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EXHIBIT 99.1
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
DATED AS OF THE 7th DAY OF July, 1998
BY AND AMONG
MARINEMAX, INC.,
C & N MARINE ACQUISITION CORP.
(A SUBSIDIARY OF MARINEMAX, INC.)
C & N MARINE CORPORATION
AND
THE STOCKHOLDERS NAMED HEREIN
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TABLE OF CONTENTS
PAGE
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............................ 4
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.................................... 6
3.1 Time and Manner of Delivery................................... 6
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 STOCKHOLDERS...... 8
(A) REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE STOCKHOLDERS...... 8
5.1 Due Organization.............................................. 8
5.2 Authorization................................................. 8
5.3 Capital Stock of COMPANY...................................... 8
5.4 Transactions in Capital Stock, Organization Accounting........ 9
5.5 No Bonus Shares............................................... 9
5.6 Subsidiaries.................................................. 9
5.7 Predecessor Status; Etc....................................... 9
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
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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
5.21 Conformity with Law; Litigation............................... 17
5.22 Taxes......................................................... 17
5.23 No Violations................................................. 18
5.24 Government Contracts.......................................... 18
5.25 Absence of Changes............................................ 18
5.26 Deposit Accounts; Powers of Attorney.......................... 19
5.27 Validity of Obligations....................................... 20
5.28 Relations with Governments.................................... 20
5.29 Prohibited Activities......................................... 20
5.30 Disclosure.................................................... 20
(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS...................... 21
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................................................. 22
6.3 Capital Stock of MARINEMAX and NEWCO.......................... 22
6.4 Transactions in Capital Stock; Organization Accounting........ 22
6.5 [Intentionally Deleted]....................................... 22
6.6 Financial Statements.......................................... 22
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TABLE OF CONTENTS
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6.7 [Intentionally Deleted]........................................ 22
6.8 Validity of Obligations........................................ 22
6.9 MARINEMAX Stock................................................ 22
6.10 Disclosure..................................................... 23
6.11 [Intentionally Deleted]........................................ 23
7. COVENANTS PRIOR TO CLOSING........................................... 23
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.................. 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 Xxxx-Xxxxx 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
8.4 [Intentionally Deleted]........................................ 28
8.5 Consents and Approvals......................................... 28
8.6 Good Standing Certificates..................................... 28
8.7 No Material Adverse Change..................................... 29
8.8 [Intentionally Deleted]........................................ 29
8.9 Secretary's Certificate........................................ 29
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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' Releases......................................... 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................................................ 31
9.11 Employment Agreements.......................................... 31
9.12 Specific Indemnification Agreement............................. 31
9.13 [Intentionally Deleted]........................................ 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
(iv) [Intentionally Deleted]............................... 32
10.4 [Intentionally Deleted]........................................ 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
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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
13.2 Damages........................................................ 38
13.3 Reasonable Restraint........................................... 38
13.4 Severability; Reformation...................................... 38
13.5 Independent Covenant........................................... 38
13.6 Materiality.................................................... 39
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............................... 41
16.1 Compliance with Law............................................ 41
16.2 Economic Risk; Sophistication.................................. 41
17. GENERAL.............................................................. 41
17.1 Cooperation.................................................... 41
17.2 Successors and Assigns......................................... 42
17.3 Entire Agreement............................................... 42
17.4 Counterparts................................................... 42
17.5 Brokers and Agents............................................. 42
17.6 Expenses....................................................... 42
17.7 Notices........................................................ 43
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17.8 Governing Law.................................................. 44
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
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AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
THIS AGREEMENT OF MERGER AND PLAN OF REORGANIZATION (this "Agreement")
is made as of the 7th day of July, 1998, by and among MARINEMAX, INC., a
Delaware corporation ("MARINEMAX"), C & N MARINE ACQUISITION CORP., a Delaware
corporation ("NEWCO"), C & N MARINE CORPORATION, a Minnesota corporation (the
"COMPANY"), XXXXX X. XXXXXXX ("X. Xxxxxxx"), and XXXXX X. XXXXXXX ("X. Xxxxxxx")
(X. Xxxxxxx and X. Xxxxxxx 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 Minnesota;
WHEREAS, the STOCKHOLDERS and Board of Directors of COMPANY and the
stockholders and Board of Directors of NEWCO have approved and adopted this
Agreement, and intend it to be a plan of reorganization pursuant to Sections
368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"), and intend the reorganization to be accounted for as a
"pooling-of-interests" for accounting purposes;
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 Company" shall mean NEWCO prior to the Effective Time.
