planning, legal support, purchasing and distribution, and management information
systems. Centralization of these functions should reduce duplicative expenses
and permit the dealerships to benefit from a level of scale and expertise that
would otherwise be unavailable to each dealership individually. The Company
expects to realize cost savings from reduced inventory carrying costs as a
result of purchasing boat inventories on a national level and directing boats to
dealership locations that can more readily sell such boats; lower financing
costs through new floor plan credit facilities; and volume purchase discounts
and rebates for certain marine products, supplies, and advertising.
Emphasizing Customer Satisfaction and Loyalty. The Company seeks to
achieve a high level of customer satisfaction and establish long-term customer
loyalty by creating an overall enjoyable boating experience beginning with the
negotiation-free purchase process. The Company further enhances and simplifies
the purchase process by offering financing and insurance at its retail locations
with competitive terms and streamlined turnaround. The Company provides the
customer with a thorough in-water orientation of boat operation as well as
ongoing boat safety, maintenance, and use seminars and demonstrations for the
customer's entire family. The Company continues its customer service after the
sale by leading and sponsoring Getaways! group boating trips to various
destinations, rendezvous gatherings, and on-the-water organized events to
provide its customers with pre-arranged opportunities to enjoy the pleasures of
the boating lifestyle. The Company also endeavors to provide superior
maintenance and repair services, often at the customer's wet slip and with
extended service department hours, to minimize the hassles of boat maintenance.
Operating with Decentralized Management. The Company has adopted a
decentralized approach to the operational management of its dealerships. The
decentralized management approach takes advantage of the extensive experience of
local managers, enabling them to implement policies and make decisions,
including the appropriate product mix, based on the needs of the local market.
Local management authority also fosters
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<PAGE> 6
responsive customer service and promotes long-term community and customer
relationships. In addition, the centralization of certain administrative
functions at the corporate level enhances the ability of local managers to focus
their efforts on day-to-day dealership operations.
Utilizing Technology Throughout Operations. The Company believes that its
management information system, which was being utilized by each Merged Company
prior to the Mergers and was developed over the past six years through
cooperative efforts with a common vendor, enhances the Company's ability to
integrate successfully the operations of the Merged Companies and future
acquired dealers. The system facilitates the interchange of information and
enhances cross-selling opportunities throughout the Company. The system
integrates each level of operations on a Company-wide basis, including
purchasing, inventory, receivables, financial reporting and budgeting, and sales
management. The system also enables management to monitor each retail location's
operations on a daily basis in order to identify quickly areas requiring
additional focus.
Growth Strategies
Pursuing Strategic Acquisitions. The Company intends to capitalize upon
the significant consolidation opportunities available in the highly fragmented
recreational boat dealer industry by acquiring additional dealers and improving
their performance and profitability through the implementation of the Company's
operating strategies. The primary acquisition focus will be on well-established,
high-end recreational boat dealers in geographic markets not currently served by
the Company, particularly geographic markets with strong boating demographics,
such as the coastal states and the Great Lakes region. The Company also may seek
to acquire boat dealers that, while located in attractive geographic markets,
have not been able to realize favorable market share or profitability and that
can benefit substantially from the Company's systems and operating strategies.
The Company may expand its range of product lines and its market penetration by
acquiring dealers that distribute recreational boat product lines different from
those currently offered by the Company. The Company believes it will be regarded
as an attractive acquiror by boat dealers because of (i) the Company's
historical performance and the experience and reputation of its management team
within the industry; (ii) the Company's decentralized operating strategy, which
enables the managers of an acquired dealer to continue their involvement in
dealership operations; (iii) the ability of management and employees of an
acquired dealer to participate in the Company's growth and expansion through
potential stock ownership and career advancement opportunities; and (iv) the
ability to offer liquidity to the owners of acquired dealers through the receipt
of Common Stock or cash.
Opening New Facilities. The Company intends to establish additional retail
facilities in its existing and new territories. The Company believes that the
demographics of its existing geographic territories support the opening of
additional facilities and has opened two new retail locations since the
Combination Transactions occurred in March 1998. The Company also plans to reach
new customers by expanding various innovative retail formats developed by the
Merged Companies, such as mall stores and floating retail facilities. The
Company currently operates one mall store and four floating retail facilities,
and plans to open a new mall store in 1998.
Offering Additional Product Lines and Services. The Company plans to offer
throughout its existing and acquired dealerships product lines that have been
offered only at certain of its locations. The Company also may obtain additional
product lines through the acquisition of distribution rights directly from
manufacturers and the acquisition of dealerships with distribution rights. In
addition, the Company plans to increase its used boat sales and boat brokerage
services through an increased emphasis on these activities, cooperative efforts
among its dealerships, and advertising on the Company's Internet home page. The
Company also plans to offer enhanced financing and insurance packages designed
to better serve customers and thereby increase sales and improve profitability.
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THE OFFERING
Common Stock offered by the
Company.................. shares
Common Stock to be
outstanding after the
Offering................. shares(1)(2)
Use of proceeds............ To pay the amounts owing to Brunswick, to repay
indebtedness, and to provide working capital and
funds for future acquisitions. See "Use of
Proceeds."
Proposed New York Stock
Exchange symbol.......... HZO
- ---------------
(1) Assumes the Underwriters' over-allotment option is not exercised. See
"Underwriting." Includes approximately 455,000 shares of Common Stock
expected to be issued in connection with the acquisition of Stovall Marine,
Inc. ("Stovall") through a merger transaction (the "Stovall Acquisition") as
contemplated by a letter of intent between the Company and Stovall. See
"Formation of the Company -- Probable Acquisition of Stovall Marine, Inc."
(2) Does not include (a) shares of Common Stock intended to be
reserved for issuance under the Company's 1998 Incentive Stock Plan, or (b)
shares of Common Stock intended to be reserved for issuance under
the Company's 1998 Employee Stock Purchase Plan. See "Management -- 1998
Incentive Stock Plan" and "Management -- Employee Stock Purchase Plan."
RISK FACTORS
See "Risk Factors" for a description of certain risks to be considered
before making an investment in the Common Stock.
6
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
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<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- -----------------------------------
PRO FORMA(1)
AS ADJUSTED
1993 1994 1995 1996 1996 1997 1997
-------- -------- -------- -------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue............... $111,543 $127,729 $152,889 $175,060 $136,325 $169,675 $188,419
Cost of sales......... 86,798 98,295 116,896 132,641 101,993 127,418 141,287
-------- -------- -------- -------- -------- -------- --------
Gross profit.......... 24,745 29,434 35,993 42,419 34,332 42,257 47,132
Selling, general, and
administrative
expenses............ 19,298 22,665 28,137 34,174 21,829 25,426 24,736
-------- -------- -------- -------- -------- -------- --------
Income from
operations.......... 5,447 6,769 7,856 8,245 12,503 16,831 22,396
Interest expense,
net................. (1,187) (484) (1,035) (1,350) (1,068) (1,538) (510)
-------- -------- -------- -------- -------- -------- --------
Income before tax
provision........... 4,260 6,285 6,821 6,895 11,435 15,293 21,886
Income tax provision
(benefit)........... 1 1 (49) 21 527 410 8,429
-------- -------- -------- -------- -------- -------- --------
Net income............ $ 4,259 $ 6,284 $ 6,870 $ 6,874 $ 10,908 $ 14,883 $ 13,457
======== ======== ======== ======== ======== ======== ========
Net income per common
share, basic........ $
Weighted average
number of common
shares
outstanding.........
OTHER DATA:
Number of stores(2)... 15 17 20 19 19 20
Sales per store(3).... $ 8,004 $ 8,353 $ 8,706 $ 9,438
Same-store sales
growth(4)........... 12% 12% 15% 16% 22%
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------------------------------
PRO FORMA(1)
AS ADJUSTED
1996 1997 1997
--------- --------- ------------
<S> <C> <C> <C>
STATEMENT OF OPERATION
Revenue............... $38,735 $44,341 $45,360
Cost of sales......... 30,648 34,689 35,522
------- ------- -------
Gross profit.......... 8,087 9,652 9,838
Selling, general, and
administrative
expenses............ 12,345 10,165 9,490
------- ------- -------
Income from
operations.......... (4,258) (513) 348
Interest expense,
net................. (282) (450) (109)
------- ------- -------
Income before tax
provision........... (4,540) (963) 239
Income tax provision
(benefit)........... (506) (427) 135
------- ------- -------
Net income............ $(4,034) $ (536) $ 104
======= ======= =======
Net income per common
share, basic........ $
Weighted average
number of common
shares
outstanding.........
OTHER DATA:
Number of stores(2)... 19 21
Sales per store(3)....
Same-store sales
growth(4)........... 6%
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------
PRO FORMA
ACTUAL PRO FORMA(5) AS ADJUSTED(6)
------- ------------ --------------
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BALANCE SHEET DATA:
Working capital............................................. $ 9,107 $ (6,317) $46,950
Total assets................................................ 83,886 100,072 127,214
Long-term debt (including current portion).................. 9,917 9,917 1,904
Total stockholders' equity.................................. 13,980 3,534 63,809
</TABLE>
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(1) Pro forma information gives effect to (a) the probable Stovall Acquisition,
(b) certain pro forma adjustments to the historical financial statements,
and (c) the consummation of the Offering. See the Pro Forma Consolidated
Financial Statements and notes thereto for a description of the pro forma
adjustments.
(2) Includes only those stores open at period end.
(3) Includes only those stores open for the entire preceding 12-month period.
(4) New stores are included in the comparable base at the beginning of the
store's thirteenth month of operations.
(5) The pro forma balance sheet has been adjusted to give effect to (a) the
probable Stovall Acquisition, and (b) certain pro forma adjustments to the
historical financial statements. See "Risk Factors -- Manufacturers' Consent
to Acquisitions and Market Expansion" and the Pro Forma Consolidated
Financial Statements and notes thereto for a description of the pro forma
adjustments.
(6) Adjusted to reflect the consummation of the Offering and the application of
the estimated net proceeds therefrom. See "Use of Proceeds" and the Pro
Forma Consolidated Financial Statements and notes thereto for a further
description of the application of the net proceeds.
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RISK FACTORS
An investment in shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should consider carefully the following
risk factors, in addition to the other information contained in this Prospectus,
in evaluating an investment in shares of Common Stock offered hereby.
RECENTLY COMBINED OPERATIONS; RISKS OF INTEGRATION
MarineMax was founded in January 1998 to acquire businesses that operated
in the recreational boat industry under their principal owners for an average of
21 years, but MarineMax itself conducted no operations until the acquisitions of
the Merged Companies in March 1998. The Merged Companies operated independently
prior to the Mergers, and the Company may not be able to integrate these
businesses successfully on an economic basis. The pro forma consolidated
financial results of MarineMax cover periods when MarineMax and the Merged
Companies were not under common management or control and are not necessarily
indicative of the results that would have been achieved if MarineMax and the
Merged Companies had been operated on an integrated basis or the results that
may be realized on a consolidated basis in the future.
The success of the Company will depend, in part, on the Company's ability
to integrate the operations of the Merged Companies and other dealerships it
acquires, including centralizing certain functions to achieve cost savings and
pursuing programs and processes that promote cooperation and the sharing of
opportunities and resources among its dealerships. The Company's senior
executives have operated independently in the recreational boat industry and
have been assembled only recently as a management team. Management may not be
able to oversee the combined entity efficiently or to implement effectively the
Company's growth and operating strategies. To the extent that the Company is
able to implement successfully its acquisition strategy, the resulting growth of
the Company will place significant additional demands on the Company's
management and infrastructure. Any failure by the Company to implement
successfully its strategies or operate effectively the combined entity could
have a material adverse effect on the Company's business, financial condition,
and results of operations. See "Formation of the Company,"
"Business -- Strategy," and "Management."
RELIANCE ON BRUNSWICK AND OTHER KEY MANUFACTURERS
Approximately 84% of the Company's revenue in calendar 1997 was derived
from sales of products manufactured by Brunswick, including 83% from Brunswick's
Sea Ray Boat division. The remainder of the Company's revenue from new boat
sales in calendar 1997 was derived from sales of products from a limited number
of other manufacturers, none of which accounted for more than 10% of the
Company's revenue. The Company's success depends to a significant extent on the
continued popularity and reputation for quality of the boating products of its
manufacturers, particularly Brunswick's Sea Ray boat lines. In addition, the
financial condition, production efficiency, product development, and management
and marketing capabilities of the Company's manufacturers, particularly
Brunswick, could have a substantial impact on the Company's business. To ensure
adequate inventory levels to support the Company's expansion, it may be
necessary for Brunswick and other manufacturers to increase production levels or
allocate a greater percentage of their production to the Company. In the event
that the operations of Brunswick or the Company's other manufacturers were
interrupted or discontinued, the Company could experience inventory shortfalls,
disruptions, or delays with respect to unfilled purchase orders then
outstanding. Although the Company believes that adequate alternate sources would
be available that could replace any manufacturer other than Brunswick as a
product source, there can be no assurance that such alternate sources will be
available at the time of any such interruption or that alternative products will
be available at comparable quality and prices.
As is typical in the industry, the Company deals with each of its
manufacturers including Brunswick pursuant to renewable dealer agreements that
do not contain any contractual provisions concerning product pricing or required
purchasing levels. Pricing is generally established on a model year basis, but
is subject to change at the manufacturer's sole discretion. In the event these
arrangements were to change or terminate for any reason, including changes in
competitive, regulatory, or marketing practices, the Company's business,
financial condition, and results of operations could be adversely affected. In
addition, the timing, structure, and amount of manufacturer sales incentives and
rebates could impact the timing and profitability of the
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Company's sales. See "Risk Factors -- Boat Manufacturers' Control Over Dealers"
and "Business -- Operations -- Suppliers and Inventory Management."
IMPACT OF GENERAL ECONOMIC CONDITIONS; DISCRETIONARY CONSUMER SPENDING; AND
CHANGES IN TAX LAWS
The Company's operations depend upon a number of factors relating to or
affecting consumer spending for luxury goods, such as recreational boats. The
Company's operations may be adversely affected by unfavorable local, regional,
or national economic developments or by uncertainties regarding future economic
prospects that reduce consumer spending in the markets served by the Company.
Consumer spending on luxury goods can also be adversely affected as a result of
declines in consumer confidence levels, even if prevailing economic conditions
are favorable. In an economic downturn, consumer discretionary spending levels
generally decline, often resulting in disproportionately large reductions in the
sale of luxury goods. Similarly, rising interest rates could have a negative
impact on consumers' ability or willingness to finance boat purchases, which
could also adversely affect the ability of the Company to sell its products.
Local influences, such as corporate downsizing and military base closings, also
could adversely affect the Company's operations in certain markets. There can be
no assurance that the Company could maintain its profitability during any such
period of adverse economic conditions or low consumer confidence. Changes in
federal and state tax laws, such as an imposition of luxury taxes on certain new
boat purchases, also could influence consumers' decisions to purchase products
offered by the Company and could have a negative effect on the Company's sales.
For example, during 1991 and 1992 the federal government imposed a luxury tax on
new recreational boats with sales prices in excess of $100,000, which coincided
with a sharp decline in boating industry sales from a high of more than $17.9
billion in the late 1980s to a low of $10.3 billion in 1992. See "Business --
U.S. Recreational Boating Industry."
INDUSTRY FACTORS
The recreational boating industry is cyclical and has been stagnant in
terms of overall revenue growth over the last 10-year period. General economic
conditions, consumer spending patterns, federal tax policies, and the cost and
availability of fuel can impact overall boat purchases. See "Risk
Factors -- Impact of General Economic Conditions; Discretionary Consumer
Spending; and Changes in Tax Laws" and "Risk Factors -- Fuel Prices and Supply."
Industry sources attribute the lack of increase in overall boat purchases to
increased competition from other recreational activities, perceived hassles of
boat ownership, and relatively poor customer service and education throughout
the retail boat industry. Although the Company's strategy addresses many of
these industry factors and the Company has achieved significant growth during
the period of stagnant industry growth, there can be no assurance that the
cyclical nature of the recreational boating industry or the lack of industry
growth will not adversely affect the Company's business, financial condition, or
results of operations in the future. See "Business -- U.S. Recreational Boating
Industry."
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
The Company intends to grow significantly through the acquisition of
additional recreational boat dealers. This strategy will entail reviewing and
potentially reorganizing acquired business operations, corporate infrastructure
and systems, and financial controls. Unforeseen expenses, difficulties, and
delays frequently encountered in connection with rapid expansion through
acquisitions could inhibit the Company's growth and negatively impact
profitability. There can be no assurance that suitable acquisition candidates
will be identified, that acquisitions of such candidates will be consummated, or
that the operations of any acquired businesses will be successfully integrated
into the Company's operations and managed profitably without substantial costs,
delays, or other operational or financial difficulties. In addition, increased
competition for acquisition candidates may increase purchase prices for
acquisitions to levels beyond the Company's financial capability or to levels
that would not result in the returns required by the Company's acquisition
criteria. As of the date of this Prospectus, the Company has no binding
agreements to effect any acquisitions and is not engaged in any active
negotiations to acquire any other dealers except Stovall. The Company may issue
Common Stock or incur substantial indebtedness in making future acquisitions.
See "Risk Factors -- Future Capital Needs; Debt Service Requirements; Possible
Dilution Through Issuance of Stock." The size, timing,
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and integration of any future acquisitions may cause substantial fluctuations in
operating results from quarter to quarter. Consequently, operating results for
any quarter may not be indicative of the results that may be achieved for any
subsequent quarter or for a full fiscal year. These fluctuations could adversely
affect the market price of the Common Stock. See "Risk Factors -- No Prior
Market and Possible Volatility of Stock Price."
The Company's ability to continue to grow through the acquisition of
additional dealers will depend upon (i) the availability of suitable acquisition
candidates at attractive purchase prices, (ii) the Company's ability to compete
effectively for available acquisition opportunities, and (iii) the availability
of funds or Common Stock with a sufficient market price to complete the
acquisitions. See "Business -- Strategy." The Company's future growth through
acquisitions also will depend upon its ability to obtain the requisite
manufacturer approvals. Alternatively, one or more manufacturers may attempt to
impose further restrictions on the Company in connection with their approval of
acquisitions. See "Risk Factors -- Manufacturers' Consent to Acquisitions and
Market Expansion."
MANUFACTURERS' CONSENT TO ACQUISITIONS AND MARKET EXPANSION
Brunswick's dealer agreement with each Merged Company and with Stovall by
its terms requires the dealer to obtain Brunswick's consent to any change in the
ownership of the dealer. Brunswick and the Company disputed the applicability of
the change in control provisions to the Mergers. In order to avoid a long,
costly, and disruptive dispute, the Company and Brunswick entered into a
Settlement Agreement under which Brunswick consented to the changes in the
ownership of the Merged Companies resulting from the Mergers and the Company
agreed to pay Brunswick $15.0 million by December 31, 1998.
The Company may be required to obtain the consent of Brunswick and various
other manufacturers prior to the acquisition of other dealers. In determining
whether to approve acquisitions, manufacturers may consider many factors,
including the financial condition and ownership structure of the Company.
Further, manufacturers may impose conditions on granting their approvals for
acquisitions, including a limitation on the number of such manufacturers'
dealers that may be acquired by the Company. The Company's ability to meet
manufacturers' requirements for approving future acquisitions will have a direct
bearing on the Company's ability to complete acquisitions and effect its growth
strategy. There can be no assurance that a manufacturer will not terminate its
dealer agreement, refuse to renew its dealer agreement, refuse to approve future
acquisitions, or take other action that could have a material adverse effect on
the Company's acquisition program.
The Company's growth strategy also entails expanding its product line and
geographic scope by obtaining additional distribution rights from its existing
and new manufacturers. While the Company believes it will be successful in
obtaining such distribution rights, there can be no assurance that such
distribution rights will be granted to the Company or that it can obtain
suitable alternative sources of supply if the Company is unable to obtain such
distribution rights.
BOAT MANUFACTURERS' CONTROL OVER DEALERS
Historically, boat manufacturers, including Brunswick, have exercised
significant control over their dealers, restricted them to specified locations,
and retained approval rights over changes in management and ownership. The
continuation of the Company's dealer agreements with certain manufacturers,
including Brunswick, is contingent upon, among other things, the Company's
achieving stated goals for customer satisfaction ratings and market share
penetration in the market served by the applicable dealership. Failure to meet
the customer satisfaction and market share goals set forth in any dealer
agreement could result in the imposition of additional conditions in subsequent
dealer agreements, termination of such dealer agreement by the manufacturer,
limitations on boat inventory allocations, reductions in reimbursement rates for
warranty work performed by the dealer, or denial of approval of future
acquisitions.
The Company's dealer agreements with manufacturers generally do not give
the Company the exclusive right to sell those manufacturers' products within a
given geographical area. Accordingly, a manufacturer could authorize another
dealer to start a new dealership in proximity to one or more of the Company's
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locations, or an existing dealer could move a dealership to a location that
would be directly competitive with the Company. Such an event could have a
material adverse effect on the Company and its operations.
The Company's dealer agreements provide for termination for a variety of
causes. The Company believes that it has been and is in material compliance with
all of its dealer agreements. The Company currently believes that it will be
able to renew all of the dealer agreements upon expiration, but no such
assurance can be given. See "Business -- Operations -- Suppliers and Inventory
Management."
FUTURE CAPITAL NEEDS; DEBT SERVICE REQUIREMENTS; POSSIBLE DILUTION THROUGH
ISSUANCE OF STOCK
The Company's future capital requirements will depend upon the size,
timing, and structure of future acquisitions and its working capital and general
corporate needs. A substantial portion of the proceeds of the Offering will be
applied to discharge certain liabilities of the Merged Companies and the
Property Companies outstanding at the effectiveness of the Mergers and the
Property Acquisitions, including $10.9 million of long-term indebtedness, and to
pay the Brunswick settlement obligation. To the extent that the Company finances
future acquisitions in whole or in part through the issuance of Common Stock or
securities convertible into or exercisable for Common Stock, existing
stockholders will experience a dilution in the voting power of their Common
Stock and earnings per share could be negatively impacted. The extent to which
the Company will be able or willing to use the Common Stock for acquisitions
will depend on the market value of its Common Stock from time to time and the
willingness of potential sellers to accept Common Stock as full or partial
consideration. The inability of the Company to use its Common Stock as
consideration, to generate cash from operations, or to obtain additional funding
through debt or equity financings in order to pursue its acquisition program
could materially limit the Company's growth.
Any borrowings made to finance future acquisitions or for operations could
make the Company more vulnerable to a downturn in its operating results, a
downturn in economic conditions, or increases in interest rates on borrowings
that are subject to interest rate fluctuations. If the Company's cash flow from
operations is insufficient to meet its debt service requirements, the Company
could be required to sell additional equity securities, refinance its
obligations, or dispose of assets in order to meet its debt service
requirements. In addition, it is likely any credit arrangements will contain
financial and operational covenants and other restrictions with which the
Company must comply, including limitations on capital expenditures and the
incurrence of additional indebtedness. There can be no assurance that such
financing will be available if and when needed or will be available on terms
acceptable to the Company. The failure to obtain sufficient financing on
favorable terms and conditions could have a material adverse effect on the
Company's growth prospects and its business, financial condition, and results of
operations.
The Company currently has floor plan financing and other lines of credit
from financial institutions and other lenders, which the Company believes are
sufficient for its anticipated needs and reflect competitive terms and
conditions. Certain of the Company's assets, principally boat inventories, are
pledged to secure such floor plan and other debt. While the Company believes it
will continue to obtain comparable financing from these or other lenders, there
can be no assurance that such financing will be available to the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Business -- Strategy."
RISKS RELATED TO INTERNAL GROWTH AND OPERATING STRATEGIES; MANAGEMENT OF GROWTH
In addition to pursuing growth by acquiring boat dealers, the Company
intends to continue to pursue a strategy of growth through opening new retail
locations and offering new products in its existing and new territories.
Accomplishing these goals for expansion will depend upon a number of factors,
including the identification of new markets in which the Company can obtain
distribution rights to sell its existing or additional product lines, the
Company's financial capabilities, the hiring, training, and retention of
qualified personnel, and the timely integration of new retail locations into
existing operations. The strategy of growth through opening new retail locations
will further depend upon the Company's ability (i) to obtain the reliable data
necessary to determine the size and product preferences of such potential
markets in which the Company believes it can obtain adequate market penetration
at favorable operating margins without the acquisition of an
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existing dealer, and (ii) to locate or construct suitable facilities at a
reasonable cost in those new markets. There can be no assurance that the Company
will be able to open and operate new retail locations or introduce new product
lines on a timely or profitable basis. Moreover, the costs associated with
opening new retail locations or introducing new product lines may adversely
affect the Company's profitability.
As a result of these growth strategies, management expects to expend
significant time and effort in opening and acquiring new retail locations and
introducing new products. There can be no assurance that the Company's systems,
procedures, controls, or financial resources will be adequate to support the
Company's expanding operations. The inability of the Company to manage its
growth effectively could have a material adverse effect on the Company's
business, financial condition, and results of operations.
The Company's planned growth also will impose significant added
responsibilities on members of senior management and require it to identify,
recruit, and integrate additional senior level managers. There can be no
assurance that suitable additions to management can be identified, hired, or
retained. See "Business -- Strategy" and "Risk Factors -- Manufacturers' Consent
to Acquisitions and Market Expansion."
IMPACT OF SEASONALITY AND WEATHER ON OPERATIONS
The Company's business, as well as the entire recreational boating
industry, is highly seasonal, with seasonality varying in different geographic
markets. During the previous two-year period, the average net sales for the
quarterly periods ended March 31, June 30, September 30, and December 31
represented 23%, 31%, 25%, and 21%, respectively, of the Company's pro forma
combined average annual sales. With the exception of Florida, the Company
generally realizes significantly lower sales in the quarterly period ending
December 31 with boat sales generally improving in January with the onset of the
public boat and recreation shows. The Company's current operations are
concentrated in the more temperate regions of the United States, and its
business could become substantially more seasonal if it acquires dealers that
operate in colder regions of the United States.
The Company's business is also significantly affected by weather patterns,
which may adversely impact the Company's operating results. For example, drought
conditions or reduced rainfall levels, as well as excessive rain, may force
boating areas to close or render boating dangerous or inconvenient, thereby
curtailing customer demand for the Company's products. Although the Company's
geographic diversity and its future geographic expansion will reduce the overall
impact on the Company of adverse weather conditions in any one market area, such
conditions will continue to represent potential material adverse risks to the
Company and its future operating performance. Many of the Company's dealerships
sell boats to customers for use on reservoirs, thereby subjecting the Company's
business to the continued viability of these reservoirs for boating use. As a
result of the foregoing and other factors, the Company's operating results in
some future quarters could be below the expectations of stock market analysts
and investors. In such event, there could be an immediate and significant
adverse effect on the trading price of the Common Stock. See "Risk Factors -- No
Prior Market and Possible Volatility of Stock Price," "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Quarterly Data
and Seasonality," and "Business -- Seasonality."
COMPETITION
The Company operates in a highly competitive environment. In addition to
facing competition generally from non-boating recreation businesses seeking to
attract discretionary spending dollars, the recreational boat industry itself is
highly fragmented, resulting in intense competition for customers, product
distribution rights, and suitable retail locations, particularly on or near
waterways. Such competition is intensified during periods of stagnant industry
growth, such as currently exists.
The Company competes primarily with single-location boat dealers and, with
respect to sales of marine parts, accessories, and equipment, with national
specialty marine parts and accessories stores, catalog retailers, sporting goods
stores, and mass merchants. Competition among boat dealers is based on the
quality of available products, the price and value of the products, and
attention to customer service. There is significant competition both within
markets currently being served by the Company and in new markets that the
Company may enter. The Company competes in each of its markets with retailers of
brands of boats and
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engines not sold by the Company in that market. In addition, several of the
Company's competitors, especially those selling marine equipment and
accessories, are large national or regional chains that have substantial
financial, marketing, and other resources. Private sales of used boats represent
an additional source of competition. See "Business -- Competition."
INCOME FROM FINANCING, INSURANCE, AND EXTENDED SERVICE CONTRACTS
A portion of the Company's income results from referral fees derived from
the placement of customer financing, insurance products, and extended service
contracts (collectively, "F&I products"), the most significant component of
which is the referral fees resulting from the Company's placement of customer
financing. During 1997, F&I products accounted for approximately 2.3% of gross
revenue. The availability of financing for the Company's boat purchasers and the
level of referral fees received by the Company in connection with such financing
depends on the arrangements that the Company has secured from various lenders.
These lenders may impose terms in their boat financing arrangements with the
Company that may be unfavorable to the Company or its customers, resulting in
reduced demand for its customer financing programs and lower referral fees. The
reduction of profit margins on sales of F&I products or the lack of demand for
or the unavailability of these products could have a material adverse effect on
the Company's business, financial condition, and results of operations.
Furthermore, under optional extended service contracts with customers, the
Company may experience significant warranty claims that, in the aggregate, may
be material to the Company's business. See "Business -- Products and
Services -- F&I Products."
DEPENDENCE ON KEY PERSONNEL
The Company believes its success depends, in large part, upon the
continuing efforts and abilities of its key management personnel, including
William H. McGill Jr., Richard R. Bassett, Louis R. DelHomme Jr., and Richard C.
LaManna Jr., each of whom is a director and officer of the Company and the
senior executive of one of the Merged Companies. Although the Company has a
five-year employment agreement with each of these members of key management, the
Company cannot assure that such individuals will remain with the Company
throughout the term of the agreements, or thereafter. As a result of the
Company's decentralized operating strategy, the Company also relies on these
individuals and their management teams to continue the operations of the Merged
Companies. In addition, the Company likely will depend on the senior management
of any significant dealers it acquires in the future. The loss of the services
of one or more of these key employees before the Company is able to attract and
retain qualified replacement personnel could adversely affect the Company's
business. The Company maintains a key-man life insurance policy on Mr. McGill in
the amount of $6.0 million. See "Management."
PRODUCT AND SERVICE LIABILITY RISKS
Products sold or serviced by the Company may expose it to potential
liability for personal injury or property damage claims relating to the use of
those products. Historically, the resolution of product liability claims has not
materially affected the Company. Manufacturers of the products sold by the
Company generally maintain product liability insurance. The Company also
maintains third-party product liability insurance that it believes to be
adequate. There can be no assurance, however, that the Company will not
experience claims that are not covered by or that are in excess of its insurance
coverage. The institution of any significant claims against the Company could
adversely affect the Company's business, financial condition, and results of
operations as well as its business reputation with potential customers. See
"Business -- Product Liability."
IMPACT OF ENVIRONMENTAL AND OTHER REGULATORY ISSUES
The Company's operations are subject to extensive regulation, supervision,
and licensing under various federal, state, and local statutes, ordinances, and
regulations. While management believes that it maintains all requisite licenses
and permits and is in substantial compliance with all applicable federal, state,
and local regulations, there can be no assurance that the Company will be able
to maintain all requisite licenses and permits. The failure to satisfy those and
other regulatory requirements could have a material adverse effect on
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the operations of the Company. The adoption of additional laws, rules, and
regulations could also have a material adverse effect on the Company's business.
Various federal, state, and local regulatory agencies, including the
Occupational Safety and Health Administration ("OSHA"), the United States
Environmental Protection Agency (the "EPA"), and similar federal and local
agencies have jurisdiction over the operation of the Company's dealerships,
repair facilities, and other operations, with respect to matters such as
consumer protection, workers' safety, and laws regarding protection of the
environment, including air, water, and soil.
The EPA recently promulgated emissions regulations for outboard marine
engines that impose stricter emissions standards for two-cycle, gasoline
outboard marine engines. Emissions from such engines must be reduced by
approximately 75% over a nine-year period beginning with the 1998 model year.
Costs of comparable new engines, if materially more expensive than previous
engines, or the inability of the Company's manufacturers to comply with EPA
requirements, could have a material adverse effect on the Company's business,
financial condition, and results of operations. See "Business -- Products and
Services -- Marine Engines and Related Marine Equipment."
Certain of the Company's facilities own and operate underground storage
tanks ("USTs") for the storage of various petroleum products. The USTs are
generally subject to federal, state, and local laws and regulations that require
testing and upgrading of USTs and remediation of contaminated soils and
groundwater resulting from leaking USTs. In addition, if leakage from
Company-owned or operated USTs migrates onto the property of others, the Company
may be subject to civil liability to third parties for remediation costs or
other damages. Based on historical experience, the Company believes that its
liabilities associated with UST testing, upgrades and remediation are unlikely
to have a material adverse effect on its financial condition or operating
results.
As with boat dealerships generally, and parts and service operations in
particular, the Company's business involves the use, handling, storage, and
contracting for recycling or disposal of hazardous or toxic substances or
wastes, including environmentally sensitive materials such as motor oil, waste
motor oil and filters, transmission fluid, antifreeze, freon, waste paint and
lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline,
and diesel fuels. Accordingly, the Company is subject to regulation by federal,
state, and local authorities establishing investigation and health and
environmental quality standards, and liability related thereto, and providing
penalties for violations of those standards. The Company also is subject to
laws, ordinances, and regulations governing investigation and remediation of
contamination at facilities it operates or to which it sends hazardous or toxic
substances or wastes for treatment, recycling, or disposal. In particular, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"
or "Superfund") imposes joint, strict, and several liability on (i) owners or
operators of facilities at, from, or to which a release of hazardous substances
has occurred; (ii) parties who generated hazardous substances that were released
at such facilities; and (iii) parties who transported or arranged for the
transportation of hazardous substances to such facilities. A majority of states
have adopted Superfund statutes comparable to and, in some cases, more stringent
than CERCLA. If the Company were to be found to be a responsible party under
CERCLA or a similar state statute, the Company could be held liable for all
investigative and remedial costs associated with addressing such contamination.
In addition, claims alleging personal injury or property damage may be brought
against the Company as a result of alleged exposure to hazardous substances
resulting from the Company's operations. In addition, certain of the Company's
retail locations are located on waterways that are subject to federal or state
laws regulating navigable waters (including oil pollution prevention), fish and
wildlife, and other matters.
The Company believes that it does not have any material environmental
liabilities and that compliance with environmental laws, ordinances, and
regulations will not, individually or in the aggregate, have a material adverse
effect on the Company's results of operations or financial condition. However,
soil and groundwater contamination has been known to exist at certain properties
owned and leased by the Company. The Company has also been required and may in
the future be required to remove aboveground and underground storage tanks
containing hazardous substances or wastes. Environmental laws and regulations
are complex and subject to frequent change. There can be no assurance that
compliance with amended, new or more stringent laws or
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regulations, stricter interpretations of existing laws or the future discovery
of environmental conditions will not require additional expenditures by the
Company, or that such expenditures would not be material.
Certain of the properties owned or leased by the Company are located in
commercial areas and have historically been used for gasoline service stations.
As a consequence, it is possible that historical site activities or current
neighboring activities have affected properties owned or leased by the Company
and that, as a result, additional environmental issues may arise in the future,
the precise nature of which the Company cannot now predict.
Additionally, certain states have required or are considering requiring a
license in order to operate a recreational boat. While such licensing
requirements are not expected to be unduly restrictive, regulations may
discourage potential first-time buyers, thereby limiting future sales and
adversely affecting the Company's business, financial condition, and results of
operations. See "Business -- Environmental and Other Regulatory Issues."
FUEL PRICES AND SUPPLY
All of the recreational boats sold by the Company are powered by diesel or
gasoline engines. Consequently, an interruption in the supply, or a significant
increase in the price or tax on the sale, of such fuel on a regional or national
basis could have a material adverse effect on the Company's sales and operating
results. At various times in the past, diesel or gasoline fuel has been
difficult to obtain, and there can be no assurance that the supply of such fuels
will not be interrupted, that rationing will not be imposed, or that the price
of or tax on such fuels will not significantly increase in the future. See
"Business -- U.S. Recreational Boating Industry."
AMORTIZATION OF INTANGIBLE ASSETS
The proposed acquisition of Stovall is expected to result in goodwill of
approximately $5.5 million, which will be amortized over a period of 40 years.
Goodwill is an intangible asset that represents the difference between the
aggregate purchase price for the net assets acquired and the amount of such
purchase price allocated to such net assets for purposes of the Company's pro
forma balance sheet. The Company is required to amortize the goodwill from
acquisitions accounted for as purchases over a period of time, with the amount
amortized in a particular period constituting an expense that reduces the
Company's net income for that period. A reduction in net income resulting from
the amortization of goodwill may have an adverse impact upon the market price of
the Company's Common Stock.
TRANSACTIONS WITH AFFILIATES
Certain of the Merged Companies and Property Companies incurred
indebtedness (including $10.9 million of long-term indebtedness) prior to the
Combination Transactions, substantially all of which was subject to personal
guarantees of their stockholders or owners and remained outstanding at the
effectiveness of the Combination Transactions. Some of the guarantors are
directors or officers of the Company or are holders of more than 5% of its
Common Stock. The Company intends to use a portion of the net proceeds from the
Offering to repay or refinance a substantial portion of this indebtedness,
including the indebtedness guaranteed by its stockholders, directors, and
officers. Additionally, the Company has entered into leases of real property
with directors or officers of the Company or holders of more than 5% of its
Common Stock or with entities controlled by such persons. Because of these
relationships between these parties, these leases have not been negotiated on an
arms'-length basis. See "Certain Transactions."
CONTROL BY OFFICERS, DIRECTORS, AND CERTAIN STOCKHOLDERS
Upon completion of the Offering and the Stovall Acquisition, the Company's
directors, executive officers, and persons associated with them will own
beneficially an aggregate of approximately % of the issued and outstanding
shares of Common Stock (approximately % if the Underwriters' over-allotment
option is exercised in full). As a result of such ownership, such persons will
have the power effectively to control the Company, including the election of
directors, the determination of matters requiring stockholder approval, and
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other matters pertaining to corporate governance. This concentration of
ownership also may have the effect of delaying or preventing a change in control
of the Company. See "Principal Stockholders."
NO PRIOR MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
There has been no public trading market for the Company's Common Stock
prior to the Offering. The initial public offering price of the Common Stock
will be determined through negotiations between the Company and the
Representatives of the Underwriters based on factors described under
"Underwriting" and may not be indicative of the price at which the Common Stock
will trade after the Offering. The Company has applied to list the Common Stock
on the New York Stock Exchange. However, there can be no assurance that the
listing application will be approved or, if approved, that an active trading
market will develop and continue after completion of the Offering or that the
market price of the Common Stock will not decline below the initial public
offering price. It is anticipated that there will be limited float in the market
as a result of the relatively low number of shares to be offered to the public,
and fluctuations in the market price for the Common Stock could be significant.
Recent market conditions for newly public companies are likely to result in
significant fluctuations in the market price for the Common Stock. In addition,
the Company's quarterly operating results in some future quarters could be below
the expectations of stock market analysts and investors as a result of
variations in operating results due to seasonality and other factors. See "Risk
Factors -- Impact of Seasonality and Weather on Operations." Future
announcements concerning the Company, including announcements regarding
acquisitions, litigation, and changes in earnings estimates published by
analysts, as well as announcements concerning governmental regulations, the
recreational boat industry, or the Company's suppliers or competitors may cause
the market price of the Common Stock to fluctuate significantly. Moreover, the
stock market in the past has experienced significant price and volume
fluctuations, which have not necessarily been related to corporate operating
performance. The volatility of the market could adversely affect the market
price of the Common Stock and the ability of the Company to raise equity in the
public markets. These fluctuations, as well as general economic, political, and
market conditions, such as recessions, may adversely affect the market price of
the Common Stock. See "Underwriting."
IMMEDIATE AND SUBSTANTIAL DILUTION
Purchasers of Common Stock in the Offering will experience immediate and
substantial dilution in the pro forma as adjusted net tangible book value of
their shares in the amount of $ per share. If the Company issues
additional Common Stock in the future, including shares which may be issued
pursuant to option grants and future acquisitions, purchasers of Common Stock in
the Offering may experience further dilution in the net tangible book value per
share of the Common Stock. The Board of Directors of the Company has the legal
power and authority to determine the terms of an offering of shares of the
Company's capital stock (or securities convertible into or exchangeable for such
shares) to the extent of the Company's shares of authorized and unissued capital
stock. See "Dilution" and "Description of Capital Stock."
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offering, there will be shares of Common
Stock outstanding, including shares anticipated to be issued in connection with
the Stovall Acquisition. The shares sold in the Offering will be
freely tradable without restriction or further registration under the Securities
Act, unless acquired by an "affiliate" of the Company, as that term is defined
in Rule 144 promulgated under the Securities Act ("Rule 144"); shares held by
affiliates of the Company will be subject to the resale limitations of Rule 144
described below. All of the 8,950,000 remaining outstanding shares of Common
Stock will be available for resale beginning one year after the respective date
of the Combination Transactions and Stovall Acquisition and subject to
compliance with the provisions of Rule 144 under the Securities Act. See "Shares
Eligible for Future Sale." Further, the Company intends to adopt the 1998
Incentive Stock Plan providing for the grant of stock options for up to
shares of Common Stock and the 1998 Employee Stock Purchase Plan
providing for the purchase of shares of Common Stock by the Company's
employees. The Company intends to file registration statements with respect to
the shares of Common Stock issuable upon the exercise of all such options
granted under the 1998 Incentive Stock Plan or offered under the 1998
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Employee Stock Purchase Plan. See "Management -- 1998 Incentive Stock Plan" and
"Management -- Employee Stock Purchase Plan."
Sales of substantial amounts of Common Stock, or the perception that such
sales could occur, could adversely affect prevailing market prices of the Common
Stock. The Company, its officers, and directors, and the holders of
substantially all of the Common Stock have agreed that, until 180 days following
the date of this Prospectus ("Lockup Period"), they will not, without the prior
written consent of Smith Barney Inc., sell, offer to sell, solicit any offer to
buy, contract to sell, grant any option to purchase, or otherwise transfer or
dispose of any shares of Common Stock, or any securities convertible into, or
exercisable or exchangeable for, Common Stock, except that the Company may grant
options under the Company's 1998 Incentive Stock Plan and may issue shares of
Common Stock (i) in connection with acquisitions, (ii) pursuant to 1998 Employee
Stock Purchase Plan, and (iii) pursuant to the exercise of options granted under
the Company's 1998 Incentive Stock Plan. See "Underwriting."
In addition, the Company may issue additional shares of Common Stock as
part of any acquisition it may complete in the future. In connection with its
intention to consummate acquisitions, the Company intends to register 3,000,000
shares of Common Stock under the Securities Act during 1998 for its use in
connection with future acquisitions. Pursuant to Rule 145, these shares
generally will be freely tradable after their issuance by persons not affiliated
with the Company or the acquired companies; however, sales of these shares
during the Lockup Period would require the prior written consent of Smith Barney
Inc. See "Business -- Strategy."
HOLDING COMPANY STRUCTURE
The Company is a holding company, the principal assets of which are the
shares of the capital stock of its subsidiaries. As a holding company without
independent means of generating operating revenue, the Company depends on
dividends and other payments from its subsidiaries to fund its obligations and
meet its cash needs. Expenses of the Company include salaries of its executive
officers, insurance, professional fees, and service of indebtedness that may be
outstanding from time to time. Financial covenants under future loan agreements
of the Company's subsidiaries may limit such subsidiaries' ability to make
sufficient dividend or other payments to permit the Company to fund its
obligations or meet its cash needs, in whole or in part.
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future.
Moreover, the Company's financing covenants under certain of the Company's loan
agreements restrict its ability to pay dividends. See "Dividend Policy."
ANTI-TAKEOVER EFFECT OF CERTIFICATE AND BYLAW PROVISIONS, DELAWARE LAW, AND
CONTRACT PROVISIONS
Certain provisions of the Company's Restated Certificate of Incorporation
and Bylaws and Delaware law may make a change in the control of the Company more
difficult to effect, even if a change in control were in the stockholders'
interest or might result in a premium over the market price for the shares held
by the stockholders. The Company's Restated Certificate of Incorporation and
Bylaws divide the Board of Directors into three classes of directors elected for
staggered three-year terms. The Restated Certificate of Incorporation also
provides that the Board of Directors may authorize the issuance of one or more
series of preferred stock from time to time and may determine the rights,
preferences, privileges, and restrictions and fix the number of shares of any
such series of preferred stock, without any vote or action by the Company's
stockholders. The Board of Directors may authorize the issuance of preferred
stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of Common Stock. The Restated Certificate
of Incorporation also allows the Board of Directors to fix the number of
directors in the Bylaws with no minimum or maximum number of directors required
and to fill vacancies on the Board of Directors. The Company also is subject to
the anti-takeover provisions of Section 203 of the Delaware General Corporation
Law, which prohibit the Company from engaging in a "business combination" with
an "interested stockholder" for a period of three years after the date of the
transaction in which the person became an "interested stockholder,"
17
<PAGE> 19
unless the business combination is approved in a prescribed manner. The
Company's Restated Certificate of Incorporation exempts from the application of
Section 203 each of the persons receiving Common Stock in the Combination
Transactions. See "Management" and "Description of Capital Stock -- Delaware
General Corporation Law and Certain Charter Provisions." Certain of the
Company's dealer agreements could also make it difficult for a third party to
attempt to acquire a significant ownership position in the Company. See "Risk
Factors -- Boat Manufacturers' Control Over Dealers" and
"Business -- Operations -- Suppliers and Inventory Management."
FORWARD-LOOKING INFORMATION
With the exception of historical information, the matters discussed in this
Prospectus may include forward-looking statements that involve risks and
uncertainties. While forward-looking statements are sometimes presented with
numerical specificity, they are based on various assumptions made by management
regarding future circumstances over many of which the Company has little or no
control. A number of important factors, including those identified in this
heading as well as factors discussed elsewhere in this Prospectus, could cause
the Company's actual results to differ materially from those in forward-looking
statements or financial information. Actual results may differ from
forward-looking results for a number of reasons, including the following: (i)
changes in general economic conditions; (ii) changes in customer demand that
affect sales and product mix; (iii) competitive factors (including changes in
market penetration and the introduction of new models by existing and new
competitors); (iv) changes in operating costs; (v) the success of the Company's
operating and growth strategies (including its ability to integrate acquisitions
into Company operations and the ability of acquired companies to achieve
satisfactory operating results); (vi) changes in the business operations or
financial condition of Brunswick or in the Company's relationship with
Brunswick; and (vii) unanticipated litigation, claims, or assessments (including
claims or problems related to product warranty and environmental issues). Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated, or projected.
18
<PAGE> 20
FORMATION OF THE COMPANY
MARINEMAX
MarineMax was incorporated in Delaware in January 1998. In March 1998, the
Company acquired in the Combination Transactions the Merged Companies, each of
which operates recreational boat dealerships, and the affiliated Property
Companies that own real properties used in the operations of the Merged
Companies. See "Certain Transactions -- The Mergers and Property Acquisitions."
As a result, the Company became the largest recreational boat dealer in the
United States. Upon the consummation of the Combination Transactions, the
Company commenced the integration of the Merged Companies by centralizing
certain administrative functions at the corporate level, such as accounting,
finance (including floor plan financing), insurance coverage, employee benefits,
marketing, strategic planning, legal support, purchasing and distribution, and
management information systems. The Company believes that this integration also
provides career advancement opportunities to incentivize and retain key
employees, mitigates the impact of local or regional economic downturns or poor
weather conditions by geographic diversity, creates marketing and sales
synergies among its dealerships, enables each dealership to offer its customers
enhanced product offerings and financing and insurance products, and improves
financial, managerial, and other resources.
The Company's executive offices are located at 18167 U.S. 19 North, Suite
499, Clearwater, Florida 33605, and its telephone number is (813) 531-1700.
THE MERGERS AND PROPERTY ACQUISITIONS
In March 1998, MarineMax acquired in separate merger transactions all of
the issued and outstanding capital stock of each of the Merged Companies in
exchange for shares of Common Stock. Simultaneously with the Mergers, MarineMax
acquired in separate contribution transactions all of the beneficial interests
of each of the Property Companies in exchange for shares of Common Stock. In
connection with the Combination Transactions, MarineMax issued an aggregate of
8,495,017 shares of Common Stock to the stockholders of the Merged Companies and
the owners of the Property Companies. Immediately prior to the Mergers, each of
the Merged Companies that was an S corporation incurred a distribution payable
to its stockholders in an amount anticipated to approximate the related income
tax obligations of such stockholders for the period from January 1, 1998 through
the date of the Mergers. As a result of the consummation of the Mergers and
Property Acquisitions, the aggregate long-term indebtedness of the Company
includes $10.9 million of indebtedness of the Merged Companies and Property
Companies that was outstanding at the time of the Combination Transactions. The
Combination Transactions have been accounted for under the "pooling-
of-interests" accounting method.
The number of shares of Common Stock issued to the stockholders of each
Merged Company and Property Company was determined based on negotiations between
MarineMax and those companies. The factors considered by the parties in
determining the number of shares of Common Stock issued included, among other
factors, historical cash flows, operating results, and appraised values of
properties. With the exception of the number of shares of Common Stock issued in
connection with each Combination Transaction, the acquisition of each Merged
Company and each Property Company was subject to substantially the same terms
and conditions as those to which the acquisition of each other Merged Company
and each other Property Company, respectively, was subject. See "Certain
Transactions -- The Mergers and Property Acquisitions" for a description of the
terms and conditions of the merger agreements between MarineMax and the Merged
Companies (the "Merger Agreements") and of the contribution agreements between
MarineMax and the Property Companies (the "Contribution Agreements").
19
<PAGE> 21
The following table sets forth information concerning the Common Stock
issued in connection with the Combination Transactions and the approximate
long-term indebtedness of the Merged Companies and Property Companies
outstanding at the time of the Combination Transactions:
<TABLE>
<CAPTION>
SHARES OF
COMMON LONG-TERM
STOCK OUTSTANDING DEBT
--------- ----------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
MERGED COMPANIES:
Bassett..................................................... 2,482,642 $ 0
DelHomme (includes DelHomme Realty, Inc.)................... 1,228,495 0
Gulfwind USA................................................ 1,878,793 6,650
Gulfwind South.............................................. 746,904 20
Harrison's.................................................. 871,690 156
--------- -------
Total............................................. 7,208,524 $ 6,826
--------- -------
PROPERTY COMPANIES:
Bassett Boat Company........................................ 47,985 $ 0
Bassett Realty, L.L.C....................................... 993,382 0
Gulfwind South Realty, L.L.C................................ 17,784 2,100
Harrison's Realty, L.L.C.................................... 104,811 900
Harrison's Realty California, L.L.C......................... 122,532 1,090
--------- -------
Total............................................. 1,286,494 4,090
--------- -------
Total Consideration in Combination Transactions............. 8,495,018 $10,916
========= =======
</TABLE>
THE MERGED COMPANIES AND PROPERTY COMPANIES
Bassett Boat Company of Florida, Bassett Realty, L.L.C., and Bassett Boat
Company ("Bassett")
Founded in 1979, Bassett operates recreational boat dealerships at four
retail locations in Miami, Palm Beach, Pompano Beach, and Stuart, Florida, and
has approximately 95 employees. Bassett offers Sea Ray pleasure boats and Boston
Whaler fishing boats. Bassett's revenue for the 12 months ended December 31,
1997 was approximately $60.5 million.
In connection with the Bassett merger, the Company acquired the five
properties used in Bassett's operations by acquiring all of the stock of Bassett
Boat Company and all of the beneficial interest in Bassett Realty, L.L.C.,
affiliates of Bassett that own such properties. See "Business -- Properties" for
a description of such properties. Richard R. Bassett, the president and owner of
Bassett, also entered into a five-year covenant not to compete and a five-year
employment agreement with the Company and became a director and Senior Vice
President of the Company. See "Management -- Employment Agreements" and "Certain
Transactions -- The Mergers and Property Acquisitions."
11502 Dumas, Inc. d/b/a Louis DelHomme Marine and DelHomme Realty, Inc.
("DelHomme")
Founded in 1971, DelHomme operates recreational boat dealerships at seven
retail locations in Fort Worth, Lewisville (Dallas), League City, Montgomery,
and Houston, Texas, and has approximately 75 employees. DelHomme offers Sea Ray
pleasure boats; Baja high-performance boats; Sea Hunt, Sea Pro, Century, and
Challenger fishing boats; and Smokercraft pontoon boats. DelHomme's revenue for
the 12 months ended December 31, 1997 was approximately $39.7 million.
As part of the DelHomme merger, the Company acquired a floating facility
used as a retail facility in DelHomme's League City operations. In addition, the
Company leases three properties used in DelHomme's Houston operations (including
two retail facilities and one warehouse facility) from affiliates of Mr.
DelHomme. See "Business -- Properties" for a description of such properties.
Louis R. DelHomme Jr., the president and principal owner of DelHomme, also
entered into a five-year covenant not to compete and a
20
<PAGE> 22
five-year employment agreement with the Company and became a director and Senior
Vice President of the Company. See "Management -- Employment Agreements,"
"Certain Transactions -- The Mergers and Property Acquisitions," and "Certain
Transactions -- Leases of Real Properties from Affiliates."
Gulfwind USA, Inc. ("Gulfwind USA")
Founded in 1973, Gulfwind USA operates recreational boat dealerships at
three retail locations in Tampa and Clearwater, Florida, and has approximately
82 employees. Gulfwind USA offers Sea Ray pleasure boats and Boston Whaler
fishing boats. Gulfwind USA's revenue for the 12 months ended December 31, 1997
was approximately $45.2 million.
As part of the Gulfwind USA merger, the Company acquired two of the
properties used in Gulfwind USA's operations that were owned by Gulfwind USA
prior to the Merger. See "Business -- Properties" for a description of such
properties. William H. McGill Jr., the president and principal owner of Gulfwind
USA and President and Chief Executive Officer of the Company, also entered into
a five-year covenant not to compete and a five-year employment agreement with
the Company and became Chairman of the Board of Directors of the Company. See
"Management -- Employment Agreements" and "Certain Transactions -- The Mergers
and Property Acquisitions."
Gulfwind South, Inc. and Gulfwind South Realty, L.L.C. ("Gulfwind South")
Founded in 1983, Gulfwind South operates recreational boat dealerships at
two locations in Fort Myers and Naples, Florida and has approximately 43
employees. Gulfwind South offers Sea Ray pleasure boats. Gulfwind South's
revenue for the 12 months ended December 31, 1997 was approximately $28.5
million.
In connection with the Gulfwind South merger, the Company acquired one of
the properties used in Gulfwind South's operations by acquiring all of the
beneficial interest in Gulfwind South Realty, L.L.C., an affiliate of Gulfwind
South that owns such property. See "Business -- Properties" for a description of
such property. See "Certain Transactions -- The Mergers and Property
Acquisitions."
Harrison's Boat Center, Inc. and Harrison's Marine Centers of Arizona, Inc.,
("Harrison's") and Harrison's Realty, L.L.C. and Harrison's Realty California,
L.L.C.
Founded in 1978, Harrison's operates recreational boat dealerships at eight
retail locations in Oakland, Oakley, Redding, Santa Rosa, and Sacramento,
California, and Tempe, Arizona, and has approximately 158 employees. Harrison's
offers Sea Ray pleasure boats, Malibu ski boats, Starcraft and Boston Whaler
fishing boats, Starcraft pontoon boats, Baja high-performance boats, Bombardier
Sea Doo and Yamaha personal watercraft, and Gregor and Generation 3 aluminum
boats. Harrison's revenue for the 12 months ended December 31, 1997 was
approximately $46.2 million.
In connection with the Harrison's merger, the Company acquired three of the
properties used in Harrison's operations by acquiring all of the beneficial
interest in Harrison's Realty L.L.C. and Harrison's Realty California, L.L.C.,
affiliates of Harrison's that own such properties. See "Business -- Properties"
for a description of such properties. Richard C. LaManna Jr., the president and
principal owner of Harrison's, also entered into a five-year covenant not to
compete and a five-year employment agreement with the Company and became a
director and Senior Vice President of the Company. Each of the two other
stockholders of Harrison's, Richard C. LaManna III, the secretary and treasurer
of Harrison's, and Darrell C. LaManna, the vice president of Harrison's, entered
into a five-year covenant not to compete and a five-year employment agreement
with the Company. In addition, Richard C. LaManna III became Vice President and
Secretary of the Company and Darrell C. LaManna became Vice President of the
Company. See "Management -- Employment Agreements" and "Certain
Transactions -- The Mergers and Property Acquisitions."
21
<PAGE> 23
PROPOSED ACQUISITION OF STOVALL MARINE, INC.
The Company has entered into a letter of intent to acquire Stovall Marine,
Inc. through a merger transaction. The consideration to be paid by the Company
upon consummation of the Stovall Acquisition will consist of approximately
455,000 shares of Common Stock to be issued to the stockholders of Stovall.
Founded in 1946, Stovall operates recreational boat dealerships at five
retail locations in Kennesaw (Atlanta), Augusta, Forest Park (Atlanta), and Lake
Lanier, Georgia, and Jacksonville, Florida, and has approximately 64 employees.
Stovall offers Sea Ray pleasure boats, Boston Whaler and SeaPro fishing boats,
and Challenger bass boats. Stovall's revenue for the 12 months ended December
31, 1997 was approximately $19.7 million. See the Pro Forma Consolidated
Financial Statements and the notes thereto.
In connection with the Stovall Acquisition, Graham P. Stovall, president of
Stovall, will enter into a five-year covenant not to compete and a five-year
employment agreement with the Company. Upon consummation of the Stovall
Acquisition, the Company will lease the five properties used in Stovall's
operations from affiliates of Stovall, at fair market rental values. See
"Business -- Properties" for a description of such properties and "Certain
Transactions -- Leases of Real Properties From Affiliates."
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common
Stock offered hereby, after deducting estimated underwriting discounts and
expenses, are estimated to be approximately $ million ($ million if the
Underwriters' over-allotment option is exercised in full), assuming an initial
public offering price of $ per share. The Company expects to use $33.1
million to repay indebtedness of the Merged Companies and Property Companies
existing at the effectiveness of the Mergers and Property Acquisitions, $15.0
million to satisfy its settlement obligation with Brunswick (due on December 31,
1998), and the remainder for working capital and general corporate purposes,
including acquisitions and opening new retail facilities. See "Formation of the
Company -- The Mergers and Property Acquisitions" and "Certain
Transactions -- The Mergers and Property Acquisitions."
The Company intends to grow significantly through the acquisition of
additional recreational boat dealers. As of the date of this Prospectus, the
Company has no binding agreements to effect any acquisitions and is not engaged
in any active negotiations to acquire any other dealers except Stovall. There
can be no assurance that any acquisitions will be consummated on terms favorable
to the Company, if at all. Pending application of the net proceeds as described
above, the Company intends to invest the net proceeds in short-term, interest-
bearing, investment grade securities. See "Business -- Strategy."
DIVIDEND POLICY
The Company currently intends to retain its earnings to support the growth
and development of its business and has no present intention of paying any
dividends on its Common Stock in the foreseeable future. Any future declaration
of dividends will be subject to the discretion of the Board of Directors of the
Company and will depend on the Company's financial condition, operating results,
capital requirements, contractual restrictions with respect to the payment of
dividends, and such other factors as the Board of Directors deems relevant.
22
<PAGE> 24
CAPITALIZATION
The following table sets forth the Company's capitalization at December 31,
1997 (i) on a historical basis; (ii) on a pro forma basis giving effect to the
Stovall Acquisition and the Brunswick settlement obligation; and (iii) as
adjusted to reflect the sale of the shares of Common Stock offered hereby at an
assumed initial offering price of $ per share and the application of the
estimated net proceeds therefrom as described in "Use of Proceeds." This table
should be read in conjunction with the financial statements, including the notes
thereto, included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED(2)
------- ------------ --------------
<S> <C> <C> <C>
Short-term debt (including current portion of long-term
debt)................................................ $ 4,160 $ 19,229 $ 15,051
Long-term debt, excluding current portion.............. 8,861 8,861 1,853
------- -------- --------
Stockholders' equity:
Preferred Stock, $.001 par value, 5,000,000 shares
authorized; none outstanding...................... -- -- --
Common Stock, $.001 par value, 40,000,000 shares
authorized; 8,495,018 shares issued and
outstanding before the Offering; shares
issued and outstanding after the Stovall
Acquisition; shares issued and outstanding
pro forma as adjusted(3).......................... 8 9
Additional paid-in capital........................... 1,009 16,417
Retained earnings.................................... 12,963 (12,892) (12,892)
------- -------- --------
Total stockholders' equity........................... 13,980 3,534 63,808
------- -------- --------
Total capitalization................................... $27,001 $ 31,624 $ 80,713
======= ======== ========
</TABLE>
- ---------------
(1) Reflects pro forma adjustments giving effect to the Stovall Acquisition, the
Brunswick settlement obligation, and certain other pro forma entries as
described in the Pro Forma Consolidated Financial Statements and the notes
thereto.
(2) Reflects pro forma adjustments giving effect to the Offering and the
application of the estimated net proceeds therefrom as described in "Use of
Proceeds." Short-term debt includes the Brunswick settlement until its
maturity on December 31, 1998.
(3) Does not include (a) shares of Common Stock intended to be
reserved for issuance under the Company's 1998 Incentive Stock Plan, or (b)
shares of Common Stock intended to be reserved for issuance under
the Company's 1998 Employee Stock Purchase Plan. See "Management -- 1998
Incentive Stock Plan" and "Management -- Employee Stock Purchase Plan."
23
<PAGE> 25
DILUTION
The pro forma deficit in net tangible book value of the Company at December
31, 1997 was $2.0 million, or $( ) per share of Common Stock. "Pro forma net
tangible book value per share" is the pro forma tangible net worth (total
tangible assets less total liabilities) of the Company divided by the number of
shares of Common Stock outstanding without giving effect to the sale of shares
of Common Stock sold in connection with the Offering. After giving effect to the
sale of the shares of Common Stock offered by the Company in the Offering at an
assumed initial public offering price of $ per share (after deducting
underwriting discounts and estimated offering expenses) and the application of
the proceeds therefrom as described under "Use of Proceeds", the combined net
tangible book value of the Company at December 31, 1997 would have been $58.3
million or $ per share, representing an immediate increase in net
tangible book value of $ per share to existing stockholders and an
immediate dilution of $ per share to new investors purchasing shares in
the Offering. The following table illustrates this dilution on a per share
basis:
<TABLE>
<S> <C>
Assumed initial public offering price per share.............
Pro forma net tangible book value per share as of December
31, 1997...............................................
Increase in pro forma net tangible book value per share
attributable to shares sold to new investors...........
-------
Pro forma as adjusted net tangible book value per share
after the Offering........................................
-------
Pro forma as adjusted dilution in net tangible book value
per share to new investors................................
=======
</TABLE>
If the Underwriters' over-allotment option is exercised in full, the
increase in pro forma net tangible book value per share attributable to the
Offering, pro forma as adjusted net tangible book value per share after the
Offering, and pro forma as adjusted dilution per share to new investors would be
$ , $ , $ , respectively.
The following table sets forth at March 1, 1998, after giving effect to the
sale of the Common Stock offered hereby, (i) the number of shares of Common
Stock purchased by existing stockholders from the Company and the total
consideration (including the fair value of the shares of Common Stock issued to
the owners of the Merged Companies and Property Companies) and the average price
per share paid to the Company for such shares; (ii) the number of shares of
Common Stock purchased by new investors in the Offering from the Company and the
total consideration and the price per share paid by them for such shares; and
(iii) the percentage of shares purchased from the Company by existing
stockholders and the new investors purchasing shares of Common Stock in the
Offering and the percentages of consideration paid to the Company for such
shares by existing stockholders and new investors.
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- ------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)(2)............. 8,950,000
New investors...........................
--- ---
Total......................... 100%
===
</TABLE>
- ---------------
(1) See "Certain Transactions -- The Mergers and Property Acquisitions." Does
not include (a) shares of Common Stock to be reserved for issuance
under the Company's 1998 Incentive Stock Plan, or (b) shares of
Common Stock to be reserved for issuance under the Company's 1998 Employee
Stock Purchase Plan. See "Management -- 1998 Incentive Stock Plan" and
"Management -- Employee Stock Purchase Plan."
(2) Includes shares of Common Stock expected to be issued and the total
consideration expected to be received by the Company in connection with the
Stovall Acquisition.
24
<PAGE> 26
SELECTED FINANCIAL DATA
(In thousands, except per share data)
The following table contains certain financial and operating data and is
qualified by the more detailed Consolidated Financial Statements and notes
thereto included elsewhere in this Prospectus. The Balance Sheet Data as of
December 31, 1995 and 1996 and September 30, 1997 and the Statements of
Operations Data for the years ended December 31, 1995 and 1996 and the nine
months ended September 30, 1997 were derived from the Consolidated Financial
Statements and notes thereto that have been audited by Arthur Andersen LLP,
independent certified public accountants, and are included elsewhere in this
Prospectus. The Balance Sheet Data as of December 31, 1993 and 1994 and the
Statements of Operations Data for the years ended December 31, 1993 and 1994 and
the nine months ended September 30, 1996 and the three-month period ended
December 31, 1996 and 1997 have been derived from the unaudited financial
statements of the Company which, in the opinion of management, have been
prepared on the same basis as the audited financial statements and include all
adjustments, consisting of normal recurring adjustments, which management
considers necessary for a fair presentation of the selected financial data
shown. The financial data shown for the three months ended December 31, 1997 are
not necessarily indicative of the results to be expected for the entire fiscal
year ending September 30, 1998. The financial data shown below should be read in
conjunction with the Consolidated Financial Statements and the related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------
PRO
YEAR ENDED DECEMBER 31, FORMA(1)
----------------------------------------- AS ADJUSTED
1993 1994 1995 1996 1996 1997 1997
-------- -------- -------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue........................... $111,543 $127,729 $152,889 $175,060 $136,325 $ 169,675 $188,419
Cost of sales..................... 86,798 98,295 116,896 132,641 101,993 127,418 141,287
-------- -------- -------- -------- -------- ---------- --------
Gross profit...................... 24,745 29,434 35,993 42,419 34,332 42,257 47,132
Selling, general, and
administrative expenses......... 19,298 22,665 28,137 34,174 21,829 25,426 24,736
-------- -------- -------- -------- -------- ---------- --------
Income from operations............ 5,447 6,769 7,856 8,245 12,503 16,831 22,396
Interest expense, net............. (1,187) (484) (1,035) (1,350) (1,068) (1,538) (510)
-------- -------- -------- -------- -------- ---------- --------
Income before tax provision....... 4,260 6,285 6,821 6,895 11,435 15,293 21,886
Income tax provision (benefit).... 1 1 (49) 21 527 410 8,429
-------- -------- -------- -------- -------- ---------- --------
Net income........................ $ 4,259 $ 6,284 $ 6,870 $ 6,874 $ 10,908 $ 14,883 $ 13,457
======== ======== ======== ======== ======== ========== ========
Net income per common share,
basic........................... $
Weighted average number of common
shares outstanding..............
OTHER DATA:
Number of stores(2)............... 15 17 20 19 19 20
Sales per store(3)................ $ 8,004 $ 8,353 $ 8,706 $ 9,438
Same-store sales growth(4)........ 12% 12% 15% 16% 22%
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
----------------------------------
PRO
FORMA(1)
AS ADJUSTED
1996 1997 1997
------- ---------- -----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue........................... $38,735 $ 44,341 $45,360
Cost of sales..................... 30,648 34,689 35,522
------- ---------- -------
Gross profit...................... 8,087 9,652 9,838
Selling, general, and
administrative expenses......... 12,345 10,165 9,490
------- ---------- -------
Income from operations............ (4,258) (513) 348
Interest expense, net............. (282) (450) (109)
------- ---------- -------
Income before tax provision....... (4,540) (963) 239
Income tax provision (benefit).... (506) (427) 135
------- ---------- -------
Net income........................ $(4,034) $ (536) $ 104
======= ========== =======
Net income per common share,
basic........................... $
Weighted average number of common
shares outstanding..............
OTHER DATA:
Number of stores(2)............... 19 21
Sales per store(3)................
Same-store sales growth(4)........ 6%
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
DECEMBER 31, SEPTEMBER 30, -----------------------------------
------------------------------------- ------------- PRO PRO FORMA
1993 1994 1995 1996 1997 ACTUAL FORMA(5) AS ADJUSTED(6)
------- ------- ------- ------- ------------- ------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................... $10,120 $ 7,349 $ 7,381 $ 8,146 $20,661 $ 9,107 $(6,317) $ 46,950
Total assets........................ 43,786 49,474 58,191 74,037 83,722 83,886 100,072 127,214
Long-term debt (including current
portion).......................... 2,852 2,324 2,172 2,118 10,068 9,917 9,917 1,904
Total stockholders' equity.......... 17,248 15,425 16,445 17,475 25,577 13,980 3,534 63,809
</TABLE>
- ---------------
(1) Pro forma information gives effect to (a) the probable Stovall Acquisition,
(b) certain pro forma adjustments to the historical financial statements,
and (c) the consummation of the Offering. See the Pro Forma Consolidated
Financial Statements and notes thereto for a description of the pro forma
adjustments.
(2) Includes only those stores open at period end.
(3) Includes only those stores open for the entire proceeding 12-month period.
(4) New stores are included in the comparable base at the beginning of the
store's thirteenth month of operations.
(5) The pro forma balance sheet has been adjusted to give effect to (a) the
probable Stovall Acquisition, and (b) certain pro forma adjustments to the
historical financial statements, including the Brunswick settlement. See the
Pro Forma Consolidated Financial Statements and notes thereto for a
description of the pro forma adjustments.
(6) Adjusted to reflect the consummation of the Offering and the application of
the estimated net proceeds therefrom. See "Use of Proceeds" and the Pro
Forma Consolidated Financial Statements and notes thereto for a further
description of the application of the net proceeds.
25
<PAGE> 27
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company is the largest recreational boat dealer in the United States.
Through 24 retail locations in four states, the Company sells new and used
recreational boats and related marine products, including engines, boats,
trailers, parts, and accessories. The Company also arranges related boat
financing, insurance and extended warranty contracts, provides boat repair and
maintenance services, and offers boat brokerage services.
The Company was formed in January 1998 and merged with five recreational
boat dealers (the "Merged Companies"), which had an average operating history of
21 years under the ownership existing at the time of the Mergers. Each of the
companies historically operated with a calendar year end, but adopted the
September 30 year end of MarineMax upon completion of the Mergers. The September
30 year end more closely conforms to the natural business cycle of the Company.
The following discussion compares the three months ended December 31, 1997 to
the three months ended December 31, 1996, the nine months ended September 30,
1997 to the nine months ended September 30, 1996, and calendar 1996 to calendar
1995, and should be read in conjunction with the Consolidated Financial
Statements of the Company, including the related notes thereto, appearing
elsewhere in this Prospectus.
The Company derives its revenue from (i) selling new and used recreational
boats and related marine products; (ii) arranging financing, insurance, and
extended warranty products; (iii) providing boat repair and maintenance
services; and (iv) offering boat brokerage services. Revenue from boat or
related marine product sales, boat repair and maintenance services, and boat
brokerage services is recognized at the time the product is delivered to the
customer or the service is completed. Revenue earned by the Company for
arranging financing, insurance, and extended warranty products is recognized
when the related boat sale is recognized.
Cost of sales generally includes the cost of the recreational boat or other
marine product, plus any additional parts or consumables used in providing
maintenance, repair, and rigging services.
The Merged Companies operated historically as independent, privately owned
entities, and their results of operations reflect varying tax structures,
including both S and C corporations, which have influenced the historical level
of employee-stockholder compensation. The selling, general, and administrative
expenses of the Merged Companies include compensation to employee-stockholders
totaling $1.6 million and $5.5 million for the three months ended December 31,
1997 and 1996, respectively, $4.1 million and $3.8 million for the nine months
ended September 30, 1997 and 1996, respectively, and $9.2 million and $6.9
million for the years ended December 31, 1996 and 1995, respectively. As a
result of the varying practices regarding compensation to employee-stockholders
among the Merged Companies, the comparison of operating margins from period to
period is not meaningful. Certain employee-stockholders have entered into
employment agreements with the Company, reflecting reduced compensation when
compared to historical levels. See "Management -- Employment Agreements." This
compensation differential has been reflected in the Pro Forma Consolidated
Statement of Operations.
RESULTS OF OPERATIONS
The following table sets forth certain selected financial data as a
percentage of revenue for the periods indicated:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
----------------------------------- -----------------------------------
1995 1996 1996 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue............... $152,889 100.0% $175,060 100.0% $136,325 100.0% $169,675 100.0%
Cost of sales......... 116,896 76.5% 132,641 75.8% 101,993 74.8% 127,418 75.1%
-------- -------- -------- --------
Gross profit.......... 35,993 23.5% 42,419 24.2% 34,332 25.2% 42,257 24.9%
Selling, general, and
administrative
expenses............ 28,137 18.4% 34,174 19.5% 21,829 16.0% 25,426 15.0%
-------- -------- -------- --------
Operating income...... 7,856 5.1% 8,245 4.7% 12,503 9.2% 16,831 9.9%
Interest expense,
net................. 1,035 0.7% 1,350 0.8% 1,068 0.8% 1,538 0.9%
-------- -------- -------- --------
Income before income
taxes............... 6,821 4.4% 6,895 3.9% 11,435 8.4% 15,293 9.0%
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
---------------------------------
1996 1997
--------------- ---------------
<S> <C> <C> <C> <C>
Revenue............... $38,735 100.0% $44,341 100.0%
Cost of sales......... 30,648 79.1% 34,689 78.2%
------- -------
Gross profit.......... 8,087 20.9% 9,652 21.8%
Selling, general, and
administrative
expenses............ 12,345 31.9% 10,165 22.9%
------- -------
Operating income...... (4,258) (11.0)% (513) (1.1)%
Interest expense,
net................. 282 0.7% 450 1.0%
------- -------
Income before income
taxes............... (4,540) (11.7)% (963) (2.1)%
</TABLE>
26
<PAGE> 28
Three Months Ended December 31, 1997 Compared to Three Months Ended December 31,
1996
Revenue. Revenue increased $5.6 million, or 14.5%, to $44.3 million for
the three-month period ended December 31, 1997 from $38.7 million for the
three-month period ended December 31, 1996. Of this increase, $2.2 million was
attributable to 5.7% growth in comparable stores sales in 1997 and $3.4 million
was attributable to stores not eligible for inclusion in the comparable store
base.
Gross Profit. Gross profit increased $1.6 million, or 19.4%, to $9.7
million for the three-month period ended December 31, 1997 from $8.1 million for
the three-month period ended December 31, 1996. Gross profit margin as a
percentage of revenue increased to 21.8% in 1997 from 20.9% in 1996. The
increase in gross profit margin is attributable to sales of products that
historically result in higher gross profits such as finance and insurance
contracts and parts and services.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses decreased by approximately $2.2 million, or 17.7%, to
$10.2 million for the three-month period ended December 31, 1997 from $12.3
million for the three-month period ended December 31, 1996. Selling, general,
and administrative expenses as a percentage of revenue decreased to 22.9% in
1997 from 31.9% in 1996. The December 31, 1996 quarter reflected larger
stockholder-employee compensation levels due to year-end bonus and compensation
activities. The current period reduction in selling, general, and administrative
expenses as a percentage of revenue was primarily due to compensation to
stockholder-employees decreasing by $3.9 million, or 10.0% of revenue, from the
three-month period ended December 31, 1996.
Interest Expense, Net. Interest expense, net increased approximately
$168,000, or 59.6%, to $450,000 in 1997 from $282,000 in 1996. Interest expense,
net as a percentage of revenue increased to 1.0% in 1997 from 0.7% in 1996. This
increase resulted primarily from increased debt associated with the redemption
of common stock and higher levels of outstanding borrowings related to the
increased level of inventories required to support the increase in revenue.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996
Revenue. Revenue increased $33.4 million, or 24.5%, to $169.7 million for
the nine-month period ended September 30, 1997 from $136.3 million for the
nine-month period ended September 30, 1996. Of this increase, $31.0 million was
attributable to 22.1% growth in comparable stores sales in 1997 and $2.4 million
was attributable to stores not eligible for inclusion in the comparable store
base. The increase in comparable store sales in 1997 resulted primarily from
more effective utilization of the prospect tracking feature of the integrated
computer system, a greater emphasis on used boat sales, the addition of the
Boston Whaler product line at 12 locations, the introduction of the MarineMax
Value-Price sales approach at seven retail locations, which management believes
has resulted in increased closing rate on sales, and participation in additional
boat shows.
Gross Profit. Gross profit increased $8.0 million, or 23.1%, to $42.3
million for the nine-month period ended September 30, 1997 from $34.3 million
for the nine-month period ended September 30, 1996. Gross profit margin as a
percentage of revenue decreased to 24.9% in 1997 from 25.2% in 1996. The Company
experienced a decrease in gross profits recognized on boat sales primarily due
to management's decision to decrease prices in an effort to gain market share in
certain of the Company's regions.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased approximately $3.6 million, or 16.5%, to $25.4
million for the nine-month period ended September 30, 1997 from $21.8 million
for the nine-month period ended September 30, 1996. Selling, general, and
administrative expenses as a percentage of revenue decreased to 15.0% in 1997
from 16.0% in 1996. Compensation to stockholder-employees increased by
approximately $300,000, which was approximately $700,000 less than the
proportional increase in revenue.
Interest Expense, Net. Interest expense, net increased approximately
$470,000, or 44.0%, to $1.5 million in 1997 from $1.0 million in 1996. Interest
expense, net as a percentage of revenue increased to 0.9% in 1997 from 0.8% in
1996. This increase resulted primarily from increased debt associated with the
redemption of common stock and higher levels of outstanding borrowings related
to the increased level of inventories required to support the increase in
revenue.
27
<PAGE> 29
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Revenue. Revenue increased $22.2 million, or 14.5%, to $175.1 million in
1996 from $152.9 million in 1995. Of this increase, $23.7 million was
attributable to 16.2% growth in comparable stores sales. This increase was
partially offset by a decrease of $1.5 million as the result of one store
closing in 1996. The increase in comparable store sales in 1996 was due
primarily to increased use of the prospect tracking feature of the integrated
computer system, a stronger emphasis on used boat sales and parts and service
sales, the addition of product lines in selected locations (such as Baja,
Challenger Bass Boats, Sea Hunt, and Sea Pro), and participation in additional
boat shows.
Gross Profit. Gross profit increased $6.4 million, or 17.9%, to $42.4
million in 1996 from $36.0 million in 1995. Gross profit as a percentage of
revenue increased to 24.2% in 1996 from 23.5% in 1995. The gross profit margin
increase was primarily due to more effective utilization of the integrated
computer system, which allowed for more timely monitoring and emphasis on daily
and monthly gross profit margins, and increased sales of products that
historically result in higher gross profits such as finance and insurance
contracts.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased approximately $6.1 million, or 21.5%, to $34.2
million in 1996 from $28.1 million in 1995. Selling, general, and administrative
expenses as a percentage of revenue increased to 19.5% in 1996 from 18.4% in
1995. The increase in selling, general, and administrative expenses as a
percentage of revenue was primarily due to an additional $1.3 million of
stockholder-employee compensation and $800,000 in additional advertising expense
in excess of their proportion to the increase in revenue. The increase in
advertising expense was primarily associated with the addition of new product
lines as noted above.
Interest Expense, Net. Interest expense, net increased approximately
$315,000, or 30.4%, to $1.3 million in 1996 from $1.0 million in 1995. Interest
expense, net as a percentage of revenue increased to 0.8% in 1996 from 0.7% in
1995. This increase was primarily the result of increased borrowings related to
the increased level of inventories required to support the increase in revenue.
QUARTERLY DATA AND SEASONALITY
The following table sets forth certain unaudited quarterly financial data
for each of the Company's last eight quarters. The information has been derived
from unaudited financial statements that, in the opinion of management, reflect
all adjustments (consisting only of normal recurring adjustments) necessary for
the fair presentation of such quarterly financial information. The operating
results for any quarter are not necessarily indicative of the results to be
expected for any future period.
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1996 1996 1996 1996 1997 1997 1997 1997
--------- -------- ------------- ------------ --------- -------- ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue............... $40,353 $58,710 $37,262 $38,735 $49,043 $62,083 $58,549 $44,341
Cost of sales......... 30,712 44,611 26,670 30,648 37,883 46,402 43,132 34,689
------- ------- ------- ------- ------- ------- ------- -------
Gross profit.......... $ 9,641 $14,099 $10,592 $ 8,087 $11,160 $15,681 $15,417 $ 9,652
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash needs are primarily for working capital to support
operations, including new and used boat and related parts inventories,
off-season liquidity, and growth through new store openings. These cash needs
have historically been financed with cash from operations and borrowings under
credit facilities. Historically, the Merged Companies utilized a combination of
floor plan financing, working capital lines of credit, and loans from
stockholders to finance inventory levels. These historic facilities had varying
interest rates, terms, and payment requirements.
For the three-month periods ended December 31, 1996 and 1997, the
nine-month periods ended September 30, 1996 and 1997, and the calendar years
ended December 31, 1995 and 1996, the Company generated cash flows from
operating activities of approximately $2.9 million, $4.4 million, $4.1 million,
$8.4
28
<PAGE> 30
million, $5.2 million, and $7.1 million, respectively. In addition to net
income, cash provided by operating activities was due primarily to inventory
management, including floor plan management. Stockholder-employee compensation
levels significantly impact net income and, therefore, cash flows from
operations, which causes variation in operating cash flows between periods.
For the three-month periods ended December 31, 1996 and 1997, the cash
flows used by investing activities approximated $381,000 in 1996 and $167,000 in
1997. For the nine-month periods ended September 30, 1996 and 1997, the cash
flows used by investing activities approximated $900,000 and $1.0 million,
respectively. For the calendar years ended December 31, 1995 and 1996, cash
flows used by investing activities were $1.1 million and $1.3 million,
respectively. Cash used in investing activities was primarily attributable to
purchases of property and equipment associated with opening new or improving
existing stores.
For the three-month periods ended December 31, 1996 and 1997, the cash
flows used by financing activities were $6.0 million and $14.4 million,
respectively. For the nine-month periods ended September 30, 1996 and 1997, the
cash flows provided by financing activities approximated $100,000 and $1.0
million, respectively. For the calendar years ended December 31, 1995 and 1996,
cash flows used by financing activities were $3.5 million and $5.4 million,
respectively. Cash flows used by financing activities during the calendar years
and three-month periods ended December 31 reflect distributions made to
stockholder-employees for tax and other purposes, which have historically been
made in the quarter ended December 31.
At December 31, 1997, the Company's long-term indebtedness totaled
approximately $9.9 million, of which approximately $5.9 million is due to a
former stockholder of one of the Merged Companies relating to the reacquisition
of that shareholder's interest, while the remaining long-term indebtedness is
primarily associated with the Company's real estate holdings. Upon completion of
the Offering, the Company intends to repay approximately $8.0 million of
long-term indebtedness.
Subsequent to the Combination Transactions, the Company obtained a
commitment letter from a financial institution providing for a $105.0 million
working capital line of credit carrying an interest rate of LIBOR plus 1.25% and
a three-year term. At December 31, 1997, the Company had $41.4 million of floor
plan financing outstanding under its existing agreements with lenders. Upon
completion of the Offering, the Company intends to repay $19.2 million of the
existing floor plan indebtedness and to refinance the remaining outstanding
balance with the newly obtained working capital line of credit.
The Company believes that its existing capital resources, including the net
proceedings from the Offering, will be sufficient to finance the Company's
operations for at least the next 12 months.
29
<PAGE> 31
BUSINESS
GENERAL
MarineMax is the largest recreational boat dealer in the United States.
Through 24 retail locations in Florida, Texas, California, and Arizona, the
Company sells new and used recreational boats, including pleasure boats (such as
sport boats, sport cruisers, sport yachts, and yachts), fishing boats, bass
boats, pontoon boats, and high-performance boats with a focus on the premium
brands in each segment. The Company also sells related marine products,
including engines, trailers, parts, and accessories. In addition, the Company
arranges related boat financing, insurance, and extended service contracts,
provides repair and maintenance services, and offers boat brokerage services.
The Company is the nation's largest retailer of Sea Ray, Boston Whaler, and
other boats manufactured by Brunswick Corporation ("Brunswick"), which is the
world's largest manufacturer of recreational boats. Sales of new Brunswick boats
accounted for 84% of the Company's new boat sales in 1997, which the Company
believes represented approximately 20% of all new Sea Ray boat sales and
approximately 5% of all Brunswick marine product sales during that period. For
the 12 months ended December 31, 1997, the Company had pro forma revenue of
$233,779,000, pro forma operating income of $22,744,000, and pro forma net
income of $13,561,000 (assuming the Stovall Acquisition and other adjustments
had occurred as of January 1, 1997). The Company's same-store sales increased by
approximately 19% in calendar 1997, following 16% and 15% increases in calendar
1996 and 1995, respectively.
The combination of the Merged Companies permits the Company to capitalize
on the experience and success of each of the Merged Companies in order to
establish a new national standard of customer service and responsiveness in the
highly fragmented retail boating industry. The Merged Companies were organized
between 1971 and 1983, and each is the exclusive dealer of Sea Ray boats in its
geographic market and ranks in the top 15 Sea Ray dealers in the United States.
While the average new boat retailer generates less than $3 million in annual
sales, the Merged Companies' retail locations averaged $10 million in annual
sales in 1997. Given the Company's emphasis on premium brand boats, the
Company's average selling price for a new boat in 1997 was approximately $39,000
compared to the industry average selling price in 1997 of approximately $14,000.
The senior executives of the Merged Companies have an average of 21 years of
experience in the recreational boat industry and have maintained long-term
business and personal relationships with each other. The Company is adopting the
best practices of the Merged Companies as appropriate to enhance its ability to
attract more customers, foster an overall enjoyable boating experience, and
offer boat manufacturers stable and professional retail distribution. The
Company believes that its prime retail locations, extensive facilities, full
range of services, MarineMax Value-Price sales approach, and emphasis on
customer service and satisfaction before and after a boat sale are competitive
advantages and enable it to be more responsive to the needs of existing and
prospective customers.
The Company plans to expand its operations through internal growth and
acquisitions. See "Risk Factors -- Risks Associated With Acquisition Strategy"
and "Business -- Strategy."
U.S. RECREATIONAL BOATING INDUSTRY
In 1996, total U.S. recreational boating sales generated $17.8 billion in
revenue, including retail sales of new and used recreational boats; marine
products, such as engines, trailers, parts, and accessories; and related boating
expenditures, such as fuel, insurance, docking, storage, and repairs. Retail
sales of new boats, engines, and trailers accounted for approximately $9.2
billion of such sales in 1996. Retail recreational boating sales were $17.9
billion in the late 1980s, but declined to a low of $10.3 billion in 1992, which
the National Marine Manufacturers Association (the "NMMA") and other industry
sources attributed to a recession and the imposition throughout 1991 and 1992 of
a luxury tax on boats sold at prices in excess of $100,000. The luxury tax was
repealed in 1993. Since 1993, retail recreational boating sales have increased
each year.
Sales in the recreational boat industry are impacted significantly by other
recreational opportunities; economic factors, including general economic
conditions, consumer income levels, tax law changes, and fuel prices; and
demographics. The share of recreational dollars that U.S. consumers spend on
boating declined from 3.1% in 1988, the boating industry's peak year, to 2.0% in
1996. Industry sources have attributed the
30
<PAGE> 32
decline in boating to poor customer service throughout the industry, lack of
boater education, and the perception that boating is time consuming, costly, and
difficult. Industry associations such as the NMMA are developing dealership
servicing standards and consumer boating education programs to improve the
overall boating experience and implementing an advertising program to educate
consumers on the pleasures and ease of boating.
Most boat purchasers are in the 35 to 54 age group. Although these
individuals account for 36% of the U.S. population over age 16, they account for
over 50% of discretionary income and represent the fastest growing segment of
the U.S. population, growing at a 2.5% annual rate.
The recreational boat retail market remains highly fragmented with little
consolidation having occurred to date. The boat retailing industry includes more
than 4,000 boat retailers, most of which are small companies owned by
individuals that operate in a single market, have annual sales of less than $3
million, and provide varying degrees of merchandising, professional management,
and customer service. Many such retailers are encountering increased pressure
from boat manufacturers to improve their levels of service and systems,
increased competition from larger national retailers in certain product lines,
and, in certain cases, business succession issues.
STRATEGY
The Company's goal is to enhance its position as the leading operator of
recreational boat dealerships. Key elements of the Company's operating and
growth strategies include the following:
Operating Strategies
Implementing Best Practices. The Company is implementing the "best
practices" of each of the Merged Companies as appropriate throughout its
dealerships. In particular, the Company is phasing in throughout its dealerships
the MarineMax Value-Price sales approach, recently implemented at certain of its
dealerships. Under the MarineMax ValuePrice approach, the Company sells its
boats at posted prices, generally representing a discount from the
manufacturer's suggested retail price, without further price negotiation,
thereby eliminating the anxieties of price negotiations that occur in most boat
purchases. The Company also generally includes two years of free boat
maintenance, as recommended in the manufacturer's maintenance guidelines, to
eliminate boat maintenance concerns from the customer's boating experience. In
addition, the Company will adopt, where beneficial, the best practices of each
Merged Company in terms of location design and layout, product purchases,
maintenance and repair services (including extended service hours and mobile or
dockside services), product mix, employee training, and customer education and
services.
Achieving Operating Efficiencies and Synergies. The Company plans to
increase the operating efficiencies of and achieve certain synergies among its
dealerships in order to enhance internal growth and profitability. The Company
is centralizing certain administrative functions at the corporate level, such as
accounting, finance, insurance coverage, employee benefits, marketing, strategic
planning, legal support, purchasing and distribution, and management information
systems. Centralization of these functions should reduce duplicative expenses
and permit the dealerships to benefit from a level of scale and expertise that
would otherwise be unavailable to each dealership individually. The Company also
expects to realize cost savings from reduced inventory carrying costs as a
result of purchasing boat inventories on a national level and directing boats to
dealership locations that can more readily sell such boats; lower financing
costs through new floor plan credit facilities; and volume purchase discounts
and rebates for certain marine products, supplies, and advertising. The ability
of each of the Company's retail locations to offer complementary services of the
Company's other retail locations, such as offering customer excursion
opportunities, providing maintenance and repair services at the customer's boat
location, and giving access to a larger inventory, increases the competitiveness
of each retail location.
Emphasizing Customer Satisfaction and Loyalty. The Company seeks to
achieve a high level of customer satisfaction and establish long-term customer
loyalty by creating an overall enjoyable boating experience beginning with the
negotiation-free purchase process. The Company further enhances and simplifies
the purchase process by offering financing and insurance at its retail locations
with competitive
31
<PAGE> 33
terms and streamlined turnaround. The Company provides the customer with a
thorough in-water orientation of boat operation as well as ongoing boat safety,
maintenance, and use seminars and demonstrations for the customer's entire
family. The Company also continues its customer service after the sale by
leading and sponsoring Getaways! group boating trips to various destinations,
rendezvous gatherings, and on-the-water organized events to provide its
customers with pre-arranged opportunities to enjoy the pleasures of the boating
lifestyle. The Company also endeavors to provide superior maintenance and repair
services, often at the customer's wet slip and with extended service department
hours, that minimize the hassles of boat maintenance.
Operating with Decentralized Management. The Company has adopted a
decentralized approach to the operational management of its dealerships. The
decentralized management approach takes advantage of the extensive experience of
local managers, enabling them to implement policies and make decisions,
including the appropriate product mix, based on the needs of the local market.
Local management authority also fosters responsive customer service and promotes
long-term community and customer relationships. In addition, the centralization
of certain administrative functions at the corporate level enhances the ability
of local managers to focus their efforts on day-to-day dealership operations.
Utilizing Technology Throughout Operations. The Company believes that its
management information system, which currently is being utilized by each Merged
Company and was developed over the past six years through cooperative efforts
with a common vendor, enhances the Company's ability to integrate successfully
the operations of the Merged Companies and future acquired dealers. The system
facilitates the interchange of information and enhances cross-selling
opportunities throughout the Company. The system integrates each level of
operations on a Company-wide basis, including purchasing, inventory,
receivables, financial reporting and budgeting, and sales management. The system
enables management to monitor each dealership's operations on a daily basis in
order to identify quickly areas requiring additional focus. The system also
provides sales representatives with prospect and customer information that aids
them in tracking the status of their contacts with prospects, automatically
generates follow-up correspondence to such prospects, posts Company-wide the
availability of a particular boat, locates boats needed to satisfy a particular
customer request, and monitors the maintenance and service needs of customers'
boats. Company representatives also utilize the computer system to assist in
arranging customer financing and insurance packages.
Growth Strategies
Pursuing Strategic Acquisitions. The Company intends to capitalize upon
the significant consolidation opportunities available in the highly fragmented
recreational boat dealer industry by acquiring additional dealers and improving
their performance and profitability through the implementation of the Company's
operating strategies. The primary acquisition focus will be on well-established,
high-end recreational boat dealers in geographic markets not currently served by
the Merged Companies, particularly geographic markets with strong boating
demographics, such as the coastal states and the Great Lakes region. The Company
also may seek to acquire boat dealers that, while located in attractive
geographic markets, have not been able to realize favorable market share or
profitability and that can benefit substantially from the Company's systems and
operating strategies. The Company may expand its range of product lines and its
market penetration by acquiring dealers that distribute recreational boat
product lines different from those currently offered by the Company. As a result
of the considerable industry experience and relationships of the Company's
management team, the Company believes it is well positioned to identify and
evaluate acquisition candidates and assess their growth prospects, the quality
of their management teams, their local reputation with customers, and the
suitability of their locations. The Company believes it will be regarded as an
attractive acquiror by boat dealers because of (i) the Company's historical
performance and the experience and reputation of its management team within the
industry; (ii) the Company's decentralized operating strategy, which enables the
managers of an acquired dealer to continue their involvement in dealership
operations; (iii) the ability of management and employees of an acquired dealer
to participate in the Company's growth and expansion through potential stock
ownership and career advancement opportunities; and (iv) the ability to offer
liquidity to the owners of acquired dealers through the receipt of Common Stock
or cash.
32
<PAGE> 34
Opening New Facilities. The Company intends to establish additional retail
facilities in its existing and new territories. The Company believes that the
demographics of its existing geographic territories support the opening of
additional facilities and has opened two new retail locations since the
Combination Transactions occurred in March 1998. The Company also plans to reach
new customers by expanding various innovative retail formats developed by the
Merged Companies, such as mall stores and floating retail facilities. The mall
store concept is unique to the boating industry and is designed to draw mall
traffic and provide exposure to boating and to the Company's boats to the
non-boating public and its new product offerings to boating enthusiasts.
Floating retail facilities place the sales facility, with a customer reception
area and sales offices, on or anchored to a dock in a marina and use adjacent
boat slips to display its new and used boats in areas of high boating activity.
The Company currently operates one mall store and four floating retail
facilities, and plans to open a new mall store in 1998.
Offering Additional Product Lines and Services. The Company plans to offer
throughout its existing and acquired dealerships product lines that have been
offered only at certain of its locations. For example, one of the Merged
Companies historically has offered bass boats at its retail locations that the
Company intends to offer at other appropriate retail locations throughout the
Company. The Company also may obtain additional product lines through the
acquisition of distribution rights directly from manufacturers and the
acquisition of dealerships with distribution rights. In addition, the Company
plans to increase its used boat sales and boat brokerage services through an
increased emphasis on these activities, cooperative efforts among its
dealerships, and advertising on the Company's Internet home page. The Company
also plans to offer enhanced financing and insurance packages designed to better
serve customers and thereby increase sales and improve profitability.
PRODUCTS AND SERVICES
The Company offers new and used recreational boats and related marine
products, including engines, trailers, parts, and accessories. While the Company
sells a broad range of new and used boats, its dealerships tend to focus on
premium brand products. In addition, the Company arranges related boat
financing, insurance, and extended service contracts; provides boat maintenance
and repair services; and offers boat brokerage services.
New Boat Sales
The Company sells recreational boats, including pleasure boats (such as
sport boats, sport cruisers, sport yachts, and yachts), fishing boats, bass
boats, pontoon boats, and high-performance boats. The principal products offered
by the Company are manufactured by Brunswick, the leading worldwide manufacturer
of recreational boats, including Sea Ray pleasure boats, Baja Marine
high-performance boats, Boston Whaler offshore fishing boats, and Sea Rayder and
Rage jet boats. In calendar 1997, approximately 84% of new boats sold by the
Company were manufactured by Brunswick. The Company believes that it accounted
for approximately 20% of Sea Ray's U.S. marine product sales, and 5% of all of
Brunswick's marine product sales in calendar 1997. Certain of the Company's
dealerships also sell bass boats manufactured by Challenger, fishing boats and
pontoon boats manufactured by Starcraft Marine, pontoon boats manufactured by
Smokercraft, ski boats manufactured by Malibu Boats, and personal watercraft
manufactured by Bombardier (Sea Doo) and Yamaha.
The Company offers recreational boats in most market segments, but has a
particular focus on larger boats as reflected by the Company's average new boat
sales price in 1997 of approximately $39,000 compared to an industry average of
approximately $14,000. Given the Company's locations in some of the more
affluent, offshore boating areas in the U.S. and emphasis on high levels of
customer service, the Company sells a relatively higher percentage of large
recreational boats such as yachts and sport cruisers. The Company believes that
the product lines offered by it are among the highest quality within their
respective market segments, with well-established trade-name recognition and
reputations for quality, performance, and styling.
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The following table illustrates the range of the Company's new boat product
lines.
<TABLE>
<CAPTION>
PRODUCT LINE NUMBER OVERALL MANUFACTURER SUGGESTED
AND TRADE NAME OF MODELS LENGTH RETAIL PRICE RANGE
-------------- --------- ----------- --------------------------
<S> <C> <C> <C> <C> <C>
PLEASURE BOATS
Sea Ray Yachts............................ 6 50' to 63' $809,000 to $2,138,000
Sea Ray Sport Yachts...................... 10 37' to 48 1/2' 289,000 to 810,000
Sea Ray Sport Cruisers.................... 9 24 1/2 to 33 1/2' 71,000 to 219,000
Sea Ray Sport Boats....................... 17 18' to 25 1/2' 18,000 to 59,000
FISHING BOATS
Boston Whaler............................. 11 17' to 25' 6,000 to 93,000
Sea Pro................................... 19 17' to 26 1/2' 10,000 to 30,000
Starcraft Marine.......................... 8 14' to 21' 5,000 to 22,000
Sea Hunt.................................. 3 17' to 21' 12,000 to 15,000
BASS BOATS
Challenger................................ 14 17' to 20' 9,000 to 21,000
HIGH-PERFORMANCE BOATS
Baja Marine............................... 23 18' to 42 1/2' 22,000 to 229,000
JET BOATS
Sea Rayder................................ 1 15 1/2' 16,000
Boston Whaler Rage........................ 1 15' 16,000 to 18,000
SKI BOATS
Malibu Boats.............................. 7 20' to 21' 19,000 to 55,000
PONTOON BOATS
Starcraft Marine.......................... 8 18' to 26' 13,000 to 20,000
Smokercraft............................... 4 18' to 24' 8,000 to 14,000
PERSONAL WATERCRAFT
Bombardier Sea Doo........................ 13 8 1/2' to 10' 4,000 to 8,000
Yamaha.................................... 7 8 1/2' to 10' 4,000 to 8,000
</TABLE>
Pleasure Boats. Sea Ray pleasure boats target both the luxury and the
family recreational boating markets. Sea Ray sport yachts and yachts serve the
luxury segment of the recreational boating market and include top-of-the-line
living accommodations with a salon, a fully equipped galley, and up to three
staterooms. The sport yachts and yachts come in a variety of configurations,
including aft cabin, bridge cockpit, and express cruiser models, to suit each
customer's particular recreational boating style. Sea Ray sport boat and sport
cruiser models are designed for performance and dependability to meet family
recreational needs and include many of the features and accommodations of Sea
Ray's sport yacht and yacht models. All Sea Ray pleasure boats feature custom
instrumentation that may include an electronics package; Mercury and MerCruiser
engines; various hull, deck, and cockpit designs that can include a swim
platform, bow pulpit, and raised bridge; and various amenities, such as swivel
bucket helm seats, lounge seats, sun pads, wet bars, built-in ice chests,
insulated in-floor fish boxes, fight chairs, rod holders, and bait prep and
refreshment centers.
