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Exhibit 10.16
CREDIT FACILITY AND SECURITY AGREEMENT
ACCOUNTS AND INVENTORY
As of the 12th day of July, 1999, Borrowers and Bank (as hereinafter
defined), in consideration of the premises, and the covenants and agreements
contained herein, hereby mutually agree as follows:
1. DEFINITIONS
Any accounting term used but not specifically defined herein shall be
construed in accordance with GAAP. The definition of each agreement, document,
and instrument set forth in Section 1 hereof shall be deemed to mean and include
such agreement, document, or instrument as amended, restated, or modified from
time to time.
As used in this Agreement:
"ACCOUNT" means accounts, receivables, chattel paper and any other right to
payment for Goods sold or leased or for services rendered, whether or not it has
been earned by performance, including all amounts payable by and rights and
claims against, any manufacturer or vendor of Inventory, such as volume purchase
discounts, advertising rebates, price protection, warranty work, incentives and
credits .
"ACCOUNT DEBTOR" means the Person who is obligated on an Account.
"AFFILIATE" means any company that controls, is controlled by, or is under
common control with another Person.
"AGREEMENT" means this Credit Facility and Security Agreement by and among
Borrowers and Bank, and includes any partial or total amendment, renewal,
restatement, extension, or substitution of or for such Agreement.
"BANK" means KEYBANK NATIONAL ASSOCIATION, a national banking association whose
principal office is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"BORROWER" means individually each of the following entities (collectively to be
known as "Borrowers"): MARINEMAX, INC., a corporation incorporated under the
laws of the State of Delaware (also sometimes hereinafter referred to herein as
"MarineMax"), and MARINEMAX MOTOR YACHTS, INC., a corporation incorporated under
the laws of the State of Delaware (also sometimes referred to herein as "Motor
Yachts").
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"BORROWERS' CERTIFICATE" OR "BORROWERS' CERTIFICATES" means a certificate or
certificates, substantially in the forms of attached Exhibit A and Exhibit A-1.
"BORROWERS' LOCATION" means the location of:
(a) Each Borrower's place of business, if there is only
one such place of business; or
(b) if there is more than one place of business, the
place (1) from which each Borrower manages the main
part of its business operations, and (2) where
persons dealing with each Borrower would normally
look for credit information.
"BORROWING BASE" means an amount not in excess of the sum of the following:
(a) One hundred percent (100%) of the cost, including
freight charges, of new vessels held less than three
hundred sixty-six (366) days from date of delivery to
Motor Yachts or any Subsidiary of MarineMax, plus
(b) Ninety percent (90%) of the cost, including freight
charges, of new vessels held more than three hundred
sixty-five (365) days but less than seven hundred
thirty-one (731) days from date of delivery to Motor
Yachts or any Subsidiary of MarineMax, plus
(c) Eighty percent (80%) of (i) NADA or BUC Value of used
vessels held less than one hundred eighty-one (181)
days, and (ii) the cost, including freight charges,
of new vessels held more than seven hundred thirty
(730) days but less than nine hundred twelve (912)
days from date of delivery to Motor Yachts or any
Subsidiary of MarineMax, plus
(d) Seventy-two percent (72%) of (i) NADA or BUC Value of
used vessels held more than one hundred eighty (180)
days but less than three hundred sixty-six (366)
days, and (ii) the cost, including freight charges,
of new vessels held more than nine hundred eleven
(911) days but less than one thousand ninety-eight
(1,098) days from date of delivery to Motor Yachts or
any Subsidiary of MarineMax, plus
(e) Seventy-five percent (75%) of cost or market value
(whichever is lower), excluding freight, of parts,
plus
(f) Eighty percent (80%) of the amount due and owing on
Qualified Accounts, plus
(g) One hundred percent (100%) of Vessel Deposits, less
any deposit made by such customer with Motor Yachts
for that vessel;
provided, however, that notwithstanding anything to the contrary contained
herein: (i) the Borrowing Base shall be the lesser of (l) the aggregate of
amounts calculated in items (a) through (g) above; or (2) the line of credit
approved for Borrowers, which currently is
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Thirty Million Dollars ($30,000,000.00); (ii) all inventory utilized in the
Borrowing Base calculation shall be Qualified Inventory; (iii) in the event of a
conflict in the terms and conditions of this Agreement and the terms and
conditions set forth in the Borrowers' Certificates, the terms and conditions of
the Borrowers' Certificates shall control; and (iv) Borrowers' Certificates
shall be delivered to the Bank once per month or as may be reasonably requested
by Bank in accordance with Section 5 hereinbelow.
"CASH COLLATERAL ACCOUNT" means a commercial Deposit Account designated "cash
collateral account" and maintained by Motor Yachts with Bank, without liability
by Bank to pay interest thereon, from which account Bank shall have the
exclusive right to withdraw funds until all Obligations are paid, performed,
satisfied, enforced, and observed in full.
"CASH SECURITY" means all cash, Instruments, Deposit Accounts, and other cash
equivalents, whether matured or unmatured, whether collected or in the process
of collection, upon which Motor Yachts presently has or may hereafter have any
claim, that are presently or may hereafter be existing or maintained with,
issued by, drawn upon, or in the possession of Bank.
"COLLATERAL" means:
(a) all of Motor Yachts' Accounts, whether now owned or
hereafter acquired or received by Motor Yachts;
(b) all of Motor Yachts' Inventory, whether now owned or
hereafter acquired by Motor Yachts;
(c) all funds on deposit in the Cash Collateral Account;
(d) all of Motor Yachts' Contract Rights;
(e) all of Motor Yachts' Cash Security; and
(f) all of the Proceeds of Motor Yachts' Accounts,
Inventory, Cash Security, Contract Rights and Cash
Collateral Account.
"CONTRACT RIGHT" means (a) all rights under a contract between Motor Yachts and
a Motor Yachts customer for the sale or construction and sale of a vessel, and
(b) all rights under contracts between Motor Yachts and Hatteras for the
construction of vessels.
"DEPOSIT ACCOUNT" means (a) any deposit account, and (b) any demand, time,
savings, passbook, or a similar account maintained with a bank, savings and loan
association, credit union, or similar organization, other than an account
evidenced by a certificate of deposit.
"DOCUMENT" means (a) any document, (b) any document of title, including a ▇▇▇▇
of lading, dock warrant, dock receipt, warehouse receipt or order for the
delivery of Goods, and any other document which in the regular course of
business or financing is treated as adequately evidencing that the Person in
possession of it is entitled to receive, hold, and dispose of the document and
the Goods it covers, and (c) any receipt covering Goods
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stored under a statute requiring a bond against withdrawal or a license for the
issuance of receipts in the nature of warehouse receipts even though issued by a
Person who is the owner of the Goods and is not a warehouseman.
"ENVIRONMENTAL LAW" means any federal, state, or local statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing
liability upon a Person in connection with the use, release or disposal of any
hazardous, toxic or dangerous substance, waste or material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"ERISA AFFILIATE" means each Person (whether or not incorporated) which together
with Borrowers or any Affiliate of theirs would be treated as a single employer
under ERISA.
"EVENT OF DEFAULT" means the occurrence of any of the events set forth in
Section 9 of this Agreement.
"FINANCIAL IMPAIRMENT" means the distressed economic condition of a Person
manifested by any one or more of the following events:
(a) adjudicated bankruptcy or insolvency or death or
discontinuation of the business of the Person;
(b) the Person ceases, is unable, or admits in writing
its inability, to make timely payment upon the
Person's debts, obligations, or liabilities as they
mature or come due;
(c) assignment by the Person for the benefit of
creditors;
(d) voluntary institution by the Person or consent
granted by the Person to the involuntary institution
whether by petition, complaint, application, default,
answer (including, without limitation, an answer or
any other permissible or required responsive pleading
admitting (1) the jurisdiction of the forum or (2)
any material allegations of the petition, complaint,
application, or other writing to which such answer
serves as a responsive pleading thereto), or
otherwise of any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt,
dissolution, liquidation, receivership, trusteeship,
or similar proceeding pursuant to or purporting to be
pursuant to any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt,
dissolution, liquidation, receivership, trusteeship,
or similar law of any jurisdiction;
(e) voluntary application by the Person for or consent
granted by the Person to the involuntary appointment
of any receiver, trustee, or similar officer (1) for
the Person or (2) of or for all or any substantial
part of the Person's property;
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(f) entry, without the Person's application, approval, or
consent, of any order that is not dismissed, stayed,
or discharged within sixty (60) days from its entry,
which is pursuant to or purporting to be pursuant to
any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution,
liquidation, receivership, trusteeship or similar law
of any jurisdiction (1) approving an involuntary
petition seeking an arrangement of the Person's
creditors, (2) approving an involuntary petition
seeking reorganization of the Person, or (3)
appointing any receiver, trustee, or similar officer
(i) for the Person, or (ii) of or for all or any
substantial part of the Person's property;
(g) any judgment, writ, warrant of attachment, execution,
or similar process is issued or levied against all or
any substantial part of the Person's property and
such judgment, writ, warrant of attachment,
execution, or similar process is not released,
vacated, or fully bonded within forty (40) days after
its issue or levy.
"FOREIGN ACCOUNT" means any Account which arises out of contracts with or orders
from an Account Debtor which is not a resident of the United States.
"GAAP" shall mean generally acceptable accounting principles as in effect, which
shall include the official interpretation thereof by the Financing Accounting
Standards Board, consistently applied.
"GENERAL INTANGIBLE" means (a) any general intangible, and (b) any personal
property (including things in action) other than Goods, Accounts, Contract
Rights, Chattel Paper, Documents, Instruments, and money.
"GOODS" means (a) any goods, and (b) all things which are movable at the time
the security interest granted Bank under this Agreement attaches or which are
fixtures but does not include money, Instruments, Documents, Accounts, Chattel
Paper, General Intangibles, and Contract Rights.
"GOVERNMENT ACCOUNT" means any Account which arises out of contracts with or
orders from the United States or any of its departments agencies, or
instrumentalities.
"HATTERAS" means Hatteras Yachts, a division of Genmar Industries, Inc.
