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EXHIBIT 2.3
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ACQUISITION AGREEMENT
dated as of the 12th day of January, 1999
by and among
RV CENTERS, INC.
AMERICAN RV CENTERS, INC.
and all of
the STOCKHOLDERS of AMERICAN RV CENTERS, INC.
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TABLE OF CONTENTS
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RECITALS ...............................................................................................1
1. ACQUISITION OF STOCK...........................................................................5
1.1 Acquisition...........................................................................5
1.2 Consideration.........................................................................5
1.3 Certain Information With Respect to the Capital Stock
of the Company and RV Centers.........................................................5
2. DELIVERY OF CONSIDERATION......................................................................6
2.1 Stockholders' Consideration...........................................................6
2.2 Stockholders' Deliveries..............................................................6
3. CLOSING........................................................................................6
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.............................................7
4.1 Due Organization......................................................................7
4.2 Authorization.........................................................................7
4.3 Capital Stock of the Company..........................................................8
4.4 Transactions in Capital Stock; Organization Accounting................................8
4.5 No Bonus Shares.......................................................................8
4.6 Subsidiaries; Ownership in Other Entities.............................................8
4.7 Predecessor Status; etc...............................................................9
4.8 Spin-off by the Company...............................................................9
4.9 Financial Statements..................................................................9
4.10 Liabilities and Obligations..........................................................10
4.11 Accounts and Notes Receivable........................................................10
4.12 Permits and Intangibles..............................................................11
4.13 Environmental Matters................................................................11
4.14 Personal Property....................................................................13
4.15 Significant Customers and Suppliers;
Material Contracts and Commitments...................................................13
4.16 Real Property........................................................................14
4.17 Insurance............................................................................15
4.18 Compensation; Employment Agreements; Labor Matters...................................15
4.19 Employee Plans.......................................................................16
4.20 Compliance with ERISA................................................................16
4.21 Conformity with Law; Litigation......................................................18
4.22 Taxes................................................................................18
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4.23 No Violations; No Consent Required, Etc..............................................19
4.24 Government Contracts.................................................................20
4.25 Absence of Changes...................................................................20
4.26 Deposit Accounts; Powers of Attorney.................................................22
4.27 Validity of Obligations..............................................................22
4.28 Relations with Governments...........................................................22
4.29 Disclosure...........................................................................23
4.30 Prohibited Activities................................................................23
4.31 No Warranties or Insurance...........................................................23
4.32 Interest in Customers and Suppliers and Related Party Transactions...................24
4.33 Registration Statement...............................................................24
4.34 Inventory............................................................................24
4.35 Year 2000............................................................................24
4.36 Authority; Ownership.................................................................25
4.37 Preemptive Rights....................................................................25
5. REPRESENTATIONS OF RV CENTERS.................................................................25
5.1 Due Organization.....................................................................25
5.2 Authorization........................................................................25
5.3 Capital Stock of RV Centers..........................................................26
5.4 Transactions in Capital Stock; Organization Accounting...............................26
5.5 Subsidiaries.........................................................................26
5.6 No Violations........................................................................26
5.7 Validity of Obligations..............................................................27
5.8 RV Centers Stock.....................................................................27
5.9 Business; Real Property; Material Agreements.........................................28
5.10 Investment Representations...........................................................28
5.11 Authorization of Other Agreements....................................................28
5.12 Financial Statements.................................................................28
5.13 Liabilities and Obligations..........................................................29
5.14 Conformity with Law; Litigation......................................................29
5.15 No Side Agreements...................................................................29
5.16 Relations with Governments...........................................................29
5.17 Other Agreements.....................................................................29
5.18 Registration Statement...............................................................30
5.19 Disclosure...........................................................................30
6. COVENANTS PRIOR TO CLOSING....................................................................30
6.1 Access and Cooperation; Due Diligence................................................30
6.2 Conduct of Business Pending Closing..................................................31
6.3 Prohibited Activities................................................................32
6.4 No Shop..............................................................................33
6.5 Agreements...........................................................................34
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6.6 Notification of Certain Matters......................................................34
6.7 Amendment of Schedules...............................................................34
6.8 Cooperation in Preparation of Registration Statement.................................35
6.9 Final Financial Statements...........................................................36
6.10 Further Assurances...................................................................36
6.11 Compliance with the ▇▇▇▇-▇▇▇▇▇ Act...................................................36
6.12 Transfers of Permits and Intangibles.................................................36
6.13 Dividends............................................................................36
6.14 Authorized Capital...................................................................36
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS AND
COMPANY.......................................................................................37
7.1 Representations and Warranties; Performance of Obligations...........................37
7.2 No Litigation........................................................................38
7.3 Opinions.............................................................................38
7.4 Registration Statement; Minimum Value................................................38
7.5 Consents and Approvals...............................................................38
7.6 Good Standing Certificates...........................................................38
7.7 No Material Adverse Change...........................................................38
7.8 Closing of IPO.......................................................................39
7.9 Secretary's Certificate..............................................................39
7.10 Employment Agreements................................................................39
7.11 Other Founding Companies.............................................................39
7.12 Management Lock-Up Agreements........................................................39
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF RV CENTERS.............................................39
8.1 Representations and Warranties; Performance of Obligations...........................40
8.2 No Litigation........................................................................40
8.3 Secretary's Certificate..............................................................40
8.4 No Material Adverse Effect...........................................................40
8.5 Stockholders' Release................................................................40
8.6 Termination of Related Party Agreements..............................................41
8.7 Opinion of Counsel...................................................................41
8.8 Consents and Approvals...............................................................41
8.9 Good Standing Certificates...........................................................41
8.10 Registration Statement...............................................................41
8.11 Employment Agreements................................................................41
8.12 Closing of IPO.......................................................................41
8.13 FIRPTA Certificate...................................................................41
8.14 Resignations of Directors............................................................42
8.15 Lease Agreements.....................................................................42
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9. COVENANTS OF RV CENTERS AND THE STOCKHOLDERS AFTER CLOSING
42
9.1 Preservation of Tax and Accounting Treatment.........................................42
9.2 Preparation and Filing of Tax Returns................................................42
9.3 Directors............................................................................43
9.4 Release From Guarantees; Repayment of Certain Obligations............................43
9.5 Access to Records....................................................................44
10. INDEMNIFICATION...............................................................................44
10.1 Indemnification by the Stockholders..................................................44
10.2 Indemnification by RV Centers........................................................45
10.3 Third Person Claims..................................................................46
10.4 Exclusive Remedy.....................................................................47
10.5 Limitations on Indemnification.......................................................47
10.6 Tax Indemnification by the Stockholders..............................................48
11. TERMINATION OF AGREEMENT......................................................................49
11.1 Termination..........................................................................49
11.2 Liabilities in Event of Termination..................................................49
11.3 Return of Stock Certificates.........................................................49
12. NONCOMPETITION................................................................................50
12.1 Prohibited Activities................................................................50
12.2 Damages..............................................................................51
12.3 Reasonable Restraint.................................................................51
12.4 Severability; Reformation............................................................51
12.5 Independent Covenant.................................................................51
12.6 Materiality..........................................................................51
13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.....................................................52
13.1 Stockholders.........................................................................52
13.2 RV Centers...........................................................................52
13.3 Damages..............................................................................53
13.4 Survival.............................................................................53
14. TRANSFER RESTRICTIONS.........................................................................53
14.1 Transfer Restrictions................................................................53
15. FEDERAL SECURITIES ACT REPRESENTATIONS........................................................54
15.1 Compliance with Law..................................................................54
15.2 Economic Risk; Sophistication........................................................55
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16. REGISTRATION RIGHTS...........................................................................55
16.1 Piggyback Registration Rights........................................................55
16.2 Registration Procedures..............................................................56
16.3 Indemnification......................................................................57
16.4 Underwriting Agreement...............................................................58
16.5 Rule 144 Reporting...................................................................58
16.6 Availability of Rule 144.............................................................59
17. GENERAL.......................................................................................59
17.1 Cooperation..........................................................................59
17.2 Successors and Assigns...............................................................59
17.3 Entire Agreement.....................................................................59
17.4 Counterparts.........................................................................59
17.5 Brokers and Agents...................................................................60
17.6 Expenses.............................................................................60
17.7 Notices..............................................................................60
17.8 Governing Law........................................................................62
17.9 Exercise of Rights and Remedies......................................................62
17.10 Time.................................................................................62
17.11 Reformation and Severability.........................................................62
17.12 Remedies Cumulative..................................................................62
17.13 Captions.............................................................................62
17.14 Amendments and Waivers...............................................................62
17.15 Dispute Resolution...................................................................62
17.16 References, Gender, Number...........................................................63
17.17 Sole Stockholder.....................................................................63
17.18 Schedules and Annexes................................................................63
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ANNEXES
Annex I - Consideration to Be Paid to Stockholders
Annex II - Certificate of Incorporation and By-Laws of RV Centers
Annex III - Form of Opinion of Counsel to RV Centers
Annex IV - Form of Opinion of Counsel to Company and Stockholders
SCHEDULES
4.1 Due Organization
4.2 Authorization
4.3 Capital Stock of the Company
4.4 Transactions in Capital Stock; Organization Accounting
4.5 No Bonus Shares
4.6 Subsidiaries; Ownership in Other Entities
4.7 Predecessor Status; etc
4.8 Spin-off by the Company
4.9 Financial Statements
4.10(a) Liabilities and Obligations
4.10(b) Trade Account Payables etc. and Copies of Loan Agreements
4.11 Accounts and Notes Receivable
4.12 Permits and Intangibles
4.13 Environmental Matters
4.14 Personal Property
4.15(a) Significant Customers and Suppliers
4.15(b) Material Contracts and Commitments
4.16 Real Property
4.17 Insurance
4.18 Compensation; Employment Agreements; Labor Matters
4.19 Employee Plans
4.20 Compliance with ERISA
4.21 Conformity with Law; Litigation
4.22 Taxes
4.23(a) Defaults
4.23(b) Violations or Defaults Arising From This Agreement
4.23(c) Notices Required By Material Documents
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4.23(e) Restrictions Imposed By Material Documents
4.24 Government Contracts
4.25 Absence of Changes
4.26 Deposit Accounts; Powers of Attorney
4.30 Prohibited Activities
4.31 No Warranties or Insurance
4.32 Interest in Customers and Suppliers and Related Party Transactions
4.34 Inventory in Interim Financial Statements
5.2 Authorization
5.3 Authorized Capital Stock of RV Centers
5.17 Unique Terms in Other Agreements
6.2 Conduct of Business Pending Closing
6.3 Prohibited Activities
6.5 Agreements
8.6 Termination of Related Party Agreements
8.11 Employment Agreements
9.4 Release From Guarantees; Repayment of Certain Obligations
12.1 Prohibited Activities
15.2 Non-accredited Investors
17.5 Brokers and Agents
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is made as of the 12th day
of January, 1999, by and among RV Centers, Inc., a Delaware corporation ("RV
Centers"), American RV Centers, Inc., a Tennessee corporation (the "Company")
and the stockholders listed on the signature pages of this Agreement (the
"Stockholders"), who are all the stockholders of the Company.