Fishing Boats. The fishing boats offered by the Company include a
10-horsepower fishing skiff model; aluminum and fiberglass models designed for
fishing and water sports in lakes and bays; and a 27-foot, 300-horsepower
fiberglass offshore fishing boat with cabins with limited live-aboard
capability. The fishing boats typically feature livewells, in-deck fishboxes,
splash-well gates with rodholders, rigging stations, cockpit coaming pads, and
fresh and saltwater washdowns.
High-Performance Boats. The high-performance boats that the Company sells
are manufactured by Baja Marine. Powered by MerCruiser sterndrive engines, Baja
high-performance boats are designed to deliver superior handling and durability
at high speeds. The larger offshore models have cabins featuring a V-berth and a
fully equipped galley.
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Ski Boats. The Company sells Malibu ski boats designed to achieve a smooth
ride and the flattest wakes possible for increased skier performance and safety.
Most of Malibu's ski boat models are powered by a 310-horsepower engine.
Malibu's ski boats have been named Ski Boat of the Year each of the last seven
years by Powerboat Magazine and Hot Boat Magazine.
Pontoon Boats. The Company offers multi-purpose pontoon boats manufactured
by Starcraft Marine and Smokercraft. Pontoon boats are used primarily for day
use for both fishing and cruising.
Personal Watercraft. The Company sells one- to three-passenger personal
watercraft manufactured by Bombardier (Sea Doo) and Yamaha. Personal watercraft
are powered by 85 to 130 horsepower engines and are designed for water sport.
Used Boat Sales
The Company offers used versions of the new makes and models it offers and,
to a lesser extent, used boats of other makes and models generally taken as
trade-ins. Approximately 75% of the used boats sold by the Company in calendar
1997 were Brunswick models.
The Company's used boat sales depend on its ability to source a supply of
high-quality used boats at attractive prices. The Company acquires substantially
all of its used boats through customer trade-ins. The Company intends to
increase its used boat business as a result of the increased availability of
quality used boats generated from its acquisition of used boats in its expanding
sales efforts, the increasing number of used boats that are well-maintained
through its boat maintenance plans, and its ability to market used boats
throughout its combined dealership network to match used boat demand. The
Company recently introduced at its retail locations the Sea Ray Legacy(TM)
two-year warranty plan available for used Sea Ray boats less than six years old.
The Legacy plan guarantees that each qualifying used Sea Ray boat has passed a
48-point inspection and provides protection against failure of most mechanical
parts. The Company believes that the Sea Ray Legacy warranty plan, which is only
available for used Sea Ray boats purchased from a Sea Ray dealer, will enhance
its sales of used Sea Ray boats by motivating purchasers of used Sea Ray boats
to purchase only from a Sea Ray dealer and motivating sellers of Sea Ray boats
to sell through a Sea Ray dealer.
Marine Engines and Related Marine Equipment
The Company offers marine engines and propellers, all of which are
manufactured by Mercury Marine, a division of Brunswick. The Company sells
marine engines and propellers primarily to retail customers as replacements for
their existing engines or propellers. The engines range in price from $560 to
$33,900, and propellers range in price from $35 to $4,300. In 1997, Mercury
Marine introduced various new engine models that reduce engine emissions to
comply with Environmental Protection Agency requirements through the year 2006,
including its OPTIMAX(R) 200-horsepower outboard engine, featuring a new direct
fuel injection technology that also increases fuel efficiency. See
"Business -- Environmental and Other Regulatory Issues." Mercury Marine is the
world's leading manufacturer of both fresh and saltwater marine propulsion
products. Each of the Merged Companies has been recognized by Mercury Marine as
a "Platinum Dealer," which is generally awarded to the top 5% of Mercury Marine
dealers, for an average of 10 consecutive years.
The Company also sells related marine parts and accessories, including
oils, lubricants, steering and control systems, corrosion control products,
engine care and service products, primarily Mercury Marine's Quicksilver line;
Kiekhaefer high-performance accessories (such as propellers), instruments, and a
complete line of boating accessories, including life jackets, inflatables, and
wakeboards. The Company also offers novelty items, such as shirts, caps, and
floormats bearing the Sea Ray or dealer logo.
Maintenance and Repair Services
Providing customers with professional, prompt maintenance and repair
services is critical to the Company's sales efforts and contributes to the
direct profitability of the Company. The Company provides maintenance and repair
services at most of its retail locations, with extended service hours at certain
of its locations. In addition, in many of its markets, the Company provides
mobile maintenance and repair services
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at the location of the customer's boat. The Company believes that this service
commitment is a competitive advantage in the markets in which the Company
competes and is critical to its efforts to provide a trouble-free boating
experience. The Company also believes that its maintenance and repair services
contribute to strong customer relationships and that its emphasis on
preventative maintenance and quality service increases the potential supply of
well-maintained boats for its used boat sales.
The Company generally offers a two-year maintenance plan that provides
protection for its customers' boats. Certain of the Company's dealerships
include the maintenance plan as part of the MarineMax Value-Price of the boat.
Company technicians provide maintenance on a regularly scheduled basis at either
the Company's retail locations or dockside. The Company notifies its customers
when their boats are due for periodic service, thereby encouraging preventative
maintenance.
The Company performs both warranty and non-warranty repair services, with
the cost of warranty work reimbursed by the manufacturer in accordance with the
manufacturer's warranty reimbursement program. For warranty work, Brunswick
reimburses a percentage of the dealer's posted service labor rates, with the
percentage varying depending on the dealer's customer satisfaction index rating
and attendance at service training courses. Certain other manufacturers
reimburse warranty work at a fixed amount per repair. Because boat manufacturers
permit warranty work to be performed only at authorized dealerships, the Company
receives substantially all of the warranted maintenance and repair work required
for the new boats it sells. The Company's extended warranty contracts also
result in an ongoing demand for the Company's maintenance and repair services
for the duration of the term of the extended warranty contract.
The Company's maintenance and repair services are performed by
manufacturer-trained and certified service technicians. In charging for its
mechanics' labor, many of the Company's dealerships use a variable rate
structure designed to reflect the difficulty and sophistication of different
types of repairs. The percentage markups on parts are similarly based on market
conditions for different parts.
F&I Products
At each of its retail locations, the Company offers its customers the
ability to finance new or used boat purchases and to purchase extended service
contracts and insurance coverage, including credit-life, accident/ disability
coverage, and boat property and casualty coverage (collectively "F&I products").
The Company believes that its customers' ability to obtain competitive financing
quickly and easily at the Company's dealerships is critical to its ability to
sell new and used boats. The Company also believes its ability to provide
customer-tailored financing on a "same day" basis gives it an advantage over
many of its competitors, particularly smaller competitors that lack the
resources to arrange boat financing at their dealerships or that do not generate
sufficient volume to attract the diversity of financing sources that are
available to the Company. The Company receives a fee from the lender for
arranging customer financing, typically subject to a charge-back against a
portion of the fee if the customer repays the loan or defaults within designated
periods.
The Company also offers certain types of credit-life, accident and
disability, and property and casualty insurance to its customers. The Company
receives a referral fee on each policy sold to its customers. Credit-life
insurance policies provide for repayment of the boat loan if the purchaser dies
while the loan is outstanding. Accident and disability insurance policies
provide for payment of the monthly loan obligations during any period in which
the purchaser is disabled. Property and casualty insurance covers loss or damage
to the boat. The Company has recently entered into arrangements with various
insurance companies to offer enhanced insurance policies covering the Company's
customers. One of the Company's strategies is to generate increased referral
fees by offering more competitive insurance products.
The Company also offers extended service contracts under which, for a
predetermined price, the Company provides all designated services recommended in
the manufacturer's maintenance guidelines during the contract term at no
additional charge above a deductible. While the Company sells all new boats with
the boat manufacturer's standard warranty of generally five years, extended
service contracts provide additional coverage beyond the time frame or scope of
the manufacturer's warranty. Purchasers of used boats generally are able to
purchase an extended service contract, even if the selected boat is no longer
covered by the manufacturer's warranty. Generally, the Company receives a fee
for arranging an extended service contract.
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The Company manages the service obligations that it sells and provides the parts
and service (or pays the cost of others that may provide such parts and
services) for claims made under the contracts. Most required services under the
contracts are provided by the Company. Claims and cancellations have been
insignificant during the past five years.
Boat Brokerage Services
Through employees who are licensed boat brokers, the Company offers boat
brokerage services at most of its retail locations. For a commission of
typically between 10% and 14%, the Company offers for sale brokered boats,
listing them on the "BUC" system, advising its other retail locations of their
availability through the Company's integrated computer system, and advertising
them on the Company's Internet home page. The BUC system, which is similar to a
real estate multiple listing service, is a national boat listing service of
approximately 600 brokers maintained by BUC International. Often sales are
co-brokered, with the commission split between the buying and selling brokers.
The Company believes that its access to potential used boat customers and
methods of listing and advertising customers' brokered boats is more extensive
than is typical among boat brokers. In addition to generating revenue from
brokerage commissions, the Company's boat brokerage services also enable the
Company to offer a broad array of used boats without increasing related
inventory costs.
The Company's brokerage customers receive the same high level of customer
service as its new and used boat customers. The Company's waterfront retail
locations enable in-water demonstrations of an on-site brokered boat. The
Company's maintenance and service, including mobile service, also is available
to the Company's brokerage customers. The purchaser of a Sea Ray boat brokered
through the Company also can take advantage of the Company's Getaways! weekend
and day trips and other rendezvous gatherings and in-water events, as well as
boat operation and safety seminars. The Company believes that the array of
services it offers are unique in the boat brokerage business.
RETAIL LOCATIONS
The Company sells its recreational boats and other marine products and
offers its related boat services through 24 retail locations in Florida, Texas,
California, and Arizona. Each retail location generally includes an indoor
showroom (including some of the industry's largest indoor boat showrooms) and
outside area for displaying boat inventories, a business office to assist
customers in arranging financing and insurance, and repair and maintenance
facilities. Most of the Company's retail locations are waterfront properties on
some of the nation's most popular boating locations, including the Intracoastal
Waterway, Naples Bay (next to the Gulf of Mexico), Tampa Bay, and the
Caloosahatchee River in Florida; Clear Lake, Lake Conroe, and Lake Lewisville in
Texas; and the Delta Basin in northern California. The Company's waterfront
retail locations, most of which include marina facilities and docks at which the
Company displays its boats, are easily accessible to the boating populace, serve
as in-water showrooms, and enable the sales force to give the customer immediate
in-water demonstrations of various boat models.
The Company plans to reach new customers by expanding in new locations the
various innovative retail formats developed by the Merged Companies, such as
mall stores and floating retail facilities. Located in a shopping mall and
utilizing a wooden dock set in a seaside scene to "anchor" seven to 10 of the
new boat lines offered by the Company, the mall store concept is unique to the
boating industry and is designed to draw mall traffic, thereby providing
exposure to boating and to the Company's boats to the non-boating public as well
as displaying its new product offerings to boating enthusiasts. Floating retail
facilities place the sales facility, with a customer reception area and sales
offices, on or anchored to a dock in a marina and use adjacent boat slips to
display its new and used boats in areas of high boating activity. The Company
currently has one mall store, which opened in November 1997, and four floating
retail facilities. The Company plans to open an additional mall store in 1998.
See "Business -- Properties."
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OPERATIONS
Dealership Operations and Management
The Company has adopted a decentralized approach to the operational
management of its dealerships. While certain administrative functions are
centralized at the corporate level, local management is primarily responsible
for the day-to-day operations of the retail locations. Each retail location is
managed by a store manager, who oversees the day-to-day operations, personnel,
and financial performance of the individual store, subject to the direction of a
district manager, who generally has responsibility for the retail locations
within a specified geographic region. Typically, each retail location also has a
staff consisting of a sales manager, an F&I manager, a parts and service
manager, sales representatives, maintenance and repair technicians, and various
support personnel.
The Company attempts to attract and retain quality employees at its retail
locations by providing them with ongoing training to enhance sales
professionalism and product knowledge, career advancement opportunities within a
larger company, and favorable benefit packages. Sales representatives receive
compensation primarily on a commission basis. Store managers are salaried
employees with incentive bonuses based on the performance of the dealership they
manage. Maintenance and repair service managers receive compensation primarily
on a salary basis with commission incentives. The Company's computer system
provides each store manager and sales representative with daily sales
information, enabling them to monitor their performance on a daily, weekly, and
monthly basis. The Company has a uniform, fully integrated computer system
serving each of its dealerships.
Sales and Marketing
The Company's sales philosophy focuses on selling the pleasures of the
boating lifestyle. The Company believes that the critical elements of its sales
philosophy include its appealing retail locations, hassle-free MarineMax
Value-Price approach, highly trained sales representatives, high level of
customer service, emphasis on educating the customer and the customer's family
on boat use, and providing its customers with opportunities for boating. The
Company strives to provide superior customer service and support before, during,
and after the sale.
The Company's retail locations offer each customer the opportunity to
evaluate a large variety of new and used boats in a comfortable and convenient
setting. The Company's full-service retail locations facilitate a turn-key
purchasing process that includes attractive lender financing packages, extended
service agreements, and insurance. Most of the Company's retail locations are
located on waterfronts and marinas, which attract boating enthusiasts and enable
customers to operate various boats prior to making a purchase decision.
The Company sells its boats at posted value prices that represent a
discount from the manufacturer's suggested retail price, frequently including
two years of free maintenance. The MarineMax Value-Price sales approach and the
two-year free maintenance policy eliminate customer anxiety associated with
price negotiation and the ongoing hassles of maintaining the boat.
Highly trained, professional sales representatives are an important factor
to the Company's successful sales efforts. These sales representatives are
trained to recognize the importance of fostering an enjoyable sales process, to
educate customers on the operation and use of the boats, and to assist customers
in making technical and design decisions in boat purchases.
As a part of its sales and marketing efforts, the Company also participates
in boat shows and in-the-water sales events on area boating locations, typically
held in January and February, in each of its markets and in certain markets in
close proximity to its markets. These shows and events are normally held at
convention centers or marinas, with area dealers renting space. Boat shows and
other offsite promotions are an important venue for generating sales orders for
the Company's new boats. The boat shows also generate a significant amount of
interest in the Company's products resulting in boat sales after the show. The
Company plans to sponsor its own boat shows.
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The Company emphasizes customer education through one-on-one education by
its sales representatives and, at some locations, its delivery captains, before
and after a sale, and through in-house seminars for the entire family on boat
safety, the use and operation of boats, and product demonstrations. One of the
Company's delivery captains or the sales representative delivers the customer's
boat to an area boating location and thoroughly instructs the customer about the
operation of the boat, including hands-on instructions for docking and
trailering the boat. To enhance its customer relationships after the sale, the
Company leads and sponsors Getaways! group boating trips to various
destinations, rendezvous gatherings, and on-the-water organized events that
promote the pleasures of the boating lifestyle. Each Company-sponsored event,
planned and led by a Company employee, also provides a favorable medium for
acclimating new customers to boating and enables the Company to actively promote
new product offerings to boating enthusiasts.
As a result of the Company's relative size, the Company believes it will
have a competitive advantage within the industry by being able to conduct an
organized and systematic advertising and marketing effort. Part of its marketing
effort includes an integrated prospect management system that tracks the status
of each sales representative's contacts with a prospect, automatically generates
follow-up correspondence, posts Company-wide availability of a particular boat
or other marine product desired by a customer, and tracks the maintenance and
service needs for the customer's boat.
Suppliers and Inventory Management
The Company purchases substantially all of its new boat inventory directly
from manufacturers, which allocate new boats to dealerships based on the amount
of boats sold by the dealership. The Company also exchanges new boats with other
dealers to accommodate customer demand and to balance inventory.
The Company purchases new boats and other marine products from Brunswick,
Starcraft Marine, Smokercraft, Challenger, SeaPro, Sea Hunt, Malibu Boats,
Bombardier, and Yamaha. The Company is the largest volume purchaser of
Brunswick's Sea Ray boats, accounting for approximately 20% of all new Sea Ray
boat sales during 1997. Approximately 84% of the Company's net purchases in 1997
were from Brunswick; no other manufacturer accounted for more than 10% of the
Company's net purchases in 1997.
The Company typically deals with each of its manufacturers under an
annually renewable, non-exclusive dealer agreement. Pricing by manufacturers is
generally established on an annual basis, but may be changed at the
manufacturer's sole discretion. Manufacturers typically discount the cost of
inventory and offer inventory financing assistance during the manufacturers'
slow season, generally September through December. To obtain lower cost of
inventory, the Company intends to capitalize on these manufacturer incentives to
take product delivery during the manufacturers' slow seasons. This permits the
Company to gain pricing advantages and better product availability during the
selling season.
Arrangements with certain manufacturers may restrict the Company's right to
offer some product lines in certain markets. The Company does not believe that
these restrictions will materially affect the Company's growth plans. See "Risk
Factors -- Boat Manufacturers' Control Over Dealers."
The Company transfers individual boats among its retail locations to fill
customer orders that otherwise might take three to four weeks to receive from
the manufacturer. This reduces delays in delivery, helps the Company maximize
inventory turnover, and assists in minimizing potential overstock or
out-of-stock situations. The Company actively monitors its inventory levels to
maintain the appropriate inventory levels to meet current market demands. The
Company is not bound by contractual agreements governing the amount of inventory
that it must purchase in any year from any manufacturer. The Company
participates in numerous end-of-summer manufacturer boat shows, which
manufacturers sponsor to sell off their remaining inventory at reduced costs
before the introduction of new model year products, typically beginning in July.
Historically, the Company has not carried over a material level of inventory
from one selling season to the next.
Floor Plan Financing
Historically, the Merged Companies purchased a substantial portion of their
inventory under floor plan lines of credit (secured by such inventory)
maintained with third-party finance companies and commercial banks, depending
upon the type of product purchased. With respect to purchases of inventory from
Brunswick,
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Brunswick reimburses the dealer a portion of the interest cost with respect to
the floor plan line of credit. The Company believes that these financing
arrangements are standard within the industry. As of December 31, 1997, the
Merged Companies owed an aggregate of approximately $41.4 million under the
floor plan financing agreements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." The Company will replace the Merged Companies' existing floor plan
lines of credit with a new floor plan financing agreement. The Company recently
obtained a $105.0 million credit commitment from a financial institution for
working capital purposes, including inventory financing. The commitment provides
for variable interest at a per annum rate of 1.25% above the 30-day LIBOR.
Management Information System
The Company believes that its management information system, which
currently is being utilized by each Merged Company and was developed over the
past six years through cooperative efforts with a common vendor, enhances the
Company's ability to integrate successfully the operations of the Merged
Companies and future acquisitions, facilitates the interchange of information,
and enhances cross-selling opportunities throughout the Company. The system
integrates each level of operations on a Company-wide basis, including
purchasing, inventory, receivables, financial reporting and budgeting, and sales
management. The system enables the Company to monitor each dealership's
operations in order to identify quickly areas requiring additional focus and to
manage inventory. The system also provides sales representatives with prospect
and customer information that aids them in tracking the status of their contacts
with prospects, automatically generates follow-up correspondence to such
prospects, posts Company-wide the availability of a particular boat, locates
boats needed to satisfy a particular customer request, and monitors the
maintenance and service needs of customers' boats. Company representatives also
utilize the system to assist in arranging financing and insurance packages. The
Company has implemented changes to its management information system that it
believes addresses the Year 2000 issue.
EMPLOYEES
As of March 1, 1998, the Company had 453 employees, 446 of whom were in
store-level management and seven of whom were in corporate administration and
management. The Company is not a party to any collective bargaining agreements
and is not aware of any efforts to unionize its employees. The Company considers
its relations with its employees to be excellent.
TRADEMARKS AND SERVICE MARKS
The Company does not hold any registered trade or service marks at this
time, but has trade name and trademark applications pending with the U.S. Patent
and Trademark Office for the name "MarineMax" for its corporate logo. There can
be no assurance that any of these applications will be granted.
SEASONALITY
The Company's business, as well as the entire recreational boating
industry, is highly seasonal. Over the previous two-year period, the average
annual net sales for the quarters ended March 31, June 30, September 30, and
December 31 represented 23%, 31%, 25%, and 21%, respectively, of the Company's
annual net sales. With the exception of Florida, the Company's geographic
territories generally realize significantly lower sales in the quarterly period
ending December 31 with boat sales generally improving in January with the onset
of the public boat and recreation shows, and continue through July.
The Company's business is also subject to weather patterns, which may
adversely affect the Company's results of operations. For example, drought
conditions, or merely reduced rainfall levels or excessive rain, may close area
boating locations or render boating dangerous or inconvenient, thereby
curtailing customer demand for the Company's products. In addition, unseasonably
cool weather and prolonged winter conditions may lead to a shorter selling
season in certain locations. Although the Company's geographic diversity is
likely to reduce
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the overall impact to the Company of adverse weather conditions in any one
market area, such conditions will continue to represent potential, material
adverse risks to the Company and its future financial performance.
ENVIRONMENTAL AND OTHER REGULATORY ISSUES
The Company's operations are subject to extensive regulation, supervision,
and licensing under various federal, state, and local statutes, ordinances, and
regulations. While management believes that it maintains all requisite licenses
and permits and is in substantial compliance with all applicable federal, state,
and local regulations, there can be no assurance that the Company will be able
to maintain all requisite licenses and permits. The failure to satisfy those and
other regulatory requirements could have a material adverse effect on the
operations of the Company. The adoption of additional laws, rules, and
regulations could also have a material adverse effect on the Company's business.
Various federal, state, and local regulatory agencies, including OSHA, the EPA,
and similar federal and local agencies have jurisdiction over the operation of
the Company's dealerships, repair facilities, and other operations, with respect
to matters such as consumer protection, workers' safety, and laws regarding
protection of the environment, including air, water, and soil.
The EPA recently promulgated air emissions regulations for outboard marine
engines that impose stricter emissions standards for two-cycle, gasoline
outboard marine engines. Emissions from such engines must be reduced by
approximately 75% over a nine-year period beginning with the 1998 model year.
Costs of comparable new engines, if materially more expensive than previous
engines, or the inability of the Company's manufacturers to comply with EPA
requirements, could have a material adverse effect on the Company's business,
financial condition, and results of operations.
Certain of the Company's facilities own and operate underground storage
tanks ("USTs") for the storage of various petroleum products. The USTs are
generally subject to federal, state, and local laws and regulations that require
testing and upgrading of USTs and remediation of contaminated soils and
groundwater resulting from leaking USTs. In addition, if leakage from
Company-owned or operated USTs migrates onto the property of others, the Company
may be subject to civil liability to third parties for remediation costs or
other damages. Based on historical experience, the Company believes that its
liabilities associated with UST testing, upgrades, and remediation are unlikely
to have a material adverse effect on its financial condition or operating
results.
As with boat dealerships generally, and parts and service operations in
particular, the Company's business involves the use, handling, storage, and
contracting for recycling or disposal of hazardous or toxic substances or
wastes, including environmentally sensitive materials such as motor oil, waste
motor oil and filters, transmission fluid, antifreeze, freon, waste paint and
lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline,
and diesel fuels. Accordingly, the Company is subject to regulation by federal,
state, and local authorities establishing requirements for the use, management,
handling, and disposal of these materials and health and environmental quality
standards, and liability related thereto, and providing penalties for violations
of those standards. The Company is also subject to laws, ordinances, and
regulations governing investigation and remediation of contamination at
facilities it operates to which it sends hazardous or toxic substances or wastes
for treatment, recycling, or disposal.
The Company believes that it does not have any material environmental
liabilities and that compliance with environmental laws, ordinances, and
regulations will not, individually or in the aggregate, have a material adverse
effect on the Company's results of operations or financial condition. However,
soil and groundwater contamination has been known to exist at certain properties
owned and leased by the Company. The Company has also been required and may in
the future be required to remove aboveground and underground storage tanks
containing hazardous substances or wastes. In addition, certain of the Company's
retail locations are located on waterways that are subject to federal or state
laws regulating navigable waters (including oil pollution prevention), fish and
wildlife, and other matters.
Certain of the properties owned or leased by the Company are located in
commercial areas and have historically been used for gasoline service stations.
As a consequence, it is possible that historical site activities or current
neighboring activities have affected properties owned or leased by the Company
and that, as a
41
<PAGE> 43
result, additional environmental issues may arise in the future, the precise
nature of which the Company cannot now predict.
Additionally, certain states have required or are considering requiring a
license in order to operate a recreational boat. While such licensing
requirements are not expected to be unduly restrictive, regulations may
discourage potential first-time buyers, thereby limiting future sales, which
adversely affects the Company's business, financial condition, and results of
operations.
PRODUCT LIABILITY
Products sold or serviced by the Company may expose it to potential
liabilities for personal injury or property damage claims relating to the use of
those products. Historically, the resolution of product liability claims has not
materially affected the Company's business. The Company's manufacturers
generally maintain product liability insurance, and the Company maintains
third-party product liability insurance, which it believes to be adequate.
However, there can be no assurance that the Company will not experience legal
claims in excess of its insurance coverage or that claims will be covered by
insurance. Furthermore, if any significant claims are made against the Company,
the Company's business, financial condition, and results of operations may be
adversely affected by related negative publicity.
COMPETITION
The Company operates in a highly competitive environment. In addition to
facing competition generally from recreation businesses seeking to attract
consumers' leisure time and discretionary spending dollars, the recreational
boat industry itself is highly fragmented, resulting in intense competition for
customers, quality products, boat show space, and suitable retail locations. The
Company believes that the principal factors influencing competition within the
recreational boat industry are product features and quality, dealer service,
price, location, selection, and the availability of customer financing. The
Company relies to a certain extent on boat shows to generate sales. The
inability of the Company to participate in boat shows in its existing or
targeted markets could have a material adverse effect on the Company's business,
financial condition, and results of operations.
The Company competes primarily with single-location boat dealers and, with
respect to sales of marine equipment, parts, and accessories, with national
specialty marine stores, catalog retailers, sporting goods stores, and mass
merchants. Dealer competition continues to increase based on the quality of
available products, the price and value of the products, and attention to
customer service. There is significant competition both within markets currently
being served by the Company and in new markets that the Company may enter. The
Company competes in each of its markets with retailers of brands of boats and
engines not sold by the Company in that market. In addition, several of the
Company's competitors, especially those selling boating accessories, are large
national or regional chains that have substantial financial, marketing, and
other resources. However, the Company believes that its integrated corporate
infrastructure and marketing and sales capabilities, its cost structure, and its
nationwide presence enable it to compete effectively against these companies.
Private sales of used boats is an additional significant source of competition.
PROPERTIES
The Company leases its corporate offices in Clearwater, Florida and
additional administrative, warehouse, and service facilities in Texas. The
Company also leases 19 of its retail locations (assuming the consummation of the
Stovall Acquisition) under leases that generally contain multi-year renewal
options. In all such cases, the Company pays a fixed rent at market rates. In
substantially all of the leased locations, the Company is responsible for taxes,
utilities, insurance, and routine repairs and maintenance.
The following table reflects the status, approximate size, and facilities
of the Company's various retail locations as of the date of this Prospectus as
well as the retail locations used in Stovall's operations.
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<PAGE> 44
COMPANY RETAIL PROPERTIES
<TABLE>
<CAPTION>
OWNED OR SQUARE FACILITIES OPERATED
LOCATION LEASED FOOTAGE(1) AT PROPERTY SINCE WATERFRONT
- -------------------------- ----------------- ---------- -------------------------------- -------- -------------------
<S> <C> <C> <C> <C> <C>
FLORIDA
Clearwater................ Company owned 42,000 Retail and service; 16 wet slips 1973 Tampa Bay
Clearwater (mall)......... Third-party lease 2,600 Retail only 1997 --
Fort Myers................ Third-party lease 8,000 Retail and service; 18 wet slips 1983 Caloosahatchee
River
Miami..................... Company owned 7,200 Retail and service; 15 wet slips 1980 Intracoastal
Waterway
Naples.................... Company owned 19,600 Retail and service; 13 wet slips 1997 Naples Bay
Palm Beach................ Company owned 22,800 Retail and service; 8 wet slips 1998 Intracoastal
Waterway
Pompano Beach............. Company owned 23,000 Retail and service; 16 wet slips 1990 Intracoastal
Waterway
Stuart(2)................. Company owned 6,700 Retail and service; 60 wet slips 1994 Intracoastal
Waterway
Tampa..................... Company owned 13,100 Retail and service 1995 --
CALIFORNIA
Oakland................... Third-party lease 17,700 Retail and service; 20 wet slips 1985 Alameda Estuary
(San Francisco Bay)
Oakley.................... Third-party lease 5,100 Retail and service 1996 --
Redding................... Company owned 11,700 Retail and service 1978 --
Redding................... Third-party lease 3,500 Retail and service 1998 --
Santa Rosa................ Third-party lease 8,100 Retail and service 1990 --
Sacramento................ Company owned 24,800 Retail and service 1995 --
Sacramento (River Bend)
(floating
facility)(3)............ Third-party lease 500 Retail and service; 20 wet slips 1998(3) Sacramento River
ARIZONA
Tempe..................... Company owned 34,000 Retail and service 1992 --
TEXAS
League City (floating
facility)(4)............ Third-party lease 800 Retail and service; 30 wet slips 1988 Clear Lake
Lewisville (Dallas)....... Third-party lease 10,000 Retail and service 1992 Lake Lewisville
Lewisville (Dallas)
(floating facility)..... Third-party lease 500 Retail only; 20 wet slips(5) 1994 Lake Lewisville
Fort Worth................ Third-party lease 1,600 Retail only(6) 1997 --
Houston................... Affiliate lease 10,000 Retail only(6) 1987 --
Houston................... Affiliate lease 10,000 Retail only 1981 --
Montgomery (floating
facility)............... Third-party lease 600 Retail only; 10 wet slips 1995 Lake Conroe
STOVALL RETAIL PROPERTIES
FLORIDA
Jacksonville.............. Affiliate lease 6,600(7) Retail and service; 12 wet slips 1998 St. John's River
GEORGIA
Kennesaw (Atlanta)........ Affiliate lease 12,000(8) Retail and service 1996 --
Augusta................... Affiliate lease 8,000 Retail and service; 15 wet slips 1988 Clark Hill Lake
Forest Park (Atlanta)..... Affiliate lease 47,300 Retail and service 1973 --
Lake Lanier............... Affiliate lease 3,000 Retail and service; 50 wet slips 1981 Lake Lanier
</TABLE>
- ---------------
(1) Square footage does not include outside sales space or dock or marina
facilities.
(2) The Stuart retail property consists of two parcels, each of which is owned
by a separate, wholly owned subsidiary of the Company.
(3) Expected to be opened in March 1998.
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<PAGE> 45
(4) The floating facility is owned by the Company; however, the related dock and
marina space is leased by the Company from an unaffiliated third-party.
(5) Shares service facility located at the other Lewisville retail location.
(6) Service performed at Houston service center leased by the Company from an
affiliate of one of the Merged Companies.
(7) Includes 3,300 square feet currently under construction for an addition to
the existing service center.
(8) Includes 4,000 square feet currently under construction for a new service
center.
LEGAL PROCEEDINGS
The Company is involved in various legal proceedings arising out of its
operations in the ordinary course of business. The Company believes that the
outcome of all such proceedings, even if determined adversely, would not have a
material adverse effect on its business, financial condition, or results of
operations.
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<PAGE> 46
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning each of the directors
and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William H. McGill Jr...... 54 Chairman of the Board, President, Chief Executive Officer,
and Director
Michael H. McLamb......... 32 Vice President, Chief Financial Officer, and Treasurer
Richard R. Bassett........ 44 Senior Vice President and Director
Louis R. DelHomme Jr...... 62 Senior Vice President and Director
Richard C. LaManna Jr..... 60 Senior Vice President and Director
Richard C. LaManna III.... 38 Vice President and Secretary
Darrell C. LaManna........ 33 Vice President
</TABLE>
William H. McGill Jr. has served as the President and Chief Executive
Officer of MarineMax since January 1998 and as the Chairman of the Board and as
a director of MarineMax since March 1998. Mr. McGill also was the principal
owner and president of Gulfwind USA, Inc., one of the Merged Companies, from
1973 until its merger with the Company.
Michael H. McLamb has served as Vice President, Chief Financial Officer,
and Treasurer of the Company since January 1998. Mr. McLamb, a certified public
accountant, was employed by Arthur Andersen LLP from December 1987 to December
1997, serving most recently as a senior audit manager.
Richard R. Bassett has served as a Senior Vice President and director of
MarineMax since March 1998. Mr. Bassett was the owner and president of Bassett
Boat Company of Florida, one of the Merged Companies, from 1979 until its merger
with the Company.
Louis R. DelHomme Jr. has served as a Senior Vice President and director of
MarineMax since March 1998. Mr. DelHomme was the owner and president of 11502
Dumas, Inc. d/b/a Louis DelHomme Marine, one of the Merged Companies, from 1971
until its merger with the Company.
Richard C. LaManna Jr. has served as a Senior Vice President and director
of MarineMax since March 1998. Mr. LaManna was the president and a principal
owner of Harrison's Boat Center, Inc. and Harrison's Marine Centers of Arizona,
Inc., one of the Merged Companies, from 1978 until its merger with the Company.
Richard C. LaManna III has served as a Vice President and the Secretary of
MarineMax since March 1998. Mr. LaManna was an owner and the secretary and
treasurer of Harrison's Marine Centers of Arizona, Inc. from 1991 until its
merger with the Company. Richard LaManna III is the son of Richard LaManna Jr.
and the brother of Darrell LaManna.
Darrell C. LaManna has served as a Vice President of MarineMax since March
1998. Mr. LaManna was an owner and the Vice President of Harrison's Boat Center,
Inc. from 1988 until its merger with the Company. Darrell LaManna is the son of
Richard LaManna Jr. and the brother of Richard LaManna III.
The Company's Restated Certificate of Incorporation and Bylaws divide the
Board of Directors of the Company into three classes. At each annual meeting of
stockholders, directors in each class will be elected for three-year terms to
succeed the directors of that class whose terms are expiring. Mr. Bassett is a
Class I director whose term will expire in 1999; Messrs. McGill and LaManna are
Class II directors whose terms will expire in 2000; and Mr. DelHomme is a Class
III director whose term will expire in 2001. Officers serve at the pleasure of
the Board of Directors. Other than as set forth above, there are no family
relationships among any of the directors or officers of the Company.
The Company plans to elect at least two independent directors prior to the
completion of the Offering.
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<PAGE> 47
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors will establish an Audit Committee and a
Compensation Committee upon the completion of the Offering, each consisting
entirely of independent directors.
The responsibilities of the Audit Committee will include recommending to
the Board of Directors the independent public accountants to be selected to
conduct the annual audit of the books and records of the Company, reviewing the
proposed scope of such audit, reviewing accounting and financial controls of the
Company with the independent public accountants and the Company's financial
accounting staff, and reviewing and approving transactions between the Company
and its directors, officers, and their affiliates.
The Compensation Committee will provide a general review of the Company's
compensation plans and policies to ensure that they meet corporate objectives.
As described below, the Company's existing plans with respect to executive
compensation are largely based upon contractual commitments set forth in
employment agreements. See "Management -- Executive Compensation." The
responsibilities of the Compensation Committee will also include administering
the 1998 Incentive Stock Plan when adopted, including selecting the officers and
salaried employees to whom awards will be granted.
EXECUTIVE COMPENSATION
The Company was incorporated in January 1998. The Company anticipates that
its Chief Executive Officer and four other most highly compensated officers will
receive annualized base salaries during the year ending December 31, 1998, as
set forth under "Management -- Employment Agreements." Executive officers also
will be eligible to receive grants of stock options under the Company's 1998
Incentive Stock Plan when adopted. See "Management -- 1998 Incentive Stock
Plan."
DIRECTOR COMPENSATION
Members of the Board of Directors who are not full-time employees of the
Company will receive a quarterly directors' fee of $10,000, $5,000 of which will
be paid by the issuance of shares of Common Stock with a market value of $5,000
and the remainder of which will be paid at the director's option in cash or
Common Stock. All directors will be reimbursed for out of pocket expenses
incurred in attending meetings of the Board or committees. In addition,
independent directors will be eligible to receive grants of stock options under
the Company's 1998 Incentive Stock Plan when adopted. See "Management -- 1998
Incentive Stock Plan." Officers of the Company receive no additional
compensation for serving on the Board of Directors.
EMPLOYMENT AGREEMENTS
The Company entered into five-year employment agreements with each of
William H. McGill Jr., Michael H. McLamb, Richard R. Bassett, Louis R. DelHomme
Jr., Richard C. LaManna Jr., Richard C. LaManna III, and Darrell C. LaManna, on
the effective date of the Mergers. The employment agreements with each of these
officers provides for a base salary of $150,000 per year. Each employment
agreement provides for incentive compensation based on the performance of the
employee and the Company as determined by the Company's Board of Directors.
The Company may terminate each officer's employment only for cause, as
defined in the respective agreements. Each agreement also will terminate
automatically upon the death of the respective officer. In the event of a
termination of employment by the Company or the employee following any "change
in control" of the Company as defined in the agreement, each employment
agreement provides for the employee to receive his fixed compensation in a lump
sum and bonus payments that would have been payable through the end of the
Company's then current fiscal year as if his employment had not been terminated.
Section 280G of the Internal Revenue Code may limit the deductibility of such
payments for federal income tax purposes. If these payments are not deductible
and if the Company has income at least equal to such payments, an amount of
income equal to the amount of such payments could not be offset. As a result,
the income that was not offset would be "phantom income" (i.e. income without
cash) to the Company. A change in control would include a merger or
consolidation of the Company, a sale of all or substantially all of the assets
of the Company, under
46
<PAGE> 48
certain circumstances changes in the identity of a majority of the members of
the Board of Directors of the Company, or acquisitions of more than 20% of the
Company's Common Stock, subject to certain limitations.
Each employment agreement contains a covenant not to compete with the
Company for a period of two years immediately following termination of
employment or, in the case of a termination by the Company without cause in the
absence of a change in control, with certain exceptions, for a period of one
year following termination of employment.
1998 INCENTIVE STOCK PLAN
The Company intends to adopt (subject to stockholder approval) the
MarineMax, Inc. 1998 Incentive Stock Plan (the "Plan"), which will provide for
the grant of incentive and nonqualified stock options to acquire Common Stock of
the Company, the direct grant of Common Stock, the grant of stock appreciation
rights ("SARs"), and the grant of other cash awards to key personnel, directors,
consultants, independent contractors, and others providing valuable services to
the Company and its subsidiaries. The Company believes that the Plan will be an
important factor in attracting and retaining executive officers and other key
employees, directors, and consultants and constitutes a significant part of its
compensation program. The Plan will provide such individuals with an opportunity
to acquire a proprietary interest in the Company, and thereby align their
interests with the interests of the Company's other stockholders, and give them
an additional incentive to use their best efforts for the long-term success of
the Company.
The Plan will provide for a maximum of the lesser of shares or
% of the outstanding shares of Common Stock of the Company may be issued under
the Plan. The maximum number of shares of stock with respect to which options or
other awards may be granted to any employee (including officers) during the term
of the Plan may not exceed 50% of the shares of Common Stock covered by the
Plan.
The power to administer the Plan with respect to executive officers and
directors of the Company and all persons who own 10% or more of the Company's
issued and outstanding stock will rest exclusively with the Board of Directors
or a committee consisting of two or more non-employee directors who are
appointed by the Board of Directors. The power to administer the Plan with
respect to other persons will be vested with the Board of Directors.
The Plan will terminate in February 2008, and options may be granted at any
time during the life of the Plan. Options become exercisable at such time as may
be determined by the Board of Directors or the Plan administrator. The exercise
prices of options will be determined by the Board of Directors or the Plan
administrator, but if an option is intended to be an incentive stock option, the
exercise price may not be less than 100% (110% if the option is granted to a
stockholder who at the time of the grant of the option owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company) of the fair market value of the Common Stock at the time of the grant.
The Plan is not intended to be the exclusive means by which the Company may
issue options or warrants to acquire its Common Stock, stock awards, or any
other type of award. To the extent permitted by applicable law and New York
Stock Exchange requirements, the Company may issue any other options, warrants,
or awards other than pursuant to the Plan without stockholder approval.
EMPLOYEE STOCK PURCHASE PLAN
The Company plans to adopt (subject to stockholder approval) the MarineMax,
Inc. 1998 Employee Stock Purchase Plan (the "Stock Purchase Plan"), which is
intended to qualify for favorable income tax treatment under Section 423 of the
Internal Revenue Code and is intended to offer financial incentives for
employees to purchase Common Stock of the Company. The Stock Purchase Plan will
be administered by an appointed committee of the Board of Directors.
The Stock Purchase Plan will provide for up to shares of Common
Stock to be issued thereunder. The Stock Purchase Plan will be available to all
regular, full-time employees of the Company who have completed at least one year
of continuous service.
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<PAGE> 49
The Stock Purchase Plan will provide for implementation of up to 10 annual
offerings beginning on the first day of July in the years 1998 through 2007,
with each offering terminating on June 30 of the following year. Each annual
offering may be divided into two six-month offerings. For each offering, the
purchase price per share will be 85% of the closing price of the Common Stock on
the last day of the offering. The purchase price is paid through periodic
payroll deductions not to exceed 10% of the participant's earnings during each
offering period. However, no participant may purchase more than $25,000 worth of
Common Stock annually.
LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION
The Company's Restated Certificate of Incorporation provides that no
director of the Company will be personally liable to the Company or its
stockholders for monetary damages for breach of a fiduciary duty as a director,
except to the extent such exemption or limitation of liability is not permitted
under the Delaware GCL. The effect of this provision in the Restated Certificate
of Incorporation is to eliminate the rights of the Company and its stockholders,
either directly or through stockholders' derivative suits brought on behalf of
the Company, to recover monetary damages from a director for breach of the
fiduciary duty of care as a director except in those instances described under
the Delaware GCL. In addition, the Company has adopted provisions in its Bylaws
and entered into indemnification agreements that require the Company to
indemnify its directors, officers, and certain other representatives of the
Company against expenses and certain other liabilities arising out of their
conduct on behalf of the Company to the maximum extent and under all
circumstances permitted by law.
48
<PAGE> 50
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock as of the date of this Prospectus, and as adjusted
to reflect the sale of shares offered hereby, for (i) all directors, the Chief
Executive Officer, and the four other most highly compensated executive
officers, (ii) all directors and executive officers as a group, and (iii) each
person known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING OFFERING(2)
-------------------- --------------------
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENT NUMBER PERCENT
--------------------------- --------- ------- --------- -------
<S> <C> <C> <C> <C>
William H. McGill Jr. ................... 1,401,492 16.50% 1,401,492 %
Richard R. Bassett....................... 3,524,009 41.48% 3,524,009 %
Louis R. DelHomme Jr..................... 1,159,699(3) 13.65%(3) 1,159,699(3) %(3)
Richard C. LaManna Jr.................... 484,403 5.70% 484,403 %
Richard C. LaManna III................... 130,225 1.53% 130,225 %
Darrell C. LaManna....................... 484,403 5.70% 484,403 %
Michael H. McLamb........................ -- (4) -- (4)
Jerry Marshall(5)........................ 494,380 5.82% 494,380 %
All directors and officers as a group
(seven persons)........................ 6,616,275 77.88% 6,616,275 %
</TABLE>
- ---------------
(1) All persons listed have an address in care of the Company at 18167 U.S. 19
North, Suite 499, Clearwater, Florida 33764, and have sole voting and
investment power over their shares unless otherwise indicated.
(2) Includes an estimated 455,000 shares expected to be issued in connection
with the Stovall Acquisition.
(3) Owned of record by Spicer Partnership Ltd. Spicer Partnership Ltd. owned
substantially all of the capital stock of DelHomme prior to its merger with
the Company and is controlled by Louis R. DelHomme Jr. Mr. DelHomme is the
majority owner of Spicer Partnership Ltd. Through his ownership of Spicer
Partnership Ltd., Mr. DelHomme indirectly owns 591,743, or 6.97%, of the
outstanding shares before the Offering and % after the Offering.
(4) Less than 1.0%
(5) Jerry Marshall was a stockholder of Gulfwind South and serves as an officer
and director of a wholly owned subsidiary of the Company.
49
<PAGE> 51
CERTAIN TRANSACTIONS
The following summarizes certain material agreements between MarineMax, the
Merged Companies, and the Property Companies. This summary is not a complete
description of such agreements and therefore this discussion is qualified in its
entirety by reference to the agreements, copies of which are filed as exhibits
to the Registration Statement of which this Prospectus forms a part. It is the
Company's intention that in the future, transactions with directors, officers,
employees, or affiliates of the Company will be minimal and will be approved in
advance by a majority of the disinterested members of the Company's Board of
Directors.
THE MERGERS AND PROPERTY ACQUISITIONS
In March 1998, MarineMax acquired all of the issued and outstanding stock
of the Merged Companies and all of the beneficial interest in the Property
Companies, at which time each Merged Company and Property Company became a
wholly owned subsidiary of the Company. MarineMax issued an aggregate of
8,495,017 shares of Common Stock in connection with the Combination
Transactions. The number of shares of Common Stock issued to the stockholders of
each Merged Company and Property Company was determined based on negotiations
between MarineMax and those companies. The factors considered by the parties in
determining the number of shares of Common Stock issued to the stockholders
included, among other factors, historical cash flows, operating results, and
appraised values of the properties owned by each such Property Company or Merged
Company. In connection with the Combination Transactions, certain persons who
became directors, executive officers, and holders of more than 5% of the
outstanding shares of the Company upon the consummation of such transactions,
together with their spouses, and partnerships and trusts for which they act as
general partners and trustees, received shares of Common Stock of the Company.
See "Formation of the Company -- The Mergers and Property Acquisitions" and
"Principal Stockholders."
With the exception of the number of shares issued in connection with each
Combination Transaction, the acquisition of each Merged Company and each
Property Company was subject to substantially the same terms and conditions as
the other Merged Companies and Property Companies, respectively. The Merger
Agreements and Contribution Agreements provide that the stockholders of the
Merged Companies and owners of the Property Companies will indemnify MarineMax
from certain liabilities that may arise in connection with the respective
Combination Transaction. A portion of the Common Stock payable as consideration
in connection with each Combination Transaction is pledged for a period of up to
one year from the effectiveness of the Combination Transaction as security for
the stockholders' and owners' respective indemnification obligations. Pursuant
to the Merger Agreements, the stockholders of the Merged Companies agreed not to
compete with the Company for five years, commencing on the date of consummation
of the Mergers.
Certain of the Merged Companies and Property Companies incurred
indebtedness prior to the effectiveness of the Combination Transactions,
substantially all of which was personally guaranteed by their stockholders,
owners, or entities controlled by their stockholders or owners and remained
outstanding at the effectiveness of the Combination Transactions (including
approximately $10.9 million of long-term indebtedness). See "Formation of the
Company -- The Mergers and Property Acquisitions." The Company intends to use a
portion of the net proceeds from the Offering to repay a substantial portion of
such indebtedness. See "Use of Proceeds."
LEASES OF REAL PROPERTY FROM AFFILIATES
The Company leases two retail locations in Houston, Texas from a trust for
which a relative of Mr. DelHomme is the beneficiary. In addition, the Company
leases a warehouse facility in Houston from LRD Corporation, of which Mr.
DelHomme is a 50% owner. Mr. DelHomme is a director and officer of the Company.
The Company believes that the rents for these properties do not exceed their
fair market rates and that the leases provide for standard market terms.
If the Company completes the Stovall Acquisition, the Company will lease
four retail locations in Georgia and one retail location in Jacksonville,
Florida from separate partnerships, the majority of each of which is owned by
owners of Stovall. The Company and Stovall intend to establish the rents for
these properties at fair market rates and to provide for standard market terms.
50
<PAGE> 52
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 40,000,000 shares of
Common Stock, par value $0.001 per share, and 5,000,000 shares of serial
preferred stock ("Serial Preferred Stock"), par value $0.001 per share. As of
March 1, 1998, there were issued and outstanding 8,495,018 shares of Common
Stock, and no shares of Serial Preferred Stock.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, the holders of a majority of the stock entitled to vote in
any election of directors may elect all of the directors standing for election.
Subject to the preferences that may be applicable to any then outstanding
preferred stock, the holders of Common Stock will be entitled to receive such
dividends, if any, as may be declared by the Board from time to time out of
legally available funds. Upon the liquidation, dissolution, or winding up of the
Company, the holders of Common Stock will be entitled to share ratably in all
assets of the Company that are legally available for distribution, after payment
of all debts and other liabilities and subject to the prior rights of holders of
any preferred stock then outstanding. The holders of Common Stock have no
preemptive, subscription, redemption, or conversion rights.
PREFERRED STOCK
The Board of Directors is authorized, subject to any limitations prescribed
by the laws of the state of Delaware, but without further action by the
Company's stockholders, to provide for the issuance of Serial Preferred Stock in
one or more series, to establish from time to time the number of shares to be
included in such series, to fix the designations, powers, preferences, and
rights of the shares of each such series and any qualifications, limitations, or
restrictions thereof, and to increase or decrease the number of shares of any
such series (but not below the number of shares of such series then outstanding)
without any further vote or action by the stockholders. The Board may authorize
and issue serial preferred stock with voting or conversion rights that could
adversely affect the voting power or other rights of the holders of Common
Stock. In addition, the issuance of Serial Preferred Stock may have the effect
of delaying, deterring, or preventing a change in control of the Company. The
Company has no current plan to issue any shares of serial preferred stock.
DELAWARE GENERAL CORPORATION LAW AND CERTAIN CHARTER PROVISIONS
The provisions of the Company's Restated Certificate of Incorporation and
Bylaws and the Delaware GCL summarized below may have the effect of
discouraging, delaying, or preventing hostile takeovers, including those that
might result in a premium over the market price, or discouraging, delaying, or
preventing changes in control or management of the Company.
Upon the completion of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware GCL. In general, this statute
prohibits a publicly held Delaware corporation from engaging, under certain
circumstances, in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless (i) prior to the date at which the
stockholder became an interested stockholder, the Board of Directors approved
either the business combination or the transaction in which the stockholder
becomes an interested stockholder; (ii) upon consummation of the transaction in
which the stockholder becomes an interested stockholder, the stockholder owned
at least 85% of the outstanding voting stock of the corporation (excluding
shares held by directors who are officers or held in certain employee stock
plans); or (iii) the business combination is approved by the Board of Directors
and by two-thirds of the outstanding voting stock of the corporation (excluding
shares held by the interested stockholder) at a meeting of stockholders (and not
by written consent) held on or subsequent to the date of the business
combination. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or at any time within the prior three years did
own) 15% or more of the corporation's voting stock. Section 203 defines a
"business combination" to include mergers, consolidations, stock sales, and
asset based transactions, and other transactions resulting in a financial
benefit to the interested
51
<PAGE> 53
stockholder. The Company's Restated Certificate of Incorporation exempts from
the application of Section 203 each of the persons receiving Common Stock in the
Combination Transactions.
The Company's Restated Certificate of Incorporation and Bylaws divide the
Board of Directors of the Company into three classes, each class to be as nearly
equal in number of directors as possible. At each annual meeting of
stockholders, directors in each class will be elected for three-year terms to
succeed the directors of that class whose terms are expiring. Mr. Bassett is a
Class I director whose term will expire in 1999; Messrs. McGill and LaManna are
Class II directors whose terms will expire in 2000; and Mr. DelHomme is a Class
III director whose term will expire in 2001. In accordance with the Delaware
General Corporation Law, directors serving on classified boards of directors may
only be removed from office for cause. These provisions could, under certain
circumstances, operate to delay, defer, or prevent a change in control of the
Company.
The Company's Restated Certificate of Incorporation and Bylaws contain a
number of other provisions relating to corporate governance and to the rights of
stockholders. These provisions include (a) the authority of the Board to fill
vacancies on the Board, and (b) the authority of the Board to issue preferred
stock in series with such voting rights and other powers as the Board may
determine.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offering and the Stovall Acquisition, the Company
will have outstanding shares of Common Stock. All of the
shares to be sold in the Offering will be freely tradable without
restriction or further registration under the Securities Act unless held by
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act. The 8,950,000 shares issued in connection with the consummation
of the Combination Transactions and the Stovall Acquisition are "restricted
securities" as that term is defined under Rule 144 (the "Restricted Shares").
The Restricted Shares are subject to the holding period, volume, and other
resale limitations described below.
The Company, its directors, executive officers, and substantially all
stockholders of the Company have agreed, at the request of the Representatives
of the Underwriters, subject to certain exceptions, not to sell or otherwise
dispose of any shares of Common Stock in the public market during the Lockup
Period without the prior written consent of Smith Barney Inc. See
"Underwriting." These persons will own approximately % of the
Restricted Shares upon completion of the Offering and the Stovall Acquisition.
Subject to compliance with the volume and other limitations of Rule 144
described below, beginning March 1, 1999, one year after completion of the
Combination Transactions, approximately Restricted Shares will be
eligible for sale in the public market.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated for purposes of Rule 144) who beneficially owns
restricted securities with respect to which at least one year has elapsed since
the later of the date the shares were acquired from the Company or from an
affiliate of the Company, is entitled to sell, within any three-month period
commencing 90 days after the date of this Prospectus, a number of shares that
does not exceed the greater of (i) 1% of the then outstanding shares of Common
Stock of the Company or (ii) the average weekly trading volume in Common Stock
during the four calendar weeks preceding such sale. Sales under Rule 144 also
are subject to certain manner-of-sale provisions and notice requirements and to
the availability of current public information about the Company. A person who
is not an affiliate, who has not been an affiliate within three months prior to
sale, and who beneficially owns restricted securities with respect to which at
least two years have elapsed since the later of the date the shares were
acquired from the Company or from an affiliate of the Company, is entitled to
sell such shares under Rule 144(k) without regard to any of the volume
limitations or other requirements described above.
The Company intends to reserve shares of Common Stock for
issuance under the 1998 Incentive Stock Plan. Following the Offering, the
Company intends to file a registration statement under the Securities Act to
register the Common Stock to be issued under this Plan. After the effective date
of such registration statement, shares issued under the Stock Option Plan will
be freely tradable without restriction or further registration under the
Securities Act, unless acquired by affiliates of the Company who will be subject
to volume and other limitations of Rule 144.
52
<PAGE> 54
In addition, the Company may issue additional shares of Common Stock as
part of any acquisition it may complete in the future. In connection with its
intention to consummate acquisitions, the Company intends to register 3,000,000
shares of Common Stock under the Securities Act during 1998 for its use in
connection with future acquisitions. These shares generally will be freely
tradable after their issuance by persons not affiliated with the Company or the
acquired companies; however, sales of these shares during the Lockup Period
would require the prior written consent of Smith Barney Inc. See
"Business -- Strategy."
Prior to the Offering, there has been no market for the Common Stock. No
prediction can be made regarding the effect, if any, that public sales of shares
of the Common Stock or the availability of shares for sale will have on the
market price of the Common Stock after the Offering. Sales of substantial
amounts of the Common Stock in the public market following the Offering, or the
perception that such sales may occur, could adversely affect the market price of
the Common Stock and could impair the ability of the Company to raise capital
through sales of its equity securities.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
LISTING
Application has been made to list the Common Stock on the New York Stock
Exchange under the symbol "HZO."
53
<PAGE> 55
UNDERWRITING
Upon the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof, each Underwriter named below has severally
agreed to purchase, and the Company has agreed to sell to such Underwriter, the
number of shares of Common Stock set forth opposite the name of such
Underwriter.
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
---- ---------
<S> <C>
Smith Barney Inc. ..........................................
William Blair & Company, L.L.C. ............................
---------
Total.............................................
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby (other than those covered by the over-allotment option described
below) if any such shares are taken.
The Underwriters, for whom Smith Barney Inc. and William Blair & Company,
L.L.C. are acting as the Representatives, propose to offer part of the shares
directly to the public at the public offering price set forth on the cover page
of this Prospectus and part of the shares to certain dealers at a price which
represents a concession not in excess of $ per share under the public offering
price. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to certain other dealers. After the initial
offering of the shares to the public, the public offering price and such
concessions may be changed by the Representatives. The Representatives of the
Underwriters have advised the Company that the Underwriters do not intend to
confirm sales of any shares to any accounts over which they exercise
discretionary authority.
The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to additional
shares of Common Stock at the price to public set forth on the cover page of
this Prospectus minus the underwriting discounts and commissions. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, in connection with the offering of the shares offered
hereby. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
each Underwriter's name in the preceding table bears to the total number of
shares listed in such table.
The Company, its executive officers, and directors, and the holders of
substantially all of the Common Stock have agreed that, until 180 days following
the date of this Prospectus, they will not, without the prior written consent of
Smith Barney Inc., sell, offer to sell, solicit any offer to buy, contract to
sell, grant any option to purchase, or otherwise transfer or dispose of any
shares of Common Stock, or any securities convertible into, or exercisable or
exchangeable for, Common Stock, except that the Company may grant options under
the Plan and may issue shares of Common Stock (i) in connection with
acquisitions, (ii) pursuant to the Stock Purchase Plan, and (iii) pursuant to
the exercise of options granted under the Plan.
Prior to the Offering, there has not been any public market for the Common
Stock of the Company. Consequently, the initial public offering price for the
shares of Common Stock included in the Offering will be determined by
negotiations between the Company and the Representatives. Among the factors to
be considered in determining such price are the history of and prospects for the
Company's business and the industry in which it competes, an assessment of the
Company's management and the present state of the Company's development, the
past and present revenues and earnings of the Company, the prospects for growth
of the Company's revenues and earnings, the current state of the economy in the
United States and the current level of economic activity in the industry in
which the Company competes and in related or
54
<PAGE> 56
comparable industries, and currently prevailing conditions in the securities
markets, including current market valuations of publicly traded companies which
are comparable to the Company.
The Representatives have advised the Company that, pursuant to Regulation M
under the Exchange Act, certain persons participating in the Offering may engage
in transactions, including stabilizing bids, syndicate covering transactions or
the imposition of penalty bids, which may have the effect of stabilizing or
maintaining the market price of the Common Stock at a level above that which
might otherwise prevail in the open market. A "stabilizing bid" is a bid for or
the purchase of the Common Stock on behalf of the Underwriters for the purpose
of fixing or maintaining the price of the Common Stock. A "syndicate covering
transaction" is the bid for or the purchase of the Common Stock on behalf of the
Underwriters to reduce a short position incurred by the Underwriters in
connection with the Offering. A "penalty bid" is an arrangement permitting the
Representatives to reclaim the selling concession otherwise accruing to an
Underwriter or syndicate member in connection with the Offering if the Common
Stock originally sold by such Underwriter or syndicate member is purchased by
the Representatives in a syndicate covering transaction and has therefore not
been effectively placed by such Underwriter or syndicate member. The
Underwriters are not required to engage in any of these activities and any such
activities, if commenced, may be discontinued at any time. The Representatives
have advised the Company that such transactions may be effected on the New York
Stock Exchange or otherwise and, if commenced, may be discontinued at any time.
The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
a professional association, Phoenix, Arizona. Certain legal matters will be
passed upon for the Underwriters by Morgan, Lewis & Bockius LLP, New York, New
York.
EXPERTS
The consolidated financial statements included in this Prospectus and
Registration Statement have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in giving said reports.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement under
the Securities Act with respect to the Common Stock offered by this Prospectus.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto. For further information with
respect to the Company and the Common Stock offered by this Prospectus,
reference is made to the Registration Statement, including the exhibits thereto.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, together with
exhibits thereto, may be inspected at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at
the following Regional Offices of the Commission: New York Regional Office,
Seven World Trade Center, New York, New York 10048, and Chicago Regional Office,
500 West Madison Street, Chicago, Illinois 60661. Copies of the material
contained therein may be obtained at prescribed rates from the Commission's
public reference facilities in Washington, D.C. The Commission also maintains a
Web site that contains reports, proxy and information statements and other
materials that are filed through the Commission's Electronic Data Gathering,
Analysis, and Retrieval system. This Web site can be accessed at
http://www.sec.gov.
55
<PAGE> 57
MARINEMAX, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
Basis of Presentation..................................... F-2
Pro Forma Consolidated Balance Sheet...................... F-3
Pro Forma Consolidated Statements of Operations........... F-4
Notes to Pro Forma Consolidated Financial Statements...... F-6
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants........ F-9
Consolidated Balance Sheets............................... F-10
Consolidated Statements of Income......................... F-11
Consolidated Statements of Shareholders' Equity........... F-12
Consolidated Statements of Cash Flows..................... F-13
Notes to Consolidated Financial Statements................ F-15
</TABLE>
F-1
<PAGE> 58
MARINEMAX, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
(UNAUDITED)
MarineMax, Inc. (MarineMax) was formed in January 1998. On March 1, 1998,
MarineMax acquired all of the issued and outstanding common stock of Bassett
Boat Company of Florida, Gulfwind South, Inc., Gulfwind U.S.A., Inc., 11502
Dumas, Inc. d/b/a/ Louis DelHomme Marine, Harrison's Boat Center, Inc., and
Harrison's Marine Centers of Arizona, Inc. in exchange for shares of MarineMax's
Common Stock (the Mergers). Simultaneously with the Mergers, MarineMax acquired
all of the beneficial interests in Bassett Boat Company, Bassett Realty, L.L.C.,
Gulfwind South Realty, L.L.C., Harrison's Realty, L.L.C., and Harrison's Realty
California, L.L.C. in exchange for shares of MarineMax's Common Stock (the
Property Acquisitions). These acquisitions have been accounted for under the
pooling-of-interests method of accounting. The historical financial statements
of MarineMax, Inc. and subsidiaries (the Company) have been restated to include
the accounts and operating results of the acquired companies for all dates and
periods prior to the combinations.
Management of the Company has signed a letter of intent to purchase Stovall
Marine, Inc. (Stovall) in a transaction that is scheduled to close before July
31, 1998. The Stovall acquisition will be accounted for under the purchase
method of accounting. The accompanying pro forma financial statements give
effect to the acquisition of Stovall, an initial public offering (the Offering),
and certain other pro forma adjustments. See notes to Pro Forma Consolidated
Financial Statements.
The pro forma balance sheet gives effect to the Offering and the
acquisition of Stovall as if they had occurred on December 31, 1997. The pro
forma statements of operations give effect to the Offering and the acquisition
of Stovall Marine as if they had occurred on January 1, 1997. See Notes to Pro
Forma Consolidated Financial Statements.
The pro forma adjustments are based on estimates, available information and
certain assumptions that management deems appropriate. The pro forma financial
data do not purport to represent what the Company's financial position or
results of operations would actually have been if such transactions had occurred
on those dates and are not necessarily representative of the Company's financial
position or results of operations for any future period. The pro forma financial
statements should be read in conjunction with the other financial statements and
notes thereto included elsewhere in this Prospectus. See "Risk Factors" included
elsewhere herein.
F-2
<PAGE> 59
MARINEMAX AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET -- DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
------------------------- PRO FORMA OFFERING PRO FORMA
MARINEMAX STOVALL ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............... $ 790,609 $ 86,006 $ -- $ 876,615 $ 27,747,961 $ 28,624,576
Accounts receivable, net................ 4,742,556 636,544 -- 5,379,100 -- 5,379,100
Due from related parties................ 605,211 -- -- 605,211 (605,211) --
Inventories............................. 63,232,957 9,199,772 -- 72,432,729 -- 72,432,729
Prepaid and other current assets........ 539,166 54,090 -- 593,256 -- 593,256
Deferred income tax asset............... 241,524 -- -- 241,524 -- 241,524
----------- ----------- ------------ ------------ ------------ ------------
Total current assets.............. 70,152,023 9,976,412 -- 80,128,435 27,142,750 107,271,185
PROPERTY AND EQUIPMENT, net............... 13,642,231 322,573 -- 13,964,804 -- 13,964,804
DEFERRED TAX ASSET........................ -- -- -- -- -- --
DUE FROM RELATED PARTIES.................. -- -- -- -- -- --
GOODWILL.................................. -- -- 5,547,213 5,547,213 -- 5,547,213
OTHER ASSETS.............................. 92,192 338,984 -- 431,176 -- 431,176
----------- ----------- ------------ ------------ ------------ ------------
Total assets...................... $83,886,446 $10,637,969 $ 5,547,213 $100,071,628 $ 27,142,750 $127,214,378
=========== =========== ============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable........................ $ 8,179,505 $ 786,012 $ -- $ 8,965,517 $ -- $ 8,965,517
Customer deposits....................... 2,743,732 58,821 -- 2,802,553 -- 2,802,553
Accrued expenses........................ 2,593,227 259,218 -- 2,852,445 -- 2,852,445
Floor plan notes payable................ 41,443,851 7,802,557 -- 49,246,408 (19,246,408) 30,000,000
Short-term borrowings................... 3,104,063 68,362 -- 3,172,425 (3,172,425) --
Current maturities of long-term debt.... 1,056,301 -- -- 1,056,301 (1,005,215) 51,086
Settlement payable...................... -- -- 15,000,000 15,000,000 -- 15,000,000
Income tax payable...................... -- 238,813 -- 238,813 -- 238,813
Deferred tax liability.................. -- -- 410,435 410,435 -- 410,435
Due to related parties.................. 1,924,818 775,000 -- 2,699,818 (2,699,818) --
----------- ----------- ------------ ------------ ------------ ------------
Total current liabilities......... 61,045,497 9,988,783 15,410,435 86,444,715 (26,123,866) 60,320,849
LONG-TERM DEBT, net of current
maturities.............................. 8,861,175 -- -- 8,861,175 (7,008,384) 1,852,791
DEFERRED TAX LIABILITY.................... -- -- 1,231,306 1,231,306 -- 1,231,306
OTHER LIABILITIES......................... -- -- -- -- -- --
COMMITMENTS AND CONTINGENCIES............. -- -- -- -- -- --
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock......................... -- -- -- -- -- --
Common stock............................ 8,495 108,400 (107,945) 8,950
Additional paid-in capital.............. 1,008,619 -- 15,408,406 16,417,025
Retained earnings (deficit)............. 12,962,660 578,685 (26,432,888) (12,891,543) -- (12,891,543)
----------- ----------- ------------ ------------ ------------ ------------
13,979,774 687,085 (11,132,427) 3,543,432 60,275,000 63,809,432
Less -- Common stock in treasury, at
cost.................................. -- (37,899) 37,899 -- -- --
----------- ----------- ------------ ------------ ------------ ------------
Total stockholder's equity
(deficit)....................... 13,979,774 649,186 (11,094,528) 3,534,432 60,275,000 63,809,432
----------- ----------- ------------ ------------ ------------ ------------
Total liabilities and
stockholder's equity
(deficit)....................... $83,886,446 $10,637,969 $ 5,547,213 $100,071,628 $ 27,142,750 $127,214,378
=========== =========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this pro forma consolidated
balance sheet.
F-3
<PAGE> 60
MARINEMAX AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------- PRO FORMA OFFERING PRO FORMA
MARINEMAX STOVALL ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
------------ ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE.............................. $169,675,293 $18,743,463 $ -- $188,418,756 $ -- $188,418,756
COST OF SALES........................ 127,417,846 13,869,520 -- 141,287,366 -- 141,287,366
------------ ----------- ----------- ------------ --------- ------------
Gross profit................. 42,257,447 4,873,943 -- 47,131,390 -- 47,131,390
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 25,426,392 2,653,194 (3,344,025)(h)(j) 24,735,561 -- 24,735,561
------------ ----------- ----------- ------------ --------- ------------
Income (loss) from
operations................. 16,831,055 2,220,749 3,344,025 22,395,829 -- 22,395,829
INTEREST EXPENSE, NET................ 1,537,587 261,273 (300,000)(k) 1,498,860 (988,698)(l) 510,162
------------ ----------- ----------- ------------ --------- ------------
INCOME (LOSS) BEFORE INCOME TAXES.... 15,293,468 1,959,476 3,644,025 20,896,969 988,698 21,885,667
PROVISION FOR INCOME TAXES........... 409,824 737,000 6,896,758(i) 8,043,582 385,592(l) 8,429,174
------------ ----------- ----------- ------------ --------- ------------
NET INCOME (LOSS).................... $ 14,883,644 $ 1,222,476 $(3,252,733) $ 12,853,387 $ 603,106 $ 13,456,493
============ =========== =========== ============ ========= ============
PRO FORMA NET INCOME PER COMMON
SHARE:
Basic.............................. $
============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES USED IN COMPUTING PRO FORMA
NET INCOME PER SHARE:
Basic..............................
============
</TABLE>
The accompanying notes are an integral part of this pro forma consolidated
statement.
F-4
<PAGE> 61
MARINEMAX AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
------------------------ PRO FORMA OFFERING PRO FORMA
MARINEMAX STOVALL ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
REVENUE............................ $44,341,011 $1,018,725 $ -- $45,359,736 $ -- $45,359,736
COST OF SALES...................... 34,689,070 833,110 -- 35,522,180 -- 35,522,180
----------- ---------- ----------- ----------- ----------- -----------
Gross profit.............. 9,651,941 185,615 -- 9,837,556 -- 9,837,556
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES......................... 10,164,836 863,640 (1,538,813)(h)(j) 9,489,663 -- 9,489,663
----------- ---------- ----------- ----------- ----------- -----------
Income (loss) from
operations.............. (512,895) (678,025) 1,538,813 347,893 -- 347,893
INTEREST EXPENSE, NET.............. 450,266 53,662 (100,000)(k) 403,928 (294,529)(l) 109,399
----------- ---------- ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES............................ (963,161) (731,687) 1,638,813 (56,035) 294,529 238,494
PROVISION (BENEFIT) FOR INCOME
TAXES............................ (426,524) (274,500) 721,036(i) 20,012 114,866(l) 134,878
----------- ---------- ----------- ----------- ----------- -----------
NET INCOME (LOSS).................. $ (536,637) $ (457,187) $ 917,777 $ (76,047) $ 179,663 $ 103,616
=========== ========== =========== =========== =========== ===========
PRO FORMA NET INCOME (LOSS) PER
COMMON SHARE:
Basic............................ $
===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES USED IN COMPUTING PRO
FORMA NET INCOME (LOSS) PER
SHARE:
Basic..........................
===========
</TABLE>
The accompanying notes are an integral part of this pro forma consolidated
statement.
F-5
<PAGE> 62
MARINEMAX, INC.
NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL:
The accompanying pro forma information presents the pro forma financial
position of MarineMax, Inc. and subsidiaries (the Company) as of December 31,
1997, and the pro forma results of operations for the nine and three-month
periods ended September 30, and December 31, 1997, respectively.
The historical financial statements of the Company were derived from the
historical statements of income for the nine and three-month periods ended
September 30, and December 31, 1997, respectively, and the historical balance
sheet as of December 31, 1997. See the Consolidated Financial Statements and
notes thereto for the Company included elsewhere in this Prospectus. The
historical financial statements of Stovall Marine, Inc. (Stovall) were derived
from the historical statements of income of Stovall for the nine and three-
month periods ended September 30, and December 31, 1997 and the historical
balance sheet as of December 31, 1997. The financial statements for Stovall have
not been included in this prospectus due to the insignificance of Stovall as
compared to the Company under Rule 3-05 of Regulation S-X.
2. PROBABLE ACQUISITION OF STOVALL MARINE
Management of the Company has entered into negotiations to acquire Stovall.
The acquisition will be accounted for under the purchase method of accounting.
It is anticipated that the purchase will be completed through the issuance of
approximately 455,000 shares of the Company's Common Stock to the stockholders
of Stovall. The purchase price will be allocated to the assets acquired and
liabilities assumed. The estimated excess purchase price over the estimated fair
value of the net assets acquired of approximately $5,547,000 will be recorded as
goodwill and amortized over 40 years. The actual goodwill may differ from this
estimate.
F-6
<PAGE> 63
MARINEMAX, INC.
NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET:
The following table summarizes the pro forma adjustments to the balance
sheet as of December 31, 1997:
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS TOTAL
----------------------------------------------------- PRO FORMA
(a) (b) (C) (D) Adjustments
---------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....... $ -- $ -- $ -- $ -- $ --
Due from related parties........ -- -- -- -- --
---------- ----------- ------------ ----------- ------------
Total current assets...... -- -- -- -- --
GOODWILL......................... 5,547,213 -- -- -- 5,547,213
---------- ----------- ------------ ----------- ------------
Total assets.............. $5,547,213 $ -- $ -- $ -- $ 5,547,213
========== =========== ============ =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Floor plan notes payable........ $ -- $ -- $ -- $ -- $ --
Short-term borrowings........... -- -- -- -- --
Current maturities of long-term
debt.......................... -- -- -- -- --
Settlement payable.............. -- -- 15,000,000 -- 15,000,000
Deferred tax liability.......... -- 410,435 -- -- 410,435
Due to related parties.......... -- -- -- -- --
---------- ----------- ------------ ----------- ------------
Total current
liabilities.............. -- 410,435 15,000,000 -- 15,410,435
LONG-TERM DEBT, net of current
maturities...................... -- -- -- -- --
DEFERRED TAX LIABILITY........... -- 1,231,306 -- -- 1,231,306
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock.................... (107,945) -- -- -- (107,945)
Additional paid-in capital...... 6,195,944 -- -- 9,212,462 15,408,406
Retained earnings (deficit)..... (578,685) (1,641,741) (15,000,000) (9,212,462) (26,432,888)
---------- ----------- ------------ ----------- ------------
5,509,314 (1,641,741) (15,000,000) -- (11,132,427)
Less -- Common stock in
treasury, at cost............. 37,899 -- -- -- 37,899
---------- ----------- ------------ ----------- ------------
Total stockholders' equity
(deficit)................ 5,547,213 (1,641,741) (15,000,000) -- (11,094,528)
---------- ----------- ------------ ----------- ------------
Total liabilities and
stockholders' equity
(deficit)................ $5,547,213 $ -- $ -- $ -- $ 5,547,213
========== =========== ============ =========== ============
<CAPTION>
OFFERING ADJUSTMENTS TOTAL
----------------------------------------- OFFERING
(e) (F) (G) ADJUSTMENTS
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....... $ 60,275,000 $(30,432,432) $(2,094,607) $ 27,747,961
Due from related parties........ -- -- (605,211) (605,211)
------------ ------------ ----------- ------------
Total current assets...... 60,275,000 (30,432,432) (2,699,818) 27,142,750
GOODWILL......................... -- -- -- --
------------ ------------ ----------- ------------
Total assets.............. $ 60,275,000 $(30,432,432) $(2,699,818) $ 27,142,750
============ ============ =========== ============
LIABI LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Floor plan notes payable........ $ -- $(19,246,408) $ -- $(19,246,408)
Short-term borrowings........... -- (3,172,425) -- (3,172,425)
Current maturities of long-term
debt.......................... -- (1,005,215) -- (1,005,215)
Settlement payable.............. -- -- -- --
Deferred tax liability.......... -- -- -- --
Due to related parties.......... -- -- (2,699,818) (2,699,818)
------------ ------------ ----------- ------------
Total current
liabilities.............. -- (23,424,048) (2,699,818) (26,123,866)
LONG-TERM DEBT, net of current
maturities...................... -- (7,008,384) -- (7,008,384)
DEFERRED TAX LIABILITY........... -- -- -- --
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock.................... -- --
Additional paid-in capital...... -- --
Retained earnings (deficit)..... -- -- -- --
------------ ------------ ----------- ------------
60,275,000 -- -- 60,275,000
Less -- Common stock in
treasury, at cost............. -- -- -- --
------------ ------------ ----------- ------------
Total stockholders' equity
(deficit)................ $ 60,275,000 -- -- 60,275,000
------------ ------------ ----------- ------------
Total liabilities and
stockholders' equity
(deficit)................ $ 60,275,000 $(30,432,432) $(2,699,818) $ 27,142,750
============ ============ =========== ============
</TABLE>
F-7
<PAGE> 64
MARINEMAX, INC.
NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(a) Records the acquisition of Stovall in exchange for Common Stock of
MarineMax.
(b) Certain subsidiaries of MarineMax, Inc. have historically operated as S
corporations and terminated such status in conjunction with the Mergers.
Upon the termination of the S corporation status, these subsidiaries
recorded a deferred income tax provision of approximately $1,642,000 for the
effect of the differences in the bases of assets and liabilities for
financial reporting and income tax purposes.
(c) Records the amount owed to Brunswick pursuant to a settlement agreement
negotiated as a result of the Mergers.
(d) Reflects the resetting of retained earnings in connection with the
termination of the S corporation status of certain of the Company's
subsidiaries.
(e) Reflects the net proceeds from the sale by the Company of shares
of Common Stock in the Offering at approximately $ per share,
estimated to be approximately $60,275,000 (after deducting underwriting
discounts and commissions and estimated offering expenses).
(f) Reflects the use of a portion of the net proceeds of the Offering to reduce
floor plan notes payable of $19,246,408, short-term borrowings of
$3,172,425, and long-term debt of $8,013,599.
(g) Reflects the settlement of certain related party payables and receivables
with proceeds from the Offering.
4. ADJUSTMENTS TO THE PRO FORMA CONSOLIDATED STATEMENTS OF INCOME:
(h) Reflects an adjustment of approximately $3,448,000 and $1,574,000 for the
nine-month and three-month periods ended September 30, and December 31,
1997, respectively, to reduce officer and employee compensation based upon
employment agreements entered into in connection with the Mergers. This
adjustment does not reflect discretionary bonuses, if any, which may be paid
to these individuals.
(i) Reflects the provision for income taxes as if all the Company's subsidiaries
were C corporations during the period presented.
(j) Reflects goodwill amortization expense of approximately $104,000 and $35,000
for the nine-month and three-month periods ended September 30, and December
31, 1997, respectively, in connection with the probable acquisition of
Stovall. The goodwill is being amortized over an estimated useful life of 40
years.
(k) Reflects a reduction of the Company's borrowing rate on outstanding floor
plan balances as a result of a newly secured working capital commitment
providing interest based on LIBOR plus 125 basis points.
(l) Reflects the elimination of interest expense resulting from the reduction of
floor plan notes payable, short-term borrowings and long-term debt by
utilizing a portion of the net proceeds of the Offering.
5. PRO FORMA NET INCOME PER SHARE:
The shares used in computing pro forma net income per share are as follows:
<TABLE>
<S> <C>
Outstanding shares of Common Stock........................ 8,495,018
Shares issued to purchase Stovall......................... 454,982
Shares issued in the Offering.............................
---------
Pro forma, as adjusted shares...........................
=========
</TABLE>
F-8
<PAGE> 65
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To MarineMax, Inc.:
We have audited the accompanying consolidated balance sheets of MarineMax,
Inc. (a Delaware corporation) and subsidiaries as of December 31, 1996, and
September 30, 1997, and the related consolidated statements of income,
stockholders' equity and cash flows for the years ended December 31, 1995 and
1996, and the nine-month period ended September 30, 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
MarineMax, Inc. and subsidiaries as of December 31, 1996, and September 30,
1997, and the results of their operations and their cash flows for the years
ended December 31, 1995 and 1996, and the nine-month period ended September 30,
1997, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Tampa, Florida,
March 2, 1998
F-9
<PAGE> 66
MARINEMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
1996 1997 1997
------------ ------------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................... $ 2,639,276 $11,014,090 $ 790,609
Accounts receivable............................... 4,990,025 6,779,176 4,742,556
Due from related parties.......................... 516,393 585,913 605,211
Inventories....................................... 53,537,272 50,404,178 63,232,957
Prepaids and other current assets................. 462,171 530,024 539,166
Deferred tax asset................................ 666,581 529,212 241,524
----------- ----------- -----------
Total current assets...................... 62,811,718 69,842,593 70,152,023
PROPERTY AND EQUIPMENT, net......................... 11,132,411 13,739,143 13,642,231
DUE FROM RELATED PARTY.............................. 54,719 54,719 --
OTHER ASSETS........................................ 37,964 86,023 92,192
----------- ----------- -----------
Total assets.............................. $74,036,812 $83,722,478 $83,886,446
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................. $ 4,015,098 $ 6,080,006 $ 8,179,505
Customer deposits................................. 1,642,978 3,395,914 2,743,732
Accrued expenses.................................. 3,504,602 4,182,182 2,593,227
Floor plan notes payable.......................... 39,250,055 26,152,099 41,443,851
Short-term borrowings............................. 3,390,601 2,711,677 3,104,063
Current maturities of long-term debt.............. 221,771 1,104,109 1,056,301
Due to stockholders............................... 2,640,434 5,555,540 1,924,818
----------- ----------- -----------
Total current liabilities................. 54,665,539 49,181,527 61,045,497
----------- ----------- -----------
LONG-TERM DEBT, net of current maturities........... 1,896,246 8,963,726 8,861,175
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 5,000,000 shares
authorized, none issued or outstanding......... -- -- --
Common stock, $.001 par value; 40,000,000 shares
authorized, 9,211,368 and 8,495,018 shares
issued at December 31, 1996, and September 30,
1997, respectively............................. 9,211 8,495 8,495
Additional paid-in capital........................ 6,807,958 985,525 1,008,619
Retained earnings................................. 10,657,858 24,583,205 12,962,660
----------- ----------- -----------
Total stockholders' equity................ 17,475,027 25,577,225 13,979,774
----------- ----------- -----------
Total liabilities and stockholders'
equity.................................. $74,036,812 $83,722,478 $83,886,446
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-10
<PAGE> 67
MARINEMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED NINE-MONTH FOR THE THREE-MONTH PERIOD
DECEMBER 31, PERIOD ENDED ENDED DECEMBER 31,
--------------------------- SEPTEMBER 30, ---------------------------
1995 1996 1997 1996 1997
------------ ------------ ------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUE.......................... $152,888,507 $175,060,206 $169,675,293 $38,735,224 $44,341,011
COST OF SALES.................... 116,896,249 132,641,343 127,417,846 30,648,226 34,689,070
------------ ------------ ------------ ----------- -----------
Gross profit........... 35,992,258 42,418,863 42,257,447 8,086,998 9,651,941
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES........ 28,136,550 34,174,417 25,426,392 12,345,356 10,164,836
------------ ------------ ------------ ----------- -----------
Income from
operations........... 7,855,708 8,244,446 16,831,055 (4,258,358) (512,895)
INTEREST EXPENSE, net............ 1,035,405 1,349,623 1,537,587 281,963 450,266
------------ ------------ ------------ ----------- -----------
INCOME BEFORE INCOME TAX
(BENEFIT) PROVISION............ 6,820,303 6,894,823 15,293,468 (4,540,321) (963,161)
INCOME TAX (BENEFIT) PROVISION... (49,097) 20,514 409,824 (506,416) (426,524)
------------ ------------ ------------ ----------- -----------
NET INCOME (LOSS)................ $ 6,869,400 $ 6,874,309 14,883,644 $(4,033,905) (536,637)
============ ============ ===========
UNAUDITED PRO FORMA INCOME TAX
PROVISION...................... 5,554,629 50,891
------------ -----------
UNAUDITED PRO FORMA NET INCOME
(LOSS)......................... $ 9,329,015 $ (587,528)
============ ===========
PRO FORMA NET INCOME (LOSS) PER
COMMON SHARE:
Basic....................... $ 1.10 $ (.07)
============ ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES USED IN COMPUTING PRO
FORMA NET INCOME (LOSS) PER
COMMON SHARE:
Basic....................... 8,495,018 8,495,018
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-11
<PAGE> 68
MARINEMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996,
THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1997,
AND THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------ PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
--------- ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1995...................... 9,211,368 $9,211 $ 6,326,404 $ 9,088,929 $ 15,424,544
Net income.................................. -- -- -- 6,869,400 6,869,400
Capital contributions....................... -- -- 408,557 -- 408,557
Distributions to stockholders............... -- -- -- (6,257,386) (6,257,386)
--------- ------ ----------- ------------ ------------
BALANCE, December 31, 1995.................... 9,211,368 9,211 6,734,961 9,700,943 16,445,115
Net income.................................. -- -- -- 6,874,309 6,874,309
Capital contributions....................... -- -- 72,997 -- 72,997
Distributions to stockholders............... -- -- -- (5,917,394) (5,917,394)
--------- ------ ----------- ------------ ------------
BALANCE, December 31, 1996.................... 9,211,368 9,211 6,807,958 10,657,858 17,475,027
Net income.................................. -- -- -- 14,883,644 14,883,644
Capital contributions....................... -- -- 276,851 -- 276,851
Distributions to stockholders............... -- -- -- (958,297) (958,297)
Redemption of common stock.................. (716,350) (716) (6,099,284) -- (6,100,000)
--------- ------ ----------- ------------ ------------
BALANCE, September 30, 1997................... 8,495,018 8,495 985,525 24,583,205 25,577,225
Net loss (unaudited)........................ -- -- -- (536,637) (536,637)
Capital contributions (unaudited)........... -- -- 23,094 -- 23,094
Distributions to stockholders (unaudited)... -- -- -- (11,083,908) (11,083,908)
--------- ------ ----------- ------------ ------------
BALANCE, December 31, 1997 (unaudited)........ 8,495,018 $8,495 $ 1,008,619 $ 12,962,660 $ 13,979,774
========= ====== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-12
<PAGE> 69
MARINEMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED NINE-MONTH FOR THE THREE-MONTH PERIOD
DECEMBER 31, PERIOD ENDED ENDED DECEMBER 31,
------------------------- SEPTEMBER 30, ---------------------------
1995 1996 1997 1996 1997
----------- ----------- ------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)................. $ 6,869,400 $ 6,874,309 $14,883,644 $(4,033,905) $ (536,637)
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation and
amortization................. 852,808 941,576 792,559 235,394 264,186
Deferred income tax (provision)
benefit...................... (71,682) (594,899) 137,369 -- 287,688
Loss (gain) on sale of property
and equipment................ 13,365 (17,054) (318) -- --
(Increase) decrease in --
Accounts receivable.......... (1,383,825) (1,834,280) (1,789,151) 1,599,603 2,036,620
Due from related parties..... 94,346 (481,623) (69,520) (567,226) 35,421
Inventories.................. (5,773,855) (12,575,374) 3,133,094 (10,030,265) (12,828,779)
Prepaids and other assets.... (391,221) 377,772 (115,912) 496,189 (15,311)
(Decrease) increase in --
Accounts payable............. (911,599) 1,788,137 2,064,908 (1,749,716) 2,099,499
Cash overdraft............... (964,355) -- -- -- --
Customer deposits............ 467,956 (2,541,399) 1,752,936 (1,615,009) (652,182)
Accrued expenses and other
liabilities............... 1,108,394 1,597,567 677,580 744,836 (1,588,955)
Floor plan notes payable..... 5,316,611 13,538,528 (13,097,956) 17,822,158 15,291,752
----------- ----------- ----------- ----------- -----------
Net cash provided by
operating activities.... 5,226,343 7,073,260 8,369,233 2,902,059 4,393,302
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and
equipment...................... (1,148,178) (1,329,897) (1,049,393) (380,920) (167,274)
Proceeds from sale of property and
equipment...................... 3,939 60,201 16,988 -- --
----------- ----------- ----------- ----------- -----------
Net cash used in investing
activities.............. (1,144,239) (1,269,696) (1,032,405) (380,920) (167,274)
----------- ----------- ----------- ----------- -----------
</TABLE>
F-13
<PAGE> 70
MARINEMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
FOR THE
NINE-MONTH
FOR THE YEAR ENDED PERIOD FOR THE THREE-MONTH PERIOD
DECEMBER 31, ENDED ENDED DECEMBER 31,
------------------------- SEPTEMBER 30, --------------------------
1995 1996 1997 1996 1997
----------- ----------- ------------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution................... 1,000 -- 1,000 -- --
Net borrowings (repayments) on notes
payable to related parties........... 1,422,975 (53,996) 2,752,106 (4,087,289) (3,630,722)
Borrowings on long-term debt........... 114,568 1,142,761 1,491,781 -- --
Repayments on long-term debt........... (200,000) (1,123,581) (1,732,680) (70,439) (127,265)
Net borrowings (repayments) on
short-term borrowings................ 1,299,460 541,141 (678,924) 3,381,984 392,386
Distributions to stockholders.......... (6,149,068) (5,917,394) (795,297) (5,255,892) (11,083,908)
----------- ----------- ----------- ----------- ------------
Net cash (used in) provided by
financing activities.......... (3,511,065) (5,411,069) 1,037,986 (6,031,636) (14,449,509)
----------- ----------- ----------- ----------- ------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS............................ 571,039 392,495 8,374,814 (3,510,497) (10,223,481)
CASH AND CASH EQUIVALENTS, beginning of
period................................. 1,675,742 2,246,781 2,639,276 6,149,773 11,014,090
----------- ----------- ----------- ----------- ------------
CASH AND CASH EQUIVALENTS, end of
period................................. $ 2,246,781 $ 2,639,276 $11,014,090 $ 2,639,276 $ 790,609
=========== =========== =========== =========== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for
Interest............................. $ 1,968,189 $ 2,349,374 $ 2,405,403 $ 399,682 $ 516,421
Income taxes......................... $ 1,562 $ 10,528 $ 24,230 $ -- $ --
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Distribution declared but not yet
paid................................. $ 108,318 $ -- $ 163,000 $ -- $ --
Long-term debt issued for redemption of
common stock......................... $ -- $ -- $ 6,100,000 $ -- $ --
Stockholder contributions of property
and equipment, treated as capital
contributions........................ $ 341,056 $ -- $ 2,366,568 $ -- $ --
Assumption of long-term debt from
stockholders in conjunction with
contributions of property and
equipment............................ $ -- $ -- $ 2,150,000 $ -- $ --
Stockholder payments on long-term debt,
treated as capital contributions..... $ 66,501 $ 72,997 $ 59,283 $ 18,250 $ 23,094
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-14
<PAGE> 71
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND ORGANIZATION:
MarineMax, Inc. (MarineMax) and subsidiaries (the Company) are primarily
engaged in the retail sale and service of new and used boats, motors, trailers,
marine parts and accessories in Florida, Texas, Arizona and California.
MarineMax was formed on January 23, 1998, and effected a business
combination on March 1, 1998, in which it acquired all of the issued and
outstanding common stock of Bassett Boat Company of Florida, Gulfwind South,
Inc., Gulfwind U.S.A., Inc., 11502 Dumas, Inc. and subsidiaries d/b/a Louis
DelHomme Marine, Harrison's Boat Center, Inc., Harrison's Marine Centers of
Arizona, Inc. and all of the beneficial interests in Bassett Boat Company,
Bassett Realty, L.L.C., Gulfwind South Realty, L.L.C., Harrison's Realty, L.L.C.
and Harrison's Realty California, L.L.C. (collectively, the Pooled Companies) in
exchange for 8,495,018 shares of the Company's common stock (the Pooling).
The business combination referred to above has been accounted for under the
pooling-of-interests method of accounting. Thus, the accompanying financial
statements have been restated to include the accounts and operating results of
the combined companies for all dates and periods prior to the combination.
Management of the Company has signed a letter of intent to acquire all of
the issued and outstanding common stock of Stovall Marine, Inc. (Stovall) (a
Georgia corporation) in a transaction expected to be accounted for under the
purchase method of accounting, in exchange for approximately 455,000 shares of
the Company. In connection with the purchase of Stovall, goodwill of
approximately $5,547,000 is expected to be recorded, which is expected to be
amortized by the Company over a period of 40 years.
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant
intercompany transactions and accounts have been eliminated.
2. SIGNIFICANT ACCOUNTING POLICIES:
FISCAL YEAR
The Company changed its fiscal year-end from December 31 to September 30 to
coincide more closely with its natural business cycle. As a result, the
accompanying financial statements present the nine-month transition period which
began January 1, 1997, and ended September 30, 1997. Results of operations
(unaudited) for the nine-month period ended September 30, 1996, were as follows:
<TABLE>
<CAPTION>
AMOUNT
------------
<S> <C>
Revenue..................................................... $136,324,982
Cost of sales............................................... 101,993,118
------------
Gross profit...................................... 34,331,864
Selling, general and administrative expenses................ 21,829,061
------------
Income from operations............................ 12,502,803
Interest expense, net....................................... 1,067,671
------------
Income before income tax provision.......................... 11,435,132
Income tax provision........................................ 526,930
------------
Net income........................................ $ 10,908,202
============
</TABLE>
INVENTORIES
New and used boat inventories are stated at the lower of cost, determined
on a specific-identification basis, or market. Parts and accessories are stated
at the lower of cost, determined on the first-in, first-out basis, or market.
F-15
<PAGE> 72
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost and depreciated over their
estimated useful lives using the straight-line method. Useful lives for purposes
of computing depreciation are as follows:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings and improvements.................................. 5-40
Machinery and equipment..................................... 5-10
Furniture and fixtures...................................... 5-10
Vehicles.................................................... 5
</TABLE>
The cost of property and equipment sold or retired and the related
accumulated depreciation are removed from the accounts at the time of
disposition, and any resulting gain or loss is included in the consolidated
statements of income. Maintenance, repairs and minor replacements are charged to
operations as incurred; major replacements and improvements are capitalized and
amortized over their useful lives.
LONG-LIVED ASSETS
Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and LongLived Assets to be Disposed Of"
(SFAS 121), requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of the
asset in question may not be recoverable. SFAS 121 was adopted in 1996 and did
not have a material effect on the Company's consolidated results of operations,
cash flows or financial position.
REVENUE RECOGNITION
Revenue from boat, motor and trailer sales and parts and service operations
is recognized at the time the boat, motor, trailer or part is delivered to the
customer or service is completed.
Revenue earned by the Company for notes placed with financial institutions
in connection with customer boat financing is recognized when the related boat
sale is recognized. Commissions earned on credit life, accident and disability
insurance sold on behalf of third-party insurance companies are also recognized
when the related boat sale is recognized. Pursuant to negotiated agreements with
financial institutions, the Company is charged back for a portion of these fees
should the customer terminate the finance contract before it is outstanding for
stipulated minimal periods of time. The chargeback reserve, which was not
material to the consolidated financial statements taken as whole as of December
31, 1996, or September 30, 1997, is based on the Company's experience for
repayments or defaults on the finance contracts.
Commissions earned on extended warranty service contracts sold on behalf of
unrelated third-party insurance companies are recognized at the later of
customer acceptance of the service contract terms as evidenced by contract
execution, or when the related boat sale is recognized. The Company is charged
back for a portion of these commissions should the customer terminate the
service contract prior to its scheduled maturity. The chargeback reserve, which
was not material to the consolidated financial statements taken as a whole as of
December 31, 1996, or September 30, 1997, is based upon the Company's experience
for repayments or defaults on the service contracts.
ADVERTISING AND PROMOTIONAL COSTS
Advertising and promotional costs are expensed as incurred and are included
in selling, general and administrative expenses in the accompanying consolidated
statements of operations. Total advertising and promotional expenses
approximated $1,599,000, $2,600,000 and $2,343,000 for the years ended December
31, 1995 and 1996, and the nine-month period ended September 30, 1997,
respectively.
F-16
<PAGE> 73
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INCOME TAXES AND UNAUDITED PRO FORMA INCOME TAX PROVISION
Certain of the Pooled Companies elected S corporation status under the
provisions of the Internal Revenue Code prior to the Pooling. Accordingly,
income of these Pooled Companies prior to the Pooling was passed through to the
stockholders; as such, these Pooled Companies historically recorded no provision
for income taxes. The accompanying consolidated statement of income for the
nine-month period ended September 30, 1997, includes an unaudited pro forma
income tax provision assuming these Pooled Companies had been taxed as C
corporations during that period.
Other Pooled Companies have been taxed as C corporations and have followed
the liability method of accounting for income taxes in accordance with SFAS No.
109, "Accounting for Income Taxes" (SFAS 109). Under SFAS 109, deferred income
taxes are recorded based upon differences between the financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the underlying assets are received or
liabilities are settled.
SUPPLIER AND CUSTOMER CONCENTRATION
Dealership Agreements
The Company has entered into dealership agreements with Ray Industries,
Inc. (Ray Industries), Boston Whaler, Inc. (Boston Whaler), Mercury Marine and
Baja Marine Corporation (subsidiaries or a division of Brunswick Corporation)
(collectively, the Manufacturers). Approximately 80 percent of the Company's
revenue is derived from products acquired from the Manufacturers. These
agreements allow the Company to purchase, stock, sell and service boats and
products of the Manufacturers. These agreements also allow the Company to use
the Manufacturers' names, trade symbols and intellectual properties.
The Company's overall sales could be impacted by the Manufacturers'
inability or unwillingness to supply the Company with an adequate supply of
popular models. The Company's existing dealership agreements with the
Manufacturers are renewable subject to certain terms and conditions in the
agreements and expire in July 1998.
Concentrations of Credit Risks
Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash and cash equivalents
and accounts receivable. Concentrations of credit risk with respect to cash and
cash equivalents are limited primarily to local financial institutions.
Concentrations of credit risk arising from receivables are limited primarily to
manufacturers and financial institutions.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid investments with an original maturity of three
months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
accounts receivable and debt. The carrying amount of these financial instruments
approximates fair value due either to length of maturity or existence of
interest rates that approximate prevailing market rates unless otherwise
disclosed in these financial statements.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
F-17
<PAGE> 74
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
During June 1996 and June 1997, the Financial Accounting Standards Board
issued SFAS No. 130, "Reporting Comprehensive Income" (SFAS 130), and SFAS No.
131, "Disclosures About Segments of An Enterprise and Related Information" (SFAS
131). The major provisions of these statements and their impact on the Company
are discussed below.
SFAS 130, effective for fiscal years beginning after December 15, 1997,
requires the presentation of comprehensive income in an entity's financial
statements. Comprehensive income represents all changes in equity of an entity
during the reporting period, including net income and charges directly to equity
which are excluded from net income. This statement is not anticipated to have
any impact on the Company as the Company currently does not enter into any
transactions which result in charges (or credits) directly to equity (such as
additional minimum pension liability changes, currency translation adjustments,
unrealized gains and losses on available-for-sale securities, etc.).
SFAS 131, effective for fiscal years beginning after December 15, 1997,
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to stockholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. The Company's management believes this statement will not have any
impact on its consolidated financial statements.
INTERIM FINANCIAL INFORMATION
As is normal and customary, the interim financial statements as of December
31, 1997, and for the three-month periods ended December 31, 1996 and 1997, are
unaudited, and certain information normally included in financial statements
prepared in accordance with generally accepted accounting principles has not
been included herein. In the opinion of management, all adjustments necessary to
fairly present the financial position, results of operations and cash flows with
respect to the interim financial statements, have been properly included. Due to
seasonality and other factors, the results of operations for the interim period
are not necessarily indicative of the results that will be realized for the
entire fiscal year.
3. ACCOUNTS RECEIVABLE:
Trade receivables consist of receivables from financial institutions which
provide funding for customer boat financing and amounts due from financial
institutions earned from arranging financing with the Company's customers. These
receivables are normally collected within 30 days of the sale. Trade receivables
also include amounts due from customers on the sale of boats and parts and
service. Amounts due from manufacturers represent receivables for various
incentive programs and parts and service work performed pursuant to the
manufacturers' warranty coverages.