"INSTRUMENT" means:
(a) any instrument;
(b) any negotiable or nonnegotiable instrument
(including, without limitation, drafts, checks,
acceptances, certificates of deposit, and notes);
(c) any security; and
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(d) any other writing which:
(l) evidences a right to the payment of money,
(2) is not itself a security agreement or lease,
and
(3) is of a type which in the ordinary course of
business is transferred by delivery with any
necessary endorsement or assignment.
"INVENTORY" means:
(a) any inventory;
(b) all Goods that are raw materials;
(c) all Goods that are work in process or production;
(d) all Goods that are materials used or consumed in
the ordinary course of a Person's business;
(e) all Goods that are, in the ordinary course of a
Person's business, held for sale or lease or
furnished or to be furnished under contracts of
service; and
(f) all substitutes and replacements for, and parts,
accessories, additions, attachments, or
accessions to (a) to (e) above.
"LIBOR RATE" means the 90-day London Interbank Offered Rate published in the
Eastern Edition of the Wall Street Journal on the last business day of Bank's
accounting month, effective for the next accounting month.
"LOAN ACCOUNT" means an account maintained by Bank on its books, which will
evidence all Advances, accrued interest thereon, other amounts due Bank with
respect to such Advances, and all payments thereof by Borrowers.
"MULTIEMPLOYER PLAN" means a plan described in ERISA which covers employees of
the Borrowers, any Affiliate, or any ERISA Affiliate.
"NADA OR BUC VALUE" means the wholesale value published in the most recent NADA
Small Boat Appraisal Guide, but if no wholesale value is available for the boat
in such Guide, then it shall be the wholesale value published in the most recent
BUC Used Boat Price Guide.
"OBLIGATIONS" means any of the following obligations, whether direct or
indirect, absolute or contingent, secured or unsecured, matured or unmatured,
which were originally contracted with Bank or another Person and now owing to or
hereafter acquired in any manner partially or totally by Bank or in which Bank
may have acquired a participation, contracted by Borrowers alone or jointly or
severally with another Person, excluding, however, recourse, dealer paper and
retail obligations of Borrowers (or any one of them), whether or not owed to or
incurred with Bank or any other Person:
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(a) any and all indebtedness, obligations, liabilities,
contracts, indentures, agreements, warranties,
covenants, guaranties, representations, provisions,
terms, and conditions of whatever kind, now existing
or hereafter arising, and however evidenced, that are
now or hereafter owed, incurred, or executed by
Borrowers to, in favor of, or with Bank (including,
without limitation, those as are set forth or
contained in, referred to, evidenced by, or executed
with reference to this Agreement, the Loan Account,
any promissory notes, letter of credit agreements,
advance agreements, indemnity agreements, guaranties,
lines of credit, mortgage deeds, security agreements,
assignments, pledge agreements, hypothecation
agreements, Instruments, and acceptance financing
agreements), and including any partial or total
extension, restatement, renewal, amendment, and
substitution thereof or therefor;
(b) any and all claims of whatever kind of Bank against
Borrowers, now existing or hereafter arising
including, without limitation, any arising out of or
in any way connected with warranties made by
Borrowers to Bank in connection with any Instrument
deposited with or purchased by Bank;
(c) any and all of Bank's Related Expenses incurred after
the occurrence of an Event of Default.
"ORGANIZATION" means a corporation, government or government subdivision or
agency, business trust, estate, trust, limited liability company, partnership,
association, two or more Persons having a joint or common interest, and any
other legal or commercial entity.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant to
Title IV of ERISA.
"PERMITTED LIENS" means those liens described on Schedule 4(e) hereto.
"PERSON" means an individual or an Organization.
"PLAN" means any plan (other than a Multiemployer Plan) defined in ERISA in
which the Borrowers or any Affiliate is, or has been at any time during the
preceding two (2) years, an "employer" or a "substantial employer" as such terms
are defined in ERISA.
"PROCEEDS" means (a) any proceeds, and (b) whatever is received upon the sale,
exchange, collection, or other disposition of Collateral or Proceeds, whether
cash or non-cash. Cash Proceeds includes, without limitation, moneys, checks,
and Deposit Accounts. Proceeds includes, without limitation, any Account arising
when the right to payment is earned under a Contract Right, any insurance
payable by reason of loss or damage to the Collateral, and any return or
unearned premium upon any cancellation of
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insurance. Except as expressly authorized in this Agreement, Bank's right to
Proceeds specifically set forth herein or indicated in any financing statement
shall never constitute an express or implied authorization on the part of Bank
to Borrowers' sale, exchange, collection, or other disposition of any or all of
the Collateral, except in the ordinary course of Borrowers' business and except
the sale of chattel paper.
"PROHIBITED TRANSACTION" means any prohibited transaction as that term is
defined for purposes of ERISA.
"QUALIFIED ACCOUNT" means an Account of Motor Yachts which, at all times until
it is collected in full, continuously meets the following requirements:
(a) is not subject to any claim for credit, allowance, or
adjustment by the Account Debtor or any set off or
counter claim;
(b) either (i) arose in the ordinary course of Motor
Yachts' business from the performance (fully
completed) of services or bona fide sale of Goods
which have been shipped to the Account Debtor, and
not more than ninety (90) days have elapsed since the
performance (fully completed) of services or the sale
of Goods for or to the Account Debtor or (ii) is
otherwise due and payable to Motor Yachts from a
manufacturer or vendor;
(c) no notice of the Financial Impairment of the Account
Debtor has been received by Borrowers;
(d) is not subject to an assignment, pledge, claim,
mortgage, lien, or security interest of any type
except that granted to or in favor of Bank;
(e) Account Debtor has not rejected, returned, revoked
acceptance of, or refused to accept any of the Goods
or services or claims which are the subject of the
Account,
(f) Motor Yachts has not received any Instrument or
Chattel Paper with respect to or in payment of the
Account;
(g) Bank has not determined in the exercise of its
reasonable discretion that the Account is
unsatisfactory in any material respect;
(h) is not a Government Account, unless Bank's security
interest in such Government Account is perfected
according to the Federal Assignment of Claims Act;
(i) is not an Account due from any Affiliate, shareholder
or employee of Motor Yachts;
(j) is not a Foreign Account; and
(k) is not evidenced by a promissory note or any other
negotiable instrument;
(l) is not an Account owed to Motor Yachts by an Account
Debtor which has failed to pay more than 25% of its
currently outstanding Accounts within 90 days of the
claim, service or sale of goods, unless Bank
otherwise approves the inclusion of such Account.
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"QUALIFIED INVENTORY" means all Vessel Deposits and all Inventory EXCEPT
Inventory which is:
(a) located outside the United States;
(b) in the possession of a bailee or a third party;
(c) work in process;
(d) damaged, defective, or, as mutually agreed, obsolete;
(e) held by Motor Yachts or a third party on consignment; or
(f) Bank has reasonably determined that the Inventory is
unsatisfactory in any material respect.
"RELATED EXPENSES" means any and all reasonable costs, liabilities, and expenses
(including, without limitation, losses, damages, penalties, claims, actions,
reasonable attorney's fees, legal expenses, judgments, suits, and disbursements)
incurred by, imposed upon, or asserted against, Bank, after the occurrence or in
connection with the occurrence and during the continuation of an Event of
Default, in any attempt by Bank:
(a) to obtain, preserve, perfect, or enforce any security
interest evidenced by (i) this Agreement, or (ii) any
other pledge agreement, mortgage deed, hypothecation
agreement, guaranty, security agreement, assignment, or
security instrument executed or given by Borrowers to or
in favor of Bank;
(b) to obtain payment, performance, and observance of any and
all of the Obligations;
(c) to maintain, insure, audit, collect, preserve, repossess,
and dispose of any of the Collateral, including, without
limitation, costs and expenses for appraisals,
assessments, and audits of Borrowers or the Collateral; or
(d) incidental or related to (a) through (c) above, including,
without limitation, interest thereupon from the date
incurred, imposed, or asserted until paid at the rate
payable as set forth in Section 2 of this Agreement, but
in no event greater than the highest rate permitted by
law.
"REPORTABLE EVENT" means any reportable event as that term is defined for
purposes of ERISA.
"REVOLVER ADVANCE OR ADVANCE(S)" means any advance made by Bank to the
Borrowers, subject to the provisions, terms and conditions of Section 2(a)
hereof, which Revolver Advance shall be payable in accordance with the terms of
this Credit Facility.
"SUBORDINATED DEBT" means Indebtedness of a Person which is subordinated, in a
manner satisfactory to the Bank, to all indebtedness owing to the Bank.
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"SUBSIDIARY" means any Person of which more than fifty percent (50%) of (i) the
voting rights entitling the holders thereof to elect a majority of the Board of
Directors, manager, or trustees thereof, or (ii) the interest in the capital or
profits of such Person, which at the time is owned or controlled, directly or
indirectly, by the Borrowers or one or more other Affiliates.
"TANGIBLE NET WORTH" means the total assets of MarineMax on a consolidated basis
less the sum of MarineMax's (i) total liabilities excluding Subordinated Debt
plus (ii) the aggregate amount of all intangible assets, and Accounts due from
any Affiliate, shareholder or employee of MarineMax, excluding, however,
Accounts due from Brunswick Corporation or its subsidiaries.
"TERMINATION DATE" means July 12, 2002, or such earlier date on which the
commitment of the Bank to make Advances pursuant to Section 2(a) hereof shall
have been terminated pursuant to Section 9 of this Agreement.
"VESSEL DEPOSITS" means deposits made by Motor Yachts to Hatteras or any other
manufacturer approved by Bank for new vessels constructed by Hatteras or such
manufacturers for delivery to either (i) a Motor Yachts customer who has
contracted with Motor Yachts to have such vessel constructed or (ii) Motor
Yachts as stock for inventory, which stock Bank has approved in writing on at
least a semi-annual basis.
The foregoing definitions shall be applicable to the singulars and plurals of
the foregoing defined terms.