RECITALS
WHEREAS, as of the date hereof, the Stockholders own, and as of the
Consummation Date the Stockholders will own, all of the issued and outstanding
capital stock of the Company (the "Company Stock");
WHEREAS, RV Centers is entering into other separate agreements
substantially similar to this Agreement (the "Other Agreements") with each of
the Other Founding Companies (as defined herein) and their respective
stockholders in order to acquire additional recreational vehicle dealership
companies;
WHEREAS, this Agreement and the Other Agreements constitute the "RV
Centers Plan of Organization;"
WHEREAS, the Stockholders and the boards of directors and the
stockholders of RV Centers and each of the Other Founding Companies that are
parties to the Other Agreements have approved and adopted the RV Centers Plan of
Organization as an integrated plan pursuant to which the Stockholders and the
stockholders of each of the Other Founding Companies (as defined herein) will
transfer the capital stock of each of the Founding Companies to RV Centers and
the stockholders of each of the Founding Companies will acquire shares of RV
Centers Stock (as defined herein);
WHEREAS, it is the intent of the parties that the transfer to RV
Centers of stock of the Company by the Stockholders in consideration for stock
of RV Centers qualify as a tax-free transfer of property under Section 351 of
the Code (as hereinafter defined);
WHEREAS, the Board of Directors of the Company has approved this
Agreement as part of the RV Centers Plan of Organization in order to transfer
the capital stock of the Company to RV Centers;
WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement or in any schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
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"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Acquired Party" means the Company, any Subsidiary of the Company and
any member of a Relevant Group.
"Additional Consideration" means that additional consideration, if any,
payable to the Stockholder pursuant to the provisions of Part B of Annex I to
this Agreement.
"Affiliate" means with respect to any person or entity, any other
person or entity that directly or indirectly, controls, is controlled by, or is
under common control with such person or entity.
"Balance Sheet Date" means June 30, 1998.
"Charter" means the certificate of incorporation or articles of
incorporation of the Company, as the case may be.
"Charter Documents" has the meaning set forth in Section 4.1.
"Closing" has the meaning set forth in Section 3.
"Closing Date" has the meaning set forth in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"Company Stock" has the meaning set forth in the first recital of this
Agreement.
"Consummation Date" has the meaning set forth in Section 3.
"Delaware GCL" means the General Corporation Law of the State of
Delaware.
"Draft Registration Statement" means the draft of the Registration
Statement as included in the Private Placement Memorandum for RV Centers dated
January 5, 1999, and any corrections thereto and supplemental information
delivered by RV Centers to the Company for delivery to the Stockholders prior to
the time this Agreement is delivered by the Stockholders to RV Centers.
"Effective Time" means the effective time of the consummation of the
purchase and sale of the Company Stock, which shall occur on the Consummation
Date.
"Environmental Law" has the meaning set forth in Section 4.13(c).
"Expiration Date" has the meaning set forth in Section 4(A).
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"Founding Companies" means: Ace Fogdall, Inc., an Iowa corporation,
American RV Centers, Inc., a Tennessee corporation, American RV Centers, Inc., a
Mississippi corporation, ▇▇▇▇▇ Motors, Inc., a Colorado corporation, County Line
Select Cars, Inc., a Florida corporation, Dusty's Camper World of Bartow, Inc.,
a Florida corporation, Emerald Coast RV Center, Inc., a Florida corporation,
Hall Enterprises, Inc., a Kentucky corporation, Little Valley Auto & RV Sales,
Inc., a West Virginia corporation, Growth Ventures, Inc., a Texas corporation,
RVs Northwest, Inc., a Washington corporation, Saddleback Recreational Vehicles,
Inc., a California corporation, ▇▇▇▇▇ Motor Coach Sales, Inc., a New Jersey
corporation, ▇▇▇▇▇▇▇▇▇ Trailer Sales, Inc., a Pennsylvania corporation, ▇▇▇ ▇.
▇▇▇▇▇▇▇ d/b/a ▇▇▇▇▇'▇ ▇▇ Center, a sole proprietorship operating in California.
"GAAP" means generally accepted accounting principles as consistently
applied in the United States.
"▇▇▇▇-▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"Hazardous Substance" has the meaning set forth in Section 4.13(d).
"Information Technology" has the meaning set forth in section 4.35.
"IPO" means the initial public offering of RV Centers Stock pursuant to
the Registration Statement.
"known," "knowledge" or "best knowledge," when used in reference to a
statement regarding the existence or absence of facts in this Agreement, is
intended by the parties to mean that the only information to be attributed to
such person is information actually known to (a) the person in the case of an
individual or (b) in the case of a corporation or other entity, an officer,
director or member. With respect to the "knowledge" of the Stockholders who are
officers, directors, employees, consultants or agents of the Company, such term
is also intended to mean that such Stockholder has made inquiry of the officers
and directors of the Company and its Affiliates, and with respect to the
representations made in Section 4.13, the Company's management.
"Material Adverse Change" means a material adverse change in the
business, operations, properties, assets or condition (financial or otherwise),
of the subject entity and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets or condition (financial or otherwise),
of the subject entity and its Subsidiaries taken as a whole.
"Material Documents" has the meaning set forth in Section 4.23(a).
"Minimum Value" has the meaning set forth in Annex I.
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"Other Agreements" has the meaning set forth in the second recital of
this Agreement.
"Other Founding Companies" means all of the Founding Companies other
than the Company.
"Person" means an individual, partnership, joint venture, corporation,
limited liability company, bank, trust, unincorporated organization or other
entity.
"Plans" has the meaning set forth in Section 4.19.
"Pricing" means the date of determination by RV Centers and the
Underwriters of the public offering price of the shares of RV Centers Stock in
the IPO.
"Qualified Plans" has the meaning set forth in Section 4.20.
"RV Centers" has the meaning set forth in the first paragraph of this
Agreement.
"RV Centers Charter Documents" has the meaning set forth in Section
5.1.
"RV Centers Documents" has the meaning set forth in Section 5.6.
"RV Centers Plan of Organization" has the meaning set forth in the
fourth recital of this Agreement.
"RV Centers Stock" means the common stock, par value $.01 per share, of
RV Centers.
"Registration Statement" means that certain registration statement on
Form S-1 to be filed with the SEC covering the shares of RV Centers Stock to be
issued in the IPO, including the prospectus and all amendments and supplements
thereto.
"Relevant Group" means the Company and any affiliated, combined,
consolidated, unitary or similar group of which the Company is or was a member.
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.
"Schedule" means each Schedule attached hereto (as amended or
supplemented pursuant to Section 6.7), which shall reference the relevant
sections of this Agreement, on which parties hereto disclose information as part
of their respective representations, warranties and covenants.
"SEC" means the United States Securities and Exchange Commission.
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"State of Incorporation" means, as it relates to a referenced
corporation, the state of incorporation for such corporation.
"Stockholders" has the meaning set forth in the first paragraph of this
Agreement.
"Subsidiaries" means with respect to a Person, any corporation or other
entity in which such Person owns a 50% or greater ownership interest.
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, withholding, employment, payroll, excise, property, deed, stamp,
alternative or add-on minimum, or other taxes, assessments, duties, fees, levies
or other governmental charges, whether disputed or not, together with any
interest, penalties, additions to tax or additional amounts with respect
thereto.
"Underwriters" means the prospective underwriters identified in the
Draft Registration Statement and any additional or substitute underwriter
appointed by RV Centers as identified in writing to the Stockholders.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. ACQUISITION OF STOCK
1.1 ACQUISITION. Upon the terms and subject to the conditions contained
in this Agreement and in reliance upon the representations, warranties,
covenants and agreements contained in this Agreement, on the Consummation Date,
the Stockholders shall transfer to RV Centers and RV Centers shall acquire from
the Stockholders, all of the issued and outstanding shares of capital stock of
the Company as set forth in Annex I hereto.
1.2 CONSIDERATION. The consideration for the Company Stock shall be as
set forth on Annex I to this Agreement.
1.3 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF THE
COMPANY AND RV CENTERS. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of the
Company and RV Centers as of the date of this Agreement are as follows:
(i) as of the date of this Agreement, the authorized and
outstanding capital stock of the Company is as set forth on Schedule
4.3 hereto; and
(ii) immediately prior to the Closing Date and the
Consummation Date, the authorized capital stock of RV Centers will
consist of 20,000,000 shares of RV Centers
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Stock, of which the number of issued and outstanding shares will be set
forth in the Registration Statement, and 5,000,000 shares of preferred
stock, $.01 par value, of which no shares will be issued and
outstanding, all of which will be issued and outstanding except as
otherwise set forth in the Registration Statement.