F-18
<PAGE> 75
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The accounts receivable balances consisted of the following as of December
31, 1996, and September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Trade receivables.................................. $2,755,139 $3,589,023
Amounts due from manufacturers..................... 1,971,426 2,996,047
Other receivables.................................. 263,460 194,106
---------- ----------
$4,990,025 $6,779,176
========== ==========
</TABLE>
4. INVENTORIES:
Inventories were comprised of the following as of December 31, 1996, and
September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
New boats, motors and trailers.................... $46,719,800 $41,764,979
Used boats, motors and trailers................... 3,808,325 5,388,798
Parts, accessories and other...................... 3,009,147 3,250,401
----------- -----------
$53,537,272 $50,404,178
=========== ===========
</TABLE>
5. PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following as of December 31, 1996,
and September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Land.............................................. $ 3,255,962 $ 4,504,533
Buildings and improvements........................ 9,955,090 11,384,566
Machinery and equipment........................... 2,782,254 3,026,428
Furniture and fixtures............................ 1,578,675 1,778,543
Vehicles.......................................... 998,368 1,236,915
----------- -----------
18,570,349 21,930,985
Less - Accumulated depreciation and
amortization.................................... (7,437,938) (8,191,842)
----------- -----------
$11,132,411 $13,739,143
=========== ===========
</TABLE>
F-19
<PAGE> 76
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. FLOOR PLAN NOTES PAYABLE:
Floor plan notes payable consisted of the following as of December 31,
1996, and September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Floor plan notes payable to financial institution, due
when the related boats are sold or 12 months after the
advance, whichever is earlier, bearing interest at prime
less .5% (8% at September 30, 1997), collateralized by
certain receivables, inventories and property and
equipment............................................... $ 8,398,558 $ 5,634,034
Floor plan notes payable to financial institutions, due
when related boats are sold, bearing interest at rates
ranging from 7.63 to 7.91%, collateralized by certain
receivables, inventories and property and equipment..... 12,441,979 7,625,727
Floor plan notes payable to financial institution, due
when related boats are sold, bearing interest at LIBOR
plus 2.5% (8.16% at September 30, 1997), collateralized
by certain receivables, inventories and property and
equipment............................................... 4,988,971 1,502,100
Floor plan notes payable to financial institution, due
when related boats are sold, bearing interest at prime
plus .75% (9.25% at September 30, 1997), collateralized
by certain inventories.................................. 1,845,223 3,624,849
Floor plan notes payable due to financial institutions,
due when related boats are sold or 12 months after the
advance, whichever is earlier, bearing interest at rates
ranging from .5% to prime plus 4% (12.5% at September
30, 1997), collateralized by certain receivables,
inventories and property and equipment.................. 11,575,324 7,765,389
----------- -----------
$39,250,055 $26,152,099
=========== ===========
</TABLE>
The maximum borrowings permitted and total available borrowings under the
floor plan notes payable at September 30, 1997, were approximately $50,000,000
and $23,848,000, respectively.
7 LONG-TERM DEBT:
Long-term debt was comprised of the following as of December 31, 1996, and
September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Unsecured note payable to former stockholder, due in various
quarterly installments, bearing interest at 5% for the
period January 1, 1997, through December 31, 1997, and 10%
thereafter through maturity in January 2008............... $ -- $ 5,955,419
Note payable to financial institution, due in monthly
installments of $15,609, bearing interest at 9%, maturing
in May 2002, with outstanding principal of $1,538,382 due
at maturity date, collateralized by property and
equipment................................................. -- 1,715,971
Mortgage note payable to financial institution, due in
monthly installments of $16,337, bearing interest at 8%,
maturing in August 2002, collateralized by property and
equipment................................................. 907,337 812,628
Note payable to financial institution, due in monthly
installments of $5,597, bearing interest at 8.75%,
maturing in June 2003, collateralized by property and
equipment................................................. 491,080 472,917
Note payable to financial institution, due in monthly
installments of $3,537, bearing interest at 6%, maturing
in October 2013, collateralized by property and
equipment................................................. 413,029 408,567
</TABLE>
F-20
<PAGE> 77
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Note payable to financial institution, due in monthly
installments of $3,333, bearing interest at 9.5%, maturing
in May 2003, with outstanding principal of $47,286 due at
maturity date, collateralized by property and equipment... -- 200,000
Various notes payable, due in monthly installments ranging
from $390 to $3,141, bearing interest at rates ranging
from 4.9% to 10.25%, maturing April 1999 through May 2017,
collateralized by property and equipment.................. 306,571 502,333
---------- -----------
2,118,017 10,067,835
Less -- Current maturities.................................. (221,771) (1,104,109)
---------- -----------
$1,896,246 $ 8,963,726
========== ===========
</TABLE>
The aggregate maturities of long-term debt were as follows at September 30,
1997:
<TABLE>
<CAPTION>
PERIOD ENDING
SEPTEMBER 30, AMOUNT
------------- -----------
<S> <C>
1998................................................. $ 1,104,109
1999................................................. 985,240
2000................................................. 919,383
2001................................................. 940,573
2002................................................. 2,475,123
Thereafter........................................... 3,643,407
-----------
$10,067,835
===========
</TABLE>
8. SHORT-TERM BORROWINGS:
Short-term borrowings consisted of the following as of December 31, 1996,
and September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Line of credit payable to financial institution, due on
demand, bearing interest due monthly at prime plus .5%
(9% at September 30, 1997), collateralized by a secondary
lien on certain receivables and property and equipment... $1,095,000 $ --
Unsecured line of credit payable to financial institution,
due on demand, bearing interest due monthly at prime plus
.5% (9% at September 30, 1997)........................... 2,295,601 2,711,677
---------- ----------
$3,390,601 $2,711,677
========== ==========
</TABLE>
The line of credit agreements above provide for total maximum borrowings of
$4,750,000. Total available borrowings on the line of credit agreements as of
September 30, 1997, were approximately $2,038,000.
F-21
<PAGE> 78
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
9. INCOME TAXES:
Federal income taxes for those Pooled Companies taxed as C corporations
were as follows for the years ended December 31, 1995 and 1996, and the
nine-month period ended September 30, 1997:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- SEPTEMBER 30,
1995 1996 1997
-------- --------- -------------
<S> <C> <C> <C>
Current................................. $ 21,610 $ 614,270 $272,455
Deferred................................ (70,707) (593,756) 137,369
-------- --------- --------
$(49,097) $ 20,514 $409,824
======== ========= ========
</TABLE>
Actual income tax expense (benefit) was not materially different from
income tax expense (benefit) computed by applying the U.S. Federal Statutory
Corporate Tax Rate of 34 percent to income (loss) before income tax provision
for the years ended December 31, 1995 and 1996, and the nine-month period ended
September 30, 1997, for those Pooled Companies taxed as C corporations.
Deferred income taxes reflect the impact of temporary differences between
the amount of assets and liabilities recognized for financial reporting purposes
and such amounts recognized for income tax purposes. The components of the net
deferred tax assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Current deferred tax assets:
Inventory........................................ $134,980 $ --
Accrued expenses................................. 432,070 368,394
Net operating loss (NOL) carryforwards........... 99,531 160,818
-------- ----------
Net current deferred tax assets.......... $666,581 $ 529,212
======== ==========
</TABLE>
As of September 30, 1997, the Company had NOL carryforwards of
approximately $498,000. The NOL carryforwards will be available to offset future
taxable income and will expire in various amounts from fiscal year 2009 through
fiscal year 2012.
Concurrent with the business combination discussed in Note 1, the Company
recorded a deferred tax liability of approximately $1,640,000 for income taxes
that will be payable by the Company upon conversion of certain of the Pooled
Companies that had elected S corporation status to C corporations.
10. DUE TO STOCKHOLDERS:
Due to stockholders includes non-collateralized demand notes which bear
interest at rates ranging from 0 to 10 percent.
11. COMMITMENTS AND CONTINGENCIES:
LEASE COMMITMENTS
The Company leases certain land, buildings, machinery, equipment and
vehicles related to its dealerships under non-cancelable operating leases.
Rental payments, including month-to-month rentals, were approximately $890,600,
$1,114,600 and $879,600 for the years ended December 31, 1995 and 1996, and the
nine-month period ended September 30, 1997, respectively. Rental payments to
related parties approximated $326,000 and $370,000 for the years ended December
31, 1995 and 1996, and $231,000 for the nine-month period ended September 30,
1997, respectively.
F-22
<PAGE> 79
MARINEMAX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Future minimum lease payments under non-cancelable operating leases were as
follows at September 30, 1997:
<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30, AMOUNT
------------- ----------
<S> <C>
1998................................................... $1,082,847
1999................................................... 733,938
2000................................................... 363,602
2001................................................... 179,970
2002................................................... 140,100
Thereafter............................................. 245,000
----------
$2,745,457
==========
</TABLE>
OTHER COMMITMENTS
The Company is party to various legal actions arising in the ordinary
course of business. The ultimate liability, if any, associated with these
matters was not determinable at September 30, 1997. While it is not feasible to
determine the outcome of these actions at this time, management believes that
these matters will not have a material adverse effect on the Company's financial
condition, results of operations or cash flows.
The Company is subject to federal and state environmental regulations,
including rules relating to air and water pollution and the storage and disposal
of gasoline, oil, other chemicals and waste. The Company believes that it is in
compliance with such regulations.
12. EMPLOYEE 401(K) PROFIT SHARING PLANS:
Certain MarineMax subsidiaries maintain defined contribution benefit plans
(the Plans). The Plans provide for matching contributions from the Company that
are limited to certain percentages of employee contributions. Additional
discretionary amounts may be contributed by the Company. The Company contributed
approximately $234,000, $339,000 and $221,000 to the Plans for the years ended
December 31, 1995 and 1996, and for the nine-month period ended September 30,
1997.
13. SUBSEQUENT EVENTS:
FLOOR PLAN NOTE PAYABLE
The Company has received a commitment for a new working capital line of
credit from a financial institution under which the Company intends to refinance
all of its outstanding floor plan notes payable. This working capital line of
credit will bear interest at LIBOR plus 1.25 percent, and will have a three-year
term.
F-23
<PAGE> 80
======================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 8
Formation of the Company.............. 19
Use of Proceeds....................... 22
Dividend Policy....................... 22
Capitalization........................ 23
Dilution.............................. 24
Selected Financial Data............... 25
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 26
Business.............................. 30
Management............................ 45
Principal Stockholders................ 49
Certain Transactions.................. 50
Description of Capital Stock.......... 51
Shares Eligible for Future Sale....... 52
Underwriting.......................... 54
Legal Opinions........................ 55
Experts............................... 55
Additional Information................ 55
Index to Financial Statements......... F-1
</TABLE>
UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
======================================================
======================================================
SHARES
MARINEMAX, INC.
COMMON STOCK
[MARINEMAX LOGO]
------------
PROSPECTUS
, 1998
------------
Salomon Smith Barney
William Blair & Company
======================================================
<PAGE> 81
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the offering
described in the Registration Statement.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 22,899.38
-----------
NASD filing fee............................................. 8,262.50
-----------
Blue Sky fees and expenses..................................
-----------
New York Stock Exchange fees................................
-----------
Transfer agent and registrar fees...........................
-----------
Accountants' fees and expenses..............................
-----------
Legal fees and expenses.....................................
-----------
Printing and engraving expenses.............................
-----------
Miscellaneous fees..........................................
-----------
Total....................................................... $
===========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Certificate of Incorporation and Bylaws of the Registrant
provide that the Registrant will indemnify and advance expenses, to the fullest
extent permitted by the Delaware General Corporation Law, to each person who is
or was a director or officer of the Registrant, or who serves or served any
other enterprise or organization at the request of the Registrant (an
"Indemnitee").
Under Delaware law, to the extent that an Indemnitee is successful on the
merits in defense of a suit or proceeding brought against him or her by reason
of the fact that he or she is or was a director, officer, or agent of the
Registrant, or serves or served any other enterprise or organization at the
request of the Registrant, the Registrant shall indemnify him or her against
expenses (including attorneys' fees) actually and reasonably incurred in
connection with such action.
If unsuccessful in defense of a third-party civil suit or a criminal suit,
or if such a suit is settled, an Indemnitee may be indemnified under Delaware
law against both (i) expenses, including attorney's fees, and (ii) judgments,
fines, and amounts paid in settlement if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Registrant, and, with respect to any criminal action, had no
reasonable cause to believe his or her conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Registrant, where the suit is settled, an Indemnitee may be indemnified under
Delaware law only against expenses (including attorneys' fees) actually and
reasonably incurred in the defense or settlement of the suit if he or she acted
in good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the Registrant except that if the Indemnitee
is adjudged to be liable for negligence or misconduct in the performance of his
or her duty to the Registrant, he or she cannot be made whole even for expenses
unless a court determines that he or she is fully and reasonably entitled to
indemnification for such expenses.
Also under Delaware law, expenses incurred by an officer or director in
defending a civil or criminal action, suit, or proceeding may be paid by the
Registrant in advance of the final disposition of the suit, action, or
proceeding upon receipt of an undertaking by or on behalf of the officer or
director to repay such amount if it is ultimately determined that he or she is
not entitled to be indemnified by the Registrant. The Registrant may also
advance expenses incurred by other employees and agents of the Registrant upon
such terms and conditions, if any, that the Board of Directors of the Registrant
deems appropriate.
II-1
<PAGE> 82
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In March 1998, the Registrant issued an aggregate of 8,495,017 shares of
Common Stock to the stockholders of the Merged Companies and the owners of the
Property Companies in connection with the Mergers and Property Acquisitions,
respectively. The shares were issued in reliance upon an exemption from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended,
as a transaction not involving a public offering.
ITEM 16. EXHIBITS.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<S> <C>
1 Form of Underwriting Agreement++
3.1 Restated Certificate of Incorporation of the Registrant+
3.2 Bylaws of the Registrant+
4 Specimen of Stock Certificate++
5 Opinion of O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association++
10.1(a) Merger Agreement between Registrant and its acquisition
subsidiary and Bassett Boat Company of Florida and Richard
Bassett+
10.1(b) Merger Agreement between Registrant and its acquisition
subsidiary and 11502 Dumas, Inc. d/b/a Louis DelHomme Marine
and its stockholders+
10.1(c) Merger Agreement between Registrant and its acquisition
subsidiary and Gulfwind USA, Inc. and its stockholders+
10.1(d) Merger Agreement between Registrant and its acquisition
subsidiary and Gulfwind South, Inc. and its stockholders+
10.1(e) Merger Agreement between Registrant and its acquisition
subsidiary and Harrison's Boat Center, Inc. and its
stockholders+
10.1(f) Merger Agreement between Registrant and its acquisition
subsidiary and Harrison's Marine Centers of Arizona, Inc.
and its stockholders+
10.2(a) Contribution Agreement between Registrant and Bassett Boat
Company and its owner+
10.2(b) Contribution Agreement between Registrant and Bassett
Realty, L.L.C. and its owner+
10.2(c) Contribution Agreement between Registrant and Gulfwind South
Realty, L.L.C. and its owners+
10.2(d) Contribution Agreement between Registrant and Harrison's
Realty, L.L.C. and its owners+
10.2(e) Contribution Agreement between Registrant and Harrison's
Realty California, L.L.C. and its owners+
10.3(a) Employment Agreement between Registrant and William H.
McGill Jr.++
10.3(b) Employment Agreement between Registrant and Michael H.
McLamb++
10.3(c) Employment Agreement between Registrant and Richard R.
Bassett++
10.3(d) Employment Agreement between Registrant and Louis R.
DelHomme, Jr.++
10.3(e) Employment Agreement between Registrant and Richard C.
LaManna Jr.++
10.3(f) Employment Agreement between Registrant and Richard C.
LaManna III++
10.3(g) Employment Agreement between Registrant and Darrell C.
LaManna++
10.4 1998 Incentive Stock Plan++
10.5 1998 Employee Stock Purchase Plan++
10.6 Settlement Agreement between Brunswick Corporation and
Registrant+
10.7 Letter of Intent between Registrant and Stovall++
11 Statement regarding computation of per share earnings+++
21 List of Subsidiaries+
23.1 Consent of O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association (included in Exhibit
5)++
</TABLE>
II-2
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<S> <C>
23.2 Consent of Arthur Andersen LLP+
24 Power of Attorney of Directors and Executive Officers
(included on the Signature Page of the Registration
Statement)+
27 Financial Data Schedule+
</TABLE>
- ---------------
+ Filed herewith
++ To be filed by amendment
+++ Not applicable
(b) Financial Statement Schedules
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1), or (4), or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 84
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Clearwater, State of
Florida, on March 12, 1998.
MARINEMAX, INC.
By: /s/ WILLIAM H. MCGILL JR.
------------------------------------
William H. McGill Jr.
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints jointly and severally, William H. McGill Jr. and
Michael H. McLamb and each one of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place, and stead, in any and all capacities, to sign any and all
amendments (including pre-effective and post-effective amendments) to this
registration statement and to sign any registration statement and amendments
thereto for the same offering files pursuant to Rule 462(b), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all which said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do, or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM H. MCGILL JR. Chairman of the Board, March 12, 1998
- ----------------------------------------------------- President, Chief Executive
William H. McGill Jr. Officer, and Director
(Principal Executive Officer)
/s/ MICHAEL H. MCLAMB Vice President, Chief Financial March 12, 1998
- ----------------------------------------------------- Officer, and Treasurer
Michael H. McLamb (Principal Financial and
Accounting Officer)
/s/ RICHARD R. BASSETT Senior Vice President and March 12, 1998
- ----------------------------------------------------- Director
Richard R. Bassett
/s/ LOUIS R. DELHOMME JR. Senior Vice President and March 12, 1998
- ----------------------------------------------------- Director
Louis R. DelHomme Jr.
/s/ RICHARD C. LAMANNA JR. Senior Vice President and March 12, 1998
- ----------------------------------------------------- Director
Richard C. LaManna Jr.
</TABLE>
II-4
<PAGE> 85
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGES
- ------- ------- ------------
<S> <C> <C>
1 Form of Underwriting Agreement++............................
3.1 Restated Certificate of Incorporation of the Registrant+....
3.2 Bylaws of the Registrant+...................................
4 Specimen of Stock Certificate++.............................
5 Opinion of O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association++......................
10.1(a) Merger Agreement between Registrant and its acquisition
subsidiary and Bassett Boat Company of Florida and Richard
Bassett+....................................................
10.1(b) Merger Agreement between Registrant and its acquisition
subsidiary and 11502 Dumas, Inc. d/b/a Louis DelHomme Marine
and its stockholders+.......................................
10.1(c) Merger Agreement between Registrant and its acquisition
subsidiary and Gulfwind USA, Inc. and its stockholders+.....
10.1(d) Merger Agreement between Registrant and its acquisition
subsidiary and Gulfwind South, Inc. and its stockholders+...
10.1(e) Merger Agreement between Registrant and its acquisition
subsidiary and Harrison's Boat Center, Inc. and its
stockholders+...............................................
10.1(f) Merger Agreement between Registrant and its acquisition
subsidiary and Harrison's Marine Centers of Arizona, Inc.
and its stockholders+.......................................
10.2(a) Contribution Agreement between Registrant and Bassett Boat
Company and its owner+......................................
10.2(b) Contribution Agreement between Registrant and Bassett
Realty, L.L.C. and its owner+...............................
10.2(c) Contribution Agreement between Registrant and Gulfwind South
Realty, L.L.C. and its owners+..............................
10.2(d) Contribution Agreement between Registrant and Harrison's
Realty, L.L.C. and its owners+..............................
10.2(e) Contribution Agreement between Registrant and Harrison's
Realty California, L.L.C. and its owners+...................
10.3(a) Employment Agreement between Registrant and William H.
McGill Jr.++................................................
10.3(b) Employment Agreement between Registrant and Michael H.
McLamb++....................................................
10.3(c) Employment Agreement between Registrant and Richard R.
Bassett++...................................................
10.3(d) Employment Agreement between Registrant and Louis R.
DelHomme, Jr.++.............................................
10.3(e) Employment Agreement between Registrant and Richard C.
LaManna Jr.++...............................................
10.3(f) Employment Agreement between Registrant and Richard C.
LaManna III++...............................................
10.3(g) Employment Agreement between Registrant and Darrell C.
LaManna++...................................................
10.4 1998 Incentive Stock Plan++.................................
10.5 1998 Employee Stock Purchase Plan++.........................
10.6 Settlement Agreement between Brunswick Corporation and
Registrant+.................................................
10.7 Letter of Intent between Registrant and Stovall++...........
11 Statement regarding computation of per share earnings+++....
21 List of Subsidiaries+.......................................
23.1 Consent of O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association (included in Exhibit
5)++........................................................
</TABLE>
<PAGE> 86
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGES
- ------- ------- ------------
<S> <C> <C>
23.2 Consent of Arthur Andersen LLP+.............................
24 Power of Attorney of Directors and Executive Officers
(included on the Signature Page of the Registration
Statement)+.................................................
27 Financial Data Schedule+....................................
</TABLE>
- ---------------
+ Filed herewith
++ To be filed by amendment
+++ Not applicable
<PAGE> 1
Ex - 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
MARINEMAX, INC.
1. The name of the corporation (which is hereinafter referred
to as the "Corporation") is MarineMax, Inc.
2. The original Certificate of Incorporation was filed with
the Secretary of State of the State of Delaware on January 23, 1998, under the
name MarineMax, Inc.
3. This Restated Certificate of Incorporation has been duly
proposed by resolutions adopted and declared advisable by the Board of Directors
of the Corporation, by written consent action given to the stockholders of the
Corporation, and duly adopted, executed and acknowledged by an officer of the
Corporation in accordance with the provisions of Sections 103, 228(d), 242 and
245 of the General Corporation Law of the State of Delaware and, restates,
integrates and amends the provisions of the Certificate of Incorporation of the
Corporation and, upon filing with the Secretary of State in accordance with
Section 103, shall thenceforth supersede the original Certificate of
Incorporation and shall, as it may thereafter be amended in accordance with its
terms and applicable law, be the Certificate of Incorporation of the
Corporation.
4. The text of the original Certificate of Incorporation of
the Corporation is hereby amended and restated to read in its entirety as
follows:
ARTICLE I
NAME
The name of the Corporation is: MarineMax, Inc.
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the
State of Delaware is The Corporation Trust Center, 1209 Orange Street,
Wilmington, County of New Castle, Delaware 19801, and the name of the
Corporation's registered agent at that address is The Corporation Trust Company.
<PAGE> 2
ARTICLE III
BUSINESS
The purposes of the Corporation shall be to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware, as the same exists or may hereafter be
amended (the "GCL").
ARTICLE IV
AUTHORIZED CAPITAL STOCK
The total number of shares of stock that the Corporation shall
have the authority to issue is Forty-five Million (45,000,000), consisting of
Forty Million (40,000,000) shares of Common Stock, par value $.001 per share
("Common Stock") and Five Million (5,000,000) shares of Preferred Stock, par
value $.001 per share ("Preferred Stock").
The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation (the "Board") is hereby
authorized to provide for the issuance of shares of Preferred Stock in one or
more series and, by filing a certificate pursuant to the GCL (hereinafter
referred to as "Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and the relative, participating, optional or
other rights of the shares of each such series and the qualifications,
limitations and restrictions thereof. The authority of the Board with respect to
each series shall include, but not be limited to, determination of the
following:
A. the designation of the series, which may be by
distinguishing number, letter or title;
B. the number of shares of the series, which number the Board
may thereafter (except where otherwise provided in the Preferred Stock
Designation) increase or decrease (but not below the number of shares thereof
then outstanding);
C. whether dividends, if any, shall be cumulative or
noncumulative and the rights with respect to dividends of the series;
D. the redemption rights and price or prices, if any, for
shares of the series;
E. the terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;
2
<PAGE> 3
F. the amounts payable on, and the preferences, if any, of
shares of the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
G. whether the shares of the series shall be convertible into
shares of any other class or series, or any other security, of the Corporation
or any other corporation, and, if so, the specification of such other class or
series of such other security, the conversion price or prices or rate or rates,
any adjustments thereof, the date or dates at which such shares shall be
convertible and all other terms and conditions upon which such conversion may be
made;
H. restrictions on the issuance of shares of the same series
or of any other class or series; and
I. the voting rights, if any, of the holders of shares of the
series.
The Common Stock shall be subject to the express terms of the
Preferred Stock and any series thereof. The holders of shares of Common Stock
shall be entitled to one (1) vote for each such share upon all questions
presented generally to the stockholders.
The number of authorized shares of Common Stock or Preferred
Stock may be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of a majority in voting
power of the stock of the Corporation entitled to vote thereon irrespective of
the provisions of Section 242(b)(2) of the GCL, and no vote of the holders of
either the Common Stock or the Preferred Stock voting separately as a class
shall be required therefor.
ARTICLE V
ELECTION OF DIRECTORS
A. The business and affairs of the Corporation shall be
conducted and managed by, or under the direction of, the Board. Subject to any
rights to elect directors set forth in any Preferred Stock Designation, the
total number of directors constituting the entire Board shall be not less than
one (1) nor more than fifteen (15), with the then-designated number of directors
being fixed from time to time by or pursuant to a resolution passed by the
Board. Members of the Board shall hold office until their successors are elected
and qualified or until their earlier death, resignation, disqualification or
removal.
B. Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
C. Except as otherwise provided for or fixed pursuant to the
provisions of Article IV of this Restated Certificate of Incorporation relating
to the rights of the holders of any
3
<PAGE> 4
series of Preferred Stock to elect additional directors, and subject to the
provisions hereof, newly created directorships resulting from any increase in
the authorized number of directors, and any vacancies on the Board resulting
from death, resignation, disqualification, removal, or other cause, may be
filled only by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the Board. No decrease in the
number of directors constituting the Board shall shorten the term of any
incumbent director.
D. During any period when the holders of any series of
Preferred Stock have the right to elect additional directors as provided for or
fixed pursuant to the provisions of Article IV of this Restated Certificate of
Incorporation, then upon commencement and for the duration of the period during
which such right continues (1) the then otherwise total designated number of
directors of the Corporation shall automatically be increased by such specified
number of directors, and the holders of such series of Preferred Stock shall be
entitled to elect the additional directors so provided for or fixed pursuant to
said provisions, and (2) each such additional director shall serve until such
director's successor shall have been duly elected and qualified, or until such
director's right to hold such office terminates pursuant to said provisions,
whichever occurs earlier, subject to the provisions of any Preferred Stock
Designation and to his or her earlier death, disqualification, resignation or
removal. Except as otherwise provided by the Board in the resolution or
resolutions establishing such series, whenever the holders of any series of
Preferred Stock having such right to elect additional directors are divested of
such right pursuant to the provisions of such stock, the terms of office of all
such additional directors elected by the holders of such stock, or elected to
fill any vacancies resulting from the death, resignation, disqualification or
removal of such additional directors, shall forthwith terminate and the total
designated number of directors of the Corporation shall be reduced accordingly.
E. Except for such additional directors, if any, as are
elected by the holders of any series of Preferred Stock as provided for or fixed
pursuant to the provisions of Article IV of this Restated Certificate of
Incorporation, any director may be removed from office only with cause and only
by the affirmative vote of sixty six and two-thirds percent (66 2/3%) or more of
the combined voting power of the then issued and outstanding shares of capital
stock of the Corporation entitled to vote in the election of directors, voting
together as a single class.
ARTICLE VI
MEETINGS OF STOCKHOLDERS
A. Meetings of stockholders of the Corporation may be held
within or without the State of Delaware, as the Bylaws of the Corporation may
provide. Except as otherwise provided for or fixed pursuant to the provisions of
Article IV of this Restated Certificate of Incorporation relating to the rights
of the holders of any series of Preferred Stock, special meetings of
stockholders of the Corporation may be called only by the Chairman of the Board,
or by the Board pursuant to a resolution adopted by the Board. Special meetings
of stockholders may not be called by any other person or persons or in any other
manner.
4
<PAGE> 5
B. In addition to the powers conferred on the Board by this
Restated Certificate of Incorporation and by the GCL, and without limiting the
generality thereof, the Board is specifically authorized from time to time, by
resolution of the Board without additional authorization by the stockholders of
the Corporation, to adopt, amend or repeal the Bylaws of the Corporation, in
such form and with such terms as the Board may determine, including, without
limiting the generality of the foregoing, Bylaws relating to: (1) regulation of
the procedure for submission by stockholders of nominations of persons to be
elected to the Board; (2) regulation of the attendance at annual or special
meetings of the stockholders of persons other than holders of record or their
proxies; and (3) regulation of the business that may properly be brought by a
stockholder of the Corporation before an annual or special meeting of
stockholders of the Corporation.
ARTICLE VII
STOCKHOLDER CONSENT
Except as otherwise provided for or fixed pursuant to the
provisions of Article IV relating to the rights of holders of any series of
Preferred Stock, no action that is required or permitted to be taken by the
stockholders of the Corporation at any annual or special meeting of stockholders
may be effected by written consent of stockholders in lieu of a meeting of
stockholders, unless the action to be effected by written consent of
stockholders and the taking of such action by such written consent have
expressly been approved in advance by the Board.
ARTICLE VIII
LIMITATION OF LIABILITY
A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the GCL.
Any repeal or modification of the foregoing paragraph shall
not adversely affect any right or protection of a director of the Corporation
existing hereunder with respect to any act or omission occurring prior to such
repeal or modification.
ARTICLE IX
BUSINESS COMBINATIONS; FAIR PRICE
A. In addition to any affirmative vote required by law or this
Restated Certificate of Incorporation, and except as otherwise expressly
provided in paragraph B of this Article IX:
1. any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (a) any
Interested Stockholder (as hereinafter
5
<PAGE> 6
defined), or (b) any other corporation, partnership or other
entity (whether or not itself an Interested Stockholder) which
is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested
Stockholder, other than a merger enacted in accordance with
Section 253 of the GCL; or
2. any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series
of transactions) to or with any Interested Stockholder,
including all Affiliates of the Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) of ten
million dollars ($10,000,000) or more; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of
any securities of the Corporation or any Subsidiary to any
Interested Stockholder, including all Affiliates of the
Interested Stockholder, in exchange for cash, securities or
other property (or a combination thereof) having an aggregate
Fair Market Value of ten million dollars ($10,000,000) or more
(other than on a pro rata basis to all holders of Voting
Stock, as hereinafter defined, of the same class or series of
Voting Stock held by the Interested Stockholder pursuant to a
stock split, reclassification, stock dividend or distribution
of warrants or rights and other than in connection with the
exercise or conversion of securities exercisable for or
convertible into securities of the Corporation of any of its
Subsidiaries which securities have been distributed pro rata
to all holders of Voting Stock); or
4. the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
on behalf of an Interested Stockholder or any Affiliates of an
Interested Stockholder; or
5. any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries or any other transaction (whether or not an
Interested Stockholder is a party thereto) which has the
effect, directly or indirectly, of increasing the
proportionate share by more than one percent (1%) of the
issued and outstanding shares of any class or series of equity
or convertible securities of the Corporation or any Subsidiary
which are directly or indirectly owned by any Interested
Stockholder or one or more Affiliates of the Interested
Stockholder, other than a merger enacted in accordance with
Section 253 of the GCL;
shall require the affirmative vote of the holders of at least sixty six and
two-thirds percent (66 2/3%) of the voting power of the then issued and
outstanding Voting Stock, voting together as a single class, and, to the extent
not prohibited by the provisions of the GCL, the affirmative
6
<PAGE> 7
vote of the holders of at least sixty six and two-thirds percent (66 2/3%) of
the voting power of the then issued and outstanding Voting Stock not
Beneficially Owned (as hereinafter defined) directly or indirectly by an
Interested Stockholder or any Affiliate of any Interested Stockholder. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be permitted, by law or in any
agreement with any national securities exchange or otherwise.
B. The provisions of Section A of this Article IX shall not be
applicable to any particular Business Combination (as hereinafter defined), and
such Business Combination shall require only such affirmative vote as is
required by law or any other provision of this Restated Certificate of
Incorporation, if the conditions specified in either of the following paragraphs
1 or 2 are met:
1. the Business Combination shall have been approved by a
majority of the Continuing Directors (as hereinafter defined); or
2. all of the following price and procedural conditions shall
have been met:
(a) the aggregate amount of the cash and the
Fair Market Value as of the date of the consummation of the
Business Combination of consideration other than cash, to be
received per share by the holders of Common Stock in such
Business Combination, shall be at least equal to the highest
of the following:
(i) (if applicable) the highest per
share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of Common
Stock acquired by it (A) within the three (3) year
period immediately prior to the first public
announcement of the proposal of such Business
Combination (the "Announcement Date"), or (B) in the
transaction in which it became an Interested
Stockholder, whichever is higher;
(ii) the Fair Market Value per share
of Common Stock on the Announcement Date or on the
date on which the Interested Stockholder became an
Interested Stockholder (the "Determination Date"),
whichever is higher; and
(iii) (if applicable) the price per
share equal to the Fair Market Value per share of
Common Stock determined pursuant to paragraph
2(a)(ii) above, multiplied by the ratio of (A) the
highest price per share (including any brokerage
commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any
shares
7
<PAGE> 8
of Common Stock acquired by it within the three (3)
year period immediately prior to the Announcement
Date to (B) the Fair Market Value per share of Common
Stock on the first day in such three (3) year period
upon which the Interested Stockholder acquired any
shares of Common Stock; and
(b) the aggregate amount of the cash and the
Fair Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of shares of any other class or
series, other than Common Stock or Excluded Preferred Stock
(as hereinafter defined), of issued and outstanding Voting
Stock shall be at least equal to the highest of the following
(it being intended that the requirements of this paragraph
2(b) shall be required to be met with respect to every such
class or series of issued and outstanding Voting Stock,
whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock):
(i) (if applicable) the highest per
share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of such
class or series of Voting Stock acquired by it (A)
within the three (3) year period immediately prior to
the Announcement Date, or (B) in the transaction in
which it became an Interested Stockholder, whichever
is higher;
(ii) (if applicable) the highest
preferential amount per share to which the holders of
shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation;
(iii) the Fair Market Value per
share of such class or series of Voting Stock on the
Announcement Date or on the Determination Date,
whichever is higher; and
(iv) (if applicable) the price per
share equal to the Fair Market Value per share of
such class of Voting Stock determined pursuant to
paragraph 2(b)(iii) above, multiplied by the ratio of
(A) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for
any shares of such class or series of Voting Stock
acquired by it within the three (3) year period
immediately prior to the Announcement Date to (B) the
Fair Market Value per share of such class of Voting
Stock on the first day in such three (3) year period
upon which the Interested Stockholder acquired any
shares of such class of Voting Stock; and
8
<PAGE> 9
(c) the consideration to be received by
holders of a particular class or series of issued and
outstanding Voting Stock (including Common Stock and other
than Excluded Preferred Stock) shall be in cash or in the same
form as the Interested Stockholder has previously paid for
shares of such class or series of Voting Stock (if the
Interested Stockholder has paid for shares of any class of
Voting Stock with varying forms of consideration, the form of
consideration for such class or series of Voting Stock shall
be either cash or the form used to acquire the largest number
of shares of such class or series of Voting Stock previously
acquired by it); and
(d) after such Interested Stockholder has
become an Interested Stockholder and prior to the consummation
of such Business Combination: (i) there shall have been no
failure to declare and pay at the regular date therefor any
full quarterly dividends (whether or not cumulative) on any
issued and outstanding shares of Preferred Stock, except as
approved by a majority of the Continuing Directors; (ii) there
shall have been no reduction in the annual rate of dividends
paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a
majority of the Continuing Directors; (iii) there shall have
been an increase in the annual rate of dividends as necessary
fully to reflect any recapitalization (including any reverse
stock split), reorganization or any similar reorganization
which has the effect of reducing the number of issued and
outstanding shares of the Common Stock, unless the failure so
to increase such annual rate is approved by a majority of the
Continuing Directors; and (iv) such Interested Stockholder
shall not have become the Beneficial Owner of any additional
Voting Stock except as part of the transaction which results
in such Interested Stockholder becoming an Interested
Stockholder; and
(e) after such Interested Stockholder has
become an Interested Stockholder, such Interested Stockholder
shall not have received the benefit, directly or indirectly
(except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the
Corporation, whether in anticipation of or in connection with
such Business Combination or otherwise; and
(f) a proxy or information statement
describing the proposed Business Combination and complying
with the requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be
mailed to stockholders of the Corporation at least thirty (30)
days prior to the consummation of such Business Combination
(whether or not such proxy or
9
<PAGE> 10
information statement is required to be made pursuant to such
Act or subsequent provisions).
C. For purposes of this Article IX the following terms shall
have the following meanings:
1. "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended from time
to time.
2. "Beneficial Owner" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations of the
Securities Exchange Act of 1934, as amended from time to time. In addition, a
Person shall be the "Beneficial Owner" of any Voting Stock which such Person or
any of its Affiliates or Associates has: (a) the right to acquire (whether such
right is exercisable immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; or (b) the right to
vote pursuant to any agreement, arrangement or understanding (but neither such
Person nor any such Affiliate or Associate shall be deemed to be the Beneficial
Owner of any shares of Voting Stock solely by reason of a revocable proxy
granted for a particular meeting of the stockholders, pursuant to a public
solicitation of proxies for such meeting, and with respect to which shares
neither such Person nor any such Affiliate of Associate is otherwise deemed the
Beneficial Owner).
3. "Business Combination" shall mean any
transaction described in any one or more of clauses (1) through (5) of Section A
of this Article IX.
4. "Continuing Director" shall mean any member
of the Board who is unaffiliated with and is not the Interested Stockholder and
was a member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any director who is thereafter chosen to
fill any vacancy on the Board or who is elected and who, in either event, is
unaffiliated with the Interested Stockholder and in connection with his or her
initial assumption of office is recommended for appointment or election by a
majority of Continuing Directors then on the Board.
5. "Excluded Preferred Stock" means any series
of Preferred Stock with respect to which a majority of the Continuing Directors
have approved a Preferred Stock Designation creating such series that expressly
provides that the provisions of this Article IX shall not apply.
6. "Fair Market Value" shall mean: (a) in the
case of stock, the highest closing sale price during the thirty (30) day period
immediately preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange listed
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stocks, or, if such stock is not quoted on the composite tape, on the New York
Stock Exchange, or, if such stock is not listed on such exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to a
share of such stock during the thirty (30) day period preceding the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use in its stead, or if no such
quotations are available, the fair market value on the date in question of a
share of such stock as determined by the Board in accordance with Section D of
this Article IX; and (b) in the case of property other than cash or stock, the
fair market value of such property on the date in question as determined by the
Board in accordance with Section D of this Article IX.
7. "Interested Stockholder" shall mean any
Person to or which:
(a) itself, or along with its Affiliates, is
the Beneficial Owner, directly or indirectly, of more than
fifteen percent (15%) of the then issued and outstanding
Voting Stock; or
(b) is an Affiliate of the Corporation and
at any time within the three (3) year period immediately prior
to the date in question was itself, or along with its
Affiliates, the Beneficial Owner, directly or indirectly, of
fifteen percent (15%) or more of the then issued and
outstanding Voting Stock; or
(c) is an assignee of or has otherwise
succeeded to any Voting Stock which was at any time within the
three (3) year period immediately prior to the date in
question beneficially owned by an Interested Stockholder, if
such assignment or succession shall have occurred in the
course of a transaction or series of transactions not
involving a public offering within the meaning of the
Securities Act of 1933.
For the purpose of determining whether a Person is an
Interested Stockholder pursuant to paragraph 7 of this Section C, the number of
shares of Voting Stock deemed to be issued and outstanding shall include shares
deemed owned through application of paragraph 2 of this Section C but shall not
include any other shares of Voting Stock that may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options or otherwise.
Notwithstanding anything to the contrary contained in this
Restated Certificate of Incorporation, for purposes of this Restated Certificate
of Incorporation, the term "Interested Stockholder" shall not, for any purpose,
include, and the provisions of Article IX(A) hereof shall not apply to: (a) the
Corporation or any Subsidiary; or (b) any employee stock ownership plan of the
Corporation or any Subsidiary.
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8. In the event of any Business Combination in
which the Corporation survives, the phrase "other consideration to be received"
as used in paragraphs 2(a) and (b) and paragraph B of this Article IX shall
include the shares of Common Stock and/or the shares of any other class of
issued and outstanding Voting Stock retained by the holders of such shares.
9. "Person" shall mean any individual, firm,
corporation, partnership or other entity.
10. "Subsidiary" shall mean any corporation or
other entity of which the Corporation owns, directly or indirectly, securities
that enable the Corporation to elect a majority of the board of directors or
other persons performing similar functions of such corporation or entity or that
otherwise give to the Corporation the power to control such corporation or
entity.
11. "Voting Stock" means all issued and
outstanding shares of capital stock of the Corporation that pursuant to or in
accordance with this Restated Certificate of Incorporation are entitled to vote
generally in the election of directors of the Corporation, and each reference
herein, where appropriate, to a percentage or portion of shares of Voting Stock
shall refer to such percentage or portion of the voting power of such shares
entitled to vote. The issued and outstanding shares of Voting Stock shall not
include any shares of Voting Stock that may be issuable pursuant to any
agreement, or upon the exercise or conversion of any rights, warrants or options
or otherwise.
D. The Continuing Directors of the Corporation shall have the
power and duty to determine for the purposes of this Article IX, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article IX, including, without limitation: (i)
whether a Person is an Interested Stockholder; (ii) the number of shares of
Voting Stock beneficially owned by any Person; (iii) whether a Person is an
Affiliate or Associate of another; (iv) whether the applicable conditions set
forth in paragraph 2 of paragraph B of this Article IX have been met with
respect to any Business Combination; (v) the Fair Market Value of stock or other
property in accordance with paragraph 6 of paragraph C of this Article IX; and
(vi) whether the assets which are the subject of any Business Combination have,
or the consideration to be received for the issuance or transfer of securities
by the Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of ten million dollars ($10,000,000) or more.
E. Nothing contained in this Article IX shall be
construed to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
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ARTICLE X
AMENDMENT OF CORPORATE DOCUMENTS
A. In addition to any affirmative vote required by applicable
law and in addition to any vote of the holders of any series of Preferred Stock
provided for or fixed pursuant to the provisions of Article IV of this Restated
Certificate of Incorporation, any alteration, amendment, repeal or rescission (a
"Change") of any provision of this Restated Certificate of Incorporation must be
approved by at least a majority of the then serving directors and by the
affirmative vote of the holders of at least a majority of the combined voting
power of the issued and outstanding shares of Voting Stock, voting together as a
single class; provided, however, that if any such Change relates to Articles V,
VI, VII, VIII, IX, XI or XII hereof or to this Article X, such Change must also
be approved by the affirmative vote of the holders of at least sixty six and
two-thirds percent (66 2/3%) of the combined voting power of the issued and
outstanding shares of Voting Stock, voting together as a single class.
Subject to the provisions hereof, the Corporation reserves the
right at any time, and from time to time, to amend, alter, repeal or rescind any
provision contained in this Restated Certificate of Incorporation in the manner
now or hereafter prescribed by law, and other provisions authorized by the laws
of the State of Delaware at the time in force may be added or inserted, in the
manner now or hereinafter prescribed by law; and all rights, preferences and
privileges of whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Restated Certificate of
Incorporation in its present form or as hereafter amended are granted subject to
the rights reserved in this Article X.
B. In addition to any affirmative vote required by law, any
Change of the Bylaws of the Corporation may be adopted either: (i) by the Board;
or (ii) by the stockholders by the affirmative vote of the holders of at least
sixty six and two-thirds percent (66 2/3%) of the combined voting power of the
issued and outstanding shares of Voting Stock, voting together as a single
class.
ARTICLE XI
BOARD CONSIDERATIONS UPON SIGNIFICANT EVENTS
The Board, when evaluating any (A) tender offer or invitation
for tenders, or proposal to make a tender offer or request or invitation for
tenders, by another party, for any equity security of the Corporation, or (B)
proposal or offer by another party to (1) merge or consolidate the Corporation
or any subsidiary with another corporation or other entity, (2) purchase or
otherwise acquire all or a substantial portion of the properties or assets of
the Corporation or any subsidiary, or sell or otherwise dispose of to the
Corporation or any subsidiary all or a substantial portion of the properties or
assets of such other party, or (3) liquidate, dissolve, reclassify the
securities of, declare an extraordinary dividend of, recapitalize
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or reorganize the Corporation, may take into account all factors that the Board
deems relevant, including, without limitation, to the extent so deemed relevant,
the potential impact on employees, customers, suppliers, partners, joint
venturers and other constituents of the Corporation and the communities in which
the Corporation operates.
ARTICLE XII
STRUCTURE OF BOARD OF DIRECTORS
A. The Board (other than those directors elected by the
holders of any series of Preferred Stock provided for or fixed pursuant to the
provisions of Article IV hereof ("Preferred Stock Directors")) shall be divided
into three classes, as nearly equal in number as possible, designated Class I,
Class II and Class III. Class I directors shall initially serve until the 1999
meeting of stockholders; Class II directors shall initially serve until the 2000
meeting of stockholders; and Class III directors shall initially serve until the
2001 meeting of stockholders. Commencing with the annual meeting of stockholders
in 1999, directors of each class, the term of which shall then expire, shall be
elected to hold office for a three-year term and until the election and
qualification of their respective successors in office. In case of any increase
or decrease, from time to time, in the number of directors (other than Preferred
Stock Directors), the number of directors in each class shall be apportioned as
nearly equal as possible.
B. Any director chosen to fill a vacancy or newly created
directorship shall hold office until the next election of the class for which
such director shall have been chosen and until his or her successor shall be
elected and qualified or until their earlier death, resignation,
disqualification or removal.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation
has been signed this 6th day of March, 1998.
MARINEMAX, INC.
By:______________________________________
William (Bill) H. McGill, Jr., President
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Exhibit 3.2
BYLAWS
OF
MARINEMAX, INC.
Adopted as of January 23, 1998
<PAGE> 2
BYLAWS
OF
MARINEMAX, INC.
ARTICLE I
STOCKHOLDERS
SECTION 1.1 PLACE OF MEETINGS. Meetings of stockholders shall
be held at the place, either within or without the State of Delaware, as may be
designated by resolution of the Board of Directors from time to time.
SECTION 1.2 ANNUAL MEETINGS. Annual meetings of stockholders
shall, unless otherwise provided by the Board of Directors, be held on the
second Wednesday in February of each calendar year, commencing in 1999, if not a
legal holiday, and if a legal holiday, then on the next full business day
following, at 1:00 p.m., at which time they shall elect a board of directors and
transact any other business as may properly be brought before the meeting.
SECTION 1.3 SPECIAL MEETINGS. Special meetings of stockholders
for any purpose or purposes may be called at any time by the Board of Directors,
or by a committee of the Board of Directors which has been duly designated by
the Board of Directors and whose powers and authority, as expressly provided in
a resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
SECTION 1.4 NOTICE OF MEETINGS. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the Certificate
of Incorporation of these Bylaws, the written notice of any meeting shall be
given no less than ten (10) nor more than sixty (60) days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at his or her address as it appears on the records
of the corporation.
SECTION 1.5 ADJOURNMENTS. Any meeting of stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may
<PAGE> 3
transact any business which might have been transacted at the original meeting.
If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
SECTION 1.6 QUORUM. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote at the meeting shall be necessary and
sufficient to constitute a quorum. In the absence of a quorum, the stockholders
so present may, by majority vote, adjourn the meeting from time to time in the
manner provided in Section 1.5 of these Bylaws until a quorum shall attend.
Shares of its own stock belonging to the corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held, directly or indirectly, by the corporation,
shall neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the corporation to vote
stock, including but not limited to its own stock, held by it in a fiduciary
capacity.
SECTION 1.7 ORGANIZATION. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his or her absence by
the Vice Chairman of the Board, if any, or in his or her absence by the
President, or in his or her absence by a Vice President, or in the absence of
the foregoing persons by a chairman designated by the Board of Directors, or in
the absence of such designation by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
SECTION 1.8 VOTING; PROXIES. Except as otherwise provided by
the Certificate of Incorporation, each stockholder entitled to vote at any
meeting of stockholders shall be entitled to one vote for each share of stock
held by him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A stockholder may revoke any
proxy which is not irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or another duly executed
proxy bearing a later date with the Secretary of the corporation. Voting at
meetings of stockholders need not be by written ballot and need not be conducted
by inspectors of election unless so determined by the holders of shares of stock
having a majority of the votes which could be cast by the holders of all
outstanding shares of stock entitled to vote thereon which are present in person
or by proxy at such meeting. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to elect. All other
elections and questions shall, unless otherwise provided by law, the Certificate
of Incorporation or these Bylaws, be decided
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by the vote of the holders of shares of stock having a majority of the votes
which could be cast by the holders of all shares of stock entitled to vote
thereon which are present in person or represented by proxy at the meeting.
SECTION 1.9 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF
RECORD. In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date: (1) in the case of determination
of stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (2) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall not be more than sixty
(60) days prior to such other action. If no record date is fixed: (1) the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held; (2) the record
date for determining stockholders entitled to express consent to corporate
action in writing without a meeting when no prior action of the Board of
Directors is required by law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation in accordance with applicable law, or, if prior action by the
Board of Directors is required by law, shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such prior
action; and (3) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 1.10 LIST OF STOCKHOLDERS ENTITLED TO VOTE. The
Secretary shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during
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the whole time thereof and may be inspected by any stockholder who is present.
Upon the willful neglect or refusal of the directors to produce such a list at
any meeting for the election of directors, they shall be ineligible for election
to any office at such meeting. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list of
stockholders or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
SECTION 1.11 ACTION BY CONSENT OF STOCKHOLDERS. Unless
otherwise restricted by the Certificate of Incorporation, any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1 NUMBER; QUALIFICATIONS. The Board of Directors
shall consist of not less than one (1) nor more than fifteen (15) members, the
number thereof to be determined from time to time by resolution of the Board of
Directors. The number of directors which shall comprise the initial Board of
Directors shall be that number set forth in the Certificate of Incorporation.
Directors need not be stockholders.
SECTION 2.2 ELECTION; RESIGNATION; REMOVAL; VACANCIES. The
Board of Directors shall be elected at each annual meeting of stockholders and
each director shall hold office for a term of one (1) year or until his or her
successor is elected and qualified. Any director may resign at any time upon
written notice to the corporation. Any newly created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled by a majority of
the remaining members of the Board of Directors, although such majority is less
than a quorum, or by a plurality of the votes cast at a meeting of stockholders,
and each director so elected shall hold office until the expiration of the term
of office of the director whom he has replaced or until his or her successor is
elected and qualified.
SECTION 2.3 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined, notices thereof need not be given.
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SECTION 2.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four (24) hours before the special meeting.
SECTION 2.5 TELEPHONIC MEETINGS PERMITTED. Members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
bylaw shall constitute presence in person at such meeting.
SECTION 2.6 QUORUM; VOTE REQUIRED FOR ACTION. At all meetings
of the Board of Directors a majority of the whole Board of Directors shall
constitute a quorum for the transaction of business. Except in cases in which
the Certificate of Incorporation or these Bylaws otherwise provide, the vote of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 2.7 ORGANIZATION. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or in his or her
absence by the Vice Chairman of the Board, if any, or in his or her absence by
the President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
SECTION 2.8 INFORMAL ACTION BY DIRECTORS. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE III
COMMITTEES
SECTION 3.1 COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, designate one
or more committees, each committee to consist of one or more of the directors of
the corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any
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meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in place of any such absent or disqualified member. Any such
committee, to the extent permitted by law and to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all pages which may require it.
SECTION 3.2 COMMITTEE RULES. Unless the Board of Directors
otherwise provides, each committee designated by the Board of Directors may
make, alter and repeal rules for the conduct of its business. In the absence of
such rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to Article II of these Bylaws.
ARTICLE IV
OFFICERS
SECTION 4.1 EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM
OF OFFICE; RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also elect one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers, and such other
officers as the Board of Directors deems necessary. Each such officer shall hold
office until the first meeting of the Board of Directors after the annual
meeting of stockholders next succeeding his or her election, and until his or
her successor is elected and qualified or until his or her earlier resignation
or removal. Any officer may resign at any time upon written notice to the
corporation. The Board of Directors may remove any officer with or without cause
at any time, but such removal shall be without prejudice to the contractual
rights of such officer, if any, with the corporation. Any number of offices may
be held by the same person. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise may be filled for the
unexpired portion of the term by the Board of Directors at any regular or
special meeting.
SECTION 4.2 POWERS AND DUTIES OF EXECUTIVE OFFICERS. The
officers of the corporation shall have such powers and duties in the management
of the corporation as may be prescribed by the Board of Directors and, to the
extent not so provided, as generally pertain to their respective officers,
subject to the control of the Board of Directors. The Board of Directors may
require any officer, agent or employee to give security for the faithful
performance of his or her duties.
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ARTICLE V
STOCK
SECTION 5.1 CERTIFICATES. Every holder of stock shall be
entitled to have a certificate signed by or in the name of the corporation by
the Chairman or Vice Chairman of the Board of Directors, if any, or the
President or a Vice President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary, of the corporation, certifying the
number of shares owned by him in the corporation. Any of or all the signatures
on the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
SECTION 5.2 LOST, STOLEN OR DESTROYED STOCK CERTIFICATES;
ISSUANCE OF NEW CERTIFICATES. The corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the corporation may require the owner of the
lost, stolen or destroyed certificate, or his or her legal representative, to
give the corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 RIGHT TO INDEMNIFICATION. The corporation shall
indemnify and hold harmless, to the fullest extent permitted by applicable law
as it presently exists or may hereafter be amended, any person who was or is
made or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he or she or a person for whom he or
she is the legal representative, is or was a director or officer of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans (an "indemnitee"), against all liability and
loss suffered and expenses (including attorneys' fees) reasonably incurred by
such indemnitee. The corporation shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if the initiation of such proceeding (or part thereof) by the indemnitee was
authorized by the Board of Directors of the corporation.
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SECTION 6.2 PREPAYMENT OF EXPENSES. The corporation shall pay
the expenses (including attorneys' fees) incurred by an indemnitee in defending
any proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the director or officer to repay all amounts advanced if it should be
ultimately determined that the director or officer is not entitled to be
indemnified under this Article or otherwise.
SECTION 6.3 CLAIMS. If a claim for indemnification or payment
of expenses under this Article is not paid in full within sixty (60) days after
a written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expenses of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the indemnitee was not entitled to the requested indemnification
or payment of expenses under applicable law.
SECTION 6.4 NONEXCLUSIVITY OF RIGHTS. The rights conferred on
any person by this Article VI shall not be exclusive of any other rights which
such person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 6.5 OTHER INDEMNIFICATION. The corporation's
obligation, if any, to indemnify any person who was or is serving at its request
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, enterprise, or nonprofit entity shall be reduced by any
amount such person may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise or nonprofit enterprise.
SECTION 6.6 AMENDMENT OR REPEAL. Any repeal or modification of
the foregoing provisions of this Article VI shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 FISCAL YEAR. The fiscal year of the corporation
shall be determined by resolution of the Board of Directors.
SECTION 7.2 SEAL. The corporate seal shall have the name of
the corporation inscribed thereon and shall be in such form as may be approved
from time to time by the Board of Directors.
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<PAGE> 10
SECTION 7.3 WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS,
DIRECTORS AND COMMITTEES. Any written waiver of notice, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
SECTION 7.4 INTERESTED DIRECTORS; QUORUM. No contract or
transaction between the corporation and one or more of its directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or committee
thereof which authorizes the contract or transaction, or solely because his, her
or their votes are counted for such purpose, if: (1) the material facts as to
his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (2) the material
facts as to his or her relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or (3) the contract or transaction is fair as to
the corporation as of the time it is authorized, approved or ratified by the
Board of Directors, a committee thereof, or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.
SECTION 7.5 FORM OF RECORDS. Any records maintained by the
corporation in the regular course of its business, including its stock ledger,
books of account, and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
SECTION 7.6 AMENDMENT OF BYLAWS. These Bylaws may be altered
or repealed, and new Bylaws made by the Board of Directors, but the stockholders
may make additional bylaws and may alter and repeal any bylaws whether adopted
by them or otherwise.
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Exhibit 10.1(a)
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
BASSETT BOAT ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
BASSETT BOAT COMPANY OF FLORIDA
AND
RICHARD R. BASSETT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
1. THE MERGER.................................................................................... 4
1.1 Delivery of Filing of Articles of Merger............................................. 4
1.2 Effective Time....................................................................... 4
1.3 Articles/Certificate of Incorporation, Bylaws and Board of Directors of
Surviving Corporation................................................................ 5
1.4 Certain Information With Respect to the Capital Stock of COMPANY,
MARINEMAX and NEWCO.................................................................. 5
1.5 Effect of Merger..................................................................... 5
1.6 Accounting Treatment................................................................. 6
2. CONVERSION AND CANCELLATION OF STOCK.......................................................... 6
2.1 Manner of Conversion and Cancellation................................................ 6
3. DELIVERY OF MERGER CONSIDERATION.............................................................. 7
3.1 Time and Manner of Delivery.......................................................... 7
3.2 Surrender of COMPANY Stock........................................................... 7
3.3 Escrow of Portion of MARINEMAX Stock................................................. 7
4. CLOSING....................................................................................... 7
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDER................................................................................... 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDER.......................................................................... 8
5.1 Due Organization..................................................................... 8
5.2 Authorization........................................................................ 9
5.3 Capital Stock of COMPANY............................................................. 9
5.4 Transactions in Capital Stock, Organization Accounting............................... 9
5.5 No Bonus Shares...................................................................... 9
5.6 Subsidiaries......................................................................... 9
5.7 Predecessor Status; Etc.............................................................. 10
5.8 Spin-off by COMPANY.................................................................. 10
5.9 Financial Statements................................................................. 10
5.10 Liabilities and Obligations.......................................................... 10
5.11 Accounts and Notes Receivable........................................................ 11
5.12 Permits and Intangibles.............................................................. 11
5.13 Environmental Matters................................................................ 11
5.14 Personal Property.................................................................... 12
5.15 Significant Customers; Material Contracts and Commitments............................ 12
5.16 Real Property........................................................................ 13
5.17 Insurance............................................................................ 14
5.18 Compensation; Employment Agreements; Organized Labor Matters......................... 14
5.19 Employee Plans....................................................................... 15
5.20 Compliance with ERISA................................................................ 15
5.21 Conformity with Law; Litigation...................................................... 16
5.22 Taxes................................................................................ 16
5.23 No Violations........................................................................ 17
</TABLE>
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<TABLE>
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<S> <C>
5.24 Government Contracts................................................................. 17
5.25 Absence of Changes................................................................... 17
5.26 Deposit Accounts; Powers of Attorney................................................. 19
5.27 Validity of Obligations.............................................................. 19
5.28 Relations with Governments........................................................... 19
5.29 Prohibited Activities................................................................ 19
5.30 Disclosure........................................................................... 19
(B) Representations and Warranties of STOCKHOLDER........................................ 20
5.31 Authority: Ownership................................................................. 20
5.32 Preemptive Rights.................................................................... 20
5.33 No Intention to Dispose of MARINEMAX Stock........................................... 20
6. REPRESENTATIONS OF MARINEMAX AND NEWCO........................................................ 20
6.1 Due Organization..................................................................... 20
6.2 Authorization........................................................................ 21
6.3 Capital Stock of MARINEMAX and NEWCO................................................. 21
6.4 Transactions in Capital Stock; Organization Accounting............................... 21
6.5 Subsidiaries......................................................................... 21
6.6 Financial Statements................................................................. 21
6.7 [Intentionally Deleted].............................................................. 22
6.8 Validity of Obligations.............................................................. 22
6.9 MARINEMAX Stock...................................................................... 22
6.10 Disclosure........................................................................... 22
6.11 No Undisclosed Agreements............................................................ 22
7. COVENANTS PRIOR TO CLOSING.................................................................... 22
7.2 Conduct of Business Pending the Merger............................................... 23
7.3 Prohibited Activities................................................................ 24
7.4 [Intentionally Deleted].............................................................. 25
7.5 [Intentionally Deleted.]............................................................. 25
7.6 Agreements........................................................................... 25
7.7 Notification of Certain Matters...................................................... 25
7.8 Delivery of Schedules; Amendment of Schedules........................................ 25
7.9 [Intentionally Deleted].............................................................. 26
7.10 Final Financial Statements........................................................... 26
7.11 Further Assurances................................................................... 26
7.12 [Intentionally Deleted].............................................................. 26
7.13 Compliance with the Hart-Scott Act................................................... 26
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER
AND COMPANY................................................................................... 27
8.1 Representations and Warranties; Performance of Obligations........................... 27
8.2 Satisfaction......................................................................... 27
8.3 No Litigation........................................................................ 27
8.4 [Intentionally Deleted].............................................................. 27
8.5 Consents and Approvals............................................................... 27
8.6 Good Standing Certificates........................................................... 28
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
8.7 No Material Adverse Change........................................................... 28
8.8 [Intentionally Deleted].............................................................. 28
8.9 Secretary's Certificate.............................................................. 28
8.10 Employment Agreements................................................................ 28
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO......................................................................................... 28
9.1 Representations and Warranties; Performance of Obligations........................... 28
9.2 No Litigation........................................................................ 28
9.3 Secretary's Certificate.............................................................. 29
9.4 No Material Adverse Effect........................................................... 29
9.5 STOCKHOLDER's Release................................................................ 29
9.6 Satisfaction......................................................................... 29
9.7 [Intentionally Deleted].............................................................. 29
9.8 Consents and Approvals............................................................... 29
9.9 Good Standing Certificates........................................................... 29
9.10 Pooling Letter....................................................................... 30
9.11 Employment Agreements................................................................ 30
9.12 Specific Indemnification Agreement................................................... 30
9.13 FIRPTA Certificate................................................................... 30
9.14 Investment Agreement................................................................. 30
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDER AFTER
CLOSING....................................................................................... 30
10.1 Assumption of STOCKHOLDER's Guarantees............................................... 30
10.2 Preservation of Tax and Accounting Treatment......................................... 30
10.3 Preparation and Filing of Tax Returns................................................ 30
10.4 Directors and Officers of the Surviving Corporation.................................. 31
10.5 Preservation of Employee Benefit Plans............................................... 31
10.6 Dividends............................................................................ 31
10.7 Distribution of Financial Statements................................................. 31
11. INDEMNIFICATION............................................................................... 32
11.1 General Indemnification by the STOCKHOLDER........................................... 32
11.2 Indemnification by MARINEMAX......................................................... 32
11.3 Third Person Claims.................................................................. 32
11.4 Limitations on Indemnification....................................................... 33
.............................................................................................. 34
11.5 Environmental Indemnification by the STOCKHOLDER..................................... 34
12. TERMINATION OF AGREEMENT...................................................................... 35
12.1 Termination.......................................................................... 35
12.2 Liabilities in Event of Termination.................................................. 36
13. NONCOMPETITION................................................................................ 36
13.1 Prohibited Activities................................................................ 36
13.2 Damages.............................................................................. 37
13.3 Reasonable Restraint................................................................. 37
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
13.4 Severability; Reformation............................................................ 37
13.5 Independent Covenant................................................................. 37
13.6 Materiality.......................................................................... 37
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION..................................................... 37
14.1 STOCKHOLDER.......................................................................... 37
14.2 MARINEMAX AND NEWCO.................................................................. 38
14.3 Damages.............................................................................. 38
14.4 Survival............................................................................. 39
15. TRANSFER RESTRICTIONS......................................................................... 39
15.1 Transfer Restrictions................................................................ 39
16. FEDERAL SECURITIES ACT REPRESENTATIONS........................................................ 39
16.1 Compliance with Law.................................................................. 39
16.2 Economic Risk; Sophistication........................................................ 40
17. GENERAL....................................................................................... 40
17.1 Cooperation.......................................................................... 40
17.2 Successors and Assigns............................................................... 40
17.3 Entire Agreement..................................................................... 40
17.4 Counterparts......................................................................... 40
17.5 Brokers and Agents................................................................... 40
17.6 Expenses............................................................................. 41
17.7 Notices.............................................................................. 41
17.8 Governing Law........................................................................ 42
17.9 Survival of Representations and Warranties........................................... 42
17.10 Exercise of Rights and Remedies...................................................... 42
17.11 Time................................................................................. 42
17.12 Reformation and Severability......................................................... 43
17.13 Remedies Cumulative.................................................................. 43
17.14 Captions............................................................................. 43
17.15 Amendments and Waivers............................................................... 43
17.16 Execution by Facsimile; Delivery of Original Signed Agreement........................ 43
</TABLE>
<PAGE> 6
AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as
of the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), BASSETT BOAT ACQUISITION CORP., a Delaware
corporation ("NEWCO"), BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation
(the "COMPANY"), and RICHARD R. BASSETT (the "STOCKHOLDER").
WHEREAS, NEWCO is a corporation duly organized and existing under the
laws of the State of Delaware, having been incorporated solely for the purpose
of completing the transactions set forth herein, and is a wholly-owned
subsidiary of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and Florida;
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the
"MARINEMAX Plan of Organization," and the parties intend that each merger
comprising the MARINEMAX Plan of Organization be accounted for as a
pooling-of-interests for accounting purposes;
WHEREAS, the STOCKHOLDER and the Boards of Directors and the
stockholders of MARINEMAX, NEWCO, each of the Other Founding Companies and each
of the subsidiaries of MARINEMAX that are parties to the Other Agreements have
approved and adopted the MARINEMAX Plan of Organization as an integrated plan
pursuant to which the STOCKHOLDER and the stockholders of each of the Other
Founding Companies will transfer the capital stock of each of the Founding
Companies to MARINEMAX and the STOCKHOLDER and the stockholders of each of the
Other Founding Companies as a tax-free transfer of property under Section 351 of
the Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
<PAGE> 7
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct
subsidiaries of COMPANY.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of
Merger with respect to the Merger substantially in the forms attached as Annex I
hereto or with such other changes therein as may be required by applicable state
laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section
5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second
recital of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
"Escrow and Security Agreement" has the meaning set forth in Section
3.3.
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in
Section 7.10.
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<PAGE> 8
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona corporation,
"GAAP" shall mean generally accepted accounting principles in the
United States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the
fourth recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the State of
Delaware and other applicable state laws.
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of
NEWCO.
"Other Agreements" has the meaning set forth in the third recital of
this Agreement.
"Other Founding Companies" means all of the Founding Companies other
than COMPANY.
"Pooling Letter" shall have the meaning set forth in Section 9.10.
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<PAGE> 9
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be
provided within fifteen (15) days from the execution of this Agreement (as
amended in compliance with Section 7.8 hereof), which reference the relevant
sections of this Agreement, on which parties hereto disclose information as part
of their respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDER" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in
the Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause the Articles of Merger to be signed, verified and filed
with the Secretary of State of the State of Delaware and the Secretary of State
of the State of Florida and stamped receipt copies of each such filing to be
delivered to MARINEMAX at the Effective Time.
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with
and into COMPANY in accordance with the Articles of Merger, the separate
existence of NEWCO shall cease, COMPANY shall be the surviving party in the
Merger. The Merger will be effected in a single transaction.
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<PAGE> 10
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF
DIRECTORS OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then
in effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the
Bylaws of the Surviving Corporation; and subsequent to the Effective Time, such
Bylaws shall be the Bylaws of the Surviving Corporation until they shall
thereafter be duly amended;
(iii) the Board of Directors of the Surviving Corporation
shall consist of the persons who are on the Board of Directors of COMPANY
immediately prior to the Effective Time, provided that William H. McGill, Jr.
shall be elected as a director of the Surviving Corporation effective as of the
Effective Time; the Board of Directors of the Surviving Corporation shall hold
office subject to the provisions of the laws of the State of Florida and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation in
the same capacity or capacities, and effective at the Effective Time William H.
McGill, Jr. shall be appointed as vice president of the Surviving Corporation
and Michael H. McLamb, Treasurer and Assistant Secretary, shall be appointed as
an assistant secretary of the Surviving Corporation, each of such officers to
serve, subject to the provisions of the Articles/Certificate of Incorporation
and Bylaws of the Surviving Corporation, until his successor is duly elected and
qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and
outstanding capital stock of COMPANY is as set forth on Schedule 5.3 hereto;
(ii) immediately prior to the Effective Time, the authorized
capital stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
(iii) as of the date of this Agreement, the authorized capital
stock of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock, of which
One (1) share is issued and outstanding.
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of Florida. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate
5
<PAGE> 11
existence of NEWCO shall cease and, in accordance with the terms of this
Agreement, the Surviving Corporation shall possess all of the rights,
privileges, immunities and franchises, of a public, as well as of a private,
nature, and all property, real, personal and mixed, and all debts due on all
accounts whatsoever, including, without limitation, subscriptions to shares, and
all taxes, including those due and owing and those accrued, and all other choses
in action, and all and every other interest of or belonging to or due to
COMPANY, and NEWCO shall be taken and deemed to be transferred to, and vested
in, the Surviving Corporation without further act or deed; and all of the
respective properties, rights and privileges, powers and franchises and all and
every other interest of COMPANY and NEWCO shall be thereafter be the property of
the Surviving Corporation as they were of COMPANY and NEWCO prior to the Merger;
the title to any real estate, or interest therein, whether by deed or otherwise,
under the laws of the state of incorporation vested in COMPANY and NEWCO, shall
not revert or be in any way impaired by reason of the Merger; and the assets,
liabilities, reserves, and accounts of COMPANY shall be taken up on the books of
the Surviving Corporation at the amounts at which they respectively were carried
on the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
As of the Effective Time:
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, automatically shall be deemed to
represent the right to receive the number of shares of MARINEMAX Stock set forth
on Annex II hereto with respect to such holder;
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
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<PAGE> 12
(iii) each share of NEWCO Stock issued and outstanding
immediately prior to the Effective Time, shall, by virtue of the Merger and
without any action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDER pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letter referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDER shall be fully exercisable by
the STOCKHOLDER and the STOCKHOLDER shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter
as reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDER shall receive the number of shares of MARINEMAX Stock
as set forth on Annex II hereto; provided, however, that the STOCKHOLDER shall
have previously surrendered all of COMPANY Stock to MARINEMAX as provided in
Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDER shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDER, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDER's expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDER agrees promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, the
STOCKHOLDER agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to the STOCKHOLDER pursuant to this Agreement
for purposes of securing the obligations, representations and warranties of the
STOCKHOLDER arising under this Agreement and all documents executed in
connection herewith, such escrow to be governed by an escrow and security
agreement in the form attached hereto as ANNEX III (the "Escrow and Security
Agreement"). STOCKHOLDER agrees to execute and deliver the Escrow and Security
Agreement at the Closing effective at the Effective Time.
4. CLOSING
At or prior to the Closing, the parties shall take all actions
necessary to prepare to (i) effect the Merger (including, without limitation, if
permitted by applicable state law, the filing with the appropriate state
authorities of the Articles of Merger specifying the Effective Time as the
delayed effective time of the Merger), and (ii) effect the conversion and
delivery of shares referred to in Section 3 hereof; provided, however, that such
actions shall not include the actual completion of the Merger or the conversion
and delivery of the shares referred to in Section 3 hereof, each of which
actions shall be
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deemed taken at the Effective Time as herein provided. In the event that the
conditions precedent contained in and this Agreement are not satisfied or waived
and this Agreement is thereby terminated, MARINEMAX hereby covenants and agrees
to do all things required by the Delaware GCL and by the applicable corporate
laws of the State of Florida in order to stop or rescind the Merger effected by
the filing of the Articles of Merger as described in this Section. The taking of
the actions described in clauses (i) and (ii) above shall take place at a
closing (the "Closing") to be held following the satisfaction or waiver of the
conditions precedent set forth in Section 5, 8 and 9 hereof on such date as
MARINEMAX shall determine (the "Closing Date") at the offices of O'Connor,
Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback Road,
Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles of
Merger shall be or shall have been filed with the appropriate state authorities
so that the Merger shall be effective at the Effective Time, and (y) the parties
shall be deemed to have consummated the transactions contemplated by this
Agreement, including, without limitation, the conversion and delivery of shares,
which the STOCKHOLDER shall be entitled to receive pursuant to the Merger
referred to in Section 3 hereof. The time at which the actions described in the
preceding clauses (x) and (y) occur shall be referred to as the "Effective
Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDER
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDER. Each
of COMPANY and the STOCKHOLDER represents and warrants that all of the following
representations and warranties in this Section 5(A) are true, complete and
correct at the date of this Agreement and, subject to Section 7.8 hereof, shall
be true, complete, and correct at the time of Closing and at the Effective Time
and that such representations and warranties shall survive the Closing and the
Effective Time for a period of the earlier of (i) the date of the first audit of
financial statements of the Surviving Corporation containing combined operations
of MARINEMAX and the Surviving Corporation for those representations and
warranties set forth within Section 5(A) which representations and warranties
specifically deal with items that would be expected to be encountered in the
audit process, or (ii) twelve (12) months, the last day of such period being the
"Expiration Date". For purposes of this Section 5(A), the term COMPANY shall
mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, and has
the requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing of its properties makes such qualification necessary, except (i) as set
forth on Schedule 5.1 or (ii) where the failure to be so authorized or qualified
would not have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise), of COMPANY taken as a
whole (as used herein with respect to COMPANY, or with respect to any person, a
"Material Adverse Effect"). Schedule 5.1 sets forth the jurisdiction in which
COMPANY is incorporated and contains a list of all jurisdictions in which
COMPANY is authorized or qualified to do business. True, complete and correct
copies of the Articles/Certificate of Incorporation and Bylaws, each as amended,
of COMPANY (the "Charter Documents") are attached hereto in Schedule 5.1. The
stock records of COMPANY, as heretofore made available to MARINEMAX, are correct
and complete in all material respects. There are no minutes in the possession of
COMPANY or the STOCKHOLDER which have not been supplied to MARINEMAX, and all of
such minutes are correct and complete in all respects. The most recent minutes
of COMPANY, which are dated no earlier than ten (10) business days prior to the
date hereof,
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affirm and ratify all prior acts of COMPANY, and of its officers and directors
on behalf and for the benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this
Agreement have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDER and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY
is as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDER in the amount set forth in
Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDER is the sole
stockholder of COMPANY. Except as disclosed in Schedule 5.3 hereto, STOCKHOLDER
has at all times during the two (2) year period immediately preceding the date
hereof owned or maintained sole equitable and beneficial interest in all of the
issued and outstanding shares of the capital stock of COMPANY as to which
STOCKHOLDER is the registered holder, as set forth in Schedule 5.3 hereto. All
of the issued and outstanding shares of the capital stock of COMPANY have been
duly authorized and validly issued, are fully paid and nonassessable, are owned
of record and beneficially by the STOCKHOLDER and further, such shares were
offered, issued, sold and delivered by COMPANY in compliance with all applicable
state and federal laws concerning the issuance of securities. Further, none of
such shares were issued in violation of any preemptive rights of any past or
present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY
Stock since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all stock option or stock purchase plans,
including, without limitation, a list of all outstanding options, warrants or
other rights to acquire shares of COMPANY's stock.
5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
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5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which STOCKHOLDER acquired his or her stock in
any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been, within
such period of time, a subsidiary or division of another corporation or a part
of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1995 and December 31, 1996, and for the
nine month period ended September 30, 1997. COMPANY Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated and for the periods prior thereto (except as noted thereon
or on Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance
Sheets as of December 31, 1996 and September 30, 1997 each present fairly in all
material respects the financial position of COMPANY as of the dates indicated
thereon, and COMPANY's Statements of Operations, Shareholders' Equity and Cash
Flows referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance Sheet Date, COMPANY has not incurred any material liabilities of any
kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. COMPANY has also delivered to MARINEMAX on Schedule
5.10, in the case of those contingent liabilities related to pending or
threatened litigation, or other liabilities incurred under the agreements listed
pursuant to Section 5.10(ii) which are not fixed or otherwise accrued or
reserved, a good faith and reasonable estimate of the maximum amount which
COMPANY reasonably expects will be payable. For each such contingent liability
or liability for which the amount is not fixed or is contested, COMPANY has
provided to MARINEMAX the following information:
(i) a summary description of the liability together with the
following:
(a) copies of all relevant documentation relating
thereto; and
(b) amounts claimed and any other action or relief
sought;
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(ii) the name of each court or agency before which such claim,
suit or proceeding is pending;
(iii) the date such claim, suit or proceeding was instituted;
and
(iv) a good faith and reasonable estimate of the maximum
amount, if any, which is likely to become payable with respect to each such
liability. If no estimate is provided, the estimate shall for purposes of this
Agreement be deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX
a true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDER. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all
licenses, franchises, permits and authorizations (governmental or otherwise) the
absence of any of which could have a Material Adverse Effect on COMPANY's
business, including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDER after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew any such license, franchise, permit or authorization. COMPANY has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in the licenses, franchises,
permits and authorizations listed on Schedules 5.12 and 5.13 and is not in
violation of any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on COMPANY. Except as specifically
provided in Schedule 5.12, the transactions contemplated by this Agreement will
not result in a default under or a breach or violation of, or adversely affect
the rights and benefits afforded to COMPANY by, any such licenses, franchises,
permits or authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with and is in compliance with all federal,
state, local and foreign statutes (civil and criminal), laws, ordinances,
regulations, rules, notices, permits, judgments, orders and decrees applicable
to COMPANY or any of its properties, assets, operations and businesses relating
to environmental protection (collectively "Environmental Laws") including,
without limitation, Environmental Laws relating to air, water, land and the
generation, storage, use, handling, transportation, treatment or disposal of
Hazardous Wastes and Hazardous Substances including petroleum and petroleum
products (as such terms are defined in any
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applicable Environmental Law); (ii) COMPANY has obtained and adhered to all
necessary permits and other approvals necessary to treat, transport, store,
dispose of and otherwise handle Hazardous Wastes and Hazardous Substances, a
list of all of such permits and approvals is set forth on Schedule 5.13; (iii)
COMPANY has reported to the appropriate authorities, to the extent required by
all Environmental Laws, all past and present sites owned and operated by COMPANY
where Hazardous Wastes or Hazardous Substances have been treated, stored,
disposed of or otherwise handled; (iv) there have been no releases or threats of
releases (as defined in Environmental Laws) at, from, in or on any property
owned or operated by COMPANY except as permitted by Environmental Laws; (v)
COMPANY and STOCKHOLDER know of no on-site or off-site location to which COMPANY
has transported or disposed of Hazardous Wastes and Hazardous Substances or
arranged for the transportation of Hazardous Wastes and Hazardous Substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which is reasonably likely to lead to any
claim against COMPANY, MARINEMAX or NEWCO for any clean-up cost, remedial work,
damage to natural resources, property damage or personal injury, including,
without limitation, any claim under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; and (vi) COMPANY has no
contingent liability in connection with any release of any Hazardous Waste or
Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDER, relatives of the
STOCKHOLDER, or Affiliates of COMPANY. Except as set forth on Schedule 5.14, (i)
all material personal property used by COMPANY in its business is either owned
by COMPANY or leased by COMPANY pursuant to a lease included on Schedule 5.14,
(ii) all of the personal property listed on Schedule 5.14 is in good working
order and condition, ordinary wear and tear excepted, and (iii) all leases and
agreements included on Schedule 5.14 are in full force and effect and constitute
valid and binding agreements of the parties (and their successors) thereto in
accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for purposes of this
Section, means a customer (or person or entity) representing 5% or more of
COMPANY's annual revenues as of the Balance Sheet Date. Except to the extent set
forth on Schedule 5.15, none of COMPANY's significant current customers have
canceled or substantially reduced or, to the best knowledge and belief of
COMPANY and the STOCKHOLDER after due inquiry, are currently attempting or
threatening to cancel a contract or substantially reduce utilization of the
services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic
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alliances and options to purchase land), other than agreements listed on
Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date and
(b) entered into since the Balance Sheet Date, and in each case has attached a
true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or
used by COMPANY is zoned for the conduct of COMPANY's business thereon pursuant
to the zoning regulations of the applicable cities, towns, villages or
townships. The uses to which such real property are presently put (including the
location of all buildings and other improvements thereon) comply in all material
respects with the applicable provisions of such zoning regulations without the
benefit of the legal non-conforming use principle of law, or other regulations
of such cities, towns, villages or townships or any other governmental body.
(ii) As to any real property leased,
owned or used by COMPANY there are no material agreements, commitments or
understandings pursuant to which COMPANY, or its successors in interest are
required to dedicate any part of the real property or to grant any easement,
water rights, rights-of-way, or license for ingress and egress or other use in
respect to any part of the real property, whether on account of the development
of adjacent or nearby real property or otherwise. Other than as provided in the
leases of the real property owned by COMPANY and leased to others, except as set
forth in Schedule 5.16 hereto, no person has any material easement, license or
other right whatsoever with respect to such real property.
(iii) COMPANY holds good and marketable
fee simple title to the real property identified on Schedule 5.16 hereto as
owned by COMPANY and good leasehold title to the real property identified on
Schedule 5.16 as leased or used by COMPANY, in each case free and clear of all
material mortgages, charges, claims, liens, encumbrances, leases, options to
purchase, rights of first refusal, contracts of sale, easements, reservations
and restrictions, except those matters identified in any title reports set forth
in Schedule 5.16. No part of such lands is affected by any restrictions imposed
by any governmental authority affecting construction of structures thereon or
the use thereof by COMPANY other than building codes and zoning classifications.
(iv) The STOCKHOLDER and COMPANY do not,
either individually or collectively, have any knowledge of any fact or condition
existing that would result or could result in the termination or material
reduction of the current access to and from the real property owned or leased or
used by COMPANY to existing public roads and highways, or of any reduction in
sewer or other utility services presently serving such real property. The real
property currently owned, leased or used by COMPANY has direct access to public
roads and highways.
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(v) As to the real property owned by
COMPANY, neither the STOCKHOLDER nor COMPANY has received any notice from any
insurance company of any material defects or inadequacies in the real property
or any part thereof that would materially and adversely affect the insurability
of the real property or the premiums for the insurance thereof.
(vi) As to the real property owned by
COMPANY, neither the STOCKHOLDER nor COMPANY has failed to disclose any material
conditions of disrepair or other adverse conditions or defects with respect to
the real property or any portion thereof of which STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of
all leases and agreements in respect of all real property leased or used by
COMPANY are attached to Schedule 5.16, and an indication as to which such
properties, if any, are currently owned, or were formerly owned, by the
STOCKHOLDER or affiliates of COMPANY or the STOCKHOLDER is included in Schedule
5.16, and except as set forth on Schedule 5.16, all of such leases included on
Schedule 5.16 are in full force and effect and constitute valid and binding
agreements of the parties (and their successors) thereto in accordance with
their respective terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1, 1994, no insurance carried by COMPANY has been canceled by the
insurer and COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
COMPANY has delivered to MARINEMAX a true, complete and accurate list (which is
set forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18 and has attached such
copies to Schedule 5.18. Since the Balance Sheet Date, there have been no
increases in the compensation payable or any special bonuses to any officer,
director, key employee or other employee of COMPANY, except ordinary salary
increases implemented on a basis consistent with past practices.
Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDER after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDER
after due inquiry, threatened, labor
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dispute involving COMPANY and any group of its employees nor has COMPANY
experienced any labor interruptions over the past three years. COMPANY believes
its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDER has delivered to MARINEMAX a true,
complete and accurate schedule (Schedule 5.19) showing all employee benefit
plans of COMPANY (including COMPANY's subsidiaries, if any), including, without
limitation, all employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and deferred
compensation agreements, together with true, complete and correct copies of such
plans, agreements and any trusts related thereto, and classifications of
employees covered thereby existing as of the Balance Sheet Date. Except for the
employee benefit plans, if any, described on Schedule 5.19, COMPANY (including
COMPANY's subsidiaries, if any) does not sponsor, maintain or contribute to any
plan program, fund or arrangement that constitutes an "employee pension benefit
plan," nor does COMPANY have any obligation to contribute to or accrue or pay
any benefits under any deferred compensation or retirement funding arrangement
on behalf of any employee or employees (such as, for example, and without
limitation, any individual retirement account or annuity, any "excess benefit
plan" (within the meaning of Section 3(36) of ERISA), or any nonqualified
deferred compensation arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is given that
term in Section 3(2) of ERISA. Neither COMPANY nor any Acquired Party has
sponsored, maintained or contributed to any employee pension benefit plan other
than the plans set forth on Schedule 5.19, nor is COMPANY or any Acquired Party
required to contribute to any retirement plan pursuant to the provisions of any
collective bargaining agreement establishing the terms and conditions or
employment of any of COMPANY's or any Acquired Party's employees.
Neither COMPANY nor any Acquired Party is now, or can as a result of
its past activities become, liable to the Pension Benefit Guaranty Corporation
or to any multiemployer employee pension benefit plan under the provisions of
Title IV of ERISA.
All employee benefit plans listed on Schedule 5.19 and the
administration thereof are in substantial compliance with their terms and all
applicable provisions of ERISA and the regulations issued thereunder, as well as
with all other applicable federal, state and local statutes, ordinances and
regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries (including, without limitation, actuarial
reports, audits or tax returns) have been timely filed or distributed, and
copies thereof that have been filed for tax years 1995 and 1996 are included as
part of Schedule 5.20 hereof. Neither STOCKHOLDER, any such plan listed in
Schedule 5.19 or administrator thereof, nor COMPANY has engaged in any
transaction prohibited under the provisions of Section 4975 of the Code or
Section 406 of ERISA or any other breach of fiduciary responsibility that could
subject STOCKHOLDER, such administrator or COMPANY to a tax or penalty on
prohibited transactions
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imposed by Section 4975 of the Code or to any liability under Section 502(i) of
ERISA. No such plan listed in Schedule 5.19 has incurred an accumulated finding
deficiency, as defined in Section 412(a) of the Code and Section 302(1) of
ERISA; and COMPANY has not incurred any liability for excise tax or penalty due
to the IRS nor any liability to the Pension Benefit Guaranty Corporation. It is
further represented and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the provisions
of Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section 4062
of ERISA; and
(v) no circumstances exist pursuant to which COMPANY could
have any direct or indirect liability whatsoever (including, without limitation,
any liability to any multiemployer plan or the Pension Benefit Guaranty
Corporation under Title IV of ERISA or to the IRS for any excise tax or
penalty), or be subject to any statutory lien to secure payment of any such
liability with respect to any plan now or heretofore maintained or contributed
to by any entity other than COMPANY that is, or at any time was, a member of a
"controlled group" (as defined in Section 412(n)(6)(B) of the Code) that
includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDER after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has conducted and is conducting its
business in substantial compliance with the requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, including all such permits, licenses, orders and other governmental
approvals set forth on Schedules 5.12 and 5.13, and is not in violation of any
of the foregoing which would have a Material Adverse Effect.
5.22 TAXES. COMPANY (including all the Acquired Parties) has timely
filed all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and
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including the Balance Sheet Date, and no notice of any such claim for Taxes,
whether pending or threatened, has been received. All Tax, including, without
limitation, all related interest and penalties (whether or not shown on any tax
return) owed by any of the Acquired Parties, or with respect to any payment made
or deemed made by any of the Acquired Parties has been paid. The amounts shown
as accruals for Taxes on COMPANY Financial Statements are sufficient for the
payment of all Taxes of the kinds indicated (including, without limitation,
penalties and interest) for all fiscal periods ended on or before the Balance
Sheet Date. Copies of (i) any tax examinations; (ii) extensions of statutory
limitations; and (iii) the federal, state and local income tax returns and
franchise tax returns of COMPANY (including the Acquired Parties) for the last
three (3) fiscal years, or such shorter period of time as any of them shall have
existed, are attached hereto as Schedule 5.22. If COMPANY is an S-Corporation,
the STOCKHOLDER made a valid election under the provisions of Subchapter S of
the Code and COMPANY has appropriately not, within the past five years, been
taxed under the provisions of Subchapter C of the Code. COMPANY has a taxable
year ended on September 30 and, if COMPANY is an S-Corporation, COMPANY has not
made an election to retain a fiscal year ending on a date other than December 31
pursuant to Section 444 of the Code. COMPANY's methods of accounting have not
changed in the past five years. COMPANY is not an investment company as defined
in Section 351(e)(1) of the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter
Document. Neither COMPANY nor, to the best knowledge and belief of COMPANY and
the STOCKHOLDER after due inquiry, any other party thereto, is in material
default under any lease, instrument, agreement, license or permit set forth on
Schedules 5.12 through 5.19 (inclusive), or any other material agreement to
which it is a party or by which its properties are bound (the "Material
Documents"); and, except as set forth in Schedule 5.23, (a) the rights and
benefits of COMPANY under the Material Documents will not be materially
adversely affected by the transactions contemplated hereby and (b) the execution
of this Agreement and the performance of the obligations hereunder and the
consummation of the transactions contemplated hereby will not result in any
material violation or breach or constitute a default under, any of the terms or
provisions of any of the Material Documents or Charter Documents. Except as set
forth on Schedule 5.23, none of the Material Documents requires notice to, or
the consent or approval of, any governmental agency or other third party with
respect to any of the transactions contemplated hereby in order to remain in
full force and effect, and consummation of the transactions contemplated hereby
will not give rise to any right to termination, cancellation, acceleration or
loss of any right or benefit arising thereunder. Except as set forth on Schedule
5.23, none of the Material Documents prohibits the use or publication by
COMPANY, MARINEMAX or NEWCO of the name of any other party to such Material
Document, and none of the Material Documents prohibits or restricts COMPANY from
freely providing services to any other customer or potential customer of
COMPANY, MARINEMAX, NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24,
COMPANY is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of COMPANY;
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(ii) any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or business of
COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or
distribution in respect of the capital stock of COMPANY, or any direct or
indirect redemption, purchase or other acquisition of any of the capital stock
of COMPANY;
(v) any increase in the compensation, bonus, sales commissions
or fee arrangement payable or to become payable by COMPANY to any of its
officers, directors, the STOCKHOLDER, employees, consultants or agents, except
for ordinary and customary bonuses and salary increases for employees in
accordance with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed,
or any event or condition of any character, materially and adversely affecting
the business of COMPANY;
(vii) any sale or transfer, or any agreement to sell or
transfer, any material asset, property or right of COMPANY to any person,
including, without limitation, the STOCKHOLDER or their affiliates;
(viii) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to COMPANY, including, without
limitation, any indebtedness or obligation of STOCKHOLDER or any affiliate
thereof;
(ix) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the assets,
properties or rights of COMPANY or requiring consent of any party to the
transfer and assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course
of its business;
(xiv) any cancellation or termination of a material contract
with a customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by COMPANY
other than in the ordinary course of COMPANY's business.
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5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which COMPANY
has accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or
have access thereto. Schedule 5.26 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from COMPANY and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by COMPANY and the performance of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors and the
stockholders of COMPANY and this Agreement has been duly and validly authorized
by all necessary corporate action and is a legal, valid, binding and enforceable
obligation of COMPANY. The execution and delivery of this Agreement by the
STOCKHOLDER and the performance of the transactions contemplated herein is a
legal, valid, binding and enforceable obligation of the STOCKHOLDER having the
appropriate legal capacity to execute and deliver this Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed $10,000 per year
for each year in which STOCKHOLDER has been a stockholder of COMPANY, COMPANY
has not made, offered or agreed to offer anything of value to any governmental,
official, political party or candidate for government office, nor has COMPANY or
STOCKHOLDER otherwise taken any action which would cause COMPANY to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any law
of similar effect. If political contributions made by COMPANY have exceeded
$10,000 per year for each year in which STOCKHOLDER has been a stockholder of
COMPANY, each contribution in the amount of $5,000 or more is accurately
described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29,
COMPANY has not, between the Balance Sheet Date and the date hereof, taken any
of the actions prohibited by Section 7.3 hereof.
5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDER in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the foregoing does not
apply to statements contained in or omitted from any of such documents made or
omitted in reliance upon information furnished by MARINEMAX. If, prior to the
Closing, COMPANY or the STOCKHOLDER becomes aware of any fact or circumstance
that would affect the accuracy of any representation or warranty of COMPANY or
the STOCKHOLDER in this Agreement in any material respect, COMPANY and the
STOCKHOLDER shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDER
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of their respective obligations under this Agreement, and, subject to the
provisions of Section 7.8, at the sole option of MARINEMAX, the truth and
accuracy of any and all representations and warranties of COMPANY and/or
STOCKHOLDER, or on behalf of COMPANY and/or STOCKHOLDER, made at the date of
this Agreement and on the Closing Date and at the Effective Time, shall be a
precondition to the consummation of the Merger and the other transactions
contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. STOCKHOLDER
represents and warrants that the representations and warranties set forth below
are true at the date of this Agreement and, subject to Section 7.8 hereof, shall
be true at the time of Closing and at the Effective Time, and that such
representations and warranties shall survive for a period of the earlier of (i)
the date of the first audit of financial statements of the Surviving Corporation
containing combined operations of MARINEMAX and the Surviving Corporation for
those representations and warranties set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
5.31 AUTHORITY: OWNERSHIP. STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. STOCKHOLDER owns
beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by STOCKHOLDER, and, except as set forth on Schedule
5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. STOCKHOLDER does not have, or hereby waives,
any preemptive or other right to acquire shares of COMPANY Stock or MARINEMAX
Stock that STOCKHOLDER has or may have had other than rights of STOCKHOLDER to
acquire MARINEMAX Stock pursuant to (i) this Agreement, or (ii) any option
granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. STOCKHOLDER is not
under any binding commitment or contract to sell, exchange or otherwise dispose
of any shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations and warranties shall survive the Closing and the Effective Time
for a period of the earlier of (i) the date of the first audit of financial
statements of the Surviving Corporation containing combined operations of
MARINEMAX and the Surviving Corporation for those representations and warranties
set forth within Section 6 which representations and warranties specifically
deal with items that would be expected to be encountered in the audit process,
or (ii) twelve (12) months, the last day of such period being the "Expiration
Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature
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of its business makes such qualification necessary, except where the failure to
be so authorized or qualified would not have a Material Adverse Effect. True,
complete and correct copies of the Certificate of Incorporation and Bylaws, each
as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter Documents") are all
attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and
NEWCO executing this Agreement have the authority to enter into and bind
MARINEMAX and NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the
full legal right, power and authority to enter into this Agreement and the
Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock
of MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii),
respectively. All of the issued and outstanding shares of the capital stock of
NEWCO are owned by MARINEMAX and all of the issued and outstanding shares of the
capital stock of MARINEMAX are owned by the persons set forth on Schedule 6.3
hereof, in each case, free and clear of all liens, security interests, pledges,
charges, voting trusts, restrictions, encumbrances and claims of every kind. All
of the issued and outstanding shares of the capital stock of MARINEMAX and NEWCO
have been duly authorized and validly issued, are fully paid and nonassessable,
are owned of record and beneficially by MARINEMAX and the persons set forth on
Schedule 6.3, respectively, and further, such shares were offered, issued, sold
and delivered by MARINEMAX and NEWCO in compliance with applicable state and
federal laws concerning the issuance of securities. Further, none of such shares
were issued in violation of the preemptive rights of any past or present
stockholder of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no
subsidiaries except for (i) NEWCO and each of the companies identified as
"NEWCO" in each of the Other Agreements, and (ii) those newly formed
corporations which will receive certain pieces and parcels of real property, and
except as set forth in the preceding sentence, neither MARINEMAX nor NEWCO
presently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and neither
MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to the STOCKHOLDER.
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6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by MARINEMAX and NEWCO and the performance of the transactions
contemplated herein have been duly and validly authorized by the respective
Boards of Directors of MARINEMAX and NEWCO, and this Agreement has been duly and
validly authorized by all necessary corporate action and is a legal, valid and
binding obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX
Stock to be delivered to the STOCKHOLDER pursuant to this Agreement will
constitute valid and legally issued shares of MARINEMAX, fully paid and
nonassessable, and with the exception of restrictions upon resale set forth in
Sections 15 and 16 hereof and in the "Pooling Letter", will be identical in all
respects (which do not include the form of certificate upon which it is printed
or the presence or absence of a CUSIP number on any such certificate) to the
MARINEMAX Stock issued and outstanding as of the date hereof by reason of the
provisions of the Delaware GCL. The shares of MARINEMAX Stock to be issued to
the STOCKHOLDER pursuant to this Agreement will not be registered under the 1933
Act, and will be issued to the STOCKHOLDER pursuant to a valid exemption from
registration under the 1933 Act and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDER in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDER.
6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX and the Other Founding Companies access
to all of COMPANY's and any Acquired Party's sites, properties, books and
records and will furnish MARINEMAX with such additional financial and operating
data and other information as to the business and properties of COMPANY and any
Acquired Party as MARINEMAX or the Other Founding Companies may from time to
time reasonably request. COMPANY will cooperate with MARINEMAX and the Other
Founding Companies, its and their representatives, auditors and counsel in the
preparation of any documents or other material which may be required in
connection with any documents or materials required by this Agreement.
MARINEMAX, NEWCO, the STOCKHOLDER and COMPANY will treat all information
obtained in connection with the negotiation and performance of this Agreement or
the due diligence investigations conducted with
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respect to the Other Founding Companies as confidential in accordance with the
provisions of Section 14 hereof. In addition, MARINEMAX will cause each of the
Other Founding Companies to enter into a provision similar to this Section 7.1
requiring each such Other Founding Company, its stockholders, directors,
officers, representatives, employees and agents to keep confidential any
information obtained by such Other Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents or other material which may be required in connection with any
documents or materials required by this Agreement. COMPANY will cause all
information obtained in connection with the negotiation and performance of this
Agreement to be treated as confidential in accordance with the provisions of
Section 14 hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as
it has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its properties and facilities, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and
effect present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its
business organization intact, retain its respective present key employees and
maintain its respective relationships with suppliers, customers and others
having business relations with COMPANY or any Acquired Party, as applicable;
(vi) maintain compliance with all material permits, laws,
rules and regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not
enter into new or amended debt or lease instruments except as permitted by
Section 10.6, without the knowledge and consent of MARINEMAX (which consent
shall not be unreasonably withheld), provided that debt and/or lease instruments
may be replaced without the consent of MARINEMAX if such replacement instruments
are on terms at least as favorable to COMPANY or any Acquired Party, as
applicable, as the instruments being replaced; and
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(viii) maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past
practices of COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of
Incorporation or Bylaws;
(ii) issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants listed in Schedule
5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree
to incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $50,000 necessary or desirable for the conduct of its business, (2)
(a) liens for taxes either not yet due or being contested in good faith and by
appropriate proceedings (provided that with respect to contested taxes, adequate
reserves have been established and are being maintained) or (b) materialmen's,
mechanics', workers', repairmen's, employees' or other like liens arising in the
ordinary course of its business (the liens set forth in clause (2) above may be
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.10 and/or 5.15 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of
any property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the
start-up of any new business;
(viii) merge or consolidate or agree to merge or consolidate
with or into any other corporation;
(ix) waive any material rights or claims of COMPANY or any
Acquired Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any
material agreement, permit, license or other right of COMPANY or any Acquired
Party, as applicable; or
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(xi) enter into any other transaction outside the ordinary
course of its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
7.6 AGREEMENTS. The STOCKHOLDER and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDER and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the STOCKHOLDER
contained herein to be untrue or inaccurate in any material respect at or prior
to the Closing, and (ii) any material failure of STOCKHOLDER or COMPANY to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by such person hereunder. MARINEMAX and NEWCO shall give prompt
notice to COMPANY of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules
required by this Agreement from the respective parties hereto shall be delivered
at the execution of this Agreement. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and 5.15 shall only have to be delivered at the Closing Date, unless
such Schedule is to be amended to reflect an event occurring other than in the
ordinary course of business. Notwithstanding the foregoing sentence, no
amendment or supplement to a Schedule prepared by COMPANY or the STOCKHOLDER
that constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless MARINEMAX and a majority of the Founding
Companies other than COMPANY consent to such amendment or supplement; and
provided further, that no amendment or supplement to a Schedule prepared by
MARINEMAX or NEWCO that constitutes or reflects an event or occurrence that
would have a Material Adverse Effect may be made unless a majority of the
Founding Companies consent to such amendment or supplement. For all purposes of
this Agreement, including without limitation for purposes of determining whether
the conditions set forth in Sections 8.1 and 9.1 have been fulfilled, the
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this
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Section 7.8. In the event that one of the Other Founding Companies seeks to
amend or supplement a Schedule pursuant to Section 7.8 of one of the Other
Agreements, and such amendment or supplement constitutes or reflects an event or
occurrence that would have a Material Adverse Effect on such Other Founding
Company, MARINEMAX shall give COMPANY notice thereof. If MARINEMAX and a
majority of the Founding Companies consent to such amendment or supplement,
which consent shall have been deemed given by MARINEMAX or any Founding Company
if no response is received within twenty-four (24) hours following receipt of
notice of such amendment or supplement (or sooner if required by the
circumstances under which such consent is requested), but COMPANY does not give
its consent, COMPANY shall, without further act or action, be deemed to have
given its consent and may not thereafter terminate this Agreement. In the event
that COMPANY seeks to amend or supplement a Schedule pursuant to this Section
7.8, and MARINEMAX and a majority of the Other Founding Companies do not consent
to such amendment or supplement, this Agreement shall be deemed terminated by
mutual consent as set forth in Section 12.1(i) hereof. In the event that
MARINEMAX or NEWCO seeks to amend or supplement a Schedule pursuant to this
Section 7.8 and a majority of the Founding Companies do not consent to such
amendment or supplement, this Agreement shall be deemed terminated by mutual
consent as set forth in Section 12.1(i) hereof. No party to this Agreement shall
be liable to any other party if this Agreement shall be terminated pursuant to
the provisions of this Section 7.8. No amendment of or supplement to a Schedule
shall be made later than twenty-four (24) hours prior to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all months
and fiscal quarters ended after the Balance Sheet Date and on or before December
31, 1997 (collectively, the "Final COMPANY Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from COMPANY Financial Statements as of the Balance Sheet Date.