2. STATEMENT OF TERMS
(a) (i) Revolving Credit. Bank will, subject to the terms and conditions
of this Agreement, up to and including the Termination Date, make
Revolver Advances to or for the account of Borrowers up to but not
exceeding an aggregate unpaid principal amount outstanding at any one
time on Revolver Advances equal to the lesser of (a) the line of
credit approved for Borrowers, which is currently Thirty Million
Dollars ($30,000,000.00), or (b) the Borrowing Base. The Borrowers may
borrow, repay and reborrow such maximum amount of credit. The Bank
shall debit to the Loan Account the amount of each Revolver Advance
made under this Agreement and all interest, other compensation, or
other fees payable on all Revolver Advances and shall credit to the
Loan Account each payment of (a) principal and interest accrued on all
outstanding Revolver Advances and (b) other amounts payable under this
Agreement by the appropriate entries. Payments made on or before 2:00
p.m. (Cleveland time) shall be credited the same day as when made. The
Loan Account shall constitute prima facie evidence of all Revolver
Advances made by Bank pursuant to this Agreement. In the event of any
discrepancy between the records of Bank and Borrowers with regard to
the Loan Account, the records of Bank shall be presumed to be correct
unless the Borrowers
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notify Bank of an error within thirty (30) business days after having
discovered any such error or unless Borrowers and Bank mutually agree
with regard to an appropriate change in such records. Borrowers shall
execute and deliver to Bank a master promissory note, substantially in
the form of attached Exhibit B, to evidence all Revolver Advances
under this Agreement.
(ii) Interest Rates and Payment of Interest. As compensation for the
Revolver Advances made by Bank, Borrowers undertake and agree to pay
to Bank on the fifteenth day of each calendar month interest upon the
actual daily balance in Borrowers' Loan Account during the preceding
month at an annual rate equal to a rate per annum of the Libor Rate
plus one hundred sixty (160) basis points.
(iii) Borrowers shall repay to the Bank on the Termination Date the
net balance in the Borrowers' Loan Account.
(b)(i) Advances. Advances shall be made pursuant to Borrowers' telephonic
request therefor (a "Request for a Advance"), given by Borrowers to
Bank stating the date of the proposed borrowing, the amount of Bank's
Advance, and the total amount to be borrowed. Bank shall promptly
thereafter confirm each request for an Advance in writing delivered
pursuant to Section 12(c) hereof but without the required copy
(provided that failure to confirm the same shall not in any manner
affect Borrowers' liability therefor). Each Advance shall not be in an
amount less than Five Hundred Thousand Dollars ($500,000). Lender may
condition any Advance upon Lender's receipt, in form and substance
acceptable to it, of such other information as it may deem necessary
or appropriate.
(ii) Computation of Interest. Interest under this Agreement shall be
calculated on the basis of a year of 360 days, for the actual number
of days (including the first day but excluding the last day) elapsed.
(iii) Default Interest Rate. After maturity (whether by acceleration
or otherwise), the unpaid principal and accrued interest on any
Advance shall bear interest at a rate per annum equal to three percent
(3%) in excess of the interest rate prior to default. Notwithstanding
the Bank's remedies as set forth in Section 10 hereof, prior to
maturity hereof, upon the occurrence of any Event of Default under
this Agreement and until such Event of Default is cured by Borrowers,
at Bank's option and upon written notice to Borrowers, the unpaid
principal and accrued interest on any Advance shall bear interest at a
rate per annum equal to three percent (3%) in excess of the interest
rate prior to default.
(c) Borrowers agree that, upon notice from Bank after the occurrence of an
Event of Default, Borrowers shall pay Bank a collateral monitoring fee
of $1,000 per
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month, payable on each interest payment date determined in accordance
with Section 2(a) hereof.
3. SECURITY INTEREST IN COLLATERAL
In consideration of and as security for the full and complete payment,
performance, and observance of all Obligations, Motor Yachts does hereby (a)
grant to Bank a security interest in the Collateral, whether now owned or
hereafter acquired or received by Motor Yachts, and (b) assign to Bank all of
its right, title, and interest (including, without limitation, all rights to
payment) arising under or with respect to all of Motor Yachts' Accounts and
Contract Rights, whether now owned or hereafter acquired or received by Motor
Yachts, but not including any duty, obligation, or liability of Motor Yachts
with respect thereto.
4. WARRANTIES
Borrowers represent and warrant to Bank (which representations and warranties
shall survive the execution of this Agreement and all Advances) that:
(a) MarineMax and Motor Yachts are duly organized and existing
corporations under the laws of the state of their incorporation
and are duly qualified and in good standing in every state in
which they are doing business where failure to so qualify would
have a material adverse effect on Borrowers;
(b) The execution, delivery, and performance hereof are within
MarineMax's corporate powers, have been duly authorized, and are
not in contravention of law or the terms of MarineMax's charter,
by-laws, or regulations, as the case may be, or of any indenture,
agreement, or undertaking to which MarineMax is a party or by
which it is bound, a violation of which could have a material
adverse effect on MarineMax or the enforceability of Bank's
rights hereunder;
(c) The execution, delivery, and performance hereof are within Motor
Yachts' corporate powers, have been duly authorized, and are not
in contravention of law or the terms of Motor Yachts' charter,
by-laws, or regulations, as the case may be, or of any indenture,
agreement, or undertaking to which Motor Yachts is a party or by
which it is bound;
(d) This Agreement and the other documents executed pursuant hereto
have been duly executed and are valid and binding obligations of
Borrowers, fully enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to the rights of
creditors generally and subject to the availability of equitable
remedies and the application of equitable principles;
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(e) Except for any security interest granted to or in favor of Bank,
Permitted Liens, and any potential claims of a customer who has
made a deposit for a particular vessel, Motor Yachts is, and as
to Collateral to be acquired after the date hereof will be, the
owner of the Collateral free from any claim, lien, encumbrance,
or security interest of any type, and Borrowers agree that they
will defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein;
(f) The offices where Motor Yachts keeps all of its records
pertaining to its Accounts and Contract Rights are located at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
(g) Subject to any limitation stated herein or in connection
herewith, all information furnished to Bank concerning Borrowers
or the Collateral is, or will be at the time such information is
furnished, accurate and correct in all material respects and
complete insofar as is necessary to give Bank true and accurate
knowledge of the subject matter;
(h) Motor Yachts is the lawful owner of and has full and unqualified
right to transfer a security interest in all of the Collateral to
Bank. Except as otherwise permitted in writing by the Bank, such
Collateral is not and will not, so long as Motor Yachts has any
Obligations to Bank or Bank has any obligation to lend money to
Borrowers under this Agreement, be subject to any adverse
financing statement, encumbrance, claim, lien, or security
interest of any type except any granted to or in favor of Bank,
Permitted Liens and any potential claims of a customer who has
made a deposit for a particular vessel;
(i) Each Qualified Account included with the aggregate amount of
Qualified Accounts set forth on each Borrowers' Certificate now
or hereafter furnished to Bank shall meet, as of the date stated
thereon, all eligibility requirements specified in the Section l
definition of Qualified Account;
(j) There is no pending or threatened action, suit or proceeding
affecting MarineMax or its Subsidiaries before any court or other
governmental authority or any arbitrator which if adversely
determined may materially adversely affect the condition or
operations, financial or otherwise, of MarineMax and its
Subsidiaries taken as a whole or the ability of Borrowers to
perform their respective obligations under this Agreement, except
as set forth in Schedule 4(j);
(k) MarineMax and its Subsidiaries are in material compliance with
all Environmental Laws and all applicable federal, state, and
local health and safety and other laws, regulations, ordinances
or rules, except to the extent that any non-compliance will not,
in the aggregate, have a materially adverse
14
effect on MarineMax and its Subsidiaries taken as a whole or the
ability of the Borrowers to fulfill their respective obligations
under this Agreement or any of the notes delivered pursuant
hereto;
(l) The consolidated financial statements of MarineMax dated
September 30, 1998 and quarterly financial statements dated
December 31, 1998, copies of which have been delivered to Bank,
fairly present the financial condition of such Persons as at the
respective dates thereof and their results of operations for the
fiscal periods ended on the respective dates thereof, all in
accordance with GAAP consistently applied, subject, in the case
of unaudited financial statements, to normal recurring year-end
adjustments, and since the respective dates of such financial
statements, there has been no material adverse change in
MarineMax's condition or operations;
(m) Borrowers have filed, or caused to be filed, all federal, state,
local and foreign tax returns required to be filed by them, and
have paid, or caused to be paid, all taxes as are shown on such
returns, or on any assessment received by them, to the extent
that such taxes have become due, except as otherwise contested in
good faith. Borrowers have set aside proper amounts on their
books, determined in accordance with GAAP, for the payment of all
taxes for the years that have not been audited by the respective
tax authorities and for taxes being contested by any of the
entities;
(n) Borrowers have received consideration which is the reasonable
equivalent value of the obligations and liabilities that the
Borrowers have incurred to Bank. The Borrowers are not insolvent
as defined in any applicable state or federal statute, nor will
the Borrowers be rendered insolvent by the execution and delivery
of this Agreement or the notes delivered to Bank pursuant hereto.
The Borrowers are not engaged or about to engage in any business
or transaction for which the assets retained by them shall be an
unreasonably small capital, taking into consideration the
obligations to Bank incurred hereunder. The Borrowers do not
intend to, nor do they believe that they will, incur debts beyond
their ability to pay them as they mature;
(o) Neither MarineMax nor any of its Subsidiaries is in material
default in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any
agreement or instrument to which they are a party, which default
materially adversely affects the business, properties, assets, or
financial condition of MarineMax and its Subsidiaries taken as a
whole;
(p) Motor Yachts is not in default in the performance, observance, or
fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party,
which default materially
15
adversely affects the business, properties, assets, or financial
condition of Motor Yachts;
(q) No Reportable Event or Prohibited Transaction has occurred and
is continuing with respect to any Plan, and the Borrowers have
incurred no "accumulated funding deficiency" (as that term is
defined by ERISA) since the effective date of ERISA;
(r) Motor Yachts has places of business or maintains its Inventory
at the locations set forth on Schedule 4(r);
(s) Each Borrower's Location is set forth on Schedule 4(s);
(t) Borrowers are not a party to any agreement or other instrument
or subject to any other restriction which materially and
adversely affects or could reasonably be expected to materially
and adversely affect their respective businesses, properties,
assets, operations or condition, financial or otherwise, and
MarineMax and its Subsidiaries, taken as a whole, are not in
default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any
agreement or instrument to which they are a party, which default
could adversely affect the respective businesses, properties,
assets or financial condition of MarineMax and its Subsidiaries
taken as a whole;
(u) Schedule 4(u) lists MarineMax's Subsidiaries as of the date of
this Agreement; and
(v) Borrowers have not operated under, or used or done business
under, any trade or fictitious name other than their respective
corporate names.