2. DELIVERY OF CONSIDERATION
2.1 STOCKHOLDERS' CONSIDERATION. On the Consummation Date, the
Stockholders, who are now and on the Consummation Date will be, the holders of
all of the outstanding capital stock of the Company, shall, upon surrender of
certificates evidencing that capital stock, receive from RV Centers the
respective number of shares of RV Centers Stock and the amount of cash described
on Part A to Annex I hereto, which shall be payable by certified check or wire
transfer. The number of shares of RV Centers Stock in Annex I has been adjusted
for the stock split provided for in the Draft Registration Statement and will
not be adjusted upon the occurrence of such split.
2.2 STOCKHOLDERS' DELIVERIES. The Stockholders shall deliver at the
Closing the certificates representing Company Stock, duly endorsed in blank by
the Stockholders, or accompanied by blank stock powers, and with all necessary
transfer tax and other revenue stamps, acquired at the Stockholders' expense,
affixed and canceled. The Stockholders agree promptly to cure any deficiencies
with respect to the endorsement of the stock certificates or other documents of
conveyance with respect to such Company Stock or with respect to the stock
powers accompanying any Company Stock.
3. CLOSING
At or prior to the Pricing and subject to the satisfaction or waiver of
the conditions in Sections 7 and 8, the parties shall take all actions necessary
to effect the delivery of shares referred to in Section 2 hereof; provided, that
such actions shall not include the actual completion of the purchase and sale of
the Company Stock or the delivery of the RV Centers Stock and cash referred to
in Section 2 hereof, each of which actions shall only be taken upon the
Consummation Date as herein provided. The delivery of the Company Stock, which
shall occur at or prior to the Pricing (the "Closing"), shall take place on the
closing date (the "Closing Date") at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P, ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. All Company Stock shall be delivered
at the Closing to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., to be held in trust for the
Stockholders until the Consummation Date, and shall be returned immediately to
the Stockholders upon any termination of this Agreement prior to the
Consummation Date. Within 20 days after the Pricing (x) all transactions
contemplated by this Agreement, including the delivery of shares and cash which
the Stockholders are entitled to receive pursuant to Part A of Annex I hereof,
shall be completed, and (y) the closing with respect to the IPO shall occur and
be completed. The date on which the actions described in the preceding clauses
(x) and (y) occur shall be referred to as the "Consummation Date." During the
period from the Closing Date to the Consummation Date, this Agreement may only
be terminated by the Company if the underwriting agreement in respect of the IPO
is terminated pursuant to the terms of such underwriting agreement. This
Agreement shall in any event terminate
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if the Consummation Date does not occur within 20 days of the Pricing or the
Closing Date, whichever occurs first. Time is of the essence with respect to the
performance hereof.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
(A) Representations and Warranties of the Stockholders.
Except as set forth in the disclosure schedules attached hereto and
except as otherwise qualified below, each of the Stockholders, jointly and
severally, represents and warrants that all of the following representations and
warranties in this Section 4(A) are true at the date of this Agreement, and that
such representations and warranties shall survive the Consummation Date until
June 30, 2000 (the "Expiration Date"), except that the warranties and
representations set forth in Sections 4.3 and 4.22 hereof shall survive until
such time as the applicable limitations period has run, which shall be deemed to
be the Expiration Date for Sections 4.3 and 4.22. For purposes of this Section
4, the term "Company" shall mean and refer to the Company and all of its
Subsidiaries, if any.
4.1 DUE ORGANIZATION. The Company is a corporation duly incorporated
and organized, validly existing and in good standing under the laws of the State
of Incorporation, and has the requisite power and authority to carry on its
business as it is now being conducted. The Company is duly qualified or
authorized to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or authorization necessary except where the failure to be so
qualified or authorized would not have a Material Adverse Effect on the Company.
Schedule 4.1 sets forth a list of all states in which the Company is authorized
or qualified to do business. True, complete and correct copies of (i) the
Charter and By-laws, each as amended, of the Company (the "Charter Documents"),
and (ii) the stock records of the Company, are all attached to Schedule 4.1. The
Company has delivered to RV Centers complete and correct copies of all minutes
of meetings, written consents and other evidence, if any, of deliberations of or
actions taken by the Company's Board of Directors, any committees of the Board
of Directors and stockholders during the last three years.
4.2 AUTHORIZATION. (i) The officers or other representatives of the
Company executing this Agreement have the authority to enter into and bind the
Company to the terms of this Agreement and (ii) the Company has the full legal
right, power and authority to enter into this Agreement and consummate the
transactions contemplated herein. Copies of the most recent resolutions adopted
by the Board of Directors of the Company and the most recent resolutions adopted
by the Stockholders, which approve this Agreement and the transactions
contemplated herein in all respects, certified by the Secretary or an Assistant
Secretary of the Company as being in full force and effect on the date hereof,
are attached hereto as Schedule 4.2.
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4.3 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company is as set forth on Schedule 4.3. All of the issued and outstanding
shares of the capital stock of the Company are owned by the Stockholders in the
amounts set forth in Schedule 4.3, other than any treasury shares listed on
Schedule 4.3. Each Stockholder, severally, represents and warrants that except
as set forth on Schedule 4.3, the shares of capital stock of the Company owned
by such Stockholder are owned free and clear of all liens, security interests,
pledges, charges, voting trusts, restrictions, encumbrances and claims of every
kind. All of the issued and outstanding shares of the capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable, are owned of record and beneficially by the Stockholders and
further, such shares were offered, issued, sold and delivered by the Company in
compliance with all applicable state and Federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.
4.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except as
set forth on Schedule 4.4, the Company has not acquired or redeemed any Company
Stock since January 1, 1995. Except as set forth on Schedule 4.4, (i) no option,
warrant, call, conversion right or commitment of any kind exists which obligates
the Company to issue any of its authorized but unissued capital stock; (ii) the
Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein or to
pay any dividend or make any distribution in respect thereof; and (iii) neither
the voting stock structure of the Company nor the relative ownership of shares
among any of its respective Stockholders has been altered or changed in
contemplation of the transactions contemplated herein and/or the RV Centers Plan
of Organization. There are no voting trusts, proxies or other agreements or
understandings to which the Company or any of the Stockholders is a party or is
bound with respect to the voting of any shares of capital stock of the Company.
Schedule 4.4 also includes complete and accurate copies of all stock option or
stock purchase plans, including a list of all outstanding options, warrants or
other rights to acquire shares of the Company's stock and the material terms of
such outstanding options, warrants or other rights.
4.5 NO BONUS SHARES. Except as set forth on Schedule 4.5, none of the
shares of Company Stock was issued pursuant to awards, grants or bonuses in
contemplation of the RV Centers Plan of Organization.
4.6 SUBSIDIARIES; OWNERSHIP IN OTHER ENTITIES. Except as set forth on
Schedule 4.6, the Company has no Subsidiaries. Except as set forth in Schedule
4.6, the Company does not presently own, of record or beneficially, or control,
directly or indirectly, any capital stock, securities convertible into capital
stock or any other equity interest in any corporation, association or business
entity nor is the Company, directly or indirectly, a participant in any joint
venture, partnership or other non-corporate entity.
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4.7 PREDECESSOR STATUS; ETC. Set forth on Schedule 4.7 is a listing of
all predecessor companies of the Company, including the names of any entities
acquired by the Company (by stock purchase, merger or otherwise) or owned by the
Company or from whom the Company previously acquired assets which are material
to the Company, in any case, from the earliest date upon which any Stockholder
acquired his or her stock in any Company. Except as disclosed on Schedule 4.7,
the Company has not been, within such period of time, a subsidiary or division
of another corporation or a part of an acquisition which was later rescinded,
nor, within such period of time, has the Company had any substantial operations
that have been discontinued or any operating plants or facilities that have been
discontinued, sold or spun off.
4.8 SPIN-OFF BY THE COMPANY. Except as set forth on Schedule 4.8, there
has not been any sale, spin-off or split-up of material assets of the Company
since January 1, 1995.
4.9 FINANCIAL STATEMENTS. Copies of the following financial statements
are attached hereto as Schedule 4.9:
(i) the combined balance sheets of the Company and American RV
Centers, Inc., a Mississippi corporation (the "Mississippi Store") as
of December 31, 1996 and 1997 and the related statements of operations,
stockholder's equity and cash flows for the two-year period ended
December 31, 1997, together with the related notes and schedules (such
balance sheets, the related statements of operations, stockholder's
equity and cash flows and the related notes and schedules are referred
to herein as the "Year-end Financial Statements"); and
(ii) the balance sheet of the Company and the Mississippi
Store as of the Balance Sheet Date and the related statements of
operations, stockholder's equity and cash flows for the six-month
period ended June 30, 1998 and on the Balance Sheet Date, together with
the related notes and schedules (such balance sheets, the related
statements of operations, stockholder's equity and cash flows and the
related notes and schedules are referred to herein as the "Interim
Financial Statements").
The Year-end Financial Statements and the Interim
Financial Statements are collectively referred to herein as the
"Financial Statements". The Financial Statements have been, and the
financial statements to be delivered pursuant to Section 6.9 will be,
prepared in accordance with GAAP applied on a consistent basis and
fairly present in all material respects the financial position of the
Company and the Mississippi Store as of the dates thereof and the
results of its operations and changes in financial position for the
periods then ended. The Company's books of account have been kept
accurately in all material respects, the transactions entered therein
represent bona fide transactions, and the revenues, expenses, assets
and liabilities of the Company have been properly recorded in such
books in all material respects.