The Final COMPANY Financial Statements shall have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated and
with past periods (except as noted therein). Except as noted in the Final
COMPANY Financial Statements, all of such financial statements will present
fairly the results of operations of COMPANY for the periods indicated therein.
7.11 FURTHER ASSURANCES. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents and take such other actions as may be reasonably necessary or
convenient to carry out the transactions contemplated hereby, including, without
limitation, all further instruments, documents and actions as may be reasonably
required by MARINEMAX's independent public accountants and attorneys with
respect to the pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
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Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDER and COMPANY shall be deemed a condition precedent in addition to
the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the Hart-Scott Act to be made. If filings under the
Hart-Scott Act are required, the costs and expenses thereof (including filing
fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER AND
COMPANY
The obligations of the STOCKHOLDER and COMPANY with respect to actions
to be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDER
shall have the right to terminate this Agreement, or in the alternative, waive
any condition not so satisfied. Any act or action of the STOCKHOLDER in
consummating the Closing or delivering certificates representing the COMPANY
Stock shall constitute a waiver of any conditions not so satisfied. However, no
such waiver shall be deemed to affect the survival of the representations and
warranties of MARINEMAX and NEWCO contained in Section 6 hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by MARINEMAX and NEWCO on or
before the Closing Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by the President or any Vice President of MARINEMAX shall have been
delivered to the STOCKHOLDER.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any
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request of COMPANY as a result of which COMPANY deems it inadvisable to proceed
with the transactions contemplated herein.
8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate
or certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall have been afforded the opportunity to enter into an employment agreement
substantially in the form attached hereto as Annex IV.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be
taken on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of all of the conditions in this Section 9. As of the
Closing Date, all conditions not satisfied shall be deemed to have been waived,
except that no such waiver shall be deemed to affect the survival of the
representations and warranties of COMPANY and the STOCKHOLDER contained in
Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDER, and COMPANY as defined in
Section 5 hereof, contained in this Agreement shall be true and correct in all
material respects as of the Closing Date and the Effective Time with the same
effect as though such representations and warranties had been made on and as of
such date and time; all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the STOCKHOLDER and COMPANY on or before the
Closing Date or the Effective Time, as the case may be, shall have been duly
performed or complied with in all material respects; and the STOCKHOLDER shall
have delivered to MARINEMAX certificates to the foregoing effect dated the
Closing Date and effective both on the Closing Date and at the Effective Time,
and signed by the STOCKHOLDER.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental
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agency or body shall have taken any other action or made any request of
MARINEMAX as a result of which the management of MARINEMAX deems it inadvisable
to proceed with the transactions hereunder.
9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a
certificate, dated the Closing Date and signed by the secretary of COMPANY,
certifying the truth and correctness of attached copies of the Charter Documents
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the board of directors and the STOCKHOLDER approving COMPANY's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDER'S RELEASE. The STOCKHOLDER shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDER against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDER,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDER, (ii) continuing obligations to the
STOCKHOLDER relating to his employment by COMPANY and (iii) obligations arising
under this Agreement or the transactions contemplated hereby. The STOCKHOLDER
Release to be delivered pursuant to this Section shall be in form and content as
set forth in Annex V hereto.
9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which MARINEMAX
deems it inadvisable to proceed with the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to
MARINEMAX certificates, dated as of a date no earlier than ten (10) days prior
to the Closing Date, duly issued by the appropriate governmental authority in
COMPANY's and all Acquired Parties' states of incorporation and, unless waived
by MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
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9.10 POOLING LETTER. The STOCKHOLDER shall have executed and delivered
a letter agreement in favor of MARINEMAX and NEWCO, in form and content as set
forth in Annex VI attached hereto (the "Pooling Letter"), pursuant to which
STOCKHOLDER shall agree to hold the MARINEMAX Stock received by STOCKHOLDER, for
such period of time as is necessary to allow the Merger to be accounted for as a
"pooling-of-interests" under the rules and regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall enter into an employment agreement effective as of the Effective Time,
substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDER shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDER shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. STOCKHOLDER shall have delivered to MARINEMAX
a certificate to the effect that he is not a foreign person pursuant to Section
1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENT. STOCKHOLDER shall have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDER AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDER'S GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDER released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as
contemplated by this Agreement after the Effective Time, MARINEMAX shall not,
and shall not permit any of its subsidiaries, to undertake any act that would
jeopardize the tax-free status or the "pooling-of-interests" accounting
treatment of the organization set forth herein, including, without limitation,
the retirement or reacquisition, directly or indirectly, of all or part of the
MARINEMAX Stock issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDER in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDER shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable
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periods that end at or before the Effective Time. STOCKHOLDER shall pay or cause
to be paid all Tax liabilities (in excess of all amounts already paid with
respect thereto or properly accrued or reserved with respect thereto on COMPANY
Financial Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate
Returns of, or that include, any Acquired Party for all taxable periods ending
after the Effective Time.
(iii) Each party hereto shall, and shall cause its
subsidiaries and affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in filing any
Return, amended Return or claim for refund, determining a liability for Taxes or
a right to refund of Taxes or in conducting any audit or other proceeding in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating to
rulings or other determinations by any taxing authority and relevant records
concerning the ownership and tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file Returns pursuant to this Agreement shall bear all costs of filing such
Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and STOCKHOLDER shall
comply with the tax reporting requirements of Section 1.351-3 of the Treasury
Regulations promulgated under the Code, and treat the transaction as a tax-free
contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons
who are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective
Time, MARINEMAX shall not terminate any health insurance, life insurance or
401(k) plan in effect at COMPANY until such time as MARINEMAX is able to replace
such plan with a plan that is applicable to MARINEMAX and all of its then
existing subsidiaries, provided that MARINEMAX shall have no obligation to
provide replacement plans that have the same terms and provisions as the
existing plans, provided, further, that any new health insurance plan shall
provide for coverage for preexisting conditions. At the Effective Time, the
employees of COMPANY will be the employees of the Surviving Corporation provided
that this provision is for purposes of clarifying that the Merger, in and of
itself, will not have any impact on the employment status of any employee and
provided, further that this provision shall not in any way limit the management
rights of the Surviving Corporation or MARINEMAX to assess work force needs and
make appropriate adjustments as necessary or desirable within their discretion
(subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare
or pay any dividends or distributions to the STOCKHOLDER, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of
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combined operations of COMPANY and MARINEMAX after giving effect to the Merger
and the transactions contemplated by the Other Agreements, to the end that the
STOCKHOLDER may thereafter sell the MARINEMAX Stock received in the Merger,
without such sale violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDER, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDER. The STOCKHOLDER
covenants and agrees that he will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDER or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDER or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that
it will indemnify, defend, protect and hold harmless the STOCKHOLDER at all
times from and after the date of this Agreement until the Expiration Date, for,
from and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDER as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDER may incur due to
MARINEMAX's or NEWCO's failure to be responsible for the liabilities and
obligations of COMPANY as provided in Section 1 hereof (except to the extent
that MARINEMAX or NEWCO has claims against the STOCKHOLDER by reason of such
liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not settle any
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criminal proceeding or agree to any nonmonetary remedy without the prior written
consent of the Indemnified Party, whose consent may be withheld in its sole
discretion. If the Indemnifying Party undertakes to defend or settle, it shall
promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
the defense thereof and in any settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing the Indemnifying Party with any
books, records or information reasonably requested by the Indemnifying Party
that are in the Indemnified Party's possession or control. All Indemnified
Parties shall use the same counsel, which shall be the counsel selected by
Indemnifying Party, provided that if counsel to the Indemnifying Party shall
have a conflict of interest that prevents counsel for the Indemnifying Party
from representing Indemnified Party, Indemnified Party shall have the right to
participate in such matter through counsel of its own choosing and Indemnifying
Party will reimburse the Indemnified Party for the reasonable expenses of such
counsel. After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability, and for
so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except (a) as set forth in the preceding sentences,
and (b) to the extent such participation is requested by the Indemnifying Party,
in which event the Indemnified Party shall be reimbursed by the Indemnifying
Party for reasonable additional legal expenses and out-of-pocket expenses. If
the Indemnifying Party desires to accept a final and complete settlement of any
Third Person's claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to such Third Person claim shall be limited to the amount so offered in
settlement by said Third Person. Upon agreement as to a settlement between said
Third Person and the Indemnifying Party, the Indemnifying Party shall, in
exchange for a complete release from the Indemnified Party, promptly (x) in the
case of MARINEMAX being the Indemnifying Party, pay to the Indemnified Party the
amount agreed to in such settlement, and (y) in the case of the STOCKHOLDER
being the Indemnifying Party, cause the MARINEMAX Stock held in escrow to be
used in such settlement; and the Indemnified Party shall, from that moment on,
bear full responsibility for any additional costs of defense which it
subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party in the manner set
forth above in this Section 11.3 for the amount paid in such settlement and any
other liabilities or expenses incurred by the Indemnified Party in connection
therewith, provided, however, that under no circumstances shall the Indemnified
Party settle any Third Person's claim without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
All settlements hereunder shall effect a complete release of the Indemnifying
Party, unless the Indemnifying Party otherwise agrees in writing. The parties
hereto will make appropriate adjustments for insurance proceeds in determining
the amount of any indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDER until such time as, and solely
to the extent that, the aggregate of all claims that such persons may have
against the STOCKHOLDER shall exceed the sum of $175,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be
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indemnified hereunder. The STOCKHOLDER shall not assert any claim for
indemnification hereunder against MARINEMAX or NEWCO until such time as, and
solely to the extent that, the aggregate of all claims which the STOCKHOLDER may
have against MARINEMAX or NEWCO shall exceed the sum of $175,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDER.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDER. It is hereby understood
and agreed that STOCKHOLDER may only satisfy an indemnification obligation
through payment of stock, such stock to be valued as described immediately
below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
For purposes of calculating the value of the MARINEMAX Stock received
by STOCKHOLDER, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDER. The STOCKHOLDER
covenants and agrees that he will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after date of this Agreement until the applicable Expiration Date, for, from and
against all claims, damages, actions, suit, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred on or prior
to the Expiration Date (or thereafter if a claim has been made therefor prior to
such date) by MARINEMAX, NEWCO, COMPANY or the Surviving Corporation as a result
of or arising from: (i) any use, generation, transportation, storage, treatment,
disposal or presence of Hazardous Wastes and/or Hazardous Substances occurring
on or prior to the Effective Time including, without limitation, any waste or
other disposal activities or releases which occurred at a facility on which any
portion of the COMPANY's (or its predecessors') business was conducted, any
waste or other disposal activities or releases which occurred off of any such
facility with regard to wastes and other substances generated on such facility,
and any waste or other disposal activities or releases which occurred on real
estate at any time whether or not the COMPANY (or its predecessors) owned or
leased such real estate at the time such waste or other disposal
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<PAGE> 40
activities or releases were engaged in, and whether or not the COMPANY performed
such waste or other disposal activities or releases; (ii) any past, present or
threatened spills, discharges, leaks, emissions, injections, escapes, dumping,
pumping, pouring, emptying, leaching, leaking, disposing or any releases or
threatened releases as defined now or in the future under any applicable
Environmental Law, to surface waters, groundwaters, soil, ambient air or
otherwise into the environment occurring as a result of any activities of the
COMPANY (or its predecessors') on or prior to the Effective Time, including,
without limitation, both those releases or incidents involving potential or
actual environmental contamination which required notification or reporting to
appropriate federal, state or local officials or agencies, or clean-up or
remedial activities and those releases or incidents which occurred prior to the
effective date of any requirements imposing such notification or reporting
obligations or clean-up or remedial activities, but which would have been
subject to such obligations if they had occurred subsequent to the effective
date of such requirements; (iii) the exposure of and resulting consequences to
any persons, including, without limitation, employees of the COMPANY, to any
mineral, chemical or industrial product, raw material intermediate, by-product
or Hazardous Waste and/or Hazardous Substance created, stored, treated,
generated, processed, handled or originating at a facility at which the COMPANY
(or any of its predecessors) conducted business on or prior to the Effective
Time or otherwise used by the COMPANY (or any of its predecessors) in the
conduct of its or their business; (iv) any violations or claim of violations by
the COMPANY, or pertaining to its properties, of Environmental Laws,
occupational or employee health and safety laws or otherwise arising out of or
under such laws, which violations or alleged violations occurred prior to the
Effective Time; (v) any and all actions, failures to act and negligence in
monitoring, maintaining and upkeep of on-site generation, storage, treatment,
transportation and disposal operations on or prior to the Effective Time; (vi)
any installation, use, removal, maintenance or monitoring of storage tanks or
related facilities on or prior to the Effective Time; or (vii) any violations,
fees, obligations or failures to comply with any and all Environmental Laws,
permit requirements, authorizations, orders and other administrative or legal
directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time solely:
(i) by mutual consent of the boards of directors of MARINEMAX,
NEWCO and COMPANY;
(ii) by the STOCKHOLDER or COMPANY (acting through its board
of directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
(iii) by the STOCKHOLDER or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDER or
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<PAGE> 41
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDER will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales representative, in
any business that sells, rents and leases and boating, nautical or other similar
lifestyle entertainment products and services, in direct competition with
MARINEMAX or any of the subsidiaries thereof, within 100 mile radius of where
COMPANY, any Acquired Party, MARINEMAX or any of its or their existing or future
subsidiaries conduct business (the "Territory");
(ii) call upon any person who is or becomes during the
Restricted Period an employee of MARINEMAX (including the subsidiaries thereof)
in a sales representative or managerial capacity for the purpose or with the
intent of enticing such employee away from or out of the employ of MARINEMAX
(including the subsidiaries thereof), provided that STOCKHOLDER shall be
permitted to call upon and hire any member of his immediate family;
(iii) call upon any person or entity that is, or becomes
during the Restricted Period, or which has been, within one (1) year prior to
the Effective Time, a customer of MARINEMAX (including the subsidiaries
thereof), of COMPANY, any Acquired Party or of any of the Other Founding
Companies for the purpose of soliciting or selling products or services in
direct competition with MARINEMAX within the Territory;
(iv) call upon any prospective acquisition candidate, on
STOCKHOLDER's own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary thereof) or for which, to the best knowledge and belief of
STOCKHOLDER after due inquiry, MARINEMAX (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose
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<PAGE> 42
whatsoever except to the extent that COMPANY or any Acquired Party has in the
past disclosed such information to the public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDER in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants contained in Section 13 shall not be affected by any breach of any
other provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDER hereby agree that this
covenant is a material and substantial part of this transaction.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDER. The STOCKHOLDER recognizes and acknowledges that he
had in the past, currently has, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
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<PAGE> 43
businesses. The STOCKHOLDER agrees that he will not disclose such confidential
information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except (a) to authorized representatives of
MARINEMAX, (b) following the Closing, such information may be disclosed by the
STOCKHOLDER as is required in the course of performing his duties for MARINEMAX
or the Surviving Corporation, and (c) to counsel and other advisers, provided
that such advisers (other than counsel) agree to the confidentiality provisions
of this Section 14.1, unless (i) such information becomes known to the public
generally through no fault of the STOCKHOLDER, (ii) disclosure is required by
law or the order of any governmental authority under color of law, provided,
that prior to disclosing any information pursuant to this clause (ii), the
STOCKHOLDER shall, if possible, give prior written notice thereof to MARINEMAX
and provide MARINEMAX with the opportunity to contest such disclosure, or (iii)
the disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party. In the
event of a breach or threatened breach by the STOCKHOLDER of the provisions of
this Section, MARINEMAX shall be entitled to an injunction restraining
STOCKHOLDER from disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting MARINEMAX from pursuing any
other available remedy for such breach or threatened breach, including the
recovery of damages. In the event the transactions contemplated by this
Agreement are not consummated, the STOCKHOLDER shall have none of the
above-mentioned restrictions on his ability to disseminate confidential
information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and
acknowledge that they had in the past and currently have access to certain
confidential information of COMPANY, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's
business. MARINEMAX and NEWCO agree that, prior to the Closing, or if the
transactions contemplated by this Agreement are not consummated, they will not
disclose such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except (a) to
authorized representatives of COMPANY, (b) to counsel and other advisers,
provided that such advisers (other than counsel) agree to the confidentiality
provisions of this Section 14.1, (c) to the Other Founding Companies and their
representatives pursuant to Section 7.1(a), unless (i) such information becomes
known to the public generally through no fault of MARINEMAX or NEWCO, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), MARINEMAX and NEWCO shall, if possible, give prior written
notice thereof to COMPANY and the STOCKHOLDER and provide COMPANY and the
STOCKHOLDER with the opportunity to contest such disclosure, or (iii) the
disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party, and (d)
to the public to the extent necessary or advisable in connection with applicable
securities laws. In the event of a breach or threatened breach by MARINEMAX or
NEWCO of the provisions of this Section, COMPANY and the STOCKHOLDER shall be
entitled to an injunction restraining MARINEMAX and NEWCO from disclosing, in
whole or in part, such confidential information. Nothing herein shall be
construed as prohibiting COMPANY and the STOCKHOLDER from pursuing any other
available remedy for such breach or threatened breach, including the recovery of
damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto
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agree that, in the event of a breach by any of them of the foregoing covenants,
the covenant may be enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14
shall survive the termination of this Agreement for a period of five (5) years
from the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDER shall not sell, assign,
exchange, transfer, encumber, pledge, distribute, appoint, or otherwise dispose
of any shares of MARINEMAX Stock received by the STOCKHOLDER in the Merger in
violation of the provisions of the Pooling Letter referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDER pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY
OF THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICES OF THIS CORPORATION.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDER acknowledges that the shares
of MARINEMAX Stock to be delivered to the STOCKHOLDER pursuant to this Agreement
have not been and will not be registered under the Act and therefore may not be
resold without compliance with the Act. The MARINEMAX Stock to be acquired by
STOCKHOLDER pursuant to this Agreement is being acquired solely for their own
respective accounts, for investment purposes only, and with no present intention
of distributing, selling or otherwise disposing of it in connection with a
distribution. The STOCKHOLDER covenants, warrants and represents that none of
the shares of MARINEMAX Stock issued to STOCKHOLDER will be offered, sold,
assigned, pledged, hypothecated, transferred or otherwise disposed of except
after full compliance with all of the applicable provisions of the Act and the
rules and regulations of the SEC. The certificates evidencing the MARINEMAX
Stock delivered to the STOCKHOLDER pursuant to this Agreement will bear a legend
substantially in the form set forth below and containing such other information
as MARINEMAX may deem necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS.
THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS
OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED.
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16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDER is able to bear the
economic risk of an investment in the MARINEMAX Stock to be acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment and has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the proposed investment in the
MARINEMAX Stock. The STOCKHOLDER has had an adequate opportunity to ask
questions and receive answers from the officers of MARINEMAX concerning any and
all matters relating to the transactions described herein including, without
limitation, the background and experience of the current and proposed officers
of MARINEMAX, the business, operations and financial condition of the Other
Founding Companies, and any plans for additional acquisitions and the like. The
STOCKHOLDER has asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to his satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDER, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of MARINEMAX, and the heirs and legal representatives of the
STOCKHOLDER.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the STOCKHOLDER, COMPANY, NEWCO and
MARINEMAX and supersede any prior agreement and understanding relating to the
subject matter of this Agreement. This Agreement, upon execution, constitutes a
valid and binding agreement of the parties hereto enforceable in accordance with
its terms and may be modified or amended only by a written instrument executed
by the STOCKHOLDER, COMPANY, NEWCO and MARINEMAX, acting through their
respective officers, duly authorized by their respective Boards of Directors.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each
party represents and warrants that it employed no broker or agent in connection
with this transaction and agrees to indemnify the other parties hereto against
all loss, cost, damages or expense arising out of claims for fees or commission
of brokers employed or alleged to have been employed by such indemnifying party.
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<PAGE> 46
17.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, STOCKHOLDER acknowledges that he, and not COMPANY or MARINEMAX, will
pay all taxes due upon receipt of the consideration payable pursuant to Section
2 hereof, and STOCKHOLDER will assume all tax risks and liabilities in
connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
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(b) If to the STOCKHOLDER, addressed to him at:
Richard R. Bassett
2291 NE 44 Street
Lighthouse Point, Florida 33064
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002 Section
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
Bassett Boat Company of Florida
700 S. Federal Highway
Pompano Beach, Florida 33062
Attn: Richard R. Bassett
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
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17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDER who holds or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the parties hereto, any other
person receiving MARINEMAX Stock in connection with the Merger and each future
holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT.
This Agreement may be executed by facsimile, and shall be deemed effectively
executed upon the receipt by all parties hereto of the last page of this
Agreement duly executed by the other parties hereto. Each party to this
Agreement agrees to deliver six (6) original, inked and signed copies of the
execution page of this Agreement within four (4) days of faxing the executed
last page hereof.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MARINEMAX: STOCKHOLDER:
/s/ Richard R. Basset
MARINEMAX, INC., a Delaware corporation --------------------------------------
Richard R. Basset
By: /s/
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
NEWCO:
BASSETT BOAT ACQUISITION CORP.,
a Delaware corporation
/s/
- -------------------------------------
Name:
--------------------------------
Title:
-------------------------------
COMPANY:
BASSETT BOAT COMPANY OF FLORIDA,
a Florida corporation
By: /s/
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
44
<PAGE> 50
CONSENT OF SPOUSE
The undersigned spouse of Richard R. Bassett, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Bassett Boat Acquisition Corp., a Delaware corporation with and into Bassett
Boat Company of Florida, a Florida corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that she has
read the Agreement in its entirety, and being fully convinced of the wisdom of
the terms of the Agreement, and in consideration of the premises and of the
provisions of the Agreement, hereby expresses her consent to the execution and
consummation of the Agreement by Richard R. Bassett.
The undersigned further agrees that in the event of the death of
Richard R. Bassett, the dissolution of their marriage, or any occurrence
contemplated by the Agreement that gives rise to any liability or obligation of
Richard R. Bassett, the provisions of the Agreement shall be binding upon her to
the extent of any community property she may now have or hereafter acquire, and
any and all separate property that she hereafter acquires which arises (directly
or indirectly) from any consideration given to Richard R. Bassett pursuant to
the Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
______________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
_______________________________________
Notary Public
45
<PAGE> 1
Exhibit 10.1(b)
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
DUMAS ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
11502 DUMAS, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
<PAGE> 2
TABLE OF CONTENTS
Page
1. THE MERGER............................................................. 5
1.1 Delivery of Filing of Articles of Merger........................ 5
1.2 Effective Time.................................................. 5
1.3 Articles/Certificate of Incorporation, Bylaws and Board
of Directors of Surviving Corporation........................... 5
1.4 Certain Information With Respect to the Capital Stock
of COMPANY, MARINEMAX and NEWCO................................. 5
1.5 Effect of Merger................................................ 6
1.6 Accounting Treatment............................................ 6
2. CONVERSION AND CANCELLATION OF STOCK................................... 6
2.1 Manner of Conversion and Cancellation........................... 6
3. DELIVERY OF MERGER CONSIDERATION....................................... 7
3.1 Time and Manner of Delivery..................................... 7
3.2 Surrender of COMPANY Stock...................................... 7
3.3 Escrow of Portion of MARINEMAX Stock............................ 7
4. CLOSING................................................................ 8
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDERS........................................................... 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDERS.................................................... 8
5.1 Due Organization................................................ 8
5.2 Authorization................................................... 9
5.3 Capital Stock of COMPANY........................................ 9
5.4 Transactions in Capital Stock, Organization Accounting.......... 9
5.5 No Bonus Shares................................................. 10
5.6 Subsidiaries.................................................... 10
5.7 Predecessor Status; Etc......................................... 10
5.8 Spin-off by COMPANY............................................. 10
5.9 Financial Statements............................................ 10
5.10 Liabilities and Obligations..................................... 10
5.11 Accounts and Notes Receivable................................... 11
5.12 Permits and Intangibles......................................... 11
5.13 Environmental Matters........................................... 12
5.14 Personal Property............................................... 12
5.15 Significant Customers; Material Contracts and Commitments....... 12
5.16 Real Property................................................... 13
5.17 Insurance....................................................... 14
5.18 Compensation; Employment Agreements; Organized Labor Matters.... 14
5.19 Employee Plans.................................................. 15
5.20 Compliance with ERISA........................................... 16
<PAGE> 3
5.21 Conformity with Law; Litigation................................. 16
5.22 Taxes........................................................... 17
5.23 No Violations................................................... 17
5.24 Government Contracts............................................ 18
5.25 Absence of Changes.............................................. 18
5.26 Deposit Accounts; Powers of Attorney............................ 19
5.27 Validity of Obligations......................................... 19
5.28 Relations with Governments...................................... 19
5.29 Prohibited Activities........................................... 19
5.30 Disclosure...................................................... 20
(B) Representations and Warranties of STOCKHOLDERS.................. 20
5.31 Authority: Ownership............................................ 20
5.32 Preemptive Rights............................................... 20
5.33 No Intention to Dispose of MARINEMAX Stock...................... 20
6. REPRESENTATIONS OF MARINEMAX AND NEWCO................................. 20
6.1 Due Organization................................................ 21
6.2 Authorization................................................... 21
6.3 Capital Stock of MARINEMAX and NEWCO............................ 21
6.4 Transactions in Capital Stock; Organization Accounting.......... 21
6.5 Subsidiaries.................................................... 21
6.6 Financial Statements............................................ 22
6.7 [Intentionally Deleted]......................................... 22
6.8 Validity of Obligations......................................... 22
6.9 MARINEMAX Stock................................................. 22
6.10 Disclosure...................................................... 22
6.11 No Undisclosed Agreements....................................... 22
7. COVENANTS PRIOR TO CLOSING............................................. 22
7.1 Access and Cooperation; Due Diligence........................... 23
7.2 Conduct of Business Pending the Merger.......................... 23
7.3 Prohibited Activities........................................... 24
7.4 [Intentionally Deleted]......................................... 25
7.5 [Intentionally Deleted.]........................................ 25
7.6 Agreements...................................................... 25
7.7 Notification of Certain Matters................................. 25
7.8 Delivery of Schedules; Amendment of Schedules................... 25
7.9 [Intentionally Deleted]......................................... 26
7.10 Final Financial Statements...................................... 26
7.11 Further Assurances.............................................. 27
7.12 [Intentionally Deleted]......................................... 27
7.13 Compliance with the Hart-Scott Act.............................. 27
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
AND COMPANY............................................................ 27
8.1 Representations and Warranties; Performance of Obligations...... 27
8.2 Satisfaction.................................................... 28
8.3 No Litigation................................................... 28
<PAGE> 4
8.4 [Intentionally Deleted]......................................... 28
8.5 Consents and Approvals.......................................... 28
8.6 Good Standing Certificates...................................... 28
8.7 No Material Adverse Change...................................... 28
8.8 [Intentionally Deleted]......................................... 28
8.9 Secretary's Certificate......................................... 28
8.10 Employment Agreements........................................... 28
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO.................................................................. 29
9.1 Representations and Warranties; Performance of Obligations...... 29
9.2 No Litigation................................................... 29
9.3 Secretary's Certificate......................................... 29
9.4 No Material Adverse Effect...................................... 29
9.5 STOCKHOLDERS' Release........................................... 29
9.6 Satisfaction.................................................... 30
9.7 [Intentionally Deleted]......................................... 30
9.8 Consents and Approvals.......................................... 30
9.9 Good Standing Certificates...................................... 30
9.10 Pooling Letters................................................. 30
9.11 Employment Agreements........................................... 30
9.12 Specific Indemnification Agreement.............................. 30
9.13 FIRPTA Certificate.............................................. 30
9.14 Investment Agreements........................................... 30
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER
CLOSING................................................................ 31
10.1 Assumption of STOCKHOLDERS' Guarantees.......................... 31
10.2 Preservation of Tax and Accounting Treatment.................... 31
10.3 Preparation and Filing of Tax Returns........................... 31
10.4 Directors and Officers of the Surviving Corporation............. 32
10.5 Preservation of Employee Benefit Plans.......................... 32
10.6 Dividends....................................................... 32
10.7 Distribution of Financial Statements............................ 32
11. INDEMNIFICATION........................................................ 32
11.1 General Indemnification by the STOCKHOLDERS..................... 32
11.2 Indemnification by MARINEMAX.................................... 33
11.3 Third Person Claims............................................. 33
11.4 Limitations on Indemnification.................................. 34
11.5 Environmental Indemnification by the STOCKHOLDERS............... 35
12. TERMINATION OF AGREEMENT............................................... 36
12.1 Termination..................................................... 36
12.2 Liabilities in Event of Termination............................. 36
13. NONCOMPETITION......................................................... 36
13.1 Prohibited Activities........................................... 36
<PAGE> 5
13.2 Damages......................................................... 37
13.3 Reasonable Restraint............................................ 37
13.4 Severability; Reformation....................................... 37
13.5 Independent Covenant............................................ 38
13.6 Materiality..................................................... 38
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.............................. 38
14.1 STOCKHOLDERS.................................................... 38
14.2 MARINEMAX AND NEWCO............................................. 38
14.3 Damages......................................................... 39
14.4 Survival........................................................ 39
15. TRANSFER RESTRICTIONS.................................................. 39
15.1 Transfer Restrictions........................................... 39
16. FEDERAL SECURITIES ACT REPRESENTATIONS................................. 40
16.1 Compliance with Law............................................. 40
16.2 Economic Risk; Sophistication................................... 40
17. GENERAL................................................................ 40
17.1 Cooperation..................................................... 40
17.2 Successors and Assigns.......................................... 41
17.3 Entire Agreement................................................ 41
17.4 Counterparts.................................................... 41
17.5 Brokers and Agents.............................................. 41
17.6 Expenses........................................................ 41
17.7 Notices......................................................... 41
17.8 Governing Law................................................... 43
17.9 Survival of Representations and Warranties...................... 43
17.10 Exercise of Rights and Remedies................................. 43
17.11 Time............................................................ 43
17.12 Reformation and Severability.................................... 43
17.13 Remedies Cumulative............................................. 43
17.14 Captions........................................................ 43
17.15 Amendments and Waivers.......................................... 44
17.16 Execution by Facsimile; Delivery of Original Signed Agreement... 44
<PAGE> 6
AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as of
the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), DUMAS ACQUISITION CORP., a Delaware corporation
("NEWCO"), 11502 DUMAS, INC., a Texas corporation (the "COMPANY"), and SUSAN
DUNNE ("Stockholder 1"), CLYDE HICKHAM ("Stockholder 2"), MARC HICKHAM
("Stockholder 3"), STEVE HICKHAM ("Stockholder 4"), GLENDA HICKHAM ("Stockholder
5"), and SPICER PARTNERSHIP, LTD. ("Stockholder 6") (Stockholder 1, Stockholder
2, Stockholder 3, Stockholder 4, Stockholder 5, and Stockholder 6 may be
referred to individually herein as a "STOCKHOLDER" and collectively as the
"STOCKHOLDERS").
WHEREAS, NEWCO is a corporation duly organized and existing under the laws
of the State of Delaware, having been incorporated solely for the purpose of
completing the transactions set forth herein, and is a wholly-owned subsidiary
of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and Texas;
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the "MARINEMAX
Plan of Organization," and the parties intend that each merger comprising the
MARINEMAX Plan of Organization be accounted for as a pooling-of-interests for
accounting purposes;
WHEREAS, the STOCKHOLDERS and the Boards of Directors and the stockholders
of MARINEMAX, NEWCO, each of the Other Founding Companies and each of the
subsidiaries of MARINEMAX that are parties to the Other Agreements have approved
and adopted the MARINEMAX Plan of Organization as an integrated plan pursuant to
which the STOCKHOLDERS and the stockholders of each of the Other Founding
Companies will transfer the capital stock of each of the Founding Companies to
MARINEMAX and the STOCKHOLDERS and the stockholders of each of the Other
Founding Companies as a tax-free transfer of property under Section 351 of the
Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
<PAGE> 7
WHEREAS, unless the context otherwise requires, capitalized terms used in
this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct subsidiaries
of COMPANY, including, without limitation, 600 Del Lago Blvd., Inc., a Texas
corporation, 7940 W. I-30 Interests, Inc., a Texas corporation, 9149 Wallisville
Road Interests, Inc., a Texas corporation, Airtex Interests, Inc., a Texas
corporation, Lake Lewisville Interests, Inc., a Texas corporation, Nasa Road
Interests, Inc., a Texas corporation, Reeder Road Interests, Inc., a Texas
corporation, and South Shore Interests, Inc., a Texas corporation.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of Merger
with respect to the Merger substantially in the forms attached as Annex I hereto
or with such other changes therein as may be required by applicable state laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section 5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second recital
of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
2
<PAGE> 8
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
"Escrow and Security Agreement" has the meaning set forth in Section 3.3.
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in Section
7.10.
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona corporation,
"GAAP" shall mean generally accepted accounting principles in the United
States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the fourth
recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to this
Agreement and the applicable provisions of the laws of the State of Delaware and
other applicable state laws.
3
<PAGE> 9
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of NEWCO.
"Other Agreements" has the meaning set forth in the third recital of this
Agreement.
"Other Founding Companies" means all of the Founding Companies other than
COMPANY.
"Pooling Letters" shall have the meaning set forth in Section 9.10.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be provided
within fifteen (15) days from the execution of this Agreement (as amended in
compliance with Section 7.8 hereof), which reference the relevant sections of
this Agreement, on which parties hereto disclose information as part of their
respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in the
Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
4
<PAGE> 10
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause the Articles of Merger to be signed, verified and filed
with the Secretary of State of the State of Delaware and the Secretary of State
of the State of Texas and stamped receipt copies of each such filing to be
delivered to MARINEMAX at the Effective Time.
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with
and into COMPANY in accordance with the Articles of Merger, the separate
existence of NEWCO shall cease, COMPANY shall be the surviving party in the
Merger. The Merger will be effected in a single transaction.
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF DIRECTORS
OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then in
effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the Bylaws of
the Surviving Corporation; and subsequent to the Effective Time, such Bylaws
shall be the Bylaws of the Surviving Corporation until they shall thereafter be
duly amended;
(iii) the Board of Directors of the Surviving Corporation shall
consist of the persons who are on the Board of Directors of COMPANY immediately
prior to the Effective Time, provided that William H. McGill, Jr. shall be
elected as a director of the Surviving Corporation effective as of the Effective
Time; the Board of Directors of the Surviving Corporation shall hold office
subject to the provisions of the laws of the State of Texas and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the Effective Time
shall continue as the officers of the Surviving Corporation in the same capacity
or capacities, and effective at the Effective Time William H. McGill, Jr. shall
be appointed as vice president of the Surviving Corporation and Michael H.
McLamb, Treasurer and Assistant Secretary, shall be appointed as an assistant
secretary of the Surviving Corporation, each of such officers to serve, subject
to the provisions of the Articles/Certificate of Incorporation and Bylaws of the
Surviving Corporation, until his successor is duly elected and qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and outstanding
capital stock of COMPANY is as set forth on Schedule 5.3 hereto;
5
<PAGE> 11
(ii) immediately prior to the Effective Time, the authorized
capital stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
(iii) as of the date of this Agreement, the authorized capital stock
of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock, of which One
(1) share is issued and outstanding.
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of Texas. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate existence of NEWCO shall
cease and, in accordance with the terms of this Agreement, the Surviving
Corporation shall possess all of the rights, privileges, immunities and
franchises, of a public, as well as of a private, nature, and all property,
real, personal and mixed, and all debts due on all accounts whatsoever,
including, without limitation, subscriptions to shares, and all taxes, including
those due and owing and those accrued, and all other choses in action, and all
and every other interest of or belonging to or due to COMPANY, and NEWCO shall
be taken and deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all of the respective properties,
rights and privileges, powers and franchises and all and every other interest of
COMPANY and NEWCO shall be thereafter be the property of the Surviving
Corporation as they were of COMPANY and NEWCO prior to the Merger; the title to
any real estate, or interest therein, whether by deed or otherwise, under the
laws of the state of incorporation vested in COMPANY and NEWCO, shall not revert
or be in any way impaired by reason of the Merger; and the assets, liabilities,
reserves, and accounts of COMPANY shall be taken up on the books of the
Surviving Corporation at the amounts at which they respectively were carried on
the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
6
<PAGE> 12
As of the Effective Time:
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, automatically shall be deemed to
represent the right to receive the number of shares of MARINEMAX Stock set forth
on Annex II hereto with respect to such holder;
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
(iii) each share of NEWCO Stock issued and outstanding immediately
prior to the Effective Time, shall, by virtue of the Merger and without any
action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDERS pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letters referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDERS shall be fully exercisable by
the STOCKHOLDERS and the STOCKHOLDERS shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter
as reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDERS shall receive the respective number of shares of
MARINEMAX Stock as set forth on Annex II hereto; provided, however, that the
STOCKHOLDERS shall have previously surrendered all of COMPANY Stock to MARINEMAX
as provided in Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDERS shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDERS, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDERS' expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDERS agree promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, each of the
STOCKHOLDERS agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to each such STOCKHOLDER pursuant to this
Agreement for purposes of securing the obligations, representations and
warranties of the STOCKHOLDERS arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow and
security agreement in the
7
<PAGE> 13
form attached hereto as ANNEX III (the "Escrow and Security Agreement").
STOCKHOLDERS each agree to execute and deliver the Escrow and Security Agreement
at the Closing effective at the Effective Time.
4. CLOSING
At or prior to the Closing, the parties shall take all actions necessary
to prepare to (i) effect the Merger (including, without limitation, if permitted
by applicable state law, the filing with the appropriate state authorities of
the Articles of Merger specifying the Effective Time as the delayed effective
time of the Merger), and (ii) effect the conversion and delivery of shares
referred to in Section 3 hereof; provided, however, that such actions shall not
include the actual completion of the Merger or the conversion and delivery of
the shares referred to in Section 3 hereof, each of which actions shall be
deemed taken at the Effective Time as herein provided. In the event that the
conditions precedent contained in and this Agreement are not satisfied or waived
and this Agreement is thereby terminated, MARINEMAX hereby covenants and agrees
to do all things required by the Delaware GCL and by the applicable corporate
laws of the State of Texas in order to stop or rescind the Merger effected by
the filing of the Articles of Merger as described in this Section. The taking of
the actions described in clauses (i) and (ii) above shall take place at a
closing (the "Closing") to be held following the satisfaction or waiver of the
conditions precedent set forth in Section 5, 8 and 9 hereof on such date as
MARINEMAX shall determine (the "Closing Date") at the offices of O'Connor,
Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback Road,
Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles of
Merger shall be or shall have been filed with the appropriate state authorities
so that the Merger shall be effective at the Effective Time, and (y) the parties
shall be deemed to have consummated the transactions contemplated by this
Agreement, including, without limitation, the conversion and delivery of shares,
which the STOCKHOLDERS shall be entitled to receive pursuant to the Merger
referred to in Section 3 hereof. The time at which the actions described in the
preceding clauses (x) and (y) occur shall be referred to as the "Effective
Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS. Each
of COMPANY and the STOCKHOLDERS represents and warrants that all of the
following representations and warranties in this Section 5(A) are true, complete
and correct at the date of this Agreement and, subject to Section 7.8 hereof,
shall be true, complete, and correct at the time of Closing and at the Effective
Time and that such representations and warranties shall survive the Closing and
the Effective Time for a period of the earlier of (i) the date of the first
audit of financial statements of the Surviving Corporation containing combined
operations of MARINEMAX and the Surviving Corporation for those representations
and warranties set forth within Section 5(A) which representations and
warranties specifically deal with items that would be expected to be encountered
in the audit process, or (ii) twelve (12) months, the last day of such period
being the "Expiration Date". For purposes of this Section 5(A), the term COMPANY
shall mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, and has the
requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing of its
8
<PAGE> 14
properties makes such qualification necessary, except (i) as set forth on
Schedule 5.1 or (ii) where the failure to be so authorized or qualified would
not have a material adverse effect on the business, operations, properties,
assets or condition (financial or otherwise), of COMPANY taken as a whole (as
used herein with respect to COMPANY, or with respect to any person, a "Material
Adverse Effect"). Schedule 5.1 sets forth the jurisdiction in which COMPANY is
incorporated and contains a list of all jurisdictions in which COMPANY is
authorized or qualified to do business. True, complete and correct copies of the
Articles/Certificate of Incorporation and Bylaws, each as amended, of COMPANY
(the "Charter Documents") are attached hereto in Schedule 5.1. The stock records
of COMPANY, as heretofore made available to MARINEMAX, are correct and complete
in all material respects. There are no minutes in the possession of COMPANY or
the STOCKHOLDERS which have not been supplied to MARINEMAX, and all of such
minutes are correct and complete in all respects. The most recent minutes of
COMPANY, which are dated no earlier than ten (10) business days prior to the
date hereof, affirm and ratify all prior acts of COMPANY, and of its officers
and directors on behalf and for the benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this
Agreement have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDERS and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY is
as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDERS in the amounts set forth
in Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDERS are the
sole stockholders of COMPANY. Except as disclosed in Schedule 5.3 hereto, each
STOCKHOLDER has at all times during the two (2) year period immediately
preceding the date hereof owned or maintained sole equitable and beneficial
interest in all of the issued and outstanding shares of the capital stock of
COMPANY as to which such STOCKHOLDER is the registered holder, as set forth in
Schedule 5.3 hereto. All of the issued and outstanding shares of the capital
stock of COMPANY have been duly authorized and validly issued, are fully paid
and nonassessable, are owned of record and beneficially by the STOCKHOLDERS and
further, such shares were offered, issued, sold and delivered by COMPANY in
compliance with all applicable state and federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY
Stock since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all stock option or stock purchase plans,
including, without limitation, a list of all outstanding options, warrants or
other rights to acquire shares of COMPANY's stock.
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5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which any STOCKHOLDER acquired his or her
stock in any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been,
within such period of time, a subsidiary or division of another corporation or a
part of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1995 and December 31, 1996 and for the
nine month period ended September 30, 1997. COMPANY Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated and for the periods prior thereto (except as noted thereon
or on Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance
Sheets as of December 31, 1996 and September 30, 1997 each present fairly in all
material respects the financial position of COMPANY as of the dates indicated
thereon, and COMPANY's Statements of Operations, Shareholders' Equity and Cash
Flows referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance Sheet Date, COMPANY has not incurred any material liabilities of any
kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. COMPANY has also delivered to MARINEMAX on Schedule
5.10, in the case of those contingent liabilities related to pending or
threatened litigation, or other liabilities
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incurred under the agreements listed pursuant to Section 5.10(ii) which are not
fixed or otherwise accrued or reserved, a good faith and reasonable estimate of
the maximum amount which COMPANY reasonably expects will be payable. For each
such contingent liability or liability for which the amount is not fixed or is
contested, COMPANY has provided to MARINEMAX the following information:
(i) a summary description of the liability together with the
following:
(a) copies of all relevant documentation relating thereto;
and
(b) amounts claimed and any other action or relief sought;
(ii) the name of each court or agency before which such claim, suit
or proceeding is pending;
(iii) the date such claim, suit or proceeding was instituted; and
(iv) a good faith and reasonable estimate of the maximum amount, if
any, which is likely to become payable with respect to each such liability. If
no estimate is provided, the estimate shall for purposes of this Agreement be
deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDERS. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all
licenses, franchises, permits and authorizations (governmental or otherwise) the
absence of any of which could have a Material Adverse Effect on COMPANY's
business, including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDERS after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew any such license, franchise, permit or authorization. COMPANY has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in the licenses, franchises,
permits and authorizations listed on Schedules 5.12 and 5.13 and is not in
violation of any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on COMPANY. Except as specifically
provided in Schedule 5.12, the transactions contemplated by this
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Agreement will not result in a default under or a breach or violation of, or
adversely affect the rights and benefits afforded to COMPANY by, any such
licenses, franchises, permits or authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with and is in compliance with all federal,
state, local and foreign statutes (civil and criminal), laws, ordinances,
regulations, rules, notices, permits, judgments, orders and decrees applicable
to COMPANY or any of its properties, assets, operations and businesses relating
to environmental protection (collectively "Environmental Laws") including,
without limitation, Environmental Laws relating to air, water, land and the
generation, storage, use, handling, transportation, treatment or disposal of
Hazardous Wastes and Hazardous Substances including petroleum and petroleum
products (as such terms are defined in any applicable Environmental Law); (ii)
COMPANY has obtained and adhered to all necessary permits and other approvals
necessary to treat, transport, store, dispose of and otherwise handle Hazardous
Wastes and Hazardous Substances, a list of all of such permits and approvals is
set forth on Schedule 5.13; (iii) COMPANY has reported to the appropriate
authorities, to the extent required by all Environmental Laws, all past and
present sites owned and operated by COMPANY where Hazardous Wastes or Hazardous
Substances have been treated, stored, disposed of or otherwise handled; (iv)
there have been no releases or threats of releases (as defined in Environmental
Laws) at, from, in or on any property owned or operated by COMPANY except as
permitted by Environmental Laws; (v) COMPANY and STOCKHOLDERS know of no on-site
or off-site location to which COMPANY has transported or disposed of Hazardous
Wastes and Hazardous Substances or arranged for the transportation of Hazardous
Wastes and Hazardous Substances, which site is the subject of any federal,
state, local or foreign enforcement action or any other investigation which is
reasonably likely to lead to any claim against COMPANY, MARINEMAX or NEWCO for
any clean-up cost, remedial work, damage to natural resources, property damage
or personal injury, including, without limitation, any claim under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; and (vi) COMPANY has no contingent liability in connection with any
release of any Hazardous Waste or Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDERS, relatives of the
STOCKHOLDERS, or Affiliates of COMPANY. Except as set forth on Schedule 5.14,
(i) all material personal property used by COMPANY in its business is either
owned by COMPANY or leased by COMPANY pursuant to a lease included on Schedule
5.14, (ii) all of the personal property listed on Schedule 5.14 is in good
working order and condition, ordinary wear and tear excepted, and (iii) all
leases and agreements included on Schedule 5.14 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for
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purposes of this Section, means a customer (or person or entity) representing 5%
or more of COMPANY's annual revenues as of the Balance Sheet Date. Except to the
extent set forth on Schedule 5.15, none of COMPANY's significant current
customers have canceled or substantially reduced or, to the best knowledge and
belief of COMPANY and the STOCKHOLDERS after due inquiry, are currently
attempting or threatening to cancel a contract or substantially reduce
utilization of the services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic alliances and options to purchase land), other than agreements listed
on Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has attached
a true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or used by COMPANY is zoned
for the conduct of COMPANY's business thereon pursuant to the zoning regulations
of the applicable cities, towns, villages or townships. The uses to which such
real property are presently put (including the location of all buildings and
other improvements thereon) comply in all material respects with the applicable
provisions of such zoning regulations without the benefit of the legal
non-conforming use principle of law, or other regulations of such cities, towns,
villages or townships or any other governmental body.
(ii) As to any real property leased, owned or used by COMPANY there
are no material agreements, commitments or understandings pursuant to which
COMPANY, or its successors in interest are required to dedicate any part of the
real property or to grant any easement, water rights, rights-of-way, or license
for ingress and egress or other use in respect to any part of the real property,
whether on account of the development of adjacent or nearby real property or
otherwise. Other than as provided in the leases of the real property owned by
COMPANY and leased to others, except as set forth in Schedule 5.16 hereto, no
person has any material easement, license or other right whatsoever with respect
to such real property.
(iii) COMPANY holds good and marketable fee simple title to the real
property identified on Schedule 5.16 hereto as owned by COMPANY and good
leasehold title to the real property identified on Schedule 5.16 as leased or
used by COMPANY, in each case free and clear of all material mortgages, charges,
claims, liens, encumbrances, leases, options to purchase, rights of first
refusal, contracts of sale, easements, reservations and restrictions, except
those matters identified in any
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title reports set forth in Schedule 5.16. No part of such lands is affected by
any restrictions imposed by any governmental authority affecting construction of
structures thereon or the use thereof by COMPANY other than building codes and
zoning classifications.
(iv) The STOCKHOLDERS and COMPANY do not, either individually or
collectively, have any knowledge of any fact or condition existing that would
result or could result in the termination or material reduction of the current
access to and from the real property owned or leased or used by COMPANY to
existing public roads and highways, or of any reduction in sewer or other
utility services presently serving such real property. The real property
currently owned, leased or used by COMPANY has direct access to public roads and
highways.
(v) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has received any notice from any insurance company of
any material defects or inadequacies in the real property or any part thereof
that would materially and adversely affect the insurability of the real property
or the premiums for the insurance thereof.
(vi) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has failed to disclose any material conditions of
disrepair or other adverse conditions or defects with respect to the real
property or any portion thereof of which any STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of all leases and agreements
in respect of all real property leased or used by COMPANY are attached to
Schedule 5.16, and an indication as to which such properties, if any, are
currently owned, or were formerly owned, by the STOCKHOLDERS or affiliates of
COMPANY or the STOCKHOLDERS is included in Schedule 5.16, and except as set
forth on Schedule 5.16, all of such leases included on Schedule 5.16 are in full
force and effect and constitute valid and binding agreements of the parties (and
their successors) thereto in accordance with their respective terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1, 1994, no insurance carried by COMPANY has been canceled by the
insurer and COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
COMPANY has delivered to MARINEMAX a true, complete and accurate list (which is
set forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct
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copies of any employment agreements for persons listed on Schedule 5.18 and has
attached such copies to Schedule 5.18. Since the Balance Sheet Date, there have
been no increases in the compensation payable or any special bonuses to any
officer, director, key employee or other employee of COMPANY, except ordinary
salary increases implemented on a basis consistent with past practices.
Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDERS
after due inquiry, threatened, labor dispute involving COMPANY and any group of
its employees nor has COMPANY experienced any labor interruptions over the past
three years. COMPANY believes its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDERS have delivered to MARINEMAX a true,
complete and accurate schedule (Schedule 5.19) showing all employee benefit
plans of COMPANY (including COMPANY's subsidiaries, if any), including, without
limitation, all employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and deferred
compensation agreements, together with true, complete and correct copies of such
plans, agreements and any trusts related thereto, and classifications of
employees covered thereby existing as of the Balance Sheet Date. Except for the
employee benefit plans, if any, described on Schedule 5.19, COMPANY (including
COMPANY's subsidiaries, if any) does not sponsor, maintain or contribute to any
plan program, fund or arrangement that constitutes an "employee pension benefit
plan," nor does COMPANY have any obligation to contribute to or accrue or pay
any benefits under any deferred compensation or retirement funding arrangement
on behalf of any employee or employees (such as, for example, and without
limitation, any individual retirement account or annuity, any "excess benefit
plan" (within the meaning of Section 3(36) of ERISA), or any nonqualified
deferred compensation arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is given that
term in Section 3(2) of ERISA. Neither COMPANY nor any Acquired Party has
sponsored, maintained or contributed to any employee pension benefit plan other
than the plans set forth on Schedule 5.19, nor is COMPANY or any Acquired Party
required to contribute to any retirement plan pursuant to the provisions of any
collective bargaining agreement establishing the terms and conditions or
employment of any of COMPANY's or any Acquired Party's employees.
Neither COMPANY nor any Acquired Party is now, or can as a result of its
past activities become, liable to the Pension Benefit Guaranty Corporation or to
any multiemployer employee pension benefit plan under the provisions of Title IV
of ERISA.
All employee benefit plans listed on Schedule 5.19 and the administration
thereof are in substantial compliance with their terms and all applicable
provisions of ERISA and the regulations issued thereunder, as well as with all
other applicable federal, state and local statutes, ordinances and regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
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5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries (including, without limitation, actuarial
reports, audits or tax returns) have been timely filed or distributed, and
copies thereof that have been filed for tax years 1995 and 1996 are included as
part of Schedule 5.20 hereof. Neither STOCKHOLDERS, any such plan listed in
Schedule 5.19 or administrator thereof, nor COMPANY has engaged in any
transaction prohibited under the provisions of Section 4975 of the Code or
Section 406 of ERISA or any other breach of fiduciary responsibility that could
subject STOCKHOLDERS, such administrator or COMPANY to a tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or to any liability
under Section 502(i) of ERISA. No such plan listed in Schedule 5.19 has incurred
an accumulated finding deficiency, as defined in Section 412(a) of the Code and
Section 302(1) of ERISA; and COMPANY has not incurred any liability for excise
tax or penalty due to the IRS nor any liability to the Pension Benefit Guaranty
Corporation. It is further represented and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the provisions of
Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase is
defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section 4062 of
ERISA; and
(v) no circumstances exist pursuant to which COMPANY could have
any direct or indirect liability whatsoever (including, without limitation, any
liability to any multiemployer plan or the Pension Benefit Guaranty Corporation
under Title IV of ERISA or to the IRS for any excise tax or penalty), or be
subject to any statutory lien to secure payment of any such liability with
respect to any plan now or heretofore maintained or contributed to by any entity
other than COMPANY that is, or at any time was, a member of a "controlled group"
(as defined in Section 412(n)(6)(B) of the Code) that includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has
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conducted and is conducting its business in substantial compliance with the
requirements, standards, criteria and conditions set forth in applicable
federal, state and local statutes, ordinances, permits, licenses, orders,
approvals, variances, rules and regulations, including all such permits,
licenses, orders and other governmental approvals set forth on Schedules 5.12
and 5.13, and is not in violation of any of the foregoing which would have a
Material Adverse Effect.
5.22 TAXES. COMPANY (including all the Acquired Parties) has timely filed
all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and including the Balance Sheet Date, and no
notice of any such claim for Taxes, whether pending or threatened, has been
received. All Tax, including, without limitation, all related interest and
penalties (whether or not shown on any tax return) owed by any of the Acquired
Parties, or with respect to any payment made or deemed made by any of the
Acquired Parties has been paid. The amounts shown as accruals for Taxes on
COMPANY Financial Statements are sufficient for the payment of all Taxes of the
kinds indicated (including, without limitation, penalties and interest) for all
fiscal periods ended on or before the Balance Sheet Date. Copies of (i) any tax
examinations; (ii) extensions of statutory limitations; and (iii) the federal,
state and local income tax returns and franchise tax returns of COMPANY
(including the Acquired Parties) for the last three (3) fiscal years, or such
shorter period of time as any of them shall have existed, are attached hereto as
Schedule 5.22. If COMPANY is an S-Corporation, the STOCKHOLDERS made a valid
election under the provisions of Subchapter S of the Code and COMPANY has
appropriately not, within the past five years, been taxed under the provisions
of Subchapter C of the Code. COMPANY has a taxable year ended on September 30
and, if COMPANY is an S-Corporation, COMPANY has not made an election to retain
a fiscal year ending on a date other than December 31 pursuant to Section 444 of
the Code. COMPANY's methods of accounting have not changed in the past five
years. COMPANY is not an investment company as defined in Section 351(e)(1) of
the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter Document.
Neither COMPANY nor, to the best knowledge and belief of COMPANY and the
STOCKHOLDERS after due inquiry, any other party thereto, is in material default
under any lease, instrument, agreement, license or permit set forth on Schedules
5.12 through 5.19 (inclusive), or any other material agreement to which it is a
party or by which its properties are bound (the "Material Documents"); and,
except as set forth in Schedule 5.23, (a) the rights and benefits of COMPANY
under the Material Documents will not be materially adversely affected by the
transactions contemplated hereby and (b) the execution of this Agreement and the
performance of the obligations hereunder and the consummation of the
transactions contemplated hereby will not result in any material violation or
breach or constitute a default under, any of the terms or provisions of any of
the Material Documents or Charter Documents. Except as set forth on Schedule
5.23, none of the Material Documents requires notice to, or the consent or
approval of, any governmental agency or other third party with respect to any of
the transactions contemplated hereby in order to remain in full force and
effect, and consummation of the transactions contemplated hereby will not give
rise to any right to termination, cancellation, acceleration or loss of any
right or benefit arising thereunder. Except as set forth on Schedule 5.23, none
of the Material Documents prohibits the use or publication by COMPANY, MARINEMAX
or NEWCO of the name of any other party to such Material Document, and none of
the Material Documents prohibits or restricts COMPANY from freely providing
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services to any other customer or potential customer of COMPANY, MARINEMAX,
NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24, COMPANY
is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of COMPANY;
(ii) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock of COMPANY, or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of COMPANY;
(v) any increase in the compensation, bonus, sales commissions or
fee arrangement payable or to become payable by COMPANY to any of its officers,
directors, the STOCKHOLDERS, employees, consultants or agents, except for
ordinary and customary bonuses and salary increases for employees in accordance
with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed, or
any event or condition of any character, materially and adversely affecting the
business of COMPANY;
(vii) any sale or transfer, or any agreement to sell or transfer,
any material asset, property or right of COMPANY to any person, including,
without limitation, the STOCKHOLDERS or their affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to COMPANY, including, without limitation, any
indebtedness or obligation of any STOCKHOLDERS or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, properties or
rights of COMPANY or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
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(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course of its
business;
(xiv) any cancellation or termination of a material contract with a
customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by COMPANY other
than in the ordinary course of COMPANY's business.
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which COMPANY has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or have
access thereto. Schedule 5.26 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from COMPANY and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by COMPANY and the performance of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors and the
stockholders of COMPANY and this Agreement has been duly and validly authorized
by all necessary corporate action and is a legal, valid, binding and enforceable
obligation of COMPANY. The execution and delivery of this Agreement by each of
the STOCKHOLDERS and the performance of the transactions contemplated herein is
a legal, valid, binding and enforceable obligation of the STOCKHOLDERS and each
of them, each having the appropriate legal capacity to execute and deliver this
Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions made
in a lawful manner which, in the aggregate, do not exceed $10,000 per year for
each year in which any STOCKHOLDER has been a stockholder of COMPANY, COMPANY
has not made, offered or agreed to offer anything of value to any governmental,
official, political party or candidate for government office, nor has COMPANY or
any STOCKHOLDER otherwise taken any action which would cause COMPANY to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any law
of similar effect. If political contributions made by COMPANY have exceeded
$10,000 per year for each year in which any STOCKHOLDER has been a stockholder
of COMPANY, each contribution in the amount of $5,000 or more is accurately
described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29, COMPANY
has not, between the Balance Sheet Date and the date hereof, taken any of the
actions prohibited by Section 7.3 hereof.
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5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDERS in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the foregoing does not
apply to statements contained in or omitted from any of such documents made or
omitted in reliance upon information furnished by MARINEMAX. If, prior to the
Closing, COMPANY or the STOCKHOLDERS become aware of any fact or circumstance
that would affect the accuracy of any representation or warranty of COMPANY or
the STOCKHOLDERS in this Agreement in any material respect, COMPANY and the
STOCKHOLDERS shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDERS of their respective
obligations under this Agreement, and, subject to the provisions of Section 7.8,
at the sole option of MARINEMAX, the truth and accuracy of any and all
representations and warranties of COMPANY and/or STOCKHOLDERS, or on behalf of
COMPANY and/or STOCKHOLDERS, made at the date of this Agreement and on the
Closing Date and at the Effective Time, shall be a precondition to the
consummation of the Merger and the other transactions contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each STOCKHOLDER
severally represents and warrants that the representations and warranties set
forth below are true at the date of this Agreement and, subject to Section 7.8
hereof, shall be true at the time of Closing and at the Effective Time, and that
such representations and warranties shall survive for a period of the earlier of
(i) the date of the first audit of financial statements of the Surviving
Corporation containing combined operations of MARINEMAX and the Surviving
Corporation for those representations set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
5.31 AUTHORITY: OWNERSHIP. Such STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. Such STOCKHOLDER
owns beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by such STOCKHOLDER, and, except as set forth on
Schedule 5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. Such STOCKHOLDER does not have, or hereby waives,
any preemptive or other right to acquire shares of COMPANY Stock or MARINEMAX
Stock that such STOCKHOLDER has or may have had other than rights of any
STOCKHOLDER to acquire MARINEMAX Stock pursuant to (i) this Agreement, or (ii)
any option granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. No STOCKHOLDER is under
any binding commitment or contract to sell, exchange or otherwise dispose of any
shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations
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and warranties shall survive the Closing and the Effective Time for a period of
the earlier of (i) the date of the first audit of financial statements of the
Surviving Corporation containing combined operations of MARINEMAX and the
Surviving Corporation for those representations and warranties set forth within
Section 6 which representations and warranties specifically deal with items that
would be expected to be encountered in the audit process, or (ii) twelve (12)
months, the last day of such period being the "Expiration Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature of its business makes such qualification necessary, except where the
failure to be so authorized or qualified would not have a Material Adverse
Effect. True, complete and correct copies of the Certificate of Incorporation
and Bylaws, each as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter
Documents") are all attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and NEWCO
executing this Agreement have the authority to enter into and bind MARINEMAX and
NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the full legal
right, power and authority to enter into this Agreement and the Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock
of MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii),
respectively. All of the issued and outstanding shares of the capital stock of
NEWCO are owned by MARINEMAX and all of the issued and outstanding shares of the
capital stock of MARINEMAX are owned by the persons set forth on Schedule 6.3
hereof, in each case, free and clear of all liens, security interests, pledges,
charges, voting trusts, restrictions, encumbrances and claims of every kind. All
of the issued and outstanding shares of the capital stock of MARINEMAX and NEWCO
have been duly authorized and validly issued, are fully paid and nonassessable,
are owned of record and beneficially by MARINEMAX and the persons set forth on
Schedule 6.3, respectively, and further, such shares were offered, issued, sold
and delivered by MARINEMAX and NEWCO in compliance with applicable state and
federal laws concerning the issuance of securities. Further, none of such shares
were issued in violation of the preemptive rights of any past or present
stockholder of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no
subsidiaries except for (i) NEWCO and each of the companies identified as
"NEWCO" in each of the Other Agreements, and (ii) those newly formed
corporations which will receive certain pieces and parcels of real property,
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and except as set forth in the preceding sentence, neither MARINEMAX nor NEWCO
presently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and neither
MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to any of the
STOCKHOLDERS.
6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by MARINEMAX and NEWCO and the performance of the transactions
contemplated herein have been duly and validly authorized by the respective
Boards of Directors of MARINEMAX and NEWCO, and this Agreement has been duly and
validly authorized by all necessary corporate action and is a legal, valid and
binding obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX
Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement will
constitute valid and legally issued shares of MARINEMAX, fully paid and
nonassessable, and with the exception of restrictions upon resale set forth in
Sections 15 and 16 hereof and in the "Pooling Letters", will be identical in all
respects (which do not include the form of certificate upon which it is printed
or the presence or absence of a CUSIP number on any such certificate) to the
MARINEMAX Stock issued and outstanding as of the date hereof by reason of the
provisions of the Delaware GCL. The shares of MARINEMAX Stock to be issued to
the STOCKHOLDERS pursuant to this Agreement will not be registered under the
1933 Act, and will be issued to the STOCKHOLDERS pursuant to a valid exemption
from registration under the 1933 Act and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDERS in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDERS.
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6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX and the Other Founding Companies access
to all of COMPANY's and any Acquired Party's sites, properties, books and
records and will furnish MARINEMAX with such additional financial and operating
data and other information as to the business and properties of COMPANY and any
Acquired Party as MARINEMAX or the Other Founding Companies may from time to
time reasonably request. COMPANY will cooperate with MARINEMAX and the Other
Founding Companies, its and their representatives, auditors and counsel in the
preparation of any documents or other material which may be required in
connection with any documents or materials required by this Agreement.
MARINEMAX, NEWCO, the STOCKHOLDERS and COMPANY will treat all information
obtained in connection with the negotiation and performance of this Agreement or
the due diligence investigations conducted with respect to the Other Founding
Companies as confidential in accordance with the provisions of Section 14
hereof. In addition, MARINEMAX will cause each of the Other Founding Companies
to enter into a provision similar to this Section 7.1 requiring each such Other
Founding Company, its stockholders, directors, officers, representatives,
employees and agents to keep confidential any information obtained by such Other
Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents or other material which may be required in connection with any
documents or materials required by this Agreement. COMPANY will cause all
information obtained in connection with the negotiation and performance of this
Agreement to be treated as confidential in accordance with the provisions of
Section 14 hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as it
has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present, ordinary
wear and tear excepted;
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(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and effect
present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its
business organization intact, retain its respective present key employees and
maintain its respective relationships with suppliers, customers and others
having business relations with COMPANY or any Acquired Party, as applicable;
(vi) maintain compliance with all material permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not enter into
new or amended debt or lease instruments except as permitted by Section 10.6,
without the knowledge and consent of MARINEMAX (which consent shall not be
unreasonably withheld), provided that debt and/or lease instruments may be
replaced without the consent of MARINEMAX if such replacement instruments are on
terms at least as favorable to COMPANY or any Acquired Party, as applicable, as
the instruments being replaced; and
(viii) maintain or reduce present salaries and commission levels for
all officers, directors, employees and agents except for ordinary and customary
bonus and salary increases for employees in accordance with past practices of
COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of Incorporation
or Bylaws;
(ii) issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind other than in
connection with the exercise of options or warrants listed in Schedule 5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $50,000 necessary or desirable for the conduct of its business, (2)
(a) liens for taxes either not yet due or being contested in good faith and by
appropriate proceedings (provided
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that with respect to contested taxes, adequate reserves have been established
and are being maintained) or (b) materialmen's, mechanics', workers',
repairmen's, employees' or other like liens arising in the ordinary course of
its business (the liens set forth in clause (2) above may be referred to herein
as "Statutory Liens"), or (3) liens set forth on Schedule 5.10 and/or 5.15
hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the start-up
of any new business;
(viii) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(ix) waive any material rights or claims of COMPANY or any Acquired
Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any material
agreement, permit, license or other right of COMPANY or any Acquired Party, as
applicable; or
(xi) enter into any other transaction outside the ordinary course
of its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
7.6 AGREEMENTS. The STOCKHOLDERS and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDERS and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the
STOCKHOLDERS contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing, and (ii) any material failure of any STOCKHOLDER or
COMPANY to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. MARINEMAX and NEWCO shall
give prompt notice to COMPANY of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth
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in Sections 8 and 9; or (iii) limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules
required by this Agreement from the respective parties hereto shall be delivered
at the execution of this Agreement. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and 5.15 shall only have to be delivered at the Closing Date, unless
such Schedule is to be amended to reflect an event occurring other than in the
ordinary course of business. Notwithstanding the foregoing sentence, no
amendment or supplement to a Schedule prepared by COMPANY or the STOCKHOLDERS
that constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless MARINEMAX and a majority of the Founding
Companies other than COMPANY consent to such amendment or supplement; and
provided further, that no amendment or supplement to a Schedule prepared by
MARINEMAX or NEWCO that constitutes or reflects an event or occurrence that
would have a Material Adverse Effect may be made unless a majority of the
Founding Companies consent to such amendment or supplement. For all purposes of
this Agreement, including without limitation for purposes of determining whether
the conditions set forth in Sections 8.1 and 9.1 have been fulfilled, the
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this Section 7.8. In the event that one of the Other Founding
Companies seeks to amend or supplement a Schedule pursuant to Section 7.8 of one
of the Other Agreements, and such amendment or supplement constitutes or
reflects an event or occurrence that would have a Material Adverse Effect on
such Other Founding Company, MARINEMAX shall give COMPANY notice thereof. If
MARINEMAX and a majority of the Founding Companies consent to such amendment or
supplement, which consent shall have been deemed given by MARINEMAX or any
Founding Company if no response is received within twenty-four (24) hours
following receipt of notice of such amendment or supplement (or sooner if
required by the circumstances under which such consent is requested), but
COMPANY does not give its consent, COMPANY shall, without further act or action,
be deemed to have given its consent and may not thereafter terminate this
Agreement. In the event that COMPANY seeks to amend or supplement a Schedule
pursuant to this Section 7.8, and MARINEMAX and a majority of the Other Founding
Companies do not consent to such amendment or supplement, this Agreement shall
be deemed terminated by mutual consent as set forth in Section 12.1(i) hereof.
In the event that MARINEMAX or NEWCO seeks to amend or supplement a Schedule
pursuant to this Section 7.8 and a majority of the Founding Companies do not
consent to such amendment or supplement, this Agreement shall be deemed
terminated by mutual consent as set forth in Section 12.1(i) hereof. No party to
this Agreement shall be liable to any other party if this Agreement shall be
terminated pursuant to the provisions of this Section 7.8. No amendment of or
supplement to a Schedule shall be made later than twenty-four (24) hours prior
to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all
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months and fiscal quarters ended after the Balance Sheet Date and on or before
December 31, 1997 (collectively, the "Final COMPANY Financial Statements"),
disclosing no material adverse change in the financial condition of COMPANY or
the results of its operations from COMPANY Financial Statements as of the
Balance Sheet Date. The Final COMPANY Financial Statements shall have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods indicated and with past periods (except as noted therein). Except as
noted in the Final COMPANY Financial Statements, all of such financial
statements will present fairly the results of operations of COMPANY for the
periods indicated therein.
7.11 FURTHER ASSURANCES. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents and
take such other actions as may be reasonably necessary or convenient to carry
out the transactions contemplated hereby, including, without limitation, all
further instruments, documents and actions as may be reasonably required by
MARINEMAX's independent public accountants and attorneys with respect to the
pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDERS and COMPANY shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the Hart-Scott Act to be made. If filings under the
Hart-Scott Act are required, the costs and expenses thereof (including filing
fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS AND
COMPANY
The obligations of the STOCKHOLDERS and COMPANY with respect to actions to
be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDERS
(acting in unison) shall have the right to terminate this Agreement, or in the
alternative, waive any condition not so satisfied. Any act or action of the
STOCKHOLDERS in consummating the Closing or delivering certificates representing
the COMPANY Stock shall constitute a waiver of any conditions not so satisfied.
However, no such waiver shall be deemed to affect the survival of the
representations and warranties of MARINEMAX and NEWCO contained in Section 6
hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement
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to be complied with and performed by MARINEMAX and NEWCO on or before the
Closing Date shall have been duly complied with and performed in all material
respects; and certificates to the foregoing effect dated the Closing Date and
effective both on the Closing Date and at the Effective Time, and signed by the
President or any Vice President of MARINEMAX shall have been delivered to the
STOCKHOLDERS.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which COMPANY deems
it inadvisable to proceed with the transactions contemplated herein.
8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate
or certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall have been afforded the opportunity to enter into an employment agreement
substantially in the form attached hereto as Annex IV.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be taken
on the Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the conditions in this Section 9. As of the Closing Date,
all conditions not satisfied shall be deemed to have been waived, except that no
such waiver shall be deemed to affect the survival of the representations and
warranties of COMPANY and the STOCKHOLDERS contained in Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDERS, and COMPANY as defined in
Section 5 hereof, contained in this Agreement shall be true and correct in all
material respects as of the Closing Date and the Effective Time with the same
effect as though such representations and warranties had been made on and as of
such date and time; all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the STOCKHOLDERS and COMPANY on or before
the Closing Date or the Effective Time, as the case may be, shall have been duly
performed or complied with in all material respects; and the STOCKHOLDERS shall
have delivered to MARINEMAX certificates to the foregoing effect dated the
Closing Date and effective both on the Closing Date and at the Effective Time,
and signed by each of the STOCKHOLDERS.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which the
management of MARINEMAX deems it inadvisable to proceed with the transactions
hereunder.
9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a
certificate, dated the Closing Date and signed by the secretary of COMPANY,
certifying the truth and correctness of attached copies of the Charter Documents
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the board of directors and the STOCKHOLDERS approving COMPANY's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDERS' RELEASE. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDERS against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDERS,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDERS, (ii) continuing obligations to the
STOCKHOLDERS relating to their employment by COMPANY and (iii) obligations
arising under this Agreement or the transactions contemplated hereby. The
STOCKHOLDER Release to be delivered pursuant to this Section shall be in form
and content as set forth in Annex V hereto.
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9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which MARINEMAX
deems it inadvisable to proceed with the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to
MARINEMAX certificates, dated as of a date no earlier than ten (10) days prior
to the Closing Date, duly issued by the appropriate governmental authority in
COMPANY's and all Acquired Parties' states of incorporation and, unless waived
by MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
9.10 POOLING LETTERS. The STOCKHOLDERS shall each have executed and
delivered a letter agreement in favor of MARINEMAX and NEWCO, in form and
content as set forth in Annex VI attached hereto (the "Pooling Letters"),
pursuant to which each STOCKHOLDER shall agree to hold the MARINEMAX Stock
received by such STOCKHOLDER, for such period of time as is necessary to allow
the Merger to be accounted for as a "pooling-of-interests" under the rules and
regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall enter into an employment agreement effective as of the Effective Time,
substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDERS shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDERS shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. Each STOCKHOLDER shall have delivered to
MARINEMAX a certificate to the effect that he is not a foreign person pursuant
to Section 1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENTS. STOCKHOLDERS shall each have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
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10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDERS' GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDERS released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as contemplated
by this Agreement after the Effective Time, MARINEMAX shall not, and shall not
permit any of its subsidiaries, to undertake any act that would jeopardize the
tax-free status or the "pooling-of-interests" accounting treatment of the
organization set forth herein, including, without limitation, the retirement or
reacquisition, directly or indirectly, of all or part of the MARINEMAX Stock
issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDERS in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDERS shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable periods that end
at or before the Effective Time. Each STOCKHOLDER shall pay or cause to be paid
all Tax liabilities (in excess of all amounts already paid with respect thereto
or properly accrued or reserved with respect thereto on COMPANY Financial
Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate Returns
of, or that include, any Acquired Party for all taxable periods ending after the
Effective Time.
(iii) Each party hereto shall, and shall cause its subsidiaries and
affiliates to, provide to each of the other parties hereto such cooperation and
information as any of them reasonably may request in filing any Return, amended
Return or claim for refund, determining a liability for Taxes or a right to
refund of Taxes or in conducting any audit or other proceeding in respect of
Taxes. Such cooperation and information shall include providing copies of all
relevant portions of relevant Returns, together with relevant accompanying
schedules and relevant work papers, relevant documents relating to rulings or
other determinations by any taxing authority and relevant records concerning the
ownership and tax basis of property, which such party may possess. Each party
shall make its employees reasonably available on a mutually convenient basis at
its cost to provide explanation of any documents or information so provided.
Subject to the preceding sentence, each party required to file Returns pursuant
to this Agreement shall bear all costs of filing such Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and each STOCKHOLDER shall
comply with the tax reporting requirements of Section 1.351-3 of the Treasury
Regulations promulgated under the Code, and treat the transaction as a tax-free
contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
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10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons who
are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective
Time, MARINEMAX shall not terminate any health insurance, life insurance or
401(k) plan in effect at COMPANY until such time as MARINEMAX is able to replace
such plan with a plan that is applicable to MARINEMAX and all of its then
existing subsidiaries, provided that MARINEMAX shall have no obligation to
provide replacement plans that have the same terms and provisions as the
existing plans, provided, further, that any new health insurance plan shall
provide for coverage for preexisting conditions. At the Effective Time, the
employees of COMPANY will be the employees of the Surviving Corporation provided
that this provision is for purposes of clarifying that the Merger, in and of
itself, will not have any impact on the employment status of any employee and
provided, further that this provision shall not in any way limit the management
rights of the Surviving Corporation or MARINEMAX to assess work force needs and
make appropriate adjustments as necessary or desirable within their discretion
(subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare or
pay any dividends or distributions to any of the STOCKHOLDERS, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of combined operations of COMPANY
and MARINEMAX after giving effect to the Merger and the transactions
contemplated by the Other Agreements, to the end that the STOCKHOLDERS may
thereafter sell the MARINEMAX Stock received in the Merger, without such sale
violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDERS, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS each
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDERS or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDERS or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
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11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that it
will indemnify, defend, protect and hold harmless the STOCKHOLDERS at all times
from and after the date of this Agreement until the Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDERS as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDERS may incur due to
MARINEMAX's or NEWCO's failure to be responsible for the liabilities and
obligations of COMPANY as provided in Section 1 hereof (except to the extent
that MARINEMAX or NEWCO has claims against the STOCKHOLDERS by reason of such
liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not settle any criminal
proceeding or agree to any nonmonetary remedy without the prior written consent
of the Indemnified Party, whose consent may be withheld in its sole discretion.
If the Indemnifying Party undertakes to defend or settle, it shall promptly
notify the Indemnified Party of its intention to do so, and the Indemnified
Party shall cooperate with the Indemnifying Party and its counsel in the defense
thereof and in any settlement thereof. Such cooperation shall include, but shall
not be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. All Indemnified Parties shall use the
same counsel, which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a conflict of
interest that prevents counsel for the Indemnifying Party from representing
Indemnified Party, Indemnified Party shall have the right to participate in such
matter through counsel of its own choosing and Indemnifying Party will reimburse
the Indemnified Party for the reasonable expenses of such counsel. After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except (a) as set forth in the preceding sentences, and (b) to the
extent such participation is requested by the Indemnifying Party, in which event
the Indemnified Party shall be reimbursed by the Indemnifying Party for
reasonable additional legal expenses and out-of-pocket expenses. If the
Indemnifying Party desires to accept a final and complete settlement of any
Third Person's claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to such Third Person claim shall be limited to the amount so offered in
settlement by said Third Person. Upon agreement as to a settlement between said
Third Person and the Indemnifying Party, the Indemnifying Party shall, in
exchange for a complete release from the Indemnified Party, promptly (x) in the
case of MARINEMAX being the Indemnifying Party, pay to
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the Indemnified Party the amount agreed to in such settlement, and (y) in the
case of the STOCKHOLDERS being the Indemnifying Party, cause the MARINEMAX Stock
held in escrow to be used in such settlement; and the Indemnified Party shall,
from that moment on, bear full responsibility for any additional costs of
defense which it subsequently incurs with respect to such claim and all
additional costs of settlement or judgment. If the Indemnifying Party does not
undertake to defend such matter to which the Indemnified Party is entitled to
indemnification hereunder, or fails diligently to pursue such defense, the
Indemnified Party may undertake such defense through counsel of its choice, at
the cost and expense of the Indemnifying Party, and the Indemnified Party may
settle such matter, and the Indemnifying Party shall reimburse the Indemnified
Party in the manner set forth above in this Section 11.3 for the amount paid in
such settlement and any other liabilities or expenses incurred by the
Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person's claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnifying Party, unless the Indemnifying Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDERS until such time as, and
solely to the extent that, the aggregate of all claims that such persons may
have against the STOCKHOLDERS shall exceed the sum of $250,000 (the
"Indemnification Deductible"); and after such Indemnification Deductible amount
has been attained, only claims in excess of such amount shall be indemnified
hereunder. The STOCKHOLDERS shall not assert any claim for indemnification
hereunder against MARINEMAX or NEWCO until such time as, and solely to the
extent that, the aggregate of all claims which the STOCKHOLDERS may have against
MARINEMAX or NEWCO shall exceed the sum of $250,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDERS.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDERS. It is hereby
understood and agreed that STOCKHOLDERS may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit
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or be deemed to limit any liability or remedy one party may have against any
other parties hereto that arises by statute or any applicable federal, state or
local law.
For purposes of calculating the value of the MARINEMAX Stock received by
STOCKHOLDERS, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after date of this Agreement until the applicable Expiration Date, for, from and
against all claims, damages, actions, suit, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred on or prior
to the Expiration Date (or thereafter if a claim has been made therefor prior to
such date) by MARINEMAX, NEWCO, COMPANY or the Surviving Corporation as a result
of or arising from: (i) any use, generation, transportation, storage, treatment,
disposal or presence of Hazardous Wastes and/or Hazardous Substances occurring
on or prior to the Effective Time including, without limitation, any waste or
other disposal activities or releases which occurred at a facility on which any
portion of the COMPANY's (or its predecessors') business was conducted, any
waste or other disposal activities or releases which occurred off of any such
facility with regard to wastes and other substances generated on such facility,
and any waste or other disposal activities or releases which occurred on real
estate at any time whether or not the COMPANY (or its predecessors) owned or
leased such real estate at the time such waste or other disposal activities or
releases were engaged in, and whether or not the COMPANY performed such waste or
other disposal activities or releases; (ii) any past, present or threatened
spills, discharges, leaks, emissions, injections, escapes, dumping, pumping,
pouring, emptying, leaching, leaking, disposing or any releases or threatened
releases as defined now or in the future under any applicable Environmental Law,
to surface waters, groundwaters, soil, ambient air or otherwise into the
environment occurring as a result of any activities of the COMPANY (or its
predecessors') on or prior to the Effective Time, including, without limitation,
both those releases or incidents involving potential or actual environmental
contamination which required notification or reporting to appropriate federal,
state or local officials or agencies, or clean-up or remedial activities and
those releases or incidents which occurred prior to the effective date of any
requirements imposing such notification or reporting obligations or clean-up or
remedial activities, but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such requirements; (iii)
the exposure of and resulting consequences to any persons, including, without
limitation, employees of the COMPANY, to any mineral, chemical or industrial
product, raw material intermediate, by-product or Hazardous Waste and/or
Hazardous Substance created, stored, treated, generated, processed, handled or
originating at a facility at which the COMPANY (or any of its predecessors)
conducted business on or prior to the Effective Time or otherwise used by the
COMPANY (or any of its predecessors) in the conduct of its or their business;
(iv) any violations or claim of violations by the COMPANY, or pertaining to its
properties, of Environmental Laws, occupational or employee health and safety
laws or otherwise arising out of or under such laws, which violations or alleged
violations occurred prior to the Effective Time; (v) any and all actions,
failures to act and negligence in monitoring, maintaining and upkeep of on-site
generation, storage, treatment, transportation and disposal operations on or
prior to the Effective Time; (vi) any installation, use, removal, maintenance or
monitoring of storage tanks or related facilities on or prior to the Effective
Time; or (vii) any
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violations, fees, obligations or failures to comply with any and all
Environmental Laws, permit requirements, authorizations, orders and other
administrative or legal directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time solely:
(i) by mutual consent of the boards of directors of MARINEMAX,
NEWCO and COMPANY;
(ii) by the STOCKHOLDERS or COMPANY (acting through its board of
directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
(iii) by the STOCKHOLDERS or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDERS or
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDERS will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any business
that sells, rents and leases and boating, nautical or other similar lifestyle
entertainment products and services, in direct competition with MARINEMAX or any
of the
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subsidiaries thereof, within 100 mile radius of where COMPANY, any Acquired
Party, MARINEMAX or any of its or their existing or future subsidiaries conduct
business (the "Territory");
(ii) call upon any person who is or becomes during the Restricted
Period an employee of MARINEMAX (including the subsidiaries thereof) in a sales
representative or managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of MARINEMAX (including
the subsidiaries thereof), provided that each STOCKHOLDER shall be permitted to
call upon and hire any member of his or her immediate family;
(iii) call upon any person or entity that is, or becomes during the
Restricted Period, or which has been, within one (1) year prior to the Effective
Time, a customer of MARINEMAX (including the subsidiaries thereof), of COMPANY,
any Acquired Party or of any of the Other Founding Companies for the purpose of
soliciting or selling products or services in direct competition with MARINEMAX
within the Territory;
(iv) call upon any prospective acquisition candidate, on any
STOCKHOLDERS own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
such STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary thereof) or for which, to the best knowledge and belief of such
STOCKHOLDER after due inquiry, MARINEMAX (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever except to the extent that
COMPANY or any Acquired Party has in the past disclosed such information to the
public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit any STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, each STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDERS in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
37
<PAGE> 43
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13 shall
be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of each STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants contained in Section 13 shall not be affected by any breach of any
other provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDERS hereby agree that this
covenant is a material and substantial part of this transaction.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDERS. The STOCKHOLDERS recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
businesses. The STOCKHOLDERS each agree that they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of MARINEMAX, (b) following the Closing, such information may be
disclosed by the STOCKHOLDERS as is required in the course of performing their
duties for MARINEMAX or the Surviving Corporation, and (c) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 14.1, unless (i) such information
becomes known to the public generally through no fault of the STOCKHOLDERS, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), the STOCKHOLDERS shall, if possible, give prior written notice
thereof to MARINEMAX and provide MARINEMAX with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any of the
STOCKHOLDERS of the provisions of this Section, MARINEMAX shall be entitled to
an injunction restraining such STOCKHOLDERS from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting MARINEMAX from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, the
STOCKHOLDERS shall have none of the above-mentioned restrictions on their
ability to disseminate confidential information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and acknowledge
that they had in the past and currently have access to certain confidential
information of
38
<PAGE> 44
COMPANY, such as operational policies, and pricing and cost policies that are
valuable, special and unique assets of COMPANY's business. MARINEMAX and NEWCO
agree that, prior to the Closing, or if the transactions contemplated by this
Agreement are not consummated, they will not disclose such confidential
information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except (a) to authorized representatives of
COMPANY, (b) to counsel and other advisers, provided that such advisers (other
than counsel) agree to the confidentiality provisions of this Section 14.1, (c)
to the Other Founding Companies and their representatives pursuant to Section
7.1(a), unless (i) such information becomes known to the public generally
through no fault of MARINEMAX or NEWCO, (ii) disclosure is required by law or
the order of any governmental authority under color of law, provided, that prior
to disclosing any information pursuant to this clause (ii), MARINEMAX and NEWCO
shall, if possible, give prior written notice thereof to COMPANY and the
STOCKHOLDERS and provide COMPANY and the STOCKHOLDERS with the opportunity to
contest such disclosure, or (iii) the disclosing party reasonably believes that
such disclosure is required in connection with the defense of a lawsuit against
the disclosing party, and (d) to the public to the extent necessary or advisable
in connection with applicable securities laws. In the event of a breach or
threatened breach by MARINEMAX or NEWCO of the provisions of this Section,
COMPANY and the STOCKHOLDERS shall be entitled to an injunction restraining
MARINEMAX and NEWCO from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting COMPANY and the
STOCKHOLDERS from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14 shall
survive the termination of this Agreement for a period of five (5) years from
the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDERS shall not sell, assign,
exchange, transfer, encumber, pledge, distribute, appoint, or otherwise dispose
of any shares of MARINEMAX Stock received by the STOCKHOLDERS in the Merger in
violation of the provisions of the Pooling Letters referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY OF
THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICES OF THIS CORPORATION.
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<PAGE> 45
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDERS acknowledge that the shares of
MARINEMAX Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement
have not been and will not be registered under the Act and therefore may not be
resold without compliance with the Act. The MARINEMAX Stock to be acquired by
such STOCKHOLDERS pursuant to this Agreement is being acquired solely for their
own respective accounts, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution. The STOCKHOLDERS covenant, warrant and represent that none
of the shares of MARINEMAX Stock issued to such STOCKHOLDERS will be offered,
sold, assigned, pledged, hypothecated, transferred or otherwise disposed of
except after full compliance with all of the applicable provisions of the Act
and the rules and regulations of the SEC. The certificates evidencing the
MARINEMAX Stock delivered to the STOCKHOLDERS pursuant to this Agreement will
bear a legend substantially in the form set forth below and containing such
other information as MARINEMAX may deem necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND
ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS. THE SHARES
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR THE RECEIPT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS
NOT REQUIRED.
16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDERS are able to bear the
economic risk of an investment in the MARINEMAX Stock to be acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment and
have such knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of the proposed investment in the
MARINEMAX Stock. The STOCKHOLDERS have had an adequate opportunity to ask
questions and receive answers from the officers of MARINEMAX concerning any and
all matters relating to the transactions described herein including, without
limitation, the background and experience of the current and proposed officers
of MARINEMAX, the business, operations and financial condition of the Other
Founding Companies, and any plans for additional acquisitions and the like. The
STOCKHOLDERS have asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to their satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDERS, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
40
<PAGE> 46
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
MARINEMAX, and the heirs and legal representatives of the STOCKHOLDERS.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the STOCKHOLDERS, COMPANY, NEWCO
and MARINEMAX and supersede any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement, upon execution,
constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written
instrument executed by the STOCKHOLDERS, COMPANY, NEWCO and MARINEMAX, acting
through their respective officers, duly authorized by their respective Boards of
Directors.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each party
represents and warrants that it employed no broker or agent in connection with
this transaction and agrees to indemnify the other parties hereto against all
loss, cost, damages or expense arising out of claims for fees or commission of
brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated shall
be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. Each STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each STOCKHOLDER acknowledges that he or she, and not COMPANY or
MARINEMAX, will pay all taxes due upon receipt of the consideration payable
pursuant to Section 2 hereof, and will assume all tax risks and liabilities of
such STOCKHOLDER in connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
41
<PAGE> 47
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
(b) If to the STOCKHOLDERS, addressed to them at:
Stockholder 1:
Susan Dunne
3911 Canyon Bluff Court
Houston, Texas 77059
Stockholder 2:
Clyde Hickham
1005 Georgia Avenue
Deer Park, Texas 77536
Stockholder 3:
Marc Hickham
16814 Clear Oak Way
Houston, Texas 77058
Stockholder 4:
Steve Hickham
4498 Highway 59 East
Beeville, Texas 78102
Stockholder 5:
Glenda Hickham
10002 Kirkdale
Houston, Texas 77089
42
<PAGE> 48
Stockholder 6:
Spicer Partnership, Ltd.
c/o Louis DelHomme
Louis DelHomme Marine
2551 S. Shore Harbour Blvd., Suite C
League City, Texas 77573
Attn: Louis DelHomme, General Partner
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
11502 Dumas, Inc.
2551 S. Shore Harbour Blvd., Suite C
League City, Texas 77573
Attn: Louis DelHomme
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
43
<PAGE> 49
17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any term
of this Agreement shall be deemed exclusive but each shall be cumulative with
all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDERS who hold or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the parties hereto, any other
person receiving MARINEMAX Stock in connection with the Merger and each future
holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT. This
Agreement may be executed by facsimile, and shall be deemed effectively executed
upon the receipt by all parties hereto of the last page of this Agreement duly
executed by the other parties hereto. Each party to this Agreement agrees to
deliver six (6) original, inked and signed copies of the execution page of this
Agreement within four (4) days of faxing the executed last page hereof.
[Remainder of Page Intentionally Left Blank]
44
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
STOCKHOLDERS:
MARINEMAX: /s/ Susan Dunne
-------------------------------------
Susan Dunne
MARINEMAX, INC., a Delaware corporation
/s/ Clyde Hickham
-------------------------------------
Clyde Hickham
By: /s/
---------------------------------
Name: /s/ Marc Hickham
------------------------------- -------------------------------------
Title: Marc Hickham
------------------------------
/s/ Steven Hickham
NEWCO: -------------------------------------
Steven Hickham
DUMAS ACQUISITION CORP., /s/ Glenda Hickham
a Delaware corporation -------------------------------------
Glenda Hickham
By: /s/ SPICER PARTNERSHIP, LTD.
--------------------------------
Name:
-------------------------------
Title: By: /s/ Louis R. DelHomme
------------------------------ ----------------------------------
Name: Louis R. DelHomme
Its: General Partner
COMPANY:
11502 DUMAS, INC.,
a Texas corporation
By: /s/
---------------------------------
Name:
-------------------------------
Title:
------------------------------
45
<PAGE> 51
CONSENT OF SPOUSE
The undersigned spouse of Clyde Hickham, who is a party to the foregoing
Agreement and Plan of Organization, pertaining to the merger of Dumas
Acquisition Corp., a Delaware corporation with and into 11502 Dumas, Inc., a
Texas corporation (the "Agreement"), hereby declares, contemporaneously with the
execution of the Agreement, that she has read the Agreement in its entirety, and
being fully convinced of the wisdom of the terms of the Agreement, and in
consideration of the premises and of the provisions of the Agreement, hereby
expresses her consent to the execution and consummation of the Agreement by
Clyde Hickham.
The undersigned further agrees that in the event of the death of Clyde
Hickham, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Clyde Hickham,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Clyde Hickham pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/________________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
_____________________________________
Notary Public
46
<PAGE> 52
CONSENT OF SPOUSE
The undersigned spouse of Marc Hickham, who is a party to the foregoing
Agreement and Plan of Organization, pertaining to the merger of Dumas
Acquisition Corp., a Delaware corporation with and into 11502 Dumas, Inc., a
Texas corporation (the "Agreement"), hereby declares, contemporaneously with the
execution of the Agreement, that she has read the Agreement in its entirety, and
being fully convinced of the wisdom of the terms of the Agreement, and in
consideration of the premises and of the provisions of the Agreement, hereby
expresses her consent to the execution and consummation of the Agreement by Marc
Hickham.
The undersigned further agrees that in the event of the death of Marc
Hickham, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Marc Hickham,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Marc Hickham pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/_________________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
_____________________________________
Notary Public
47
<PAGE> 53
CONSENT OF SPOUSE
The undersigned spouse of Steven Hickham, who is a party to the foregoing
Agreement and Plan of Organization, pertaining to the merger of Dumas
Acquisition Corp., a Delaware corporation with and into 11502 Dumas, Inc., a
Texas corporation (the "Agreement"), hereby declares, contemporaneously with the
execution of the Agreement, that she has read the Agreement in its entirety, and
being fully convinced of the wisdom of the terms of the Agreement, and in
consideration of the premises and of the provisions of the Agreement, hereby
expresses her consent to the execution and consummation of the Agreement by
Steven Hickham.
The undersigned further agrees that in the event of the death of Steven
Hickham, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Steven Hickham,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Steven Hickham pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/_________________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
_____________________________________
Notary Public
48
<PAGE> 54
CONSENT OF SPOUSE
The undersigned spouse of Susan Dunne, who is a party to the foregoing
Agreement and Plan of Organization, pertaining to the merger of Dumas
Acquisition Corp., a Delaware corporation with and into 11502 Dumas, Inc., a
Texas corporation (the "Agreement"), hereby declares, contemporaneously with the
execution of the Agreement, that he has read the Agreement in its entirety, and
being fully convinced of the wisdom of the terms of the Agreement, and in
consideration of the premises and of the provisions of the Agreement, hereby
expresses his consent to the execution and consummation of the Agreement by
Susan Dunne.
The undersigned further agrees that in the event of the death of Susan
Dunne, the dissolution of their marriage, or any occurrence contemplated by the
Agreement that gives rise to any liability or obligation of Susan Dunne, the
provisions of the Agreement shall be binding upon his to the extent of any
community property he may now have or hereafter acquire, and any and all
separate property that he hereafter acquires which arises (directly or
indirectly) from any consideration given to Susan Dunne pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that he will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
_____________________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
_____________________________________
Notary Public
49
<PAGE> 55
CONSENT OF SPOUSE
The undersigned spouse of Glenda Hickham, who is a party to the foregoing
Agreement and Plan of Organization, pertaining to the merger of Dumas
Acquisition Corp., a Delaware corporation with and into 11502 Dumas, Inc., a
Texas corporation (the "Agreement"), hereby declares, contemporaneously with the
execution of the Agreement, that he has read the Agreement in its entirety, and
being fully convinced of the wisdom of the terms of the Agreement, and in
consideration of the premises and of the provisions of the Agreement, hereby
expresses his consent to the execution and consummation of the Agreement by
Glenda Hickham.