"Affiliates" has the meaning set forth in Section 5.6.
"Articles of Merger" means 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 May 31, 1998.
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"Cochrans Marine" has the meaning set forth in Section 5.9.
"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 third recital of this
Agreement.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"Combined 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 Combined Financial Statements" has the meaning set forth in
Section 7.10.
"GAAP" shall mean generally accepted accounting principles in the
United States.
"Xxxx-Xxxxx Act"" shall mean the Xxxx-Xxxxx-Xxxxxx 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.
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"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.
"May Financial Statements" shall have the meaning set forth in Section
5.9.
"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.
"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.
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"Transfer Taxes" has the meaning set forth in Section 17.6.
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 Minnesota 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 COMPANY 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 Xxxxxxx X. XxXxxx, Xx. 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 Minnesota 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 Xxxxxxx X. XxXxxx,
Xx. shall be appointed as vice president of the Surviving Corporation and
Xxxxxxx X. XxXxxx shall be appointed as vice president and 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 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:
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(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 Forty Million (40,000,000) shares of
MARINEMAX Stock, and Five Million (5,000,000) shares of preferred stock, par
value $.001 per share.
(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 Hundred (100) shares are 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 Minnesota. 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 chosen 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 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.
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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 only 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. Upon the surrender and
delivery of the COMPANY Stock to MARINEMAX by the STOCKHOLDERS, 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
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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.
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 Minnesota 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
X'Xxxxxx, Cavanagh, Anderson, Xxxxxxxxxxxxx & Xxxxxxxx, P.A., Xxx Xxxx Xxxxxxxxx
Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000. 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,
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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 Minnesota, 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 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
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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. 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.
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. None of the STOCKHOLDERS have any equity interest in any
"Affiliates." The term "Affiliates" shall mean all entities that directly or
indirectly engage in any business that sells, rents, or leases boating, nautical
or similar lifestyle entertainment products and services, leases or owns real
property used in any such business, and in which any of the STOCKHOLDERS,
directly or indirectly, own or control ten percent (10%) or more of the equity
securities of the 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
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under common control with, COMPANY during the two (2) year period immediately
preceding the date hereof.
5.9 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.9 are copies
of the following combined financial statements of COMPANY and COCHRANS MARINE,
INC., a Minnesota corporation ("Xxxxxxx Marine") (the "Combined Financial
Statements"): the combined audited Balance Sheets as of December 31, 1996 and
December 31, 1997, and Statements of Operations, Shareholders' Equity and Cash
Flows for the years ended December 31, 1996 and December 31, 1997. Also attached
hereto as Schedule 5.9 are copies of the COMPANY's unaudited balance sheet as of
May 31, 1998, and Statements of Operations, Shareholders' Equity and Cash Flows
for the five month period ended May 31, 1998 (the "May Financial Statements").
The Combined Financial Statements and the May 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, the combined Balance
Sheets as of December 31, 1996 and December 31, 1997 and the COMPANY's Balance
Sheet as of May 31, 1998, each present fairly in all material respects the
combined financial position of COMPANY and Cochrans Marine and the financial
position of the COMPANY, as the applicable case may be, as of the dates
indicated thereon, and the 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 the Combined 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 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 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
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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 May 31, 1998 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
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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 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
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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,
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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.
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
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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 May 31, 1998 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, 1996 and 1997 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 funding 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
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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
Combined 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 December 31
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.
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
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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.
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;
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(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 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.
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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 twelve (12)
months from the Effective Time.
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.
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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
MARINEMAX and NEWCO have been duly authorized and validly issued, are fully paid
and nonassessable, 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.
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6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. 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.
6.5 [INTENTIONALLY DELETED].
6.6 FINANCIAL STATEMENTS. MarineMax has previously provided
consolidated financial statements of MARINEMAX as of December 31, 1996,
September 30, 1997 and March 31, 1998, as set forth on pages F-10 through F-27
of the Registration Statement and Prospectus of MARINEMAX as declared effective
by the SEC as of June 3, 1998 and as attached as Schedule 6.4 hereto, to the
COMPANY and 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 [INTENTIONALLY DELETED].
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7. COVENANTS PRIOR TO CLOSING
7.1 ACCESS AND COOPERATION; DUE DILIGENCE.
(i) Between the date of this Agreement and the Closing Date,
COMPANY will afford to the officers and authorized representatives of MARINEMAX
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 may from time to time reasonably request. COMPANY
will cooperate with MARINEMAX, 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 in connection therewith
as confidential in accordance with the provisions of Section 14 hereof.