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4.10 LIABILITIES AND OBLIGATIONS. Except as set forth on Schedule
4.10(a), as of the Balance Sheet Date, the Company has no liabilities or
obligations of any kind, character or description, whether accrued, absolute,
secured or unsecured, contingent or otherwise, which are not reflected in the
Company Interim Financial Statements at the Balance Sheet Date. In addition,
except as set forth on Schedule 4.10(a), since the Balance Sheet Date, the
Company has not incurred any material liabilities or obligations of any kind,
character or description whether accrued, absolute, secured or unsecured,
contingent or otherwise, other than liabilities incurred in the ordinary course
of business and consistent with past operating practices. For each contingent
liability or other liability for which the amount is not fixed or is contested,
the Company has included on Schedule 4.10(a) the following information:
(i) a summary description of the liability together with the
following:
(A) copies of the principal documentation in the
possession of the Company or its directors, officers,
management, stockholders or key employees relating
thereto;
(B) amounts claimed and any other action or relief
sought; and
(C) name of claimant and all other parties to the claim,
suit or proceeding;
(ii) the name of each court or agency before which such claim,
suit or proceeding is pending; and
(iii) the date such claim, suit or proceeding was instituted.
Schedule 4.10(b) sets forth an accurate list of all trade
accounts payable, accrued liabilities, indebtedness and other liabilities of the
Company as reflected in the Company Interim Financial Statements as of the
Balance Sheet Date. Schedule 4.10(b) also includes copies of all loan
agreements, floor plan financing agreements, warranty, indemnity or guarantee
agreements, bonds, mortgages, pledges or other security agreements to which the
Company is a party or by which its properties may be bound.
4.11 ACCOUNTS AND NOTES RECEIVABLE. Schedule 4.11 sets forth an
accurate list of the accounts and notes receivable of the Company, as of the
Balance Sheet Date, including any such amounts which are not reflected in the
balance sheet as of the Balance Sheet Date, and including all receivables from
and advances to employees and the Stockholders, which are identified as such.
Schedule 4.11 also sets forth an accurate aging of all accounts and notes
receivable as of the Balance Sheet Date showing amounts due in 30-day aging
categories. Except to the extent reflected on Schedule 4.11, such accounts,
notes and other receivables arose in connection with bona fide transactions, the
reserves reflected in the balance sheet as of the Balance Sheet Date are
adequate and such accounts, notes and other receivables are, subject to the
stated reserves, collectible.
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4.12 PERMITS AND INTANGIBLES. The Company holds all licenses,
franchises, permits and other governmental authorizations ("Licenses") necessary
to conduct the business of the Company, and the Company has delivered to RV
Centers a list that is accurate and a summary description (which is set forth on
Schedule 4.12) of all such Licenses, including any trademarks, trade names,
patents, patent applications and copyrights owned or held by the Company or any
of its employees (including interests in software or other technology systems,
programs and intellectual property) the absence of which would have a Material
Adverse Effect on the Company. Except as set forth on Schedule 4.12, the
Licenses and other rights listed on Schedule 4.12 are valid, held by the Company
and the Company has not received any notice that any Person intends to cancel,
terminate or not renew any such License or other right. Except as set forth on
Schedule 4.12, the Company has conducted and is conducting its business in
compliance with the requirements, standards, criteria and conditions set forth
in the Licenses and other rights listed on Schedule 4.12 and is not in violation
of any of the foregoing. Except as specifically provided in Schedule 4.12, the
consummation by the Company of the transactions contemplated in this Agreement
will not result in a default under or a breach or violation of, or adversely
affect the rights and benefits afforded to the Company by, any such Licenses or
other rights.
4.13 ENVIRONMENTAL MATTERS. (a) Except as specifically set forth in
Schedule 4.13 attached hereto, (i) the Company has conducted and is conducting
its businesses in compliance with all applicable Environmental Laws, including,
without limitation, having all environmental permits, licenses and other
approvals and authorizations required by Environmental Laws for the operation of
its business as presently conducted, (ii) none of the properties now or
previously owned or occupied by the Company contain any Hazardous Substance, the
existence of which imposes a requirement under Environmental Laws to remove,
remediate, reduce the levels of Hazardous Substances to levels below regulatory
action levels, or otherwise perform any response, corrective or preventive
measure or pay for any environmental response costs ("Environmental Response
Measures"), (iii) the Company has not received any written notices, demand
letters or requests for information from any Federal, state, local or foreign
governmental entity or third party indicating that the Company may be in
violation of, or liable for any Environmental Response Measures under, any
Environmental Law in connection with the ownership or operation of its business,
and has no reason to believe that any such written documentation may be
forthcoming, (iv) there have been and are no civil, criminal or administrative
actions, suits, demands, claims, hearings, consent orders, investigations or
proceedings pending or, to the knowledge of the Stockholders, threatened,
against the Company relating to any Environmental Law, (v) no reports have been
filed, or are required to be filed, by the Company concerning the release of any
Hazardous Substance or the threatened or actual violation of any Environmental
Law, (vi) no Hazardous Substance has been disposed of, released or transported
in violation of any applicable Environmental Law from any properties owned,
leased or operated by the Company as a result of any activity of the Company
during the time such properties were owned, leased or operated by the Company,
(vii) there have been and are no environmental investigations, studies, audits,
tests, reviews or other analyses regarding compliance or non-compliance with any
applicable Environmental Law conducted by or which are in the possession of the
Company relating to the activities of the Company prior to the date hereof,
(viii) there are no underground storage tanks on, in or under any properties
owned by the Company,
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there were no underground storage tanks owned or used by the Company on
properties formerly owned, leased or operated by the Company, and no underground
storage tanks have been closed or removed from any of such properties during the
time such properties were owned, leased or operated by the Company, (ix) there
is no asbestos or asbestos-containing material present in any of the properties
owned, leased or operated by the Company that is required to be removed or
otherwise abated under Environmental Laws, and no asbestos was removed from any
properties now or formerly owned, leased or operated during the time such
properties were owned, leased or operated by the Company, except in compliance
with Environmental Laws, (x) neither the Company nor any of its respective
properties are subject to any liabilities or expenditures (fixed or contingent)
relating to any suit, settlement, court order, administrative order, regulatory
requirement, judgment or claim asserted or arising under any Environmental Law,
(xi) there are no environmental liabilities at sites not owned, operated or
leased by the Company, for which the Company could, in whole or in part, be
liable, and (xii) the Company has not been a contractee under any tolling
agreement, processing agreement or netback agreement with a third party.
(b) With respect to any past direct or indirect Subsidiaries or
Affiliates of the Company, the representations contained in Section 4.13(a)
shall apply to the assets and activities conducted by such entity while owned,
directly or indirectly, by the Company or affiliated therewith to the extent
that a failure of such representations to be true and correct could subject the
Company to liability.
(c) As used herein, "Environmental Law" means any federal, state, or
local, statute, ordinance, rule, regulation, code, license, permit,
authorization, order, judgment, decree, injunction, restriction or agreement
with any governmental entity, relating to (x) the protection, preservation or
restoration of the environment or to human health or safety or (y) the exposure
to, or the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of Hazardous
Substances, in each case as amended and as in effect on the Closing Date. The
term Environmental Law includes, without limitation, (i) the Federal
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Federal Water Pollution Control Act of 1972, the Federal Clean Air Act, the
Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous
and Solid Waste Amendments thereto), the Federal Toxic Substances Control Act,
the Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational
Safety and Health Act of 1970, and similar law, regulation or requirement of any
governmental authority or agency having jurisdiction over the Company or its
property, each as amended and as in effect on the Closing Date, and (ii) any
common law or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries or damages due
to, or threatened as a result of, the presence of, effects of or exposure to any
Hazardous Substance.
(d) As used herein, "Hazardous Substance" means any substance regulated
under any Environmental Law or the exposure to which is regulated by any
Environmental Law, and shall include, without limitation, any industrial
substance, petroleum or any derivative or by-product thereof, radon, asbestos or
asbestos-containing material, urea formaldehyde foam insulation, lead, fibers or
polychlorinated biphenyls.
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4.14 PERSONAL PROPERTY. Schedule 4.14 sets forth an accurate list of
(x) all personal property material to the operations of the Company included in
"plant, property and equipment" on the balance sheet of the Company, (y) all
other personal property owned by the Company with an individual net book value
in excess of $5,000 (i) as of the Balance Sheet Date and (ii) acquired since the
Balance Sheet Date and (z) all material leases and agreements in respect of
personal property, including, in the case of each of (x), (y) and (z), (1) true,
complete and correct copies of all such leases and agreements and (2) an
indication as to which assets are currently owned, or were formerly owned, by
Stockholders, relatives of Stockholders, or Affiliates of the Company. Except as
set forth on Schedule 4.14, (i) all personal property material to, and used by,
the Company in its business is either owned by the Company or leased by the
Company pursuant to a lease included on Schedule 4.14, (ii) all of the personal
property listed on Schedule 4.14 or replacement property thereof is in working
order and condition, ordinary wear and tear excepted and (iii) all leases and
agreements included on Schedule 4.14 are in full force and effect and constitute
valid and binding agreements of the Company and (to the knowledge of the
Stockholders) the other parties thereto (or their successors) in accordance with
their respective terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, liquidation or
other similar laws and equity principles relating to creditors' rights
generally. For the purposes of this Section 4.14, "personal property" shall be
deemed to exclude personal property addressed by Sections 4.11 and 4.12 and
inventory of the Company.
4.15 SIGNIFICANT CUSTOMERS AND SUPPLIERS; MATERIAL CONTRACTS AND
COMMITMENTS
(a) Schedule 4.15(a) sets forth an accurate list of (i) all customers
(persons or entities) representing 5% or more of the Company's annual revenues
for fiscal year 1997, showing the approximate total sales to each such customer,
and (ii) all suppliers (persons or entities) representing 5% or more of the
Company's annual purchases of supplies for fiscal year 1997, showing the
approximate total purchases of supplies from each such supplier. Except to the
extent set forth on Schedule 4.15(a), none of such customers or suppliers has
canceled or substantially reduced or is currently attempting or threatening to
cancel a contract or substantially reduce utilization of the services provided
by the Company.