The undersigned further agrees that in the event of the death of Glenda
Hickham, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Glenda Hickham,
the provisions of the Agreement shall be binding upon his to the extent of any
community property he may now have or hereafter acquire, and any and all
separate property that he hereafter acquires which arises (directly or
indirectly) from any consideration given to Glenda Hickham pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that he will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
_____________________________________
______________________________ (Name)
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
_____________________________________
Notary Public
50
<PAGE> 1
Exhibit 10.1(c)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
GULFWIND USA ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
GULFWIND USA, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
------------------------------------------------------------------------------
------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. THE MERGER................................................................... 4
1.1 Delivery of Filing of Articles of Merger............................... 4
1.2 Effective Time......................................................... 5
1.3 Articles/Certificate of Incorporation, Bylaws and Board of Directors of
Surviving Corporation.................................................. 5
1.4 Certain Information With Respect to the Capital Stock of COMPANY,
MARINEMAX and NEWCO.................................................... 5
1.5 Effect of Merger....................................................... 6
1.6 Accounting Treatment................................................... 6
2. CONVERSION AND CANCELLATION OF STOCK......................................... 6
2.1 Manner of Conversion and Cancellation.................................. 6
3. DELIVERY OF MERGER CONSIDERATION............................................. 7
3.1 Time and Manner of Delivery............................................ 7
3.2 Surrender of COMPANY Stock............................................. 7
3.3 Escrow of Portion of MARINEMAX Stock................................... 7
4. CLOSING...................................................................... 8
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDERS................................................................. 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDERS........................................................... 8
5.1 Due Organization....................................................... 8
5.2 Authorization.......................................................... 9
5.3 Capital Stock of COMPANY............................................... 9
5.4 Transactions in Capital Stock, Organization Accounting................. 9
5.5 No Bonus Shares........................................................ 9
5.6 Subsidiaries........................................................... 10
5.7 Predecessor Status; Etc................................................ 10
5.8 Spin-off by COMPANY.................................................... 10
5.9 Financial Statements................................................... 10
5.10 Liabilities and Obligations............................................ 10
5.11 Accounts and Notes Receivable.......................................... 11
5.12 Permits and Intangibles................................................ 11
5.13 Environmental Matters.................................................. 11
5.14 Personal Property...................................................... 12
5.15 Significant Customers; Material Contracts and Commitments.............. 12
5.16 Real Property.......................................................... 13
5.17 Insurance.............................................................. 14
5.18 Compensation; Employment Agreements; Organized Labor Matters........... 14
5.19 Employee Plans......................................................... 15
5.20 Compliance with ERISA.................................................. 15
</TABLE>
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<TABLE>
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5.21 Conformity with Law; Litigation........................................ 16
5.22 Taxes.................................................................. 17
5.23 No Violations.......................................................... 17
5.24 Government Contracts................................................... 17
5.25 Absence of Changes..................................................... 18
5.26 Deposit Accounts; Powers of Attorney................................... 19
5.27 Validity of Obligations................................................ 19
5.28 Relations with Governments............................................. 19
5.29 Prohibited Activities.................................................. 19
5.30 Disclosure............................................................. 19
(B) Representations and Warranties of STOCKHOLDERS......................... 20
5.31 Authority: Ownership................................................... 20
5.32 Preemptive Rights...................................................... 20
5.33 No Intention to Dispose of MARINEMAX Stock............................. 20
6. REPRESENTATIONS OF MARINEMAX AND NEWCO....................................... 20
6.1 Due Organization....................................................... 21
6.2 Authorization.......................................................... 21
6.3 Capital Stock of MARINEMAX and NEWCO................................... 21
6.4 Transactions in Capital Stock; Organization Accounting................. 21
6.5 Subsidiaries........................................................... 21
6.6 Financial Statements................................................... 22
6.7 [Intentionally Deleted]................................................ 22
6.8 Validity of Obligations................................................ 22
6.9 MARINEMAX Stock........................................................ 22
6.10 Disclosure............................................................. 22
6.11 No Undisclosed Agreements.............................................. 22
7. COVENANTS PRIOR TO CLOSING................................................... 22
7.1 Access and Cooperation; Due Diligence.................................. 22
7.2 Conduct of Business Pending the Merger................................. 23
7.3 Prohibited Activities.................................................. 24
7.4 [Intentionally Deleted]................................................ 25
7.5 [Intentionally Deleted.]............................................... 25
7.6 Agreements............................................................. 25
7.7 Notification of Certain Matters........................................ 25
7.8 Delivery of Schedules; Amendment of Schedules.......................... 25
7.9 [Intentionally Deleted]................................................ 26
7.10 Final Financial Statements............................................. 26
7.11 Further Assurances..................................................... 27
7.12 [Intentionally Deleted]................................................ 27
7.13 Compliance with the Hart-Scott Act..................................... 27
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
AND COMPANY.................................................................. 27
8.1 Representations and Warranties; Performance of Obligations.............. 27
8.2 Satisfaction........................................................... 27
8.3 No Litigation.......................................................... 28
</TABLE>
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8.4 [Intentionally Deleted]................................................ 28
8.5 Consents and Approvals................................................. 28
8.6 Good Standing Certificates............................................. 28
8.7 No Material Adverse Change............................................. 28
8.8 [Intentionally Deleted]................................................ 28
8.9 Secretary's Certificate................................................ 28
8.10 Employment Agreements.................................................. 28
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO........................................................................ 28
9.1 Representations and Warranties; Performance of Obligations.............. 28
9.2 No Litigation.......................................................... 29
9.3 Secretary's Certificate................................................ 29
9.4 No Material Adverse Effect............................................. 29
9.5 STOCKHOLDERS' Release.................................................. 29
9.6 Satisfaction........................................................... 29
9.7 [Intentionally Deleted]................................................ 29
9.8 Consents and Approvals................................................. 29
9.9 Good Standing Certificates............................................. 30
9.10 Pooling Letters........................................................ 30
9.11 Employment Agreements.................................................. 30
9.12 Specific Indemnification Agreement..................................... 30
9.13 FIRPTA Certificate..................................................... 30
9.14 Investment Agreements.................................................. 30
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER
CLOSING...................................................................... 30
10.1 Assumption of STOCKHOLDERS' Guarantees................................. 30
10.2 Preservation of Tax and Accounting Treatment........................... 30
10.3 Preparation and Filing of Tax Returns.................................. 31
10.4 Directors and Officers of the Surviving Corporation.................... 31
10.5 Preservation of Employee Benefit Plans................................. 31
10.6 Dividends.............................................................. 32
10.7 Distribution of Financial Statements................................... 32
11. INDEMNIFICATION.............................................................. 32
11.1 General Indemnification by the STOCKHOLDERS............................ 32
11.2 Indemnification by MARINEMAX........................................... 32
11.3 Third Person Claims.................................................... 33
11.4 Limitations on Indemnification......................................... 34
11.5 Environmental Indemnification by the STOCKHOLDERS...................... 34
12. TERMINATION OF AGREEMENT..................................................... 35
12.1 Termination............................................................ 35
12.2 Liabilities in Event of Termination.................................... 36
</TABLE>
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13. NONCOMPETITION............................................................... 36
13.1 Prohibited Activities.................................................. 36
13.2 Damages................................................................ 37
13.3 Reasonable Restraint................................................... 37
13.4 Severability; Reformation.............................................. 37
13.5 Independent Covenant................................................... 37
13.6 Materiality............................................................ 38
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.................................... 38
14.1 STOCKHOLDERS........................................................... 38
14.2 MARINEMAX AND NEWCO.................................................... 38
14.3 Damages................................................................ 39
14.4 Survival............................................................... 39
15. TRANSFER RESTRICTIONS........................................................ 39
15.1 Transfer Restrictions.................................................. 39
16. FEDERAL SECURITIES ACT REPRESENTATIONS....................................... 39
16.1 Compliance with Law.................................................... 39
16.2 Economic Risk; Sophistication.......................................... 40
17. GENERAL...................................................................... 40
17.1 Cooperation............................................................ 40
17.2 Successors and Assigns................................................. 40
17.3 Entire Agreement....................................................... 40
17.4 Counterparts........................................................... 41
17.5 Brokers and Agents..................................................... 41
17.6 Expenses............................................................... 41
17.7 Notices................................................................ 41
17.8 Governing Law.......................................................... 42
17.9 Survival of Representations and Warranties............................. 42
17.10 Exercise of Rights and Remedies........................................ 42
17.11 Time................................................................... 42
17.12 Reformation and Severability........................................... 43
17.13 Remedies Cumulative.................................................... 43
17.14 Captions............................................................... 43
17.15 Amendments and Waivers................................................. 43
17.16 Execution by Facsimile; Delivery of Original Signed Agreement.......... 43
</TABLE>
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AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as of
the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), GULFWIND USA ACQUISITION CORP., a Delaware
corporation ("NEWCO"), GULFWIND USA, INC., a Florida corporation (the
"COMPANY"), and WILLIAM H. MCGILL, JR. ("Stockholder 1"), WILLIAM BRETT MCGILL
("Stockholder 2"), EDWARD A. RUSSELL ("Stockholder 3"), SCOTT ST. ANGELO
("Stockholder 4"), and THOMAS A. GEORGE AND THERESA C. GEORGE, AS HUSBAND AND
WIFE ("Stockholder 5")(Stockholder 1, Stockholder 2, Stockholder 3, Stockholder
4, and Stockholder 5 may be referred to individually herein as a "STOCKHOLDER"
and collectively as the "STOCKHOLDERS").
WHEREAS, NEWCO is a corporation duly organized and existing under the laws
of the State of Delaware, having been incorporated solely for the purpose of
completing the transactions set forth herein, and is a wholly-owned subsidiary
of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and Florida;
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the "MARINEMAX
Plan of Organization," and the parties intend that each merger comprising the
MARINEMAX Plan of Organization be accounted for as a pooling-of-interests for
accounting purposes;
WHEREAS, the STOCKHOLDERS and the Boards of Directors and the stockholders
of MARINEMAX, NEWCO, each of the Other Founding Companies and each of the
subsidiaries of MARINEMAX that are parties to the Other Agreements have approved
and adopted the MARINEMAX Plan of Organization as an integrated plan pursuant to
which the STOCKHOLDERS and the stockholders of each of the Other Founding
Companies will transfer the capital stock of each of the Founding Companies to
MARINEMAX and the STOCKHOLDERS and the stockholders of each of the Other
Founding Companies as a tax-free transfer of property under Section 351 of the
Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
<PAGE> 7
WHEREAS, unless the context otherwise requires, capitalized terms used in
this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct subsidiaries
of COMPANY.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of Merger
with respect to the Merger substantially in the forms attached as Annex I hereto
or with such other changes therein as may be required by applicable state laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section 5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second recital
of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
"Escrow and Security Agreement" has the meaning set forth in Section 3.3.
2
<PAGE> 8
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in Section
7.10.
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona corporation,
"GAAP" shall mean generally accepted accounting principles in the United
States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the fourth
recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to this
Agreement and the applicable provisions of the laws of the State of Delaware and
other applicable state laws.
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of NEWCO.
"Other Agreements" has the meaning set forth in the third recital of this
Agreement.
3
<PAGE> 9
"Other Founding Companies" means all of the Founding Companies other than
COMPANY.
"Pooling Letters" shall have the meaning set forth in Section 9.10.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be provided
within fifteen (15) days from the execution of this Agreement (as amended in
compliance with Section 7.8 hereof), which reference the relevant sections of
this Agreement, on which parties hereto disclose information as part of their
respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in the
Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent Corporations
will cause the Articles of Merger to be signed, verified and filed with the
Secretary of State of the State of Delaware and the Secretary of State of the
State of Florida and stamped receipt copies of each such filing to be delivered
to MARINEMAX at the Effective Time.
4
<PAGE> 10
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with and
into COMPANY in accordance with the Articles of Merger, the separate existence
of NEWCO shall cease, COMPANY shall be the surviving party in the Merger. The
Merger will be effected in a single transaction.
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF DIRECTORS
OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then in
effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the Bylaws of
the Surviving Corporation; and subsequent to the Effective Time, such Bylaws
shall be the Bylaws of the Surviving Corporation until they shall thereafter be
duly amended;
(iii) the Board of Directors of the Surviving Corporation shall
consist of the persons who are on the Board of Directors of COMPANY immediately
prior to the Effective Time, provided that William H. McGill, Jr. shall be
elected as a director of the Surviving Corporation effective as of the Effective
Time; the Board of Directors of the Surviving Corporation shall hold office
subject to the provisions of the laws of the State of Florida and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the Effective Time
shall continue as the officers of the Surviving Corporation in the same capacity
or capacities, and effective at the Effective Time William H. McGill, Jr. shall
be appointed as vice president of the Surviving Corporation and Michael H.
McLamb, Treasurer and Assistant Secretary, shall be appointed as an assistant
secretary of the Surviving Corporation, each of such officers to serve, subject
to the provisions of the Articles/Certificate of Incorporation and Bylaws of the
Surviving Corporation, until his successor is duly elected and qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and outstanding
capital stock of COMPANY is as set forth on Schedule 5.3 hereto.
(ii) immediately prior to the Effective Time, the authorized capital
stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
(iii) as of the date of this Agreement, the authorized capital stock
of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock, of which One
(1) share is issued and outstanding.
5
<PAGE> 11
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of Florida. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate existence of NEWCO shall
cease and, in accordance with the terms of this Agreement, the Surviving
Corporation shall possess all of the rights, privileges, immunities and
franchises, of a public, as well as of a private, nature, and all property,
real, personal and mixed, and all debts due on all accounts whatsoever,
including, without limitation, subscriptions to shares, and all taxes, including
those due and owing and those accrued, and all other choses in action, and all
and every other interest of or belonging to or due to COMPANY, and NEWCO shall
be taken and deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all of the respective properties,
rights and privileges, powers and franchises and all and every other interest of
COMPANY and NEWCO shall be thereafter be the property of the Surviving
Corporation as they were of COMPANY and NEWCO prior to the Merger; the title to
any real estate, or interest therein, whether by deed or otherwise, under the
laws of the state of incorporation vested in COMPANY and NEWCO, shall not revert
or be in any way impaired by reason of the Merger; and the assets, liabilities,
reserves, and accounts of COMPANY shall be taken up on the books of the
Surviving Corporation at the amounts at which they respectively were carried on
the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
As of the Effective Time:
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, automatically shall be deemed to
represent the right to receive the number of shares of MARINEMAX Stock set forth
on Annex II hereto with respect to such holder;
6
<PAGE> 12
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
(iii) each share of NEWCO Stock issued and outstanding immediately
prior to the Effective Time, shall, by virtue of the Merger and without any
action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDERS pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letters referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDERS shall be fully exercisable by
the STOCKHOLDERS and the STOCKHOLDERS shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter as
reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDERS shall receive the respective number of shares of
MARINEMAX Stock as set forth on Annex II hereto; provided, however, that the
STOCKHOLDERS shall have previously surrendered all of COMPANY Stock to MARINEMAX
as provided in Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDERS shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDERS, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDERS' expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDERS agree promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, each of the
STOCKHOLDERS agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to each such STOCKHOLDER pursuant to this
Agreement for purposes of securing the obligations, representations and
warranties of the STOCKHOLDERS arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow and
security agreement in the form attached hereto as ANNEX III (the "Escrow and
Security Agreement"). STOCKHOLDERS each agree to execute and deliver the Escrow
and Security Agreement at the Closing effective at the Effective Time.
7
<PAGE> 13
4. CLOSING
At or prior to the Closing, the parties shall take all actions necessary
to prepare to (i) effect the Merger (including, without limitation, if permitted
by applicable state law, the filing with the appropriate state authorities of
the Articles of Merger specifying the Effective Time as the delayed effective
time of the Merger), and (ii) effect the conversion and delivery of shares
referred to in Section 3 hereof; provided, however, that such actions shall not
include the actual completion of the Merger or the conversion and delivery of
the shares referred to in Section 3 hereof, each of which actions shall be
deemed taken at the Effective Time as herein provided. In the event that the
conditions precedent contained in and this Agreement are not satisfied or waived
and this Agreement is thereby terminated, MARINEMAX hereby covenants and agrees
to do all things required by the Delaware GCL and by the applicable corporate
laws of the State of Florida in order to stop or rescind the Merger effected by
the filing of the Articles of Merger as described in this Section. The taking of
the actions described in clauses (i) and (ii) above shall take place at a
closing (the "Closing") to be held following the satisfaction or waiver of the
conditions precedent set forth in Section 5, 8 and 9 hereof on such date as
MARINEMAX shall determine (the "Closing Date") at the offices of O'Connor,
Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback Road,
Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles of
Merger shall be or shall have been filed with the appropriate state authorities
so that the Merger shall be effective at the Effective Time, and (y) the parties
shall be deemed to have consummated the transactions contemplated by this
Agreement, including, without limitation, the conversion and delivery of shares,
which the STOCKHOLDERS shall be entitled to receive pursuant to the Merger
referred to in Section 3 hereof. The time at which the actions described in the
preceding clauses (x) and (y) occur shall be referred to as the "Effective
Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS. Each
of COMPANY and the STOCKHOLDERS represents and warrants that all of the
following representations and warranties in this Section 5(A) are true, complete
and correct at the date of this Agreement and, subject to Section 7.8 hereof,
shall be true, complete, and correct at the time of Closing and at the Effective
Time and that such representations and warranties shall survive the Closing and
the Effective Time for a period of the earlier of (i) the date of the first
audit of financial statements of the Surviving Corporation containing combined
operations of MARINEMAX and the Surviving Corporation for those representations
and warranties set forth within Section 5(A) which representations and
warranties specifically deal with items that would be expected to be encountered
in the audit process, or (ii) twelve (12) months, the last day of such period
being the "Expiration Date". For purposes of this Section 5(A), the term COMPANY
shall mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, and has
the requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing of its properties makes such qualification necessary, except (i) as set
forth on Schedule 5.1 or (ii) where the failure to be so authorized or qualified
would not have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise), of COMPANY taken as a
whole (as used herein with respect to COMPANY, or with respect to any person, a
"Material Adverse Effect").
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Schedule 5.1 sets forth the jurisdiction in which COMPANY is incorporated and
contains a list of all jurisdictions in which COMPANY is authorized or qualified
to do business. True, complete and correct copies of the Articles/Certificate of
Incorporation and Bylaws, each as amended, of COMPANY (the "Charter Documents")
are attached hereto in Schedule 5.1. The stock records of COMPANY, as heretofore
made available to MARINEMAX, are correct and complete in all material respects.
There are no minutes in the possession of COMPANY or the STOCKHOLDERS which have
not been supplied to MARINEMAX, and all of such minutes are correct and complete
in all respects. The most recent minutes of COMPANY, which are dated no earlier
than ten (10) business days prior to the date hereof, affirm and ratify all
prior acts of COMPANY, and of its officers and directors on behalf and for the
benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this Agreement
have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDERS and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY is
as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDERS in the amounts set forth
in Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDERS are the
sole stockholders of COMPANY. Except as disclosed in Schedule 5.3 hereto, each
STOCKHOLDER has at all times during the two (2) year period immediately
preceding the date hereof owned or maintained sole equitable and beneficial
interest in all of the issued and outstanding shares of the capital stock of
COMPANY as to which such STOCKHOLDER is the registered holder, as set forth in
Schedule 5.3 hereto. All of the issued and outstanding shares of the capital
stock of COMPANY have been duly authorized and validly issued, are fully paid
and nonassessable, are owned of record and beneficially by the STOCKHOLDERS and
further, such shares were offered, issued, sold and delivered by COMPANY in
compliance with all applicable state and federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as set
forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY Stock
since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all stock option or stock purchase plans,
including, without limitation, a list of all outstanding options, warrants or
other rights to acquire shares of COMPANY's stock.
5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
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5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of all
names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which any STOCKHOLDER acquired his or her
stock in any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been,
within such period of time, a subsidiary or division of another corporation or a
part of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1995 and December 31, 1996 and for the
nine month period ended September 30, 1997. COMPANY Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated and for the periods prior thereto (except as noted thereon
or on Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance
Sheets as of December 31, 1996 and September 30, 1997 each present fairly in all
material respects the financial position of COMPANY as of the dates indicated
thereon, and COMPANY's Statements of Operations, Shareholders' Equity and Cash
Flows referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance Sheet Date, COMPANY has not incurred any material liabilities of any
kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. COMPANY has also delivered to MARINEMAX on Schedule
5.10, in the case of those contingent liabilities related to pending or
threatened litigation, or other liabilities incurred under the agreements listed
pursuant to Section 5.10(ii) which are not fixed or otherwise accrued or
reserved, a good faith and reasonable estimate of the maximum amount which
COMPANY reasonably expects will be payable. For each such contingent liability
or liability for which the amount is not fixed or is contested, COMPANY has
provided to MARINEMAX the following information:
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(i) a summary description of the liability together with the
following:
(a) copies of all relevant documentation relating thereto;
and
(b) amounts claimed and any other action or relief sought;
(ii) the name of each court or agency before which such claim, suit
or proceeding is pending;
(iii) the date such claim, suit or proceeding was instituted; and
(iv) a good faith and reasonable estimate of the maximum amount, if
any, which is likely to become payable with respect to each such liability. If
no estimate is provided, the estimate shall for purposes of this Agreement be
deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDERS. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all licenses,
franchises, permits and authorizations (governmental or otherwise) the absence
of any of which could have a Material Adverse Effect on COMPANY's business,
including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDERS after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew any such license, franchise, permit or authorization. COMPANY has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in the licenses, franchises,
permits and authorizations listed on Schedules 5.12 and 5.13 and is not in
violation of any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on COMPANY. Except as specifically
provided in Schedule 5.12, the transactions contemplated by this Agreement will
not result in a default under or a breach or violation of, or adversely affect
the rights and benefits afforded to COMPANY by, any such licenses, franchises,
permits or authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with
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and is in compliance with all federal, state, local and foreign statutes (civil
and criminal), laws, ordinances, regulations, rules, notices, permits,
judgments, orders and decrees applicable to COMPANY or any of its properties,
assets, operations and businesses relating to environmental protection
(collectively "Environmental Laws") including, without limitation, Environmental
Laws relating to air, water, land and the generation, storage, use, handling,
transportation, treatment or disposal of Hazardous Wastes and Hazardous
Substances including petroleum and petroleum products (as such terms are defined
in any applicable Environmental Law); (ii) COMPANY has obtained and adhered to
all necessary permits and other approvals necessary to treat, transport, store,
dispose of and otherwise handle Hazardous Wastes and Hazardous Substances, a
list of all of such permits and approvals is set forth on Schedule 5.13; (iii)
COMPANY has reported to the appropriate authorities, to the extent required by
all Environmental Laws, all past and present sites owned and operated by COMPANY
where Hazardous Wastes or Hazardous Substances have been treated, stored,
disposed of or otherwise handled; (iv) there have been no releases or threats of
releases (as defined in Environmental Laws) at, from, in or on any property
owned or operated by COMPANY except as permitted by Environmental Laws; (v)
COMPANY and STOCKHOLDERS know of no on-site or off-site location to which
COMPANY has transported or disposed of Hazardous Wastes and Hazardous Substances
or arranged for the transportation of Hazardous Wastes and Hazardous Substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which is reasonably likely to lead to any
claim against COMPANY, MARINEMAX or NEWCO for any clean-up cost, remedial work,
damage to natural resources, property damage or personal injury, including,
without limitation, any claim under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; and (vi) COMPANY has no
contingent liability in connection with any release of any Hazardous Waste or
Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDERS, relatives of the
STOCKHOLDERS, or Affiliates of COMPANY. Except as set forth on Schedule 5.14,
(i) all material personal property used by COMPANY in its business is either
owned by COMPANY or leased by COMPANY pursuant to a lease included on Schedule
5.14, (ii) all of the personal property listed on Schedule 5.14 is in good
working order and condition, ordinary wear and tear excepted, and (iii) all
leases and agreements included on Schedule 5.14 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for purposes of this
Section, means a customer (or person or entity) representing 5% or more of
COMPANY's annual revenues as of the Balance Sheet Date. Except to the extent set
forth on Schedule 5.15, none of COMPANY's significant current customers have
canceled or substantially reduced or, to the best knowledge and belief of
COMPANY and the STOCKHOLDERS after due inquiry, are currently
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attempting or threatening to cancel a contract or substantially reduce
utilization of the services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic alliances and options to purchase land), other than agreements listed
on Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has attached
a true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or used by COMPANY is
zoned for the conduct of COMPANY's business thereon pursuant to the zoning
regulations of the applicable cities, towns, villages or townships. The uses to
which such real property are presently put (including the location of all
buildings and other improvements thereon) comply in all material respects with
the applicable provisions of such zoning regulations without the benefit of the
legal non-conforming use principle of law, or other regulations of such cities,
towns, villages or townships or any other governmental body.
(ii) As to any real property leased, owned or used by COMPANY
there are no material agreements, commitments or understandings pursuant to
which COMPANY, or its successors in interest are required to dedicate any part
of the real property or to grant any easement, water rights, rights-of-way, or
license for ingress and egress or other use in respect to any part of the real
property, whether on account of the development of adjacent or nearby real
property or otherwise. Other than as provided in the leases of the real property
owned by COMPANY and leased to others, except as set forth in Schedule 5.16
hereto, no person has any material easement, license or other right whatsoever
with respect to such real property.
(iii) COMPANY holds good and marketable fee simple title to
the real property identified on Schedule 5.16 hereto as owned by COMPANY and
good leasehold title to the real property identified on Schedule 5.16 as leased
or used by COMPANY, in each case free and clear of all material mortgages,
charges, claims, liens, encumbrances, leases, options to purchase, rights of
first refusal, contracts of sale, easements, reservations and restrictions,
except those matters identified in any title reports set forth in Schedule 5.16.
No part of such lands is affected by any restrictions imposed by any
governmental authority affecting construction of structures thereon or the use
thereof by COMPANY other than building codes and zoning classifications.
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(iv) The STOCKHOLDERS and COMPANY do not, either individually
or collectively, have any knowledge of any fact or condition existing that would
result or could result in the termination or material reduction of the current
access to and from the real property owned or leased or used by COMPANY to
existing public roads and highways, or of any reduction in sewer or other
utility services presently serving such real property. The real property
currently owned, leased or used by COMPANY has direct access to public roads and
highways.
(v) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has received any notice from any insurance company of
any material defects or inadequacies in the real property or any part thereof
that would materially and adversely affect the insurability of the real property
or the premiums for the insurance thereof.
(vi) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has failed to disclose any material conditions of
disrepair or other adverse conditions or defects with respect to the real
property or any portion thereof of which any STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of all leases and
agreements in respect of all real property leased or used by COMPANY are
attached to Schedule 5.16, and an indication as to which such properties, if
any, are currently owned, or were formerly owned, by the STOCKHOLDERS or
affiliates of COMPANY or the STOCKHOLDERS is included in Schedule 5.16, and
except as set forth on Schedule 5.16, all of such leases included on Schedule
5.16 are in full force and effect and constitute valid and binding agreements of
the parties (and their successors) thereto in accordance with their respective
terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1, 1994, no insurance carried by COMPANY has been canceled by the
insurer and COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18 and has attached such
copies to Schedule 5.18. Since the Balance Sheet Date, there have been no
increases in the compensation payable or any special bonuses to any officer,
director, key employee or other employee of COMPANY, except ordinary salary
increases implemented on a basis consistent with past practices.
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Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDERS
after due inquiry, threatened, labor dispute involving COMPANY and any group of
its employees nor has COMPANY experienced any labor interruptions over the past
three years. COMPANY believes its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDERS have delivered to MARINEMAX a true,
complete and accurate schedule (Schedule 5.19) showing all employee benefit
plans of COMPANY (including COMPANY's subsidiaries, if any), including, without
limitation, all employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and deferred
compensation agreements, together with true, complete and correct copies of such
plans, agreements and any trusts related thereto, and classifications of
employees covered thereby existing as of the Balance Sheet Date. Except for the
employee benefit plans, if any, described on Schedule 5.19, COMPANY (including
COMPANY's subsidiaries, if any) does not sponsor, maintain or contribute to any
plan program, fund or arrangement that constitutes an "employee pension benefit
plan," nor does COMPANY have any obligation to contribute to or accrue or pay
any benefits under any deferred compensation or retirement funding arrangement
on behalf of any employee or employees (such as, for example, and without
limitation, any individual retirement account or annuity, any "excess benefit
plan" (within the meaning of Section 3(36) of ERISA), or any nonqualified
deferred compensation arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is given that
term in Section 3(2) of ERISA. Neither COMPANY nor any Acquired Party has
sponsored, maintained or contributed to any employee pension benefit plan other
than the plans set forth on Schedule 5.19, nor is COMPANY or any Acquired Party
required to contribute to any retirement plan pursuant to the provisions of any
collective bargaining agreement establishing the terms and conditions or
employment of any of COMPANY's or any Acquired Party's employees.
Neither COMPANY nor any Acquired Party is now, or can as a result of its
past activities become, liable to the Pension Benefit Guaranty Corporation or to
any multiemployer employee pension benefit plan under the provisions of Title IV
of ERISA.
All employee benefit plans listed on Schedule 5.19 and the administration
thereof are in substantial compliance with their terms and all applicable
provisions of ERISA and the regulations issued thereunder, as well as with all
other applicable federal, state and local statutes, ordinances and regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries
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(including, without limitation, actuarial reports, audits or tax returns) have
been timely filed or distributed, and copies thereof that have been filed for
tax years 1995 and 1996 are included as part of Schedule 5.20 hereof. Neither
STOCKHOLDERS, any such plan listed in Schedule 5.19 or administrator thereof,
nor COMPANY has engaged in any transaction prohibited under the provisions of
Section 4975 of the Code or Section 406 of ERISA or any other breach of
fiduciary responsibility that could subject STOCKHOLDERS, such administrator or
COMPANY to a tax or penalty on prohibited transactions imposed by Section 4975
of the Code or to any liability under Section 502(i) of ERISA. No such plan
listed in Schedule 5.19 has incurred an accumulated finding deficiency, as
defined in Section 412(a) of the Code and Section 302(1) of ERISA; and COMPANY
has not incurred any liability for excise tax or penalty due to the IRS nor any
liability to the Pension Benefit Guaranty Corporation. It is further represented
and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the provisions of
Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase is
defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section 4062 of
ERISA; and
(v) no circumstances exist pursuant to which COMPANY could have any
direct or indirect liability whatsoever (including, without limitation, any
liability to any multiemployer plan or the Pension Benefit Guaranty Corporation
under Title IV of ERISA or to the IRS for any excise tax or penalty), or be
subject to any statutory lien to secure payment of any such liability with
respect to any plan now or heretofore maintained or contributed to by any entity
other than COMPANY that is, or at any time was, a member of a "controlled group"
(as defined in Section 412(n)(6)(B) of the Code) that includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has conducted and is conducting its
business in substantial compliance with the requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, including all such permits, licenses, orders and other governmental
approvals set forth on Schedules 5.12 and 5.13, and is not in violation of any
of the foregoing which would have a Material Adverse Effect.
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5.22 TAXES. COMPANY (including all the Acquired Parties) has timely filed
all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and including the Balance Sheet Date, and no
notice of any such claim for Taxes, whether pending or threatened, has been
received. All Tax, including, without limitation, all related interest and
penalties (whether or not shown on any tax return) owed by any of the Acquired
Parties, or with respect to any payment made or deemed made by any of the
Acquired Parties has been paid. The amounts shown as accruals for Taxes on
COMPANY Financial Statements are sufficient for the payment of all Taxes of the
kinds indicated (including, without limitation, penalties and interest) for all
fiscal periods ended on or before the Balance Sheet Date. Copies of (i) any tax
examinations; (ii) extensions of statutory limitations; and (iii) the federal,
state and local income tax returns and franchise tax returns of COMPANY
(including the Acquired Parties) for the last three (3) fiscal years, or such
shorter period of time as any of them shall have existed, are attached hereto as
Schedule 5.22. If COMPANY is an S-Corporation, the STOCKHOLDERS made a valid
election under the provisions of Subchapter S of the Code and COMPANY has
appropriately not, within the past five years, been taxed under the provisions
of Subchapter C of the Code. COMPANY has a taxable year ended on September 30
and, if COMPANY is an S-Corporation, COMPANY has not made an election to retain
a fiscal year ending on a date other than December 31 pursuant to Section 444 of
the Code. COMPANY's methods of accounting have not changed in the past five
years. COMPANY is not an investment company as defined in Section 351(e)(1) of
the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter Document.
Neither COMPANY nor, to the best knowledge and belief of COMPANY and the
STOCKHOLDERS after due inquiry, any other party thereto, is in material default
under any lease, instrument, agreement, license or permit set forth on Schedules
5.12 through 5.19 (inclusive), or any other material agreement to which it is a
party or by which its properties are bound (the "Material Documents"); and,
except as set forth in Schedule 5.23, (a) the rights and benefits of COMPANY
under the Material Documents will not be materially adversely affected by the
transactions contemplated hereby and (b) the execution of this Agreement and the
performance of the obligations hereunder and the consummation of the
transactions contemplated hereby will not result in any material violation or
breach or constitute a default under, any of the terms or provisions of any of
the Material Documents or Charter Documents. Except as set forth on Schedule
5.23, none of the Material Documents requires notice to, or the consent or
approval of, any governmental agency or other third party with respect to any of
the transactions contemplated hereby in order to remain in full force and
effect, and consummation of the transactions contemplated hereby will not give
rise to any right to termination, cancellation, acceleration or loss of any
right or benefit arising thereunder. Except as set forth on Schedule 5.23, none
of the Material Documents prohibits the use or publication by COMPANY, MARINEMAX
or NEWCO of the name of any other party to such Material Document, and none of
the Material Documents prohibits or restricts COMPANY from freely providing
services to any other customer or potential customer of COMPANY, MARINEMAX,
NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24, COMPANY
is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
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5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set forth
on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition, assets,
liabilities (contingent or otherwise), income or business of COMPANY;
(ii) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock of COMPANY, or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of COMPANY;
(v) any increase in the compensation, bonus, sales commissions or
fee arrangement payable or to become payable by COMPANY to any of its officers,
directors, the STOCKHOLDERS, employees, consultants or agents, except for
ordinary and customary bonuses and salary increases for employees in accordance
with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed, or
any event or condition of any character, materially and adversely affecting the
business of COMPANY;
(vii) any sale or transfer, or any agreement to sell or transfer,
any material asset, property or right of COMPANY to any person, including,
without limitation, the STOCKHOLDERS or their affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to COMPANY, including, without limitation, any
indebtedness or obligation of any STOCKHOLDERS or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, properties or
rights of COMPANY or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course of its
business;
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(xiv) any cancellation or termination of a material contract with a
customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by COMPANY other
than in the ordinary course of COMPANY's business.
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which COMPANY has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or have
access thereto. Schedule 5.26 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from COMPANY and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this Agreement
by COMPANY and the performance of the transactions contemplated herein have been
duly and validly authorized by the Board of Directors and the stockholders of
COMPANY and this Agreement has been duly and validly authorized by all necessary
corporate action and is a legal, valid, binding and enforceable obligation of
COMPANY. The execution and delivery of this Agreement by each of the
STOCKHOLDERS and the performance of the transactions contemplated herein is a
legal, valid, binding and enforceable obligation of the STOCKHOLDERS and each of
them, each having the appropriate legal capacity to execute and deliver this
Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions made
in a lawful manner which, in the aggregate, do not exceed $10,000 per year for
each year in which any STOCKHOLDER has been a stockholder of COMPANY, COMPANY
has not made, offered or agreed to offer anything of value to any governmental,
official, political party or candidate for government office, nor has COMPANY or
any STOCKHOLDER otherwise taken any action which would cause COMPANY to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any law
of similar effect. If political contributions made by COMPANY have exceeded
$10,000 per year for each year in which any STOCKHOLDER has been a stockholder
of COMPANY, each contribution in the amount of $5,000 or more is accurately
described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29, COMPANY
has not, between the Balance Sheet Date and the date hereof, taken any of the
actions prohibited by Section 7.3 hereof.
5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDERS in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they
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were made, not misleading; provided, however, that the foregoing does not apply
to statements contained in or omitted from any of such documents made or omitted
in reliance upon information furnished by MARINEMAX. If, prior to the Closing,
COMPANY or the STOCKHOLDERS become aware of any fact or circumstance that would
affect the accuracy of any representation or warranty of COMPANY or the
STOCKHOLDERS in this Agreement in any material respect, COMPANY and the
STOCKHOLDERS shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDERS of their respective
obligations under this Agreement, and, subject to the provisions of Section 7.8,
at the sole option of MARINEMAX, the truth and accuracy of any and all
representations and warranties of COMPANY and/or STOCKHOLDERS, or on behalf of
COMPANY and/or STOCKHOLDERS, made at the date of this Agreement and on the
Closing Date and at the Effective Time, shall be a precondition to the
consummation of the Merger and the other transactions contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each STOCKHOLDER
severally represents and warrants that the representations and warranties set
forth below are true at the date of this Agreement and, subject to Section 7.8
hereof, shall be true at the time of Closing and at the Effective Time, and that
such representations and warranties shall survive for a period of the earlier of
(i) the date of the first audit of financial statements of the Surviving
Corporation containing combined operations of MARINEMAX and the Surviving
Corporation for those representations set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
5.31 AUTHORITY: OWNERSHIP. Such STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. Such STOCKHOLDER
owns beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by such STOCKHOLDER, and, except as set forth on
Schedule 5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. Such STOCKHOLDER does not have, or hereby waives,
any preemptive or other right to acquire shares of COMPANY Stock or MARINEMAX
Stock that such STOCKHOLDER has or may have had other than rights of any
STOCKHOLDER to acquire MARINEMAX Stock pursuant to (i) this Agreement, or (ii)
any option granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. No STOCKHOLDER is under
any binding commitment or contract to sell, exchange or otherwise dispose of any
shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations and warranties shall survive the Closing and the Effective Time
for a period of the earlier of (i) the date of the first audit of financial
statements of the Surviving Corporation containing combined operations of
MARINEMAX and the Surviving Corporation for those representations and warranties
set forth within Section 6 which representations and warranties specifically
deal with items that would be expected to be
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encountered in the audit process, or (ii) twelve (12) months, the last day of
such period being the "Expiration Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature of its business makes such qualification necessary, except where the
failure to be so authorized or qualified would not have a Material Adverse
Effect. True, complete and correct copies of the Certificate of Incorporation
and Bylaws, each as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter
Documents") are all attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and NEWCO
executing this Agreement have the authority to enter into and bind MARINEMAX and
NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the full legal
right, power and authority to enter into this Agreement and the Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock of
MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii), respectively.
All of the issued and outstanding shares of the capital stock of NEWCO are owned
by MARINEMAX and all of the issued and outstanding shares of the capital stock
of MARINEMAX are owned by the persons set forth on Schedule 6.3 hereof, in each
case, free and clear of all liens, security interests, pledges, charges, voting
trusts, restrictions, encumbrances and claims of every kind. All of the issued
and outstanding shares of the capital stock of MARINEMAX and NEWCO have been
duly authorized and validly issued, are fully paid and nonassessable, are owned
of record and beneficially by MARINEMAX and the persons set forth on Schedule
6.3, respectively, and further, such shares were offered, issued, sold and
delivered by MARINEMAX and NEWCO in compliance with applicable state and federal
laws concerning the issuance of securities. Further, none of such shares were
issued in violation of the preemptive rights of any past or present stockholder
of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for the
Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no subsidiaries
except for (i) NEWCO and each of the companies identified as "NEWCO" in each of
the Other Agreements, and (ii) those newly formed corporations which will
receive certain pieces and parcels of real property, and except as set forth in
the preceding sentence, neither MARINEMAX nor NEWCO presently owns, of record or
beneficially, or controls, directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation,
association or business entity, and neither
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MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to any of the
STOCKHOLDERS.
6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this Agreement
by MARINEMAX and NEWCO and the performance of the transactions contemplated
herein have been duly and validly authorized by the respective Boards of
Directors of MARINEMAX and NEWCO, and this Agreement has been duly and validly
authorized by all necessary corporate action and is a legal, valid and binding
obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX Stock
to be delivered to the STOCKHOLDERS pursuant to this Agreement will constitute
valid and legally issued shares of MARINEMAX, fully paid and nonassessable, and
with the exception of restrictions upon resale set forth in Sections 15 and 16
hereof and in the "Pooling Letters", will be identical in all respects (which do
not include the form of certificate upon which it is printed or the presence or
absence of a CUSIP number on any such certificate) to the MARINEMAX Stock issued
and outstanding as of the date hereof by reason of the provisions of the
Delaware GCL. The shares of MARINEMAX Stock to be issued to the STOCKHOLDERS
pursuant to this Agreement will not be registered under the 1933 Act, and will
be issued to the STOCKHOLDERS pursuant to a valid exemption from registration
under the 1933 Act and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDERS in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDERS.
6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX
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and the Other Founding Companies access to all of COMPANY's and any Acquired
Party's sites, properties, books and records and will furnish MARINEMAX with
such additional financial and operating data and other information as to the
business and properties of COMPANY and any Acquired Party as MARINEMAX or the
Other Founding Companies may from time to time reasonably request. COMPANY will
cooperate with MARINEMAX and the Other Founding Companies, its and their
representatives, auditors and counsel in the preparation of any documents or
other material which may be required in connection with any documents or
materials required by this Agreement. MARINEMAX, NEWCO, the STOCKHOLDERS and
COMPANY will treat all information obtained in connection with the negotiation
and performance of this Agreement or the due diligence investigations conducted
with respect to the Other Founding Companies as confidential in accordance with
the provisions of Section 14 hereof. In addition, MARINEMAX will cause each of
the Other Founding Companies to enter into a provision similar to this Section
7.1 requiring each such Other Founding Company, its stockholders, directors,
officers, representatives, employees and agents to keep confidential any
information obtained by such Other Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents or other material which may be required in connection with any
documents or materials required by this Agreement. COMPANY will cause all
information obtained in connection with the negotiation and performance of this
Agreement to be treated as confidential in accordance with the provisions of
Section 14 hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as it has
heretofore and not introduce any material new method of management, operation or
accounting;
(ii) maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present, ordinary
wear and tear excepted;
(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and effect
present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its business
organization intact, retain its respective present key employees and maintain
its respective relationships with suppliers, customers and others having
business relations with COMPANY or any Acquired Party, as applicable;
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(vi) maintain compliance with all material permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not enter into
new or amended debt or lease instruments except as permitted by Section 10.6,
without the knowledge and consent of MARINEMAX (which consent shall not be
unreasonably withheld), provided that debt and/or lease instruments may be
replaced without the consent of MARINEMAX if such replacement instruments are on
terms at least as favorable to COMPANY or any Acquired Party, as applicable, as
the instruments being replaced; and
(viii) maintain or reduce present salaries and commission levels for
all officers, directors, employees and agents except for ordinary and customary
bonus and salary increases for employees in accordance with past practices of
COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of Incorporation or
Bylaws;
(ii) issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind other than in
connection with the exercise of options or warrants listed in Schedule 5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or other
lien or encumbrance upon any assets or properties whether now owned or hereafter
acquired, except (1) with respect to purchase money liens incurred in connection
with the acquisition of equipment with an aggregate cost not in excess of
$50,000 necessary or desirable for the conduct of its business, (2) (a) liens
for taxes either not yet due or being contested in good faith and by appropriate
proceedings (provided that with respect to contested taxes, adequate reserves
have been established and are being maintained) or (b) materialmen's,
mechanics', workers', repairmen's, employees' or other like liens arising in the
ordinary course of its business (the liens set forth in clause (2) above may be
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.10 and/or 5.15 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the start-up
of any new business;
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(viii) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(ix) waive any material rights or claims of COMPANY or any Acquired
Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any material
agreement, permit, license or other right of COMPANY or any Acquired Party, as
applicable; or
(xi) enter into any other transaction outside the ordinary course of
its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
7.6 AGREEMENTS. The STOCKHOLDERS and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDERS and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the
STOCKHOLDERS contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing, and (ii) any material failure of any STOCKHOLDER or
COMPANY to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. MARINEMAX and NEWCO shall
give prompt notice to COMPANY of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules required
by this Agreement from the respective parties hereto shall be delivered at the
execution of this Agreement. Each party hereto agrees that, with respect to the
representations and warranties of such party contained in this Agreement, such
party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and
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5.15 shall only have to be delivered at the Closing Date, unless such Schedule
is to be amended to reflect an event occurring other than in the ordinary course
of business. Notwithstanding the foregoing sentence, no amendment or supplement
to a Schedule prepared by COMPANY or the STOCKHOLDERS that constitutes or
reflects an event or occurrence that would have a Material Adverse Effect may be
made unless MARINEMAX and a majority of the Founding Companies other than
COMPANY consent to such amendment or supplement; and provided further, that no
amendment or supplement to a Schedule prepared by MARINEMAX or NEWCO that
constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless a majority of the Founding Companies consent
to such amendment or supplement. For all purposes of this Agreement, including
without limitation for purposes of determining whether the conditions set forth
in Sections 8.1 and 9.1 have been fulfilled, the Schedules hereto shall be
deemed to be the Schedules as amended or supplemented pursuant to this Section
7.8. In the event that one of the Other Founding Companies seeks to amend or
supplement a Schedule pursuant to Section 7.8 of one of the Other Agreements,
and such amendment or supplement constitutes or reflects an event or occurrence
that would have a Material Adverse Effect on such Other Founding Company,
MARINEMAX shall give COMPANY notice thereof. If MARINEMAX and a majority of the
Founding Companies consent to such amendment or supplement, which consent shall
have been deemed given by MARINEMAX or any Founding Company if no response is
received within twenty-four (24) hours following receipt of notice of such
amendment or supplement (or sooner if required by the circumstances under which
such consent is requested), but COMPANY does not give its consent, COMPANY
shall, without further act or action, be deemed to have given its consent and
may not thereafter terminate this Agreement. In the event that COMPANY seeks to
amend or supplement a Schedule pursuant to this Section 7.8, and MARINEMAX and a
majority of the Other Founding Companies do not consent to such amendment or
supplement, this Agreement shall be deemed terminated by mutual consent as set
forth in Section 12.1(i) hereof. In the event that MARINEMAX or NEWCO seeks to
amend or supplement a Schedule pursuant to this Section 7.8 and a majority of
the Founding Companies do not consent to such amendment or supplement, this
Agreement shall be deemed terminated by mutual consent as set forth in Section
12.1(i) hereof. No party to this Agreement shall be liable to any other party if
this Agreement shall be terminated pursuant to the provisions of this Section
7.8. No amendment of or supplement to a Schedule shall be made later than
twenty-four (24) hours prior to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all months
and fiscal quarters ended after the Balance Sheet Date and on or before December
31, 1997 (collectively, the "Final COMPANY Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from COMPANY Financial Statements as of the Balance Sheet Date.
The Final COMPANY Financial Statements shall have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated and
with past periods (except as noted therein). Except as noted in the Final
COMPANY Financial Statements, all of such financial statements will present
fairly the results of operations of COMPANY for the periods indicated therein.
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7.11 FURTHER ASSURANCES. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents and
take such other actions as may be reasonably necessary or convenient to carry
out the transactions contemplated hereby, including, without limitation, all
further instruments, documents and actions as may be reasonably required by
MARINEMAX's independent public accountants and attorneys with respect to the
pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDERS and COMPANY shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the Hart-Scott Act to be made. If filings under the
Hart-Scott Act are required, the costs and expenses thereof (including filing
fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS AND
COMPANY
The obligations of the STOCKHOLDERS and COMPANY with respect to actions to
be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDERS
(acting in unison) shall have the right to terminate this Agreement, or in the
alternative, waive any condition not so satisfied. Any act or action of the
STOCKHOLDERS in consummating the Closing or delivering certificates representing
the COMPANY Stock shall constitute a waiver of any conditions not so satisfied.
However, no such waiver shall be deemed to affect the survival of the
representations and warranties of MARINEMAX and NEWCO contained in Section 6
hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by MARINEMAX and NEWCO on or
before the Closing Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by the President or any Vice President of MARINEMAX shall have been
delivered to the STOCKHOLDERS.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
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8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with any
governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which COMPANY deems
it inadvisable to proceed with the transactions contemplated herein.
8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate or
certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall have been afforded the opportunity to enter into an employment agreement
substantially in the form attached hereto as Annex IV.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be taken
on the Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the conditions in this Section 9. As of the Closing Date,
all conditions not satisfied shall be deemed to have been waived, except that no
such waiver shall be deemed to affect the survival of the representations and
warranties of COMPANY and the STOCKHOLDERS contained in Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDERS, and COMPANY as defined in
Section 5 hereof, contained in
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this Agreement shall be true and correct in all material respects as of the
Closing Date and the Effective Time with the same effect as though such
representations and warranties had been made on and as of such date and time;
all of the terms, covenants and conditions of this Agreement to be complied with
or performed by the STOCKHOLDERS and COMPANY on or before the Closing Date or
the Effective Time, as the case may be, shall have been duly performed or
complied with in all material respects; and the STOCKHOLDERS shall have
delivered to MARINEMAX certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by each of the STOCKHOLDERS.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which the
management of MARINEMAX deems it inadvisable to proceed with the transactions
hereunder.
9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a certificate,
dated the Closing Date and signed by the secretary of COMPANY, certifying the
truth and correctness of attached copies of the Charter Documents (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the board of directors and the STOCKHOLDERS approving COMPANY's entering into
this Agreement and the consummation of the transactions contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDERS' RELEASE. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDERS against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDERS,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDERS, (ii) continuing obligations to the
STOCKHOLDERS relating to their employment by COMPANY and (iii) obligations
arising under this Agreement or the transactions contemplated hereby. The
STOCKHOLDER Release to be delivered pursuant to this Section shall be in form
and content as set forth in Annex V hereto.
9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with any
governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of
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MARINEMAX as a result of which MARINEMAX deems it inadvisable to proceed with
the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to MARINEMAX
certificates, dated as of a date no earlier than ten (10) days prior to the
Closing Date, duly issued by the appropriate governmental authority in COMPANY's
and all Acquired Parties' states of incorporation and, unless waived by
MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
9.10 POOLING LETTERS. The STOCKHOLDERS shall each have executed and
delivered a letter agreement in favor of MARINEMAX and NEWCO, in form and
content as set forth in Annex VI attached hereto (the "Pooling Letters"),
pursuant to which each STOCKHOLDER shall agree to hold the MARINEMAX Stock
received by such STOCKHOLDER, for such period of time as is necessary to allow
the Merger to be accounted for as a "pooling-of-interests" under the rules and
regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall enter into an employment agreement effective as of the Effective Time,
substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDERS shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDERS shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. Each STOCKHOLDER shall have delivered to
MARINEMAX a certificate to the effect that he is not a foreign person pursuant
to Section 1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENTS. STOCKHOLDERS shall each have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDERS' GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDERS released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as contemplated
by this Agreement after the Effective Time, MARINEMAX shall not, and shall not
permit any of its subsidiaries, to undertake any act that would jeopardize the
tax-free status or the "pooling-of-interests" accounting
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treatment of the organization set forth herein, including, without limitation,
the retirement or reacquisition, directly or indirectly, of all or part of the
MARINEMAX Stock issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDERS in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDERS shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable periods that end
at or before the Effective Time. Each STOCKHOLDER shall pay or cause to be paid
all Tax liabilities (in excess of all amounts already paid with respect thereto
or properly accrued or reserved with respect thereto on COMPANY Financial
Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate Returns
of, or that include, any Acquired Party for all taxable periods ending after the
Effective Time.
(iii) Each party hereto shall, and shall cause its subsidiaries and
affiliates to, provide to each of the other parties hereto such cooperation and
information as any of them reasonably may request in filing any Return, amended
Return or claim for refund, determining a liability for Taxes or a right to
refund of Taxes or in conducting any audit or other proceeding in respect of
Taxes. Such cooperation and information shall include providing copies of all
relevant portions of relevant Returns, together with relevant accompanying
schedules and relevant work papers, relevant documents relating to rulings or
other determinations by any taxing authority and relevant records concerning the
ownership and tax basis of property, which such party may possess. Each party
shall make its employees reasonably available on a mutually convenient basis at
its cost to provide explanation of any documents or information so provided.
Subject to the preceding sentence, each party required to file Returns pursuant
to this Agreement shall bear all costs of filing such Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and each STOCKHOLDER shall
comply with the tax reporting requirements of Section 1.351-3 of the Treasury
Regulations promulgated under the Code, and treat the transaction as a tax-free
contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons who
are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective Time,
MARINEMAX shall not terminate any health insurance, life insurance or 401(k)
plan in effect at COMPANY until such time as MARINEMAX is able to replace such
plan with a plan that is applicable to MARINEMAX and all of its then existing
subsidiaries, provided that MARINEMAX shall have no obligation to provide
replacement plans that have the same terms and provisions as the existing plans,
provided, further, that any new health insurance plan shall provide for coverage
for preexisting conditions. At the Effective
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Time, the employees of COMPANY will be the employees of the Surviving
Corporation provided that this provision is for purposes of clarifying that the
Merger, in and of itself, will not have any impact on the employment status of
any employee and provided, further that this provision shall not in any way
limit the management rights of the Surviving Corporation or MARINEMAX to assess
work force needs and make appropriate adjustments as necessary or desirable
within their discretion (subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare or
pay any dividends or distributions to any of the STOCKHOLDERS, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of combined operations of COMPANY
and MARINEMAX after giving effect to the Merger and the transactions
contemplated by the Other Agreements, to the end that the STOCKHOLDERS may
thereafter sell the MARINEMAX Stock received in the Merger, without such sale
violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDERS, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS each
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDERS or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDERS or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that it
will indemnify, defend, protect and hold harmless the STOCKHOLDERS at all times
from and after the date of this Agreement until the Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDERS as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDERS may incur due to
MARINEMAX's or NEWCO's failure to be responsible
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for the liabilities and obligations of COMPANY as provided in Section 1 hereof
(except to the extent that MARINEMAX or NEWCO has claims against the
STOCKHOLDERS by reason of such liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter the
"Indemnified Party") has received notice of or has knowledge of any claim by a
person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not settle any criminal
proceeding or agree to any nonmonetary remedy without the prior written consent
of the Indemnified Party, whose consent may be withheld in its sole discretion.
If the Indemnifying Party undertakes to defend or settle, it shall promptly
notify the Indemnified Party of its intention to do so, and the Indemnified
Party shall cooperate with the Indemnifying Party and its counsel in the defense
thereof and in any settlement thereof. Such cooperation shall include, but shall
not be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. All Indemnified Parties shall use the
same counsel, which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a conflict of
interest that prevents counsel for the Indemnifying Party from representing
Indemnified Party, Indemnified Party shall have the right to participate in such
matter through counsel of its own choosing and Indemnifying Party will reimburse
the Indemnified Party for the reasonable expenses of such counsel. After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except (a) as set forth in the preceding sentences, and (b) to the
extent such participation is requested by the Indemnifying Party, in which event
the Indemnified Party shall be reimbursed by the Indemnifying Party for
reasonable additional legal expenses and out-of-pocket expenses. If the
Indemnifying Party desires to accept a final and complete settlement of any
Third Person's claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to such Third Person claim shall be limited to the amount so offered in
settlement by said Third Person. Upon agreement as to a settlement between said
Third Person and the Indemnifying Party, the Indemnifying Party shall, in
exchange for a complete release from the Indemnified Party, promptly (x) in the
case of MARINEMAX being the Indemnifying Party, pay to the Indemnified Party the
amount agreed to in such settlement, and (y) in the case of the STOCKHOLDERS
being the Indemnifying Party, cause the MARINEMAX Stock held in escrow to be
used in such settlement; and the Indemnified Party shall, from that moment on,
bear full responsibility for any additional costs of defense which it
subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party in the manner set
forth above in this Section 11.3 for the amount paid in such settlement and any
other liabilities or expenses incurred by the
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Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person's claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnifying Party, unless the Indemnifying Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDERS until such time as, and
solely to the extent that, the aggregate of all claims that such persons may
have against the STOCKHOLDERS shall exceed the sum of $250,000 (the
"Indemnification Deductible"); and after such Indemnification Deductible amount
has been attained, only claims in excess of such amount shall be indemnified
hereunder. The STOCKHOLDERS shall not assert any claim for indemnification
hereunder against MARINEMAX or NEWCO until such time as, and solely to the
extent that, the aggregate of all claims which the STOCKHOLDERS may have against
MARINEMAX or NEWCO shall exceed the sum of $250,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDERS.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDERS. It is hereby
understood and agreed that STOCKHOLDERS may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
For purposes of calculating the value of the MARINEMAX Stock received by
STOCKHOLDERS, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX,
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NEWCO, COMPANY and the Surviving Corporation at all times, from and after date
of this Agreement until the applicable Expiration Date, for, from and against
all claims, damages, actions, suit, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred on or prior
to the Expiration Date (or thereafter if a claim has been made therefor prior to
such date) by MARINEMAX, NEWCO, COMPANY or the Surviving Corporation as a result
of or arising from: (i) any use, generation, transportation, storage, treatment,
disposal or presence of Hazardous Wastes and/or Hazardous Substances occurring
on or prior to the Effective Time including, without limitation, any waste or
other disposal activities or releases which occurred at a facility on which any
portion of the COMPANY's (or its predecessors') business was conducted, any
waste or other disposal activities or releases which occurred off of any such
facility with regard to wastes and other substances generated on such facility,
and any waste or other disposal activities or releases which occurred on real
estate at any time whether or not the COMPANY (or its predecessors) owned or
leased such real estate at the time such waste or other disposal activities or
releases were engaged in, and whether or not the COMPANY performed such waste or
other disposal activities or releases; (ii) any past, present or threatened
spills, discharges, leaks, emissions, injections, escapes, dumping, pumping,
pouring, emptying, leaching, leaking, disposing or any releases or threatened
releases as defined now or in the future under any applicable Environmental Law,
to surface waters, groundwaters, soil, ambient air or otherwise into the
environment occurring as a result of any activities of the COMPANY (or its
predecessors') on or prior to the Effective Time, including, without limitation,
both those releases or incidents involving potential or actual environmental
contamination which required notification or reporting to appropriate federal,
state or local officials or agencies, or clean-up or remedial activities and
those releases or incidents which occurred prior to the effective date of any
requirements imposing such notification or reporting obligations or clean-up or
remedial activities, but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such requirements; (iii)
the exposure of and resulting consequences to any persons, including, without
limitation, employees of the COMPANY, to any mineral, chemical or industrial
product, raw material intermediate, by-product or Hazardous Waste and/or
Hazardous Substance created, stored, treated, generated, processed, handled or
originating at a facility at which the COMPANY (or any of its predecessors)
conducted business on or prior to the Effective Time or otherwise used by the
COMPANY (or any of its predecessors) in the conduct of its or their business;
(iv) any violations or claim of violations by the COMPANY, or pertaining to its
properties, of Environmental Laws, occupational or employee health and safety
laws or otherwise arising out of or under such laws, which violations or alleged
violations occurred prior to the Effective Time; (v) any and all actions,
failures to act and negligence in monitoring, maintaining and upkeep of on-site
generation, storage, treatment, transportation and disposal operations on or
prior to the Effective Time; (vi) any installation, use, removal, maintenance or
monitoring of storage tanks or related facilities on or prior to the Effective
Time; or (vii) any violations, fees, obligations or failures to comply with any
and all Environmental Laws, permit requirements, authorizations, orders and
other administrative or legal directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time solely:
(i) by mutual consent of the boards of directors of MARINEMAX, NEWCO
and COMPANY;
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(ii) by the STOCKHOLDERS or COMPANY (acting through its board of
directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
(iii) by the STOCKHOLDERS or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDERS or
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDERS will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any business
that sells, rents and leases and boating, nautical or other similar lifestyle
entertainment products and services, in direct competition with MARINEMAX or any
of the subsidiaries thereof, within 100 mile radius of where COMPANY, any
Acquired Party, MARINEMAX or any of its or their existing or future subsidiaries
conduct business (the "Territory");
(ii) call upon any person who is or becomes during the Restricted
Period an employee of MARINEMAX (including the subsidiaries thereof) in a sales
representative or managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of MARINEMAX (including
the subsidiaries thereof), provided that each STOCKHOLDER shall be permitted to
call upon and hire any member of his or her immediate family;
(iii) call upon any person or entity that is, or becomes during the
Restricted Period, or which has been, within one (1) year prior to the Effective
Time, a customer of MARINEMAX (including the subsidiaries thereof), of COMPANY,
any Acquired Party or of any of the Other Founding
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<PAGE> 42
Companies for the purpose of soliciting or selling products or services in
direct competition with MARINEMAX within the Territory;
(iv) call upon any prospective acquisition candidate, on any
STOCKHOLDERS own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
such STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary thereof) or for which, to the best knowledge and belief of such
STOCKHOLDER after due inquiry, MARINEMAX (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever except to the extent that
COMPANY or any Acquired Party has in the past disclosed such information to the
public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit any STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, each STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDERS in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13 shall
be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of each STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants
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<PAGE> 43
contained in Section 13 shall not be affected by any breach of any other
provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDERS hereby agree that this
covenant is a material and substantial part of this transaction.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDERS. The STOCKHOLDERS recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
businesses. The STOCKHOLDERS each agree that they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of MARINEMAX, (b) following the Closing, such information may be
disclosed by the STOCKHOLDERS as is required in the course of performing their
duties for MARINEMAX or the Surviving Corporation, and (c) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 14.1, unless (i) such information
becomes known to the public generally through no fault of the STOCKHOLDERS, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), the STOCKHOLDERS shall, if possible, give prior written notice
thereof to MARINEMAX and provide MARINEMAX with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any of the
STOCKHOLDERS of the provisions of this Section, MARINEMAX shall be entitled to
an injunction restraining such STOCKHOLDERS from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting MARINEMAX from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, the
STOCKHOLDERS shall have none of the above-mentioned restrictions on their
ability to disseminate confidential information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and
acknowledge that they had in the past and currently have access to certain
confidential information of COMPANY, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's
business. MARINEMAX and NEWCO agree that, prior to the Closing, or if the
transactions contemplated by this Agreement are not consummated, they will not
disclose such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except (a) to
authorized representatives of COMPANY, (b) to counsel and other advisers,
provided that such advisers (other than counsel) agree to the confidentiality
provisions of this Section 14.1, (c) to the Other Founding Companies and their
representatives pursuant to Section 7.1(a), unless (i) such information becomes
known to the public generally through no fault of MARINEMAX or NEWCO, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), MARINEMAX and NEWCO shall, if possible, give prior written
notice thereof to COMPANY and the STOCKHOLDERS and provide COMPANY and the
STOCKHOLDERS with the opportunity to contest such disclosure, or
38
<PAGE> 44
(iii) the disclosing party reasonably believes that such disclosure is required
in connection with the defense of a lawsuit against the disclosing party, and
(d) to the public to the extent necessary or advisable in connection with
applicable securities laws. In the event of a breach or threatened breach by
MARINEMAX or NEWCO of the provisions of this Section, COMPANY and the
STOCKHOLDERS shall be entitled to an injunction restraining MARINEMAX and NEWCO
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting COMPANY and the STOCKHOLDERS from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14 shall
survive the termination of this Agreement for a period of five (5) years from
the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDERS shall not sell, assign, exchange,
transfer, encumber, pledge, distribute, appoint, or otherwise dispose of any
shares of MARINEMAX Stock received by the STOCKHOLDERS in the Merger in
violation of the provisions of the Pooling Letters referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY OF
THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICES OF THIS CORPORATION.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDERS acknowledge that the shares of
MARINEMAX Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement
have not been and will not be registered under the Act and therefore may not be
resold without compliance with the Act. The MARINEMAX Stock to be acquired by
such STOCKHOLDERS pursuant to this Agreement is being acquired solely for their
own respective accounts, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution. The STOCKHOLDERS covenant, warrant and represent that none
of the shares of MARINEMAX Stock issued to such STOCKHOLDERS will be offered,
sold, assigned, pledged, hypothecated, transferred or otherwise disposed of
except after full compliance with all of the applicable provisions of the Act
and the rules and regulations of the SEC. The certificates evidencing the
MARINEMAX Stock delivered to the
39
<PAGE> 45
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND
ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS. THE SHARES
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR THE RECEIPT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS
NOT REQUIRED.
16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDERS are able to bear the
economic risk of an investment in the MARINEMAX Stock to be acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment and
have such knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of the proposed investment in the
MARINEMAX Stock. The STOCKHOLDERS have had an adequate opportunity to ask
questions and receive answers from the officers of MARINEMAX concerning any and
all matters relating to the transactions described herein including, without
limitation, the background and experience of the current and proposed officers
of MARINEMAX, the business, operations and financial condition of the Other
Founding Companies, and any plans for additional acquisitions and the like. The
STOCKHOLDERS have asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to their satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDERS, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
MARINEMAX, and the heirs and legal representatives of the STOCKHOLDERS.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and annexes
attached hereto) and the documents delivered pursuant hereto constitute the
entire agreement and understanding among the STOCKHOLDERS, COMPANY, NEWCO and
MARINEMAX and supersede any prior agreement and understanding relating to the
subject matter of this Agreement. This Agreement, upon execution, constitutes a
valid and binding agreement of the parties hereto enforceable in accordance with
its terms and may be modified or amended only by a written instrument executed
by the
40
<PAGE> 46
STOCKHOLDERS, COMPANY, NEWCO and MARINEMAX, acting through their respective
officers, duly authorized by their respective Boards of Directors.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each party
represents and warrants that it employed no broker or agent in connection with
this transaction and agrees to indemnify the other parties hereto against all
loss, cost, damages or expense arising out of claims for fees or commission of
brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated shall
be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. Each STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each STOCKHOLDER acknowledges that he or she, and not COMPANY or
MARINEMAX, will pay all taxes due upon receipt of the consideration payable
pursuant to Section 2 hereof, and will assume all tax risks and liabilities of
such STOCKHOLDER in connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted hereunder
shall be in writing and may be given by depositing the same in United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person to
an officer or agent of such party.
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
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<PAGE> 47
(b) If to the STOCKHOLDERS, addressed to them at:
Stockholder 1:
William H. McGill, Jr.
423 St. Andrews Drive
Bellaire, Florida 33756
Stockholder 2:
William Brett McGill
18144 Oakdale Road
Odessa, Florida 33556
Stockholder 3:
Edward A. Russell
17913 Spencer Road
Odessa, Florida 33556
Stockholder 4:
Scott St. Angelo
1280 Glendale Drive
Dunedin, Florida 34698
Stockholder 5:
Thomas A. George and Theresa C. George
2851 Pheasant Run
Clearwater, Florida 33759
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
Gulfwind USA, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
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<PAGE> 48
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any term
of this Agreement shall be deemed exclusive but each shall be cumulative with
all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDERS who hold or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the
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<PAGE> 49
parties hereto, any other person receiving MARINEMAX Stock in connection with
the Merger and each future holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT. This
Agreement may be executed by facsimile, and shall be deemed effectively executed
upon the receipt by all parties hereto of the last page of this Agreement duly
executed by the other parties hereto. Each party to this Agreement agrees to
deliver six (6) original, inked and signed copies of the execution page of this
Agreement within four (4) days of faxing the executed last page hereof.
[Remainder of Page Intentionally Left Blank]
44
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
STOCKHOLDERS:
MARINEMAX:
MARINEMAX, INC., a Delaware corporation /s/ William H. McGill, Jr.
----------------------------
William H. McGill, Jr.
By: /s/
- --------------------------------------- /s/ William Brett McGill
Name: ----------------------------
- --------------------------------------- William Brett McGill
Title:
- ---------------------------------------
NEWCO: /s/ Edward A. Russell
----------------------------
Edward A. Russell
GULFWIND USA ACQUISITION CORP., a
Delaware corporation /s/ Scott St. Angelo
----------------------------
Scott St. Angelo
By: /s/
- ---------------------------------------
Name: Thomas A. George & Theresa C.
- --------------------------------------- George, as husband and wife
Title:
- ---------------------------------------
COMPANY: /s/ Thomas A. George
----------------------------
Thomas A. George
GULFWIND USA, INC., a Florida corporation
By: /s/ /s/ Theresa C. George
- --------------------------------------- ----------------------------
Name: Theresa C. George
- ---------------------------------------
Title:
- ---------------------------------------
45
<PAGE> 51
CONSENT OF SPOUSE
The undersigned spouse of William H. McGill, Jr., who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind USA Acquisition Corp., a Delaware corporation with and into Gulfwind
USA, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by William H. McGill, Jr..
The undersigned further agrees that in the event of the death of William
H. McGill, Jr., the dissolution of their marriage, or any occurrence
contemplated by the Agreement that gives rise to any liability or obligation of
William H. McGill, Jr., the provisions of the Agreement shall be binding upon
her to the extent of any community property she may now have or hereafter
acquire, and any and all separate property that she hereafter acquires which
arises (directly or indirectly) from any consideration given to William H.
McGill, Jr. pursuant to the Agreement or any agreement executed in connection
thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/____________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
___________________________________________
Notary Public
46
<PAGE> 52
CONSENT OF SPOUSE
The undersigned spouse of William Brett McGill, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind USA Acquisition Corp., a Delaware corporation with and into Gulfwind
USA, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by William Brett McGill.
The undersigned further agrees that in the event of the death of William
Brett McGill, the dissolution of their marriage, or any occurrence contemplated
by the Agreement that gives rise to any liability or obligation of William Brett
McGill, the provisions of the Agreement shall be binding upon her to the extent
of any community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to William Brett McGill pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/______________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
____________________________________________
Notary Public
47
<PAGE> 53
CONSENT OF SPOUSE
The undersigned spouse of Edward A. Russell, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind USA Acquisition Corp., a Delaware corporation with and into Gulfwind
USA, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by Edward A. Russell.
The undersigned further agrees that in the event of the death of Edward A.
Russell, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Edward A.
Russell, the provisions of the Agreement shall be binding upon her to the extent
of any community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Edward A. Russell pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
___________________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
___________________________________________
Notary Public
48
<PAGE> 54
CONSENT OF SPOUSE
The undersigned spouse of Scott St. Angelo, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind USA Acquisition Corp., a Delaware corporation with and into Gulfwind
USA, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by Scott St. Angelo.
The undersigned further agrees that in the event of the death of Scott St.
Angelo, the dissolution of their marriage, or any occurrence contemplated by the
Agreement that gives rise to any liability or obligation of Scott St. Angelo,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Scott St. Angelo pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
_________________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
___________________________________________
Notary Public
49
<PAGE> 1
EXHIBIT 10.1 (d)
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
GULFWIND SOUTH ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
GULFWIND SOUTH, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. THE MERGER.................................................................................... 4
1.1 Delivery of Filing of Articles of Merger............................................. 4
1.2 Effective Time....................................................................... 5
1.3 Articles/Certificate of Incorporation, Bylaws and Board of Directors of
Surviving Corporation................................................................ 5
1.4 Certain Information With Respect to the Capital Stock of COMPANY,
MARINEMAX and NEWCO.................................................................. 5
1.5 Effect of Merger..................................................................... 6
1.6 Accounting Treatment................................................................. 6
2. CONVERSION AND CANCELLATION OF STOCK.......................................................... 6
2.1 Manner of Conversion and Cancellation................................................ 6
3. DELIVERY OF MERGER CONSIDERATION.............................................................. 7
3.1 Time and Manner of Delivery.......................................................... 7
3.2 Surrender of COMPANY Stock........................................................... 7
3.3 Escrow of Portion of MARINEMAX Stock................................................. 7
4. CLOSING....................................................................................... 8
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDERS.................................................................................. 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDERS......................................................................... 8
5.1 Due Organization..................................................................... 8
5.2 Authorization........................................................................ 9
5.3 Capital Stock of COMPANY............................................................. 9
5.4 Transactions in Capital Stock, Organization Accounting............................... 9
5.5 No Bonus Shares...................................................................... 9
5.6 Subsidiaries......................................................................... 10
5.7 Predecessor Status; Etc.............................................................. 10
5.8 Spin-off by COMPANY.................................................................. 10
5.9 Financial Statements................................................................. 10
5.10 Liabilities and Obligations.......................................................... 10
5.11 Accounts and Notes Receivable........................................................ 11
5.12 Permits and Intangibles.............................................................. 11
5.13 Environmental Matters................................................................ 11
5.14 Personal Property.................................................................... 12
5.15 Significant Customers; Material Contracts and Commitments............................ 12
5.16 Real Property........................................................................ 13
5.17 Insurance............................................................................ 14
5.18 Compensation; Employment Agreements; Organized Labor Matters......................... 14
5.19 Employee Plans....................................................................... 15
5.20 Compliance with ERISA................................................................ 15
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
5.21 Conformity with Law; Litigation...................................................... 16
5.22 Taxes................................................................................ 17
5.23 No Violations........................................................................ 17
5.24 Government Contracts................................................................. 17
5.25 Absence of Changes................................................................... 18
5.26 Deposit Accounts; Powers of Attorney................................................. 19
5.27 Validity of Obligations.............................................................. 19
5.28 Relations with Governments........................................................... 19
5.29 Prohibited Activities................................................................ 19
5.30 Disclosure........................................................................... 19
(B) Representations and Warranties of STOCKHOLDERS....................................... 20
5.31 Authority: Ownership................................................................. 20
5.32 Preemptive Rights.................................................................... 20
5.33 No Intention to Dispose of MARINEMAX Stock........................................... 20
6. REPRESENTATIONS OF MARINEMAX AND NEWCO........................................................ 20
6.1 Due Organization..................................................................... 21
6.2 Authorization........................................................................ 21
6.3 Capital Stock of MARINEMAX and NEWCO................................................. 21
6.4 Transactions in Capital Stock; Organization Accounting............................... 21
6.5 Subsidiaries......................................................................... 21
6.6 Financial Statements................................................................. 22
6.7 [Intentionally Deleted].............................................................. 22
6.8 Validity of Obligations.............................................................. 22
6.9 MARINEMAX Stock...................................................................... 22
6.10 Disclosure........................................................................... 22
6.11 No Undisclosed Agreements............................................................ 22
7. COVENANTS PRIOR TO CLOSING.................................................................... 22
7.1 Access and Cooperation; Due Diligence................................................ 22
7.2 Conduct of Business Pending the Merger............................................... 23
7.3 Prohibited Activities................................................................ 24
7.4 [Intentionally Deleted].............................................................. 25
7.5 [Intentionally Deleted.]............................................................. 25
7.6 Agreements........................................................................... 25
7.7 Notification of Certain Matters...................................................... 25
7.8 Delivery of Schedules; Amendment of Schedules........................................ 25
7.9 [Intentionally Deleted].............................................................. 26
7.10 Final Financial Statements........................................................... 26
7.11 Further Assurances................................................................... 27
7.12 [Intentionally Deleted].............................................................. 27
7.13 Compliance with the Hart-Scott Act................................................... 27
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
AND COMPANY................................................................................... 27
8.1 Representations and Warranties; Performance of Obligations........................... 27
8.2 Satisfaction......................................................................... 27
8.3 No Litigation........................................................................ 28
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
8.4 [Intentionally Deleted].............................................................. 28
8.5 Consents and Approvals............................................................... 28
8.6 Good Standing Certificates........................................................... 28
8.7 No Material Adverse Change........................................................... 28
8.8 [Intentionally Deleted].............................................................. 28
8.9 Secretary's Certificate.............................................................. 28
8.10 Employment Agreements................................................................ 28
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO......................................................................................... 28
9.1 Representations and Warranties; Performance of Obligations........................... 28
9.2 No Litigation........................................................................ 29
9.3 Secretary's Certificate.............................................................. 29
9.4 No Material Adverse Effect........................................................... 29
9.5 STOCKHOLDERS' Release................................................................ 29
9.6 Satisfaction......................................................................... 29
9.7 [Intentionally Deleted].............................................................. 29
9.8 Consents and Approvals............................................................... 29
9.9 Good Standing Certificates........................................................... 30
9.10 Pooling Letters...................................................................... 30
9.11 Employment Agreements................................................................ 30
9.12 Specific Indemnification Agreement................................................... 30
9.13 FIRPTA Certificate................................................................... 30
9.14 Investment Agreements................................................................ 30
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER
CLOSING....................................................................................... 30
10.1 Assumption of STOCKHOLDERS' Guarantees............................................... 30
10.2 Preservation of Tax and Accounting Treatment......................................... 30
10.3 Preparation and Filing of Tax Returns................................................ 31
10.4 Directors and Officers of the Surviving Corporation.................................. 31
10.5 Preservation of Employee Benefit Plans............................................... 31
10.6 Dividends............................................................................ 32
10.7 Distribution of Financial Statements................................................. 32
11. INDEMNIFICATION............................................................................... 32
11.1 General Indemnification by the STOCKHOLDERS.......................................... 32
11.2 Indemnification by MARINEMAX......................................................... 32
11.3 Third Person Claims.................................................................. 33
11.4 Limitations on Indemnification....................................................... 34
11.5 Environmental Indemnification by the STOCKHOLDERS.................................... 34
12. TERMINATION OF AGREEMENT...................................................................... 35
12.1 Termination.......................................................................... 35
12.2 Liabilities in Event of Termination.................................................. 36
13. NONCOMPETITION................................................................................ 36
13.1 Prohibited Activities................................................................ 36
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
13.2 Damages.............................................................................. 37
13.3 Reasonable Restraint................................................................. 37
13.4 Severability; Reformation............................................................ 37
13.5 Independent Covenant................................................................. 37
13.6 Materiality.......................................................................... 38
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION..................................................... 38
14.1 STOCKHOLDERS......................................................................... 38
14.2 MARINEMAX AND NEWCO.................................................................. 38
14.3 Damages.............................................................................. 39
14.4 Survival............................................................................. 39
15. TRANSFER RESTRICTIONS......................................................................... 39
15.1 Transfer Restrictions................................................................ 39
16. FEDERAL SECURITIES ACT REPRESENTATIONS........................................................ 39
16.1 Compliance with Law.................................................................. 39
16.2 Economic Risk; Sophistication........................................................ 40
17. GENERAL....................................................................................... 40
17.1 Cooperation.......................................................................... 40
17.2 Successors and Assigns............................................................... 40
17.3 Entire Agreement..................................................................... 40
17.4 Counterparts......................................................................... 41
17.5 Brokers and Agents................................................................... 41
17.6 Expenses............................................................................. 41
17.7 Notices.............................................................................. 41
17.8 Governing Law........................................................................ 43
17.9 Survival of Representations and Warranties........................................... 43
17.10 Exercise of Rights and Remedies...................................................... 43
17.11 Time................................................................................. 43
17.12 Reformation and Severability......................................................... 43
17.13 Remedies Cumulative.................................................................. 43
17.14 Captions............................................................................. 43
17.15 Amendments and Waivers............................................................... 43
17.16 Execution by Facsimile; Delivery of Original Signed Agreement........................ 44
</TABLE>
<PAGE> 6
AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as
of the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), GULFWIND SOUTH ACQUISITION CORP., a Delaware
corporation ("NEWCO"), GULFWIND SOUTH, INC., a Florida corporation (the
"COMPANY"), BARRY MARSHALL ("Stockholder 1"), DANA MARSHALL KING ("Stockholder
2"), JERRY MARSHALL ("Stockholder 3"), and GERALD PEDIGO ("Stockholder
4")(Stockholder 1, Stockholder 2, Stockholder 3, and Stockholder 4 may be
referred to individually herein as a "STOCKHOLDER" and collectively as the
"STOCKHOLDERS").
WHEREAS, NEWCO is a corporation duly organized and existing under the
laws of the State of Delaware, having been incorporated solely for the purpose
of completing the transactions set forth herein, and is a wholly-owned
subsidiary of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and Florida;
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the
"MARINEMAX Plan of Organization," and the parties intend that each merger
comprising the MARINEMAX Plan of Organization be accounted for as a
pooling-of-interests for accounting purposes;
WHEREAS, the STOCKHOLDERS and the Boards of Directors and the
stockholders of MARINEMAX, NEWCO, each of the Other Founding Companies and each
of the subsidiaries of MARINEMAX that are parties to the Other Agreements have
approved and adopted the MARINEMAX Plan of Organization as an integrated plan
pursuant to which the STOCKHOLDERS and the stockholders of each of the Other
Founding Companies will transfer the capital stock of each of the Founding
Companies to MARINEMAX and the STOCKHOLDERS and the stockholders of each of the
Other Founding Companies as a tax-free transfer of property under Section 351 of
the Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
<PAGE> 7
WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct
subsidiaries of COMPANY.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of
Merger with respect to the Merger substantially in the forms attached as Annex I
hereto or with such other changes therein as may be required by applicable state
laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section
5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second
recital of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
"Escrow and Security Agreement" has the meaning set forth in Section
3.3.
2
<PAGE> 8
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in
Section 7.10.
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona
corporation,
"GAAP" shall mean generally accepted accounting principles in the
United States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the
fourth recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the State of
Delaware and other applicable state laws.
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of
NEWCO.
"Other Agreements" has the meaning set forth in the third recital of
this Agreement.
3
<PAGE> 9
"Other Founding Companies" means all of the Founding Companies other
than COMPANY.
"Pooling Letters" shall have the meaning set forth in Section 9.10.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be
provided within fifteen (15) days from the execution of this Agreement (as
amended in compliance with Section 7.8 hereof), which reference the relevant
sections of this Agreement, on which parties hereto disclose information as part
of their respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in
the Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause the Articles of Merger to be signed, verified and filed
with the Secretary of State of the State of Delaware and the Secretary of State
of the State of Florida and stamped receipt copies of each such filing to be
delivered to MARINEMAX at the Effective Time.
4
<PAGE> 10
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with
and into COMPANY in accordance with the Articles of Merger, the separate
existence of NEWCO shall cease, COMPANY shall be the surviving party in the
Merger. The Merger will be effected in a single transaction.
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF
DIRECTORS OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then
in effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the
Bylaws of the Surviving Corporation; and subsequent to the Effective Time, such
Bylaws shall be the Bylaws of the Surviving Corporation until they shall
thereafter be duly amended;
(iii) the Board of Directors of the Surviving Corporation
shall consist of the persons who are on the Board of Directors of COMPANY
immediately prior to the Effective Time, provided that William H. McGill, Jr.
shall be elected as a director of the Surviving Corporation effective as of the
Effective Time; the Board of Directors of the Surviving Corporation shall hold
office subject to the provisions of the laws of the State of Florida and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation in
the same capacity or capacities, and effective at the Effective Time William H.
McGill, Jr. shall be appointed as vice president of the Surviving Corporation
and Michael H. McLamb, Treasurer and Assistant Secretary, shall be appointed as
an assistant secretary of the Surviving Corporation, each of such officers to
serve, subject to the provisions of the Articles/Certificate of Incorporation
and Bylaws of the Surviving Corporation, until his successor is duly elected and
qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and
outstanding capital stock of COMPANY is as set forth on Schedule 5.3 hereto;
(ii) immediately prior to the Effective Time, the authorized
capital stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
(iii) as of the date of this Agreement, the authorized capital
stock of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock, of which
One (1) share is issued and outstanding.
5
<PAGE> 11
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of Florida. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate existence of NEWCO shall
cease and, in accordance with the terms of this Agreement, the Surviving
Corporation shall possess all of the rights, privileges, immunities and
franchises, of a public, as well as of a private, nature, and all property,
real, personal and mixed, and all debts due on all accounts whatsoever,
including, without limitation, subscriptions to shares, and all taxes, including
those due and owing and those accrued, and all other choses in action, and all
and every other interest of or belonging to or due to COMPANY, and NEWCO shall
be taken and deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all of the respective properties,
rights and privileges, powers and franchises and all and every other interest of
COMPANY and NEWCO shall be thereafter be the property of the Surviving
Corporation as they were of COMPANY and NEWCO prior to the Merger; the title to
any real estate, or interest therein, whether by deed or otherwise, under the
laws of the state of incorporation vested in COMPANY and NEWCO, shall not revert
or be in any way impaired by reason of the Merger; and the assets, liabilities,
reserves, and accounts of COMPANY shall be taken up on the books of the
Surviving Corporation at the amounts at which they respectively were carried on
the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
As of the Effective Time:
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, automatically shall be deemed to
represent the right to receive the number of shares of MARINEMAX Stock set forth
on Annex II hereto with respect to such holder;
6
<PAGE> 12
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
(iii) each share of NEWCO Stock issued and outstanding
immediately prior to the Effective Time, shall, by virtue of the Merger and
without any action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDERS pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letters referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDERS shall be fully exercisable by
the STOCKHOLDERS and the STOCKHOLDERS shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter
as reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDERS shall receive the respective number of shares of
MARINEMAX Stock as set forth on Annex II hereto; provided, however, that the
STOCKHOLDERS shall have previously surrendered all of COMPANY Stock to MARINEMAX
as provided in Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDERS shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDERS, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDERS' expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDERS agree promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, each of the
STOCKHOLDERS agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to each such STOCKHOLDER pursuant to this
Agreement for purposes of securing the obligations, representations and
warranties of the STOCKHOLDERS arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow and
security agreement in the form attached hereto as ANNEX III (the "Escrow and
Security Agreement"). STOCKHOLDERS each agree to execute and deliver the Escrow
and Security Agreement at the Closing effective at the Effective Time.
7
<PAGE> 13
4. CLOSING
At or prior to the Closing, the parties shall take all actions
necessary to prepare to (i) effect the Merger (including, without limitation, if
permitted by applicable state law, the filing with the appropriate state
authorities of the Articles of Merger specifying the Effective Time as the
delayed effective time of the Merger), and (ii) effect the conversion and
delivery of shares referred to in Section 3 hereof; provided, however, that such
actions shall not include the actual completion of the Merger or the conversion
and delivery of the shares referred to in Section 3 hereof, each of which
actions shall be deemed taken at the Effective Time as herein provided. In the
event that the conditions precedent contained in and this Agreement are not
satisfied or waived and this Agreement is thereby terminated, MARINEMAX hereby
covenants and agrees to do all things required by the Delaware GCL and by the
applicable corporate laws of the State of Florida in order to stop or rescind
the Merger effected by the filing of the Articles of Merger as described in this
Section. The taking of the actions described in clauses (i) and (ii) above shall
take place at a closing (the "Closing") to be held following the satisfaction or
waiver of the conditions precedent set forth in Section 5, 8 and 9 hereof on
such date as MARINEMAX shall determine (the "Closing Date") at the offices of
O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback
Road, Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles
of Merger shall be or shall have been filed with the appropriate state
authorities so that the Merger shall be effective at the Effective Time, and (y)
the parties shall be deemed to have consummated the transactions contemplated by
this Agreement, including, without limitation, the conversion and delivery of
shares, which the STOCKHOLDERS shall be entitled to receive pursuant to the
Merger referred to in Section 3 hereof. The time at which the actions described
in the preceding clauses (x) and (y) occur shall be referred to as the
"Effective Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS.
Each of COMPANY and the STOCKHOLDERS represents and warrants that all of the
following representations and warranties in this Section 5(A) are true, complete
and correct at the date of this Agreement and, subject to Section 7.8 hereof,
shall be true, complete, and correct at the time of Closing and at the Effective
Time and that such representations and warranties shall survive the Closing and
the Effective Time for a period of the earlier of (i) the date of the first
audit of financial statements of the Surviving Corporation containing combined
operations of MARINEMAX and the Surviving Corporation for those representations
and warranties set forth within Section 5(A) which representations and
warranties specifically deal with items that would be expected to be encountered
in the audit process, or (ii) twelve (12) months, the last day of such period
being the "Expiration Date". For purposes of this Section 5(A), the term COMPANY
shall mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, and has
the requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing of its properties makes such qualification necessary, except (i) as set
forth on Schedule 5.1 or (ii) where the failure to be so authorized or qualified
would not have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise), of COMPANY taken as a
whole (as used herein with respect to COMPANY, or with respect to any person, a
"Material Adverse Effect").
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Schedule 5.1 sets forth the jurisdiction in which COMPANY is incorporated and
contains a list of all jurisdictions in which COMPANY is authorized or qualified
to do business. True, complete and correct copies of the Articles/Certificate of
Incorporation and Bylaws, each as amended, of COMPANY (the "Charter Documents")
are attached hereto in Schedule 5.1. The stock records of COMPANY, as heretofore
made available to MARINEMAX, are correct and complete in all material respects.
There are no minutes in the possession of COMPANY or the STOCKHOLDERS which have
not been supplied to MARINEMAX, and all of such minutes are correct and complete
in all respects. The most recent minutes of COMPANY, which are dated no earlier
than ten (10) business days prior to the date hereof, affirm and ratify all
prior acts of COMPANY, and of its officers and directors on behalf and for the
benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this
Agreement have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDERS and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY
is as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDERS in the amounts set forth
in Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDERS are the
sole stockholders of COMPANY. Except as disclosed in Schedule 5.3 hereto, each
STOCKHOLDER has at all times during the two (2) year period immediately
preceding the date hereof owned or maintained sole equitable and beneficial
interest in all of the issued and outstanding shares of the capital stock of
COMPANY as to which such STOCKHOLDER is the registered holder, as set forth in
Schedule 5.3 hereto. All of the issued and outstanding shares of the capital
stock of COMPANY have been duly authorized and validly issued, are fully paid
and nonassessable, are owned of record and beneficially by the STOCKHOLDERS and
further, such shares were offered, issued, sold and delivered by COMPANY in
compliance with all applicable state and federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY
Stock since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all stock option or stock purchase plans,
including, without limitation, a list of all outstanding options, warrants or
other rights to acquire shares of COMPANY's stock.
5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
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5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which any STOCKHOLDER acquired his or her
stock in any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been,
within such period of time, a subsidiary or division of another corporation or a
part of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the year ended December 31, 1996 and for the nine month period ended
September 30, 1997. COMPANY Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated and for the periods prior thereto (except as noted thereon or on
Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance Sheets as
of December 31, 1996 and September 30, 1997 each present fairly in all material
respects the financial position of COMPANY as of the dates indicated thereon,
and COMPANY's Statements of Operations, Shareholders' Equity and Cash Flows
referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance Sheet Date, COMPANY has not incurred any material liabilities of any
kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. COMPANY has also delivered to MARINEMAX on Schedule
5.10, in the case of those contingent liabilities related to pending or
threatened litigation, or other liabilities incurred under the agreements listed
pursuant to Section 5.10(ii) which are not fixed or otherwise accrued or
reserved, a good faith and reasonable estimate of the maximum amount which
COMPANY reasonably expects will be payable. For each such contingent liability
or liability for which the amount is not fixed or is contested, COMPANY has
provided to MARINEMAX the following information:
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(i) a summary description of the liability together with
the following:
(a) copies of all relevant documentation
relating thereto; and
(b) amounts claimed and any other action or
relief sought;
(ii) the name of each court or agency before which such
claim, suit or proceeding is pending;
(iii) the date such claim, suit or proceeding was
instituted; and
(iv) a good faith and reasonable estimate of the maximum
amount, if any, which is likely to become payable with respect to each such
liability. If no estimate is provided, the estimate shall for purposes of this
Agreement be deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX
a true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDERS. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all
licenses, franchises, permits and authorizations (governmental or otherwise) the
absence of any of which could have a Material Adverse Effect on COMPANY's
business, including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDERS after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew any such license, franchise, permit or authorization. COMPANY has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in the licenses, franchises,
permits and authorizations listed on Schedules 5.12 and 5.13 and is not in
violation of any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on COMPANY. Except as specifically
provided in Schedule 5.12, the transactions contemplated by this Agreement will
not result in a default under or a breach or violation of, or adversely affect
the rights and benefits afforded to COMPANY by, any such licenses, franchises,
permits or authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with
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and is in compliance with all federal, state, local and foreign statutes (civil
and criminal), laws, ordinances, regulations, rules, notices, permits,
judgments, orders and decrees applicable to COMPANY or any of its properties,
assets, operations and businesses relating to environmental protection
(collectively "Environmental Laws") including, without limitation, Environmental
Laws relating to air, water, land and the generation, storage, use, handling,
transportation, treatment or disposal of Hazardous Wastes and Hazardous
Substances including petroleum and petroleum products (as such terms are defined
in any applicable Environmental Law); (ii) COMPANY has obtained and adhered to
all necessary permits and other approvals necessary to treat, transport, store,
dispose of and otherwise handle Hazardous Wastes and Hazardous Substances, a
list of all of such permits and approvals is set forth on Schedule 5.13; (iii)
COMPANY has reported to the appropriate authorities, to the extent required by
all Environmental Laws, all past and present sites owned and operated by COMPANY
where Hazardous Wastes or Hazardous Substances have been treated, stored,
disposed of or otherwise handled; (iv) there have been no releases or threats of
releases (as defined in Environmental Laws) at, from, in or on any property
owned or operated by COMPANY except as permitted by Environmental Laws; (v)
COMPANY and STOCKHOLDERS know of no on-site or off-site location to which
COMPANY has transported or disposed of Hazardous Wastes and Hazardous Substances
or arranged for the transportation of Hazardous Wastes and Hazardous Substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which is reasonably likely to lead to any
claim against COMPANY, MARINEMAX or NEWCO for any clean-up cost, remedial work,
damage to natural resources, property damage or personal injury, including,
without limitation, any claim under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; and (vi) COMPANY has no
contingent liability in connection with any release of any Hazardous Waste or
Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDERS, relatives of the
STOCKHOLDERS, or Affiliates of COMPANY. Except as set forth on Schedule 5.14,
(i) all material personal property used by COMPANY in its business is either
owned by COMPANY or leased by COMPANY pursuant to a lease included on Schedule
5.14, (ii) all of the personal property listed on Schedule 5.14 is in good
working order and condition, ordinary wear and tear excepted, and (iii) all
leases and agreements included on Schedule 5.14 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for purposes of this
Section, means a customer (or person or entity) representing 5% or more of
COMPANY's annual revenues as of the Balance Sheet Date. Except to the extent set
forth on Schedule 5.15, none of COMPANY's significant current customers have
canceled or substantially reduced or, to the best knowledge and belief of
COMPANY and the STOCKHOLDERS after due inquiry, are currently
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attempting or threatening to cancel a contract or substantially reduce
utilization of the services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic alliances and options to purchase land), other than agreements listed
on Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has attached
a true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or used by COMPANY is
zoned for the conduct of COMPANY's business thereon pursuant to the zoning
regulations of the applicable cities, towns, villages or townships. The uses to
which such real property are presently put (including the location of all
buildings and other improvements thereon) comply in all material respects with
the applicable provisions of such zoning regulations without the benefit of the
legal non-conforming use principle of law, or other regulations of such cities,
towns, villages or townships or any other governmental body.
(ii) As to any real property leased, owned or used by COMPANY
there are no material agreements, commitments or understandings pursuant to
which COMPANY, or its successors in interest are required to dedicate any part
of the real property or to grant any easement, water rights, rights-of-way, or
license for ingress and egress or other use in respect to any part of the real
property, whether on account of the development of adjacent or nearby real
property or otherwise. Other than as provided in the leases of the real property
owned by COMPANY and leased to others, except as set forth in Schedule 5.16
hereto, no person has any material easement, license or other right whatsoever
with respect to such real property.
(iii) COMPANY holds good and marketable fee simple title to
the real property identified on Schedule 5.16 hereto as owned by COMPANY and
good leasehold title to the real property identified on Schedule 5.16 as leased
or used by COMPANY, in each case free and clear of all material mortgages,
charges, claims, liens, encumbrances, leases, options to purchase, rights of
first refusal, contracts of sale, easements, reservations and restrictions,
except those matters identified in any title reports set forth in Schedule 5.16.
No part of such lands is affected by any restrictions imposed by any
governmental authority affecting construction of structures thereon or the use
thereof by COMPANY other than building codes and zoning classifications.
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(iv) The STOCKHOLDERS and COMPANY do not, either individually
or collectively, have any knowledge of any fact or condition existing that would
result or could result in the termination or material reduction of the current
access to and from the real property owned or leased or used by COMPANY to
existing public roads and highways, or of any reduction in sewer or other
utility services presently serving such real property. The real property
currently owned, leased or used by COMPANY has direct access to public roads and
highways.
(v) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has received any notice from any insurance company of
any material defects or inadequacies in the real property or any part thereof
that would materially and adversely affect the insurability of the real property
or the premiums for the insurance thereof.
(vi) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has failed to disclose any material conditions of
disrepair or other adverse conditions or defects with respect to the real
property or any portion thereof of which any STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of all leases and
agreements in respect of all real property leased or used by COMPANY are
attached to Schedule 5.16, and an indication as to which such properties, if
any, are currently owned, or were formerly owned, by the STOCKHOLDERS or
affiliates of COMPANY or the STOCKHOLDERS is included in Schedule 5.16, and
except as set forth on Schedule 5.16, all of such leases included on Schedule
5.16 are in full force and effect and constitute valid and binding agreements of
the parties (and their successors) thereto in accordance with their respective
terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1, 1994, no insurance carried by COMPANY has been canceled by the
insurer and COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
COMPANY has delivered to MARINEMAX a true, complete and accurate list (which is
set forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18 and has attached such
copies to Schedule 5.18. Since the Balance Sheet Date, there have been no
increases in the compensation payable or any special bonuses to any officer,
director, key employee or other employee of COMPANY, except ordinary salary
increases implemented on a basis consistent with past practices.
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Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDERS
after due inquiry, threatened, labor dispute involving COMPANY and any group of
its employees nor has COMPANY experienced any labor interruptions over the past
three years. COMPANY believes its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDERS have delivered to MARINEMAX a
true, complete and accurate schedule (Schedule 5.19) showing all employee
benefit plans of COMPANY (including COMPANY's subsidiaries, if any), including,
without limitation, all employment agreements and other agreements or
arrangements containing "golden parachute" or other similar provisions, and
deferred compensation agreements, together with true, complete and correct
copies of such plans, agreements and any trusts related thereto, and
classifications of employees covered thereby existing as of the Balance Sheet
Date. Except for the employee benefit plans, if any, described on Schedule 5.19,
COMPANY (including COMPANY's subsidiaries, if any) does not sponsor, maintain or
contribute to any plan program, fund or arrangement that constitutes an
"employee pension benefit plan," nor does COMPANY have any obligation to
contribute to or accrue or pay any benefits under any deferred compensation or
retirement funding arrangement on behalf of any employee or employees (such as,
for example, and without limitation, any individual retirement account or
annuity, any "excess benefit plan" (within the meaning of Section 3(36) of
ERISA), or any nonqualified deferred compensation arrangement). For the purposes
of this Agreement, the term "employee pension benefit plan" shall have the same
meaning as is given that term in Section 3(2) of ERISA. Neither COMPANY nor any
Acquired Party has sponsored, maintained or contributed to any employee pension
benefit plan other than the plans set forth on Schedule 5.19, nor is COMPANY or
any Acquired Party required to contribute to any retirement plan pursuant to the
provisions of any collective bargaining agreement establishing the terms and
conditions or employment of any of COMPANY's or any Acquired Party's employees.
Neither COMPANY nor any Acquired Party is now, or can as a result of
its past activities become, liable to the Pension Benefit Guaranty Corporation
or to any multiemployer employee pension benefit plan under the provisions of
Title IV of ERISA.
All employee benefit plans listed on Schedule 5.19 and the
administration thereof are in substantial compliance with their terms and all
applicable provisions of ERISA and the regulations issued thereunder, as well as
with all other applicable federal, state and local statutes, ordinances and
regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries
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(including, without limitation, actuarial reports, audits or tax returns) have
been timely filed or distributed, and copies thereof that have been filed for
tax years 1995 and 1996 are included as part of Schedule 5.20 hereof. Neither
STOCKHOLDERS, any such plan listed in Schedule 5.19 or administrator thereof,
nor COMPANY has engaged in any transaction prohibited under the provisions of
Section 4975 of the Code or Section 406 of ERISA or any other breach of
fiduciary responsibility that could subject STOCKHOLDERS, such administrator or
COMPANY to a tax or penalty on prohibited transactions imposed by Section 4975
of the Code or to any liability under Section 502(i) of ERISA. No such plan
listed in Schedule 5.19 has incurred an accumulated finding deficiency, as
defined in Section 412(a) of the Code and Section 302(1) of ERISA; and COMPANY
has not incurred any liability for excise tax or penalty due to the IRS nor any
liability to the Pension Benefit Guaranty Corporation. It is further represented
and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the provisions
of Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section 4062
of ERISA; and
(v) no circumstances exist pursuant to which COMPANY could
have any direct or indirect liability whatsoever (including, without limitation,
any liability to any multiemployer plan or the Pension Benefit Guaranty
Corporation under Title IV of ERISA or to the IRS for any excise tax or
penalty), or be subject to any statutory lien to secure payment of any such
liability with respect to any plan now or heretofore maintained or contributed
to by any entity other than COMPANY that is, or at any time was, a member of a
"controlled group" (as defined in Section 412(n)(6)(B) of the Code) that
includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has conducted and is conducting its
business in substantial compliance with the requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, including all such permits, licenses, orders and other governmental
approvals set forth on Schedules 5.12 and 5.13, and is not in violation of any
of the foregoing which would have a Material Adverse Effect.