(ii) 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
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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, 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) 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;
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(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 in Sections 8 and 9; or (iii) limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
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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 NEWCO 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 Company
and the Stockholders 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. If MARINEMAX and NEWCO and consent to
such amendment or supplement, which consent shall have been deemed given by
MARINEMAX and NEWCO 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 do not give their consent, COMPANY and STOCKHOLDERS shall, without
further act or action, be deemed to have given their 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 NEWCO 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 COMPANY and STOCKHOLDERS 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 May 31,
1998 (collectively, the "Final Combined Financial Statements"), disclosing no
material adverse change in the financial condition of COMPANY or the results of
its operations from Combined Financial Statements as of the Balance Sheet Date.
The Final Combined Financial Statements shall have been prepared in accordance
with GAAP applied on a
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consistent basis throughout the periods indicated and with past periods (except
as noted therein). Except as noted in the Final Combined 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 XXXX-XXXXX ACT. All parties to this Agreement
hereby recognize that one or more filings under the Xxxx-Xxxxx 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 Xxxx-Xxxxx
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Xxxx-Xxxxx 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 Xxxx-Xxxxx Act to be made. If filings under the
Xxxx-Xxxxx 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
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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' RELEASES. The STOCKHOLDERS shall have executed and
delivered to MARINEMAX instruments 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
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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 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 [INTENTIONALLY DELETED]
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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 COMPANY or 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 Combined
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.
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(iv) [INTENTIONALLY DELETED].
10.4 [INTENTIONALLY DELETED].
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, 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
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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 MARINEXMAX 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 MARINEXMAX 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 Seventy-Nine Thousand, Two
Hundred Forty-One Dollars ($79,241) (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 of
Seventy-Nine Thousand, Two Hundred Forty-One Dollars ($79,241).
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.
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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 $12.50 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 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 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
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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 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 August
31, 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
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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. Each of 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 boating, nautical or other similar
lifestyle entertainment products and services, in direct competition with
MARINEMAX or any of the subsidiaries thereof, within a 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 or any Acquired Party 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.
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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.
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 (subsidiaries), any Acquired Party,
and/or MARINEMAX and its subsidiaries, such as operational policies, and pricing
and cost policies that are valuable, special and unique assets of COMPANY's, any
Acquired Party, and/or MARINEMAX's and its subsidiaries 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
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46
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, 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.
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47
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:
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
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48
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 MARINEMAX, 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.
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.
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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 X'Xxxxxx, Cavanagh, Anderson, Xxxxxxxxxxxxx & Xxxxxxxx,
P.A., Xxxxxx Xxxxxxxx, 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.
(i) If to MARINEMAX, or NEWCO, addressed to them at:
MarineMax, Inc.
00000 X.X. 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. XxXxxx, Xx.
with copies to:
X'Xxxxxx Xxxxxxxx
One East Camelback Road
Suite 1100
Attn: Xxxxxx X. Xxxx, Esq. and Xxxx X. Xxxxxx, Esq.
Xxxxxxx, Xxxxxxx 00000
(ii) If to the STOCKHOLDERS, addressed to them:
Xxxxx X. Xxxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxxx 00000
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50
Xxxxx X. Xxxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxxx 00000
(iii) If to COMPANY, addressed to it at:
C & N MARINE CORPORATION
00000 Xxxxxx Xxxx 00
X.X. Xxx 000
Xxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
with copies to:
Xxxx X. Xxxxxx, Esq.
X.X. Xxx 000
Xxxxxx, Xxxxxxxxx 00000
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
and warranties 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.
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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]
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52
[Page Intentionally Left Blank]
45
53
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/ Xxxxxxx XxXxxx
------------------------------------
Name: Xxxxxxx XxXxxx
----------------------------------
Title: Vice President
---------------------------------
NEWCO:
C & N MARINE ACQUISITION CORP., a
Delaware corporation
By: /s/ Xxxxxxx XxXxxx
------------------------------------
Name: Xxxxxxx XxXxxx
----------------------------------
Title: Vice President
---------------------------------
COMPANY:
C & N MARINE CORPORATION, a
Minnesota corporation
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx
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54
CONSENT OF SPOUSE
The undersigned spouse of Xxxxx X. Xxxxxxx, who is a party to the
foregoing Agreement of Merger and Plan of Reorganization, pertaining to the
merger of C & N Marine Acquisition Corp., a Delaware corporation, with and into
C & N Marine Corporation, a Minnesota 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 Xxxxx X. Xxxxxxx.