(b) The Company has listed on Schedule 4.15(b) all material contracts,
commitments and similar agreements to which the Company is a party or by which
it or any of its properties is bound (including, but not limited to, contracts
with significant customers or suppliers, joint venture or partnership
agreements, contracts with any labor organizations, strategic alliances and
options to purchase land), other than agreements listed on Schedules 4.10, 4.14
or 4.16, (i) in existence as of the Balance Sheet Date and (ii) entered into
since the Balance Sheet Date, and in each case has delivered true, complete and
correct copies of such agreements to RV Centers. Except as set forth on Schedule
4.15(b), the Company has complied with all commitments and obligations
pertaining to it and is not in default in any material respect under any
contracts or agreements listed on Schedules 4.10, 4.14, 4.15(b) or 4.16 and has
not received notice of a default under any such contract or agreement. Where
required prior to the execution of this Agreement under such contracts or
agreements, the Company has furnished notice of the Agreement to third parties
and has, where
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required prior to the execution of this Agreement, obtained consent from third
parties to enter into the transactions contemplated in this Agreement. The
Company has also indicated on Schedule 4.15(b) a list of all plans or projects
involving the opening of new operations, expansion of existing operations, or
the acquisition of any personal property, business or assets requiring, in any
event, the payment of more than $25,000 by the Company.
(c) Except as set forth on Schedule 4.15(b), since January 1, 1997, the
Company has not experienced any difficulties in obtaining any inventory items
necessary to the operation of its business, and, to the knowledge of the
Stockholders, no such shortage of supply of inventory items is threatened or
pending. Except as set forth in Schedule 4.15(b), to the knowledge of the
Stockholders, no customer or supplier of the Company has indicated that it will
cease to do business with, or substantially reduce its purchases from or sales
to, the Company by reason of or after the consummation of the transactions
contemplated hereby.
(d) Except as set forth on Schedule 4.15(b), the Company is not
required to provide any bonding or other financial security arrangements in any
amount in connection with any contract listed on Schedule 4.15(b).
4.16 REAL PROPERTY. Schedule 4.16 includes a list of all real property
owned or leased by the Company at the date hereof and all other real property,
if any, used by the Company in the conduct of its business. The Company has good
title to any real property owned by it that is shown on Schedule 4.16, and all
real property so owned is subject to no mortgage, pledge, lien, conditional
sales agreement, encumbrance, lease, possessory rights of third parties or
charge, except for:
(i) liens reflected on Schedules 4.10 or 4.16 as securing
specified liabilities (with respect to which no material default
exists);
(ii) liens for current taxes not yet payable and assessments
not in default and other inchoate liens for amounts not yet payable and
assessments not in default;
(iii) easements for utilities serving the property only; and
(iv) easements, covenants and restrictions and other
exceptions to title which do not adversely affect the current or
contemplated use of the property.
Copies of all leases and agreements in respect of such real property
leased by the Company, which are true, complete and correct, are attached to
Schedule 4.16, and an indication as to which such properties, if any, are
currently owned, or were formerly owned, by Stockholders or Affiliates of the
Company is included in Schedule 4.16. Copies of all title reports and title
insurance policies with respect to such real property owned by the Company and
in its possession or reasonably accessible to it are attached to Schedule 4.16.
Except as set forth on Schedule 4.16, all of such leases included on Schedule
4.16 are in full force and effect and constitute valid and binding agreements of
the Company and to the knowledge of the Stockholders the other parties thereto
in accordance
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with their respective terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, liquidation or
other similar laws and equity principles relating to creditors' rights
generally.
4.17 INSURANCE. The Company has delivered to RV Centers (i) an accurate
list as of the Balance Sheet Date and as of the date hereof of all insurance
policies carried by the Company, (ii) an accurate list of all insurance loss
runs or workers compensation claims received by the Company for the past three
policy years and (iii) true, complete and correct copies of all insurance
policies currently in effect. Such insurance policies evidence all of the
insurance the Company is required to carry pursuant to all of its contracts and
other agreements and pursuant to all applicable laws. Except as set forth on
Schedule 4.17, all of such insurance policies are currently in full force and
effect and shall remain in full force and effect through the Consummation Date.
Since January 1, 1996, no insurance carried by the Company has been canceled by
the insurer and the Company has not been denied coverage.
4.18 COMPENSATION; EMPLOYMENT AGREEMENTS; LABOR MATTERS.
(a) The Company has delivered to RV Centers an accurate list (which is
set forth on Schedule 4.18) showing all officers, directors and key employees of
the Company, listing all employment, compensation, change in control and
severance agreements with such officers, directors and key employees (the
"Agreements") and the rate of compensation, and sales commissions, (and the
portions thereof attributable to salary, bonus and other compensation,
respectively) of each of such persons as of (i) the Balance Sheet Date and (ii)
the date hereof. The Company has provided to RV Centers true, complete and
correct copies of all Agreements. Since the Balance Sheet Date, except as
disclosed on Schedule 4.18, there have been no increases in the compensation
payable or any special bonuses to any officer, director, key employee or other
employee, except ordinary salary increases implemented on a basis and in amounts
consistent with past practices.
(b) Except as set forth on Schedule 4.18, (i) the Company is not bound
by or subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union, (ii) no campaign to establish
such arrangement is in progress and (iii) to the knowledge of the Stockholders,
there is no pending or threatened labor dispute involving the Company and any
group of its employees nor has the Company experienced any labor interruptions
over the past three years. Except as set forth on Schedule 4.18, the
Stockholders believe that the Company's relationship with its employees is good.
(c) Except as set forth in Schedule 4.18 attached hereto, (i) there are
no significant controversies pending or, to the knowledge of the Stockholders,
threatened between the Company and any of its employees, (ii) the Company has
complied in all material respects with all applicable laws relating to the
employment of labor, including, without limitation, any provisions thereof
relating to wages, hours, collective bargaining, and the payment of social
security and similar taxes, and (iii) the Company has not received notice from
any person asserting that the Company is liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing.
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4.19 EMPLOYEE PLANS. Schedule 4.19 lists all employee benefit plans and
compensation plans, programs or arrangements (the "Plans") which are maintained
by, contributed to or with respect to which there is or would be any obligation
or liability of the Company, including all employment agreements and other
agreements or arrangements containing "golden parachute" or other similar
provisions, incentive compensation agreements, and deferred compensation
agreements, together with true, complete and correct copies of such plans,
agreements and any trusts related thereto, and classifications of employees
covered thereby as of the Balance Sheet Date and as of the date of this
Agreement. Such Plans cover the Company and the Mississippi Store, as described
on Schedule 4.19. Except for the Plans, if any, described on Schedule 4.19, the
Company does not sponsor, maintain or contribute to any plan, program, fund or
arrangement that constitutes an "employee benefit plan," and the Company does
not have any obligation to contribute to or accrue or pay any benefits under any
deferred compensation or retirement arrangement on behalf of any current or
former employee or employees (such as, for example, and without limitation, any
individual retirement account or annuity, any "excess benefit plan" (within the
meaning of Section 3(36) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")). For the purposes of this Agreement, the term "employee
benefit plan" shall have the same meaning as is given that term in Section 3(3)
of ERISA. The Company has not sponsored, maintained or contributed to any
employee benefit plan other than the Plans set forth on Schedule 4.19, and the
Company is not or could not be required to contribute to any Plan pursuant to
the provisions of any collective bargaining agreement establishing the terms and
conditions or employment of any of the Company's employees.
Except as set forth on Schedule 4.19, the Company is not now, and will
not as a result of its past activities become, liable to the Pension Benefit
Guaranty Corporation or to any multiemployer employee pension benefit plan under
the provisions of Title IV of ERISA.
All Plans listed on Schedule 4.19 and the administration thereof are in
compliance in all material respects with their terms and all applicable
provisions of ERISA and the regulations issued thereunder, as well as with all
other applicable federal, state and local statutes, ordinances and regulations.
All accrued contribution obligations of the Company as of the Balance
Sheet Date with respect to any Plan listed on Schedule 4.19 have either been
fulfilled in their entirety or are fully reflected on the balance sheet of the
Company included in the Interim Financial Statements. All accrued contribution
obligations of the Company since the Balance Sheet Date with respect to any Plan
listed on Schedule 4.19 have been fulfilled or will be fully reflected on the
balance sheets delivered pursuant to Section 6.9.
4.20 COMPLIANCE WITH ERISA. All such Plans listed on Schedule 4.19 that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are, and have been from their inception, so qualified and are the subject of a
determination letter or notification letter issued by the Internal Revenue
Service, which letter covers the status of such Qualified Plans under the
provisions of the Tax Reform Act of 1986, and copies of such letters are
attached to Schedule 4.19. Except as
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disclosed on Schedule 4.20, all reports and other documents required to be filed
with any governmental agency or distributed to plan participants or
beneficiaries (including, but not limited to, actuarial reports, audits or tax
returns) have been timely filed or distributed. Neither the Stockholders, any
such Plan listed in Schedule 4.19, nor the Company or, to the knowledge of the
Stockholders, any other person has engaged in any transaction with any Plan
which is prohibited under the provisions of Section 4975 of the Code or Section
406 of ERISA, and to which no exemption under the Code or ERISA applies. No such
Plan listed in Schedule 4.19 has incurred an accumulated funding deficiency, as
defined in Section 412(a) of the Code and Section 302(l) of ERISA, whether or
not waived; and neither the Company nor, to the knowledge of the Stockholders,
any other person has incurred any liability for excise tax or penalty due to the
Internal Revenue Service or any liability to the Pension Benefit Guaranty
Corporation ("PBGC") with respect to any Plan or breached any fiduciary duty
with respect to any Plan. The Company further represents that except as set
forth on Schedule 4.20 hereto:
(i) With respect to any plan year for which the applicable
statutes of limitations has not expired, there have been no
terminations, partial terminations or discontinuations of contributions
to any Qualified Plan intended to qualify under Section 401(a) of the
Code without notice to and approval by the Internal Revenue Service;
(ii) no Plan listed in Schedule 4.19 is subject to the
provisions of Title IV of ERISA;
(iii) there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any Plan listed in
Schedule 4.19;
(iv) the Company has not incurred liability under Section
4062 or Section 4069 of ERISA;
(v) no circumstances exist pursuant to which the Company
could have any direct or indirect liability whatsoever (including, but
not limited to, any liability to any multiemployer plan or the PBGC
under Title IV of ERISA or to the Internal Revenue Service for any
excise tax or penalty, or being subject to any statutory lien to
secure payment of any such liability) with respect to any plan now or
heretofore maintained or contributed to by any entity other than the
Company that is, or at any time was, a member of a "controlled group"
(as defined in Section 412(n)(6)(B) of the Code) that includes the
Company; and
(vi) each Plan may be unilaterally terminated at any time by
the Company without material liability to the Company.