5. COVENANTS
Borrowers undertake, covenant, and agree that, until the full and complete
payment, performance, and observance of all Obligations:
(a) MarineMax shall deliver to Bank within twenty (20) days after
the close of each month, a statement of condition of MarineMax
on a consolidated basis for such period, certified as complete
and correct by a duly authorized officer of MarineMax, as well
as a certificate showing MarineMax's compliance with all
financial covenants herein;
(b) MarineMax shall deliver to Bank within forty-five (45) days
after the close of each calendar quarter, a statement of cash
flows of MarineMax on a
16
consolidated basis for such period, certified as complete and
correct by a duly authorized officer of MarineMax;
(c) MarineMax shall deliver to Bank, not later than one hundred
twenty (120) days after the end of each fiscal year of
MarineMax, consolidated financial statements of MarineMax
covering such fiscal year and containing an unqualified audit
opinion by a certified public accountant acceptable to Bank;
(d) MarineMax shall deliver to Bank within sixty (60) days prior
to the close of each fiscal year of MarineMax, an annual
projection of MarineMax's financial statements on a
consolidated basis for the next fiscal year;
(e) MarineMax shall deliver to Bank within forty-five (45) days
after each filing period, corporate 10-Q's of MarineMax,
certified by MarineMax's Chief Financial Officer;
(f) Borrowers shall provide Bank with at least forty-five (45)
days prior written notification of:
(1) any change in any location where Motor Yachts'
Inventory is maintained, and any new locations where
Motor Yachts' Inventory is to be maintained,
(2) any change in the location of the office where Motor
Yachts' records pertaining to its Accounts and
Contract Rights are kept,
(3) the location of any new places of business of Motor
Yachts and the changing or closing of any of Motor
Yachts' existing places of business,
(4) any change in Borrowers' names, and
(5) any change in Borrowers' Location;
(g) MarineMax shall promptly notify the Bank in writing of (a) any
future event which, if it had existed on the date of this
Agreement, would have required material qualification of the
representations and warranties set forth in Article 4 hereof
and (b) any material adverse change in the condition,
business, or prospects, financial or otherwise, of MarineMax
and its subsidiaries taken as a whole;
(h) Borrowers shall promptly and in any event within ten (10)
business days after the occurrence of a Reportable Event with
respect to a Plan, provide to Bank a copy of any materials
required to be filed with the PBGC with respect to such
Reportable Event or those that would have been required to be
filed if the thirty (30) day notice requirement to the PBGC
had not been waived;
17
(i) MarineMax shall promptly upon receipt, and in no event more
than ten (10) business days after receipt, of a notice by
MarineMax or any of its Subsidiaries, ERISA Affiliate, or any
administrator of any Plan or Multiemployer Plan that the PBGC
has instituted proceedings to terminate such Plan or to
appoint a trustee to administer such Plan, provide to Bank a
copy of such notice;
(j) Borrowers shall not permit its aggregate Obligations to Bank
pursuant to Paragraph 2(a) hereof at any time to exceed the
lesser of (1) the Borrowing Base or (2) Borrowers' currently
approved line of credit;
(k) Borrowers shall, if requested, deliver to Bank within twenty
(20) days after the close of each month, in form and substance
acceptable to Bank (1) aging reports for Accounts and payables
for Motor Yachts, each substantiated by detailed supporting
schedules, (2) a schedule of Motor Yachts' Inventory showing
the cost or market value thereof, whichever is lower, and (3)
such other reports as Bank may reasonably request;
(l) Borrowers shall, within twenty (20) days after the close of
each month, and at any other times reasonably required by
Bank, deliver to Bank a Borrowers' Certificate fully completed
as to all figures and information called for therein and
certified as materially complete and correct by duly
authorized officers of Borrowers;
(m) Borrowers shall promptly pay and discharge when due, all
taxes, assessments, and governmental charges of every kind and
nature that have been lawfully levied, assessed, or imposed
upon Borrowers or their respective properties, including the
use thereof, or any of the Obligations, which, if unpaid,
would become liens against their respective assets including,
without limitation, all sums due and owing to any taxing
authority for income and other taxes withheld from the wages
and salaries of its employees, except to the extent Borrowers
are reasonably contesting in good faith any such tax,
assessment, or charge with an adequate reserve provided
therefor;
(n) Borrowers shall at all reasonable times and upon at least two
(2) business days prior notice (which may be verbal notice)
allow Bank by or through any of its officers, agents,
employees, attorneys, or accountants to (1) examine, inspect,
and make extracts from Borrowers' books and other records,
including, without limitation, the tax returns of Borrowers
and any of Borrowers' Subsidiaries, (2) arrange for
verification of Motor Yachts' Accounts, under reasonable
procedures, including directly with Account Debtors after the
occurrence of an Event of Default or by other methods, and (3)
examine and inspect Borrowers' Inventory wherever located;
18
(o) Borrowers shall promptly furnish to Bank upon request (1)
additional statements and information with respect to the
Collateral, and all writings and information relating to or
evidencing any of Motor Yachts' Accounts (including, without
limitation, computer printouts or typewritten reports listing
the mailing addresses of all present Account Debtors), and (2)
any other writings and information as Bank may reasonably
request;
(p) Borrowers shall upon request of Bank promptly take such action
and promptly make, execute, and deliver all such additional
and further items, assurances, and instruments as Bank may
reasonably require, including, without limitation, financing
statements, so as to completely vest in and ensure to Bank its
rights hereunder and in or to the Collateral. If certificates
of title are issued or outstanding with respect to any of
Motor Yachts' Inventory, Borrowers will cause the interest of
Bank to be properly noted thereon at Borrowers' expense to the
extent required by applicable law to perfect a security
interest in such Inventory;
(q) Borrowers hereby authorize Bank or Bank's designated agent
(but without obligation by Bank to do so) to incur Related
Expenses, upon or during the continuance of any Event of
Default, and Borrowers shall promptly repay, reimburse, and
indemnify Bank for any and all Related Expenses. Bank may, at
its option, debit Related Expenses directly to the Loan
Account;
(r) Motor Yachts shall, if any of Motor Yachts' Accounts arise out
of contracts with or orders from the United States or any of
its departments, agencies, or instrumentalities, immediately
notify Bank in writing of same and shall execute any writing
or take any action required by Bank with reference to the
Federal Assignment of Claims Act;
(s) Motor Yachts shall not, without the prior written consent of
Bank (which consent shall not be unreasonably withheld),
borrow any money or, directly or indirectly, create, incur,
assume, guarantee, or otherwise become or remain liable with
respect to any indebtedness for borrowed money or advances
other than (1) Motor Yachts' Obligations, (2) any indebtedness
of Motor Yachts existing on the date hereof and not required
by Bank to be prepaid as a condition to execution of this
Agreement, (3) Subordinated Debt, and (4) any indebtedness of
Motor Yachts to MarineMax;
(t) Motor Yachts shall not, without the prior written consent of
Bank (which consent shall not be unreasonably withheld), loan
any money to or guarantee or assume any obligation of any
other Person, or purchase (1) any evidence of indebtedness or
securities (including stock) other than direct obligations of
the United States of America or any agency thereof,
19
banker's acceptances, and certificates of deposit issued by
any commercial bank in the United States of America, or (2)
the business or substantially all of the property of any other
Person other than Subsidiaries of MarineMax, or hereafter make
prepayments or advances to others, provided Motor Yachts may
endorse checks, drafts, and similar instruments for deposit or
collection in the ordinary course of business;
(u) MarineMax shall not, without the prior written consent of Bank
(which consent shall not be unreasonably withheld), purchase
or retire any of its stock or the stock of any Subsidiary or
pay or declare in any fiscal year dividends (other than stock
dividends) in excess of Ten Million Dollars ($10,000,000.00)
upon all of its stock;
(v) Borrowers shall not, without the prior written consent of Bank
(which consent shall not be unreasonably withheld), enter into
any sale and leaseback transaction or arrangement with any
other Person with respect to any of the assets of Borrowers
(however, this shall not limit performance under any lease
contract existing on the date hereof and disclosed in writing
by Borrowers to Bank);
(w) MarineMax shall not, without the prior written consent of Bank
(which consent shall not be unreasonably withheld), mortgage,
pledge, grant a security interest, or otherwise voluntarily
place or permit to be placed any lien upon any assets of
MarineMax;
(x) Motor Yachts shall not, without the prior written consent of
Bank (which consent shall not be unreasonably withheld),
mortgage, pledge, grant a security interest, or otherwise
voluntarily place or permit to be placed any lien upon any
assets of Motor Yachts except any security interest granted to
or in favor of Bank;
(y) Motor Yachts shall not, without the prior written consent of
Bank (which consent shall not be unreasonably withheld),
engage in any transaction with any Subsidiary of MarineMax,
unless:
(i) such transaction is at arms length and on terms that
are at least as favorable to Motor Yachts as those
prevailing at the time for comparable transactions
with nonaffiliated Persons, and
(ii) Motor Yachts will receive no less than fair market
value for any assets transferred;
(z) Motor Yachts shall not, without the prior written consent of
Bank (which consent shall not be unreasonably withheld), make
any change in any location where a material part of Motor
Yachts' Inventory is maintained or
20
any change in the location of the offices where Motor Yachts'
records pertaining to their respective Accounts and Contract
Rights are kept;
(aa) Motor Yachts shall not use any Collateral in material
violation of any applicable statute, ordinance, or regulation;
(bb) MarineMax shall not permit MarineMax's ratio of its current
assets to current liabilities, on a consolidated basis and
calculated on a monthly basis, to be at any time less than (i)
1.10 to 1.00 for the period of October 1 through June 30 of
each year, and (ii) 1.20 to 1.00 for the period of July 1
through September 30 of each year;
(cc) MarineMax shall not permit MarineMax's ratio of its total
liabilities less Subordinated Debt to the sum of its Tangible
Net Worth plus total Subordinated Debt, on a consolidated
basis and calculated on a monthly basis, to be at any time
more than (i) 5.50 to 1.00 at the end of each calendar month
for the period from January 1 through June 30 of each year,
and (ii) 2.75 to 1.00 at the end of each calendar month for
the period from July through December of each year;
(dd) MarineMax shall not permit MarineMax's ratio of its earnings
before interest, taxes, depreciation and amortization, divided
by interest expense, on a consolidated basis and calculated on
a trailing four quarters basis, to be at any time less than
1.75 to 1.00;
(ee) MarineMax shall not permit MarineMax's Tangible Net Worth to
be less than Thirty Million Dollars ($30,000,000.00),
calculated annually in accordance with MarineMax's current
methods of accounting (as of the date hereof), plus fifty
percent (50%) of retained earnings for each year commencing
with earnings from fiscal year ending September 30, 1999, it
being expressly agreed by Borrowers that MarineMax shall not
change its current method of accounting without the express
written consent of the Bank (which consent shall not be
unreasonably withheld);
(ff) Borrowers shall not make any payment upon their outstanding
Subordinated Debt, except in such manner and amounts as may be
expressly authorized in any subordination agreement presently
or hereafter held by the Bank;
(gg) all of Borrowers' computer hardware and software shall
materially provide the following functions:
(l) consistently handle date information before, during
and after January 1, 2000, including, but not limited
to, accepting date input,
21
providing date output and performing calculations on
dates or portions of dates;
(2) function accurately in accordance with the
specifications of such computer hardware or software
and without interruption before, during and after
January 1, 2000, without any change in operations
associated with the advent of the new century;
(3) respond to two-digit date input in a way that
resolves any ambiguity as to century in a disclosed,
defined and predetermined manner; and
(4) store and provide output of date information in ways
that are unambiguous as to century.