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5.22 TAXES. COMPANY (including all the Acquired Parties) has timely
filed all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and including the Balance Sheet Date, and no
notice of any such claim for Taxes, whether pending or threatened, has been
received. All Tax, including, without limitation, all related interest and
penalties (whether or not shown on any tax return) owed by any of the Acquired
Parties, or with respect to any payment made or deemed made by any of the
Acquired Parties has been paid. The amounts shown as accruals for Taxes on
COMPANY Financial Statements are sufficient for the payment of all Taxes of the
kinds indicated (including, without limitation, penalties and interest) for all
fiscal periods ended on or before the Balance Sheet Date. Copies of (i) any tax
examinations; (ii) extensions of statutory limitations; and (iii) the federal,
state and local income tax returns and franchise tax returns of COMPANY
(including the Acquired Parties) for the last three (3) fiscal years, or such
shorter period of time as any of them shall have existed, are attached hereto as
Schedule 5.22. If COMPANY is an S-Corporation, the STOCKHOLDERS made a valid
election under the provisions of Subchapter S of the Code and COMPANY has
appropriately not, within the past five years, been taxed under the provisions
of Subchapter C of the Code. COMPANY has a taxable year ended on September 30
and, if COMPANY is an S-Corporation, COMPANY has not made an election to retain
a fiscal year ending on a date other than December 31 pursuant to Section 444 of
the Code. COMPANY's methods of accounting have not changed in the past five
years. COMPANY is not an investment company as defined in Section 351(e)(1) of
the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter
Document. Neither COMPANY nor, to the best knowledge and belief of COMPANY and
the STOCKHOLDERS after due inquiry, any other party thereto, is in material
default under any lease, instrument, agreement, license or permit set forth on
Schedules 5.12 through 5.19 (inclusive), or any other material agreement to
which it is a party or by which its properties are bound (the "Material
Documents"); and, except as set forth in Schedule 5.23, (a) the rights and
benefits of COMPANY under the Material Documents will not be materially
adversely affected by the transactions contemplated hereby and (b) the execution
of this Agreement and the performance of the obligations hereunder and the
consummation of the transactions contemplated hereby will not result in any
material violation or breach or constitute a default under, any of the terms or
provisions of any of the Material Documents or Charter Documents. Except as set
forth on Schedule 5.23, none of the Material Documents requires notice to, or
the consent or approval of, any governmental agency or other third party with
respect to any of the transactions contemplated hereby in order to remain in
full force and effect, and consummation of the transactions contemplated hereby
will not give rise to any right to termination, cancellation, acceleration or
loss of any right or benefit arising thereunder. Except as set forth on Schedule
5.23, none of the Material Documents prohibits the use or publication by
COMPANY, MARINEMAX or NEWCO of the name of any other party to such Material
Document, and none of the Material Documents prohibits or restricts COMPANY from
freely providing services to any other customer or potential customer of
COMPANY, MARINEMAX, NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24,
COMPANY is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
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5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of COMPANY;
(ii) any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or business of
COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or
distribution in respect of the capital stock of COMPANY, or any direct or
indirect redemption, purchase or other acquisition of any of the capital stock
of COMPANY;
(v) any increase in the compensation, bonus, sales commissions
or fee arrangement payable or to become payable by COMPANY to any of its
officers, directors, the STOCKHOLDERS, employees, consultants or agents, except
for ordinary and customary bonuses and salary increases for employees in
accordance with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed,
or any event or condition of any character, materially and adversely affecting
the business of COMPANY;
(vii) any sale or transfer, or any agreement to sell or
transfer, any material asset, property or right of COMPANY to any person,
including, without limitation, the STOCKHOLDERS or their affiliates;
(viii) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to COMPANY, including, without
limitation, any indebtedness or obligation of any STOCKHOLDERS or any affiliate
thereof;
(ix) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the assets,
properties or rights of COMPANY or requiring consent of any party to the
transfer and assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course
of its business;
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(xiv) any cancellation or termination of a material contract
with a customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by COMPANY
other than in the ordinary course of COMPANY's business.
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which COMPANY
has accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or
have access thereto. Schedule 5.26 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from COMPANY and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by COMPANY and the performance of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors and the
stockholders of COMPANY and this Agreement has been duly and validly authorized
by all necessary corporate action and is a legal, valid, binding and enforceable
obligation of COMPANY. The execution and delivery of this Agreement by each of
the STOCKHOLDERS and the performance of the transactions contemplated herein is
a legal, valid, binding and enforceable obligation of the STOCKHOLDERS and each
of them, each having the appropriate legal capacity to execute and deliver this
Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed $10,000 per year
for each year in which any STOCKHOLDER has been a stockholder of COMPANY,
COMPANY has not made, offered or agreed to offer anything of value to any
governmental, official, political party or candidate for government office, nor
has COMPANY or any STOCKHOLDER otherwise taken any action which would cause
COMPANY to be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, or any law of similar effect. If political contributions made by
COMPANY have exceeded $10,000 per year for each year in which any STOCKHOLDER
has been a stockholder of COMPANY, each contribution in the amount of $5,000 or
more is accurately described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29,
COMPANY has not, between the Balance Sheet Date and the date hereof, taken any
of the actions prohibited by Section 7.3 hereof.
5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDERS in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they
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were made, not misleading; provided, however, that the foregoing does not apply
to statements contained in or omitted from any of such documents made or omitted
in reliance upon information furnished by MARINEMAX. If, prior to the Closing,
COMPANY or the STOCKHOLDERS become aware of any fact or circumstance that would
affect the accuracy of any representation or warranty of COMPANY or the
STOCKHOLDERS in this Agreement in any material respect, COMPANY and the
STOCKHOLDERS shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDERS of their respective
obligations under this Agreement, and, subject to the provisions of Section 7.8,
at the sole option of MARINEMAX, the truth and accuracy of any and all
representations and warranties of COMPANY and/or STOCKHOLDERS, or on behalf of
COMPANY and/or STOCKHOLDERS, made at the date of this Agreement and on the
Closing Date and at the Effective Time, shall be a precondition to the
consummation of the Merger and the other transactions contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each STOCKHOLDER
severally represents and warrants that the representations and warranties set
forth below are true at the date of this Agreement and, subject to Section 7.8
hereof, shall be true at the time of Closing and at the Effective Time, and that
such representations and warranties shall survive for a period of the earlier of
(i) the date of the first audit of financial statements of the Surviving
Corporation containing combined operations of MARINEMAX and the Surviving
Corporation for those representations set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
5.31 AUTHORITY: OWNERSHIP. Such STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. Such STOCKHOLDER
owns beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by such STOCKHOLDER, and, except as set forth on
Schedule 5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. Such STOCKHOLDER does not have, or hereby
waives, any preemptive or other right to acquire shares of COMPANY Stock or
MARINEMAX Stock that such STOCKHOLDER has or may have had other than rights of
any STOCKHOLDER to acquire MARINEMAX Stock pursuant to (i) this Agreement, or
(ii) any option granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. No STOCKHOLDER is
under any binding commitment or contract to sell, exchange or otherwise dispose
of any shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations and warranties shall survive the Closing and the Effective Time
for a period of the earlier of (i) the date of the first audit of financial
statements of the Surviving Corporation containing combined operations of
MARINEMAX and the Surviving Corporation for those representations and warranties
set forth within Section 6 which representations and warranties specifically
deal with items that would be expected to be
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encountered in the audit process, or (ii) twelve (12) months, the last day of
such period being the "Expiration Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature of its business makes such qualification necessary, except where the
failure to be so authorized or qualified would not have a Material Adverse
Effect. True, complete and correct copies of the Certificate of Incorporation
and Bylaws, each as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter
Documents") are all attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and
NEWCO executing this Agreement have the authority to enter into and bind
MARINEMAX and NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the
full legal right, power and authority to enter into this Agreement and the
Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock
of MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii),
respectively. All of the issued and outstanding shares of the capital stock of
NEWCO are owned by MARINEMAX and all of the issued and outstanding shares of the
capital stock of MARINEMAX are owned by the persons set forth on Schedule 6.3
hereof, in each case, free and clear of all liens, security interests, pledges,
charges, voting trusts, restrictions, encumbrances and claims of every kind. All
of the issued and outstanding shares of the capital stock of MARINEMAX and NEWCO
have been duly authorized and validly issued, are fully paid and nonassessable,
are owned of record and beneficially by MARINEMAX and the persons set forth on
Schedule 6.3, respectively, and further, such shares were offered, issued, sold
and delivered by MARINEMAX and NEWCO in compliance with applicable state and
federal laws concerning the issuance of securities. Further, none of such shares
were issued in violation of the preemptive rights of any past or present
stockholder of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no
subsidiaries except for (i) NEWCO and each of the companies identified as
"NEWCO" in each of the Other Agreements, and (ii) those newly formed
corporations which will receive certain pieces and parcels of real property, and
except as set forth in the preceding sentence, neither MARINEMAX nor NEWCO
presently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and neither
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MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to any of the
STOCKHOLDERS.
6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by MARINEMAX and NEWCO and the performance of the transactions
contemplated herein have been duly and validly authorized by the respective
Boards of Directors of MARINEMAX and NEWCO, and this Agreement has been duly and
validly authorized by all necessary corporate action and is a legal, valid and
binding obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX
Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement will
constitute valid and legally issued shares of MARINEMAX, fully paid and
nonassessable, and with the exception of restrictions upon resale set forth in
Sections 15 and 16 hereof and in the "Pooling Letters", will be identical in all
respects (which do not include the form of certificate upon which it is printed
or the presence or absence of a CUSIP number on any such certificate) to the
MARINEMAX Stock issued and outstanding as of the date hereof by reason of the
provisions of the Delaware GCL. The shares of MARINEMAX Stock to be issued to
the STOCKHOLDERS pursuant to this Agreement will not be registered under the
1933 Act, and will be issued to the STOCKHOLDERS pursuant to a valid exemption
from registration under the 1933 Act and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDERS in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDERS.
6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX
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and the Other Founding Companies access to all of COMPANY's and any Acquired
Party's sites, properties, books and records and will furnish MARINEMAX with
such additional financial and operating data and other information as to the
business and properties of COMPANY and any Acquired Party as MARINEMAX or the
Other Founding Companies may from time to time reasonably request. COMPANY will
cooperate with MARINEMAX and the Other Founding Companies, its and their
representatives, auditors and counsel in the preparation of any documents or
other material which may be required in connection with any documents or
materials required by this Agreement. MARINEMAX, NEWCO, the STOCKHOLDERS and
COMPANY will treat all information obtained in connection with the negotiation
and performance of this Agreement or the due diligence investigations conducted
with respect to the Other Founding Companies as confidential in accordance with
the provisions of Section 14 hereof. In addition, MARINEMAX will cause each of
the Other Founding Companies to enter into a provision similar to this Section
7.1 requiring each such Other Founding Company, its stockholders, directors,
officers, representatives, employees and agents to keep confidential any
information obtained by such Other Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents or other material which may be required in connection with any
documents or materials required by this Agreement. COMPANY will cause all
information obtained in connection with the negotiation and performance of this
Agreement to be treated as confidential in accordance with the provisions of
Section 14 hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as
it has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its properties and facilities, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and
effect present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its
business organization intact, retain its respective present key employees and
maintain its respective relationships with suppliers, customers and others
having business relations with COMPANY or any Acquired Party, as applicable;
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(vi) maintain compliance with all material permits, laws,
rules and regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not
enter into new or amended debt or lease instruments except as permitted by
Section 10.6, without the knowledge and consent of MARINEMAX (which consent
shall not be unreasonably withheld), provided that debt and/or lease instruments
may be replaced without the consent of MARINEMAX if such replacement instruments
are on terms at least as favorable to COMPANY or any Acquired Party, as
applicable, as the instruments being replaced; and
(viii) maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past
practices of COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of
Incorporation or Bylaws;
(ii) issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants listed in Schedule
5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree
to incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $50,000 necessary or desirable for the conduct of its business, (2)
(a) liens for taxes either not yet due or being contested in good faith and by
appropriate proceedings (provided that with respect to contested taxes, adequate
reserves have been established and are being maintained) or (b) materialmen's,
mechanics', workers', repairmen's, employees' or other like liens arising in the
ordinary course of its business (the liens set forth in clause (2) above may be
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.10 and/or 5.15 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of
any property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the
start-up of any new business;
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(viii) merge or consolidate or agree to merge or consolidate
with or into any other corporation;
(ix) waive any material rights or claims of COMPANY or any
Acquired Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any
material agreement, permit, license or other right of COMPANY or any Acquired
Party, as applicable; or
(xi) enter into any other transaction outside the ordinary
course of its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
7.6 AGREEMENTS. The STOCKHOLDERS and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDERS and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the
STOCKHOLDERS contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing, and (ii) any material failure of any STOCKHOLDER or
COMPANY to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. MARINEMAX and NEWCO shall
give prompt notice to COMPANY of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules
required by this Agreement from the respective parties hereto shall be delivered
at the execution of this Agreement. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and
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5.15 shall only have to be delivered at the Closing Date, unless such Schedule
is to be amended to reflect an event occurring other than in the ordinary course
of business. Notwithstanding the foregoing sentence, no amendment or supplement
to a Schedule prepared by COMPANY or the STOCKHOLDERS that constitutes or
reflects an event or occurrence that would have a Material Adverse Effect may be
made unless MARINEMAX and a majority of the Founding Companies other than
COMPANY consent to such amendment or supplement; and provided further, that no
amendment or supplement to a Schedule prepared by MARINEMAX or NEWCO that
constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless a majority of the Founding Companies consent
to such amendment or supplement. For all purposes of this Agreement, including
without limitation for purposes of determining whether the conditions set forth
in Sections 8.1 and 9.1 have been fulfilled, the Schedules hereto shall be
deemed to be the Schedules as amended or supplemented pursuant to this Section
7.8. In the event that one of the Other Founding Companies seeks to amend or
supplement a Schedule pursuant to Section 7.8 of one of the Other Agreements,
and such amendment or supplement constitutes or reflects an event or occurrence
that would have a Material Adverse Effect on such Other Founding Company,
MARINEMAX shall give COMPANY notice thereof. If MARINEMAX and a majority of the
Founding Companies consent to such amendment or supplement, which consent shall
have been deemed given by MARINEMAX or any Founding Company if no response is
received within twenty-four (24) hours following receipt of notice of such
amendment or supplement (or sooner if required by the circumstances under which
such consent is requested), but COMPANY does not give its consent, COMPANY
shall, without further act or action, be deemed to have given its consent and
may not thereafter terminate this Agreement. In the event that COMPANY seeks to
amend or supplement a Schedule pursuant to this Section 7.8, and MARINEMAX and a
majority of the Other Founding Companies do not consent to such amendment or
supplement, this Agreement shall be deemed terminated by mutual consent as set
forth in Section 12.1(i) hereof. In the event that MARINEMAX or NEWCO seeks to
amend or supplement a Schedule pursuant to this Section 7.8 and a majority of
the Founding Companies do not consent to such amendment or supplement, this
Agreement shall be deemed terminated by mutual consent as set forth in Section
12.1(i) hereof. No party to this Agreement shall be liable to any other party if
this Agreement shall be terminated pursuant to the provisions of this Section
7.8. No amendment of or supplement to a Schedule shall be made later than
twenty-four (24) hours prior to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all months
and fiscal quarters ended after the Balance Sheet Date and on or before December
31, 1997 (collectively, the "Final COMPANY Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from COMPANY Financial Statements as of the Balance Sheet Date.
The Final COMPANY Financial Statements shall have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated and
with past periods (except as noted therein). Except as noted in the Final
COMPANY Financial Statements, all of such financial statements will present
fairly the results of operations of COMPANY for the periods indicated therein.
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7.11 FURTHER ASSURANCES. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents and take such other actions as may be reasonably necessary or
convenient to carry out the transactions contemplated hereby, including, without
limitation, all further instruments, documents and actions as may be reasonably
required by MARINEMAX's independent public accountants and attorneys with
respect to the pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDERS and COMPANY shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the Hart-Scott Act to be made. If filings under the
Hart-Scott Act are required, the costs and expenses thereof (including filing
fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS AND
COMPANY
The obligations of the STOCKHOLDERS and COMPANY with respect to actions
to be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDERS
(acting in unison) shall have the right to terminate this Agreement, or in the
alternative, waive any condition not so satisfied. Any act or action of the
STOCKHOLDERS in consummating the Closing or delivering certificates representing
the COMPANY Stock shall constitute a waiver of any conditions not so satisfied.
However, no such waiver shall be deemed to affect the survival of the
representations and warranties of MARINEMAX and NEWCO contained in Section 6
hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by MARINEMAX and NEWCO on or
before the Closing Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by the President or any Vice President of MARINEMAX shall have been
delivered to the STOCKHOLDERS.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
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8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which COMPANY deems
it inadvisable to proceed with the transactions contemplated herein.
8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate
or certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall have been afforded the opportunity to enter into an employment agreement
substantially in the form attached hereto as Annex IV.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be
taken on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of all of the conditions in this Section 9. As of the
Closing Date, all conditions not satisfied shall be deemed to have been waived,
except that no such waiver shall be deemed to affect the survival of the
representations and warranties of COMPANY and the STOCKHOLDERS contained in
Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDERS, and COMPANY as defined in
Section 5 hereof, contained in
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this Agreement shall be true and correct in all material respects as of the
Closing Date and the Effective Time with the same effect as though such
representations and warranties had been made on and as of such date and time;
all of the terms, covenants and conditions of this Agreement to be complied with
or performed by the STOCKHOLDERS and COMPANY on or before the Closing Date or
the Effective Time, as the case may be, shall have been duly performed or
complied with in all material respects; and the STOCKHOLDERS shall have
delivered to MARINEMAX certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by each of the STOCKHOLDERS.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which the
management of MARINEMAX deems it inadvisable to proceed with the transactions
hereunder.
9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a
certificate, dated the Closing Date and signed by the secretary of COMPANY,
certifying the truth and correctness of attached copies of the Charter Documents
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the board of directors and the STOCKHOLDERS approving COMPANY's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDERS' RELEASE. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDERS against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDERS,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDERS, (ii) continuing obligations to the
STOCKHOLDERS relating to their employment by COMPANY and (iii) obligations
arising under this Agreement or the transactions contemplated hereby. The
STOCKHOLDER Release to be delivered pursuant to this Section shall be in form
and content as set forth in Annex V hereto.
9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of
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MARINEMAX as a result of which MARINEMAX deems it inadvisable to proceed with
the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to
MARINEMAX certificates, dated as of a date no earlier than ten (10) days prior
to the Closing Date, duly issued by the appropriate governmental authority in
COMPANY's and all Acquired Parties' states of incorporation and, unless waived
by MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
9.10 POOLING LETTERS. The STOCKHOLDERS shall each have executed and
delivered a letter agreement in favor of MARINEMAX and NEWCO, in form and
content as set forth in Annex VI attached hereto (the "Pooling Letters"),
pursuant to which each STOCKHOLDER shall agree to hold the MARINEMAX Stock
received by such STOCKHOLDER, for such period of time as is necessary to allow
the Merger to be accounted for as a "pooling-of-interests" under the rules and
regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall enter into an employment agreement effective as of the Effective Time,
substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDERS shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDERS shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. Each STOCKHOLDER shall have delivered to
MARINEMAX a certificate to the effect that he is not a foreign person pursuant
to Section 1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENTS. STOCKHOLDERS shall each have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDERS' GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDERS released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as
contemplated by this Agreement after the Effective Time, MARINEMAX shall not,
and shall not permit any of its subsidiaries, to undertake any act that would
jeopardize the tax-free status or the "pooling-of-interests" accounting
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treatment of the organization set forth herein, including, without limitation,
the retirement or reacquisition, directly or indirectly, of all or part of the
MARINEMAX Stock issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDERS in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDERS shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable periods that end
at or before the Effective Time. Each STOCKHOLDER shall pay or cause to be paid
all Tax liabilities (in excess of all amounts already paid with respect thereto
or properly accrued or reserved with respect thereto on COMPANY Financial
Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate
Returns of, or that include, any Acquired Party for all taxable periods ending
after the Effective Time.
(iii) Each party hereto shall, and shall cause its
subsidiaries and affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in filing any
Return, amended Return or claim for refund, determining a liability for Taxes or
a right to refund of Taxes or in conducting any audit or other proceeding in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating to
rulings or other determinations by any taxing authority and relevant records
concerning the ownership and tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file Returns pursuant to this Agreement shall bear all costs of filing such
Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and each STOCKHOLDER
shall comply with the tax reporting requirements of Section 1.351-3 of the
Treasury Regulations promulgated under the Code, and treat the transaction as a
tax-free contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons
who are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective
Time, MARINEMAX shall not terminate any health insurance, life insurance or
401(k) plan in effect at COMPANY until such time as MARINEMAX is able to replace
such plan with a plan that is applicable to MARINEMAX and all of its then
existing subsidiaries, provided that MARINEMAX shall have no obligation to
provide replacement plans that have the same terms and provisions as the
existing plans, provided, further, that any new health insurance plan shall
provide for coverage for preexisting conditions. At the Effective
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Time, the employees of COMPANY will be the employees of the Surviving
Corporation provided that this provision is for purposes of clarifying that the
Merger, in and of itself, will not have any impact on the employment status of
any employee and provided, further that this provision shall not in any way
limit the management rights of the Surviving Corporation or MARINEMAX to assess
work force needs and make appropriate adjustments as necessary or desirable
within their discretion (subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare
or pay any dividends or distributions to any of the STOCKHOLDERS, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of combined operations of COMPANY
and MARINEMAX after giving effect to the Merger and the transactions
contemplated by the Other Agreements, to the end that the STOCKHOLDERS may
thereafter sell the MARINEMAX Stock received in the Merger, without such sale
violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDERS, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS each
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDERS or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDERS or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that
it will indemnify, defend, protect and hold harmless the STOCKHOLDERS at all
times from and after the date of this Agreement until the Expiration Date, for,
from and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDERS as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDERS may incur due to
MARINEMAX's or NEWCO's failure to be responsible
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for the liabilities and obligations of COMPANY as provided in Section 1 hereof
(except to the extent that MARINEMAX or NEWCO has claims against the
STOCKHOLDERS by reason of such liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not settle any criminal
proceeding or agree to any nonmonetary remedy without the prior written consent
of the Indemnified Party, whose consent may be withheld in its sole discretion.
If the Indemnifying Party undertakes to defend or settle, it shall promptly
notify the Indemnified Party of its intention to do so, and the Indemnified
Party shall cooperate with the Indemnifying Party and its counsel in the defense
thereof and in any settlement thereof. Such cooperation shall include, but shall
not be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. All Indemnified Parties shall use the
same counsel, which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a conflict of
interest that prevents counsel for the Indemnifying Party from representing
Indemnified Party, Indemnified Party shall have the right to participate in such
matter through counsel of its own choosing and Indemnifying Party will reimburse
the Indemnified Party for the reasonable expenses of such counsel. After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except (a) as set forth in the preceding sentences, and (b) to the
extent such participation is requested by the Indemnifying Party, in which event
the Indemnified Party shall be reimbursed by the Indemnifying Party for
reasonable additional legal expenses and out-of-pocket expenses. If the
Indemnifying Party desires to accept a final and complete settlement of any
Third Person's claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to such Third Person claim shall be limited to the amount so offered in
settlement by said Third Person. Upon agreement as to a settlement between said
Third Person and the Indemnifying Party, the Indemnifying Party shall, in
exchange for a complete release from the Indemnified Party, promptly (x) in the
case of MARINEMAX being the Indemnifying Party, pay to the Indemnified Party the
amount agreed to in such settlement, and (y) in the case of the STOCKHOLDERS
being the Indemnifying Party, cause the MARINEMAX Stock held in escrow to be
used in such settlement; and the Indemnified Party shall, from that moment on,
bear full responsibility for any additional costs of defense which it
subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party in the manner set
forth above in this Section 11.3 for the amount paid in such settlement and any
other liabilities or expenses incurred by the
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Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person's claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnifying Party, unless the Indemnifying Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDERS until such time as, and
solely to the extent that, the aggregate of all claims that such persons may
have against the STOCKHOLDERS shall exceed the sum of $240,000 (the
"Indemnification Deductible"); and after such Indemnification Deductible amount
has been attained, only claims in excess of such amount shall be indemnified
hereunder. The STOCKHOLDERS shall not assert any claim for indemnification
hereunder against MARINEMAX or NEWCO until such time as, and solely to the
extent that, the aggregate of all claims which the STOCKHOLDERS may have against
MARINEMAX or NEWCO shall exceed the sum of $240,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDERS.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDERS. It is hereby
understood and agreed that STOCKHOLDERS may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
For purposes of calculating the value of the MARINEMAX Stock received
by STOCKHOLDERS, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDERS. The
STOCKHOLDERS covenant and agree that they will indemnify, defend, protect and
hold harmless MARINEMAX,
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NEWCO, COMPANY and the Surviving Corporation at all times, from and after date
of this Agreement until the applicable Expiration Date, for, from and against
all claims, damages, actions, suit, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred on or prior
to the Expiration Date (or thereafter if a claim has been made therefor prior to
such date) by MARINEMAX, NEWCO, COMPANY or the Surviving Corporation as a result
of or arising from: (i) any use, generation, transportation, storage, treatment,
disposal or presence of Hazardous Wastes and/or Hazardous Substances occurring
on or prior to the Effective Time including, without limitation, any waste or
other disposal activities or releases which occurred at a facility on which any
portion of the COMPANY's (or its predecessors') business was conducted, any
waste or other disposal activities or releases which occurred off of any such
facility with regard to wastes and other substances generated on such facility,
and any waste or other disposal activities or releases which occurred on real
estate at any time whether or not the COMPANY (or its predecessors) owned or
leased such real estate at the time such waste or other disposal activities or
releases were engaged in, and whether or not the COMPANY performed such waste or
other disposal activities or releases; (ii) any past, present or threatened
spills, discharges, leaks, emissions, injections, escapes, dumping, pumping,
pouring, emptying, leaching, leaking, disposing or any releases or threatened
releases as defined now or in the future under any applicable Environmental Law,
to surface waters, groundwaters, soil, ambient air or otherwise into the
environment occurring as a result of any activities of the COMPANY (or its
predecessors') on or prior to the Effective Time, including, without limitation,
both those releases or incidents involving potential or actual environmental
contamination which required notification or reporting to appropriate federal,
state or local officials or agencies, or clean-up or remedial activities and
those releases or incidents which occurred prior to the effective date of any
requirements imposing such notification or reporting obligations or clean-up or
remedial activities, but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such requirements; (iii)
the exposure of and resulting consequences to any persons, including, without
limitation, employees of the COMPANY, to any mineral, chemical or industrial
product, raw material intermediate, by-product or Hazardous Waste and/or
Hazardous Substance created, stored, treated, generated, processed, handled or
originating at a facility at which the COMPANY (or any of its predecessors)
conducted business on or prior to the Effective Time or otherwise used by the
COMPANY (or any of its predecessors) in the conduct of its or their business;
(iv) any violations or claim of violations by the COMPANY, or pertaining to its
properties, of Environmental Laws, occupational or employee health and safety
laws or otherwise arising out of or under such laws, which violations or alleged
violations occurred prior to the Effective Time; (v) any and all actions,
failures to act and negligence in monitoring, maintaining and upkeep of on-site
generation, storage, treatment, transportation and disposal operations on or
prior to the Effective Time; (vi) any installation, use, removal, maintenance or
monitoring of storage tanks or related facilities on or prior to the Effective
Time; or (vii) any violations, fees, obligations or failures to comply with any
and all Environmental Laws, permit requirements, authorizations, orders and
other administrative or legal directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time solely:
(i) by mutual consent of the boards of directors of MARINEMAX,
NEWCO and COMPANY;
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(ii) by the STOCKHOLDERS or COMPANY (acting through its board
of directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
(iii) by the STOCKHOLDERS or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDERS or
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDERS will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales representative, in
any business that sells, rents and leases and boating, nautical or other similar
lifestyle entertainment products and services, in direct competition with
MARINEMAX or any of the subsidiaries thereof, within 100 mile radius of where
COMPANY, any Acquired Party, MARINEMAX or any of its or their existing or future
subsidiaries conduct business (the "Territory");
(ii) call upon any person who is or becomes during the
Restricted Period an employee of MARINEMAX (including the subsidiaries thereof)
in a sales representative or managerial capacity for the purpose or with the
intent of enticing such employee away from or out of the employ of MARINEMAX
(including the subsidiaries thereof), provided that each STOCKHOLDER shall be
permitted to call upon and hire any member of his or her immediate family;
(iii) call upon any person or entity that is, or becomes
during the Restricted Period, or which has been, within one (1) year prior to
the Effective Time, a customer of MARINEMAX (including the subsidiaries
thereof), of COMPANY, any Acquired Party or of any of the Other Founding
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<PAGE> 42
Companies for the purpose of soliciting or selling products or services in
direct competition with MARINEMAX within the Territory;
(iv) call upon any prospective acquisition candidate, on any
STOCKHOLDERS own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
such STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary thereof) or for which, to the best knowledge and belief of such
STOCKHOLDER after due inquiry, MARINEMAX (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever except to the extent that
COMPANY or any Acquired Party has in the past disclosed such information to the
public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit any STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, each STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDERS in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of each STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants
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<PAGE> 43
contained in Section 13 shall not be affected by any breach of any other
provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDERS hereby agree that this
covenant is a material and substantial part of this transaction.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDERS. The STOCKHOLDERS recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
businesses. The STOCKHOLDERS each agree that they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of MARINEMAX, (b) following the Closing, such information may be
disclosed by the STOCKHOLDERS as is required in the course of performing their
duties for MARINEMAX or the Surviving Corporation, and (c) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 14.1, unless (i) such information
becomes known to the public generally through no fault of the STOCKHOLDERS, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), the STOCKHOLDERS shall, if possible, give prior written notice
thereof to MARINEMAX and provide MARINEMAX with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any of the
STOCKHOLDERS of the provisions of this Section, MARINEMAX shall be entitled to
an injunction restraining such STOCKHOLDERS from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting MARINEMAX from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, the
STOCKHOLDERS shall have none of the above-mentioned restrictions on their
ability to disseminate confidential information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and acknowledge
that they had in the past and currently have access to certain confidential
information of COMPANY, such as operational policies, and pricing and cost
policies that are valuable, special and unique assets of COMPANY's business.
MARINEMAX and NEWCO agree that, prior to the Closing, or if the transactions
contemplated by this Agreement are not consummated, they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of COMPANY, (b) to counsel and other advisers, provided that
such advisers (other than counsel) agree to the confidentiality provisions of
this Section 14.1, (c) to the Other Founding Companies and their representatives
pursuant to Section 7.1(a), unless (i) such information becomes known to the
public generally through no fault of MARINEMAX or NEWCO, (ii) disclosure is
required by law or the order of any governmental authority under color of law,
provided, that prior to disclosing any information pursuant to this clause (ii),
MARINEMAX and NEWCO shall, if possible, give prior written notice thereof to
COMPANY and the STOCKHOLDERS and provide COMPANY and the STOCKHOLDERS with the
opportunity to contest such disclosure, or
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<PAGE> 44
(iii) the disclosing party reasonably believes that such disclosure is required
in connection with the defense of a lawsuit against the disclosing party, and
(d) to the public to the extent necessary or advisable in connection with
applicable securities laws. In the event of a breach or threatened breach by
MARINEMAX or NEWCO of the provisions of this Section, COMPANY and the
STOCKHOLDERS shall be entitled to an injunction restraining MARINEMAX and NEWCO
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting COMPANY and the STOCKHOLDERS from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14
shall survive the termination of this Agreement for a period of five (5) years
from the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDERS shall not sell, assign,
exchange, transfer, encumber, pledge, distribute, appoint, or otherwise dispose
of any shares of MARINEMAX Stock received by the STOCKHOLDERS in the Merger in
violation of the provisions of the Pooling Letters referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY
OF THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICES OF THIS CORPORATION.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDERS acknowledge that the shares
of MARINEMAX Stock to be delivered to the STOCKHOLDERS pursuant to this
Agreement have not been and will not be registered under the Act and therefore
may not be resold without compliance with the Act. The MARINEMAX Stock to be
acquired by such STOCKHOLDERS pursuant to this Agreement is being acquired
solely for their own respective accounts, for investment purposes only, and with
no present intention of distributing, selling or otherwise disposing of it in
connection with a distribution. The STOCKHOLDERS covenant, warrant and represent
that none of the shares of MARINEMAX Stock issued to such STOCKHOLDERS will be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the Act and the rules and regulations of the SEC. The certificates evidencing
the MARINEMAX Stock delivered to the
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<PAGE> 45
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS.
THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS
OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED.
16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDERS are able to bear
the economic risk of an investment in the MARINEMAX Stock to be acquired
pursuant to this Agreement and can afford to sustain a total loss of such
investment and have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the proposed
investment in the MARINEMAX Stock. The STOCKHOLDERS have had an adequate
opportunity to ask questions and receive answers from the officers of MARINEMAX
concerning any and all matters relating to the transactions described herein
including, without limitation, the background and experience of the current and
proposed officers of MARINEMAX, the business, operations and financial condition
of the Other Founding Companies, and any plans for additional acquisitions and
the like. The STOCKHOLDERS have asked any and all questions in the nature
described in the preceding sentence and all questions have been answered to
their satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDERS, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of MARINEMAX, and the heirs and legal representatives of the
STOCKHOLDERS.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the STOCKHOLDERS, COMPANY, NEWCO
and MARINEMAX and supersede any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement, upon execution,
constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written
instrument executed by the
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<PAGE> 46
STOCKHOLDERS, COMPANY, NEWCO and MARINEMAX, acting through their respective
officers, duly authorized by their respective Boards of Directors.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each
party represents and warrants that it employed no broker or agent in connection
with this transaction and agrees to indemnify the other parties hereto against
all loss, cost, damages or expense arising out of claims for fees or commission
of brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. Each STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each STOCKHOLDER acknowledges that he or she, and not COMPANY or
MARINEMAX, will pay all taxes due upon receipt of the consideration payable
pursuant to Section 2 hereof, and will assume all tax risks and liabilities of
such STOCKHOLDER in connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
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<PAGE> 47
(b) If to the STOCKHOLDERS, addressed to them at:
Stockholder 1:
Barry Marshall
5432 Brandy Circle
Ft. Myers, Florida 33919
Stockholder 2:
Dana Marshall King
14340 Hampton Lake C
Ft. Myers, Florida 33908
Stockholder 3:
Jerry Marshall
Gulfwind South, Inc.
14070 McGregor Blvd.
Ft. Myers, Florida 33919
Stockholder 4:
Gerald Pedigo
P. O. Box 99076
15465 Las Planideras
Rancho Santa Fe, California 92067
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
Gulfwind South, Inc.
14070 McGregor Blvd.
Ft. Myers, Florida 33919
Attention: Jerry Marshall
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<PAGE> 48
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDERS who hold or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the
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<PAGE> 49
parties hereto, any other person receiving MARINEMAX Stock in connection with
the Merger and each future holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT.
This Agreement may be executed by facsimile, and shall be deemed effectively
executed upon the receipt by all parties hereto of the last page of this
Agreement duly executed by the other parties hereto. Each party to this
Agreement agrees to deliver six (6) original, inked and signed copies of the
execution page of this Agreement within four (4) days of faxing the executed
last page hereof.
[Remainder of Page Intentionally Left Blank]
44
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MARINEMAX:
MARINEMAX, INC., a Delaware corporation
By: /s/
___________________________________
Name:___________________________________
Title:__________________________________
NEWCO:
GULFWIND SOUTH ACQUISITION CORP.,
a Delaware corporation
By: /s/
___________________________________
Name:___________________________________
Title:__________________________________
COMPANY:
GULFWIND SOUTH, INC.,
a Florida corporation
By: /s/
___________________________________
Name:___________________________________
Title:__________________________________
STOCKHOLDERS:
/s/ Barry Marshall
_______________________________________
Barry Marshall
/s/ Dana Marshall King
_______________________________________
Dana Marshall King
/s/ Jerry Marshall
_______________________________________
Jerry Marshall
/s/ Gerald Pedigo
_______________________________________
Gerald Pedigo
45
<PAGE> 51
CONSENT OF SPOUSE
The undersigned spouse of Jerry Marshall, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind South Acquisition Corp., a Delaware corporation with and into Gulfwind
South, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by Jerry Marshall.
The undersigned further agrees that in the event of the death of Jerry
Marshall, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Jerry Marshall,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Jerry Marshall pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
___________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
___________________________________
Notary Public
46
<PAGE> 52
CONSENT OF SPOUSE
The undersigned spouse of Dana Marshall, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind South Acquisition Corp., a Delaware corporation with and into Gulfwind
South, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by Dana Marshall.
The undersigned further agrees that in the event of the death of Dana
Marshall, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Dana Marshall,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Dana Marshall pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
___________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
___________________________________
Notary Public
47
<PAGE> 53
CONSENT OF SPOUSE
The undersigned spouse of Barry Marshall, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Gulfwind South Acquisition Corp., a Delaware corporation with and into Gulfwind
South, Inc., a Florida corporation (the "Agreement"), hereby declares,
contemporaneously with the execution of the Agreement, that she has read the
Agreement in its entirety, and being fully convinced of the wisdom of the terms
of the Agreement, and in consideration of the premises and of the provisions of
the Agreement, hereby expresses her consent to the execution and consummation of
the Agreement by Barry Marshall.
The undersigned further agrees that in the event of the death of Barry
Marshall, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Barry Marshall,
the provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she hereafter acquires which arises (directly or
indirectly) from any consideration given to Barry Marshall pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
___________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
___________________________________
Notary Public
48
<PAGE> 1
Exhibit 10.1(e)
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
HARRISON'S CALIFORNIA ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
HARRISON'S BOAT CENTER, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
<PAGE> 2
TABLE OF CONTENTS
Page
1. THE MERGER............................................................. 4
1.1 Delivery of Filing of Articles of Merger........................ 4
1.2 Effective Time.................................................. 5
1.3 Articles/Certificate of Incorporation, Bylaws
and Board of Directors of Surviving Corporation................. 5
1.4 Certain Information With Respect to the Capital
Stock of COMPANY, MARINEMAX and NEWCO........................... 5
1.5 Effect of Merger................................................ 6
1.6 Accounting Treatment............................................ 6
2. CONVERSION AND CANCELLATION OF STOCK................................... 6
2.1 Manner of Conversion and Cancellation........................... 6
3. DELIVERY OF MERGER CONSIDERATION....................................... 7
3.1 Time and Manner of Delivery..................................... 7
3.2 Surrender of COMPANY Stock...................................... 7
3.3 Escrow of Portion of MARINEMAX Stock............................ 7
4. CLOSING................................................................ 8
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDERS........................................................... 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDERS........................................................... 8
5.1 Due Organization................................................ 8
5.2 Authorization................................................... 9
5.3 Capital Stock of COMPANY........................................ 9
5.4 Transactions in Capital Stock, Organization Accounting.......... 9
5.5 No Bonus Shares................................................. 9
5.6 Subsidiaries.................................................... 10
5.7 Predecessor Status; Etc......................................... 10
5.8 Spin-off by COMPANY............................................. 10
5.9 Financial Statements............................................ 10
5.10 Liabilities and Obligations..................................... 10
5.11 Accounts and Notes Receivable................................... 11
5.12 Permits and Intangibles......................................... 11
5.13 Environmental Matters........................................... 11
5.14 Personal Property............................................... 12
5.15 Significant Customers; Material Contracts and Commitments....... 12
5.16 Real Property................................................... 13
5.17 Insurance....................................................... 14
5.18 Compensation; Employment Agreements; Organized Labor Matters.... 14
5.19 Employee Plans.................................................. 15
5.20 Compliance with ERISA........................................... 15
<PAGE> 3
5.21 Conformity with Law; Litigation................................. 16
5.22 Taxes........................................................... 17
5.23 No Violations................................................... 17
5.24 Government Contracts............................................ 17
5.25 Absence of Changes.............................................. 18
5.26 Deposit Accounts; Powers of Attorney............................ 19
5.27 Validity of Obligations......................................... 19
5.28 Relations with Governments...................................... 19
5.29 Prohibited Activities........................................... 19
5.30 Disclosure...................................................... 19
(B) Representations and Warranties of STOCKHOLDERS.................. 20
5.31 Authority: Ownership............................................ 20
5.32 Preemptive Rights............................................... 20
5.33 No Intention to Dispose of MARINEMAX Stock...................... 20
6. REPRESENTATIONS OF MARINEMAX AND NEWCO................................. 20
6.1 Due Organization................................................ 21
6.2 Authorization................................................... 21
6.3 Capital Stock of MARINEMAX and NEWCO............................ 21
6.4 Transactions in Capital Stock; Organization Accounting.......... 21
6.5 Subsidiaries.................................................... 21
6.6 Financial Statements............................................ 22
6.7 [Intentionally Deleted]......................................... 22
6.8 Validity of Obligations......................................... 22
6.9 MARINEMAX Stock................................................. 22
6.10 Disclosure...................................................... 22
6.11 No Undisclosed Agreements....................................... 22
7. COVENANTS PRIOR TO CLOSING............................................. 22
7.1 Access and Cooperation; Due Diligence........................... 23
7.2 Conduct of Business Pending the Merger.......................... 23
7.3 Prohibited Activities........................................... 24
7.4 [Intentionally Deleted]......................................... 25
7.5 [Intentionally Deleted.]........................................ 25
7.6 Agreements...................................................... 25
7.7 Notification of Certain Matters................................. 25
7.8 Delivery of Schedules; Amendment of Schedules................... 25
7.9 [Intentionally Deleted]......................................... 26
7.10 Final Financial Statements...................................... 26
7.11 Further Assurances.............................................. 27
7.12 [Intentionally Deleted]......................................... 27
7.13 Compliance with the Hart-Scott Act.............................. 27
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
AND COMPANY............................................................ 27
8.1 Representations and Warranties; Performance of Obligations...... 27
8.2 Satisfaction.................................................... 27
8.3 No Litigation................................................... 28
<PAGE> 4
8.4 [Intentionally Deleted]......................................... 28
8.5 Consents and Approvals.......................................... 28
8.6 Good Standing Certificates...................................... 28
8.7 No Material Adverse Change...................................... 28
8.8 [Intentionally Deleted]......................................... 28
8.9 Secretary's Certificate......................................... 28
8.10 Employment Agreements........................................... 28
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO.................................................................. 28
9.1 Representations and Warranties; Performance of Obligations...... 28
9.2 No Litigation................................................... 29
9.3 Secretary's Certificate......................................... 29
9.4 No Material Adverse Effect...................................... 29
9.5 STOCKHOLDERS' Release........................................... 29
9.6 Satisfaction.................................................... 29
9.7 [Intentionally Deleted]......................................... 29
9.8 Consents and Approvals.......................................... 29
9.9 Good Standing Certificates...................................... 30
9.10 Pooling Letters................................................. 30
9.11 Employment Agreements........................................... 30
9.12 Specific Indemnification Agreement.............................. 30
9.13 FIRPTA Certificate.............................................. 30
9.14 Investment Agreements........................................... 30
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER
CLOSING................................................................ 30
10.1 Assumption of STOCKHOLDERS' Guarantees.......................... 30
10.2 Preservation of Tax and Accounting Treatment.................... 30
10.3 Preparation and Filing of Tax Returns........................... 31
10.4 Directors and Officers of the Surviving Corporation............. 31
10.5 Preservation of Employee Benefit Plans.......................... 31
10.6 Dividends....................................................... 32
10.7 Distribution of Financial Statements............................ 32
11. INDEMNIFICATION........................................................ 32
11.1 General Indemnification by the STOCKHOLDERS..................... 32
11.2 Indemnification by MARINEMAX.................................... 32
11.3 Third Person Claims............................................. 33
11.4 Limitations on Indemnification.................................. 34
11.5 Environmental Indemnification by the STOCKHOLDERS............... 34
12. TERMINATION OF AGREEMENT............................................... 35
12.1 Termination..................................................... 35
12.2 Liabilities in Event of Termination............................. 36
13. NONCOMPETITION......................................................... 36
13.1 Prohibited Activities........................................... 36
<PAGE> 5
13.2 Damages......................................................... 37
13.3 Reasonable Restraint............................................ 37
13.4 Severability; Reformation....................................... 37
13.5 Independent Covenant............................................ 37
13.6 Materiality..................................................... 38
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.............................. 38
14.1 STOCKHOLDERS.................................................... 38
14.2 MARINEMAX AND NEWCO............................................. 38
14.3 Damages......................................................... 39
14.4 Survival........................................................ 39
15. TRANSFER RESTRICTIONS.................................................. 39
15.1 Transfer Restrictions........................................... 39
16. FEDERAL SECURITIES ACT REPRESENTATIONS................................. 39
16.1 Compliance with Law............................................. 39
16.2 Economic Risk; Sophistication................................... 40
17. GENERAL................................................................ 40
17.1 Cooperation..................................................... 40
17.2 Successors and Assigns.......................................... 40
17.3 Entire Agreement................................................ 40
17.4 Counterparts.................................................... 41
17.5 Brokers and Agents.............................................. 41
17.6 Expenses........................................................ 41
17.7 Notices......................................................... 41
17.8 Governing Law................................................... 42
17.9 Survival of Representations and Warranties...................... 42
17.10 Exercise of Rights and Remedies................................. 43
17.11 Time............................................................ 43
17.12 Reformation and Severability.................................... 43
17.13 Remedies Cumulative............................................. 43
17.14 Captions........................................................ 43
17.15 Amendments and Waivers.......................................... 43
17.16 Execution by Facsimile; Delivery of Original Signed Agreement... 43
<PAGE> 6
AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as of
the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), HARRISON'S CALIFORNIA ACQUISITION CORP., a Delaware
corporation ("NEWCO"), HARRISON'S BOAT CENTER, INC., a California corporation
(the "COMPANY"), and RICHARD C. LAMANNA, JR. and JUDITH L. LAMANNA, as joint
tenants ("Stockholder 1"), and DARRELL CHRISTOPHER LAMANNA, AS TRUSTEE OF THE
DARRELL CHRISTOPHER LAMANNA SEPARATE PROPERTY TRUST DATED 1/4/93 ("Stockholder
2")(Stockholder 1 and Stockholder 2 may be referred to individually herein as a
"STOCKHOLDER" and together as the "STOCKHOLDERS").
WHEREAS, NEWCO is a corporation duly organized and existing under the laws
of the State of Delaware, having been incorporated solely for the purpose of
completing the transactions set forth herein, and is a wholly-owned subsidiary
of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and California;
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the "MARINEMAX
Plan of Organization," and the parties intend that each merger comprising the
MARINEMAX Plan of Organization be accounted for as a pooling-of-interests for
accounting purposes;
WHEREAS, the STOCKHOLDERS and the Boards of Directors and the stockholders
of MARINEMAX, NEWCO, each of the Other Founding Companies and each of the
subsidiaries of MARINEMAX that are parties to the Other Agreements have approved
and adopted the MARINEMAX Plan of Organization as an integrated plan pursuant to
which the STOCKHOLDERS and the stockholders of each of the Other Founding
Companies will transfer the capital stock of each of the Founding Companies to
MARINEMAX and the STOCKHOLDERS and the stockholders of each of the Other
Founding Companies as a tax-free transfer of property under Section 351 of the
Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
<PAGE> 7
WHEREAS, unless the context otherwise requires, capitalized terms used in
this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct subsidiaries
of COMPANY.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of Merger
with respect to the Merger substantially in the forms attached as Annex I hereto
or with such other changes therein as may be required by applicable state laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section 5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second recital
of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
"Escrow and Security Agreement" has the meaning set forth in Section 3.3.
2
<PAGE> 8
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in Section
7.10.
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona corporation,
"GAAP" shall mean generally accepted accounting principles in the United
States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the fourth
recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to this
Agreement and the applicable provisions of the laws of the State of Delaware and
other applicable state laws.
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of NEWCO.
"Other Agreements" has the meaning set forth in the third recital of this
Agreement.
3
<PAGE> 9
"Other Founding Companies" means all of the Founding Companies other than
COMPANY.
"Pooling Letters" shall have the meaning set forth in Section 9.10.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be provided
within fifteen (15) days from the execution of this Agreement (as amended in
compliance with Section 7.8 hereof), which reference the relevant sections of
this Agreement, on which parties hereto disclose information as part of their
respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in the
Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause the Articles of Merger to be signed, verified and filed
with the Secretary of State of the State of Delaware and the Secretary of State
of the State of California and stamped receipt copies of each such filing to be
delivered to MARINEMAX at the Effective Time.
4
<PAGE> 10
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with
and into COMPANY in accordance with the Articles of Merger, the separate
existence of NEWCO shall cease, COMPANY shall be the surviving party in the
Merger. The Merger will be effected in a single transaction.
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF DIRECTORS
OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then in
effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the Bylaws of
the Surviving Corporation; and subsequent to the Effective Time, such Bylaws
shall be the Bylaws of the Surviving Corporation until they shall thereafter be
duly amended;
(iii) the Board of Directors of the Surviving Corporation shall
consist of the persons who are on the Board of Directors of COMPANY immediately
prior to the Effective Time, provided that William H. McGill, Jr. shall be
elected as a director of the Surviving Corporation effective as of the Effective
Time; the Board of Directors of the Surviving Corporation shall hold office
subject to the provisions of the laws of the State of California and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the Effective
Time shall continue as the officers of the Surviving Corporation in the same
capacity or capacities, and effective at the Effective Time William H. McGill,
Jr. shall be appointed as vice president of the Surviving Corporation and
Michael H. McLamb, Treasurer and Assistant Secretary, shall be appointed as an
assistant secretary of the Surviving Corporation, each of such officers to
serve, subject to the provisions of the Articles/Certificate of Incorporation
and Bylaws of the Surviving Corporation, until his successor is duly elected and
qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and
outstanding capital stock of COMPANY is as set forth on Schedule 5.3 hereto;
(ii) immediately prior to the Effective Time, the authorized
capital stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
(iii) as of the date of this Agreement, the authorized capital stock
of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock, of which One
(1) share is issued and outstanding.
5
<PAGE> 11
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of California. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate existence of NEWCO shall
cease and, in accordance with the terms of this Agreement, the Surviving
Corporation shall possess all of the rights, privileges, immunities and
franchises, of a public, as well as of a private, nature, and all property,
real, personal and mixed, and all debts due on all accounts whatsoever,
including, without limitation, subscriptions to shares, and all taxes, including
those due and owing and those accrued, and all other choses in action, and all
and every other interest of or belonging to or due to COMPANY, and NEWCO shall
be taken and deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all of the respective properties,
rights and privileges, powers and franchises and all and every other interest of
COMPANY and NEWCO shall be thereafter be the property of the Surviving
Corporation as they were of COMPANY and NEWCO prior to the Merger; the title to
any real estate, or interest therein, whether by deed or otherwise, under the
laws of the state of incorporation vested in COMPANY and NEWCO, shall not revert
or be in any way impaired by reason of the Merger; and the assets, liabilities,
reserves, and accounts of COMPANY shall be taken up on the books of the
Surviving Corporation at the amounts at which they respectively were carried on
the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
As of the Effective Time:
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof,
6
<PAGE> 12
automatically shall be deemed to represent the right to receive the number of
shares of MARINEMAX Stock set forth on Annex II hereto with respect to such
holder;
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
(iii) each share of NEWCO Stock issued and outstanding
immediately prior to the Effective Time, shall, by virtue of the Merger and
without any action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDERS pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letters referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDERS shall be fully exercisable by
the STOCKHOLDERS and the STOCKHOLDERS shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter
as reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDERS shall receive the respective number of shares of
MARINEMAX Stock as set forth on Annex II hereto; provided, however, that the
STOCKHOLDERS shall have previously surrendered all of COMPANY Stock to MARINEMAX
as provided in Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDERS shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDERS, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDERS' expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDERS agree promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, each of the
STOCKHOLDERS agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to each such STOCKHOLDER pursuant to this
Agreement for purposes of securing the obligations, representations and
warranties of the STOCKHOLDERS arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow and
security agreement in the form attached hereto as ANNEX III (the "Escrow and
Security Agreement"). STOCKHOLDERS each agree to execute and deliver the Escrow
and Security Agreement at the Closing effective at the Effective Time.
7
<PAGE> 13
4. CLOSING
At or prior to the Closing, the parties shall take all actions necessary
to prepare to (i) effect the Merger (including, without limitation, if permitted
by applicable state law, the filing with the appropriate state authorities of
the Articles of Merger specifying the Effective Time as the delayed effective
time of the Merger), and (ii) effect the conversion and delivery of shares
referred to in Section 3 hereof; provided, however, that such actions shall not
include the actual completion of the Merger or the conversion and delivery of
the shares referred to in Section 3 hereof, each of which actions shall be
deemed taken at the Effective Time as herein provided. In the event that the
conditions precedent contained in and this Agreement are not satisfied or waived
and this Agreement is thereby terminated, MARINEMAX hereby covenants and agrees
to do all things required by the Delaware GCL and by the applicable corporate
laws of the State of California in order to stop or rescind the Merger effected
by the filing of the Articles of Merger as described in this Section. The taking
of the actions described in clauses (i) and (ii) above shall take place at a
closing (the "Closing") to be held following the satisfaction or waiver of the
conditions precedent set forth in Section 5, 8 and 9 hereof on such date as
MARINEMAX shall determine (the "Closing Date") at the offices of O'Connor,
Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback Road,
Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles of
Merger shall be or shall have been filed with the appropriate state authorities
so that the Merger shall be effective at the Effective Time, and (y) the parties
shall be deemed to have consummated the transactions contemplated by this
Agreement, including, without limitation, the conversion and delivery of shares,
which the STOCKHOLDERS shall be entitled to receive pursuant to the Merger
referred to in Section 3 hereof. The time at which the actions described in the
preceding clauses (x) and (y) occur shall be referred to as the "Effective
Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS. Each
of COMPANY and the STOCKHOLDERS represents and warrants that all of the
following representations and warranties in this Section 5(A) are true, complete
and correct at the date of this Agreement and, subject to Section 7.8 hereof,
shall be true, complete, and correct at the time of Closing and at the Effective
Time and that such representations and warranties shall survive the Closing and
the Effective Time for a period of the earlier of (i) the date of the first
audit of financial statements of the Surviving Corporation containing combined
operations of MARINEMAX and the Surviving Corporation for those representations
and warranties set forth within Section 5(A) which representations and
warranties specifically deal with items that would be expected to be encountered
in the audit process, or (ii) twelve (12) months, the last day of such period
being the "Expiration Date". For purposes of this Section 5(A), the term COMPANY
shall mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of California, and has
the requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing of its properties makes such qualification necessary, except (i) as set
forth on Schedule 5.1 or (ii) where the failure to be so authorized or qualified
would not have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise), of COMPANY taken as a
whole (as used herein with respect to COMPANY, or with respect to any person, a
"Material Adverse Effect").
8
<PAGE> 14
Schedule 5.1 sets forth the jurisdiction in which COMPANY is incorporated and
contains a list of all jurisdictions in which COMPANY is authorized or qualified
to do business. True, complete and correct copies of the Articles/Certificate of
Incorporation and Bylaws, each as amended, of COMPANY (the "Charter Documents")
are attached hereto in Schedule 5.1. The stock records of COMPANY, as heretofore
made available to MARINEMAX, are correct and complete in all material respects.
There are no minutes in the possession of COMPANY or the STOCKHOLDERS which have
not been supplied to MARINEMAX, and all of such minutes are correct and complete
in all respects. The most recent minutes of COMPANY, which are dated no earlier
than ten (10) business days prior to the date hereof, affirm and ratify all
prior acts of COMPANY, and of its officers and directors on behalf and for the
benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this
Agreement have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDERS and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY is
as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDERS in the amounts set forth
in Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDERS are the
sole stockholders of COMPANY. Except as disclosed in Schedule 5.3 hereto, each
STOCKHOLDER has at all times during the two (2) year period immediately
preceding the date hereof owned or maintained sole equitable and beneficial
interest in all of the issued and outstanding shares of the capital stock of
COMPANY as to which such STOCKHOLDER is the registered holder, as set forth in
Schedule 5.3 hereto. All of the issued and outstanding shares of the capital
stock of COMPANY have been duly authorized and validly issued, are fully paid
and nonassessable, are owned of record and beneficially by the STOCKHOLDERS and
further, such shares were offered, issued, sold and delivered by COMPANY in
compliance with all applicable state and federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY
Stock since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all stock option or stock purchase plans,
including, without limitation, a list of all outstanding options, warrants or
other rights to acquire shares of COMPANY's stock.
5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
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5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which any STOCKHOLDER acquired his or her
stock in any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been,
within such period of time, a subsidiary or division of another corporation or a
part of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1995 and December 31, 1996 and for the
nine month period ended September 30, 1997. COMPANY Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated and for the periods prior thereto (except as noted thereon
or on Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance
Sheets as of December 31, 1996 and September 30, 1997 each present fairly in all
material respects the financial position of COMPANY as of the dates indicated
thereon, and COMPANY's Statements of Operations, Shareholders' Equity and Cash
Flows referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance Sheet Date, COMPANY has not incurred any material liabilities of any
kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. COMPANY has also delivered to MARINEMAX on Schedule
5.10, in the case of those contingent liabilities related to pending or
threatened litigation, or other liabilities incurred under the agreements listed
pursuant to Section 5.10(ii) which are not fixed or otherwise accrued or
reserved, a good faith and reasonable estimate of the maximum amount which
COMPANY reasonably expects will be payable. For each such contingent liability
or liability for which the amount is not fixed or is contested, COMPANY has
provided to MARINEMAX the following information:
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(i) a summary description of the liability together with the
following:
(a) copies of all relevant documentation relating thereto;
and
(b) amounts claimed and any other action or relief sought;
(ii) the name of each court or agency before which such claim, suit
or proceeding is pending;
(iii) the date such claim, suit or proceeding was instituted; and
(iv) a good faith and reasonable estimate of the maximum amount, if
any, which is likely to become payable with respect to each such liability. If
no estimate is provided, the estimate shall for purposes of this Agreement be
deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDERS. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all
licenses, franchises, permits and authorizations (governmental or otherwise) the
absence of any of which could have a Material Adverse Effect on COMPANY's
business, including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDERS after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew any such license, franchise, permit or authorization. COMPANY has
conducted and is conducting its business in compliance with the requirements,
standards, criteria and conditions set forth in the licenses, franchises,
permits and authorizations listed on Schedules 5.12 and 5.13 and is not in
violation of any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on COMPANY. Except as specifically
provided in Schedule 5.12, the transactions contemplated by this Agreement will
not result in a default under or a breach or violation of, or adversely affect
the rights and benefits afforded to COMPANY by, any such licenses, franchises,
permits or authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with
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and is in compliance with all federal, state, local and foreign statutes (civil
and criminal), laws, ordinances, regulations, rules, notices, permits,
judgments, orders and decrees applicable to COMPANY or any of its properties,
assets, operations and businesses relating to environmental protection
(collectively "Environmental Laws") including, without limitation, Environmental
Laws relating to air, water, land and the generation, storage, use, handling,
transportation, treatment or disposal of Hazardous Wastes and Hazardous
Substances including petroleum and petroleum products (as such terms are defined
in any applicable Environmental Law); (ii) COMPANY has obtained and adhered to
all necessary permits and other approvals necessary to treat, transport, store,
dispose of and otherwise handle Hazardous Wastes and Hazardous Substances, a
list of all of such permits and approvals is set forth on Schedule 5.13; (iii)
COMPANY has reported to the appropriate authorities, to the extent required by
all Environmental Laws, all past and present sites owned and operated by COMPANY
where Hazardous Wastes or Hazardous Substances have been treated, stored,
disposed of or otherwise handled; (iv) there have been no releases or threats of
releases (as defined in Environmental Laws) at, from, in or on any property
owned or operated by COMPANY except as permitted by Environmental Laws; (v)
COMPANY and STOCKHOLDERS know of no on-site or off-site location to which
COMPANY has transported or disposed of Hazardous Wastes and Hazardous Substances
or arranged for the transportation of Hazardous Wastes and Hazardous Substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which is reasonably likely to lead to any
claim against COMPANY, MARINEMAX or NEWCO for any clean-up cost, remedial work,
damage to natural resources, property damage or personal injury, including,
without limitation, any claim under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; and (vi) COMPANY has no
contingent liability in connection with any release of any Hazardous Waste or
Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDERS, relatives of the
STOCKHOLDERS, or Affiliates of COMPANY. Except as set forth on Schedule 5.14,
(i) all material personal property used by COMPANY in its business is either
owned by COMPANY or leased by COMPANY pursuant to a lease included on Schedule
5.14, (ii) all of the personal property listed on Schedule 5.14 is in good
working order and condition, ordinary wear and tear excepted, and (iii) all
leases and agreements included on Schedule 5.14 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for purposes of this
Section, means a customer (or person or entity) representing 5% or more of
COMPANY's annual revenues as of the Balance Sheet Date. Except to the extent set
forth on Schedule 5.15, none of COMPANY's significant current customers have
canceled or substantially reduced or, to the best knowledge and belief of
COMPANY and the STOCKHOLDERS after due inquiry, are currently
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attempting or threatening to cancel a contract or substantially reduce
utilization of the services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic alliances and options to purchase land), other than agreements listed
on Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has attached
a true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or used by COMPANY is zoned
for the conduct of COMPANY's business thereon pursuant to the zoning regulations
of the applicable cities, towns, villages or townships. The uses to which such
real property are presently put (including the location of all buildings and
other improvements thereon) comply in all material respects with the applicable
provisions of such zoning regulations without the benefit of the legal
non-conforming use principle of law, or other regulations of such cities, towns,
villages or townships or any other governmental body.
(ii) As to any real property leased, owned or used by COMPANY there
are no material agreements, commitments or understandings pursuant to which
COMPANY, or its successors in interest are required to dedicate any part of the
real property or to grant any easement, water rights, rights-of-way, or license
for ingress and egress or other use in respect to any part of the real property,
whether on account of the development of adjacent or nearby real property or
otherwise. Other than as provided in the leases of the real property owned by
COMPANY and leased to others, except as set forth in Schedule 5.16 hereto, no
person has any material easement, license or other right whatsoever with respect
to such real property.
(iii) COMPANY holds good and marketable fee simple title to the real
property identified on Schedule 5.16 hereto as owned by COMPANY and good
leasehold title to the real property identified on Schedule 5.16 as leased or
used by COMPANY, in each case free and clear of all material mortgages, charges,
claims, liens, encumbrances, leases, options to purchase, rights of first
refusal, contracts of sale, easements, reservations and restrictions, except
those matters identified in any title reports set forth in Schedule 5.16. No
part of such lands is affected by any restrictions imposed by any governmental
authority affecting construction of structures thereon or the use thereof by
COMPANY other than building codes and zoning classifications.
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(iv) The STOCKHOLDERS and COMPANY do not, either individually or
collectively, have any knowledge of any fact or condition existing that would
result or could result in the termination or material reduction of the current
access to and from the real property owned or leased or used by COMPANY to
existing public roads and highways, or of any reduction in sewer or other
utility services presently serving such real property. The real property
currently owned, leased or used by COMPANY has direct access to public roads and
highways.
(v) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has received any notice from any insurance company of
any material defects or inadequacies in the real property or any part thereof
that would materially and adversely affect the insurability of the real property
or the premiums for the insurance thereof.
(vi) As to the real property owned by COMPANY, neither the
STOCKHOLDERS nor COMPANY has failed to disclose any material conditions of
disrepair or other adverse conditions or defects with respect to the real
property or any portion thereof of which any STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of all leases and agreements
in respect of all real property leased or used by COMPANY are attached to
Schedule 5.16, and an indication as to which such properties, if any, are
currently owned, or were formerly owned, by the STOCKHOLDERS or affiliates of
COMPANY or the STOCKHOLDERS is included in Schedule 5.16, and except as set
forth on Schedule 5.16, all of such leases included on Schedule 5.16 are in full
force and effect and constitute valid and binding agreements of the parties (and
their successors) thereto in accordance with their respective terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1, 1994, no insurance carried by COMPANY has been canceled by the
insurer and COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
COMPANY has delivered to MARINEMAX a true, complete and accurate list (which is
set forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18 and has attached such
copies to Schedule 5.18. Since the Balance Sheet Date, there have been no
increases in the compensation payable or any special bonuses to any officer,
director, key employee or other employee of COMPANY, except ordinary salary
increases implemented on a basis consistent with past practices.
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Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDERS
after due inquiry, threatened, labor dispute involving COMPANY and any group of
its employees nor has COMPANY experienced any labor interruptions over the past
three years. COMPANY believes its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDERS have delivered to MARINEMAX a true,
complete and accurate schedule (Schedule 5.19) showing all employee benefit
plans of COMPANY (including COMPANY's subsidiaries, if any), including, without
limitation, all employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and deferred
compensation agreements, together with true, complete and correct copies of such
plans, agreements and any trusts related thereto, and classifications of
employees covered thereby existing as of the Balance Sheet Date. Except for the
employee benefit plans, if any, described on Schedule 5.19, COMPANY (including
COMPANY's subsidiaries, if any) does not sponsor, maintain or contribute to any
plan program, fund or arrangement that constitutes an "employee pension benefit
plan," nor does COMPANY have any obligation to contribute to or accrue or pay
any benefits under any deferred compensation or retirement funding arrangement
on behalf of any employee or employees (such as, for example, and without
limitation, any individual retirement account or annuity, any "excess benefit
plan" (within the meaning of Section 3(36) of ERISA), or any nonqualified
deferred compensation arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is given that
term in Section 3(2) of ERISA. Neither COMPANY nor any Acquired Party has
sponsored, maintained or contributed to any employee pension benefit plan other
than the plans set forth on Schedule 5.19, nor is COMPANY or any Acquired Party
required to contribute to any retirement plan pursuant to the provisions of any
collective bargaining agreement establishing the terms and conditions or
employment of any of COMPANY's or any Acquired Party's employees.
Neither COMPANY nor any Acquired Party is now, or can as a result of its
past activities become, liable to the Pension Benefit Guaranty Corporation or to
any multiemployer employee pension benefit plan under the provisions of Title IV
of ERISA.
All employee benefit plans listed on Schedule 5.19 and the administration
thereof are in substantial compliance with their terms and all applicable
provisions of ERISA and the regulations issued thereunder, as well as with all
other applicable federal, state and local statutes, ordinances and regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries
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(including, without limitation, actuarial reports, audits or tax returns) have
been timely filed or distributed, and copies thereof that have been filed for
tax years 1995 and 1996 are included as part of Schedule 5.20 hereof. Neither
STOCKHOLDERS, any such plan listed in Schedule 5.19 or administrator thereof,
nor COMPANY has engaged in any transaction prohibited under the provisions of
Section 4975 of the Code or Section 406 of ERISA or any other breach of
fiduciary responsibility that could subject STOCKHOLDERS, such administrator or
COMPANY to a tax or penalty on prohibited transactions imposed by Section 4975
of the Code or to any liability under Section 502(i) of ERISA. No such plan
listed in Schedule 5.19 has incurred an accumulated finding deficiency, as
defined in Section 412(a) of the Code and Section 302(1) of ERISA; and COMPANY
has not incurred any liability for excise tax or penalty due to the IRS nor any
liability to the Pension Benefit Guaranty Corporation. It is further represented
and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the
provisions of Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section
4062 of ERISA; and
(v) no circumstances exist pursuant to which COMPANY could
have any direct or indirect liability whatsoever (including, without limitation,
any liability to any multiemployer plan or the Pension Benefit Guaranty
Corporation under Title IV of ERISA or to the IRS for any excise tax or
penalty), or be subject to any statutory lien to secure payment of any such
liability with respect to any plan now or heretofore maintained or contributed
to by any entity other than COMPANY that is, or at any time was, a member of a
"controlled group" (as defined in Section 412(n)(6)(B) of the Code) that
includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has conducted and is conducting its
business in substantial compliance with the requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, including all such permits, licenses, orders and other governmental
approvals set forth on Schedules 5.12 and 5.13, and is not in violation of any
of the foregoing which would have a Material Adverse Effect.
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5.22 TAXES. COMPANY (including all the Acquired Parties) has timely filed
all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and including the Balance Sheet Date, and no
notice of any such claim for Taxes, whether pending or threatened, has been
received. All Tax, including, without limitation, all related interest and
penalties (whether or not shown on any tax return) owed by any of the Acquired
Parties, or with respect to any payment made or deemed made by any of the
Acquired Parties has been paid. The amounts shown as accruals for Taxes on
COMPANY Financial Statements are sufficient for the payment of all Taxes of the
kinds indicated (including, without limitation, penalties and interest) for all
fiscal periods ended on or before the Balance Sheet Date. Copies of (i) any tax
examinations; (ii) extensions of statutory limitations; and (iii) the federal,
state and local income tax returns and franchise tax returns of COMPANY
(including the Acquired Parties) for the last three (3) fiscal years, or such
shorter period of time as any of them shall have existed, are attached hereto as
Schedule 5.22. If COMPANY is an S-Corporation, the STOCKHOLDERS made a valid
election under the provisions of Subchapter S of the Code and COMPANY has
appropriately not, within the past five years, been taxed under the provisions
of Subchapter C of the Code. COMPANY has a taxable year ended on September 30
and, if COMPANY is an S-Corporation, COMPANY has not made an election to retain
a fiscal year ending on a date other than December 31 pursuant to Section 444 of
the Code. COMPANY's methods of accounting have not changed in the past five
years. COMPANY is not an investment company as defined in Section 351(e)(1) of
the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter Document.
Neither COMPANY nor, to the best knowledge and belief of COMPANY and the
STOCKHOLDERS after due inquiry, any other party thereto, is in material default
under any lease, instrument, agreement, license or permit set forth on Schedules
5.12 through 5.19 (inclusive), or any other material agreement to which it is a
party or by which its properties are bound (the "Material Documents"); and,
except as set forth in Schedule 5.23, (a) the rights and benefits of COMPANY
under the Material Documents will not be materially adversely affected by the
transactions contemplated hereby and (b) the execution of this Agreement and the
performance of the obligations hereunder and the consummation of the
transactions contemplated hereby will not result in any material violation or
breach or constitute a default under, any of the terms or provisions of any of
the Material Documents or Charter Documents. Except as set forth on Schedule
5.23, none of the Material Documents requires notice to, or the consent or
approval of, any governmental agency or other third party with respect to any of
the transactions contemplated hereby in order to remain in full force and
effect, and consummation of the transactions contemplated hereby will not give
rise to any right to termination, cancellation, acceleration or loss of any
right or benefit arising thereunder. Except as set forth on Schedule 5.23, none
of the Material Documents prohibits the use or publication by COMPANY, MARINEMAX
or NEWCO of the name of any other party to such Material Document, and none of
the Material Documents prohibits or restricts COMPANY from freely providing
services to any other customer or potential customer of COMPANY, MARINEMAX,
NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24, COMPANY
is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
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5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of COMPANY;
(ii) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock of COMPANY, or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of COMPANY;
(v) any increase in the compensation, bonus, sales commissions or
fee arrangement payable or to become payable by COMPANY to any of its officers,
directors, the STOCKHOLDERS, employees, consultants or agents, except for
ordinary and customary bonuses and salary increases for employees in accordance
with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed, or
any event or condition of any character, materially and adversely affecting the
business of COMPANY;
(vii) any sale or transfer, or any agreement to sell or transfer,
any material asset, property or right of COMPANY to any person, including,
without limitation, the STOCKHOLDERS or their affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to COMPANY, including, without limitation, any
indebtedness or obligation of any STOCKHOLDERS or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, properties or
rights of COMPANY or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course of its
business;
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(xiv) any cancellation or termination of a material contract with a
customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by COMPANY other
than in the ordinary course of COMPANY's business.
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which COMPANY has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or have
access thereto. Schedule 5.26 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from COMPANY and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by COMPANY and the performance of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors and the
stockholders of COMPANY and this Agreement has been duly and validly authorized
by all necessary corporate action and is a legal, valid, binding and enforceable
obligation of COMPANY. The execution and delivery of this Agreement by each of
the STOCKHOLDERS and the performance of the transactions contemplated herein is
a legal, valid, binding and enforceable obligation of the STOCKHOLDERS and each
of them, each having the appropriate legal capacity to execute and deliver this
Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions made
in a lawful manner which, in the aggregate, do not exceed $10,000 per year for
each year in which any STOCKHOLDER has been a stockholder of COMPANY, COMPANY
has not made, offered or agreed to offer anything of value to any governmental,
official, political party or candidate for government office, nor has COMPANY or
any STOCKHOLDER otherwise taken any action which would cause COMPANY to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any law
of similar effect. If political contributions made by COMPANY have exceeded
$10,000 per year for each year in which any STOCKHOLDER has been a stockholder
of COMPANY, each contribution in the amount of $5,000 or more is accurately
described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29, COMPANY
has not, between the Balance Sheet Date and the date hereof, taken any of the
actions prohibited by Section 7.3 hereof.
5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDERS in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they
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were made, not misleading; provided, however, that the foregoing does not apply
to statements contained in or omitted from any of such documents made or omitted
in reliance upon information furnished by MARINEMAX. If, prior to the Closing,
COMPANY or the STOCKHOLDERS become aware of any fact or circumstance that would
affect the accuracy of any representation or warranty of COMPANY or the
STOCKHOLDERS in this Agreement in any material respect, COMPANY and the
STOCKHOLDERS shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDERS of their respective
obligations under this Agreement, and, subject to the provisions of Section 7.8,
at the sole option of MARINEMAX, the truth and accuracy of any and all
representations and warranties of COMPANY and/or STOCKHOLDERS, or on behalf of
COMPANY and/or STOCKHOLDERS, made at the date of this Agreement and on the
Closing Date and at the Effective Time, shall be a precondition to the
consummation of the Merger and the other transactions contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each STOCKHOLDER
severally represents and warrants that the representations and warranties set
forth below are true at the date of this Agreement and, subject to Section 7.8
hereof, shall be true at the time of Closing and at the Effective Time, and that
such representations and warranties shall survive for a period of the earlier of
(i) the date of the first audit of financial statements of the Surviving
Corporation containing combined operations of MARINEMAX and the Surviving
Corporation for those representations set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
5.31 AUTHORITY: OWNERSHIP. Such STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. Such STOCKHOLDER
owns beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by such STOCKHOLDER, and, except as set forth on
Schedule 5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. Such STOCKHOLDER does not have, or hereby waives,
any preemptive or other right to acquire shares of COMPANY Stock or MARINEMAX
Stock that such STOCKHOLDER has or may have had other than rights of any
STOCKHOLDER to acquire MARINEMAX Stock pursuant to (i) this Agreement, or (ii)
any option granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. No STOCKHOLDER is under
any binding commitment or contract to sell, exchange or otherwise dispose of any
shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations and warranties shall survive the Closing and the Effective Time
for a period of the earlier of (i) the date of the first audit of financial
statements of the Surviving Corporation containing combined operations of
MARINEMAX and the Surviving Corporation for those representations and warranties
set forth within Section 6 which representations and warranties specifically
deal with items that would be expected to be
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encountered in the audit process, or (ii) twelve (12) months, the last day of
such period being the "Expiration Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature of its business makes such qualification necessary, except where the
failure to be so authorized or qualified would not have a Material Adverse
Effect. True, complete and correct copies of the Certificate of Incorporation
and Bylaws, each as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter
Documents") are all attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and NEWCO
executing this Agreement have the authority to enter into and bind MARINEMAX and
NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the full legal
right, power and authority to enter into this Agreement and the Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock
of MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii),
respectively. All of the issued and outstanding shares of the capital stock of
NEWCO are owned by MARINEMAX and all of the issued and outstanding shares of the
capital stock of MARINEMAX are owned by the persons set forth on Schedule 6.3
hereof, in each case, free and clear of all liens, security interests, pledges,
charges, voting trusts, restrictions, encumbrances and claims of every kind. All
of the issued and outstanding shares of the capital stock of MARINEMAX and NEWCO
have been duly authorized and validly issued, are fully paid and nonassessable,
are owned of record and beneficially by MARINEMAX and the persons set forth on
Schedule 6.3, respectively, and further, such shares were offered, issued, sold
and delivered by MARINEMAX and NEWCO in compliance with applicable state and
federal laws concerning the issuance of securities. Further, none of such shares
were issued in violation of the preemptive rights of any past or present
stockholder of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no
subsidiaries except for (i) NEWCO and each of the companies identified as
"NEWCO" in each of the Other Agreements, and (ii) those newly formed
corporations which will receive certain pieces and parcels of real property, and
except as set forth in the preceding sentence, neither MARINEMAX nor NEWCO
presently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and neither
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MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to any of the
STOCKHOLDERS.
6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by MARINEMAX and NEWCO and the performance of the transactions
contemplated herein have been duly and validly authorized by the respective
Boards of Directors of MARINEMAX and NEWCO, and this Agreement has been duly and
validly authorized by all necessary corporate action and is a legal, valid and
binding obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX
Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement will
constitute valid and legally issued shares of MARINEMAX, fully paid and
nonassessable, and with the exception of restrictions upon resale set forth in
Sections 15 and 16 hereof and in the "Pooling Letters", will be identical in all
respects (which do not include the form of certificate upon which it is printed
or the presence or absence of a CUSIP number on any such certificate) to the
MARINEMAX Stock issued and outstanding as of the date hereof by reason of the
provisions of the Delaware GCL. The shares of MARINEMAX Stock to be issued to
the STOCKHOLDERS pursuant to this Agreement will not be registered under the
1933 Act, and will be issued to the STOCKHOLDERS pursuant to a valid exemption
from registration under the 1933 Act and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDERS in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDERS.
6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX
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and the Other Founding Companies access to all of COMPANY's and any Acquired
Party's sites, properties, books and records and will furnish MARINEMAX with
such additional financial and operating data and other information as to the
business and properties of COMPANY and any Acquired Party as MARINEMAX or the
Other Founding Companies may from time to time reasonably request. COMPANY will
cooperate with MARINEMAX and the Other Founding Companies, its and their
representatives, auditors and counsel in the preparation of any documents or
other material which may be required in connection with any documents or
materials required by this Agreement. MARINEMAX, NEWCO, the STOCKHOLDERS and
COMPANY will treat all information obtained in connection with the negotiation
and performance of this Agreement or the due diligence investigations conducted
with respect to the Other Founding Companies as confidential in accordance with
the provisions of Section 14 hereof. In addition, MARINEMAX will cause each of
the Other Founding Companies to enter into a provision similar to this Section
7.1 requiring each such Other Founding Company, its stockholders, directors,
officers, representatives, employees and agents to keep confidential any
information obtained by such Other Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents or other material which may be required in connection with any
documents or materials required by this Agreement. COMPANY will cause all
information obtained in connection with the negotiation and performance of this
Agreement to be treated as confidential in accordance with the provisions of
Section 14 hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as it
has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present, ordinary
wear and tear excepted;
(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and effect
present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its
business organization intact, retain its respective present key employees and
maintain its respective relationships with suppliers, customers and others
having business relations with COMPANY or any Acquired Party, as applicable;
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(vi) maintain compliance with all material permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not enter into
new or amended debt or lease instruments except as permitted by Section 10.6,
without the knowledge and consent of MARINEMAX (which consent shall not be
unreasonably withheld), provided that debt and/or lease instruments may be
replaced without the consent of MARINEMAX if such replacement instruments are on
terms at least as favorable to COMPANY or any Acquired Party, as applicable, as
the instruments being replaced; and
(viii) maintain or reduce present salaries and commission levels for
all officers, directors, employees and agents except for ordinary and customary
bonus and salary increases for employees in accordance with past practices of
COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of Incorporation
or Bylaws;
(ii) issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind other than in
connection with the exercise of options or warrants listed in Schedule 5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $50,000 necessary or desirable for the conduct of its business, (2)
(a) liens for taxes either not yet due or being contested in good faith and by
appropriate proceedings (provided that with respect to contested taxes, adequate
reserves have been established and are being maintained) or (b) materialmen's,
mechanics', workers', repairmen's, employees' or other like liens arising in the
ordinary course of its business (the liens set forth in clause (2) above may be
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.10 and/or 5.15 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the start-up
of any new business;
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(viii) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(ix) waive any material rights or claims of COMPANY or any Acquired
Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any material
agreement, permit, license or other right of COMPANY or any Acquired Party, as
applicable; or
(xi) enter into any other transaction outside the ordinary course
of its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
7.6 AGREEMENTS. The STOCKHOLDERS and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDERS and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the
STOCKHOLDERS contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing, and (ii) any material failure of any STOCKHOLDER or
COMPANY to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. MARINEMAX and NEWCO shall
give prompt notice to COMPANY of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules
required by this Agreement from the respective parties hereto shall be delivered
at the execution of this Agreement. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and
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5.15 shall only have to be delivered at the Closing Date, unless such Schedule
is to be amended to reflect an event occurring other than in the ordinary course
of business. Notwithstanding the foregoing sentence, no amendment or supplement
to a Schedule prepared by COMPANY or the STOCKHOLDERS that constitutes or
reflects an event or occurrence that would have a Material Adverse Effect may be
made unless MARINEMAX and a majority of the Founding Companies other than
COMPANY consent to such amendment or supplement; and provided further, that no
amendment or supplement to a Schedule prepared by MARINEMAX or NEWCO that
constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless a majority of the Founding Companies consent
to such amendment or supplement. For all purposes of this Agreement, including
without limitation for purposes of determining whether the conditions set forth
in Sections 8.1 and 9.1 have been fulfilled, the Schedules hereto shall be
deemed to be the Schedules as amended or supplemented pursuant to this Section
7.8. In the event that one of the Other Founding Companies seeks to amend or
supplement a Schedule pursuant to Section 7.8 of one of the Other Agreements,
and such amendment or supplement constitutes or reflects an event or occurrence
that would have a Material Adverse Effect on such Other Founding Company,
MARINEMAX shall give COMPANY notice thereof. If MARINEMAX and a majority of the
Founding Companies consent to such amendment or supplement, which consent shall
have been deemed given by MARINEMAX or any Founding Company if no response is
received within twenty-four (24) hours following receipt of notice of such
amendment or supplement (or sooner if required by the circumstances under which
such consent is requested), but COMPANY does not give its consent, COMPANY
shall, without further act or action, be deemed to have given its consent and
may not thereafter terminate this Agreement. In the event that COMPANY seeks to
amend or supplement a Schedule pursuant to this Section 7.8, and MARINEMAX and a
majority of the Other Founding Companies do not consent to such amendment or
supplement, this Agreement shall be deemed terminated by mutual consent as set
forth in Section 12.1(i) hereof. In the event that MARINEMAX or NEWCO seeks to
amend or supplement a Schedule pursuant to this Section 7.8 and a majority of
the Founding Companies do not consent to such amendment or supplement, this
Agreement shall be deemed terminated by mutual consent as set forth in Section
12.1(i) hereof. No party to this Agreement shall be liable to any other party if
this Agreement shall be terminated pursuant to the provisions of this Section
7.8. No amendment of or supplement to a Schedule shall be made later than
twenty-four (24) hours prior to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all months
and fiscal quarters ended after the Balance Sheet Date and on or before December
31, 1997 (collectively, the "Final COMPANY Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from COMPANY Financial Statements as of the Balance Sheet Date.
The Final COMPANY Financial Statements shall have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated and
with past periods (except as noted therein). Except as noted in the Final
COMPANY Financial Statements, all of such financial statements will present
fairly the results of operations of COMPANY for the periods indicated therein.
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7.11 FURTHER ASSURANCES. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents and
take such other actions as may be reasonably necessary or convenient to carry
out the transactions contemplated hereby, including, without limitation, all
further instruments, documents and actions as may be reasonably required by
MARINEMAX's independent public accountants and attorneys with respect to the
pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDERS and COMPANY shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the Hart-Scott Act to be made. If filings under the
Hart-Scott Act are required, the costs and expenses thereof (including filing
fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS AND
COMPANY
The obligations of the STOCKHOLDERS and COMPANY with respect to actions to
be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDERS
(acting in unison) shall have the right to terminate this Agreement, or in the
alternative, waive any condition not so satisfied. Any act or action of the
STOCKHOLDERS in consummating the Closing or delivering certificates representing
the COMPANY Stock shall constitute a waiver of any conditions not so satisfied.
However, no such waiver shall be deemed to affect the survival of the
representations and warranties of MARINEMAX and NEWCO contained in Section 6
hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by MARINEMAX and NEWCO on or
before the Closing Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by the President or any Vice President of MARINEMAX shall have been
delivered to the STOCKHOLDERS.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
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8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which COMPANY deems
it inadvisable to proceed with the transactions contemplated herein.
8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate
or certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall have been afforded the opportunity to enter into an employment agreement
substantially in the form attached hereto as Annex IV.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be taken
on the Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the conditions in this Section 9. As of the Closing Date,
all conditions not satisfied shall be deemed to have been waived, except that no
such waiver shall be deemed to affect the survival of the representations and
warranties of COMPANY and the STOCKHOLDERS contained in Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDERS, and COMPANY as defined in
Section 5 hereof, contained in
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this Agreement shall be true and correct in all material respects as of the
Closing Date and the Effective Time with the same effect as though such
representations and warranties had been made on and as of such date and time;
all of the terms, covenants and conditions of this Agreement to be complied with
or performed by the STOCKHOLDERS and COMPANY on or before the Closing Date or
the Effective Time, as the case may be, shall have been duly performed or
complied with in all material respects; and the STOCKHOLDERS shall have
delivered to MARINEMAX certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by each of the STOCKHOLDERS.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which the
management of MARINEMAX deems it inadvisable to proceed with the transactions
hereunder.
9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a
certificate, dated the Closing Date and signed by the secretary of COMPANY,
certifying the truth and correctness of attached copies of the Charter Documents
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the board of directors and the STOCKHOLDERS approving COMPANY's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDERS' RELEASE. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDERS against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDERS,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDERS, (ii) continuing obligations to the
STOCKHOLDERS relating to their employment by COMPANY and (iii) obligations
arising under this Agreement or the transactions contemplated hereby. The
STOCKHOLDER Release to be delivered pursuant to this Section shall be in form
and content as set forth in Annex V hereto.
9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of
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MARINEMAX as a result of which MARINEMAX deems it inadvisable to proceed with
the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to
MARINEMAX certificates, dated as of a date no earlier than ten (10) days prior
to the Closing Date, duly issued by the appropriate governmental authority in
COMPANY's and all Acquired Parties' states of incorporation and, unless waived
by MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
9.10 POOLING LETTERS. The STOCKHOLDERS shall each have executed and
delivered a letter agreement in favor of MARINEMAX and NEWCO, in form and
content as set forth in Annex VI attached hereto (the "Pooling Letters"),
pursuant to which each STOCKHOLDER shall agree to hold the MARINEMAX Stock
received by such STOCKHOLDER, for such period of time as is necessary to allow
the Merger to be accounted for as a "pooling-of-interests" under the rules and
regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 9.11
shall enter into an employment agreement effective as of the Effective Time,
substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDERS shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDERS shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. Each STOCKHOLDER shall have delivered to
MARINEMAX a certificate to the effect that he is not a foreign person pursuant
to Section 1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENTS. STOCKHOLDERS shall each have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDERS' GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDERS released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as contemplated
by this Agreement after the Effective Time, MARINEMAX shall not, and shall not
permit any of its subsidiaries, to undertake any act that would jeopardize the
tax-free status or the "pooling-of-interests" accounting
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treatment of the organization set forth herein, including, without limitation,
the retirement or reacquisition, directly or indirectly, of all or part of the
MARINEMAX Stock issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDERS in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDERS shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable periods that end
at or before the Effective Time. Each STOCKHOLDER shall pay or cause to be paid
all Tax liabilities (in excess of all amounts already paid with respect thereto
or properly accrued or reserved with respect thereto on COMPANY Financial
Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate Returns
of, or that include, any Acquired Party for all taxable periods ending after the
Effective Time.
(iii) Each party hereto shall, and shall cause its subsidiaries and
affiliates to, provide to each of the other parties hereto such cooperation and
information as any of them reasonably may request in filing any Return, amended
Return or claim for refund, determining a liability for Taxes or a right to
refund of Taxes or in conducting any audit or other proceeding in respect of
Taxes. Such cooperation and information shall include providing copies of all
relevant portions of relevant Returns, together with relevant accompanying
schedules and relevant work papers, relevant documents relating to rulings or
other determinations by any taxing authority and relevant records concerning the
ownership and tax basis of property, which such party may possess. Each party
shall make its employees reasonably available on a mutually convenient basis at
its cost to provide explanation of any documents or information so provided.
Subject to the preceding sentence, each party required to file Returns pursuant
to this Agreement shall bear all costs of filing such Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and each STOCKHOLDER shall
comply with the tax reporting requirements of Section 1.351-3 of the Treasury
Regulations promulgated under the Code, and treat the transaction as a tax-free
contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons who
are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective
Time, MARINEMAX shall not terminate any health insurance, life insurance or
401(k) plan in effect at COMPANY until such time as MARINEMAX is able to replace
such plan with a plan that is applicable to MARINEMAX and all of its then
existing subsidiaries, provided that MARINEMAX shall have no obligation to
provide replacement plans that have the same terms and provisions as the
existing plans, provided, further, that any new health insurance plan shall
provide for coverage for preexisting conditions. At the Effective
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Time, the employees of COMPANY will be the employees of the Surviving
Corporation provided that this provision is for purposes of clarifying that the
Merger, in and of itself, will not have any impact on the employment status of
any employee and provided, further that this provision shall not in any way
limit the management rights of the Surviving Corporation or MARINEMAX to assess
work force needs and make appropriate adjustments as necessary or desirable
within their discretion (subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare or
pay any dividends or distributions to any of the STOCKHOLDERS, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of combined operations of COMPANY
and MARINEMAX after giving effect to the Merger and the transactions
contemplated by the Other Agreements, to the end that the STOCKHOLDERS may
thereafter sell the MARINEMAX Stock received in the Merger, without such sale
violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDERS, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS each
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDERS or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDERS or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that it
will indemnify, defend, protect and hold harmless the STOCKHOLDERS at all times
from and after the date of this Agreement until the Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDERS as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDERS may incur due to
MARINEMAX's or NEWCO's failure to be responsible
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for the liabilities and obligations of COMPANY as provided in Section 1 hereof
(except to the extent that MARINEMAX or NEWCO has claims against the
STOCKHOLDERS by reason of such liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not settle any criminal
proceeding or agree to any nonmonetary remedy without the prior written consent
of the Indemnified Party, whose consent may be withheld in its sole discretion.
If the Indemnifying Party undertakes to defend or settle, it shall promptly
notify the Indemnified Party of its intention to do so, and the Indemnified
Party shall cooperate with the Indemnifying Party and its counsel in the defense
thereof and in any settlement thereof. Such cooperation shall include, but shall
not be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. All Indemnified Parties shall use the
same counsel, which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a conflict of
interest that prevents counsel for the Indemnifying Party from representing
Indemnified Party, Indemnified Party shall have the right to participate in such
matter through counsel of its own choosing and Indemnifying Party will reimburse
the Indemnified Party for the reasonable expenses of such counsel. After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except (a) as set forth in the preceding sentences, and (b) to the
extent such participation is requested by the Indemnifying Party, in which event
the Indemnified Party shall be reimbursed by the Indemnifying Party for
reasonable additional legal expenses and out-of-pocket expenses. If the
Indemnifying Party desires to accept a final and complete settlement of any
Third Person's claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section with
respect to such Third Person claim shall be limited to the amount so offered in
settlement by said Third Person. Upon agreement as to a settlement between said
Third Person and the Indemnifying Party, the Indemnifying Party shall, in
exchange for a complete release from the Indemnified Party, promptly (x) in the
case of MARINEMAX being the Indemnifying Party, pay to the Indemnified Party the
amount agreed to in such settlement, and (y) in the case of the STOCKHOLDERS
being the Indemnifying Party, cause the MARINEMAX Stock held in escrow to be
used in such settlement; and the Indemnified Party shall, from that moment on,
bear full responsibility for any additional costs of defense which it
subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party in the manner set
forth above in this Section 11.3 for the amount paid in such settlement and any
other liabilities or expenses incurred by the
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Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person's claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnifying Party, unless the Indemnifying Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDERS until such time as, and
solely to the extent that, the aggregate of all claims that such persons may
have against the STOCKHOLDERS shall exceed the sum of $130,000 (the
"Indemnification Deductible"); and after such Indemnification Deductible amount
has been attained, only claims in excess of such amount shall be indemnified
hereunder. The STOCKHOLDERS shall not assert any claim for indemnification
hereunder against MARINEMAX or NEWCO until such time as, and solely to the
extent that, the aggregate of all claims which the STOCKHOLDERS may have against
MARINEMAX or NEWCO shall exceed the sum of $130,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDERS.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDERS. It is hereby
understood and agreed that STOCKHOLDERS may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
For purposes of calculating the value of the MARINEMAX Stock received by
STOCKHOLDERS, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX,
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NEWCO, COMPANY and the Surviving Corporation at all times, from and after date
of this Agreement until the applicable Expiration Date, for, from and against
all claims, damages, actions, suit, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred on or prior
to the Expiration Date (or thereafter if a claim has been made therefor prior to
such date) by MARINEMAX, NEWCO, COMPANY or the Surviving Corporation as a result
of or arising from: (i) any use, generation, transportation, storage, treatment,
disposal or presence of Hazardous Wastes and/or Hazardous Substances occurring
on or prior to the Effective Time including, without limitation, any waste or
other disposal activities or releases which occurred at a facility on which any
portion of the COMPANY's (or its predecessors') business was conducted, any
waste or other disposal activities or releases which occurred off of any such
facility with regard to wastes and other substances generated on such facility,
and any waste or other disposal activities or releases which occurred on real
estate at any time whether or not the COMPANY (or its predecessors) owned or
leased such real estate at the time such waste or other disposal activities or
releases were engaged in, and whether or not the COMPANY performed such waste or
other disposal activities or releases; (ii) any past, present or threatened
spills, discharges, leaks, emissions, injections, escapes, dumping, pumping,
pouring, emptying, leaching, leaking, disposing or any releases or threatened
releases as defined now or in the future under any applicable Environmental Law,
to surface waters, groundwaters, soil, ambient air or otherwise into the
environment occurring as a result of any activities of the COMPANY (or its
predecessors') on or prior to the Effective Time, including, without limitation,
both those releases or incidents involving potential or actual environmental
contamination which required notification or reporting to appropriate federal,
state or local officials or agencies, or clean-up or remedial activities and
those releases or incidents which occurred prior to the effective date of any
requirements imposing such notification or reporting obligations or clean-up or
remedial activities, but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such requirements; (iii)
the exposure of and resulting consequences to any persons, including, without
limitation, employees of the COMPANY, to any mineral, chemical or industrial
product, raw material intermediate, by-product or Hazardous Waste and/or
Hazardous Substance created, stored, treated, generated, processed, handled or
originating at a facility at which the COMPANY (or any of its predecessors)
conducted business on or prior to the Effective Time or otherwise used by the
COMPANY (or any of its predecessors) in the conduct of its or their business;
(iv) any violations or claim of violations by the COMPANY, or pertaining to its
properties, of Environmental Laws, occupational or employee health and safety
laws or otherwise arising out of or under such laws, which violations or alleged
violations occurred prior to the Effective Time; (v) any and all actions,
failures to act and negligence in monitoring, maintaining and upkeep of on-site
generation, storage, treatment, transportation and disposal operations on or
prior to the Effective Time; (vi) any installation, use, removal, maintenance or
monitoring of storage tanks or related facilities on or prior to the Effective
Time; or (vii) any violations, fees, obligations or failures to comply with any
and all Environmental Laws, permit requirements, authorizations, orders and
other administrative or legal directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time solely:
(i) by mutual consent of the boards of directors of MARINEMAX,
NEWCO and COMPANY;
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(ii) by the STOCKHOLDERS or COMPANY (acting through its board of
directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
(iii) by the STOCKHOLDERS or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDERS or
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDERS will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any business
that sells, rents and leases and boating, nautical or other similar lifestyle
entertainment products and services, in direct competition with MARINEMAX or any
of the subsidiaries thereof, within 100 mile radius of where COMPANY, any
Acquired Party, MARINEMAX or any of its or their existing or future subsidiaries
conduct business (the "Territory");
(ii) call upon any person who is or becomes during the Restricted
Period an employee of MARINEMAX (including the subsidiaries thereof) in a sales
representative or managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of MARINEMAX (including
the subsidiaries thereof), provided that each STOCKHOLDER shall be permitted to
call upon and hire any member of his or her immediate family;
(iii) call upon any person or entity that is, or becomes during the
Restricted Period, or which has been, within one (1) year prior to the Effective
Time, a customer of MARINEMAX (including the subsidiaries thereof), of COMPANY,
any Acquired Party or of any of the Other Founding
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Companies for the purpose of soliciting or selling products or services in
direct competition with MARINEMAX within the Territory;
(iv) call upon any prospective acquisition candidate, on any
STOCKHOLDERS own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
such STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary thereof) or for which, to the best knowledge and belief of such
STOCKHOLDER after due inquiry, MARINEMAX (or any subsidiary thereof) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever except to the extent that
COMPANY or any Acquired Party has in the past disclosed such information to the
public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit any STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, each STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDERS in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13 shall
be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of each STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants
37
<PAGE> 43
contained in Section 13 shall not be affected by any breach of any other
provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDERS hereby agree that this
covenant is a material and substantial part of this transaction.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDERS. The STOCKHOLDERS recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
businesses. The STOCKHOLDERS each agree that they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of MARINEMAX, (b) following the Closing, such information may be
disclosed by the STOCKHOLDERS as is required in the course of performing their
duties for MARINEMAX or the Surviving Corporation, and (c) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 14.1, unless (i) such information
becomes known to the public generally through no fault of the STOCKHOLDERS, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), the STOCKHOLDERS shall, if possible, give prior written notice
thereof to MARINEMAX and provide MARINEMAX with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any of the
STOCKHOLDERS of the provisions of this Section, MARINEMAX shall be entitled to
an injunction restraining such STOCKHOLDERS from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting MARINEMAX from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, the
STOCKHOLDERS shall have none of the above-mentioned restrictions on their
ability to disseminate confidential information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and acknowledge
that they had in the past and currently have access to certain confidential
information of COMPANY, such as operational policies, and pricing and cost
policies that are valuable, special and unique assets of COMPANY's business.
MARINEMAX and NEWCO agree that, prior to the Closing, or if the transactions
contemplated by this Agreement are not consummated, they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of COMPANY, (b) to counsel and other advisers, provided that
such advisers (other than counsel) agree to the confidentiality provisions of
this Section 14.1, (c) to the Other Founding Companies and their representatives
pursuant to Section 7.1(a), unless (i) such information becomes known to the
public generally through no fault of MARINEMAX or NEWCO, (ii) disclosure is
required by law or the order of any governmental authority under color of law,
provided, that prior to disclosing any information pursuant to this clause (ii),
MARINEMAX and NEWCO shall, if possible, give prior written notice thereof to
COMPANY and the STOCKHOLDERS and provide COMPANY and the STOCKHOLDERS with the
opportunity to contest such disclosure, or
38
<PAGE> 44
(iii) the disclosing party reasonably believes that such disclosure is required
in connection with the defense of a lawsuit against the disclosing party, and
(d) to the public to the extent necessary or advisable in connection with
applicable securities laws. In the event of a breach or threatened breach by
MARINEMAX or NEWCO of the provisions of this Section, COMPANY and the
STOCKHOLDERS shall be entitled to an injunction restraining MARINEMAX and NEWCO
from disclosing, in whole or in part, such confidential information. Nothing
herein shall be construed as prohibiting COMPANY and the STOCKHOLDERS from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14 shall
survive the termination of this Agreement for a period of five (5) years from
the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDERS shall not sell, assign,
exchange, transfer, encumber, pledge, distribute, appoint, or otherwise dispose
of any shares of MARINEMAX Stock received by the STOCKHOLDERS in the Merger in
violation of the provisions of the Pooling Letters referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY OF
THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICES OF THIS CORPORATION.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDERS acknowledge that the shares of
MARINEMAX Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement
have not been and will not be registered under the Act and therefore may not be
resold without compliance with the Act. The MARINEMAX Stock to be acquired by
such STOCKHOLDERS pursuant to this Agreement is being acquired solely for their
own respective accounts, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution. The STOCKHOLDERS covenant, warrant and represent that none
of the shares of MARINEMAX Stock issued to such STOCKHOLDERS will be offered,
sold, assigned, pledged, hypothecated, transferred or otherwise disposed of
except after full compliance with all of the applicable provisions of the Act
and the rules and regulations of the SEC. The certificates evidencing the
MARINEMAX Stock delivered to the
39
<PAGE> 45
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND
ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS. THE SHARES
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR THE RECEIPT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS
NOT REQUIRED.