The undersigned further agrees that in the event of the death of Xxxxx
X. Xxxxxxx, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Xxxxx X.
Xxxxxxx, 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 Xxxxx X. Xxxxxxx 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 7th day of July, 1998.
/s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
State of Mn. )
)ss.
County of Cass )
The foregoing was acknowledged before me this 23rd day of June, 1998 by
Xxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxx
------------------------------------
[Name]
My Commission Expires:
1/31/00
----------------------
47
55
CONSENT OF SPOUSE
The undersigned spouse of Xxxxx X. Xxxxxxx, who is a party to the
foregoing Agreement of Merger and Plan of Reorganization, pertaining to the
merger of C & N Marine Acquisition Corp., a Delaware corporation, with and into
C & N Marine Corporation, a Minnesota 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 Xxxxx X. Xxxxxxx.
The undersigned further agrees that in the event of the death of Xxxxx
X. Xxxxxxx, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Xxxxx X.
Xxxxxxx, the provisions of the Agreement shall be binding upon him 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 Xxxxx X. Xxxxxxx 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 7th day of July, 1998.
/s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
State of Mn. )
)ss.
County of Cass )
The foregoing was acknowledged before me this 23rd day of June, 1998 by
Xxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxx
------------------------------------
[Name]
My Commission Expires:
1/31/00
----------------------
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ARTICLES OF MERGER
MERGING
C & N MARINE ACQUISITION CORP.
WITH AND INTO
C & N MARINE CORPORATION
Pursuant to Section 302A.615 of the Minnesota Business Corporation Act, C &
N MARINE ACQUISITION CORP., a Delaware corporation ("Acquisition"), and C & N
MARINE CORPORATION, a Minnesota corporation (the "Company") hereby submit the
following Articles of Merger merging Acquisition with and into the Company (the
"Merger").
FIRST: The plan of merger is attached hereto as EXHIBIT A (the "Plan of
Merger").
SECOND: The Plan of Merger has been approved by Acquisition and the
Company pursuant to the Minnesota Business Corporation Act.
THIRD: These Articles of Merger may be executed in two counterparts,
both of which shall be deemed an original and both of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the undersigned corporations have caused these Articles
of Merger to be executed on this day of , 1998.
C & N MARINE ACQUISITION CORP., a
Delaware corporation
By: ____________________________
Name: __________________________
Its: ___________________________
C & N MARINE CORPORATION, a
Minnesota corporation
By: ____________________________
Name: __________________________
Its: ___________________________
57
PLAN OF MERGER
MERGING
C & N MARINE ACQUISITION CORP.
WITH AND INTO
C & N MARINE CORPORATION
This Plan of Merger is made and entered into by and between C & N MARINE
ACQUISITION CORP., a Delaware corporation ("Acquisition") and C & N MARINE
CORPORATION, a Minnesota corporation (the "Company") whereby Acquisition will
merge with and into the Company (the "Merger").
RECITALS
A. This Plan of Merger has been approved by the entire Board of
Directors of Acquisition pursuant to a resolution dated June 30, 1998. This
Plan of Merger has been approved by the entire Board of Directors of the
Company pursuant to a resolution dated June 30, 1998.
B. The Plan of Merger has been submitted to the respective shareholders
of Acquisition and the Company. The respective shareholders of Acquisition and
the Company unanimously approved and adopted the Plan of Merger pursuant to
resolution dated June 30, 1998 and June 30, 1998, respectively.
C. The General Corporation Law of the State of Delaware permits the
Merger as contemplated in this Plan of Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, Acquisition and the Company hereby agree as follows:
1. NAMES OF CONSTITUENT CORPORATIONS. The names of the Constituent
corporations proposing to merger are:
(a) C & N Marine Acquisition Corp.
(b) C & N Marine Corporation.
2. SURVIVING CORPORATION. The name of the surviving corporation shall be
C & N Marine Corporation (the "Surviving Corporation").
3. CONVERSION OF SHARES. On the Effective Date (as hereinafter defined),
each outstanding share of capital stock of Acquisition shall be cancelled
without consideration. On the Effective Date, each outstanding share of the
Company prior to the merger shall be exchanged for 24.14 shares of common
stock, par value $.001 per share of MarineMax, Inc., a Delaware corporation.