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4.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
Schedule 4.21 or 4.13, the Company is not in violation of any law or regulation
or any order of any court or Federal, state, local or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over it other than violations that would not have a Material
Adverse Effect on the Company and except to the extent set forth on Schedules
4.10, 4.13 or 4.21, there are no claims, actions, suits or proceedings, pending
or, to the knowledge of the Stockholders, threatened against, the Company, at
law or in equity, or before or by any Federal, state, local or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over any of them and no written notice of any claim, action,
suit or proceeding, whether pending or threatened, has been received by the
Company. Except as set forth in Schedule 4.21, the Company has conducted and is
now conducting its business in compliance in all material respects with the
requirements, standards, criteria and conditions set forth in applicable
Federal, state and local statutes, ordinances, orders, approvals, variances,
rules and regulations.
4.22 TAXES.
(a) The Company has timely filed all requisite Federal, state, local
and other income and payroll tax returns or extension requests for all fiscal
periods ended on or before the Balance Sheet Date; and except as set forth on
Schedule 4.22, there are no examinations in progress or claims pending against
the Company for federal, state, local and other Taxes (including penalties and
interest) for any period or periods prior to and including the Balance Sheet
Date and no notice of any claim for Taxes, whether pending or threatened, has
been received. All Taxes, including interest and penalties (whether or not shown
on any tax return), owed by the Company has been paid or reflected as accrued as
of the Balance Sheet Date. The amounts shown as accruals for Taxes on the
Company's Financial Statements are sufficient for the payment of all Taxes of
the kinds indicated (including penalties and interest) for all fiscal periods
ended on or before that date. Copies of (i) any tax examinations, (ii)
extensions of statutory limitations and (iii) the federal and local income tax
returns and franchise tax returns of Company for their last three (3) fiscal
years, or such shorter period of time as any of them shall have existed, are
attached hereto as Schedule 4.22 or have otherwise been delivered to RV Centers.
The Company has a taxable year ended as of the year end date in the Year-end
Financial Statements in Schedule 4.9. Except as set forth on Schedule 4.22, the
Company uses the accrual method of accounting for income tax purposes, and the
Company's methods of accounting have not changed in the past five years. The
Company is not an Investment Company as defined in Section 351(e)(1) of the
Code. Except as set forth on Schedule 4.22, the Company is not and has not been
a party to any tax sharing agreement or agreement of similar effect. Except as
set forth on Schedule 4.22, the Company is not and has not been a member of any
consolidated group. The Company has not received, been denied, or applied for
any private letter ruling during the last ten years.
(b) The Company has timely filed all requisite Federal, state, local
and other income and payroll tax returns or extension requests for all fiscal
periods ended on or prior to the date hereof; and except as set forth on
Schedule 4.22, there are no examinations in progress or claims pending against
the Company for federal, state, local and other Taxes (including penalties and
interest) for
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any period or periods ended on or prior to the date hereof and no notice of any
claim for Taxes, whether pending or threatened, has been received. All Taxes,
including interest and penalties (whether or not shown on any tax return), owed
by the Company have been paid or reflected as accrued. The amounts shown as
accruals for Taxes on the Company's Financial Statements are sufficient for the
payment of all Taxes of the kinds indicated (including penalties and interest)
for all fiscal periods ended on or before that date.
(c) If the Company is an S corporation, the Company makes the
representations and warranties in this subsection 4.22(c). Except as set forth
in Schedule 4.22 or disclosed in the Year- end Financial Statements, the Company
has been a validly existing S corporation within the meaning of Sections 1361
and 1362 of the Code at all times during its existence and the Company will be
an S corporation up to and including the day before the Closing Date. The
Company would not be liable for any tax under Section 1374 of the Code if its
assets were sold for their fair market value as of the Closing Date. Neither the
Company nor any qualified subchapter S subsidiary of the Company has, in the
past 10 years, (A) acquired assets from another corporation in a transaction in
which the Company's tax basis in the acquired assets was determined, in whole or
part, by reference to the tax basis of the acquired assets in the hands of the
transferor or (B) acquired the stock of any corporation which is a qualified
subchapter S subsidiary. The Stockholders shall pay, and they hereby indemnify
RV Centers and the Company against, all income taxes payable with respect to the
Company's operations for all periods through and including the Consummation
Date.
4.23 NO VIOLATIONS; NO CONSENT REQUIRED, ETC.
(a) The Company is not in violation of any Charter Document. Except as
set forth on Schedule 4.23(a), neither the Company nor, to the knowledge of the
Stockholders, any other party thereto, is in default under any lease,
instrument, agreement, license, or permit set forth on Schedule 4.10(b), 4.12,
4.14, 4.15(b) or 4.16 (the "Material Documents").
(b) Except as set forth on Schedule 4.23(b), the execution and delivery
of this Agreement by each of the Company and the Stockholders do not violate,
conflict with or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company under any of the terms,
conditions or provisions of (i) the Charter Documents of the Company, (ii) any
statute, law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or license of any court or governmental authority applicable to the
Company or any of its properties or assets, or (iii) any Material Document to
which the Company or any of the Stockholders is now a party or by which any of
the Stockholders or the Company or any of its properties or assets may be bound
or affected. The consummation by the Company and the Stockholders of the
transactions contemplated herein will not result in any material violation,
conflict, breach, right of termination or acceleration or creation of liens
under any of the terms, conditions or provisions of the items described in
clauses (i) through (iii) of the preceding sentence, subject, in the case of the
terms,
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conditions or provisions of the items described in clause (iii) above, to
obtaining (prior to the Effective Time) such consents as may be required from
commercial lenders, lessors or other third parties.
(c) Except as set forth on Schedule 4.23(c) and except for requirements
under the ▇▇▇▇- ▇▇▇▇▇ Act, none of the Material Documents requires notice to, or
the consent or approval of, any governmental agency or other third party with
respect to the consummation by the Company and the Stockholders of any of the
transactions contemplated herein in order to remain in full force and effect,
and consummation by the Company and the Stockholders of the transactions
contemplated herein will not give rise to any right to termination, cancellation
or acceleration or loss of any right or benefit.
(d) Except for (i) the filing of the Registration Statement, (ii) the
declaration of the effectiveness thereof by the SEC and filings with various
state blue sky authorities and (iii) any filing required under the ▇▇▇▇-▇▇▇▇▇
Act in connection with the purchase and sale of the Company Stock, no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of, any governmental or regulatory body or authority is
necessary for the execution and delivery of this Agreement by the Company and
the Stockholders or the consummation by the Company and the Stockholders of the
transactions contemplated herein.
(e) Except as set forth on Schedule 4.23(e), none of the Material
Documents prohibits the use or publication by the Company or RV Centers of the
name of any other party to such Material Document, and none of the Material
Documents prohibits or restricts the Company from providing services or selling
products to any other customer or potential customer of the Company, RV Centers
or any Other Founding Company.
4.24 GOVERNMENT CONTRACTS. Except as set forth on Schedule 4.24, the
Company is not a party to any governmental contract subject to price
redetermination or renegotiation.
4.25 ABSENCE OF CHANGES. Since June 30, 1998, except as set forth on
Schedule 4.25 or as otherwise contemplated herein, there has not been:
(i) any Material Adverse Change in the Company;
(ii) any material damage, destruction or loss to any property
or asset of the Company (whether or not covered by insurance) which has
caused a Material Adverse Effect on the Company;
(iii) any change in the authorized capital of the Company or
its outstanding securities or any change in its ownership interests or
any grant of any options, warrants, calls, conversion rights or
commitments;
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(iv) any declaration or payment of any dividend or
distribution in respect of the capital stock or any direct or indirect
redemption, purchase or other acquisition of any of the capital stock
of the Company except for distributions that are described in Annex I;
(v) any increase in the compensation, bonus, sales commissions
or fee arrangement payable or to become payable by the Company to any
of its officers, directors, Stockholders, employees, consultants or
agents, except for ordinary and customary bonuses and salary increases
for employees in accordance with past practice; notwithstanding the
foregoing, the Company has not paid or agreed to pay salary, bonus,
sales commissions, fees or any other form of compensation, directly or
indirectly, to the Stockholders or any members of their family in
excess of the aggregate monthly compensation provided for in Annex I
hereto.
(vi) any work interruptions, labor grievances or claims filed,
or any similar event or condition of any character which has caused a
Material Adverse Effect on the Company;
(vii) any sale or transfer, or any agreement to sell or
transfer, any material assets, property or rights of the Company to any
Person, including, without limitation, the Stockholders and their
Affiliates, except inventory sold in the ordinary course of business;
(viii) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to the Company, including
without limitation any indebtedness or obligation of any Stockholders
or any Affiliate thereof;
(ix) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the
material assets, property or rights of the Company or requiring consent
of any party to the transfer and assignment of any such assets,
property or rights;
(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets
outside of the ordinary course of the Company's business;
(xi) any waiver of any material rights or claims of the
Company;
(xii) any amendment or termination of any material contract,
agreement, license, permit or other right to which the Company is a
party;
(xiii) any transaction by the Company outside the ordinary
course of its business;
(xiv) any cancellation or termination of a material contract
with a customer or client prior to the scheduled termination date other
than in the ordinary course of business of the Company and of which
notice has been given to RV Centers;
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(xv) any other distribution of property or assets by the
Company other than in the ordinary course of business and other than
distributions of real estate and other assets as permitted by this
Agreement (including the Schedules hereto); or
(xvi) any occurrence that is reasonably likely to give rise to
a contingent liability which would have a Material Adverse Effect on
the Company excluding occurrences due to general economic conditions,
legislative or regulatory developments or occurrences affecting the
recreational vehicle industry generally.