16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDERS are able to bear the
economic risk of an investment in the MARINEMAX Stock to be acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment and
have such knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of the proposed investment in the
MARINEMAX Stock. The STOCKHOLDERS have had an adequate opportunity to ask
questions and receive answers from the officers of MARINEMAX concerning any and
all matters relating to the transactions described herein including, without
limitation, the background and experience of the current and proposed officers
of MARINEMAX, the business, operations and financial condition of the Other
Founding Companies, and any plans for additional acquisitions and the like. The
STOCKHOLDERS have asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to their satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDERS, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
MARINEMAX, and the heirs and legal representatives of the STOCKHOLDERS.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the STOCKHOLDERS, COMPANY, NEWCO
and MARINEMAX and supersede any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement, upon execution,
constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written
instrument executed by the
40
<PAGE> 46
STOCKHOLDERS, COMPANY, NEWCO and MARINEMAX, acting through their respective
officers, duly authorized by their respective Boards of Directors.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each party
represents and warrants that it employed no broker or agent in connection with
this transaction and agrees to indemnify the other parties hereto against all
loss, cost, damages or expense arising out of claims for fees or commission of
brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated shall
be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. Each STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each STOCKHOLDER acknowledges that he or she, and not COMPANY or
MARINEMAX, will pay all taxes due upon receipt of the consideration payable
pursuant to Section 2 hereof, and will assume all tax risks and liabilities of
such STOCKHOLDER in connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
41
<PAGE> 47
(b) If to the STOCKHOLDERS, addressed to them at:
Stockholder 1:
Richard C. LaManna, Jr. and Judith L. LaManna
3452 Green Stone Place
Redding, California 96001
Stockholder 2:
Darrell Christopher LaManna
20 Riverbank Drive
Carmichael, California 95608
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
Harrison's Boat Center, Inc.
1928 Twin View Blvd.
Redding, California 96003
Attn: Richard C. LaManna, Jr.
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
42
<PAGE> 48
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any term
of this Agreement shall be deemed exclusive but each shall be cumulative with
all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDERS who hold or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the parties hereto, any other
person receiving MARINEMAX Stock in connection with the Merger and each future
holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT. This
Agreement may be executed by facsimile, and shall be deemed effectively executed
upon the receipt by all parties hereto of the last page of this Agreement duly
executed by the other parties hereto. Each party to this Agreement agrees to
deliver six (6) original, inked and signed copies of the execution page of this
Agreement within four (4) days of faxing the executed last page hereof.
[Remainder of Page Intentionally Left Blank]
43
<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
STOCKHOLDERS:
MARINEMAX:
RICHARD C. LAMANNA, JR. AND JUDITH
L. LAMANNA, AS JOINT TENANTS
MARINEMAX, INC., a Delaware corporation
/s/ Richard C. LaManna, Jr.
-------------------------------------
Richard C. LaManna, Jr.
By: /s/
------------------------------------
Name:
----------------------------------
Title: /s/ Judith L. LaManna
--------------------------------- -------------------------------------
Judith L. LaManna
DARRELL CHRISTOPHER LAMANNA AS
NEWCO: TRUSTEE OF THE DARRELL
CHRISTOPHER LAMANNA SEPARATE
PROPERTY TRUST DATED 1/4/93
HARRISON'S CALIFORNIA ACQUISITION
CORP., a Delaware corporation
By: /s/ Darrell Christopher LaManna
-----------------------------------
Darrell Christopher LaManna, Trustee
By: /s/
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COMPANY:
HARRISON'S BOAT CENTER, INC., a
California corporation
By: /s/ Richard C. LaManna, Jr.
------------------------------------
Richard C. LaManna, Jr., President
44
<PAGE> 50
CONSENT OF SPOUSE
The undersigned spouse of Richard C. LaManna, Jr., who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Harrison's California Acquisition Corp., a Delaware corporation with and into
Harrison's Boat Center, Inc., a California corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that she has
read the Agreement in its entirety, and being fully convinced of the wisdom of
the terms of the Agreement, and in consideration of the premises and of the
provisions of the Agreement, hereby expresses her consent to the execution and
consummation of the Agreement by Richard C. LaManna, Jr.
The undersigned further agrees that in the event of the death of Richard
C. LaManna, Jr., the dissolution of their marriage, or any occurrence
contemplated by the Agreement that gives rise to any liability or obligation of
Richard C. LaManna, Jr., the provisions of the Agreement shall be binding upon
her to the extent of any community property she may now have or hereafter
acquire, and any and all separate property that she hereafter acquires which
arises (directly or indirectly) from any consideration given to richard C.
LaManna, Jr. pursuant to the Agreement or any agreement executed in connection
thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
__________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
__________________________________
Notary Public
45
<PAGE> 51
CONSENT OF SPOUSE
The undersigned spouse of Judith L. LaManna, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Harrison's California Acquisition Corp., a Delaware corporation with and into
Harrison's Boat Center, Inc., a California corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that he has
read the Agreement in its entirety, and being fully convinced of the wisdom of
the terms of the Agreement, and in consideration of the premises and of the
provisions of the Agreement, hereby expresses his consent to the execution and
consummation of the Agreement by Judith L. LaManna.
The undersigned further agrees that in the event of the death of Judith L.
LaManna, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Judith L.
LaManna, the provisions of the Agreement shall be binding upon his to the extent
of any community property he may now have or hereafter acquire, and any and all
separate property that he hereafter acquires which arises (directly or
indirectly) from any consideration given to richard C. LaManna, Jr. pursuant to
the Agreement or any agreement executed in connection thereto.
The undersigned further agrees that he will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
__________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998 by
_____________.
__________________________________
Notary Public
46
<PAGE> 1
EXHIBIT 10.1(f)
AGREEMENT AND PLAN OF ORGANIZATION
DATED AS OF THE 1ST DAY OF FEBRUARY, 1998
BY AND AMONG
MARINEMAX, INC.,
HARRISON'S ARIZONA ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
HARRISON'S MARINE CENTERS OF ARIZONA, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
1. THE MERGER..................................................................................... 4
1.1 Delivery of Filing of Articles of Merger............................................. 4
1.2 Effective Time....................................................................... 5
1.3 Articles/Certificate of Incorporation, Bylaws and Board of Directors of
Surviving Corporation................................................................ 5
1.4 Certain Information With Respect to the Capital Stock of COMPANY,
MARINEMAX and NEWCO.................................................................. 5
1.5 Effect of Merger..................................................................... 6
1.6 Accounting Treatment................................................................. 6
2. CONVERSION AND CANCELLATION OF STOCK........................................................... 6
2.1 Manner of Conversion and Cancellation................................................ 6
3. DELIVERY OF MERGER CONSIDERATION............................................................... 7
3.1 Time and Manner of Delivery.......................................................... 7
3.2 Surrender of COMPANY Stock........................................................... 7
3.3 Escrow of Portion of MARINEMAX Stock................................................. 7
4. CLOSING........................................................................................ 8
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE
STOCKHOLDERS................................................................................... 8
(A) Representations and Warranties of COMPANY and the
STOCKHOLDERS......................................................................... 8
5.1 Due Organization..................................................................... 8
5.2 Authorization........................................................................ 9
5.3 Capital Stock of COMPANY............................................................. 9
5.4 Transactions in Capital Stock, Organization Accounting............................... 9
5.5 No Bonus Shares...................................................................... 10
5.6 Subsidiaries......................................................................... 10
5.7 Predecessor Status; Etc.............................................................. 10
5.8 Spin-off by COMPANY.................................................................. 10
5.9 Financial Statements................................................................. 10
5.10 Liabilities and Obligations.......................................................... 10
5.11 Accounts and Notes Receivable........................................................ 11
5.12 Permits and Intangibles.............................................................. 11
5.13 Environmental Matters................................................................ 12
5.14 Personal Property.................................................................... 12
5.15 Significant Customers; Material Contracts and Commitments............................ 13
5.16 Real Property........................................................................ 13
5.17 Insurance............................................................................ 14
5.18 Compensation; Employment Agreements; Organized Labor Matters......................... 15
5.19 Employee Plans....................................................................... 15
5.20 Compliance with ERISA................................................................ 16
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
5.21 Conformity with Law; Litigation...................................................... 17
5.22 Taxes................................................................................ 17
5.23 No Violations........................................................................ 17
5.24 Government Contracts................................................................. 18
5.25 Absence of Changes................................................................... 18
5.26 Deposit Accounts; Powers of Attorney................................................. 19
5.27 Validity of Obligations.............................................................. 19
5.28 Relations with Governments........................................................... 20
5.29 Prohibited Activities................................................................ 20
5.30 Disclosure........................................................................... 20
(B) Representations and Warranties of STOCKHOLDERS....................................... 20
5.31 Authority: Ownership................................................................. 21
5.32 Preemptive Rights.................................................................... 21
5.33 No Intention to Dispose of MARINEMAX Stock........................................... 21
6. REPRESENTATIONS OF MARINEMAX AND NEWCO........................................................ 21
6.1 Due Organization..................................................................... 21
6.2 Authorization........................................................................ 21
6.3 Capital Stock of MARINEMAX and NEWCO................................................. 21
6.4 Transactions in Capital Stock; Organization Accounting............................... 22
6.5 Subsidiaries......................................................................... 22
6.6 Financial Statements................................................................. 22
6.7 [Intentionally Deleted].............................................................. 22
6.8 Validity of Obligations.............................................................. 22
6.9 MARINEMAX Stock...................................................................... 22
6.10 Disclosure........................................................................... 23
6.11 No Undisclosed Agreements............................................................ 23
7. COVENANTS PRIOR TO CLOSING.................................................................... 23
7.1 Access and Cooperation; Due Diligence................................................ 23
7.2 Conduct of Business Pending the Merger............................................... 24
7.3 Prohibited Activities................................................................ 24
7.4 [Intentionally Deleted].............................................................. 25
7.5 [Intentionally Deleted.]............................................................. 25
7.6 Agreements........................................................................... 26
7.7 Notification of Certain Matters...................................................... 26
7.8 Delivery of Schedules; Amendment of Schedules........................................ 26
7.9 [Intentionally Deleted].............................................................. 27
7.10 Final Financial Statements........................................................... 27
7.11 Further Assurances................................................................... 27
7.12 [Intentionally Deleted].............................................................. 27
7.13 Compliance with the Hart-Scott Act................................................... 27
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS
AND COMPANY................................................................................... 28
8.1 Representations and Warranties; Performance of Obligations........................... 28
8.2 Satisfaction......................................................................... 28
8.3 No Litigation........................................................................ 28
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
8.4 [Intentionally Deleted].............................................................. 28
8.5 Consents and Approvals............................................................... 28
8.6 Good Standing Certificates........................................................... 29
8.7 No Material Adverse Change........................................................... 29
8.8 [Intentionally Deleted].............................................................. 29
8.9 Secretary's Certificate.............................................................. 29
8.10 Employment Agreements................................................................ 29
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND
NEWCO......................................................................................... 29
9.1 Representations and Warranties; Performance of Obligations........................... 29
9.2 No Litigation........................................................................ 29
9.3 Secretary's Certificate.............................................................. 30
9.4 No Material Adverse Effect........................................................... 30
9.5 STOCKHOLDERS' Release................................................................ 30
9.6 Satisfaction......................................................................... 30
9.7 [Intentionally Deleted].............................................................. 30
9.8 Consents and Approvals............................................................... 30
9.9 Good Standing Certificates........................................................... 30
9.10 Pooling Letters...................................................................... 30
9.11 Employment Agreements................................................................ 31
9.12 Specific Indemnification Agreement................................................... 31
9.13 FIRPTA Certificate................................................................... 31
9.14 Investment Agreements................................................................ 31
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER
CLOSING....................................................................................... 31
10.1 Assumption of STOCKHOLDERS' Guarantees............................................... 31
10.2 Preservation of Tax and Accounting Treatment......................................... 31
10.3 Preparation and Filing of Tax Returns................................................ 31
10.4 Directors and Officers of the Surviving Corporation.................................. 32
10.5 Preservation of Employee Benefit Plans............................................... 32
10.6 Dividends............................................................................ 32
10.7 Distribution of Financial Statements................................................. 32
11. INDEMNIFICATION............................................................................... 33
11.1 General Indemnification by the STOCKHOLDERS.......................................... 33
11.2 Indemnification by MARINEMAX......................................................... 33
11.3 Third Person Claims.................................................................. 33
11.4 Limitations on Indemnification....................................................... 34
11.5 Environmental Indemnification by the STOCKHOLDERS.................................... 35
12. TERMINATION OF AGREEMENT...................................................................... 36
12.1 Termination.......................................................................... 36
12.2 Liabilities in Event of Termination.................................................. 37
13. NONCOMPETITION................................................................................ 37
13.1 Prohibited Activities................................................................ 37
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
13.2 Damages.............................................................................. 38
13.3 Reasonable Restraint................................................................. 38
13.4 Severability; Reformation............................................................ 38
13.5 Independent Covenant................................................................. 38
13.6 Materiality.......................................................................... 38
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION..................................................... 39
14.1 STOCKHOLDERS......................................................................... 39
14.2 MARINEMAX AND NEWCO.................................................................. 39
14.3 Damages.............................................................................. 40
14.4 Survival............................................................................. 40
15. TRANSFER RESTRICTIONS......................................................................... 40
15.1 Transfer Restrictions................................................................ 40
16. FEDERAL SECURITIES ACT REPRESENTATIONS........................................................ 40
16.1 Compliance with Law.................................................................. 40
16.2 Economic Risk; Sophistication........................................................ 41
17. GENERAL....................................................................................... 41
17.1 Cooperation.......................................................................... 41
17.2 Successors and Assigns............................................................... 41
17.3 Entire Agreement..................................................................... 41
17.4 Counterparts......................................................................... 42
17.5 Brokers and Agents................................................................... 42
17.6 Expenses............................................................................. 42
17.7 Notices.............................................................................. 42
17.8 Governing Law........................................................................ 43
17.9 Survival of Representations and Warranties........................................... 44
17.10 Exercise of Rights and Remedies...................................................... 44
17.11 Time................................................................................. 44
17.12 Reformation and Severability......................................................... 44
17.13 Remedies Cumulative.................................................................. 44
17.14 Captions............................................................................. 44
17.15 Amendments and Waivers............................................................... 44
17.16 Execution by Facsimile; Delivery of Original Signed Agreement........................ 44
</TABLE>
<PAGE> 6
AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (this "Agreement") is made as
of the 1st day of February, 1998, by and among MARINEMAX, INC., a Delaware
corporation ("MARINEMAX"), HARRISON'S ARIZONA ACQUISITION CORP., a Delaware
corporation ("NEWCO"), HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona
corporation (the "COMPANY"), and RICHARD C. LAMANNA, JR. ("Stockholder 1"),
DARRELL CHRISTOPHER LAMANNA ("Stockholder 2"), RICHARD C. LAMANNA, III
("Stockholder 3")(Stockholder 1, Stockholder 2, and Stockholder 3 may be
referred to individually herein as a "STOCKHOLDER" and collectively as the
"STOCKHOLDERS").
WHEREAS, NEWCO is a corporation duly organized and existing under the
laws of the State of Delaware, having been incorporated solely for the purpose
of completing the transactions set forth herein, and is a wholly-owned
subsidiary of MARINEMAX.
WHEREAS, the respective Boards of Directors of NEWCO and COMPANY (which
together are hereinafter collectively referred to as "Constituent Corporations")
deem it advisable and in the best interests of the Constituent Corporations and
their respective stockholders that NEWCO merge with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the States of
Delaware and Arizona.
WHEREAS, MARINEMAX is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements"), each of which
is entitled "Agreement and Plan of Organization," with each of the Other
Founding Companies and their respective stockholders in order to acquire
additional companies engaged in the business of selling, renting and leasing
nautical and other lifestyle entertainment products and services, and related
activities;
WHEREAS, this Agreement and the Other Agreements constitute the
"MARINEMAX Plan of Organization," and the parties intend that each merger
comprising the MARINEMAX Plan of Organization be accounted for as a
pooling-of-interests for accounting purposes;
WHEREAS, the STOCKHOLDERS and the Boards of Directors and the
stockholders of MARINEMAX, NEWCO, each of the Other Founding Companies and each
of the subsidiaries of MARINEMAX that are parties to the Other Agreements have
approved and adopted the MARINEMAX Plan of Organization as an integrated plan
pursuant to which the STOCKHOLDERS and the stockholders of each of the Other
Founding Companies will transfer the capital stock of each of the Founding
Companies to MARINEMAX and the STOCKHOLDERS and the stockholders of each of the
Other Founding Companies as a tax-free transfer of property under Section 351 of
the Internal Revenue Code of 1986, as amended ("Code");
WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, and other consideration herein
recited, the Board of Directors of COMPANY has approved this Agreement as part
of the MARINEMAX Plan of Organization in order to transfer all of the capital
stock of COMPANY to MARINEMAX:
<PAGE> 7
WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the COMPANY and any indirect or direct
subsidiaries of COMPANY.
"Acquisition Companies" shall mean NEWCO and each of the other Delaware
companies wholly-owned by MARINEMAX prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.8.
"Articles of Merger" shall mean those Articles or Certificates of
Merger with respect to the Merger substantially in the forms attached as Annex I
hereto or with such other changes therein as may be required by applicable state
laws.
"Balance Sheet Date" means September 30, 1997.
"Charter Documents" has the meaning set forth in Section 5.1.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" shall have the meaning set forth in the fifth recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY Financial Statements" has the meaning set forth in Section
5.9.
"COMPANY Stock" has the meaning set forth in Section 2.1.
"Constituent Corporations" has the meaning set forth in the second
recital of this Agreement.
"Delaware GCL" means the Delaware General Corporation Law, as it may be
amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Effective Time" shall mean the time as of which the Merger becomes
effective.
"Environmental Laws" has the meaning set forth in Section 5.13.
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<PAGE> 8
"Escrow and Security Agreement" has the meaning set forth in Section
3.3.
"Expiration Date" has the meaning set forth in Section 5(A).
"Final COMPANY Financial Statements" has the meaning set forth in
Section 7.10.
"Founding Companies" means:
BASSETT BOAT COMPANY OF FLORIDA, a Florida corporation,
11502 DUMAS, INC., a Texas corporation,
GULFWIND SOUTH, INC., a Florida corporation,
GULFWIND USA, INC., a Florida corporation,
HARRISON'S BOAT CENTER, INC., a California corporation, and
HARRISON'S MARINE CENTERS OF ARIZONA, INC., an Arizona
corporation,
"GAAP" shall mean generally accepted accounting principles in the
United States.
"Hart-Scott Act"" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Indemnification Deductible" has the meaning set forth in Section 11.4.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section 11.3.
"IRS" shall mean the Internal Revenue Service.
"MARINEMAX" has the meaning set forth in the first paragraph of this
Agreement.
"MARINEMAX Charter Documents" has the meaning set forth in Section 6.1.
"MARINEMAX Plan of Organization" has the meaning set forth in the
fourth recital of this Agreement.
"MARINEMAX Stock" means the common stock, par value $.001 per share, of
MARINEMAX.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Material Documents" has the meaning set forth in Section 5.23.
"Merger" means the merger of NEWCO with and into COMPANY pursuant to
this Agreement and the applicable provisions of the laws of the State of
Delaware and other applicable state laws.
"NEWCO" has the meaning set forth in the first paragraph of this
Agreement.
"NEWCO Stock" means the common stock, par value $.001 per share, of
NEWCO.
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<PAGE> 9
"Other Agreements" has the meaning set forth in the third recital of
this Agreement.
"Other Founding Companies" means all of the Founding Companies other
than COMPANY.
"Pooling Letters" shall have the meaning set forth in Section 9.10.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Restricted Period" means that period of time defined in Section 13.1.
"Returns" means any returns, reports or statements (including, without
limitation, any information returns) required to be filed for purposes of a
particular Tax.
"Schedules" means the schedules attached hereto or that will be
provided within fifteen (15) days from the execution of this Agreement (as
amended in compliance with Section 7.8 hereof), which reference the relevant
sections of this Agreement, on which parties hereto disclose information as part
of their respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
"Statutory Liens" has the meaning set forth in Section 7.3.
"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" shall mean COMPANY as the surviving party in
the Merger.
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum tax, or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Territory" has the meaning set forth in Section 13.1.
"Third Person" has the meaning set forth in Section 11.3.
"Transfer Taxes" has the meaning set forth in Section 18.6.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. THE MERGER
1.1 DELIVERY OF FILING OF ARTICLES OF MERGER. The Constituent
Corporations will cause the Articles of Merger to be signed, verified and filed
with the Secretary of State of the State of Delaware
4
<PAGE> 10
and the Arizona Corporation Commission and stamped receipt copies of each such
filing to be delivered to MARINEMAX at the Effective Time.
1.2 EFFECTIVE TIME. At the Effective Time, NEWCO shall be merged with
and into COMPANY in accordance with the Articles of Merger, the separate
existence of NEWCO shall cease, COMPANY shall be the surviving party in the
Merger. The Merger will be effected in a single transaction.
1.3 ARTICLES/CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF
DIRECTORS OF SURVIVING CORPORATION. At the Effective Time:
(i) the Articles/Certificate of Incorporation of COMPANY then in
effect shall be the Articles/Certificate of Incorporation of the Surviving
Corporation until changed as provided by applicable law;
(ii) the Bylaws of NEWCO then in effect shall become the Bylaws
of the Surviving Corporation; and subsequent to the Effective Time, such Bylaws
shall be the Bylaws of the Surviving Corporation until they shall thereafter be
duly amended;
(iii) the Board of Directors of the Surviving Corporation shall
consist of the persons who are on the Board of Directors of COMPANY immediately
prior to the Effective Time, provided that William H. McGill, Jr. shall be
elected as a director of the Surviving Corporation effective as of the Effective
Time; the Board of Directors of the Surviving Corporation shall hold office
subject to the provisions of the laws of the State of Arizona and of the
Articles/Certificate of Incorporation and Bylaws of the Surviving Corporation;
and
(iv) the officers of COMPANY immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation in
the same capacity or capacities, and effective at the Effective Time William H.
McGill, Jr. shall be appointed as vice president of the Surviving Corporation
and Michael H. McLamb, Treasurer and Assistant Secretary, shall be appointed as
an assistant secretary of the Surviving Corporation, each of such officers to
serve, subject to the provisions of the Articles/Certificate of Incorporation
and Bylaws of the Surviving Corporation, until his successor is duly elected and
qualified.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF COMPANY,
MARINEMAX AND NEWCO. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of COMPANY,
MARINEMAX and NEWCO as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and
outstanding capital stock of COMPANY is as set forth on Schedule 5.3 hereto;
(ii) immediately prior to the Effective Time, the authorized
capital stock of MARINEMAX will consist of Thirty Million (30,000,000) shares of
MARINEMAX Stock, of which the number of issued and outstanding shares will be
set forth on Schedule 6.3 hereof.
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<PAGE> 11
(iii) as of the date of this Agreement, the authorized
capital stock of NEWCO consists of One Thousand (1,000) shares of NEWCO Stock,
of which One (1) share is issued and outstanding.
1.5 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware GCL and the
laws of the State of Arizona. Except as herein specifically set forth, the
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of COMPANY shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of NEWCO shall be merged with
and into COMPANY, and COMPANY, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time, the separate existence of NEWCO shall
cease and, in accordance with the terms of this Agreement, the Surviving
Corporation shall possess all of the rights, privileges, immunities and
franchises, of a public, as well as of a private, nature, and all property,
real, personal and mixed, and all debts due on all accounts whatsoever,
including, without limitation, subscriptions to shares, and all taxes, including
those due and owing and those accrued, and all other choses in action, and all
and every other interest of or belonging to or due to COMPANY, and NEWCO shall
be taken and deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all of the respective properties,
rights and privileges, powers and franchises and all and every other interest of
COMPANY and NEWCO shall be thereafter be the property of the Surviving
Corporation as they were of COMPANY and NEWCO prior to the Merger; the title to
any real estate, or interest therein, whether by deed or otherwise, under the
laws of the state of incorporation vested in COMPANY and NEWCO, shall not revert
or be in any way impaired by reason of the Merger; and the assets, liabilities,
reserves, and accounts of COMPANY shall be taken up on the books of the
Surviving Corporation at the amounts at which they respectively were carried on
the books of COMPANY, subject to such adjustments as may be appropriate in
giving effect to the Merger and the accounting for the Merger as a
pooling-of-interests. Except as otherwise provided herein, the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of COMPANY and NEWCO and any claim existing, or action or
proceeding pending, by or against COMPANY or NEWCO may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
their place. Neither the rights of creditors nor any liens upon the property of
COMPANY or NEWCO shall be impaired by the Merger, and all debts, liabilities and
duties of COMPANY and NEWCO shall attach to the Surviving Corporation, and may
be enforced against such Surviving Corporation to the same extent as if said
debts, liabilities and duties had been incurred or contracted by such Surviving
Corporation. The separate corporate existence of any direct or indirect
subsidiary of Company existing prior to the Merger shall continue unaffected by
the Merger, and such subsidiaries shall be subsidiaries of the Surviving
Corporation at the Effective Time.
1.6 ACCOUNTING TREATMENT. The Merger shall be accounted for as a
pooling-of-interests, in accordance with GAAP and the rules and regulations of
the SEC.
2. CONVERSION AND CANCELLATION OF STOCK
2.1 MANNER OF CONVERSION AND CANCELLATION. The manner of converting the
shares of the outstanding capital stock of COMPANY (the "COMPANY Stock"), and
the cancellation of the NEWCO Stock, issued and outstanding immediately prior to
the Effective Time, respectively, shall be as follows:
As of the Effective Time:
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<PAGE> 12
(i) all of the shares of COMPANY Stock issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, automatically shall be deemed to
represent the right to receive the number of shares of MARINEMAX Stock set forth
on Annex II hereto with respect to such holder;
(ii) all shares of COMPANY Stock that are held by COMPANY as
treasury stock shall be canceled and retired and no shares of MARINEMAX Stock or
other consideration shall be delivered or paid in exchange therefor; and
(iii) each share of NEWCO Stock issued and outstanding
immediately prior to the Effective Time, shall, by virtue of the Merger and
without any action on the part of MARINEMAX, automatically be cancelled.
All MARINEMAX Stock received by the STOCKHOLDERS pursuant to this
Agreement shall, except for restrictions on resale or transfer described in
Sections 15 and 16 hereof and in the Pooling Letters referred to in Section 9.10
hereof, have the same rights as all the other shares of outstanding MARINEMAX
Stock by reason of the provisions of the Certificate of Incorporation of
MARINEMAX or as otherwise provided by the Delaware GCL. All voting rights of
such MARINEMAX Stock received by the STOCKHOLDERS shall be fully exercisable by
the STOCKHOLDERS and the STOCKHOLDERS shall not be deprived nor restricted in
exercising those rights.
3. DELIVERY OF MERGER CONSIDERATION
3.1 TIME AND MANNER OF DELIVERY. At the Closing, or as soon thereafter
as reasonably practicable, but in no event more than Fifteen (15) days after the
Closing, the STOCKHOLDERS shall receive the respective number of shares of
MARINEMAX Stock as set forth on Annex II hereto; provided, however, that the
STOCKHOLDERS shall have previously surrendered all of COMPANY Stock to MARINEMAX
as provided in Section 3.2 below.
3.2 SURRENDER OF COMPANY STOCK. The STOCKHOLDERS shall deliver to
MARINEMAX at the Closing the certificates representing COMPANY Stock, duly
endorsed in-blank by the STOCKHOLDERS, or accompanied by in-blank stock powers,
and with all necessary transfer tax and other revenue stamps, pursuant to
applicable law, acquired at the STOCKHOLDERS' expense, affixed and canceled,
such COMPANY Stock to be free and clear of all liens, claims, rights, charges
and encumbrances of every nature whatsoever. The STOCKHOLDERS agree promptly to
cure any deficiencies with respect to the endorsement of the stock certificates
or other documents of conveyance with respect to such COMPANY Stock or with
respect to the stock powers accompanying COMPANY Stock.
3.3 ESCROW OF PORTION OF MARINEMAX STOCK. At the Closing, each of the
STOCKHOLDERS agrees to deliver or cause to be delivered into escrow for a period
of one (1) year following the Effective Time an aggregate of ten percent (10%)
of the MARINEMAX Stock delivered to each such STOCKHOLDER pursuant to this
Agreement for purposes of securing the obligations, representations and
warranties of the STOCKHOLDERS arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow and
security agreement in the form attached hereto as ANNEX III (the "Escrow and
Security Agreement"). STOCKHOLDERS each
7
<PAGE> 13
agree to execute and deliver the Escrow and Security Agreement at the Closing
effective at the Effective Time.
4. CLOSING
At or prior to the Closing, the parties shall take all actions
necessary to prepare to (i) effect the Merger (including, without limitation, if
permitted by applicable state law, the filing with the appropriate state
authorities of the Articles of Merger specifying the Effective Time as the
delayed effective time of the Merger), and (ii) effect the conversion and
delivery of shares referred to in Section 3 hereof; provided, however, that such
actions shall not include the actual completion of the Merger or the conversion
and delivery of the shares referred to in Section 3 hereof, each of which
actions shall be deemed taken at the Effective Time as herein provided. In the
event that the conditions precedent contained in and this Agreement are not
satisfied or waived and this Agreement is thereby terminated, MARINEMAX hereby
covenants and agrees to do all things required by the Delaware GCL and by the
applicable corporate laws of the State of Arizona in order to stop or rescind
the Merger effected by the filing of the Articles of Merger as described in this
Section. The taking of the actions described in clauses (i) and (ii) above shall
take place at a closing (the "Closing") to be held following the satisfaction or
waiver of the conditions precedent set forth in Section 5, 8 and 9 hereof on
such date as MARINEMAX shall determine (the "Closing Date") at the offices of
O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, P.A., One East Camelback
Road, Suite 1100, Phoenix, Arizona 85012. At the Effective Time (x) the Articles
of Merger shall be or shall have been filed with the appropriate state
authorities so that the Merger shall be effective at the Effective Time, and (y)
the parties shall be deemed to have consummated the transactions contemplated by
this Agreement, including, without limitation, the conversion and delivery of
shares, which the STOCKHOLDERS shall be entitled to receive pursuant to the
Merger referred to in Section 3 hereof. The time at which the actions described
in the preceding clauses (x) and (y) occur shall be referred to as the
"Effective Time."
5. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS.
Each of COMPANY and the STOCKHOLDERS represents and warrants that all of the
following representations and warranties in this Section 5(A) are true, complete
and correct at the date of this Agreement and, subject to Section 7.8 hereof,
shall be true, complete, and correct at the time of Closing and at the Effective
Time and that such representations and warranties shall survive the Closing and
the Effective Time for a period of the earlier of (i) the date of the first
audit of financial statements of the Surviving Corporation containing combined
operations of MARINEMAX and the Surviving Corporation for those representations
and warranties set forth within Section 5(A) which representations and
warranties specifically deal with items that would be expected to be encountered
in the audit process, or (ii) twelve (12) months, the last day of such period
being the "Expiration Date". For purposes of this Section 5(A), the term COMPANY
shall mean and refer to COMPANY and all other Acquired Parties, if any.
5.1 DUE ORGANIZATION. COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arizona, and has
the requisite power and authority to carry on its business as it is now being
conducted. COMPANY is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership, sales or
leasing
8
<PAGE> 14
of its properties makes such qualification necessary, except (i) as set forth on
Schedule 5.1 or (ii) where the failure to be so authorized or qualified would
not have a material adverse effect on the business, operations, properties,
assets or condition (financial or otherwise), of COMPANY taken as a whole (as
used herein with respect to COMPANY, or with respect to any person, a "Material
Adverse Effect"). Schedule 5.1 sets forth the jurisdiction in which COMPANY is
incorporated and contains a list of all jurisdictions in which COMPANY is
authorized or qualified to do business. True, complete and correct copies of the
Articles/Certificate of Incorporation and Bylaws, each as amended, of COMPANY
(the "Charter Documents") are attached hereto in Schedule 5.1. The stock records
of COMPANY, as heretofore made available to MARINEMAX, are correct and complete
in all material respects. There are no minutes in the possession of COMPANY or
the STOCKHOLDERS which have not been supplied to MARINEMAX, and all of such
minutes are correct and complete in all respects. The most recent minutes of
COMPANY, which are dated no earlier than ten (10) business days prior to the
date hereof, affirm and ratify all prior acts of COMPANY, and of its officers
and directors on behalf and for the benefit of COMPANY.
5.2 AUTHORIZATION. The representatives of COMPANY executing this
Agreement have the authority to enter into and bind COMPANY to the terms of this
Agreement. COMPANY has the full legal right, power and authority to enter into
this Agreement and the Merger, subject to the terms of the approval of the
STOCKHOLDERS and the Board of Directors of COMPANY described on Schedule 5.2,
executed copies of which are attached thereto.
5.3 CAPITAL STOCK OF COMPANY. The authorized capital stock of COMPANY
is as set forth in Schedule 5.3. All of the issued and outstanding shares of the
capital stock of COMPANY are owned by the STOCKHOLDERS in the amounts set forth
in Schedule 5.3 and further, except as set forth in Schedule 5.3, are owned free
and clear of all liens, security interests, pledges, charges, voting trusts,
restrictions, encumbrances and claims of every kind. The STOCKHOLDERS are the
sole stockholders of COMPANY. Except as disclosed in Schedule 5.3 hereto, each
STOCKHOLDER has at all times during the two (2) year period immediately
preceding the date hereof owned or maintained sole equitable and beneficial
interest in all of the issued and outstanding shares of the capital stock of
COMPANY as to which such STOCKHOLDER is the registered holder, as set forth in
Schedule 5.3 hereto. All of the issued and outstanding shares of the capital
stock of COMPANY have been duly authorized and validly issued, are fully paid
and nonassessable, are owned of record and beneficially by the STOCKHOLDERS and
further, such shares were offered, issued, sold and delivered by COMPANY in
compliance with all applicable state and federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
5.4 TRANSACTIONS IN CAPITAL STOCK, ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 5.4, COMPANY has not acquired or redeemed any COMPANY
Stock since the Balance Sheet Date. Except as set forth on Schedule 5.4, (i) no
option, warrant, call, conversion right or commitment of any kind exists which
obligates COMPANY to issue any of its capital stock; (ii) COMPANY has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof; and (iii) neither the voting stock
structure of COMPANY nor the relative ownership of shares among any of its
respective stockholders has been altered or changed in contemplation of the
Merger and/or the MARINEMAX Plan of Organization. Schedule 5.4 also includes
complete and accurate copies of all
9
<PAGE> 15
stock option or stock purchase plans, including, without limitation, a list of
all outstanding options, warrants or other rights to acquire shares of COMPANY's
stock.
5.5 NO BONUS SHARES. Except as set forth on Schedule 5.5, none of the
shares of COMPANY Stock was issued pursuant to awards, grants or bonuses in
contemplation of the Merger or the MARINEMAX Plan of Organization.
5.6 SUBSIDIARIES. Except as set forth on Schedule 5.6, COMPANY has no
subsidiaries. Except as set forth on Schedule 5.6, COMPANY does not presently
own, of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, nor is COMPANY, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 PREDECESSOR STATUS; ETC. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of COMPANY, including the names of any
entities acquired by COMPANY (by stock purchase, merger or otherwise) or owned
by COMPANY or from whom COMPANY previously acquired material assets, in any
case, from the earliest date upon which any STOCKHOLDER acquired his or her
stock in any COMPANY. Except as disclosed on Schedule 5.7, COMPANY has not been,
within such period of time, a subsidiary or division of another corporation or a
part of an acquisition which was later rescinded.
5.8 SPIN-OFF BY COMPANY. Except as set forth on Schedule 5.8, there has
not been any sale, spin-off or split-up of material assets of either COMPANY or
any other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
COMPANY ("Affiliates") since September 30, 1997.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies of
the following financial statements of COMPANY (the "COMPANY Financial
Statements"): COMPANY's audited Balance Sheets as of December 31, 1996 and
September 30, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1995 and December 31, 1996 and for the
nine month period ended September 30, 1997. COMPANY Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated and for the periods prior thereto (except as noted thereon
or on Schedule 5.9). Except as set forth on Schedule 5.9, COMPANY's Balance
Sheets as of December 31, 1996 and September 30, 1997 each present fairly in all
material respects the financial position of COMPANY as of the dates indicated
thereon, and COMPANY's Statements of Operations, Shareholders' Equity and Cash
Flows referenced herein present fairly in all material respects the results of
operations for the periods indicated thereon.
5.10 LIABILITIES AND OBLIGATIONS. COMPANY has delivered to MARINEMAX a
true, complete and accurate list (which is set forth on Schedule 5.10) as of the
Balance Sheet Date of (i) all material liabilities of COMPANY which are not
reflected on the balance sheet of COMPANY at the Balance Sheet Date or otherwise
reflected in COMPANY Financial Statements at the Balance Sheet Date which by
their nature would be required in accordance with GAAP to be reflected in such
balance sheet, and (ii) all loan agreements, indemnity or guaranty agreements,
bonds, mortgages, liens, pledges or other security agreements to which COMPANY
or any of its assets is bound and which individually or in the aggregate involve
sums in excess of $25,000. Except as set forth on Schedule 5.10, since the
Balance
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Sheet Date, COMPANY has not incurred any material liabilities of any kind,
character and description, whether accrued, absolute, secured or unsecured,
contingent or otherwise, other than liabilities incurred in the ordinary course
of business. COMPANY has also delivered to MARINEMAX on Schedule 5.10, in the
case of those contingent liabilities related to pending or threatened
litigation, or other liabilities incurred under the agreements listed pursuant
to Section 5.10(ii) which are not fixed or otherwise accrued or reserved, a good
faith and reasonable estimate of the maximum amount which COMPANY reasonably
expects will be payable. For each such contingent liability or liability for
which the amount is not fixed or is contested, COMPANY has provided to MARINEMAX
the following information:
(i) a summary description of the liability together with the
following:
(a) copies of all relevant documentation relating thereto; and
(b) amounts claimed and any other action or relief sought;
(ii) the name of each court or agency before which such claim,
suit proceeding or is pending;
(iii) the date such claim, suit or proceeding was instituted; and
(iv) a good faith and reasonable estimate of the maximum amount,
if any, which is likely to become payable with respect to each such liability.
If no estimate is provided, the estimate shall for purposes of this Agreement be
deemed zero.
5.11 ACCOUNTS AND NOTES RECEIVABLE. COMPANY has delivered to MARINEMAX
a true, complete and accurate list (which is set forth on Schedule 5.11) of the
accounts and notes receivable of COMPANY, as of the Balance Sheet Date,
including any such amounts which are not reflected in the balance sheet as of
the Balance Sheet Date, and including receivables from and advances to employees
and the STOCKHOLDERS. Except to the extent reflected on Schedule 5.11, such
accounts, notes and other receivables are collectible in the amounts shown on
Schedule 5.11, net of reserves reflected in the balance sheet as of the Balance
Sheet Date.
5.12 PERMITS AND INTANGIBLES. COMPANY and its employees hold all
licenses, franchises, permits and authorizations (governmental or otherwise) the
absence of any of which could have a Material Adverse Effect on COMPANY's
business, including, without limitation, all licenses, franchises, rights and
authorizations from Brunswick Corporation and Ray Industries, Inc., necessary or
beneficial for the business of COMPANY. COMPANY has delivered to MARINEMAX an
accurate list and summary description (which is set forth on Schedule 5.12) of
all such licenses, franchises, permits and authorizations, including permits,
titles (including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications and copyrights owned or held by COMPANY or any of its employees
(including interests in software or other technology systems, programs and
intellectual property) (it being understood and agreed that a list of all
environmental permits and other environmental approvals is set forth on Schedule
5.13). To the best knowledge and belief of COMPANY and STOCKHOLDERS after due
inquiry, the licenses, franchises, permits and authorizations listed on
Schedules 5.12 and 5.13 are valid, and COMPANY has not received any notice that
any entity, governmental or otherwise, intends to cancel, limit, terminate or
not renew
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any such license, franchise, permit or authorization. COMPANY has conducted and
is conducting its business in compliance with the requirements, standards,
criteria and conditions set forth in the licenses, franchises, permits and
authorizations listed on Schedules 5.12 and 5.13 and is not in violation of any
of the foregoing except where such non-compliance or violation would not have a
Material Adverse Effect on COMPANY. Except as specifically provided in Schedule
5.12, the transactions contemplated by this Agreement will not result in a
default under or a breach or violation of, or adversely affect the rights and
benefits afforded to COMPANY by, any such licenses, franchises, permits or
authorizations.
5.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 5.13, and
except where any failure to comply or action would not have a Material Adverse
Effect, (i) COMPANY has complied with and is in compliance with all federal,
state, local and foreign statutes (civil and criminal), laws, ordinances,
regulations, rules, notices, permits, judgments, orders and decrees applicable
to COMPANY or any of its properties, assets, operations and businesses relating
to environmental protection (collectively "Environmental Laws") including,
without limitation, Environmental Laws relating to air, water, land and the
generation, storage, use, handling, transportation, treatment or disposal of
Hazardous Wastes and Hazardous Substances including petroleum and petroleum
products (as such terms are defined in any applicable Environmental Law); (ii)
COMPANY has obtained and adhered to all necessary permits and other approvals
necessary to treat, transport, store, dispose of and otherwise handle Hazardous
Wastes and Hazardous Substances, a list of all of such permits and approvals is
set forth on Schedule 5.13; (iii) COMPANY has reported to the appropriate
authorities, to the extent required by all Environmental Laws, all past and
present sites owned and operated by COMPANY where Hazardous Wastes or Hazardous
Substances have been treated, stored, disposed of or otherwise handled; (iv)
there have been no releases or threats of releases (as defined in Environmental
Laws) at, from, in or on any property owned or operated by COMPANY except as
permitted by Environmental Laws; (v) COMPANY and STOCKHOLDERS know of no on-site
or off-site location to which COMPANY has transported or disposed of Hazardous
Wastes and Hazardous Substances or arranged for the transportation of Hazardous
Wastes and Hazardous Substances, which site is the subject of any federal,
state, local or foreign enforcement action or any other investigation which is
reasonably likely to lead to any claim against COMPANY, MARINEMAX or NEWCO for
any clean-up cost, remedial work, damage to natural resources, property damage
or personal injury, including, without limitation, any claim under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; and (vi) COMPANY has no contingent liability in connection with any
release of any Hazardous Waste or Hazardous Substance into the environment.
5.14 PERSONAL PROPERTY. COMPANY has delivered to MARINEMAX a true,
complete and accurate list (which is set forth on Schedule 5.14) of (x) all
personal property included (or that will be included) in "depreciable plant,
property and equipment" on the September 30, 1997 balance sheet of COMPANY; (y)
all other personal property owned by COMPANY with an individual value in excess
of $20,000 (i) as of the Balance Sheet Date and (ii) acquired since the Balance
Sheet Date; and (z) all leases and agreements in respect of personal property,
including, in the case of each of (x), (y) and (z), (1) true, complete and
correct copies of all such leases, and (2) an indication as to which assets are
currently owned, or were formerly owned, by the STOCKHOLDERS, relatives of the
STOCKHOLDERS, or Affiliates of COMPANY. Except as set forth on Schedule 5.14,
(i) all material personal property used by COMPANY in its business is either
owned by COMPANY or leased by COMPANY pursuant to a lease included on Schedule
5.14, (ii) all of the personal property listed on Schedule 5.14 is in good
working order and condition, ordinary wear and tear excepted, and (iii) all
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leases and agreements included on Schedule 5.14 are in full force and effect and
constitute valid and binding agreements of the parties (and their successors)
thereto in accordance with their respective terms.
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS. COMPANY
has delivered to MARINEMAX a true, complete and accurate list (which is set
forth on Schedule 5.15) of (i) all significant current customers, it being
understood and agreed that a "significant customer," for purposes of this
Section, means a customer (or person or entity) representing 5% or more of
COMPANY's annual revenues as of the Balance Sheet Date. Except to the extent set
forth on Schedule 5.15, none of COMPANY's significant current customers have
canceled or substantially reduced or, to the best knowledge and belief of
COMPANY and the STOCKHOLDERS after due inquiry, are currently attempting or
threatening to cancel a contract or substantially reduce utilization of the
services provided by COMPANY.
COMPANY has listed on Schedule 5.15 all material contracts, commitments
and similar agreements (other than the customer contracts referred to above) to
which COMPANY is a party or by which it or any of its properties are bound
(including, without limitation, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor organizations,
strategic alliances and options to purchase land), other than agreements listed
on Schedule 5.14, 5.15 or 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has attached
a true, complete and correct copy of such agreements to Schedule 5.15 hereto.
COMPANY has complied with all material commitments and obligations pertaining to
it, and is not in default under any contracts or agreements listed on Schedule
5.15 and no notice of default under any such contract or agreement has been
received. COMPANY has also set forth on Schedule 5.15 a true, accurate and
complete summary description of all plans or projects involving the opening of
new operations, expansion of existing operations, the acquisition of any
personal property, business or assets requiring, in any event, the payment of
more than $50,000 by COMPANY.
5.16 REAL PROPERTY. Schedule 5.16 includes a list of all real property
owned, leased or used by COMPANY at the date hereof and all other real property,
if any, used by COMPANY in the conduct of its business. Except as set forth in
Schedule 5.16 hereto,
(i) All real property owned, leased or used by COMPANY
is zoned for the conduct of COMPANY's business thereon pursuant to the zoning
regulations of the applicable cities, towns, villages or townships. The uses to
which such real property are presently put (including the location of all
buildings and other improvements thereon) comply in all material respects with
the applicable provisions of such zoning regulations without the benefit of the
legal non-conforming use principle of law, or other regulations of such cities,
towns, villages or townships or any other governmental body.
(ii) As to any real property leased, owned or used by
COMPANY there are no material agreements, commitments or understandings pursuant
to which COMPANY, or its successors in interest are required to dedicate any
part of the real property or to grant any easement, water rights, rights-of-way,
or license for ingress and egress or other use in respect to any part of the
real property, whether on account of the development of adjacent or nearby real
property or otherwise. Other than as provided in the leases of the real property
owned by COMPANY and leased to others,
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except as set forth in Schedule 5.16 hereto, no person has any material
easement, license or other right whatsoever with respect to such real property.
(iii) COMPANY holds good and marketable fee simple title
to the real property identified on Schedule 5.16 hereto as owned by COMPANY and
good leasehold title to the real property identified on Schedule 5.16 as leased
or used by COMPANY, in each case free and clear of all material mortgages,
charges, claims, liens, encumbrances, leases, options to purchase, rights of
first refusal, contracts of sale, easements, reservations and restrictions,
except those matters identified in any title reports set forth in Schedule 5.16.
No part of such lands is affected by any restrictions imposed by any
governmental authority affecting construction of structures thereon or the use
thereof by COMPANY other than building codes and zoning classifications.
(iv) The STOCKHOLDERS and COMPANY do not, either
individually or collectively, have any knowledge of any fact or condition
existing that would result or could result in the termination or material
reduction of the current access to and from the real property owned or leased or
used by COMPANY to existing public roads and highways, or of any reduction in
sewer or other utility services presently serving such real property. The real
property currently owned, leased or used by COMPANY has direct access to public
roads and highways.
(v) As to the real property owned by COMPANY, neither
the STOCKHOLDERS nor COMPANY has received any notice from any insurance company
of any material defects or inadequacies in the real property or any part thereof
that would materially and adversely affect the insurability of the real property
or the premiums for the insurance thereof.
(vi) As to the real property owned by COMPANY, neither
the STOCKHOLDERS nor COMPANY has failed to disclose any material conditions of
disrepair or other adverse conditions or defects with respect to the real
property or any portion thereof of which any STOCKHOLDER or COMPANY has
knowledge or which, with the exercise of reasonable diligence, any of them
should have known.
(vii) True, complete and correct copies of all leases
and agreements in respect of all real property leased or used by COMPANY are
attached to Schedule 5.16, and an indication as to which such properties, if
any, are currently owned, or were formerly owned, by the STOCKHOLDERS or
affiliates of COMPANY or the STOCKHOLDERS is included in Schedule 5.16, and
except as set forth on Schedule 5.16, all of such leases included on Schedule
5.16 are in full force and effect and constitute valid and binding agreements of
the parties (and their successors) thereto in accordance with their respective
terms.
5.17 INSURANCE. COMPANY has delivered to MARINEMAX (i) a true, accurate
and complete list as of the Balance Sheet Date of all insurance policies carried
by COMPANY; (ii) an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years; and (iii)
true, complete and correct copies of all insurance policies currently in effect.
Such insurance policies evidence all of the insurance that COMPANY is required
to carry pursuant to all of its contracts and other agreements and pursuant to
all applicable laws. All of such insurance policies are currently in full force
and effect and shall remain in full force and effect through the Effective Time.
Since January 1,
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1994, no insurance carried by COMPANY has been canceled by the insurer and
COMPANY has not been denied coverage.
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
COMPANY has delivered to MARINEMAX a true, complete and accurate list (which is
set forth on Schedule 5.18) showing all officers, directors and key employees of
COMPANY, listing all employment agreements that do not provide for at-will
employment terminable without penalty or that pertain to any officers, directors
or key employees of COMPANY and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons as of (i) the Balance Sheet Date and (ii) the date hereof.
COMPANY has provided to MARINEMAX true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18 and has attached such
copies to Schedule 5.18. Since the Balance Sheet Date, there have been no
increases in the compensation payable or any special bonuses to any officer,
director, key employee or other employee of COMPANY, except ordinary salary
increases implemented on a basis consistent with past practices.
Except as set forth on Schedule 5.18, (i) COMPANY is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
arrangement with any labor union; (ii) no employees of COMPANY are represented
by any labor union or covered by any collective bargaining agreement; (iii) to
the best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
no campaign to establish such representation is in progress; and (iv) there is
no pending or, to the best knowledge and belief of COMPANY and the STOCKHOLDERS
after due inquiry, threatened, labor dispute involving COMPANY and any group of
its employees nor has COMPANY experienced any labor interruptions over the past
three years. COMPANY believes its relationship with employees to be good.
5.19 EMPLOYEE PLANS. The STOCKHOLDERS have delivered to MARINEMAX a
true, complete and accurate schedule (Schedule 5.19) showing all employee
benefit plans of COMPANY (including COMPANY's subsidiaries, if any), including,
without limitation, all employment agreements and other agreements or
arrangements containing "golden parachute" or other similar provisions, and
deferred compensation agreements, together with true, complete and correct
copies of such plans, agreements and any trusts related thereto, and
classifications of employees covered thereby existing as of the Balance Sheet
Date. Except for the employee benefit plans, if any, described on Schedule 5.19,
COMPANY (including COMPANY's subsidiaries, if any) does not sponsor, maintain or
contribute to any plan program, fund or arrangement that constitutes an
"employee pension benefit plan," nor does COMPANY have any obligation to
contribute to or accrue or pay any benefits under any deferred compensation or
retirement funding arrangement on behalf of any employee or employees (such as,
for example, and without limitation, any individual retirement account or
annuity, any "excess benefit plan" (within the meaning of Section 3(36) of
ERISA), or any nonqualified deferred compensation arrangement). For the purposes
of this Agreement, the term "employee pension benefit plan" shall have the same
meaning as is given that term in Section 3(2) of ERISA. Neither COMPANY nor any
Acquired Party has sponsored, maintained or contributed to any employee pension
benefit plan other than the plans set forth on Schedule 5.19, nor is COMPANY or
any Acquired Party required to contribute to any retirement plan pursuant to the
provisions of any collective bargaining agreement establishing the terms and
conditions or employment of any of COMPANY's or any Acquired Party's employees.
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Neither COMPANY nor any Acquired Party is now, or can as a result of
its past activities become, liable to the Pension Benefit Guaranty Corporation
or to any multiemployer employee pension benefit plan under the provisions of
Title IV of ERISA.
All employee benefit plans listed on Schedule 5.19 and the
administration thereof are in substantial compliance with their terms and all
applicable provisions of ERISA and the regulations issued thereunder, as well as
with all other applicable federal, state and local statutes, ordinances and
regulations.
All accrued contribution obligations of COMPANY and any Acquired Party
with respect to any plan listed on Schedule 5.19 have either been fulfilled in
their entirety or are fully reflected on the December 31, 1997 balance sheet of
COMPANY as of the Balance Sheet Date.
5.20 COMPLIANCE WITH ERISA. All such plans listed on Schedule 5.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been so qualified and have been determined by the IRS to be so
qualified, and copies of such determination letters are included as part of
Schedule 5.19 hereof. Except as disclosed on Schedule 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries (including, without limitation, actuarial
reports, audits or tax returns) have been timely filed or distributed, and
copies thereof that have been filed for tax years 1995 and 1996 are included as
part of Schedule 5.20 hereof. Neither STOCKHOLDERS, any such plan listed in
Schedule 5.19 or administrator thereof, nor COMPANY has engaged in any
transaction prohibited under the provisions of Section 4975 of the Code or
Section 406 of ERISA or any other breach of fiduciary responsibility that could
subject STOCKHOLDERS, such administrator or COMPANY to a tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or to any liability
under Section 502(i) of ERISA. No such plan listed in Schedule 5.19 has incurred
an accumulated finding deficiency, as defined in Section 412(a) of the Code and
Section 302(1) of ERISA; and COMPANY has not incurred any liability for excise
tax or penalty due to the IRS nor any liability to the Pension Benefit Guaranty
Corporation. It is further represented and warranted that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan intended to qualify under
Section 401(a) of the Code without notice to and approval by the IRS;
(ii) no plan listed in Schedule 5.19 subject to the provisions
of Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any plan listed in Schedule
5.19;
(iv) COMPANY has not incurred any liability under Section 4062
of ERISA; and
(v) no circumstances exist pursuant to which COMPANY could
have any direct or indirect liability whatsoever (including, without limitation,
any liability to any multiemployer plan or the Pension Benefit Guaranty
Corporation under Title IV of ERISA or to the IRS for any excise tax or
penalty), or be subject to any statutory lien to secure payment of any such
liability with respect to any
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plan now or heretofore maintained or contributed to by any entity other than
COMPANY that is, or at any time was, a member of a "controlled group" (as
defined in Section 412(n)(6)(B) of the Code) that includes COMPANY.
5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 5.21 or Schedule 5.13, COMPANY is not in violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over COMPANY which would have a Material Adverse Effect; and
except to the extent set forth on Schedule 5.10, Schedule 5.13 or Schedule 5.21,
there are no material claims, actions, suits or proceedings, pending or, to the
best knowledge and belief of COMPANY and the STOCKHOLDERS after due inquiry,
threatened against or affecting, COMPANY, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over COMPANY, and
no notice of any claim, action, suit or proceeding, whether pending or
threatened, has been received. COMPANY has conducted and is conducting its
business in substantial compliance with the requirements, standards, criteria
and conditions set forth in applicable federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations, including all such permits, licenses, orders and other governmental
approvals set forth on Schedules 5.12 and 5.13, and is not in violation of any
of the foregoing which would have a Material Adverse Effect.
5.22 TAXES. COMPANY (including all the Acquired Parties) has timely
filed all required federal, state and other tax returns, filings and extension
requests with respect to all Taxes for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on Schedule 5.22, there are no
examinations in progress or claims against any Acquired Party for federal, state
or other Taxes (including, without limitation, related penalties and interest)
for any period or periods prior to and including the Balance Sheet Date, and no
notice of any such claim for Taxes, whether pending or threatened, has been
received. All Tax, including, without limitation, all related interest and
penalties (whether or not shown on any tax return) owed by any of the Acquired
Parties, or with respect to any payment made or deemed made by any of the
Acquired Parties has been paid. The amounts shown as accruals for Taxes on
COMPANY Financial Statements are sufficient for the payment of all Taxes of the
kinds indicated (including, without limitation, penalties and interest) for all
fiscal periods ended on or before the Balance Sheet Date. Copies of (i) any tax
examinations; (ii) extensions of statutory limitations; and (iii) the federal,
state and local income tax returns and franchise tax returns of COMPANY
(including the Acquired Parties) for the last three (3) fiscal years, or such
shorter period of time as any of them shall have existed, are attached hereto as
Schedule 5.22. If COMPANY is an S-Corporation, the STOCKHOLDERS made a valid
election under the provisions of Subchapter S of the Code and COMPANY has
appropriately not, within the past five years, been taxed under the provisions
of Subchapter C of the Code. COMPANY has a taxable year ended on September 30
and, if COMPANY is an S-Corporation, COMPANY has not made an election to retain
a fiscal year ending on a date other than December 31 pursuant to Section 444 of
the Code. COMPANY's methods of accounting have not changed in the past five
years. COMPANY is not an investment company as defined in Section 351(e)(1) of
the Code.
5.23 NO VIOLATIONS. COMPANY is not in violation of any Charter
Document. Neither COMPANY nor, to the best knowledge and belief of COMPANY and
the STOCKHOLDERS after due inquiry, any other party thereto, is in material
default under any lease, instrument, agreement, license
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or permit set forth on Schedules 5.12 through 5.19 (inclusive), or any other
material agreement to which it is a party or by which its properties are bound
(the "Material Documents"); and, except as set forth in Schedule 5.23, (a) the
rights and benefits of COMPANY under the Material Documents will not be
materially adversely affected by the transactions contemplated hereby and (b)
the execution of this Agreement and the performance of the obligations hereunder
and the consummation of the transactions contemplated hereby will not result in
any material violation or breach or constitute a default under, any of the terms
or provisions of any of the Material Documents or Charter Documents. Except as
set forth on Schedule 5.23, none of the Material Documents requires notice to,
or the consent or approval of, any governmental agency or other third party with
respect to any of the transactions contemplated hereby in order to remain in
full force and effect, and consummation of the transactions contemplated hereby
will not give rise to any right to termination, cancellation, acceleration or
loss of any right or benefit arising thereunder. Except as set forth on Schedule
5.23, none of the Material Documents prohibits the use or publication by
COMPANY, MARINEMAX or NEWCO of the name of any other party to such Material
Document, and none of the Material Documents prohibits or restricts COMPANY from
freely providing services to any other customer or potential customer of
COMPANY, MARINEMAX, NEWCO or any Other Founding Company.
5.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 5.24,
COMPANY is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
5.25 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of COMPANY;
(ii) any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or business of
COMPANY;
(iii) any change in the authorized capital of COMPANY or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or distribution
in respect of the capital stock of COMPANY, or any direct or indirect
redemption, purchase or other acquisition of any of the capital stock of
COMPANY;
(v) any increase in the compensation, bonus, sales commissions
or fee arrangement payable or to become payable by COMPANY to any of its
officers, directors, the STOCKHOLDERS, employees, consultants or agents,
except for ordinary and customary bonuses and salary increases for employees in
accordance with past practices of COMPANY;
(vi) any work interruptions, labor grievances or claims filed,
or any event or condition of any character, materially and adversely affecting
the business of COMPANY;
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(vii) any sale or transfer, or any agreement to sell or
transfer, any material asset, property or right of COMPANY to any person,
including, without limitation, the STOCKHOLDERS or their affiliates;
(viii) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to COMPANY, including, without
limitation, any indebtedness or obligation of any STOCKHOLDERS or any affiliate
thereof;
(ix) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the assets,
properties or rights of COMPANY or requiring consent of any party to the
transfer and assignment of any such assets, properties or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any assets, properties or rights outside of
the ordinary course of COMPANY's business;
(xi) any waiver of any material rights or claims of COMPANY;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which COMPANY is a party or by
which any of COMPANY's assets are bound;
(xiii) any transaction by COMPANY outside the ordinary course
of its business;
(xiv) any cancellation or termination of a material contract
with a customer or client of COMPANY prior to the scheduled termination date; or
(xv) any other distribution of property or assets by
COMPANY other than in the ordinary course of COMPANY's business.
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. COMPANY has delivered to
MARINEMAX an accurate schedule (which is set forth on Schedule 5.26) as of the
date of this Agreement of:
(i) the name of each financial institution in which
COMPANY has accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or
have access thereto.
Schedule 5.26 also sets forth the name of each person, corporation,
firm or other entity holding a general or special power of attorney from COMPANY
and a description of the terms of such power.
5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by COMPANY and the performance of the transactions contemplated herein
have been duly and validly authorized by the Board of Directors and the
stockholders of COMPANY and this Agreement has been duly and validly authorized
by all necessary corporate action and is a legal, valid, binding and enforceable
obligation of
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COMPANY. The execution and delivery of this Agreement by each of the
STOCKHOLDERS and the performance of the transactions contemplated herein is a
legal, valid, binding and enforceable obligation of the STOCKHOLDERS and each of
them, each having the appropriate legal capacity to execute and deliver this
Agreement.
5.28 RELATIONS WITH GOVERNMENTS. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed $10,000 per year
for each year in which any STOCKHOLDER has been a stockholder of COMPANY,
COMPANY has not made, offered or agreed to offer anything of value to any
governmental, official, political party or candidate for government office, nor
has COMPANY or any STOCKHOLDER otherwise taken any action which would cause
COMPANY to be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, or any law of similar effect. If political contributions made by
COMPANY have exceeded $10,000 per year for each year in which any STOCKHOLDER
has been a stockholder of COMPANY, each contribution in the amount of $5,000 or
more is accurately described on Schedule 5.28 hereto.
5.29 PROHIBITED ACTIVITIES. Except as set forth on Schedule 5.29,
COMPANY has not, between the Balance Sheet Date and the date hereof, taken any
of the actions prohibited by Section 7.3 hereof.
5.30 DISCLOSURE. This Agreement, including the annexes and Schedules
hereto, together with the other information furnished to MARINEMAX by COMPANY
and the STOCKHOLDERS in connection herewith, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein and therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the foregoing does not
apply to statements contained in or omitted from any of such documents made or
omitted in reliance upon information furnished by MARINEMAX. If, prior to the
Closing, COMPANY or the STOCKHOLDERS become aware of any fact or circumstance
that would affect the accuracy of any representation or warranty of COMPANY or
the STOCKHOLDERS in this Agreement in any material respect, COMPANY and the
STOCKHOLDERS shall immediately give notice of such fact or circumstance to
MARINEMAX. However, subject to the provisions of Section 7.8, such notification
shall not relieve either COMPANY or the STOCKHOLDERS of their respective
obligations under this Agreement, and, subject to the provisions of Section 7.8,
at the sole option of MARINEMAX, the truth and accuracy of any and all
representations and warranties of COMPANY and/or STOCKHOLDERS, or on behalf of
COMPANY and/or STOCKHOLDERS, made at the date of this Agreement and on the
Closing Date and at the Effective Time, shall be a precondition to the
consummation of the Merger and the other transactions contemplated herein.
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each STOCKHOLDER
severally represents and warrants that the representations and warranties set
forth below are true at the date of this Agreement and, subject to Section 7.8
hereof, shall be true at the time of Closing and at the Effective Time, and that
such representations and warranties shall survive for a period of the earlier of
(i) the date of the first audit of financial statements of the Surviving
Corporation containing combined operations of MARINEMAX and the Surviving
Corporation for those representations set forth within Section 5(B) which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve (12) months.
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5.31 AUTHORITY: OWNERSHIP. Such STOCKHOLDER has the full legal right,
capacity, power and authority to enter into this Agreement. Such STOCKHOLDER
owns beneficially and of record all of the shares of COMPANY Stock identified in
Schedule 5.3 as being owned by such STOCKHOLDER, and, except as set forth on
Schedule 5.3, such COMPANY Stock is owned free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind.
5.32 PREEMPTIVE RIGHTS. Such STOCKHOLDER does not have, or hereby
waives, any preemptive or other right to acquire shares of COMPANY Stock or
MARINEMAX Stock that such STOCKHOLDER has or may have had other than rights of
any STOCKHOLDER to acquire MARINEMAX Stock pursuant to (i) this Agreement, or
(ii) any option granted by MARINEMAX.
5.33 NO INTENTION TO DISPOSE OF MARINEMAX STOCK. No STOCKHOLDER is
under any binding commitment or contract to sell, exchange or otherwise dispose
of any shares of MARINEMAX Stock to be received pursuant to this Agreement.
6. REPRESENTATIONS OF MARINEMAX AND NEWCO
MARINEMAX and NEWCO represent and warrant that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true, complete and
correct on the Closing Date and at the Effective Time, and that such
representations and warranties shall survive the Closing and the Effective Time
for a period of the earlier of (i) the date of the first audit of financial
statements of the Surviving Corporation containing combined operations of
MARINEMAX and the Surviving Corporation for those representations and warranties
set forth within Section 6 which representations and warranties specifically
deal with items that would be expected to be encountered in the audit process,
or (ii) twelve (12) months, the last day of such period being the "Expiration
Date".
6.1 DUE ORGANIZATION. MARINEMAX and NEWCO are each corporations duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and each has the requisite power and authority to carry on its
business as it is now being conducted. MARINEMAX and NEWCO are each qualified to
do business and are each in good standing in each jurisdiction in which the
nature of its business makes such qualification necessary, except where the
failure to be so authorized or qualified would not have a Material Adverse
Effect. True, complete and correct copies of the Certificate of Incorporation
and Bylaws, each as amended, of MARINEMAX and NEWCO (the "MARINEMAX Charter
Documents") are all attached hereto on Schedule 6.1.
6.2 AUTHORIZATION. The respective representatives of MARINEMAX and
NEWCO executing this Agreement have the authority to enter into and bind
MARINEMAX and NEWCO to the terms of this Agreement. MARINEMAX and NEWCO have the
full legal right, power and authority to enter into this Agreement and the
Merger.
6.3 CAPITAL STOCK OF MARINEMAX AND NEWCO. The authorized capital stock
of MARINEMAX and NEWCO is as set forth in Sections 1.4(ii) and (iii),
respectively. All of the issued and outstanding shares of the capital stock of
NEWCO are owned by MARINEMAX and all of the issued and outstanding shares of the
capital stock of MARINEMAX are owned by the persons set forth on Schedule 6.3
hereof, in each case, free and clear of all liens, security interests, pledges,
charges, voting
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trusts, restrictions, encumbrances and claims of every kind. All of the issued
and outstanding shares of the capital stock of MARINEMAX and NEWCO have been
duly authorized and validly issued, are fully paid and nonassessable, are owned
of record and beneficially by MARINEMAX and the persons set forth on Schedule
6.3, respectively, and further, such shares were offered, issued, sold and
delivered by MARINEMAX and NEWCO in compliance with applicable state and federal
laws concerning the issuance of securities. Further, none of such shares were
issued in violation of the preemptive rights of any past or present stockholder
of MARINEMAX or NEWCO.
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth on Schedule 6.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
MARINEMAX or NEWCO to issue any of their respective authorized but unissued
capital stock; and (ii) neither MARINEMAX nor NEWCO has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Schedule 6.4 also includes complete and
accurate copies of all stock option or stock purchase plans, including a list,
accurate as of the date hereof, of all outstanding options, warrants or other
rights to acquire shares of the stock of MARINEMAX.
6.5 SUBSIDIARIES. NEWCO has no subsidiaries. MARINEMAX has no
subsidiaries except for (i) NEWCO and each of the companies identified as
"NEWCO" in each of the Other Agreements, and (ii) those newly formed
corporations which will receive certain pieces and parcels of real property, and
except as set forth in the preceding sentence, neither MARINEMAX nor NEWCO
presently owns, of record or beneficially, or controls, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and neither
MARINEMAX nor NEWCO, directly or indirectly, is a participant in any joint
venture, partnership or other non-corporate entity.
6.6 FINANCIAL STATEMENTS. MARINEMAX was formed on January 23, 1998, and
has had no operations to the date hereof except with respect to the transactions
contemplated by this Agreement and the Other Agreements with each of the Other
Founding Companies, and accordingly MARINEMAX has not delivered any Financial
Statements or other financial information of MARINEMAX to any of the
STOCKHOLDERS.
6.7 [INTENTIONALLY DELETED].
6.8 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by MARINEMAX and NEWCO and the performance of the transactions
contemplated herein have been duly and validly authorized by the respective
Boards of Directors of MARINEMAX and NEWCO, and this Agreement has been duly and
validly authorized by all necessary corporate action and is a legal, valid and
binding obligation of MARINEMAX and NEWCO.
6.9 MARINEMAX STOCK. At the time of issuance thereof, the MARINEMAX
Stock to be delivered to the STOCKHOLDERS pursuant to this Agreement will
constitute valid and legally issued shares of MARINEMAX, fully paid and
nonassessable, and with the exception of restrictions upon resale set forth in
Sections 15 and 16 hereof and in the "Pooling Letters", will be identical in all
respects (which do not include the form of certificate upon which it is printed
or the presence or absence of a CUSIP
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number on any such certificate) to the MARINEMAX Stock issued and outstanding as
of the date hereof by reason of the provisions of the Delaware GCL. The shares
of MARINEMAX Stock to be issued to the STOCKHOLDERS pursuant to this Agreement
will not be registered under the 1933 Act, and will be issued to the
STOCKHOLDERS pursuant to a valid exemption from registration under the 1933 Act
and applicable state securities laws.
6.10 DISCLOSURE. The information furnished by MARINEMAX and NEWCO to
COMPANY and the STOCKHOLDERS in connection with this Agreement, does not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing does
not apply to statements contained in or omitted from any of such information
made or omitted in reliance upon information furnished by COMPANY or the
STOCKHOLDERS.
6.11 NO UNDISCLOSED AGREEMENTS. There do not exist any agreements,
understandings or commitments by MARINEMAX or NEWCO or, to the knowledge of
MARINEMAX or NEWCO, any of the Other Founding Companies, which provide any
material benefit or other thing of material value to any stockholder of any of
the Other Founding Companies in connection with their relation to MARINEMAX, or
that vary materially the express terms of the Other Agreements, except as set
forth in any of the Other Agreements or any employment or consultant agreement
entered into pursuant thereto or appended thereto as an Annex, or except as
described on Schedule 6.11.
7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE. (a) Between the date of this
Agreement and the Closing Date, COMPANY will afford to the officers and
authorized representatives of MARINEMAX and the Other Founding Companies access
to all of COMPANY's and any Acquired Party's sites, properties, books and
records and will furnish MARINEMAX with such additional financial and operating
data and other information as to the business and properties of COMPANY and any
Acquired Party as MARINEMAX or the Other Founding Companies may from time to
time reasonably request. COMPANY will cooperate with MARINEMAX and the Other
Founding Companies, its and their representatives, auditors and counsel in the
preparation of any documents or other material which may be required in
connection with any documents or materials required by this Agreement.
MARINEMAX, NEWCO, the STOCKHOLDERS and COMPANY will treat all information
obtained in connection with the negotiation and performance of this Agreement or
the due diligence investigations conducted with respect to the Other Founding
Companies as confidential in accordance with the provisions of Section 14
hereof. In addition, MARINEMAX will cause each of the Other Founding Companies
to enter into a provision similar to this Section 7.1 requiring each such Other
Founding Company, its stockholders, directors, officers, representatives,
employees and agents to keep confidential any information obtained by such Other
Founding Company.
(b) Between the date of this Agreement and the Closing Date, MARINEMAX
will afford to the officers and authorized representatives of COMPANY access to
all of MARINEMAX's and NEWCO's sites, properties, books and records and will
furnish COMPANY with such additional financial and operating data and other
information as to the business and properties of MARINEMAX and NEWCO as COMPANY
may from time to time reasonably request. MARINEMAX and NEWCO will cooperate
with COMPANY, its representatives, auditors and counsel in the preparation of
any documents
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or other material which may be required in connection with any documents or
materials required by this Agreement. COMPANY will cause all information
obtained in connection with the negotiation and performance of this Agreement to
be treated as confidential in accordance with the provisions of Section 14
hereof.
7.2 CONDUCT OF BUSINESS PENDING THE MERGER. Between the date of this
Agreement and the Effective Time, COMPANY shall, and Company shall cause all
Acquired Parties to, except as set forth on Schedule 7.2:
(i) carry on its business in substantially the same manner as
it has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its properties and facilities, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
(iv) use all reasonable efforts to keep in full force and
effect present insurance policies or other comparable insurance coverage;
(v) use its reasonable efforts to maintain and preserve its
business organization intact, retain its respective present key employees and
maintain its respective relationships with suppliers, customers and others
having business relations with COMPANY or any Acquired Party, as applicable;
(vi) maintain compliance with all material permits, laws,
rules and regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities;
(vii) maintain present debt and lease instruments and not
enter into new or amended debt or lease instruments except as permitted by
Section 10.6, without the knowledge and consent of MARINEMAX (which consent
shall not be unreasonably withheld), provided that debt and/or lease instruments
may be replaced without the consent of MARINEMAX if such replacement instruments
are on terms at least as favorable to COMPANY or any Acquired Party, as
applicable, as the instruments being replaced; and
(viii) maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past
practices of COMPANY or any Acquired Party, as applicable.
7.3 PROHIBITED ACTIVITIES. Except as disclosed on Schedule 7.3, between
the date of this Agreement and the Effective Time, COMPANY shall not, and
Company shall cause all Acquired Parties to not, without prior written consent
of MARINEMAX:
(i) make any change in its Articles/Certificate of
Incorporation or Bylaws;
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(ii) issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants listed in Schedule
5.4;
(iii) except as permitted by Section 10.6 declare or pay any
dividend, or make any distribution in respect of its stock whether now or
hereafter outstanding, or purchase, redeem or otherwise acquire or retire for
value any shares of its stock;
(iv) enter into any contract or commitment or incur or agree
to incur any liability or make any capital expenditures, except if it is in the
normal course of business (consistent with past practice) or involves an amount
not in excess of $50,000;
(v) create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $50,000 necessary or desirable for the conduct of its business, (2)
(a) liens for taxes either not yet due or being contested in good faith and by
appropriate proceedings (provided that with respect to contested taxes, adequate
reserves have been established and are being maintained) or (b) materialmen's,
mechanics', workers', repairmen's, employees' or other like liens arising in the
ordinary course of its business (the liens set forth in clause (2) above may be
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.10 and/or 5.15 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of
any property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the
start-up of any new business;
(viii) merge or consolidate or agree to merge or consolidate
with or into any other corporation;
(ix) waive any material rights or claims of COMPANY or any
Acquired Party, as applicable, provided that COMPANY or any Acquired Party, as
applicable, may negotiate and adjust bills in the course of good faith disputes
with customers in a manner consistent with past practice of COMPANY, or any
Acquired Party, as applicable;
(x) commit a material breach or amend or terminate any
material agreement, permit, license or other right of COMPANY or any Acquired
Party, as applicable; or
(xi) enter into any other transaction outside the ordinary
course of its business or prohibited hereunder.
7.4 [INTENTIONALLY DELETED].
7.5 [INTENTIONALLY DELETED.]
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7.6 AGREEMENTS. The STOCKHOLDERS and COMPANY shall terminate (i) any
stockholders agreements, voting agreements, voting trusts, options, warrants and
employment agreements between COMPANY, any Acquired Party and any of COMPANY's
or any Acquired Party's employees. Such termination agreements are listed on
Schedule 7.6 and copies thereof shall be attached thereto.
7.7 NOTIFICATION OF CERTAIN MATTERS. The STOCKHOLDERS and COMPANY shall
give prompt notice to MARINEMAX of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of COMPANY as defined in Section 5 or the
STOCKHOLDERS contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing, and (ii) any material failure of any STOCKHOLDER or
COMPANY to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. MARINEMAX and NEWCO shall
give prompt notice to COMPANY of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of MARINEMAX or NEWCO contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing, and (ii) any
material failure of MARINEMAX or NEWCO to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 7.7 shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, which modification may only be made pursuant to Section 7.8; (ii) modify
the conditions set forth in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
7.8 DELIVERY OF SCHEDULES; AMENDMENT OF SCHEDULES. The Schedules
required by this Agreement from the respective parties hereto shall be delivered
at the execution of this Agreement. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules, provided however, that supplements and amendments to Schedules 5.10,
5.11, 5.14 and 5.15 shall only have to be delivered at the Closing Date, unless
such Schedule is to be amended to reflect an event occurring other than in the
ordinary course of business. Notwithstanding the foregoing sentence, no
amendment or supplement to a Schedule prepared by COMPANY or the STOCKHOLDERS
that constitutes or reflects an event or occurrence that would have a Material
Adverse Effect may be made unless MARINEMAX and a majority of the Founding
Companies other than COMPANY consent to such amendment or supplement; and
provided further, that no amendment or supplement to a Schedule prepared by
MARINEMAX or NEWCO that constitutes or reflects an event or occurrence that
would have a Material Adverse Effect may be made unless a majority of the
Founding Companies consent to such amendment or supplement. For all purposes of
this Agreement, including without limitation for purposes of determining whether
the conditions set forth in Sections 8.1 and 9.1 have been fulfilled, the
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this Section 7.8. In the event that one of the Other Founding
Companies seeks to amend or supplement a Schedule pursuant to Section 7.8 of one
of the Other Agreements, and such amendment or supplement constitutes or
reflects an event or occurrence that would have a Material Adverse Effect on
such Other Founding Company, MARINEMAX shall give COMPANY notice thereof. If
MARINEMAX and a majority of the Founding Companies consent to such amendment or
supplement, which consent shall have been deemed given by MARINEMAX or any
Founding Company if no response is received within
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twenty-four (24) hours following receipt of notice of such amendment or
supplement (or sooner if required by the circumstances under which such consent
is requested), but COMPANY does not give its consent, COMPANY shall, without
further act or action, be deemed to have given its consent and may not
thereafter terminate this Agreement. In the event that COMPANY seeks to amend or
supplement a Schedule pursuant to this Section 7.8, and MARINEMAX and a majority
of the Other Founding Companies do not consent to such amendment or supplement,
this Agreement shall be deemed terminated by mutual consent as set forth in
Section 12.1(i) hereof. In the event that MARINEMAX or NEWCO seeks to amend or
supplement a Schedule pursuant to this Section 7.8 and a majority of the
Founding Companies do not consent to such amendment or supplement, this
Agreement shall be deemed terminated by mutual consent as set forth in Section
12.1(i) hereof. No party to this Agreement shall be liable to any other party if
this Agreement shall be terminated pursuant to the provisions of this Section
7.8. No amendment of or supplement to a Schedule shall be made later than
twenty-four (24) hours prior to the Effective Time.
7.9 [INTENTIONALLY DELETED].
7.10 FINAL FINANCIAL STATEMENTS. COMPANY shall provide prior to the
Closing Date, and MARINEMAX shall have had sufficient time to review the
unaudited consolidated balance sheets of COMPANY as of the end of all months and
fiscal quarters following the Balance Sheet Date, and the unaudited consolidated
statement of income, cash flows and retained earnings of COMPANY for all months
and fiscal quarters ended after the Balance Sheet Date and on or before December
31, 1997 (collectively, the "Final COMPANY Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from COMPANY Financial Statements as of the Balance Sheet Date.
The Final COMPANY Financial Statements shall have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated and
with past periods (except as noted therein). Except as noted in the Final
COMPANY Financial Statements, all of such financial statements will present
fairly the results of operations of COMPANY for the periods indicated therein.
7.11 FURTHER ASSURANCES. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents and take such other actions as may be reasonably necessary or
convenient to carry out the transactions contemplated hereby, including, without
limitation, all further instruments, documents and actions as may be reasonably
required by MARINEMAX's independent public accountants and attorneys with
respect to the pooling-of-interests accounting issues.
7.12 [INTENTIONALLY DELETED]
7.13 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the STOCKHOLDERS and COMPANY shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 9 of this Agreement, and such
compliance by MARINEMAX and NEWCO shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and (iii) the parties agree to cooperate
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and use their best efforts to cause all filings required under the Hart-Scott
Act to be made. If filings under the Hart-Scott Act are required, the costs and
expenses thereof (including filing fees) shall be borne by MARINEMAX.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS AND COMPANY
The obligations of the STOCKHOLDERS and COMPANY with respect to actions
to be taken on the Closing Date are subject to the satisfaction or waiver on or
prior to the Closing Date of all of the conditions in this Section 8. As of the
Closing Date, if any of such conditions has not been satisfied, the STOCKHOLDERS
(acting in unison) shall have the right to terminate this Agreement, or in the
alternative, waive any condition not so satisfied. Any act or action of the
STOCKHOLDERS in consummating the Closing or delivering certificates representing
the COMPANY Stock shall constitute a waiver of any conditions not so satisfied.
However, no such waiver shall be deemed to affect the survival of the
representations and warranties of MARINEMAX and NEWCO contained in Section 6
hereof.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of MARINEMAX and NEWCO contained in Section 6
shall be true and correct in all material respects as of the Closing Date and
the Effective Time as though such representations and warranties had been made
on and as of such date and time; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by MARINEMAX and NEWCO on or
before the Closing Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and effective both on the Closing Date and at the Effective Time, and
signed by the President or any Vice President of MARINEMAX shall have been
delivered to the STOCKHOLDERS.
8.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall be reasonably satisfactory to COMPANY and its counsel.
8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which the management
of COMPANY deems it inadvisable to proceed with the transactions hereunder.
8.4 [INTENTIONALLY DELETED].
8.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and no
action or proceeding shall have been instituted or threatened to restrain or
prohibit the Merger, and no governmental agency or body shall have taken any
other action or made any request of COMPANY as a result of which COMPANY deems
it inadvisable to proceed with the transactions contemplated herein.
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8.6 GOOD STANDING CERTIFICATES. MARINEMAX and NEWCO each shall have
delivered to COMPANY a certificate, dated as of a date no later than ten (10)
days prior to the Closing Date, duly issued by the Delaware Secretary of State
and in each state in which MARINEMAX or NEWCO is authorized to do business,
showing that each of MARINEMAX and NEWCO is in good standing and authorized to
do business.
8.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to MARINEMAX or NEWCO that would constitute a Material
Adverse Effect.
8.8 [INTENTIONALLY DELETED].
8.9 SECRETARY'S CERTIFICATE. COMPANY shall have received a certificate
or certificates, dated the Closing Date and signed by the secretary of MARINEMAX
and of NEWCO, certifying the truth and correctness of attached copies of the
MARINEMAX's and NEWCO's respective Certificates of Incorporation (including
amendments thereto), Bylaws (including amendments thereto), and resolutions of
the boards of directors and, if required, the stockholders of MARINEMAX and
NEWCO, in each case approving MARINEMAX's and NEWCO's entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.10 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule
9.11 shall have been afforded the opportunity to enter into an employment
agreement substantially in the form attached hereto as Annex IV.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF MARINEMAX AND NEWCO
The obligations of MARINEMAX and NEWCO with respect to actions to be
taken on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of all of the conditions in this Section 9. As of the
Closing Date, all conditions not satisfied shall be deemed to have been waived,
except that no such waiver shall be deemed to affect the survival of the
representations and warranties of COMPANY and the STOCKHOLDERS contained in
Section 5 hereof.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the STOCKHOLDERS, and COMPANY as defined in
Section 5 hereof, contained in this Agreement shall be true and correct in all
material respects as of the Closing Date and the Effective Time with the same
effect as though such representations and warranties had been made on and as of
such date and time; all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the STOCKHOLDERS and COMPANY on or before
the Closing Date or the Effective Time, as the case may be, shall have been duly
performed or complied with in all material respects; and the STOCKHOLDERS shall
have delivered to MARINEMAX certificates to the foregoing effect dated the
Closing Date and effective both on the Closing Date and at the Effective Time,
and signed by each of the STOCKHOLDERS.
9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which the
management of MARINEMAX deems it inadvisable to proceed with the transactions
hereunder.
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9.3 SECRETARY'S CERTIFICATE. MARINEMAX shall have received a
certificate, dated the Closing Date and signed by the secretary of COMPANY,
certifying the truth and correctness of attached copies of the Charter Documents
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the board of directors and the STOCKHOLDERS approving COMPANY's
entering into this Agreement and the consummation of the transactions
contemplated hereby.
9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to COMPANY that would constitute a Material Adverse
Effect, and COMPANY shall not have suffered any material loss or damages to any
of its properties or assets, whether or not covered by insurance, which change,
loss or damage materially affects or impairs the ability of COMPANY to conduct
its business.
9.5 STOCKHOLDERS' RELEASE. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX an instrument at the Closing releasing COMPANY as of the
Effective Time from (a) any and all claims of the STOCKHOLDERS against COMPANY
and MARINEMAX and (b) obligations of COMPANY and MARINEMAX to the STOCKHOLDERS,
except for (i) items specifically identified on Schedules 5.10 and 5.15 as being
claims of or obligations to the STOCKHOLDERS, (ii) continuing obligations to the
STOCKHOLDERS relating to their employment by COMPANY and (iii) obligations
arising under this Agreement or the transactions contemplated hereby. The
STOCKHOLDER Release to be delivered pursuant to this Section shall be in form
and content as set forth in Annex V hereto.
9.6 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out the transactions contemplated by this Agreement or
incidental hereto and all other related legal matters shall have been approved
by counsel to MARINEMAX.
9.7 [INTENTIONALLY DELETED].
9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the Merger and no governmental agency or body shall have taken any
other action or made any request of MARINEMAX as a result of which MARINEMAX
deems it inadvisable to proceed with the transactions hereunder.
9.9 GOOD STANDING CERTIFICATES. COMPANY shall have delivered to
MARINEMAX certificates, dated as of a date no earlier than ten (10) days prior
to the Closing Date, duly issued by the appropriate governmental authority in
COMPANY's and all Acquired Parties' states of incorporation and, unless waived
by MARINEMAX, in all states in which COMPANY and all Acquired Parties are
authorized to do business, showing COMPANY and all Acquired Parties are in good
standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for COMPANY and all Acquired Parties for all
periods prior to the Closing have been filed and paid.
9.10 POOLING LETTERS. The STOCKHOLDERS shall each have executed and
delivered a letter agreement in favor of MARINEMAX and NEWCO, in form and
content as set forth in Annex VI attached hereto (the "Pooling Letters"),
pursuant to which each STOCKHOLDER shall agree to hold the
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MARINEMAX Stock received by such STOCKHOLDER, for such period of time as is
necessary to allow the Merger to be accounted for as a "pooling-of-interests"
under the rules and regulations of the SEC.
9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule
9.11 shall enter into an employment agreement effective as of the Effective
Time, substantially in form and content as attached hereto as Annex IV.
9.12 SPECIFIC INDEMNIFICATION AGREEMENT. The STOCKHOLDERS shall have
delivered a specific indemnification agreement in favor of MARINEMAX and NEWCO,
in form and content satisfactory to MARINEMAX in its sole discretion, pursuant
to which the STOCKHOLDERS shall agree to hold MARINEMAX and NEWCO harmless for,
from and against certain specific items for which indemnification shall be
required.
9.13 FIRPTA CERTIFICATE. Each STOCKHOLDER shall have delivered to
MARINEMAX a certificate to the effect that he is not a foreign person pursuant
to Section 1.1445-2(b) of the Treasury Regulations.
9.14 INVESTMENT AGREEMENTS. STOCKHOLDERS shall each have executed and
delivered to MARINEMAX and NEWCO an investment agreement, in form and content as
set forth in Annex VII attached hereto (the "Investment Agreement").
10. COVENANTS OF MARINEMAX AND THE STOCKHOLDERS AFTER CLOSING
10.1 ASSUMPTION OF STOCKHOLDERS' GUARANTEES. MARINEMAX shall use its
commercially reasonable best efforts to have the STOCKHOLDERS released from any
and all guarantees on any indebtedness that they personally guaranteed and from
any and all pledges of assets that they pledged to secure such indebtedness for
the benefit of COMPANY, with all such guarantees on indebtedness being assumed
by MARINEMAX.
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as
contemplated by this Agreement after the Effective Time, MARINEMAX shall not,
and shall not permit any of its subsidiaries, to undertake any act that would
jeopardize the tax-free status or the "pooling-of-interests" accounting
treatment of the organization set forth herein, including, without limitation,
the retirement or reacquisition, directly or indirectly, of all or part of the
MARINEMAX Stock issued in connection with the transactions contemplated hereby.
10.3 PREPARATION AND FILING OF TAX RETURNS.
(i) COMPANY shall, if possible, file or cause to be filed all
separate Returns of any Acquired Party for all taxable periods that end at or
before the Effective Time, which Returns as to the taxable periods that end at
or before the Effective Time shall be acceptable to the STOCKHOLDERS in their
reasonable judgment. Notwithstanding the foregoing, the STOCKHOLDERS shall file
or cause to be filed all separate federal income tax returns (and any state and
local tax returns filed on the basis similar to that of S corporations under
federal income tax rules) of any Acquired Party for all taxable periods that end
at or before the Effective Time. Each STOCKHOLDER shall pay or cause to be paid
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all Tax liabilities (in excess of all amounts already paid with respect thereto
or properly accrued or reserved with respect thereto on COMPANY Financial
Statements) shown by such returns to be due.
(ii) MARINEMAX shall file or cause to be filed all separate
Returns of, or that include, any Acquired Party for all taxable periods ending
after the Effective Time.
(iii) Each party hereto shall, and shall cause its
subsidiaries and affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in filing any
Return, amended Return or claim for refund, determining a liability for Taxes or
a right to refund of Taxes or in conducting any audit or other proceeding in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating to
rulings or other determinations by any taxing authority and relevant records
concerning the ownership and tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file Returns pursuant to this Agreement shall bear all costs of filing such
Returns.
(iv) Each of COMPANY, NEWCO, MARINEMAX and each STOCKHOLDER
shall comply with the tax reporting requirements of Section 1.351-3 of the
Treasury Regulations promulgated under the Code, and treat the transaction as a
tax-free contribution under Section 351(a) of the Code subject to gain, if any,
recognized on the receipt of cash or other property under Section 351(b) of the
Code.
10.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The persons
who are the directors and officers of NEWCO shall be appointed as directors and
elected as officers of the Surviving Corporation, promptly following the
Effective Time.
10.5 PRESERVATION OF EMPLOYEE BENEFIT PLANS. Following the Effective
Time, MARINEMAX shall not terminate any health insurance, life insurance or
401(k) plan in effect at COMPANY until such time as MARINEMAX is able to replace
such plan with a plan that is applicable to MARINEMAX and all of its then
existing subsidiaries, provided that MARINEMAX shall have no obligation to
provide replacement plans that have the same terms and provisions as the
existing plans, provided, further, that any new health insurance plan shall
provide for coverage for preexisting conditions. At the Effective Time, the
employees of COMPANY will be the employees of the Surviving Corporation provided
that this provision is for purposes of clarifying that the Merger, in and of
itself, will not have any impact on the employment status of any employee and
provided, further that this provision shall not in any way limit the management
rights of the Surviving Corporation or MARINEMAX to assess work force needs and
make appropriate adjustments as necessary or desirable within their discretion
(subject to applicable laws).
10.6 DIVIDENDS. The COMPANY and all Acquired Parties shall not declare
or pay any dividends or distributions to any of the STOCKHOLDERS, or Company, as
applicable.
10.7 DISTRIBUTION OF FINANCIAL STATEMENTS. MARINEMAX shall use its
reasonable business efforts to prepare, publish and disseminate financial
statements including at least thirty (30) days of
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combined operations of COMPANY and MARINEMAX after giving effect to the Merger
and the transactions contemplated by the Other Agreements, to the end that the
STOCKHOLDERS may thereafter sell the MARINEMAX Stock received in the Merger,
without such sale violating the rules and regulations of the SEC.
11. INDEMNIFICATION
The STOCKHOLDERS, MARINEMAX and NEWCO each make the following covenants
that are applicable to them, respectively:
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The STOCKHOLDERS each
covenant and agree that they will indemnify, defend, protect and hold harmless
MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all times, from and
after the date of this Agreement until the applicable Expiration Date, for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or the Surviving
Corporation as a result of or arising from (a) any breach of the representations
and warranties of the STOCKHOLDERS or COMPANY set forth herein or on the
Schedules or certificates delivered in connection herewith; (b) any breach of
any agreement on the part of the STOCKHOLDERS or COMPANY under this Agreement;
and (c) any environmental matters set forth in Section 11.5 hereof. For purposes
of this Section 11, the term COMPANY shall refer to COMPANY and all other
Acquired Parties, if any.
11.2 INDEMNIFICATION BY MARINEMAX. MARINEMAX covenants and agrees that
it will indemnify, defend, protect and hold harmless the STOCKHOLDERS at all
times from and after the date of this Agreement until the Expiration Date, for,
from and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by the STOCKHOLDERS as a result of or arising
from (a) any breach by MARINEMAX or NEWCO of their representations and
warranties set forth herein or on the schedules or certificates attached hereto;
(b) any nonfulfillment of any agreement on the part of MARINEMAX or NEWCO under
this Agreement; or (c) any liabilities which the STOCKHOLDERS may incur due to
MARINEMAX's or NEWCO's failure to be responsible for the liabilities and
obligations of COMPANY as provided in Section 1 hereof (except to the extent
that MARINEMAX or NEWCO has claims against the STOCKHOLDERS by reason of such
liabilities).
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1, 11.2 or 11.5
hereof hereinafter (the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or of the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own counsel, any such
matter so long as the Indemnifying Party
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pursues the same in good faith and diligently, provided that the Indemnifying
Party shall not settle any criminal proceeding or agree to any nonmonetary
remedy without the prior written consent of the Indemnified Party, whose consent
may be withheld in its sole discretion. If the Indemnifying Party undertakes to
defend or settle, it shall promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in the defense thereof and in any settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records or information reasonably
requested by the Indemnifying Party that are in the Indemnified Party's
possession or control. All Indemnified Parties shall use the same counsel, which
shall be the counsel selected by Indemnifying Party, provided that if counsel to
the Indemnifying Party shall have a conflict of interest that prevents counsel
for the Indemnifying Party from representing Indemnified Party, Indemnified
Party shall have the right to participate in such matter through counsel of its
own choosing and Indemnifying Party will reimburse the Indemnified Party for the
reasonable expenses of such counsel. After the Indemnifying Party has notified
the Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability, except (a) as set forth in the
preceding sentences, and (b) to the extent such participation is requested by
the Indemnifying Party, in which event the Indemnified Party shall be reimbursed
by the Indemnifying Party for reasonable additional legal expenses and
out-of-pocket expenses. If the Indemnifying Party desires to accept a final and
complete settlement of any Third Person's claim and the Indemnified Party
refuses to consent to such settlement, then the Indemnifying Party's liability
under this Section with respect to such Third Person claim shall be limited to
the amount so offered in settlement by said Third Person. Upon agreement as to a
settlement between said Third Person and the Indemnifying Party, the
Indemnifying Party shall, in exchange for a complete release from the
Indemnified Party, promptly (x) in the case of MARINEMAX being the Indemnifying
Party, pay to the Indemnified Party the amount agreed to in such settlement, and
(y) in the case of the STOCKHOLDERS being the Indemnifying Party, cause the
MARINEMAX Stock held in escrow to be used in such settlement; and the
Indemnified Party shall, from that moment on, bear full responsibility for any
additional costs of defense which it subsequently incurs with respect to such
claim and all additional costs of settlement or judgment. If the Indemnifying
Party does not undertake to defend such matter to which the Indemnified Party is
entitled to indemnification hereunder, or fails diligently to pursue such
defense, the Indemnified Party may undertake such defense through counsel of its
choice, at the cost and expense of the Indemnifying Party, and the Indemnified
Party may settle such matter, and the Indemnifying Party shall reimburse the
Indemnified Party in the manner set forth above in this Section 11.3 for the
amount paid in such settlement and any other liabilities or expenses incurred by
the Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person's claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnifying Party, unless the Indemnifying Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 LIMITATIONS ON INDEMNIFICATION. MARINEMAX, NEWCO, the Surviving
Corporation and the other persons or entities entitled to indemnification
pursuant to Section 11.1, 11.2 or 11.5 shall not assert any claim for
indemnification hereunder against the STOCKHOLDERS until such time as, and
solely to the extent that, the aggregate of all claims that such persons may
have against the
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STOCKHOLDERS shall exceed the sum of $65,000 (the "Indemnification Deductible");
and after such Indemnification Deductible amount has been attained, only claims
in excess of such amount shall be indemnified hereunder. The STOCKHOLDERS shall
not assert any claim for indemnification hereunder against MARINEMAX or NEWCO
until such time as, and solely to the extent that, the aggregate of all claims
which the STOCKHOLDERS may have against MARINEMAX or NEWCO shall exceed the sum
of $65,000.
No person shall be entitled to indemnification under this Section 11 if
and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
The liability of the Company for breaches of its representations and
warranties contained in this Agreement and for any indemnification obligation
herein shall cease as of the Effective Time, and MARINEMAX and Surviving
Corporation may recover for such breaches and recover for such indemnification
only from the MARINEMAX Stock held in escrow pursuant to and as provided in the
Escrow and Security Agreement, except to the extent specific and separate
indemnification is provided by the STOCKHOLDERS.
MARINEMAX and Surviving Corporation may recover for indemnification
hereunder only from the MARINEMAX Stock held in escrow pursuant to and as
provided in the Escrow and Security Agreement, except to the extent specific and
separate indemnification is provided by the STOCKHOLDERS. It is hereby
understood and agreed that STOCKHOLDERS may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
For purposes of calculating the value of the MARINEMAX Stock received
by STOCKHOLDERS, MARINEMAX Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 11 shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto with respect to a claim of fraud.