6. COLLECTIONS AND RECEIPT OF PROCEEDS BY BORROWERS
If an Event of Default shall occur and during the continuance thereof, both (1)
the lawful collection and enforcement of all of Motor Yachts' Accounts, and (2)
the lawful receipt and retention by Motor Yachts of all Proceeds of all of Motor
Yachts' Accounts, Contract Rights and Inventory shall be remitted daily by Motor
Yachts to Bank in the form in which they are received by Motor Yachts, either by
mailing or by delivering such collections and Proceeds to Bank, appropriately
endorsed for deposit in the Cash Collateral Account. Motor Yachts will not
commingle such collections or Proceeds with any of Motor Yachts' other funds or
property, but will hold such collections and Proceeds separate and apart
therefrom upon an express trust for Bank. Unless otherwise agreed to by Bank and
Borrower, Bank shall apply all of the account balance in the Cash Collateral
Account (allowing two (2) days for collection and clearance of remittances,
however, in the event Bank applies any proceeds from the Cash Collateral Account
as a credit to any obligations due Bank and such payment includes uncollected
funds, the Borrowers will incur a charge for those uncollected funds at the
floating rate payable on Advances) as a credit against the Loan Account,
including the outstanding principal or interest of any Advance and any other
costs and expenses agreed to be paid by Borrowers pursuant to and in connection
with this Agreement. If any remittance shall be dishonored, or if, upon final
payment, any claim with respect thereto shall be made against Bank on its
warranties of collection, Bank may charge the amount of such item against the
Cash Collateral Account or any other Deposit Account maintained by Motor Yachts
with Bank, and, in any event, retain same and Motor Yachts interest therein as
additional security for the Obligations. The Bank may, in its sole discretion,
at any time and from time to time, release funds from the Cash Collateral
Account to Motor Yachts for use in Motor Yachts' businesses. The balance in the
Cash Collateral Account may be withdrawn by Motor Yachts upon termination of
this Agreement in accordance with Subsection 12(e) of this Agreement. If an
Event of Default shall occur and during the continuance thereof, at Bank's
request, Motor Yachts will cause all remittances representing collections and
Proceeds of Collateral to be mailed to a lock box in Cleveland, Ohio, to which
Bank shall
22
have access for the processing of such items in accordance with the provisions,
terms, and conditions of Bank's customary lock box agreement.
7. COLLECTIONS AND RECEIPT OF PROCEEDS BY BANK
Motor Yachts hereby constitutes and appoints Bank, or Bank's designated agent,
effective upon the occurrence and during the continuance of an Event of Default,
as Motor Yachts' attorney-in-fact to exercise, at any time, all or any of the
following powers which, being coupled with an interest, shall be irrevocable
until the complete and full payment, performance, and observance of all
Obligations:
(a) to receive, retain, acquire, take, endorse, assign, deliver,
accept, and deposit, in the Bank's name or Motor Yachts' name,
any and all of Motor Yachts' cash, Instruments, Proceeds of
Motor Yachts' Accounts, Proceeds of Motor Yachts' Inventory,
collection of Motor Yachts' Accounts, and any other writings
relating to any of the Collateral;
(b) to transmit to Account Debtors, on any or all of Motor Yachts'
Accounts, notice of assignment to Bank thereof and Bank's
security interest therein and to request from such Persons at
any time, in the Bank's name or in the name of Motor Yachts ,
information concerning Motor Yachts' Accounts and the amounts
owing thereon;
(c) to transmit to purchasers of any or all of Motor Yachts'
Inventory, notice of Bank's security interest therein, and to
request from such Persons at any time, in Bank's name or in
Motor Yachts' name, information concerning Motor Yachts'
Inventory and the amounts owing thereon by such purchasers;
(d) to notify and require Account Debtors on Motor Yachts'
Accounts and purchasers of Motor Yachts' Inventory to make
payment of their indebtedness directly to Bank;
(e) to take or bring, in Bank's name or Motor Yachts' name, all
steps, actions, suits, or proceedings reasonably deemed by
Bank necessary or desirable to effect the receipt,
enforcement, and collection of the Collateral;
(f) to accept all collections in any form relating to the
Collateral, including remittances which may reflect
deductions, and to deposit the same, into Motor Yachts' Cash
Collateral Account or, at the option of Bank, to apply them as
a payment against the Loan Account.
23
8. INSURANCE AND USE OF INVENTORY
(a) Except upon the occurrence and during the continuance of any
Event of Default:
(1) Motor Yachts may retain possession of and use its
Inventory in any lawful manner not inconsistent with
this Agreement or with the terms, conditions, or
provisions of any policy of insurance thereon.
(2) Motor Yachts may sell or lease its Inventory in the
ordinary course of business; provided, however, that
a sale or lease in the ordinary course of business
does not include a transfer in partial or total
satisfaction of a debt, except for transfers in
satisfaction of partial or total purchase money
prepayments by a buyer in the ordinary course of
Motor Yachts' business. Except upon the occurrence
and during the continuance of any Event of Default,
Motor Yachts may also use and consume any raw
materials or supplies, the use and consumption of
which are necessary in order to carry on Motor
Yachts' business.
(b) Motor Yachts shall obtain, and at all times maintain,
insurance upon its Inventory in such form, written by such
companies, in such amounts, for such period, and against such
risks as may be reasonably acceptable to Bank, with provisions
satisfactory to Bank for payment of all losses thereunder to
Bank and Motor Yachts as their interests may appear (loss
payable endorsement in favor of Bank). Any such policies of
insurance shall provide for no less than ten (10) days prior
written cancellation notice to Bank. Any sums received by Bank
in payment of insurance losses under the policies may, at the
option of Bank, be applied upon the Loan Account, whether or
not the same is then due and payable, or may be delivered to
Motor Yachts for the purpose of replacing, repairing, or
restoring its Inventory. Bank or Bank's designated agent is
hereby constituted and appointed Motor Yachts'
attorney-in-fact effective upon the occurrence and during the
continuance of an Event of Default to (either in the name of
Motor Yachts or in the name of the Bank), make adjustments of
all insurance losses covering Collateral, sign all
applications, receipts, releases, and other papers necessary
for the collection of any such loss, execute proof of loss,
make settlements, and endorse and collect all Instruments
payable or issued to Motor Yachts in connection therewith.
Notwithstanding any action by Bank hereunder, any and all risk
of loss or damage to Motor Yachts' Inventory to the extent of
any and all deficiencies in the effective insurance coverage
thereof is hereby expressly assumed by Borrowers.
24
(c) Bank acknowledges that Motor Yachts may transfer Inventory to,
and accept Inventory from, Affiliates, provided that any such
transfer to an Affiliate will not cause the total amount of
Advances to exceed the Borrowing Base.
9. EVENTS OF DEFAULT
The occurrence of any one or more of the following shall constitute an Event of
Default under this Agreement:
(a) Failure of Borrowers to promptly pay any payment Obligation
within fifteen (15) days after written notice from Bank that
the same is due, or, perform, or observe any non-payment
Obligation within thirty (30) days after written notice from
Bank that the same has not been performed or observed, whether
upon demand, at maturity, by acceleration, or otherwise, but
(i) if the failure is subject to cure but (ii) the cure is not
able to be completed with such period, then so long as the
cure commenced within a reasonable time and the cure is being
diligently pursued by appropriate means at the end of such
thirty (30) days, the Borrowers shall have an additional
thirty (30) days to complete the cure;
(b) Failure of Borrowers to promptly pay, perform, or observe when
due, whether upon demand, at maturity, by acceleration, or
otherwise, or any event which results in the acceleration of
the maturity of, any or all of the indebtedness, obligations,
liabilities, contracts, indentures, and agreements (including,
without limitation, any and all warranties, covenants,
guaranties, provisions, terms, and conditions set forth or
contained therein) of whatever kind and however evidenced,
owed, incurred, or executed by Borrowers, to, in favor of, or
with any and all other Persons, and including any partial or
total extension, renewal, amendment, restatement, and
substitution thereof or therefor, which failure could have a
material impact on MarineMax and its Subsidiaries taken as a
whole;
(c) Any warranty, representation, or statement made or furnished
to Bank in connection with this Agreement or any other writing
evidencing or given as security for any of the Obligations by
or on behalf of the Borrowers proves to have been false in any
material respect when made, furnished, or at any time
thereafter;
(d) Bank shall reasonably deem itself insecure in good faith
believing that the prospect of payment, performance, or
observance of any of the Obligations herein secured is
materially impaired;
25
(e) Uninsured loss, damage, theft, destruction, levy, seizure, or
attachment to, of, or upon any material portion of the
Collateral, including any attempt to accomplish the foregoing;
(f) Sale, lease, transfer, assignment, encumbrance, or other
disposition of any of the Collateral (other than in the
ordinary course of business or as expressly permitted under
this Agreement), without Bank's prior written authorization
therefor (which authorization shall not be unreasonably
withheld), including any attempt to accomplish the foregoing;
(g) Any tax lien in excess of One Million Dollars ($1,000,000.00)
shall have been filed against Borrowers or any of their
property by any federal, state, or municipal authority;
(h) If any of the following events occur: (a) any Plan incurs any
"accumulated funding deficiency" (as such term is defined in
ERISA) whether waived or not, (b) the Borrowers or any
Affiliate engages in any Prohibited Transaction, (c) any Plan
is terminated (other than terminations permitted by ERISA),
(d) a trustee is appointed by an appropriate United States
district court to administer any Plan, or (e) the PBGC
institutes proceedings to terminate any Plan or to appoint a
trustee to administer any Plan;
(i) Financial Impairment of Borrowers or of any other Subsidiary
of MarineMax which, in the aggregate, have a materially
adverse effect on MarineMax and its Subsidiaries taken as a
whole.