4.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. The Company has delivered to
RV Centers an accurate schedule (which is set forth on Schedule 4.26) as of the
date of the Agreement of:
(i) the name of each financial institution in which the
Company has accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or
have access thereto.
All of the cash indicated on the Company's balance sheet as of June 30,
1998, was held in the accounts listed on Schedule 4.26, and as of the
Consummation Date, the Company will have no other accounts. Schedule 4.26 also
sets forth the name of each person, corporation, firm or other entity holding a
general or special power of attorney from the Company and a description of the
terms of such power.
4.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by the Company and the performance by the Company of the transactions
contemplated herein have been duly and validly authorized by the Board of
Directors and the Stockholders of the Company and this Agreement has been duly
and validly authorized by all necessary corporate action and is a valid and
binding obligation of the Company, subject to the effect of applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium,
liquidation or other similar laws and equity principles relating to creditors'
rights generally.
4.28 RELATIONS WITH GOVERNMENTS. None of the Company, any of the
Stockholders, nor any Affiliate of any of them has given or offered anything of
value to any governmental official, political party or candidate for government
office nor has it or any of them otherwise taken any action which would in any
case cause the Company to be in violation of the Foreign Corrupt Practices Act
of 1977, as amended, or any law of similar effect.
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4.29 DISCLOSURE. (a) The representations and warranties of the
Stockholders as set forth in this Agreement, including the Annexes and Schedules
hereto, to the extent such representations and warranties relate to the Company
and the Stockholders, and the completed Director and Officer Questionnaires,
with respect to any Stockholder who has completed such Questionnaires do not
contain an untrue statement of a material fact concerning the Company or the
Stockholders or omit to state a material fact concerning the Company or the
Stockholders necessary to make the statements herein and therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that the foregoing does not apply to statements contained in or omitted from any
of such documents made or omitted in reliance upon information furnished in
writing by the Other Founding Companies, RV Centers and its Affiliates or any
representatives or agents of RV Centers and its Affiliates.
(b) The Stockholders acknowledge and agree that (i) there exists no
firm commitment, binding agreement, or promise or other assurance of any kind,
whether express or implied, oral or written, that a Registration Statement will
become effective or that the IPO pursuant thereto will occur; (ii) neither RV
Centers nor ▇▇▇▇▇ ▇▇▇▇▇ Funding I, L.L.C. or any of their officers, directors,
agents or representatives nor any Underwriter shall have any liability to the
Company, the Stockholders or any other person affiliated or associated with the
Company for any failure of the Registration Statement to become effective, the
IPO to occur at a particular price or within a particular range of prices or to
occur at all, the transactions contemplated by this Agreement to be successful
or the prospects for RV Centers described in the Registration Statement to be
realized; and (iii) the decision of Stockholders to enter into this Agreement,
or to vote in favor of or consent to the proposed purchase of RV Centers Stock
and sale of the Company Stock, has been or will be made independent of, and
without reliance upon, any statements, opinions or other communications, or due
diligence investigations which have been or will be made or performed by any
prospective Underwriter, relative to RV Centers or the prospective IPO.
(c) No Stockholder has any present plan, intention, commitment or
binding agreement or arrangement to dispose of any shares of RV Centers Stock to
be received by such Stockholder as a result of the transactions contemplated in
this Agreement, except for transfers permitted pursuant to Sections 14 and 15
hereof.
4.30 PROHIBITED ACTIVITIES. Except as set forth on Schedule 4.30, the
Company has not, between the Balance Sheet Date and the date hereof, taken any
of the actions (Prohibited Activities) set forth in Section 6.3.
4.31 NO WARRANTIES OR INSURANCE. Except as set forth on Schedule 4.31,
the Company has no liability to any person under any warranty relating to goods
sold or services provided by the Company and the Company does not offer or sell
insurance or consumer protection plans or other arrangements that could result
in the Company being required to make any payment to or perform any service for
any person.
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4.32 INTEREST IN CUSTOMERS AND SUPPLIERS AND RELATED PARTY
TRANSACTIONS. Except as described on Schedule 4.32, no Stockholder, officer,
director or Affiliate of the Company (i) possesses, directly or indirectly, any
financial interest in, or is a director, officer, employee or Affiliate of, any
corporation, firm, association or business organization that is a client,
supplier, customer, lessor, lessee or competitor of the Company, or (ii) is a
party to an agreement or relationship, that involves the receipt by such person
of compensation or property from the Company other than through a customary
employment relationship.
4.33 REGISTRATION STATEMENT. None of the information supplied by the
Company in writing for inclusion in the Registration Statement contains any
untrue statement of a material fact concerning the Company or the Stockholders
or has omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein concerning the Company or the
Stockholders, in light of the circumstances under which they are made, not
misleading. The Stockholders will have the right to review and approve in
advance any statements made about the Company in the Registration Statement.
4.34 INVENTORY. Except as provided in Schedule 4.34, all of the
Company's inventories at June 30, 1998 are reflected on the Interim Financial
Statements. The values at which inventories are carried on the Interim Financial
Statements reflect the normal inventory valuation policies of the Company in
conformity with GAAP consistently applied. The inventories reflected on the
Interim Financial Statements or arising since the date thereof are currently
marketable and substantially all of such inventories can reasonably be
anticipated to be sold at normal ▇▇▇▇-ups within 180 days after the date hereof
in the ordinary course of business (subject to any reserve for obsolete,
off-grade or slow-moving items that is reflected in the Interim Financial
Statements) except for spare parts inventory which inventory is good and usable.
4.35 YEAR 2000. Except and to the extent described in Schedule 4.35,
the "Information Technology" (as defined below in this Section 4.35) of the
Company and its Subsidiaries is Year 2000 compliant. "Year 2000 compliant" means
that the Information Technology is designed to be used prior to, during and
after the calendar Year 2000 A.D. and the Information Technology used during
each such time period will accurately receive, provide and process date/time
data (including, but not limited to, calculating, comparing and sequencing)
from, into and between the 20th and 21st centuries, including the years 1999 and
2000, and leap-year calculations and will not malfunction, cease to function, or
provide invalid or incorrect results as a result of date/time data.
For purposes hereof, "Information Technology," means all computer
operated or micro processor controlled equipment, including, but not limited to
computer software, computer hardware and related software, all central
processing units, terminals, disk drives, tape drives, electronic memory units,
printers, keyboards, screens, peripherals (and other input/output devices),
modems and other communication controllers, and any and all parts and
appurtenances thereto, together with all intellectual property used in the
operation of such computer equipment and hardware, and other similar or related
items of automated, computerized, or software system(s) that are used or relied
on by the Company or its Subsidiaries in the conduct of their business.
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(B) Individual Representations and Warranties of Stockholders.
Each Stockholder severally represents and warrants that the
representations and warranties set forth below are true as of the date of this
Agreement, and that the representations and warranties set forth in Section 4(B)
shall survive the Consummation Date.
4.36 AUTHORITY; OWNERSHIP. Such Stockholder has the full legal right,
power and authority to enter into this Agreement. Such Stockholder owns
beneficially and of record all of the shares of the Company Stock identified on
Schedule 4.3 hereto as being owned by such Stockholder, and such Company Stock
is owned free and clear of all liens, encumbrances and claims of every kind.
4.37 PREEMPTIVE RIGHTS. Stockholder does not have, or hereby waives,
any preemptive or other right to acquire shares of Company Stock that such
Stockholder has or may have had. Nothing herein, however, shall limit or
restrict the rights of any Stockholder to acquire RV Centers Stock pursuant to
(i) this Agreement or (ii) any outstanding option, warrant or other rights
granted by RV Centers.
5. REPRESENTATIONS OF RV CENTERS
Except as set forth in the disclosure schedules attached hereto and
except otherwise qualified below, RV Centers represents and warrants that all of
the following representations and warranties in this Section 5 are true at the
date of this Agreement, and that such representations and warranties, except for
those in Section 5.3, shall survive the Consummation Date until June 30, 2000
(the "Expiration Date"). The representations and warranties set forth in Section
5.3 shall survive until the date on which the applicable statute of limitations
expires, which date shall be the "Expiration Date" for purposes of Section 5.3.
5.1 DUE ORGANIZATION. RV Centers is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Delaware, and it has the requisite power and authority to carry on its business
as it is now being conducted and as contemplated in the RV Centers Plan of
Organization. RV Centers is duly qualified or authorized to do business and is
in good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or authorization
necessary, except where the failure to be so qualified or authorized to do
business would not have a Material Adverse Effect. True, complete and correct
copies of the Certificate of Incorporation and By-laws, as proposed to be
amended, of RV Centers (the "RV Centers Charter Documents") are attached hereto
as Annex II.
5.2 AUTHORIZATION. (i) The officers of RV Centers executing this
Agreement have the authority to enter into and bind RV Centers to the terms of
this Agreement and (ii) RV Centers has the full legal right, power and authority
to enter into and perform this Agreement and consummate the transactions
contemplated herein. All corporate acts and other proceedings required to have
been taken by RV Centers to authorize the execution, delivery and performance of
this Agreement
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and all the transactions contemplated hereby have been duly and properly
authorized. Copies of the most recent resolutions adopted by the Board of
Directors of RV Centers, which approve this Agreement and the transactions
contemplated herein in all respects, certified by the Secretary or an Assistant
Secretary of RV Centers, as the case may be, as being in full force and effect
on the date hereof, are attached hereto as Schedule 5.2.
5.3 CAPITAL STOCK OF RV CENTERS. As of the date of this Agreement, the
authorized capital stock of RV Centers is as set forth on Schedule 5.3.