11.5 ENVIRONMENTAL INDEMNIFICATION BY THE STOCKHOLDERS. The
STOCKHOLDERS covenant and agree that they will indemnify, defend, protect and
hold harmless MARINEMAX, NEWCO, COMPANY and the Surviving Corporation at all
times, from and after date of this Agreement until the applicable Expiration
Date, for, from and against all claims, damages, actions, suit, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred on or prior to the Expiration Date (or thereafter if a
claim has been made therefor prior to such date) by MARINEMAX, NEWCO, COMPANY or
the Surviving Corporation as a result of or arising from: (i) any use,
generation, transportation, storage, treatment, disposal or presence of
Hazardous Wastes and/or Hazardous Substances occurring on or prior to the
Effective Time including, without limitation, any waste or other disposal
activities or releases which occurred at a facility on which any portion of the
COMPANY's (or its predecessors') business was conducted, any waste or other
disposal activities or releases which occurred
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off of any such facility with regard to wastes and other substances generated on
such facility, and any waste or other disposal activities or releases which
occurred on real estate at any time whether or not the COMPANY (or its
predecessors) owned or leased such real estate at the time such waste or other
disposal activities or releases were engaged in, and whether or not the COMPANY
performed such waste or other disposal activities or releases; (ii) any past,
present or threatened spills, discharges, leaks, emissions, injections, escapes,
dumping, pumping, pouring, emptying, leaching, leaking, disposing or any
releases or threatened releases as defined now or in the future under any
applicable Environmental Law, to surface waters, groundwaters, soil, ambient air
or otherwise into the environment occurring as a result of any activities of the
COMPANY (or its predecessors') on or prior to the Effective Time, including,
without limitation, both those releases or incidents involving potential or
actual environmental contamination which required notification or reporting to
appropriate federal, state or local officials or agencies, or clean-up or
remedial activities and those releases or incidents which occurred prior to the
effective date of any requirements imposing such notification or reporting
obligations or clean-up or remedial activities, but which would have been
subject to such obligations if they had occurred subsequent to the effective
date of such requirements; (iii) the exposure of and resulting consequences to
any persons, including, without limitation, employees of the COMPANY, to any
mineral, chemical or industrial product, raw material intermediate, by-product
or Hazardous Waste and/or Hazardous Substance created, stored, treated,
generated, processed, handled or originating at a facility at which the COMPANY
(or any of its predecessors) conducted business on or prior to the Effective
Time or otherwise used by the COMPANY (or any of its predecessors) in the
conduct of its or their business; (iv) any violations or claim of violations by
the COMPANY, or pertaining to its properties, of Environmental Laws,
occupational or employee health and safety laws or otherwise arising out of or
under such laws, which violations or alleged violations occurred prior to the
Effective Time; (v) any and all actions, failures to act and negligence in
monitoring, maintaining and upkeep of on-site generation, storage, treatment,
transportation and disposal operations on or prior to the Effective Time; (vi)
any installation, use, removal, maintenance or monitoring of storage tanks or
related facilities on or prior to the Effective Time; or (vii) any violations,
fees, obligations or failures to comply with any and all Environmental Laws,
permit requirements, authorizations, orders and other administrative or legal
directives on or prior to the Effective Time.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time solely:
(i) by mutual consent of the boards of directors of
MARINEMAX, NEWCO and ;
(ii) by the STOCKHOLDERS or COMPANY (acting through its board
of directors), on the one hand, or by MARINEMAX (acting through its board of
directors), on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated by June
30, 1998, unless the failure of such transactions to be consummated is due to
the willful failure of the party seeking to terminate this Agreement to perform
any of its obligations under this Agreement or satisfy any conditions precedent
set forth in this Agreement and over which such party has influence or to the
extent required to be performed by such party prior to the Effective Time.
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(iii) by the STOCKHOLDERS or COMPANY, on the one hand, or by
MARINEMAX, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants or agreements contained herein, and the curing of such default
shall not have been made on or before the Closing Date or by the STOCKHOLDERS or
COMPANY, if the conditions set forth in Section 8 hereof have not been satisfied
or waived as of the Closing Date, as applicable, or by MARINEMAX, if the
conditions set forth in Section 9 hereof have not been satisfied or waived as of
the Closing Date; or
(iv) pursuant to Section 7.8 hereof.
12.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
7.8 hereof, the termination of this Agreement will in no way limit any
obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, without
limitation, legal and audit costs and out-of-pocket expenses.
13. NONCOMPETITION
13.1 PROHIBITED ACTIVITIES. The STOCKHOLDERS will not, for a period of
five (5) years following the Effective Time (the "Restricted Period"), for any
reason whatsoever, directly or indirectly, for themselves or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales representative, in
any business that sells, rents and leases and boating, nautical or other similar
lifestyle entertainment products and services, in direct competition with
MARINEMAX or any of the subsidiaries thereof, within 100 mile radius of where
COMPANY, any Acquired Party, MARINEMAX or any of its or their existing or future
subsidiaries conduct business (the "Territory");
(ii) call upon any person who is or becomes during the
Restricted Period an employee of MARINEMAX (including the subsidiaries thereof)
in a sales representative or managerial capacity for the purpose or with the
intent of enticing such employee away from or out of the employ of MARINEMAX
(including the subsidiaries thereof), provided that each STOCKHOLDER shall be
permitted to call upon and hire any member of his or her immediate family;
(iii) call upon any person or entity that is, or becomes
during the Restricted Period, or which has been, within one (1) year prior to
the Effective Time, a customer of MARINEMAX (including the subsidiaries
thereof), of COMPANY, any Acquired Party or of any of the Other Founding
Companies for the purpose of soliciting or selling products or services in
direct competition with MARINEMAX within the Territory;
(iv) call upon any prospective acquisition candidate, on any
STOCKHOLDERS own behalf or on behalf of any competitor in the business of
selling, renting and leasing boating, nautical or other similar lifestyle
entertainment products and services, which candidate, to the actual knowledge of
such STOCKHOLDER after due inquiry, was called upon by MARINEMAX (including any
subsidiary
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thereof) or for which, to the best knowledge and belief of such STOCKHOLDER
after due inquiry, MARINEMAX (or any subsidiary thereof) made an acquisition
analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
COMPANY, or other Acquired Party to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever except to the extent that
COMPANY or any Acquired Party has in the past disclosed such information to the
public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit any STOCKHOLDER from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter market.
13.2 DAMAGES. Because of the difficulty of measuring economic losses to
MARINEMAX as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to MARINEMAX for which it
would have no other adequate remedy, each STOCKHOLDER agrees that the foregoing
covenant may be enforced by MARINEMAX in the event of breach by such
STOCKHOLDER, by injunctions and restraining orders.
13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
STOCKHOLDERS in light of the activities and business of MARINEMAX (including the
subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of MARINEMAX.
13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth herein are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent the court deems reasonable, and the Agreement shall thereby be reformed.
13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any STOCKHOLDER
against MARINEMAX (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by MARINEMAX of such covenants. It is specifically agreed that the period of
five (5) years stated at the beginning of this Section 13, during which the
agreements and covenants of each STOCKHOLDER made in this Section 13 shall be
effective, shall be computed by excluding from such computation any time during
which such STOCKHOLDER is in violation of any provision of this Section 13. The
covenants contained in Section 13 shall not be affected by any breach of any
other provision hereof by any party hereto and shall have no effect if the
transactions contemplated by this Agreement are not consummated.
13.6 MATERIALITY. COMPANY and the STOCKHOLDERS hereby agree that this
covenant is a material and substantial part of this transaction.
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14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
14.1 STOCKHOLDERS. The STOCKHOLDERS recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of COMPANY, any Acquired Party, the Other
Founding Companies, and/or MARINEMAX, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, the Other Founding Companies' and/or MARINEMAX's respective
businesses. The STOCKHOLDERS each agree that they will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of MARINEMAX, (b) following the Closing, such information may be
disclosed by the STOCKHOLDERS as is required in the course of performing their
duties for MARINEMAX or the Surviving Corporation, and (c) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 14.1, unless (i) such information
becomes known to the public generally through no fault of the STOCKHOLDERS, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), the STOCKHOLDERS shall, if possible, give prior written notice
thereof to MARINEMAX and provide MARINEMAX with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any of the
STOCKHOLDERS of the provisions of this Section, MARINEMAX shall be entitled to
an injunction restraining such STOCKHOLDERS from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting MARINEMAX from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, the
STOCKHOLDERS shall have none of the above-mentioned restrictions on their
ability to disseminate confidential information with respect to COMPANY.
14.2 MARINEMAX AND NEWCO. MARINEMAX and NEWCO recognize and
acknowledge that they had in the past and currently have access to certain
confidential information of COMPANY, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's
business. MARINEMAX and NEWCO agree that, prior to the Closing, or if the
transactions contemplated by this Agreement are not consummated, they will not
disclose such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except (a) to
authorized representatives of COMPANY, (b) to counsel and other advisers,
provided that such advisers (other than counsel) agree to the confidentiality
provisions of this Section 14.1, (c) to the Other Founding Companies and their
representatives pursuant to Section 7.1(a), unless (i) such information becomes
known to the public generally through no fault of MARINEMAX or NEWCO, (ii)
disclosure is required by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information pursuant to
this clause (ii), MARINEMAX and NEWCO shall, if possible, give prior written
notice thereof to COMPANY and the STOCKHOLDERS and provide COMPANY and the
STOCKHOLDERS with the opportunity to contest such disclosure, or (iii) the
disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party, and (d)
to the public to the extent necessary or advisable in connection with applicable
securities laws. In the event of a breach or threatened breach by MARINEMAX or
NEWCO of the provisions of this Section, COMPANY and the STOCKHOLDERS shall be
entitled to an injunction restraining MARINEMAX and NEWCO from disclosing, in
whole or
39
<PAGE> 45
in part, such confidential information. Nothing herein shall be construed as
prohibiting COMPANY and the STOCKHOLDERS from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
14.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Sections 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against them by injunctions and restraining orders.
14.4 SURVIVAL. The obligations of the parties under this Section 14
shall survive the termination of this Agreement for a period of five (5) years
from the Effective Time.
15. TRANSFER RESTRICTIONS
15.1 TRANSFER RESTRICTIONS. STOCKHOLDERS shall not sell, assign,
exchange, transfer, encumber, pledge, distribute, appoint, or otherwise dispose
of any shares of MARINEMAX Stock received by the STOCKHOLDERS in the Merger in
violation of the provisions of the Pooling Letters referred to in Section 9.10
hereof. The certificates evidencing the MARINEMAX Stock delivered to the
STOCKHOLDERS pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as MARINEMAX may deem
necessary or appropriate:
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
__________________, 1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE,
WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY
OF THE LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICES OF THIS CORPORATION.
16. FEDERAL SECURITIES ACT REPRESENTATIONS
16.1 COMPLIANCE WITH LAW. The STOCKHOLDERS acknowledge that the shares
of MARINEMAX Stock to be delivered to the STOCKHOLDERS pursuant to this
Agreement have not been and will not be registered under the Act and therefore
may not be resold without compliance with the Act. The MARINEMAX Stock to be
acquired by such STOCKHOLDERS pursuant to this Agreement is being acquired
solely for their own respective accounts, for investment purposes only, and with
no present intention of distributing, selling or otherwise disposing of it in
connection with a distribution. The STOCKHOLDERS covenant, warrant and represent
that none of the shares of MARINEMAX Stock issued to such STOCKHOLDERS will be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the Act and the rules and regulations of the SEC. The certificates evidencing
the MARINEMAX Stock delivered to the STOCKHOLDERS pursuant to this Agreement
will bear a legend substantially in the form set forth below and containing such
other information as MARINEMAX may deem necessary or appropriate:
40
<PAGE> 46
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS.
THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS
OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED.
16.2 ECONOMIC RISK; SOPHISTICATION. The STOCKHOLDERS are able to bear
the economic risk of an investment in the MARINEMAX Stock to be acquired
pursuant to this Agreement and can afford to sustain a total loss of such
investment and have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the proposed
investment in the MARINEMAX Stock. The STOCKHOLDERS have had an adequate
opportunity to ask questions and receive answers from the officers of MARINEMAX
concerning any and all matters relating to the transactions described herein
including, without limitation, the background and experience of the current and
proposed officers of MARINEMAX, the business, operations and financial condition
of the Other Founding Companies, and any plans for additional acquisitions and
the like. The STOCKHOLDERS have asked any and all questions in the nature
described in the preceding sentence and all questions have been answered to
their satisfaction.
17. GENERAL
17.1 COOPERATION. COMPANY, the STOCKHOLDERS, MARINEMAX and NEWCO shall
each deliver or cause to be delivered to the other on the Closing Date, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. COMPANY will cooperate and use its reasonable efforts to have
the present officers, directors and employees of COMPANY cooperate with
MARINEMAX on and after the Closing Date in furnishing information, evidence,
testimony and other assistance in connection with any tax return filing
obligations, actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods ending at or prior to the Effective
Time.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of MARINEMAX, and the heirs and legal representatives of the
STOCKHOLDERS.
17.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the STOCKHOLDERS, COMPANY, NEWCO
and MARINEMAX and supersede any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement, upon execution,
constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written
instrument executed by the STOCKHOLDERS, COMPANY, NEWCO and MARINEMAX, acting
through their respective officers, duly authorized by their respective Boards of
Directors.
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<PAGE> 47
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, all of which shall be deemed an original and all of which together
shall constitute but one and the same instrument.
17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each
party represents and warrants that it employed no broker or agent in connection
with this transaction and agrees to indemnify the other parties hereto against
all loss, cost, damages or expense arising out of claims for fees or commission
of brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, MARINEMAX will pay the fees, expenses and disbursements of
MARINEMAX and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by MARINEMAX under this Agreement, including the
fees and expenses of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears,
P.A., Arthur Andersen, L.L.P., and any other person or entity retained by
MARINEMAX. Each STOCKHOLDER shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the Merger, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each STOCKHOLDER shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each STOCKHOLDER acknowledges that he or she, and not COMPANY or
MARINEMAX, will pay all taxes due upon receipt of the consideration payable
pursuant to Section 2 hereof, and will assume all tax risks and liabilities of
such STOCKHOLDER in connection with the transactions contemplated hereby.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
(a) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
18167 U.S. Highway 19 North, Suite 499
Clearwater, Florida 33764
Attn: William H. McGill, Jr.
with copies to:
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Attn: Robert S. Kant, Esq. and John B. Furman, Esq.
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<PAGE> 48
(b) If to the STOCKHOLDERS, addressed to them at:
Stockholder 1:
Richard C. LaManna, Jr.
3452 Green Stone Place
Redding, California 96001
Stockholder 2:
Darrell Christopher LaManna
20 Riverbank Drive
Carmichael, California 95608
Stockholder 3:
Richard C. LaManna, III
19 E. 13th Street
Tempe, Arizona 85281
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
(c) If to COMPANY, addressed to it at:
Harrison's Marine Centers of Arizona, Inc.
1840 E. Broadway Blvd.
Tempe, Arizona 85285
Attn: Richard C. LaManna, III
with copies to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Roy E. Bertolatus, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
17.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware, notwithstanding any conflict of laws
principles applicable in such state.
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<PAGE> 49
17.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the Expiration Date.
17.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.11 TIME. Time is of the essence with respect to this Agreement.
17.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
17.13 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
17.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.15 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of MARINEMAX, NEWCO, COMPANY and the STOCKHOLDERS who hold or
who will hold at least 50% of the MARINEMAX Stock issued or to be issued upon
consummation of the Merger. Any amendment or waiver effected in accordance with
this Section 17.15 shall be binding upon each of the parties hereto, any other
person receiving MARINEMAX Stock in connection with the Merger and each future
holder of such MARINEMAX Stock.
17.16 EXECUTION BY FACSIMILE; DELIVERY OF ORIGINAL SIGNED AGREEMENT.
This Agreement may be executed by facsimile, and shall be deemed effectively
executed upon the receipt by all parties hereto of the last page of this
Agreement duly executed by the other parties hereto. Each party to this
Agreement agrees to deliver six (6) original, inked and signed copies of the
execution page of this Agreement within four (4) days of faxing the executed
last page hereof.
[Remainder of Page Intentionally Left Blank]
44
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MARINEMAX: STOCKHOLDERS:
MARINEMAX, INC., a Delaware corporation
/s/ Richard C. LaManna, Jr.
____________________________________
Richard C. LaManna, Jr.
By: /s/________________________________
Name:__________________________________
Title:_________________________________ /s/ Darrell Christopher LaManna
____________________________________
Darrell Christopher LaManna
NEWCO: /s/ Richard C. LaManna III
____________________________________
Richard C. LaManna III
HARRISON'S ARIZONA ACQUISITION
CORP., a Delaware corporation
By: /s/________________________________
Name:__________________________________
Title:_________________________________
COMPANY:
HARRISON'S MARINE CENTERS OF
ARIZONA, INC., an Arizona corporation
By: /s/ Richard C. LaManna, Jr.
___________________________________
Richard C. LaManna, Jr., President
45
<PAGE> 51
CONSENT OF SPOUSE
The undersigned spouse of Richard C. LaManna, Jr., who is a party to
the foregoing Agreement and Plan of Organization, pertaining to the merger of
Harrison's Arizona Acquisition Corp., a Delaware corporation with and into
Harrison's Marine Centers of Arizona, Inc., an Arizona corporation (the
"Agreement"), hereby declares, contemporaneously with the execution of the
Agreement, that she has read the Agreement in its entirety, and being fully
convinced of the wisdom of the terms of the Agreement, and in consideration of
the premises and of the provisions of the Agreement, hereby expresses her
consent to the execution and consummation of the Agreement by Richard C.
LaManna, Jr.
The undersigned further agrees that in the event of the death of
Richard C. LaManna, Jr., the dissolution of their marriage, or any occurrence
contemplated by the Agreement that gives rise to any liability or obligation of
Richard C. LaManna, Jr., the provisions of the Agreement shall be binding upon
her to the extent of any community property she may now have or hereafter
acquire, and any and all separate property that she hereafter acquires which
arises (directly or indirectly) from any consideration given to Richard C.
LaManna, Jr., pursuant to the Agreement or any agreement executed in connection
thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/_________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
____________________________________
Notary Public
46
<PAGE> 52
CONSENT OF SPOUSE
The undersigned spouse of Darrell Christopher LaManna, who is a party
to the foregoing Agreement and Plan of Organization, pertaining to the merger of
Harrison's Arizona Acquisition Corp., a Delaware corporation with and into
Harrison's Marine Centers of Arizona, Inc., an Arizona corporation (the
"Agreement"), hereby declares, contemporaneously with the execution of the
Agreement, that she has read the Agreement in its entirety, and being fully
convinced of the wisdom of the terms of the Agreement, and in consideration of
the premises and of the provisions of the Agreement, hereby expresses her
consent to the execution and consummation of the Agreement by Darrell
Christopher LaManna.
The undersigned further agrees that in the event of the death of
Darrell Christopher LaManna, the dissolution of their marriage, or any
occurrence contemplated by the Agreement that gives rise to any liability or
obligation of Darrell Christopher LaManna, the provisions of the Agreement shall
be binding upon her to the extent of any community property she may now have or
hereafter acquire, and any and all separate property that she hereafter acquires
which arises (directly or indirectly) from any consideration given to Darrell
Christopher LaManna, pursuant to the Agreement or any agreement executed in
connection thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/___________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
____________________________________
Notary Public
47
<PAGE> 53
CONSENT OF SPOUSE
The undersigned spouse of Richard C. LaManna III, who is a party to the
foregoing Agreement and Plan of Organization, pertaining to the merger of
Harrison's Arizona Acquisition Corp., a Delaware corporation with and into
Harrison's Marine Centers of Arizona, Inc., an Arizona corporation (the
"Agreement"), hereby declares, contemporaneously with the execution of the
Agreement, that she has read the Agreement in its entirety, and being fully
convinced of the wisdom of the terms of the Agreement, and in consideration of
the premises and of the provisions of the Agreement, hereby expresses her
consent to the execution and consummation of the Agreement by Richard C. LaManna
III.
The undersigned further agrees that in the event of the death of
Richard C. LaManna III, the dissolution of their marriage, or any occurrence
contemplated by the Agreement that gives rise to any liability or obligation of
Richard C. LaManna III, the provisions of the Agreement shall be binding upon
her to the extent of any community property she may now have or hereafter
acquire, and any and all separate property that she hereafter acquires which
arises (directly or indirectly) from any consideration given to Richard C.
LaManna III, pursuant to the Agreement or any agreement executed in connection
thereto.
The undersigned further agrees that she will, at any and all times,
make, execute and deliver such instruments and documents as may be reasonable
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this ____ day of January, 1998.
/s/
___________________________________
State of _________________ )
)ss.
County of ________________ )
The foregoing was acknowledged before me this ___ day of January, 1998
by _____________.
____________________________________
Notary Public
48
<PAGE> 1
Exhibit 10.2(a)
STOCK CONTRIBUTION AGREEMENT
THIS STOCK CONTRIBUTION AGREEMENT (this "Agreement") is made as of the
___ day of __________, 1998, by and between the transferor set forth on
Attachment 1 to this Agreement ("Transferor") and MARINEMAX, INC. ("Transferee"
or "MarineMax").
1. AGREEMENT OF TRANSFER.
(a) TRANSFER OF THE SHARES. Transferor, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby contributes, transfers, and conveys and Transferee hereby receives all of
the issued and outstanding capital stock (the "Bassett Stock") of Bassett Boat
Company, a Florida corporation (the "Company").
(b) TAX-FREE EXCHANGE. Transferor and Transferee acknowledge that
this Agreement is intended to effectuate a tax-free exchange of property under
Section 351 of the Internal Revenue Code of 1986, as amended.
(c) ACCOUNTING TREATMENT. The contribution provided for in this
Agreement shall be accounted for as a pooling-of-interests, in accordance with
generally accepted accounting principles and the rules and regulations of the
SEC.
2. CLOSING. The consummation of the transactions contemplated by this
Agreement shall be deemed to have occurred on and as of the date hereof first
above written ("Effective Time").
3. CONSIDERATION. The consideration for the exchange of the Bassett
Stock shall be the number of shares of the common stock, par value $.001 per
share, of the Transferee (the "Shares") set forth on Exhibit "A" attached
hereto.
4. STOCK CERTIFICATES. On or before a date fifteen (15) business days
from and after the date hereof, Transferee shall deliver to Transferor stock
certificate(s) representing the Shares.
5. ESCROW OF PORTION OF THE SHARES. Upon the delivery to Transferor
of the Shares, Transferor agrees to deliver or cause to be delivered into escrow
for a period of one (1) year following the date of the Effective Time an
aggregate of ten percent (10%) of the Shares delivered to Transferor pursuant to
this Agreement for purposes of securing the obligations, representations and
warranties of Transferor arising under this Agreement and all documents executed
in connection herewith, such escrow to be governed by an escrow agreement in the
form attached hereto as Exhibit "B" (the "Escrow Agreement"). Transferor agrees
to execute and deliver the Escrow Agreement at the Effective Time.
<PAGE> 2
6. REPRESENTATIONS AND WARRANTIES. Transferor represents and warrants
to Transferee as of the date of this Agreement, as follows:
(a) All of the real estate owned by the Company (the "Property")
is zoned for the conduct of Company's business thereon pursuant to the zoning
regulations of the applicable cities, towns, villages or townships in which the
Property is located. The uses to which the Property are presently put (including
the location of all buildings and other improvements thereon) comply in all
material respects with the applicable provisions of such zoning regulations
without the benefit of the legal non-conforming use principle of law, or other
regulations of such cities, towns, villages or townships or any other
governmental body.
(b) There are no material agreements, commitments or
understandings pursuant to which Company and/or Transferor, or its or their
successors in interest, are required to dedicate any part of the Property or to
grant any easement, water rights, rights of way, or license for ingress and
egress or other use in respect to any part of the Property, whether on account
of the development of adjacent or nearby real property or otherwise. Other than
as provided in the leases of the Property owned by Company and leased to others,
if any, and except as otherwise appear of record, no person has any easement,
license or other right whatsoever with respect to the Property.
(c) Company holds good and marketable fee simple title to the
Property subject only to taxes not yet due and payable, current assessments,
encumbrances, covenants, conditions, restrictions, rights of way and easements
as appear of record. No part of the Property is affected by any restrictions
imposed by any governmental authority affecting construction of structures
thereon or the use thereof by Company other than building codes and zoning
classifications.
(d) Transferor and/or Company do not have any knowledge of any
fact or condition existing that would result or could result in the termination
or material reduction of the current access to and from the Property to existing
public roads and highways, or of any reduction in sewer or other utility
services presently serving the Property. The Property has direct access to
public roads and highways.
(e) Transferor and/or Company has not received any notice from any
insurance company of any material defects or inadequacies in the Property or any
part thereof that would materially and adversely affect the insurability of the
Property or the premiums for the insurance thereof.
(f) Transferor and/or Company have not failed to disclose any
material conditions of disrepair or other adverse conditions or defects with
respect to the Property or any portion thereof of which Transferor or Company
has knowledge or which, with the exercise of reasonable diligence, should have
known.
(g) True, complete and correct copies of all leases and agreements
in respect of the Property, if any, are attached hereto as Exhibit "C". All such
leases are in full
2
<PAGE> 3
force and effect and constitute valid and binding agreements of the parties (and
their successors) thereto in accordance with their respective terms.
(h) In respect of the Property (i) Company has complied with and
is in compliance with all federal, state, local and foreign statutes (civil and
criminal), laws, ordinances, regulations, rules, notices, permits, judgments,
orders and decrees applicable to Company relating to environmental protection
(collectively "Environmental Laws"), including, without limitation,
Environmental Laws relating to air, water, land and the generation, storage,
use, handling, transportation, treatment or disposal of Hazardous Wastes and
Hazardous Substances including petroleum and petroleum products (as such terms
are defined in any applicable Environmental Law); (ii) Company has obtained and
adhered to all necessary permits and other approvals necessary to treat,
transport, store, dispose of and otherwise handle Hazardous Wastes and Hazardous
Substances; (iii) Company has reported to the appropriate authorities, to the
extent required by all Environmental Laws, all past and present activities where
Hazardous Wastes or Hazardous Substances have been treated, stored, disposed of
or otherwise handled on the Property; (iv) there have been no releases or
threats of releases (as defined in Environmental Laws) at, from, in or on the
Property except as permitted by Environmental Laws; (v) Company knows of no
location on the Property to which has been transported or on which has been
disposed of Hazardous Wastes and Hazardous Substances or which location is the
subject of any federal, state, local or foreign enforcement action or any other
investigation which is reasonably likely to lead to any claim against Company,
Transferor, Transferee or any of Transferee's affiliates for any clean-up cost,
remedial work, damage to natural resources, property damage or personal injury,
including, without limitation, any claim under the Comprehensive Environmental
Response Compensation and Liability Act of 1980 (as amended); and (vi) Company
has no contingent liability in connection with any release of any Hazardous
Waste or Hazardous Substance into the environment at or from the Property.
(i) Transferor is the sole shareholder of Company, and the Shares
are free and clear of all liens, claims, rights, charges, encumbrances and
security interests of whatsoever nature or type, and Transferor has good and
marketable title to all of the Shares.
(j) Transferor has sufficient knowledge and experience in business
and financial matters (or has received from a person of Transferor's selection
sufficient advice with respect to such matters) to be capable of evaluating the
merits and risks of the acquisition of the Shares.
(k) Transferor has been encouraged and has had the opportunity to
rely upon the advice of Transferor's legal counsel and other advisers with
respect to the ownership of the Shares. Transferor has reviewed with
Transferor's own tax advisors the federal, state, local and foreign tax
consequences in connection with the acquisition of the Shares (including any tax
consequences that may result under recently enacted legislation). Transferor
shall be responsible for Transferor's own tax liability that may arise as a
result of this transaction.
(l) Transferor has had the opportunity to ask questions and
receive information with respect to, among other things, the proposed business
affairs, financial
3
<PAGE> 4
condition, plans and prospects of the Transferee and the terms and conditions of
the acquisition of the Shares, as Transferor has requested so as to more fully
understand his investment.
(m) Neither the Transferee nor any person representing or acting
on behalf of the Transferee, or purportedly representing or acting on behalf of
the Transferee, has made any representations, warranties, agreements or
statements other than those contained herein which influenced or affected
Transferor's decision to acquire the Shares.
(n) Transferor is acquiring the Shares for Transferor's own
account without any view to a transfer, sale, assignment or other distribution
thereof other than a transfer, sale, assignment or other distribution not in
violation of the Securities Act of 1933, as amended.
(o) Transferor acknowledges, understands and agrees that the
Shares have not been and will not be registered under any federal or state
securities law including, but not limited to, the Securities Act of 1933, as
amended, and that no federal or state governmental agency or authority has
approved or passed upon the issuance of the Shares. Transferor understands that
there is not now, and that there is not likely to be in the future, any market
for the Shares and that the Shares must be held by Transferor for an indefinite
period of time, absent registration or qualification of the Shares under
applicable laws or the receipt of an opinion of counsel satisfactory to
Transferee that registration or qualification is not required. Transferor
acknowledges that the certificate representing the Shares to be issued to
Transferor will bear legends restricting the transferability thereof to the
foregoing effect.
(p) Transferor has the ability to bear the economic risk of the
acquisition of the Shares, including the complete loss of Transferor's
investment.
(q) Transferor further acknowledges, understands and agrees that
the Transferee shall affix the following legends in substantially the following
form to the certificates evidencing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS.
THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS
OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND
4
<PAGE> 5
CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED __________________,
1998 BY THE BENEFICIAL HOLDER OF THIS CERTIFICATE, WHICH RESTRICTS THE
SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY OF THE LETTER
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE
OFFICES OF THIS CORPORATION.
(r) All of the information set forth in this Agreement concerning
Transferor is true and correct.
7. INDEMNIFICATION. Transferor makes the following covenants that are
applicable to him:
(a) GENERAL INDEMNIFICATION BY THE TRANSFEROR. Transferor
covenants and agrees that he will indemnify, defend, protect and hold harmless
MarineMax at all times, from and after the date of this Agreement until the
applicable Expiration Date (as herein defined), for, from and against all
claims, damages, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) incurred on or prior to the
Expiration Date (or thereafter if a claim has been made therefor prior to such
date) by MarineMax as a result of or arising from (i) any breach of the
representations and warranties of the Transferor set forth in Section 6 hereof;
and (ii) any breach of any agreement on the part of the Transferor under this
Agreement.
(b) LIMITATIONS ON INDEMNIFICATION. The indemnification
obligations of Transferor set forth in Section 7(a) shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company, for
those representations and warranties set forth in Section 6, which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time (the end of such period being the "Expiration Date"). MarineMax
and the Company shall not assert any claim hereunder against the Transferor
until such time as, and solely to the extent that, the aggregate of all claims
against the Transferor shall exceed the sum of $5,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be indemnified hereunder.
Transferee may recover for indemnification hereunder only from the
Shares held in escrow pursuant to and as provided in the Escrow Agreement. It is
hereby understood and agreed that Transferor may only satisfy an indemnification
obligation through payment of stock, such stock to be valued as described
immediately below, except as may otherwise be permitted and still preserve
pooling-of-interests accounting treatment. Notwithstanding any term of this
Agreement to the contrary, no provision of this Agreement shall limit or be
deemed to limit any liability or remedy one party may have against any other
parties hereto that arises by statute or any applicable federal, state or local
law.
5
<PAGE> 6
For purposes of calculating the value of the Shares received by
Transferor, the Shares shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 8 shall limit or
be deemed to limit any liability or remedy one party may have against any other
party hereto with respect to a claim of fraud.
8. FURTHER ASSURANCES. Transferor and Transferee hereby agree to
execute and deliver, or cause Transferor's spouse, partners, members,
shareholders, officers, directors or any other necessary party to execute and
deliver, such further instruments and documents and take such other actions as
may be reasonably necessary or convenient to carry out the transactions
contemplated hereby, including, without limitation, all further instruments,
documents and actions as may be reasonably required to transfer the Property
from Transferor to Transferee such that the Property complies with all
municipal, county and state regulations, including any necessary lot split,
subdivision or platting process which shall be accomplished at Transferor's
expense. The provisions of this Section 8 shall survive the date of this
Agreement.
9. NOTICES. Unless otherwise required by law, all notices required to
be given hereunder shall be in writing and shall be conveyed by (i) personal
delivery (including by any messenger, courier service or facsimile), or (ii)
United States Postal Service by certified or registered mail, postage prepaid,
with return receipt requested, if to Transferor, at the address set forth on
Attachment 1, and if to Transferee, at 18167 U.S. Hwy 19 North, Suite 499,
Clearwater, Florida, 33764. Notice given by personal delivery shall be deemed to
have been given upon delivery to the appropriate address against receipt
therefor (or upon refusal or acceptance), and notice given by U.S. mail shall be
deemed to have been given two days after deposit in the U.S. mail. Each party
may designate from time to time, another address in place of the address
hereinabove set forth by notifying the other parties in the same manner as
provided in this paragraph.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of Transferor's
representations and warranties contained in Sections 6 shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company,
which representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time.
11. ATTORNEYS' FEES. If any party to this Agreement shall breach its
representations or warranties hereunder or shall fail to fulfill or perform any
of its covenants or obligations in this Agreement, that party shall pay all
costs, including, without limitation, reasonable attorneys' fees and expert
witness fees, that may be incurred to enforce the terms, covenants, conditions
and provisions of this Agreement, or that may be incurred as a result of the
default under or breach of this Agreement, in the event legal action is
commenced.
6
<PAGE> 7
12. ENTIRE AGREEMENT; AMENDMENT. All attachments and exhibits attached
to this Agreement are incorporated into this Agreement by reference and made a
part hereof. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties. No change
or addition may be made to this Agreement except by a written agreement executed
by the parties.
13. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all terms, covenants, conditions and provisions of this
Agreement.
14. APPLICABLE LAW. This Agreement and the rights of the parties
hereto shall be interpreted, governed and construed in accordance with the laws
of the state of Delaware.
15. SECTION HEADINGS. The section headings in this Agreement are
inserted only for convenience and reference and the parties intend that they
shall be disregarded in interpreting the terms, covenants, conditions and
provisions of this Agreement.
16. WAIVER. Each party shall have the right to excuse or waive
performance by the other party of any obligation under this Agreement by a
writing signed by the party so excusing or waiving. No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Transferor
or Transferee of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other
covenant or condition of this Agreement.
17. BINDING EFFECT, NOMINEE. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Transferee may assign this Agreement or nominate a substitute
Transferee for this Agreement.
18. CONSTRUCTION. As used in this Agreement, the masculine, feminine
or neuter gender and the singular or plural numbers shall each be deemed to
include the other whenever the context so requires. This Agreement shall be
construed as a whole and in accordance with its fair meaning and without regard
to any presumption or other rule requiring construction against the party
causing this Agreement or any part of this Agreement to be drafted. The parties
acknowledge that each party has reviewed this Agreement and has had the
opportunity to have it reviewed by legal counsel. If any words or phrases in
this Agreement are stricken or otherwise eliminated, whether or not other words
or phrases have been added, this Agreement shall be construed as if the words or
phrases stricken or otherwise eliminated were never included in this Agreement,
and no implication or inference will be drawn from the fact that the words or
phrases were stricken or otherwise eliminated.
19. NO PARTNERSHIP, THIRD PERSON. It is not intended by this Agreement
to, and nothing contained in this Agreement shall, create any partnership, joint
venture or other arrangement between Transferor and Transferee except as
specifically provided herein. No term or provision of this Agreement is intended
to benefit any person, partnership, corporation or
7
<PAGE> 8
other entity not a party hereto (including, without limitation, any broker), and
no such other person, partnership, corporation or entity shall have any right or
cause of action hereunder.
20. TIME OF PERFORMANCE. If the date for performance of any obligation
hereunder or the last day of any time period provided for herein shall fall on a
Saturday, Sunday or legal holiday, then said date for performance or time period
shall expire on the first day thereafter which is not a Saturday, Sunday or
legal holiday. Except as may otherwise be set forth herein, any performance
provided for herein shall be timely made and completed if made and completed no
later than 5:00 P.M. Eastern Standard Time on the day for performance.
21. TRANSFER TAXES. Any transaction, privilege, sales, transfer, or
other taxes payable by reason of the purchase and sale provided for in this
Agreement shall be paid by Transferor.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts; each of which shall upon execution be deemed to be an original.
[NO FURTHER TEXT ON THIS PAGE]
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first set forth above.
TRANSFEROR:
/s/ Richard R. Bassett
_______________________________________
Richard R. Bassett, a single man
TRANSFEREE:
MARINEMAX, INC.
/s/ Michael H. McLamb
By:____________________________________
Name: Michael H. McLamb
Its:___________________________________
9
<PAGE> 10
ATTACHMENT 1
TRANSFEROR
Name: Richard R. Bassett, a single man
Address: __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE> 11
EXHIBIT "A"
NUMBER OF SHARES OF TRANSFEREE STOCK
TO BE RECEIVED BY TRANSFEROR
Richard R. Bassett 47,985 (4,798 of which shall be placed into escrow)
<PAGE> 12
EXHIBIT "B"
ESCROW AGREEMENT
<PAGE> 13
EXHIBIT "C"
LEASES AND AGREEMENTS
<PAGE> 1
Exhibit 10.2(b)
MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
THIS MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT (this "Agreement")
is made as of the ___ day of _________, 1998, by and between the transferor set
forth on Attachment 1 to this Agreement ("Transferor") and MARINEMAX, INC.
("Transferee" or "MarineMax").
1. AGREEMENT OF TRANSFER.
(a) TRANSFER OF MEMBERSHIP INTERESTS. Transferor, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby contributes, transfers and conveys and Transferee hereby
receives all of Transferor's membership interests (the "Membership Interests")
in Bassett Realty, L.L.C., a Delaware limited liability company (the "Company"),
such Membership Interests constituting all of the membership interests in the
Company.
(b) TAX-FREE EXCHANGE. Transferor and Transferee acknowledge
that this Agreement is intended to effectuate a tax-free exchange of property
under Section 351 of the Internal Revenue Code of 1986, as amended.
(c) ACCOUNTING TREATMENT. The contribution provided for in
this Agreement shall be accounted for as a pooling-of-interests, in accordance
with generally accepted accounting principles and the rules and regulations of
the SEC.
2. CLOSING. The consummation of the transactions contemplated by
this Agreement shall be deemed to have occurred on and as of the date hereof
first above written ("Effective Time").
3. CONSIDERATION. The consideration for the exchange of the
Membership Interests shall be the number of shares of the Common Stock, par
value $.001 per share, of the Transferee (the "Shares") set forth on Exhibit "A"
attached hereto. If there is more than one Transferor, Exhibit "A" also sets
forth the allocation of the Shares between the Transferors.
4. STOCK CERTIFICATES AND STOCK POWER. On or before a date fifteen
(15) business days from and after the date hereof, Transferee shall deliver to
Transferor stock certificates representing the Shares.
5. ESCROW OF PORTION OF THE SHARES. Upon the delivery to Transferor
of the Shares, Transferor agrees to deliver or cause to be delivered into escrow
for a period of one (1) year following the Effective Time an aggregate of ten
percent (10%) of the Shares delivered to Transferor pursuant to this Agreement
for purposes of securing the obligations, representations
<PAGE> 2
and warranties of Transferor arising under this Agreement and all documents
executed in connection herewith, such escrow to be governed by an escrow
agreement in the form attached hereto as Exhibit "B" (the "Escrow Agreement").
Transferor agrees to execute and deliver the Escrow Agreement at or before the
Effective Time.
6. REPRESENTATIONS AND WARRANTIES. Transferor represents and
warrants to Transferee as of the date of this Agreement, as follows:
(a) Transferor owns all of the Membership Interests, such
Membership Interests constituting all of the membership interests in the
Company, and the Membership Interests are free and clear of all liens, claims,
rights, charges, encumbrances and security interests of whatsoever nature or
type, and Transferor has good title to all of the Membership Interests.
(b) The Company has no liabilities except liabilities relating
to any outstanding mortgages or deeds of trust, and relating to any obligations
of record with respect to real property owned by the Company.
(c) Transferor acknowledges that he has received the Private
Placement Memorandum and is familiar with and understands the information set
forth therein, including the "Risk Factors."
(d) Transferor has sufficient knowledge and experience in
business and financial matters (or has received from a person of Transferor's
selection sufficient advice with respect to such matters) to be capable of
evaluating the merits and risks of the acquisition of the Shares.
(e) Transferor represents and warrants that he has relied
solely upon the Private Placement Memorandum and upon the advice of Transferor's
legal counsel and other advisers with respect to the ownership of the Shares.
Transferor has reviewed with Transferor's own tax advisors the federal, state,
local and foreign tax consequences in connection with the acquisition of the
Shares (including any tax consequences that may result under recently enacted
legislation). Transferor shall be responsible for Transferor's own tax liability
that may arise as a result of this transaction.
(f) Transferor has had the opportunity to ask questions and
receive information with respect to, among other things, the proposed business
affairs, financial condition, plans and prospects of the Transferee and the
terms and conditions of the acquisition of the Shares, as Transferor has
requested so as to more fully understand his investment.
(g) Neither the Transferee nor any person representing or
acting on behalf of the Transferee, or purportedly representing or acting on
behalf of the Transferee in the
2
<PAGE> 3
Private Placement Memorandum or set forth in the Contribution Agreement, has
made any representations, warranties, agreements or statements other than those
contained herein which influenced or affected Transferor's decision to acquire
the Shares.
(h) Transferor is acquiring the Shares for Transferor's own
account without any view to a transfer, sale, assignment or other distribution
thereof other than a transfer, sale, assignment or other distribution not in
violation of the Securities Act of 1933, as amended.
(i) Transferor acknowledges, understands and agrees that the
Shares have not been and will not be registered under any federal or state
securities law including, but not limited to, the Securities Act of 1933, as
amended, and that no federal or state governmental agency or authority has
approved or passed upon the issuance of the Shares. Transferor understands that
there is not now, and that there is not likely to be in the future, any market
for the Shares and that the Shares must be held by Transferor for an indefinite
period of time, absent registration or qualification of the Shares under
applicable laws or the receipt of an opinion of counsel satisfactory to
Transferee that registration or qualification is not required. Transferor
acknowledges that the certificate representing the Shares to be issued to
Transferor will bear legends restricting the transferability thereof to the
foregoing effect.
(j) Transferor has the ability to bear the economic risk of
the acquisition of the Shares, including the complete loss of Transferor's
investment.
(k) Transferor further acknowledges, understands and agrees
that the Transferee shall affix the following legends in substantially the
following form to the certificates evidencing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF
SUCH ACTS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER SUCH ACTS OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
, 1998 BY THE BENEFICIAL
3
<PAGE> 4
HOLDER OF THIS CERTIFICATE, WHICH RESTRICTS THE SALE, TRANSFER OR
DISPOSITION OF THE SHARES. A COPY OF THE LETTER AGREEMENT IS ON FILE
AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THIS
CORPORATION.
(l) All of the information set forth in this Agreement
concerning Transferor is true and correct.
7. INDEMNIFICATION. Transferor makes the following covenants that
are applicable to them:
(a) GENERAL INDEMNIFICATION BY THE TRANSFEROR. Transferor
covenants and agrees that they will indemnify, defend, protect and hold harmless
MarineMax and the Company at all times, from and after the date of this
Agreement until the applicable Expiration Date (as herein defined), for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MarineMax as a result of or arising from
(i) any breach of the representations and warranties of Transferor; and (ii) any
breach of any agreement on the part of Transferor under this Agreement.
(b) LIMITATIONS ON INDEMNIFICATION. The indemnification
obligations of Transferor set forth in this Agreement shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company, for
those representations and warranties set forth in Section 6, which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time(the end of such period being the "Expiration Date"). MarineMax
and the Company shall not assert any claim hereunder against the Transferor
until such time as, and solely to the extent that, the aggregate of all claims
against the Transferor shall exceed the sum of $70,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be indemnified hereunder.
MarineMax and the Company may recover for indemnification
hereunder only from the Shares held in escrow pursuant to and as provided in the
Escrow Agreement. It is hereby understood and agreed that Transferor may only
satisfy an indemnification obligation through payment of stock, such stock to be
valued as described immediately below, except as may otherwise be permitted and
still preserve pooling-of-interests accounting treatment. Notwithstanding any
term of this Agreement to the contrary, no provision of this Agreement shall
limit or be deemed to limit any liability or remedy one party may have against
any other parties hereto that arises by statute or any applicable federal, state
or local law.
4
<PAGE> 5
For purposes of calculating the value of the MarineMax Stock
received by Transferor, MarineMax Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 7 shall
limit or be deemed to limit any liability or remedy one party may have against
any other party hereto with respect to a claim of fraud.
8. FURTHER ASSURANCES. Transferor and Transferee hereby agree to
execute and deliver, or cause Transferor's spouse, partners, members,
shareholders, officers, directors or any other necessary party to execute and
deliver, such further instruments and documents and take such other actions as
may be reasonably necessary or convenient to carry out the transactions
contemplated hereby, including, without limitation, all further instruments,
documents and actions as may be reasonably required to transfer the Membership
Interests from Transferor to Transferee. The provisions of this Paragraph 8
shall survive the date of this Agreement.
9. NOTICES. Unless otherwise required by law, all notices required
to be given hereunder shall be in writing and shall be conveyed by (i) personal
delivery (including by any messenger, courier service or facsimile), or (ii)
United States Postal Service by certified or registered mail, postage prepaid,
with return receipt requested, if to Transferor, at the address set forth on
Attachment 1, and if to Transferee, at 18167 U.S. Hwy 19 North, Suite 499,
Clearwater, Florida, 33764. Notice given by personal delivery shall be deemed to
have been given upon delivery to the appropriate address against receipt
therefor (or upon refusal or acceptance), and notice given by U.S. mail shall be
deemed to have been given two days after deposit in the U.S. mail. Each party
may designate from time to time, another address in place of the address
hereinabove set forth by notifying the other parties in the same manner as
provided in this paragraph.
10. REPRESENTATIONS AND WARRANTIES AT CLOSING. All of Transferor's
representations and warranties contained in Section 6 shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company,
which representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time.
11. ATTORNEYS' FEES. If any party to this Agreement shall breach its
representations or warranties hereunder or shall fail to fulfill or perform any
of its covenants or obligations in this Agreement, that party shall pay all
costs, including, without limitation, reasonable attorneys' fees and expert
witness fees, that may be incurred to enforce the terms, covenants, conditions
and provisions of this Agreement, or that may be incurred as a result of the
default under or breach of this Agreement, in the event legal action is
commenced.
5
<PAGE> 6
12. ENTIRE AGREEMENT; AMENDMENT. All attachments and exhibits
attached to this Agreement are incorporated into this Agreement by reference and
made a part hereof. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties. No change
or addition may be made to this Agreement except by a written agreement executed
by the parties.
13. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all terms, covenants, conditions and provisions of this
Agreement.
14. APPLICABLE LAW. This Agreement and the rights of the parties
hereto shall be interpreted, governed and construed in accordance with the laws
of the State of Delaware.
15. SECTION HEADINGS. The section headings in this Agreement are
inserted only for convenience and reference and the parties intend that they
shall be disregarded in interpreting the terms, covenants, conditions and
provisions of this Agreement.
16. WAIVER. Each party shall have the right to excuse or waive
performance by the other party of any obligation under this Agreement by a
writing signed by the party so excusing or waiving. No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Transferor
or Transferee of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other
covenant or condition of this Agreement.
17. BINDING EFFECT, NOMINEE. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Transferee may assign this Agreement or nominate a substitute
Transferee for this Agreement.
18. CONSTRUCTION. As used in this Agreement, the masculine, feminine
or neuter gender and the singular or plural numbers shall each be deemed to
include the other whenever the context so requires. This Agreement shall be
construed as a whole and in accordance with its fair meaning and without regard
to any presumption or other rule requiring construction against the party
causing this Agreement or any part of this Agreement to be drafted. The parties
acknowledge that each party has reviewed this Agreement and has had the
opportunity to have it reviewed by legal counsel. If any words or phrases in
this Agreement are stricken or otherwise eliminated, whether or not other words
or phrases have been added, this Agreement shall be construed as if the words or
phrases stricken or otherwise eliminated were never included in this Agreement,
and no implication or inference will be drawn from the fact that the words or
phrases were stricken or otherwise eliminated.
19. NO PARTNERSHIP, THIRD PERSON. It is not intended by this
Agreement to, and nothing contained in this Agreement shall, create any
partnership, joint venture or other arrangement between Transferor and
Transferee except as specifically provided herein. No term
6
<PAGE> 7
or provision of this Agreement is intended to benefit any person, partnership,
corporation or other entity not a party hereto (including, without limitation,
any broker), and no such other person, partnership, corporation or entity shall
have any right or cause of action hereunder.
20. TIME OF PERFORMANCE. If the date for performance of any
obligation hereunder or the last day of any time period provided for herein
shall fall on a Saturday, Sunday or legal holiday, then said date for
performance or time period shall expire on the first day thereafter which is not
a Saturday, Sunday or legal holiday. Except as may otherwise be set forth
herein, any performance provided for herein shall be timely made and completed
if made and completed no later than 5:00 P.M. (Eastern Standard Time) on the day
for performance.
21. TRANSFER TAXES. Any transaction, privilege, sales, transfer, or
other taxes payable by reason of the purchase and sale provided for in this
Agreement shall be paid by Transferor.
[NO FURTHER TEXT ON THIS PAGE]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first set forth above.
TRANSFEROR:
/s/ Richard R. Bassett
-----------------------------------------
Richard R. Bassett, a single man, Member
TRANSFEREE:
MARINEMAX, INC.
By: /s/ Michael H. McLamb
---------------------------------------
Name: Michael H. McLamb
Its:
---------------------------------------
8
<PAGE> 9
ATTACHMENT 1
TRANSFEROR
Name: Richard R. Bassett, a single Man, as Member
Address: ____________________________________________
____________________________________________
____________________________________________
____________________________________________
<PAGE> 10
EXHIBIT "A"
NUMBER OF SHARES OF TRANSFEREE STOCK
TO BE RECEIVED BY TRANSFEROR
Richard R. Bassett 993,382 (99,338 of which shall be placed into Escrow)
<PAGE> 1
Exhibit 10.2(c)
MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
THIS MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT (this "Agreement")
is made as of the ___ day of __________, 1998, by and among the transferors set
forth on Attachment 1 to this Agreement ("Transferors") and MARINEMAX, INC.
("Transferee" or "MarineMax").
1. AGREEMENT OF TRANSFER.
(a) TRANSFER OF MEMBERSHIP INTERESTS. Transferors, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby contribute, transfer and convey and Transferee hereby
receives all of Transferors' membership interests (the "Membership Interests")
in Gulfwind South Realty, L.L.C., a Delaware limited liability company (the
"Company"), such Membership Interests constituting all of the membership
interests in the Company.
(b) TAX-FREE EXCHANGE. Transferors and Transferee acknowledge
that this Agreement is intended to effectuate a tax-free exchange of property
under Section 351 of the Internal Revenue Code of 1986, as amended.
(c) ACCOUNTING TREATMENT. The contribution provided for in
this Agreement shall be accounted for as a pooling-of-interests, in accordance
with generally accepted accounting principles and the rules and regulations of
the SEC.
2. CLOSING. The consummation of the transactions contemplated by
this Agreement shall be deemed to have occurred on and as of the date hereof
first above written ("Effective Time").
3. CONSIDERATION. The consideration for the exchange of the
Membership Interests shall be the number of shares of the Common Stock, par
value $.001 per share, of the Transferee (the "Shares") set forth on Exhibit "A"
attached hereto. If there is more than one Transferor, Exhibit "A" also sets
forth the allocation of the Shares between the Transferors.
4. STOCK CERTIFICATES AND STOCK POWER. On or before a date fifteen
(15) business days from and after the date hereof, Transferee shall deliver to
Transferors stock certificates representing the Shares.
5. ESCROW OF PORTION OF THE SHARES. Upon the delivery to Transferors
of the Shares, each of the Transferors agrees to deliver or cause to be
delivered into escrow for a period of one (1) year following the Effective Time
an aggregate of ten percent (10%) of the
<PAGE> 2
Shares delivered to each such Transferors pursuant to this Agreement for
purposes of securing the obligations, representations and warranties of the
Transferors arising under this Agreement and all documents executed in
connection herewith, such escrow to be governed by an escrow agreement in the
form attached hereto as Exhibit "B" (the "Escrow Agreement"). Transferors each
agree to execute and deliver the Escrow Agreement at or before the Effective
Time.
6. REPRESENTATIONS AND WARRANTIES. Transferors represent and warrant
to Transferee as of the date of this Agreement, as follows:
(a) Transferors own all of the Membership Interests, such
Membership Interests constituting all of the membership interests in the
Company, and the Membership Interests are free and clear of all liens, claims,
rights, charges, encumbrances and security interests of whatsoever nature or
type, and Transferors have good title to all of the Membership Interests.
(b) The Company has no liabilities except liabilities relating
to any outstanding mortgages or deeds of trust, and relating to any obligations
of record with respect to real property owned by the Company.
(c) Transferors acknowledge that they have received the
Private Placement Memorandum and are familiar with and understand the
information therein including the "Risk Factors."
(d) Transferors have sufficient knowledge and experience in
business and financial matters (or has received from a person of Transferors'
selection sufficient advice with respect to such matters) to be capable of
evaluating the merits and risks of the acquisition of the Shares.
(e) Transferors represent and warrant that they have relied
solely upon the Private Placement Memorandum and upon the advice of Transferors'
legal counsel and other advisers with respect to the ownership of the Shares.
Transferors have reviewed with Transferors' own tax advisors the federal, state,
local and foreign tax consequences in connection with the acquisition of the
Shares (including any tax consequences that may result under recently enacted
legislation). Transferors shall be responsible for Transferors' own tax
liability that may arise as a result of this transaction.
(f) Transferors have had the opportunity to ask questions and
receive information with respect to, among other things, the proposed business
affairs, financial condition, plans and prospects of the Transferee and the
terms and conditions of the acquisition of the Shares, as Transferors have
requested so as to more fully understand their investment.
2
<PAGE> 3
(g) Neither the Transferee nor any person representing or
acting on behalf of the Transferee, or purportedly representing or acting on
behalf of the Transferee in the Private Placement Memorandum or set forth in the
Contribution Agreement, have made any representations, warranties, agreements or
statements other than those contained herein which influenced or affected
Transferors' decision to acquire the Shares.
(h) Transferors are acquiring the Shares for Transferors' own
account without any view to a transfer, sale, assignment or other distribution
thereof other than a transfer, sale, assignment or other distribution not in
violation of the Securities Act of 1933, as amended.
(i) Transferors acknowledge, understand and agree that the
Shares have not been and will not be registered under any federal or state
securities law including, but not limited to, the Securities Act of 1933, as
amended, and that no federal or state governmental agency or authority has
approved or passed upon the issuance of the Shares. Transferors understand that
there is not now, and that there is not likely to be in the future, any market
for the Shares and that the Shares must be held by Transferors for an indefinite
period of time, absent registration or qualification of the Shares under
applicable laws or the receipt of an opinion of counsel satisfactory to
Transferee that registration or qualification is not required. Transferors
acknowledge that the certificate representing the Shares to be issued to
Transferors will bear legends restricting the transferability thereof to the
foregoing effect.
(j) Transferors have the ability to bear the economic risk of
the acquisition of the Shares, including the complete loss of Transferors'
investment.
(k) Transferors further acknowledge, understand and agree that
the Transferee shall affix the following legends in substantially the following
form to the certificates evidencing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF
SUCH ACTS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER SUCH ACTS OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND
3
<PAGE> 4
CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
, 1998 BY THE BENEFICIAL HOLDER OF THIS
CERTIFICATE, WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF
THE SHARES. A COPY OF THE LETTER AGREEMENT IS ON FILE AND MAY BE
INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THIS CORPORATION.
(l) All of the information set forth in this Agreement
concerning Transferors is true and correct.
7. INDEMNIFICATION. Transferors make the following covenants that
are applicable to them:
(a) GENERAL INDEMNIFICATION BY THE TRANSFERORS. Transferors
each covenant and agree that they will indemnify, defend, protect and hold
harmless MarineMax and the Company at all times, from and after the date of this
Agreement until the applicable Expiration Date (as herein defined), for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MarineMax as a result of or arising from
(i) any breach of the representations and warranties of the Transferors set
forth in Section 6 hereof; and (ii) any breach of any agreement on the part of
the Transferors under this Agreement.
(b) LIMITATIONS ON INDEMNIFICATION. The indemnification
obligations of Transferors set forth in this Agreement shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company, for
those representations and warranties set forth in Section 6, which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time (the end of such period being the "Expiration Date"). MarineMax
and the Company shall not assert any claim hereunder against the Transferors
until such time as, and solely to the extent that, the aggregate of all claims
against the Transferors shall exceed the sum of $10,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be indemnified hereunder.
MarineMax and the Company may recover for indemnification
hereunder only from the Shares held in escrow pursuant to and as provided in the
Escrow Agreement. It is hereby understood and agreed that Transferors may only
satisfy an indemnification obligation through payment of stock, such stock to be
valued as described immediately below, except as may otherwise be permitted and
still preserve pooling-of-interests accounting treatment. Notwithstanding any
term of this Agreement to the contrary, no provision of this Agreement
4
<PAGE> 5
shall limit or be deemed to limit any liability or remedy one party may have
against any other parties hereto that arises by statute or any applicable
federal, state or local law.
For purposes of calculating the value of the MarineMax Stock
received by Transferors, MarineMax Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 7 shall
limit or be deemed to limit any liability or remedy one party may have against
any other party hereto with respect to a claim of fraud.
8. FURTHER ASSURANCES. Transferors and Transferee hereby agree to
execute and deliver, or cause Transferors' spouse, partners, members,
shareholders, officers, directors or any other necessary party to execute and
deliver, such further instruments and documents and take such other actions as
may be reasonably necessary or convenient to carry out the transactions
contemplated hereby, including, without limitation, all further instruments,
documents and actions as may be reasonably required to transfer the Membership
Interests from Transferors to Transferee. The provisions of this Paragraph 8
shall survive the date of this Agreement.
9. NOTICES. Unless otherwise required by law, all notices required
to be given hereunder shall be in writing and shall be conveyed by (i) personal
delivery (including by any messenger, courier service or facsimile), or (ii)
United States Postal Service by certified or registered mail, postage prepaid,
with return receipt requested, if to Transferors, at the address set forth on
Attachment 1, and if to Transferee, at 18167 U.S. Hwy 19 North, Suite 499,
Clearwater, Florida, 33764. Notice given by personal delivery shall be deemed to
have been given upon delivery to the appropriate address against receipt
therefor (or upon refusal or acceptance), and notice given by U.S. mail shall be
deemed to have been given two days after deposit in the U.S. mail. Each party
may designate from time to time, another address in place of the address
hereinabove set forth by notifying the other parties in the same manner as
provided in this paragraph.
10. REPRESENTATIONS AND WARRANTIES AT CLOSING. All of Transferors'
representations and warranties contained in Section 6 shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company
which representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months, from the
Effective Time.
11. ATTORNEYS' FEES. If any party to this Agreement shall breach its
representations or warranties hereunder or shall fail to fulfill or perform any
of its covenants or obligations in this Agreement, that party shall pay all
costs, including, without limitation, reasonable attorneys' fees and expert
witness fees, that may be incurred to enforce the terms,
5
<PAGE> 6
covenants, conditions and provisions of this Agreement, or that may be incurred
as a result of the default under or breach of this Agreement, in the event legal
action is commenced.
12. ENTIRE AGREEMENT; AMENDMENT. All attachments and exhibits
attached to this Agreement are incorporated into this Agreement by reference and
made a part hereof. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties. No change
or addition may be made to this Agreement except by a written agreement executed
by the parties.
13. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all terms, covenants, conditions and provisions of this
Agreement.
14. APPLICABLE LAW. This Agreement and the rights of the parties
hereto shall be interpreted, governed and construed in accordance with the laws
of the State of Delaware.
15. SECTION HEADINGS. The section headings in this Agreement are
inserted only for convenience and reference and the parties intend that they
shall be disregarded in interpreting the terms, covenants, conditions and
provisions of this Agreement.
16. WAIVER. Each party shall have the right to excuse or waive
performance by the other party of any obligation under this Agreement by a
writing signed by the party so excusing or waiving. No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Transferors
or Transferee of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other
covenant or condition of this Agreement.
17. BINDING EFFECT, NOMINEE. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Transferee may assign this Agreement or nominate a substitute
Transferee for this Agreement.
18. CONSTRUCTION. As used in this Agreement, the masculine, feminine
or neuter gender and the singular or plural numbers shall each be deemed to
include the other whenever the context so requires. This Agreement shall be
construed as a whole and in accordance with its fair meaning and without regard
to any presumption or other rule requiring construction against the party
causing this Agreement or any part of this Agreement to be drafted. The parties
acknowledge that each party has reviewed this Agreement and has had the
opportunity to have it reviewed by legal counsel. If any words or phrases in
this Agreement are stricken or otherwise eliminated, whether or not other words
or phrases have been added, this Agreement shall be construed as if the words or
phrases stricken or otherwise eliminated were never included in this Agreement,
and no implication or inference will be drawn from the fact that the words or
phrases were stricken or otherwise eliminated.
6
<PAGE> 7
19. NO PARTNERSHIP, THIRD PERSON. It is not intended by this
Agreement to, and nothing contained in this Agreement shall, create any
partnership, joint venture or other arrangement between Transferors and
Transferee except as specifically provided herein. No term or provision of this
Agreement is intended to benefit any person, partnership, corporation or other
entity not a party hereto (including, without limitation, any broker), and no
such other person, partnership, corporation or entity shall have any right or
cause of action hereunder.
20. TIME OF PERFORMANCE. If the date for performance of any
obligation hereunder or the last day of any time period provided for herein
shall fall on a Saturday, Sunday or legal holiday, then said date for
performance or time period shall expire on the first day thereafter which is not
a Saturday, Sunday or legal holiday. Except as may otherwise be set forth
herein, any performance provided for herein shall be timely made and completed
if made and completed no later than 5:00 P.M. (Eastern Standard Time) on the day
for performance.
21. TRANSFER TAXES. Any transaction, privilege, sales, transfer, or
other taxes payable by reason of the purchase and sale provided for in this
Agreement shall be paid by Transferor.
[NO FURTHER TEXT ON THIS PAGE]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first set forth above.
TRANSFERORS:
/s/ Jerry Marshall
----------------------------------
Jerry Marshall, Member
/s/ Gerald Pedigo
----------------------------------
Gerald Pedigo, Member
TRANSFEREE:
MARINEMAX, INC.
By: /s/ Michael H. McLamb
-----------------------------
Name: Michael H. McLamb
Its:
-----------------------------
8
<PAGE> 9
ATTACHMENT 1
TRANSFERORS
Name: Jerry Marshall, Member of Gulfwind South Realty, L.L.C., a Delaware
limited liability company
Address: _________________________________________
_________________________________________
_________________________________________
_________________________________________
Name: Gerald Pedigo, Member of Gulfwind South Realty, L.L.C., a Delaware
limited liability company
Address: _________________________________________
_________________________________________
_________________________________________
_________________________________________
<PAGE> 10
EXHIBIT "A"
NUMBER OF SHARES OF TRANSFEREE STOCK
TO BE RECEIVED BY TRANSFERORS
Jerry Marshall 8,892 (889 of which shall be placed into Escrow)
Gerald Pedigo 8,892 (889 of which shall be placed into Escrow)
<PAGE> 1
Exhibit 10.2(d)
MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
THIS MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT (this "Agreement")
is made as of the ___ day of __________, 1998, by and among the transferors set
forth on Attachment 1 to this Agreement ("Transferors") and MARINEMAX, INC.
("Transferee" or "MarineMax").
1. AGREEMENT OF TRANSFER.
(a) TRANSFER OF MEMBERSHIP INTERESTS. Transferors, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby contribute, transfer and convey and Transferee hereby
receives all of Transferors' membership interests (the "Membership Interests")
in Harrison's Realty, L.L.C., a Delaware limited liability company (the
"Company"), such Membership Interests constituting all of the membership
interests in the Company.
(b) TAX-FREE EXCHANGE. Transferors and Transferee acknowledge
that this Agreement is intended to effectuate a tax-free exchange of property
under Section 351 of the Internal Revenue Code of 1986, as amended.
(c) ACCOUNTING TREATMENT. The contribution provided for in
this Agreement shall be accounted for as a pooling-of-interests, in accordance
with generally accepted accounting principles and the rules and regulations of
the SEC.
2. CLOSING. The consummation of the transactions contemplated by
this Agreement shall be deemed to have occurred on and as of the date hereof
first above written ("Effective Time").
3. CONSIDERATION. The consideration for the exchange of the
Membership Interests shall be the number of shares of the Common Stock, par
value $.001 per share, of the Transferee (the "Shares") set forth on Exhibit "A"
attached hereto. If there is more than one Transferor, Exhibit "A" also sets
forth the allocation of the Shares between the Transferors.
4. STOCK CERTIFICATES AND STOCK POWER. On or before a date fifteen
(15) business days from and after the date hereof, Transferee shall deliver to
Transferors stock certificates representing the Shares.
5. ESCROW OF PORTION OF THE SHARES. Upon the delivery to Transferors
of the Shares, each of the Transferors agree to deliver or cause to be delivered
into escrow for a period of one (1) year following the Effective Time an
aggregate of ten percent (10%) of the Shares delivered to each such Transferors
pursuant to this Agreement for purposes of securing
<PAGE> 2
the obligations, representations and warranties of the Transferors arising under
this Agreement and all documents executed in connection herewith, such escrow to
be governed by an escrow agreement in the form attached hereto as Exhibit "B"
(the "Escrow Agreement"). Transferors each agree to execute and deliver the
Escrow Agreement at or before the Effective Time.
6. REPRESENTATIONS AND WARRANTIES. Transferors represent and warrant
to Transferee as of the date of this Agreement, as follows:
(a) Transferors own all of the Membership Interests, such
Membership Interests constituting all of the membership interests in the
Company, and the Membership Interests are free and clear of all liens, claims,
rights, charges, encumbrances and security interests of whatsoever nature or
type, and Transferors have good title to all of the Membership Interests.
(b) The Company has no liabilities except liabilities relating
to any outstanding mortgages or deeds of trust, and relating to any obligations
of record with respect to real property owned by the Company.
(c) Transferors acknowledge that they have received the
Private Placement Memorandum and are familiar with and understand the
information set forth therein, including the "Risk Factors."
(d) Transferors have sufficient knowledge and experience in
business and financial matters (or has received from a person of Transferors'
selection sufficient advice with respect to such matters) to be capable of
evaluating the merits and risks of the acquisition of the Shares.
(e) Transferors represent and warrant that they have relied
solely upon the Private Placement Memorandum and upon the advice of Transferors'
legal counsel and other advisers with respect to the ownership of the Shares.
Transferors have reviewed with Transferors' own tax advisors the federal, state,
local and foreign tax consequences in connection with the acquisition of the
Shares (including any tax consequences that may result under recently enacted
legislation). Transferors shall be responsible for Transferors' own tax
liability that may arise as a result of this transaction.
(f) Transferors have the opportunity to ask questions and
receive information with respect to, among other things, the proposed business
affairs, financial condition, plans and prospects of the Transferee and the
terms and conditions of the acquisition of the Shares, as Transferors have
requested so as to more fully understand their investment.
(g) Neither the Transferee nor any person representing or
acting on behalf of the Transferee, or purportedly representing or acting on
behalf of the Transferee in the Private Placement Memorandum or set forth in the
Contribution Agreement, have made any
2
<PAGE> 3
representations, warranties, agreements or statements other than those contained
herein which influenced or affected Transferors' decision to acquire the Shares.
(h) Transferors are acquiring the Shares for Transferors' own
account without any view to a transfer, sale, assignment or other distribution
thereof other than a transfer, sale, assignment or other distribution not in
violation of the Securities Act of 1933, as amended.
(i) Transferors acknowledge, understand and agree that the
Shares have not been and will not be registered under any federal or state
securities law including, but not limited to, the Securities Act of 1933, as
amended, and that no federal or state governmental agency or authority has
approved or passed upon the issuance of the Shares. Transferors understand that
there is not now, and that there is not likely to be in the future, any market
for the Shares and that the Shares must be held by Transferors for an indefinite
period of time, absent registration or qualification of the Shares under
applicable laws or the receipt of an opinion of counsel satisfactory to
Transferee that registration or qualification is not required. Transferors
acknowledge that the certificate representing the Shares to be issued to
Transferors will bear legends restricting the transferability thereof to the
foregoing effect.
(j) Transferors have the ability to bear the economic risk of
the acquisition of the Shares, including the complete loss of Transferors'
investment.
(k) Transferors further acknowledge, understand and agree that
the Transferee shall affix the following legends in substantially the following
form to the certificates evidencing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF
SUCH ACTS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER SUCH ACTS OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
, 1998 BY THE BENEFICIAL HOLDER OF THIS
CERTIFICATE, WHICH RESTRICTS THE SALE, TRANSFER OR DISPOSITION OF
THE
3
<PAGE> 4
SHARES. A COPY OF THE LETTER AGREEMENT IS ON FILE AND MAY BE
INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THIS CORPORATION.
(l) All of the information set forth in this Agreement
concerning Transferors is true and correct.
7. INDEMNIFICATION. Transferors make the following covenants that
are applicable to them:
(a) GENERAL INDEMNIFICATION BY THE TRANSFERORS. Transferors
each covenant and agree that they will indemnify, defend, protect and hold
harmless MarineMax and the Company at all times, from and after the date of this
Agreement until the applicable Expiration Date (as herein defined), for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MarineMax as a result of or arising from
(i) any breach of the representations and warranties of the Transferors set
forth in Section 6 hereof; and (ii) any breach of any agreement on the part of
the Transferors under this Agreement.
(b) LIMITATIONS ON INDEMNIFICATION. The indemnification
obligations of Transferors set forth in this Agreement shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company, for
those representations and warranties set forth in Section 6, which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time (the end of such period being the "Expiration Date"). MarineMax
and the Company shall not assert any claim hereunder against the Transferors
until such time as, and solely to the extent that, the aggregate of all claims
against the Transferors shall exceed the sum of $25,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be indemnified hereunder.
MarineMax and the Company may recover for indemnification
hereunder only from the Shares held in escrow pursuant to and as provided in the
Escrow Agreement. It is hereby understood and agreed that Transferors may only
satisfy an indemnification obligation through payment of stock, such stock to be
valued as described immediately below, except as may otherwise be permitted and
still preserve pooling-of-interests accounting treatment. Notwithstanding any
term of this Agreement to the contrary, no provision of this Agreement shall
limit or be deemed to limit any liability or remedy one party may have against
any other parties hereto that arises by statute or any applicable federal, state
or local law.
For purposes of calculating the value of the MarineMax Stock
received by Transferors, MarineMax Stock shall be valued at $13.00 per share.
4
<PAGE> 5
No provision of this Agreement or in this Section 7 shall
limit or be deemed to limit any liability or remedy one party may have against
any other party hereto with respect to a claim of fraud.
8. FURTHER ASSURANCES. Transferors and Transferee hereby agree to
execute and deliver, or cause Transferors' spouse, partners, members,
shareholders, officers, directors or any other necessary party to execute and
deliver, such further instruments and documents and take such other actions as
may be reasonably necessary or convenient to carry out the transactions
contemplated hereby, including, without limitation, all further instruments,
documents and actions as may be reasonably required to transfer the Membership
Interests from Transferors to Transferee. The provisions of this Paragraph 8
shall survive the date of this Agreement.
9. NOTICES. Unless otherwise required by law, all notices required
to be given hereunder shall be in writing and shall be conveyed by (i) personal
delivery (including by any messenger, courier service or facsimile), or (ii)
United States Postal Service by certified or registered mail, postage prepaid,
with return receipt requested, if to Transferors, at the address set forth on
Attachment 1, and if to Transferee, at 18167 U.S. Hwy 19 North, Suite 499,
Clearwater, Florida, 33764. Notice given by personal delivery shall be deemed to
have been given upon delivery to the appropriate address against receipt
therefor (or upon refusal or acceptance), and notice given by U.S. mail shall be
deemed to have been given two days after deposit in the U.S. mail. Each party
may designate from time to time, another address in place of the address
hereinabove set forth by notifying the other parties in the same manner as
provided in this paragraph.
10. REPRESENTATIONS AND WARRANTIES AT CLOSING. All of Transferors'
representations and warranties contained in Section 6 shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company,
which representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time.
11. ATTORNEYS' FEES. If any party to this Agreement shall breach its
representations or warranties hereunder or shall fail to fulfill or perform any
of its covenants or obligations in this Agreement, that party shall pay all
costs, including, without limitation, reasonable attorneys' fees and expert
witness fees, that may be incurred to enforce the terms, covenants, conditions
and provisions of this Agreement, or that may be incurred as a result of the
default under or breach of this Agreement, in the event legal action is
commenced.
12. ENTIRE AGREEMENT; AMENDMENT. All attachments and exhibits
attached to this Agreement are incorporated into this Agreement by reference and
made a part hereof. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties.
5
<PAGE> 6
No change or addition may be made to this Agreement except by a written
agreement executed by the parties.
13. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all terms, covenants, conditions and provisions of this
Agreement.
14. APPLICABLE LAW. This Agreement and the rights of the parties
hereto shall be interpreted, governed and construed in accordance with the laws
of the State of Delaware.
15. SECTION HEADINGS. The section headings in this Agreement are
inserted only for convenience and reference and the parties intend that they
shall be disregarded in interpreting the terms, covenants, conditions and
provisions of this Agreement.
16. WAIVER. Each party shall have the right to excuse or waive
performance by the other party of any obligation under this Agreement by a
writing signed by the party so excusing or waiving. No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Transferors
or Transferee of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other
covenant or condition of this Agreement.
17. BINDING EFFECT, NOMINEE. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Transferee may assign this Agreement or nominate a substitute
Transferee for this Agreement.
18. CONSTRUCTION. As used in this Agreement, the masculine, feminine
or neuter gender and the singular or plural numbers shall each be deemed to
include the other whenever the context so requires. This Agreement shall be
construed as a whole and in accordance with its fair meaning and without regard
to any presumption or other rule requiring construction against the party
causing this Agreement or any part of this Agreement to be drafted. The parties
acknowledge that each party has reviewed this Agreement and has had the
opportunity to have it reviewed by legal counsel. If any words or phrases in
this Agreement are stricken or otherwise eliminated, whether or not other words
or phrases have been added, this Agreement shall be construed as if the words or
phrases stricken or otherwise eliminated were never included in this Agreement,
and no implication or inference will be drawn from the fact that the words or
phrases were stricken or otherwise eliminated.
19. NO PARTNERSHIP, THIRD PERSON. It is not intended by this
Agreement to, and nothing contained in this Agreement shall, create any
partnership, joint venture or other arrangement between Transferors and
Transferee except as specifically provided herein. No term or provision of this
Agreement is intended to benefit any person, partnership, corporation or other
entity not a party hereto (including, without limitation, any broker), and no
such other person, partnership, corporation or entity shall have any right or
cause of action hereunder.
6
<PAGE> 7
20. TIME OF PERFORMANCE. If the date for performance of any
obligation hereunder or the last day of any time period provided for herein
shall fall on a Saturday, Sunday or legal holiday, then said date for
performance or time period shall expire on the first day thereafter which is not
a Saturday, Sunday or legal holiday. Except as may otherwise be set forth
herein, any performance provided for herein shall be timely made and completed
if made and completed no later than 5:00 P.M. (Eastern Standard Time) on the day
for performance.
21. TRANSFER TAXES. Any transaction, privilege, sales, transfer, or
other taxes payable by reason of the purchase and sale provided for in this
Agreement shall be paid by Transferor.
[NO FURTHER TEXT ON THIS PAGE]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first set forth above.
TRANSFERORS:
/s/ Richard C. LaManna, Jr.
-------------------------------------------
Richard C. LaManna, Jr., as Co-Trustee of
The LaManna Family Trust, Member
/s/ Judith L. LaManna
-------------------------------------------
Judith L. LaManna, as Co-Trustee of the
Lamanna Family Trust, Member
/s/ Richard C. LaManna, III
-------------------------------------------
Richard C. LaManna, III, Member
/s/ Darrell Christopher LaManna
-------------------------------------------
Darrell Christopher LaManna, as Trustee of
the Darrell Christopher LaManna Separate
Property Trust, Member
TRANSFEREE:
MARINEMAX, INC.
By: /s/ Michael H. McLamb
--------------------------------------
Name: Michael H. McLamb
Its:
--------------------------------------
8
<PAGE> 9
ATTACHMENT 1
TRANSFERORS
Name: Richard C. LaManna, Jr. and Judith L. LaManna, as Co-Trustees of the
LaManna Family Trust, Members of Harrison's Realty, L.L.C., a
Delaware limited liability company
Address: _____________________________________
_____________________________________
_____________________________________
_____________________________________
Name: Richard C. LaManna, III., Member of Harrison's Realty, L.L.C., a
Delaware limited liability company
Address: _____________________________________
_____________________________________
_____________________________________
_____________________________________
Name: Darrell Christopher LaManna, as Trustee of the Darrell Christopher
LaManna Separate Property Trust, Member of Harrison's Realty,
L.L.C., a Delaware limited liability company
Address: _____________________________________
_____________________________________
_____________________________________
_____________________________________
<PAGE> 10
EXHIBIT "A"
NUMBER OF SHARES OF TRANSFEREE STOCK
TO BE RECEIVED BY TRANSFERORS
Richard C. LaManna, Jr. and Judith L. LaManna 34,937 (3,493 of which
as Co-Trustees of the LaManna Family Trust shall be placed into Escrow)
Richard C. LaManna, III 34,937 (3,493 of which
shall be placed into Escrow)
Darrell Christopher LaManna, as Trustee 34,937 (3,493 of which
of the Darrell Christopher LaManna Separate shall be placed into Escrow)
Property Trust
<PAGE> 1
Exhibit 10.2(e)
MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
THIS MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT (this "Agreement")
is made as of the ___ day of __________, 1998, by and among the transferors set
forth on Attachment 1 to this Agreement ("Transferors") and MARINEMAX, INC.
("Transferee" or "MarineMax").
1. AGREEMENT OF TRANSFER.
(a) TRANSFER OF MEMBERSHIP INTERESTS. Transferors, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby contribute, transfer and convey and Transferee hereby
receives all of Transferors' membership interests (the "Membership Interests")
in Harrison's Realty California, L.L.C., a Delaware limited liability company
(the "Company"), such Membership Interests constituting all of the membership
interests in the Company.
(b) TAX-FREE EXCHANGE. Transferors and Transferee acknowledge
that this Agreement is intended to effectuate a tax-free exchange of property
under Section 351 of the Internal Revenue Code of 1986, as amended.
(c) ACCOUNTING TREATMENT. The contribution provided for in
this Agreement shall be accounted for as a pooling-of-interests, in accordance
with generally accepted accounting principles and the rules and regulations of
the SEC.
2. CLOSING. The consummation of the transactions contemplated by
this Agreement shall be deemed to have occurred on and as of the date hereof
first above written ("Effective Time").
3. CONSIDERATION. The consideration for the exchange of the
Membership Interests shall be the number of shares of the Common Stock, par
value $.001 per share, of the Transferee (the "Shares") set forth on Exhibit "A"
attached hereto. If there is more than one Transferor, Exhibit "A" also sets
forth the allocation of the Shares between the Transferors.
4. STOCK CERTIFICATES AND STOCK POWER. On or before a date fifteen
(15) business days from and after the date hereof, Transferee shall deliver to
Transferors stock certificates representing the Shares.
5. ESCROW OF PORTION OF THE SHARES. Upon the delivery to Transferors
of the Shares, each of the Transferors agree to deliver or cause to be delivered
into escrow for a period of one (1) year following the Effective Time an
aggregate of ten percent (10%) of the Shares delivered to each such Transferors
pursuant to this Agreement for purposes of securing the obligations,
representations and warranties of the Transferors arising under this Agreement
<PAGE> 2
and all documents executed in connection herewith, such escrow to be governed by
an escrow agreement in the form attached hereto as Exhibit "B" (the "Escrow
Agreement"). Transferors each agree to execute and deliver the Escrow Agreement
at or before the Effective Time.
6. REPRESENTATIONS AND WARRANTIES. Transferors represent and warrant
to Transferee as of the date of this Agreement, as follows:
(a) Transferors own all of the Membership Interests, such
Membership Interests constituting all of the membership interests in the
Company, and the Membership Interests are free and clear of all liens, claims,
rights, charges, encumbrances and security interests of whatsoever nature or
type, and Transferors have good title to all of the Membership Interests.
(b) The Company has no liabilities except liabilities relating
to any outstanding mortgages or deeds of trust, and relating to any obligations
of record with respect to real property owned by the Company.
(c) Transferors acknowledge that they have received the
Private Placement Memorandum and are familiar with and understand the
information set forth therein including the "Risk Factors."
(d) Transferors have sufficient knowledge and experience in
business and financial matters (or has received from a person of Transferors'
selection sufficient advice with respect to such matters) to be capable of
evaluating the merits and risks of the acquisition of the Shares.
(e) Transferors represent and warrant that they have relied
solely upon the Private Placement Memorandum and upon the advice of Transferors'
legal counsel and other advisers with respect to the ownership of the Shares.
Transferors have reviewed with Transferors' own tax advisors the federal, state,
local and foreign tax consequences in connection with the acquisition of the
Shares (including any tax consequences that may result under recently enacted
legislation). Transferors shall be responsible for Transferors' own tax
liability that may arise as a result of this transaction.
(f) Transferors have the opportunity to ask questions and
receive information with respect to, among other things, the proposed business
affairs, financial condition, plans and prospects of the Transferee and the
terms and conditions of the acquisition of the Shares, as Transferors have
requested so as to more fully understand their investment.
(g) Neither the Transferee nor any person representing or
acting on behalf of the Transferee, or purportedly representing or acting on
behalf of the Transferee in the Private Placement Memorandum or set forth in the
Contribution Agreement, have made any
2
<PAGE> 3
representations, warranties, agreements or statements other than those contained
herein which influenced or affected Transferors' decision to acquire the Shares.
(h) Transferors are acquiring the Shares for Transferors' own
account without any view to a transfer, sale, assignment or other distribution
thereof other than a transfer, sale, assignment or other distribution not in
violation of the Securities Act of 1933, as amended.
(i) Transferors acknowledge, understand and agree that the
Shares have not been and will not be registered under any federal or state
securities law including, but not limited to, the Securities Act of 1933, as
amended, and that no federal or state governmental agency or authority has
approved or passed upon the issuance of the Shares. Transferors understand that
there is not now, and that there is not likely to be in the future, any market
for the Shares and that the Shares must be held by Transferors for an indefinite
period of time, absent registration or qualification of the Shares under
applicable laws or the receipt of an opinion of counsel satisfactory to
Transferee that registration or qualification is not required. Transferors
acknowledge that the certificate representing the Shares to be issued to
Transferors will bear legends restricting the transferability thereof to the
foregoing effect.
(j) Transferors have the ability to bear the economic risk of
the acquisition of the Shares, including the complete loss of Transferors'
investment.
(k) Transferors further acknowledge, understand and agree that
the Transferee shall affix the following legends in substantially the following
form to the certificates evidencing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF
SUCH ACTS. THE SHARES MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER SUCH ACTS OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS OF THAT CERTAIN LETTER AGREEMENT DATED
, 1998 BY THE BENEFICIAL HOLDER OF THIS
CERTIFICATE, WHICH RESTRICTS
3
<PAGE> 4
THE SALE, TRANSFER OR DISPOSITION OF THE SHARES. A COPY OF THE
LETTER AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICES OF THIS CORPORATION.
(l) All of the information set forth in this Agreement
concerning Transferors is true and correct.
7. INDEMNIFICATION. Transferors make the following covenants that
are applicable to them:
(a) GENERAL INDEMNIFICATION BY THE TRANSFERORS. Transferors
each covenant and agree that they will indemnify, defend, protect and hold
harmless MarineMax and the Company at all times, from and after the date of this
Agreement until the applicable Expiration Date (as herein defined), for, from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred on or prior to the Expiration Date (or thereafter if a claim has been
made therefor prior to such date) by MarineMax as a result of or arising from
(i) any breach of the representations and warranties of the Transferors set
forth in Section 6 hereof; and (ii) any breach of any agreement on the part of
the Transferors under this Agreement.
(b) LIMITATIONS ON INDEMNIFICATION. The indemnification
obligations of Transferors set forth in this Agreement shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company, for
those representations and warranties set forth in Section 6, which
representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time (the end of such period being the "Expiration Date"). MarineMax
and the Company shall not assert any claim hereunder against the Transferors
until such time as, and solely to the extent that, the aggregate of all claims
against the Transferors shall exceed the sum of $30,000 (the "Indemnification
Deductible"); and after such Indemnification Deductible amount has been
attained, only claims in excess of such amount shall be indemnified hereunder.
MarineMax and the Company may recover for indemnification
hereunder only from the Shares held in escrow pursuant to and as provided in the
Escrow Agreement. It is hereby understood and agreed that Transferors may only
satisfy an indemnification obligation through payment of stock, such stock to be
valued as described immediately below, except as may otherwise be permitted and
still preserve pooling-of-interests accounting treatment. Notwithstanding any
term of this Agreement to the contrary, no provision of this Agreement shall
limit or be deemed to limit any liability or remedy one party may have against
any other parties hereto that arises by statute or any applicable federal, state
or local law.
4
<PAGE> 5
For purposes of calculating the value of the MarineMax Stock
received by Transferors, MarineMax Stock shall be valued at $13.00 per share.
No provision of this Agreement or in this Section 7 shall
limit or be deemed to limit any liability or remedy one party may have against
any other party hereto with respect to a claim of fraud.
8. FURTHER ASSURANCES. Transferors and Transferee hereby agree to
execute and deliver, or cause Transferors' spouse, partners, members,
shareholders, officers, directors or any other necessary party to execute and
deliver, such further instruments and documents and take such other actions as
may be reasonably necessary or convenient to carry out the transactions
contemplated hereby, including, without limitation, all further instruments,
documents and actions as may be reasonably required to transfer the Membership
Interests from Transferors to Transferee. The provisions of this Paragraph 8
shall survive the date of this Agreement.
9. NOTICES. Unless otherwise required by law, all notices required
to be given hereunder shall be in writing and shall be conveyed by (i) personal
delivery (including by any messenger, courier service or facsimile), or (ii)
United States Postal Service by certified or registered mail, postage prepaid,
with return receipt requested, if to Transferors, at the address set forth on
Attachment 1, and if to Transferee, at 18167 U.S. Hwy 19 North, Suite 499,
Clearwater, Florida, 33764. Notice given by personal delivery shall be deemed to
have been given upon delivery to the appropriate address against receipt
therefor (or upon refusal or acceptance), and notice given by U.S. mail shall be
deemed to have been given two days after deposit in the U.S. mail. Each party
may designate from time to time, another address in place of the address
hereinabove set forth by notifying the other parties in the same manner as
provided in this paragraph.
10. REPRESENTATIONS AND WARRANTIES AT CLOSING. All of Transferors'
representations and warranties contained in Section 6 shall survive only for a
period of the earlier of (i) the date of the first audit of financial statements
of the Company containing combined operations of Transferee and the Company,
which representations and warranties specifically deal with items that would be
expected to be encountered in the audit process, or (ii) twelve months from the
Effective Time.
11. ATTORNEYS' FEES. If any party to this Agreement shall breach its
representations or warranties hereunder or shall fail to fulfill or perform any
of its covenants or obligations in this Agreement, that party shall pay all
costs, including, without limitation, reasonable attorneys' fees and expert
witness fees, that may be incurred to enforce the terms, covenants, conditions
and provisions of this Agreement, or that may be incurred as a result of the
default under or breach of this Agreement, in the event legal action is
commenced.
5
<PAGE> 6
12. ENTIRE AGREEMENT; AMENDMENT. All attachments and exhibits
attached to this Agreement are incorporated into this Agreement by reference and
made a part hereof. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties. No change
or addition may be made to this Agreement except by a written agreement executed
by the parties.
13. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all terms, covenants, conditions and provisions of this
Agreement.
14. APPLICABLE LAW. This Agreement and the rights of the parties
hereto shall be interpreted, governed and construed in accordance with the laws
of the State of Delaware.
15. SECTION HEADINGS. The section headings in this Agreement are
inserted only for convenience and reference and the parties intend that they
shall be disregarded in interpreting the terms, covenants, conditions and
provisions of this Agreement.
16. WAIVER. Each party shall have the right to excuse or waive
performance by the other party of any obligation under this Agreement by a
writing signed by the party so excusing or waiving. No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Transferors
or Transferee of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other
covenant or condition of this Agreement.
17. BINDING EFFECT, NOMINEE. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Transferee may assign this Agreement or nominate a substitute
Transferee for this Agreement.
18. CONSTRUCTION. As used in this Agreement, the masculine, feminine
or neuter gender and the singular or plural numbers shall each be deemed to
include the other whenever the context so requires. This Agreement shall be
construed as a whole and in accordance with its fair meaning and without regard
to any presumption or other rule requiring construction against the party
causing this Agreement or any part of this Agreement to be drafted. The parties
acknowledge that each party has reviewed this Agreement and has had the
opportunity to have it reviewed by legal counsel. If any words or phrases in
this Agreement are stricken or otherwise eliminated, whether or not other words
or phrases have been added, this Agreement shall be construed as if the words or
phrases stricken or otherwise eliminated were never included in this Agreement,
and no implication or inference will be drawn from the fact that the words or
phrases were stricken or otherwise eliminated.
19. NO PARTNERSHIP, THIRD PERSON. It is not intended by this
Agreement to, and nothing contained in this Agreement shall, create any
partnership, joint venture or other arrangement between Transferors and
Transferee except as specifically provided herein. No term
6
<PAGE> 7
or provision of this Agreement is intended to benefit any person, partnership,
corporation or other entity not a party hereto (including, without limitation,
any broker), and no such other person, partnership, corporation or entity shall
have any right or cause of action hereunder.
20. TIME OF PERFORMANCE. If the date for performance of any
obligation hereunder or the last day of any time period provided for herein
shall fall on a Saturday, Sunday or legal holiday, then said date for
performance or time period shall expire on the first day thereafter which is not
a Saturday, Sunday or legal holiday. Except as may otherwise be set forth
herein, any performance provided for herein shall be timely made and completed
if made and completed no later than 5:00 P.M. (Eastern Standard Time) on the day
for performance.
21. TRANSFER TAXES. Any transaction, privilege, sales, transfer, or
other taxes payable by reason of the purchase and sale provided for in this
Agreement shall be paid by Transferor.
[NO FURTHER TEXT ON THIS PAGE]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first set forth above.
TRANSFERORS:
/s/ Richard C. LaManna
-------------------------------------------
Richard C. LaManna, Jr., as Co-Trustee of
The LaManna Family Trust, Member
/s/ Judith L. LaManna
-------------------------------------------
Judith L. LaManna, as Co-Trustee of The
LaManna Family Trust, Member
/s/ Darrell Christopher LaManna
-------------------------------------------
Darrell Christopher LaManna, a single man,
Member
TRANSFEREE:
MARINEMAX, INC.
By: /s/ Michael H. McLamb
---------------------------------------
Name: Michael H. McLamb
Its:
---------------------------------------
8
<PAGE> 9
ATTACHMENT 1
TRANSFERORS
Name: Richard C. LaManna, Jr. and Judith L. LaManna, as Co-Trustees of the
LaManna Family Trust, as Members of Harrison's Realty California,
L.L.C., a Delaware limited liability company
Address: ____________________________________________
____________________________________________
____________________________________________
____________________________________________
Name: Darrell Christopher LaManna, a single man, as Member of Harrison's
Realty California, L.L.C., a Delaware limited liability company
Address: ____________________________________________
____________________________________________
____________________________________________
____________________________________________
<PAGE> 10
EXHIBIT "A"
NUMBER OF SHARES OF TRANSFEREE STOCK
TO BE RECEIVED BY TRANSFERORS
Richard C. LaManna, Jr. 61,266 (6,126 of which shall be placed into Escrow)
and Judith L. LaManna as
Co-Trustees of the LaManna
Family Trust
Darrell Christopher LaManna 61,266 (6,126 of which shall be placed into Escrow)
<PAGE> 1
Exhibit 10.6
===============================================================================
SETTLEMENT AGREEMENT
between
MARINEMAX, INC.
and
BRUNSWICK CORPORATION
March 12, 1998
===============================================================================
6
<PAGE> 2
SETTLEMENT AGREEMENT
AGREEMENT dated as of the 12th day of March 1998 by and among
MARINEMAX, INC., a Delaware corporation ("MarineMax"); and BRUNSWICK
CORPORATION, a Delaware corporation for itself and on behalf of the subsidiaries
set forth on the signature page hereof and the Sea Ray Division of Brunswick
("Brunswick").
R E C I T A L S
A. MarineMax has completed merger transactions (the "Mergers")
involving Bassett Boat Company of Florida, Louis DelHomme Marine, Gulfwind
Marine, USA, Gulfwind Marine South, and Harrison's Marine Centers as well as
their affiliated and subsidiary companies (collectively, the "Merged Companies")
as a result of which the Merged Companies became wholly owned subsidiaries of
MarineMax.
B. The Merged Companies sell and service various boats manufactured
by Brunswick or division or subsidiaries of Brunswick ("Brunswick Affiliates,"
which includes the Sea Ray Division of Brunswick), including Sea Ray pleasure
boats, Boston Whaler fishing boats, and Baja high-performance boats, pursuant to
various dealer agreements (the "Dealer Agreements") between the Merged Companies
and the relevant Brunswick Affiliates as set forth in Schedule A to this
Agreement.
C. Brunswick believes that the Dealer Agreements require the consent
of Brunswick and the applicable Brunswick Affiliates to any changes in the
ownership of the Merged Companies as a result of the Mergers or otherwise (the
"Ownership Changes").
D. MarineMax does not believe that the Dealer Agreements require the
consent of Brunswick or the Brunswick Affiliates to the Ownership Changes, but
desires to avoid a long, costly, and disruptive dispute with the principal
supplier of boats and related boating products sold by the Merged Companies in
order to protect the business of the Merged Companies.
E. MarineMax and Brunswick have agreed to resolve their disputes as
provided herein.
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. PAYMENT TO BRUNSWICK. MarineMax shall pay to the order of
Brunswick an amount equal to $15.0 million (the "MarineMax Settlement Amount"),
payable on December 31, 1998 (the "Due Date"), together with interest on the
unpaid principal balance at a rate equal
1
<PAGE> 3
to LIBOR plus 125 basis points. The obligation of MarineMax is evidenced by a
promissory note in the form of Exhibit A to this Agreement.
2. CONSENT OF BRUNSWICK. Brunswick consents to the Ownership
Changes. Brunswick shall cause each Brunswick Affiliate to consent to the
Ownership Changes.
3. GENERAL.
(a) NOTICES. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed given when delivered against
receipt, or upon the receipt of a facsimile copy, or three days after being
deposited in the United States mail, postage prepaid, registered, or certified
mail, addressed as follows:
If to the Company, to: With a copy to:
MarineMax, Inc. O'Connor, Cavanagh, Anderson,
Attn: Mr. William H. McGill Jr. Killingsworth & Beshears P.A.
18167 US North #499 Attn: Robert S. Kant, Esq.
Clearwater, Florida 33764 One East Camelback Road, Suite 1100
Tel: 813-531-1700 Phoenix, Arizona 85012
Fax: 813-531-0123 Tel: 602-263-2606
Fax: 602-263-2900
If to Brunswick, to: With a copy to:
Brunswick Corporation Brunswick Corporation
Attn: Mr. Peter Larson Attn: General Counsel
1 North Field Court 1 North Field Court
Lake Forest, Illinois 60045 Lake Forest, Illinois 60045
Tel: (847) 735-4822 Tel: (847) 735-4305
Fax: (847) 735-4425 Fax: (847) 735-4050
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section.
(b) SUCCESSORS AND ASSIGNS; THIRD-PARTY BENEFICIARIES. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective assigns, legal representatives, executors, heirs and
successors (including any party that acquires any Brunswick Affiliate);
provided, however, that no party hereto shall have the right to assign any right
hereunder or delegate any obligation hereunder, in whole or in part, without the
prior written consent of the other parties hereto, and any attempt to do so
shall be void. The Merged Companies shall be deemed to be third-party
beneficiaries of this Agreement.
2
<PAGE> 4
(c) AMENDMENT, MODIFICATION, OR WAIVER. No amendment,
modification, or waiver of any condition, provision, or term of this Agreement
shall be valid or of any effect unless made in writing, signed by the party or
parties to be bound, and specifying with particularity the nature and extent of
such amendment, modification, or waiver. Failure on the part of any party to
complain of any act or failure to act of another party or to declare another
party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such party of its rights hereunder. Any waiver by any
party of any default of another party shall not affect or impair any right
arising from any other or subsequent default. Nothing herein shall limit the
remedies and rights of the parties hereto under and pursuant to this Agreement.
(d) SEVERABLE PROVISIONS; ENFORCEABILITY. Each provision of
this Agreement is intended to be severable. If any provision hereof shall be
declared by a court of competent jurisdiction to be illegal, unenforceable, or
invalid for any reason whatsoever, such illegality, unenforceability, or
invalidity shall not affect the validity of the remainder of this Agreement.
(e) ENTIRE AGREEMENT. This Agreement, including the exhibits
and schedules hereto, contains the entire understanding and agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, express or implied, oral or written, among
the parties with respect to such subject matter. The express terms of this
Agreement shall control and supersede any course of performance or usage of the
trade inconsistent with any of the terms hereof. Each of the exhibits and
schedules hereto is incorporated herein by this reference and constitutes a part
of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original as against
any party whose signature appears thereon, and all of which together shall
constitute one and the same agreement. This Agreement shall become binding when
one or more counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto.
(g) GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the law of the state of Delaware,
regardless of any applicable conflict-of-law rules to the contrary.
(h) CONSTRUCTION. The parties hereto acknowledge that each
party was represented by legal counsel (or had the opportunity to be represented
by legal counsel) in connection with this Agreement and that each of them and
their counsel have reviewed and revised this Agreement, or have had an
opportunity to do so, and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or any exhibits hereto
or thereto.
3
<PAGE> 5
(i) ADDITIONAL ACTIONS. Each party hereto agrees to do all
acts and things and to make, execute, and deliver such written instruments and
documents as shall from time to time be reasonably required to carry out the
provisions of this Agreement.
(j) ATTORNEYS' FEES. In the event of any claim, controversy or
dispute arising out of or relating to this Agreement, or the breach thereof, the
prevailing party shall be entitled to recover reasonable attorneys' fees
incurred in connection with any arbitration or court proceeding.
(k) REMEDIES CUMULATIVE. The remedies of the parties hereto
under this Agreement are cumulative and shall not exclude any other remedies to
which any party may be lawfully entitled.
(l) AUTHORITY. Each individual signing below personally
represents that he or she has full authority to bind the party or parties on
whose behalf he or she is signing.
4
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
MARINEMAX, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
BRUNSWICK CORPORATION
By:____________________________________
Name:__________________________________
Title:_________________________________
THE FOLLOWING BRUNSWICK SUBSIDIARIES
HEREBY APPROVE THIS AGREEMENT:
BAJA MARINE CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
BOSTON WHALER, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
5
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION OF
NAME INCORPORATION
<S> <C>
Subsidiaries of MarineMax, Inc. (Delaware):
Bassett Boat Company Florida
Bassett Realty, L.L.C. Delaware
Bassett Boat Company of Florida Florida
Gulfwind South, Inc. Florida
Gulfwind South Realty, L.L.C. Delaware
Gulfwind USA, Inc. Florida
Harrison's Boat Center, Inc. California
Harrison's Realty California, L.L.C. Delaware
Harrison's Marine Centers of Arizona, Inc. Arizona
Harrison's Realty, L.L.C. Delaware
11502 Dumas, Inc. Texas
Subsidiaries of 11502 Dumas, Inc. (Texas):
DelHomme Realty, Inc. Delaware
9149 Wallisville Road Interests, Inc., dba DelHomme Service Center Texas
600 Del Lago Blvd., Inc., dba Louis DelHomme Marine-Del Lago Texas
7940 W. I-30 Interests, Inc. Texas
Airtex Interests, Inc., dba Louis DelHomme Marine--Airtex Texas
South Shore Interests, Inc., dba Louis DelHomme Marine-South Shore Texas
Nasa Road Interests, Inc., dba Louis DelHomme Marine--Nasa Road Texas
Reeder Road Interests, Inc., dba Louis DelHomme Marine Texas
Lake Lewisville Interests, Inc., dba Louis DelHomme Texas
Marine-Lake Lewisville
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use
of our report (and to all references to our Firm) included in or made a part of
Registration Statement.
ARTHUR ANDERSEN LLP
Tampa, Florida,
March 5, 1998
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<PERIOD-END> SEP-30-1997 DEC-31-1997
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<PP&E> 21,930,985 21,930,985
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<INCOME-PRETAX> 15,293,468 (963,161)
<INCOME-TAX> 409,824 (426,524)
<INCOME-CONTINUING> 14,883,644 (536,637)
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