58
4. EFFECTIVE DATE. The effective date of the Merger shall be __________,
1998 (the "Effective Date").
5. ABANDONMENT. This Plan of Merger may be abandoned at any time prior
to the Effective Date by action of the Board of Directors of either Acquisition
or the Company.
6. COUNTERPARTS. This Plan of Merger may be executed in two
counterparts, both of which shall be deemed an original and both of which
together shall constitute one and the same instrument.
[Remainder of Page Left Intentionally Blank]
59
IN WITNESS WHEREOF, the undersigned corporations have caused this Plan of
Merger to be executed on this ____ day of ______________, 1998.
C & N MARINE ACQUISITION CORP., a
Delaware corporation
By:__________________________________
Name:________________________________
Its:_________________________________
C & N MARINE CORPORATION, a Minnesota
corporation
By:__________________________________
Name:________________________________
Its:_________________________________
60
CERTIFICATE OF MERGER
MERGING
C & N MARINE ACQUISITION CORP.
WITH AND INTO
C & N MARINE CORPORATION
The undersigned DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each constituent
corporation of the merger is as follows:
Name State of Incorporation
---- ----------------------
C & N Marine Corporation Minnesota
C & N Marine Acquisition Corp. Delaware
SECOND: That an Agreement of Merger and Plan of Reorganization (the "Plan
of Merger") between the parties to the merger has been approved, adopted,
certified, executed and acknowledged by each of C & N Marine Corporation and C
& N Marine Acquisition Corp., in accordance with the requirements of subsection
(c) of Section 252 of the General Corporation Law of the State of Delaware.
THIRD: That the Plan of Merger between the parties to the merger has been
adopted and approved by the respective boards of directors and stockholders of
C & N Marine Corporation and C & N Marine Acquisition Corp., in accordance with
the requirements of the laws of the State of Minnesota and Section 252 of the
General Corporation Law of the State of Delaware.
FOURTH: That the name of the corporation surviving the merger is C & N
Marine Corporation, a Minnesota corporation.
FIFTH: That the Articles of Incorporation of C & N Marine Corporation
shall be the Articles of Incorporation of the surviving corporation after the
merger.
61
SIXTH: That an executed Plan of Merger is on file at the principal place
of business of the surviving corporation. The address of said principal place of
business of C & N Marine Corporation, is 00000 Xxxxxx Xxxx 00, Xxxxxx
Xxxxxxxxx 00000.
SEVENTH: That a copy of the Plan of Merger will be furnished by C & N
Marine Corporation, on request and without cost to any stockholder of any
constituent corporation.
EIGHTH: That the surviving corporation may be served with process in the
State of Delaware in any proceeding for enforcement of any obligation of C & N
Marine Acquisition Corp., as well as for enforcement of any obligation of the
surviving corporation arising from the merger, including any suit or other
proceeding to enforce the right of any stockholder as determined in appraisal
proceedings pursuant to the provisions of Section 262 of the General
Corporation Law of the State of Delaware, and it does hereby irrevocably
appoint the Secretary of State of the State of Delaware as the agent to accept
service of process in any such suit or proceeding. The address to which a copy
of such process shall be mailed by the Secretary of State of Delaware is 00000
X.X. Xxxxxxx 00 Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx
X. XxXxxx, Xx., until the surviving corporation shall have hereafter designated
in writing to the said Secretary of State a different address for such purpose.
NINTH: That effective at , on , 1998, C & N Marine
Acquisition Corp. shall be merged with and into C & N Marine Corporation. The
date and the time upon which C & N Marine Acquisition Corp. shall be merged
into C & N Marine Corporation is hereinafter sometimes referred to as the
"Effective Date." Upon the Effective Date, the separate corporate existence of
C & N Marine Acquisition Corp. shall cease (except insofar as continued by
statute); and the two (2) corporations shall become and thenceforth be a single
corporation, to-wit: C & N MARINE CORPORATION, a Minnesota corporation.
2
62
TENTH: That notwithstanding the approval of the Plan of Merger by the
respective boards of directors and stockholders of the constituent
corporations, the merger herein contemplated may be abandoned and the Plan of
Merger may be terminated at any time prior to the Effective Date by mutual
agreement of the boards of directors of the constituent corporations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
63
IN WITNESS WHEREOF, the undersigned officer, for and on behalf of C & N
Marine Corporation, has executed this Certificate of Merger this ___ day
of ________, 1998.
C & N MARINE CORPORATION
By:_____________________
Name:___________________
Its:____________________
4