If there shall occur any Event of Default set forth in (a) through (h) above,
Bank, by written notice to Borrowers, may (1) declare the unpaid principal of
and accrued interest on all Obligations to be immediately due and payable and
(2) immediately terminate Bank's commitment to make further Advances under this
Agreement, whereupon Obligations shall become and be forthwith due and payable,
and such commitment shall be terminated, without any further notice,
presentment, or demand of any kind, all of which are hereby expressly waived by
Borrowers. If there shall occur any Event of Default set forth in (i) above, all
Obligations shall automatically become and be immediately due and payable, and
Bank's commitment to make further Advances shall automatically be terminated,
without notice, presentment, or demand of any kind, all of which are hereby
expressly waived by Borrowers.
26
10. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT
Upon the occurrence of any such Event of Default and during the continuance of
such Event of Default, Bank shall have the rights and remedies of a secured
party under the Ohio Uniform Commercial Code in addition to the rights and
remedies of a secured party provided elsewhere within this Agreement or in any
other writing executed by Borrowers. Bank may require Borrowers to assemble the
Collateral and make it available to Bank at a reasonably convenient place to be
designated by Bank. Unless the Collateral is perishable, threatens to decline
speedily in value, or is of a type customarily sold on a recognized market, Bank
will give Borrowers reasonable notice of the time and place of any public sale
of the Collateral or of the time after which any private sale or other intended
disposition thereof is to be made. The requirement of reasonable notice shall be
met if such notice is mailed (deposited for delivery, postage prepaid, by U.S.
mail) to Borrowers' Location set forth in Subsection 12(c) of this Agreement (as
modified by any change therein which Borrowers have supplied in writing to
Bank), or at least ten (10) days before the time of the public sale or the time
after which any private sale or other intended disposition thereof is to be
made. At any such public or private sale, Bank may purchase the Collateral to
the extent permitted by law. After deduction for Bank's Related Expenses, the
residue of any such sale or other disposition shall be applied in satisfaction
of the Obligations in such order of preference as Bank may reasonably determine.
Any excess, to the extent permitted by law, shall be paid to Borrowers, and
Borrowers shall remain liable for any deficiency.
In addition, upon the occurrence of any such Event of Default and during the
continuance of such Event of Default, Bank shall have the right to obtain new
appraisals of the Collateral, the cost of which shall be paid by Borrowers.
11. CONDITIONS PRECEDENT TO FUTURE ADVANCES
The obligation of Bank to make any Advance to Borrowers after the date of this
Agreement shall be subject to the conditions precedent that on or before the
date of such Advance:
(a) The representations and warranties contained in Section 4 of
this Agreement and in each document, instrument, agreement,
and certificate delivered to Bank by Borrowers pursuant to
this Agreement shall be materially true and correct on and as
of such date as if made on and as of such date; no Event of
Default or event or condition that, with the serving of notice
or the lapse of time or both, would constitute an Event of
Default shall have occurred and be continuing or would result
from the making of such Advance; and Bank shall have received,
if requested by Bank, a certificate of the chief executive
officer or the chief financial officer of Borrowers, dated as
of the date of such Advance, to such effect (in the absence of
Bank's request for such a certificate, Borrowers' borrowing of
the Advance shall itself constitute a representation to Bank
to such effect);
27
(b) The making of such Advance shall not contravene any material
law, rule or regulation applicable to Bank;
(c) Not later than 2:00 p.m., Cleveland time, on such date, Bank
shall have received, by telephone to be promptly confirmed by
Bank in writing, a request by Borrowers to Bank for an Advance
in the requested amount;
(d) Prior to the first Advance Borrowers shall have delivered to
Bank an opinion of counsel substantially in the form attached
hereto as Exhibit C;
(e) Bank shall have received such other approvals, opinions,
appraisals, or documents as it may reasonably request.
12. GENERAL
(a) If any provision, term, or portion, of this Agreement,
(including, without limitation, (1) any indebtedness,
obligation, liability, contract, agreement, indenture,
warranty, covenant, guaranty, representation, or condition of
this Agreement made, assumed, or entered into, (2) any act of
action taken under this Agreement, or (3) any application of
this Agreement) is for any reason held to be illegal or
invalid, such illegality or invalidity shall not affect any
other such provision, term, or portion of this Agreement, each
of which shall be construed and enforced as if such illegal or
invalid provision, term, or portion were not contained in this
Agreement. Any illegality or invalidity of any application of
this Agreement shall not affect any legal and valid
application of this Agreement, and each provision, term, and
portion of this Agreement shall be deemed to be effective,
operative, made, entered into, or taken in the manner and to
the full extent permitted by law.
(b) Bank shall not be deemed to have waived any of Bank's rights
of this Agreement or under any other agreement, instrument, or
document executed by Borrowers, unless such waiver be in
writing and signed by Bank. No delay or omission on part of
Bank in exercising any right shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of any right or remedy
on any future occasion. All of Bank's rights and remedies,
whether evidenced by this Agreement or by any other agreement,
instrument, or document shall be cumulative and may be
exercised singularly or concurrently. Any written demands,
written requests, or written notices to Borrowers that Bank
may elect to give shall be effective (1) upon delivery when
sent by confirmed facsimile or (2) the next business day after
deposited with a recognized overnight courier for next day
delivery or (3) three (3) business days after deposited for
delivery, postage prepaid, by
28
U.S. mail, and addressed to Borrowers' Location set forth in
Subsection 12(c) of this Agreement (as modified by any change
therein which Borrowers have supplied in writing to Bank). If
at any time or times, by assignment or otherwise, Bank
transfers any of the Obligations or any part of the Collateral
to another Person, such transfer shall carry with it Bank's
powers and rights under this Agreement with respect to the
Obligation or Collateral so transferred and the transferee
shall have said powers and rights, whether or not they are
specifically referred to in the transfer. To the extent that
Bank retains any other of the Obligations or any part of the
Collateral, Bank will continue to have the rights and powers
with respect to the Obligations and the Collateral as set
forth in this Agreement.
(c) All written notices, requests, or other communications herein
provided for must be addressed:
to Borrowers as follows:
c/o MarineMax, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CFO
with a copy to:
▇'▇▇▇▇▇▇, Cavanagh, Anderson, ▇▇▇▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
to the Bank as follows:
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇, Senior Vice President
or at such other address as either party may designate to the other in writing.
Such communication will be effective as set forth in Section 12(b) above.
(d) The laws of the State of Ohio shall govern the construction of
this Agreement (including, without limitation, any terms not
specifically defined in this Agreement that may be so
specifically defined pursuant to Article 9 of the UCC as
adopted in Ohio, and including any amendments thereof or any
substitution therefor) and the rights and duties of Borrowers
and Bank. This Agreement shall be binding upon and inure to
the benefit
29
of Borrowers and Bank and their respective successors and
assigns. The rights and powers given in this Agreement to the
Bank are in addition to those otherwise created or existing in
the same Collateral by virtue of other agreements or writings.
(e) Borrowers may terminate this Agreement by giving Bank not less
than ten (10) days prior written notice of termination and by
paying, performing, and observing in full all Obligations.
Notwithstanding the termination of the line of credit
hereunder, this Agreement and the security interest in the
Collateral shall continue in full force and effect after such
termination until all Obligations of Borrowers to Bank have
been paid, performed, and observed in full.
(f) In this Agreement unless the context otherwise requires, words
in the singular number include the plural, and in the plural
number include the singular.
(g) Borrowers hereby release Bank from and agrees to indemnify and
hold harmless Bank, and its officers, agents, and employees
for any and all claims of Borrowers or any other Person for
damage or loss caused by any act or acts under this Agreement
or in furtherance of this Agreement whether by omission or
commission, and whether based upon any error of judgment or
mistake of law or fact (except gross negligence, willful
misconduct or other negligence) on the part of Bank, or its
officers, agents, and employees.
(h) Bank is hereby authorized to fill in all blank spaces in this
Agreement, to correct patent errors in this Agreement, to
complete or correct the description of the Collateral, and to
date this Agreement.
(i) This Agreement is assignable by Bank upon notice to Borrowers
and shall be binding on Bank's respective successors, assigns,
and nominees.
(j) This Agreement and any promissory notes or other writing
executed and delivered by Borrowers to Bank in connection
herewith integrate all the terms and conditions mentioned
herein or incidental hereto and supersede all oral
representations and negotiations and prior writings with
respect to the subject matter hereof.
(k) Wherever this Agreement provides that an action may be taken
only with the consent or approval of Bank, such consent or
approval shall not be unreasonably withheld.
13. JURY TRIAL WAIVER
30
BORROWERS AND BANK EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN BANK AND
BORROWERS ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO ANY
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
[THE BALANCE OF THIS PAGE LEFT INTENTIONALLY BLANK.]
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
Witnessed by: BORROWERS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ MARINEMAX, INC.
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇. Vice President /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name/Title-------------------- By: -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President &
Chief Financial Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Natn'l Mfg. Mgr.
Print Name/Title--------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ MARINEMAX MOTOR YACHTS, INC.
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇. Vice President /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name/Title-------------------- By: -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President & Secretary
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Natn'l Mfg. Mgr.
Print Name/Title--------------------
BANK:
KEYBANK NATIONAL ASSOCIATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇. Vice President /s/ ▇▇▇ ▇▇▇▇▇▇
Print Name/Title-------------------- By: -------------------------------
▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Natn'l Mfg. Mgr.
Print Name/Title--------------------
32
EXHIBIT B
MASTER PROMISSORY NOTE
$30,000,000.00 Executed ____________
July 12, 1999
As of July 12, 1999, the undersigned (herein called "Borrowers") promise to pay
to the order of KEYBANK NATIONAL ASSOCIATION, Cleveland, Ohio (herein called
"Bank"), the sum of Thirty Million Dollars ($30,000,000.00) or such lesser
amount of Advances as shall have actually been borrowed by Borrowers from Bank
and not previously repaid, pursuant to the terms of a certain "Credit Facility
and Security Agreement (Accounts and Inventory)" by and among Borrowers and Bank
dated July 12, 1999, including any partial or total extension, restatement,
renewal, amendment, and substitution thereof or therefor (herein called
"Agreement") with interest payable monthly on the fifteenth day of each month,
starting on the fifteenth day of the month following the month in which this
Note is signed, according to the provisions set forth in Section 2(a) of the
Agreement.
Borrowers have assigned to Bank all of MARINEMAX MOTOR YACHTS, INC. (also
referred to as "Motor Yachts") "Accounts" and has granted to Bank a security
interest in all of Motor Yachts' "Accounts", "Inventory", "Cash Security",
"Contract Rights", funds on deposit in the "Cash Collateral Account", certain
other assets, and all "Proceeds" thereof, as security for the payment of this
Note and all other "Obligations", as those terms are defined in Section 1 of the
Agreement (all herein called "Obligations").
Upon the occurrence of any one or more "Events of Default", any and all
Obligations shall, at the option of Bank, immediately become due and payable
without demand, presentment, protest, or notice of any kind, all as provided in
the Agreement.
Borrowers expressly waive presentment, demand, notice, protest, and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note (except for notices expressly provided for
in the Agreement), assent to any extension or postponement of the time of
payment or any other indulgence, to any substitution, exchange or release of
collateral, and to the addition or release of any other person primarily or
secondarily liable. Borrowers understand and agrees that this Note is subject to
and shall be construed according to the laws of the State of Ohio.
33
Reference is made to the Agreement for certain provisions concerning prepayment
of this Note, rights of Bank and its successors and assigns with respect to this
Note, and related matters. This Note is the "Master Promissory Note" referred to
in the Agreement.
Witnessed by:
MARINEMAX, INC.
____________________________________
Print Name/Title____________________ By: _______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President & Chief
Financial Officer
____________________________________
Print Name/Title____________________
MARINEMAX MOTOR YACHTS, INC.
____________________________________
Print Name/Title____________________ By: _______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President & Secretary
____________________________________
Print Name/Title____________________
34
STATE OF _________________ )
)SS
COUNTY OF________________ )
Before me, a Notary Public in and for said County and State, personally appeared
the above-named ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Vice President & Secretary of MARINEMAX
MOTOR YACHTS, INC., who acknowledged that he did sign the foregoing instrument
as an Officer of MARINEMAX MOTOR YACHTS, INC., and that the same is free act and
deed and the free act and deed of such corporation.
In Testimony Whereof, I have hereunto set my hand and official seal, at
_____________, this ______ day of July, 1999.
____________________________________
NOTARY PUBLIC
STATE OF _________________ )
)SS
COUNTY OF________________ )
Before me, a Notary Public in and for said County and State, personally appeared
the above-named ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Vice President & Chief Financial Officer
of MARINEMAX, INC., who acknowledged that he did sign the foregoing instrument
as an Officer of MARINEMAX, INC., and that the same is free act and deed and the
free act and deed of such corporation.
In Testimony Whereof, I have hereunto set my hand and official seal, at
_____________, this ______ day of July, 1999.
____________________________________
NOTARY PUBLIC
35
EXHIBIT C
DRAFT LEGAL OPINION
July 12, 1999
KeyBank National Association
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Credit Facility to MarineMax, Inc. and MarineMax Motor Yachts, Inc.
Ladies and Gentlemen:
This firm has acted as legal counsel to MarineMax, Inc., a Delaware
corporation ("MarineMax") and MarineMax Motor Yachts, Inc., a Delaware
corporation (the "Dealer" and MarineMax and Dealer, collectively, the
"Borrowers"), in connection with the Credit Facility in the maximum principal
amount of $30,000,000 (the "Facility") from KeyBank National Association, a
national banking association corporation ("Lender") pursuant to that Credit
Facility and Security Agreement dated as of July 12, 1999, between Borrowers and
Lender (the "Credit Agreement"). Capitalized terms used and not otherwise
defined in this Opinion shall have the meanings ascribed to them in the Credit
Agreement.
In our capacity as such counsel and for purposes of this Opinion, we
have examined such questions of law and fact as we have deemed necessary or
appropriate and have examined, and relied as to matters of fact upon, originals,
certified copies or copies otherwise identified as being true copies of the
following documents:
1. The Credit Agreement.
2. Financing Statement on Form UCC-1, executed by Dealer, as debtor, in
favor of Lender, as secured party, to be filed in the Office of the Secretary of
State of the State of Florida (the "Financing Statement").
3. Certificates of officers of MarineMax and Dealer, dated as of the
date hereof (collectively, the "Certificates").
4. The respective Certificate of Incorporation and the Bylaws of
Borrowers.
5. Resolutions of the respective Board of Directors of Borrowers
authorizing the transactions contemplated by the Credit Agreement, each
certified as true and correct as of the date hereof by the applicable corporate
secretary or assistant secretary.
6. Each of the Certificates of Good Standing set forth on Schedule A
(collectively, the "Official Certificates").
The documents described in items 1 and 2 above are collectively
referred to as the "Loan Documents". In addition, we have examined such
certificates of public officials, corporate documents and records and other
certificates, documents and instruments and have made such other inquiries as we
have deemed appropriate in connection with the opinions set forth herein. As to
various questions material to our opinions, we have relied upon, and assumed the
truth and accuracy of, the representations and warranties of Borrowers contained
in the Credit Agreement and in the Certificates.
36
In reaching the opinions set forth below, with your permission, we have
made the following assumptions without investigation. However, we have no
knowledge of any facts inconsistent with the following assumptions.
A. The genuineness of the signatures not witnessed, the authenticity of
documents submitted as originals, and the conformity to originals of documents
submitted as copies.
B. The legal capacity of all natural persons executing the Loan Documents and
the Certificates.
C. The Loan Documents accurately describes and contains the mutual understanding
of the parties, and there are no oral or written statements or agreements that
modify, amend, or vary, or purport to modify, amend, or vary, any of the terms
of the Loan Documents.
D. Borrowers own all of the property, assets, and rights purported to be owned
by each of them.
E. Lender will receive no interest, charges, fees or other benefits or
compensation in the nature of interest in connection with the Facility other
than those that Borrowers have agreed in writing in the Credit Agreement to pay.
F. Lender is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has the requisite power and
authority to enter into and consummate the Facility. The execution, delivery
and/or acceptance of the Credit Agreement has been duly authorized by all
action, corporate or otherwise, by Lender. The Facility does not violate any
laws or regulations governing the activities of Lender. Lender has obtained all
necessary consents, authorizations, approvals, permits or certificates
(governmental and otherwise) that are required as a condition to the execution
and delivery of the Credit Agreement by it and to the consummation by Lender of
the transactions contemplated by the Credit Agreement. The Credit Agreement,
when executed and delivered by Lender, shall constitute the legal, valid and
binding obligations of Lender and shall be enforceable against Lender in
accordance with its terms.
G. Lender will act in a commercially reasonable manner in enforcing its rights
under the Credit Agreement.
Based upon the foregoing assumptions, and subject to the further limitations and
qualifications set forth below, we are of the opinion that:
(i) MarineMax and Dealer are each duly organized, validly existing and in good
standing under the laws of the State of Delaware and are qualified to do
business as a foreign corporation and in good standing under the laws of each
other jurisdiction in which the conduct of its affairs or the ownership of its
assets requires such qualification, unless the failure to so qualify in such
jurisdiction would have no material and adverse effect on the business or
financial condition of Borrowers taken as a whole.
(ii) The execution, delivery, and performance of the Loan Documents by Borrowers
have been duly authorized by all requisite action on the part of Borrowers and
the Loan Documents have been duly executed and delivered by Borrowers.
(iii) Each of the Borrowers has the requisite corporate power and authority (a)
to own and operate its properties and assets, (b) to carry out its business as
currently being conducted, and (c) to carry out the terms and conditions
applicable to it under the Credit Agreement.
(iv) The execution and delivery of the Credit Agreement and consummation of the
Facility by Borrowers will not conflict with or result in a violation of any of
Borrowers respective Certificates of Incorporation or Bylaws.
37
(v) Based solely upon our knowledge and the Certificates, except as disclosed on
Schedule 4(j) to the Credit Agreement, there are no pending litigation or other
legal proceedings against Borrowers that if adversely determined, would have a
material adverse effect on the business or financial condition of Borrowers
taken as a whole, or would have a material adverse effect on the ability of
Borrowers to perform their obligations under the Credit Agreement.
(vi) The execution and delivery of the Loan Documents and consummation of the
Facility by the Borrowers will not materially conflict with or result in a
material violation of any applicable law or rule affecting either of the
Borrowers.
(vii) Based solely upon our knowledge and the Certificates, the execution and
delivery of the Loan Documents and consummation of the Facility by Borrowers
will not materially conflict with or result in a material violation of any
judgment, order, or decree of any court or governmental agency to which either
of the Borrowers is a party.
(viii) Based solely upon our knowledge and the Certificates, the execution and
delivery of the Loan Documents, and consummation of the Facility by Borrowers
(a) will not conflict with or result in a material violation of any contract,
indenture, instrument or other agreement to which MarineMax or Dealer is a party
or by which it is bound, and (b) will not result in or require the creation or
imposition of any material lien or security interest upon or with respect to any
of the properties or assets of MarineMax or Dealer (other than liens and
security interests created pursuant to the transactions contemplated by the
Credit Agreement).
(ix) No material consent, approval, authorization, or other action by, or filing
with, any federal, state, or local governmental authority is required in
connection with the execution and delivery by Borrowers of the Loan Documents
and the consummation of the Facility, or, if any of the foregoing is required,
it has been obtained.
(x) You have requested that we advise you whether an Arizona court would give
effect to the choice of law provisions in the Credit Agreement in favor of the
law of the State of Ohio. The Supreme Court of Arizona has consistently ruled
that where it is not bound by a previous decision or by legislative enactment,
it will follow the rules of the Restatement of the Law, including, without
limitation, the Restatements of Conflict of Laws. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 51 Ariz.
134, 75 P.2d 38 (1938); Western Coal & Min. Co. ▇. ▇▇▇▇▇▇▇, 63 Ariz. 171, 160
P.2d 331 (1945); ▇▇▇▇ v. Renewal Guaranty Corp., 105 Ariz. 549, 468 P.2d 576
(1970); ▇▇▇▇▇▇ v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 841 P.2d 198
(1992); ▇▇▇▇▇▇ v. Security National Bank, 20 Ariz. App. 504, 514 P.2d 257
(1973); and In re ▇▇▇▇▇▇, 145 ▇▇▇▇. ▇▇▇, ▇▇▇ ▇.▇▇ ▇▇▇ (▇▇▇▇. App. 1985). Section
187 of the Restatement (Second) Conflict of Laws provides that the parties to a
contract may stipulate their choice of law to govern a contract and that the
laws of the state chosen will be applied unless (a) the particular issue is one
that the parties could not have resolved by an explicit provision in their
agreement directed to that issue and (b) either:
(a) The chosen state has no substantial relationship to the parties or
the transaction and there is no other reasonable basis for the parties' choice;
or
(b) Application of the law of the chosen state would be contrary to a
fundamental policy of a state that has a materially greater interest than the
chosen state in the determination of the particular issue and that, under the
rule of Section 188 of the Restatement (Second) Conflict of Laws, would be a
state of applicable law in the absence of an effective choice of law by the
parties.
Based on the facts concerning the negotiation of the Credit Agreement
and the terms thereof and considering such other matters as we have deemed
relevant, we believe that an Arizona court would give effect to the choice of
law provisions in the Credit Agreement in favor of the law of the State of Ohio.
(xi) The Credit Agreement constitutes the legal, valid, and binding obligations
of Borrowers enforceable against each of them in accordance with their
respective terms.
38
The opinions set forth above are subject to the following qualifications and
limitations:
a. The enforceability of the Credit Agreement may be subject to or limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium, or other similar laws relating to or affecting the rights of
creditors generally.
b. The enforceability of the Credit Agreement is subject to general principles
of equity and unconscionability.
c. The enforceability of the Credit Agreement is further subject to the
qualification that certain waivers, procedures, remedies, and other provisions
of the Credit Agreement may be unenforceable under, or limited by the law of,
the State of Arizona; however, such law does not, in our opinion, substantially
prevent the practical realization of the benefits intended by the Credit
Agreement, except that the application of principles of guaranty and suretyship
may prevent the practical realization of the benefits intended by the Credit
Agreement.
d. We express no opinion as to the title to any property described in, or the
priority of any lien or security interest created by, the Loan Documents.
e. The Credit Agreement states it is to be governed by the laws of the State of
Ohio. We are not familiar with those laws and render no opinion about them. For
purposes of our opinion, we have assumed, with your permission, that the Credit
Agreement will be governed by the laws of the State of Arizona, notwithstanding
its express terms.
f. The opinions expressed in paragraph (i) above are based solely on our review
of the Official Certificates.
g. We assume that the Financing Statement will be properly filed or recorded in
the appropriate governmental offices.
For purposes of this Opinion, the phrase "knowledge" shall mean the conscious
awareness of information by any Primary Lawyer (as defined below), without
undertaking any other investigation within this Firm. The term "Primary Lawyer"
means each lawyer in this Firm who has given substantive legal attention to
representation of Borrowers.
We are qualified to practice law in the State of Arizona, and we do not express
any opinion as to any law other than the law of the State of Arizona, the
Delaware General Corporation Law, and applicable federal law.
The opinions expressed in this letter are based upon the law in effect on the
date hereof, and we assume no obligation to revise or supplement this opinion
should such law be changed by legislative action, judicial decision, or
otherwise. Except as expressly stated in this opinion, no opinions are offered
or implied as to any matter, and no inference may be drawn beyond the strict
scope of this opinion.
This opinion is being furnished to you solely for your benefit and only with
respect to the transactions contemplated by the Credit Agreement. Accordingly,
it may not be relied upon by, or quoted, to any person or entity, other than
you, without, in each instance, our prior written consent; provided, however,
that you are permitted to provide copies of this opinion to any regulatory
authority holding jurisdiction over you.
Very truly yours,
39
SCHEDULE A
Official Certificates
Certificate of Good Standing for MarineMax, Inc., issued January 29, 1999, by
the Secretary of State of the State of Delaware.
Certificate of Good Standing of MarineMax, Inc., issued February 4, 1999, by the
Secretary of State of the State of Florida.
Certificate of Good Standing for MarineMax Motor Yachts, Inc., issued February
17, 1999, by the Secretary of State of the State of Delaware.
Certificate of Good Standing for MarineMax Motor Yachts, Inc., issued February
17, 1999, by the Secretary of State of the State of Florida.
40
SCHEDULE 4(e)
PERMITTED LIENS
(i) Liens to secure payment of taxes which are not yet due and
payable or which are being contested in good faith.
(ii) Deposits under workmen's compensation, unemployment insurance,
social security and other similar laws, or to secure statutory
or performance bonds in the ordinary course of business.
41
SCHEDULE 4(j)
PENDING OR THREATENED ACTIONS, SUITS OR PROCEEDINGS
None.
42
SCHEDULE 4(r)
PLACES OF BUSINESS AND MAINTENANCE OF INVENTORY
Address City State Zip Code
------- ---- ----- --------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
43
SCHEDULE 4(s)
LOCATION
MarineMax, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
MarineMax Motor Yachts, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
44
SCHEDULE 4(u)
MARINEMAX SUBSIDIARIES
LOCATION OF TYPE & PERCENTAGE
NAME & ADDRESS TYPE OF ORGANIZATION ACTIVITIES OF OWNERSHIP
-------------- -------------------- ---------- ------------------
▇▇▇▇▇▇▇ Boat Company of Florida, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Florida corporation Florida 100% of the capital stock
owned by Company
Gulfwind South, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Florida corporation Florida 100% of the capital stock
owned by Company
Gulfwind USA, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Florida corporation Florida 100% of the capital stock
owned by Company
MarineMax of Brevard County, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation Florida 100% of the capital stock
owned by Company
Cochrans Marine, Inc.
▇. ▇▇▇. ▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Minnesota corporation Minnesota 100% of the capital stock
owned by Company
C&N Marine Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Minnesota corporation Minnesota 100% of the capital stock
owned by Company
▇▇▇▇▇▇▇ Marine, Inc.
▇▇▇▇ ▇-▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Georgia corporation Georgia 100% of the capital stock
owned by Company
45
LOCATION OF TYPE & PERCENTAGE
NAME & ADDRESS TYPE OF ORGANIZATION ACTIVITIES OF OWNERSHIP
-------------- -------------------- ---------- ------------------
MarineMax of Treasure Cove, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation Ohio 100% of the capital stock
owned by Company
MarineMax of North Carolina, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ North Carolina corporation North Carolina 100% of the capital stock
owned by Company
MarineMax Motor Yachts, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation Florida 100% of the capital stock
owned by Company
MarineMax of New Jersey, Inc.
▇▇▇▇▇ ▇.▇. ▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation New Jersey 100% of the capital stock
owned by Company
MarineMax of New Jersey II, Inc.
▇▇▇▇▇ ▇.▇. ▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation New Jersey & 100% of the capital stock
Pennsylvania owned by Company
▇▇▇▇▇▇▇▇'▇ Boat Center, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ California corporation California 100% of the capital stock
owned by Company
▇▇▇▇▇▇▇▇'▇ Marine Centers of Arizona, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Arizona corporation Arizona 100% of the capital stock
owned by Company
MarineMax of Las Vegas, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation Nevada 100% of the capital stock
owned by Company
46
LOCATION OF TYPE & PERCENTAGE
NAME & ADDRESS TYPE OF ORGANIZATION ACTIVITIES OF OWNERSHIP
-------------- -------------------- ---------- ------------------
11502 ▇▇▇▇▇, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Nevada corporation Texas 100% of the capital stock
owned by Company
▇▇▇▇▇ ▇▇, L.L.C.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Texas 100% of the membership
interests owned by
11502 ▇▇▇▇▇, Inc.
MarineMax TX, L.P.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Texas limited partnership Texas 99% of the partnership
units owned by 11502
▇▇▇▇▇, Inc. and 1% of the
partnership units owned
by ▇▇▇▇▇ ▇▇, L.L.C.
▇▇▇▇▇▇▇ Boat Company
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Florida corporation Florida 100% of the capital stock
owned by Company
▇▇▇▇▇ ▇▇, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Nevada corporation 100% of the capital stock
owned by Company
MarineMax of Jacksonville, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware corporation 100% of the capital stock
owned by Company
MarineMax USA, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Nevada corporation 100% of the capital stock
owned by Company
▇▇▇▇▇▇▇ Realty, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Florida 100% of the membership
interests owned by Company
47
LOCATION OF TYPE & PERCENTAGE
NAME & ADDRESS TYPE OF ORGANIZATION ACTIVITIES OF OWNERSHIP
-------------- -------------------- ---------- ------------------
C & N Marine Realty, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Minnesota 100% of the membership
interests owned by
Company
Gulfwind South Realty, L.L.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Florida 100% of the membership
interests owned by
Company
▇▇▇▇▇▇▇▇'▇ Realty California, L.L.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company California 100% of the membership
interests owned by
Company
▇▇▇▇▇▇▇▇'▇ Realty, L.L.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Arizona 100% of the membership
interests owned by
Company
Marina Drive Realty I, L.L.C.
▇. ▇▇▇. ▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Minnesota 100% of the membership
interests owned by
Company
Marina Drive Realty II, L.L.C.
▇. ▇▇▇. ▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Minnesota 100% of the membership
interests owned by
Company
▇▇▇▇▇▇ ▇▇▇▇▇▇ Realty, L.L.C.
#▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware limited liability company Minnesota 100% of the membership
interests owned by
Company