Immediately prior to the Closing Date and the Consummation Date, all of the
issued and outstanding shares of the capital stock of RV Centers will be as set
forth in the Registration Statement, free and clear of all liens, security
interests, pledges, charges, voting trusts, restrictions, encumbrances and
claims of every kind other than any restrictions described in the Registration
Statement. All of the issued and outstanding shares of the capital stock of RV
Centers has been duly authorized and validly issued, are fully paid and
nonassessable and such shares were offered, issued, sold and delivered by RV
Centers in compliance with all applicable state and Federal laws concerning the
issuance of securities. Further, none of such shares were issued in violation of
the preemptive rights of any past or present stockholder of RV Centers.
5.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for
the Other Agreements and except as set forth in the Draft Registration
Statement, (i) no option, warrant, call, conversion right or commitment of any
kind exists which obligates RV Centers to issue any of its authorized but
unissued capital stock; and (ii) RV Centers has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof. The outstanding options, warrants or other rights to acquire
shares of the stock of RV Centers will be as described in the Registration
Statement.
5.5 SUBSIDIARIES. RV Centers has no subsidiaries. RV Centers does not
presently own, of record or beneficially, or control, directly or indirectly,
any capital stock, securities convertible into capital stock or any other equity
interest in any corporation, association or business entity, and RV Centers,
directly or indirectly, is not a participant in any joint venture, partnership
or other non-corporate entity.
5.6 NO VIOLATIONS. (a) RV Centers is not in violation of any RV Centers
Charter Document. Neither RV Centers nor, to the best knowledge of RV Centers,
any other party thereto, is in default under any lease, instrument, agreement,
license, or permit to which RV Centers is a party, or by which RV Centers, or
any of its properties, is bound (collectively, the "RV Centers Documents").
(b) The execution and delivery of this Agreement by RV Centers does not
violate, conflict with or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or
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result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of RV Centers under any of the terms,
conditions or provisions of (i) the RV Centers Charter Documents, (ii) any
statute, law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or license of any court or governmental authority applicable to RV
Centers or any of its properties or assets, or (iii) any RV Centers Document.
The consummation by RV Centers of the transactions contemplated herein will not
result in any material violation, conflict, breach, right of termination or
acceleration or creation of liens under any of the terms, conditions or
provisions of the items described in clauses (i) through (iii) of the preceding
sentence, subject, in the case of the terms, conditions or provisions of the
items described in clause (iii) above, to obtaining (prior to the Effective
Time) such consents as may be required from commercial lenders, lessors or other
third parties.
(c) Except for (i) the filings with the SEC pursuant to the 1933 Act in
connection with the IPO and the purchase and sale of the Company Stock, (ii) the
declaration of the effectiveness thereof by the SEC and filings with various
state blue sky authorities, and (iii) any filings required under the ▇▇▇▇-▇▇▇▇▇
Act in connection with the transactions contemplated by the RV Centers Plan of
Organization, none of the RV Centers Documents requires notice to, or the
consent or approval of, any governmental agency or other third party with
respect to the consummation by RV Centers of any of the transactions
contemplated herein, and consummation by RV Centers of the transactions
contemplated herein will not give rise to any right to termination, cancellation
or acceleration or loss of any material right or benefit under any of the RV
Centers Documents.
(d) Except for (i) the filings with the SEC pursuant to the 1933 Act in
connection with the IPO and the purchase and sale of the Company Stock, (ii) the
declaration of the effectiveness thereof by the SEC and filings with various
state blue sky authorities, and (iii) any filings required under the ▇▇▇▇-▇▇▇▇▇
Act in connection with the transactions contemplated in the RV Centers Plan of
Organization, no declaration, filing or registration with, notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the execution and delivery of this Agreement by RV
Centers or the consummation by RV Centers of the transactions contemplated
herein.
5.7 VALIDITY OF OBLIGATIONS. The execution and delivery of this
Agreement by RV Centers and the performance of the transactions contemplated
herein have been duly and validly authorized by the Board of Directors of RV
Centers and this Agreement has been duly and validly authorized by all necessary
corporate action and is a legal, valid and binding obligation of RV Centers.
5.8 RV CENTERS STOCK. At the time of issuance thereof and delivery to
the Stockholders, the RV Centers Stock to be delivered to the Stockholders
pursuant to this Agreement will constitute valid, duly authorized and legally
issued shares of RV Centers, fully paid and nonassessable, and with the
exception of restrictions upon resale set forth in Sections 14 and 15 hereof,
will be identical in all substantive respects (which do not include the form of
certificate upon which it is printed or the presence or absence of a CUSIP
number on any such certificate) to the RV Centers Stock issued
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and outstanding as of the date hereof by reason of the provisions of the
Delaware GCL. The RV Centers Stock issued and delivered to the Stockholders
shall at the time of such issuance and delivery be free and clear of any liens,
claims or encumbrances of any kind or character. The shares of RV Centers Stock
to be issued to the Stockholders pursuant to this Agreement will not be
registered under the 1933 Act, except as provided in Section 16 hereof.
5.9 BUSINESS; REAL PROPERTY; MATERIAL AGREEMENTS. RV Centers was formed
in May, 1998 and has conducted only limited operations since that time. RV
Centers has not conducted any material business since the date of its inception,
except in connection with this Agreement, the Other Agreements and the IPO.
Except as described in the Draft Registration Statement, RV Centers does not own
and has not at any time owned any real property or any material personal
property and is not a party to any other material agreement other than the Other
Agreements, the agreements contemplated hereby and such agreements as will be
filed as Exhibits to the Registration Statement. Except as set forth in the
Registration Statement, RV Centers has not entered into any material agreement
with any of the Founding Companies or any of the stockholders of the Founding
Companies other than the Other Agreements and the agreements contemplated in
each of the Other Agreements and the Registration Statement, including the
employment agreements and leases referred to herein or entered into in
connection with the transactions contemplated herein and therein.
5.10 INVESTMENT REPRESENTATIONS. RV Centers represents that the Company
Stock is being acquired by RV Centers for its own account for investment
purposes only and not with a view to the distribution thereof within the meaning
of the 1933 Act.
5.11 AUTHORIZATION OF OTHER AGREEMENTS. The Other Agreements have been
duly authorized, executed and delivered by RV Centers and constitute the legal,
valid and binding obligation of RV Centers enforceable against RV Centers in
accordance with their respective terms, subject to the effect of applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium,
liquidation or other similar laws and equity principles relating to creditors'
rights generally.
5.12 FINANCIAL STATEMENTS. The unaudited pro forma financial statements
of RV Centers included in the Draft Registration Statement comply as to form in
all material respects to the applicable accounting requirements of the 1933 Act
and the regulations promulgated under the 1933 Act. Management of RV Centers
believes that the assumptions underlying the pro forma adjustments utilized in
the preparation of such pro forma financial statements are reasonable, and such
pro forma adjustments have been properly applied to the historical financial
amounts in the compilation of the pro forma financial statements. Based on the
representations in Section 4.9 of this Agreement and in Section 4.9 of each of
the Other Agreements, to the knowledge of RV Centers, the pro forma financial
information of RV Centers fairly presents the pro forma financial position,
results of operations and other information purported to be shown therein at the
respective dates and for the respective periods specified.
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5.13 LIABILITIES AND OBLIGATIONS. Except as set forth in the Draft
Registration Statement, as of the date of this Agreement, RV Centers has no
material liabilities or obligations of any kind, character or description,
whether accrued, absolute, secured or unsecured, contingent or otherwise, other
than liabilities incurred in the ordinary course of business and consistent with
past practices, liabilities or obligations set forth in or contemplated by this
Agreement and the Other Agreements and except for fees incurred in connection
with the transactions contemplated hereby and thereby.
5.14 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth in
the Draft Registration Statement, RV Centers is not in violation of any law or
regulation or any order of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over it and its stockholders and, there are no claims,
actions, suits or proceedings, pending or, to the knowledge of RV Centers,
threatened against or affecting, RV Centers, at law or in equity, or before or
by any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over it and no
notice of any claim, action, suit or proceeding, whether pending or threatened,
has been received. RV Centers has conducted and is conducting its businesses in
compliance in all material respects with the requirements, standards, criteria
and conditions set forth in applicable Federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations and is not in violation, in any material respect, of any of the
foregoing.
5.15 NO SIDE AGREEMENTS. RV Centers has not entered into any agreement
with any of the Founding Companies or any of the Stockholders of the Founding
Companies other than the Other Agreements and the agreements referred to in the
Other Agreements or the Draft Registration Statement, including the employment
agreements and/or advisory agreements and leases referred to herein or entered
into in connection with the transactions contemplated hereby and thereby. RV
Centers has not entered into any agreements providing for rights to register
shares of RV Centers Stock under the 1933 Act except as provided in Section 16
of this Agreement, in Section 16 of the Other Agreements and the Exhibits to the
Draft Registration Statement.
5.16 RELATIONS WITH GOVERNMENTS. Neither RV Centers nor any of its
directors, officers or Affiliates has given or offered anything of value to any
government official, political party or candidate for government office, nor has
RV Centers, any of its directors, officers or Affiliates of any of them
otherwise taken any action, which would cause RV Centers to be in violation of
the Foreign Corrupt Practices Act of 1977, as amended, or any law of similar
effect.
5.17 OTHER AGREEMENTS. The Other Agreements have been duly authorized,
executed and delivered by RV Centers and constitute the legal, valid and binding
obligation of RV Centers enforceable against RV Centers in accordance with their
respective terms. Except as disclosed on Schedule 5.17 or the Draft Registration
Statement, the terms and conditions of the Other Agreements and the employment
agreements, advisory agreements and leases attached as annexes thereto
(excluding the terms relating to the consideration payable by RV Centers
thereunder) are identical in all material respects to the terms and conditions
in this Agreement and its comparable Annexes.
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5.18 REGISTRATION STATEMENT. On the date of each filing of the
Registration Statement with the SEC the Registration Statement will comply, as
to form in all material respects with the requirements of the Form S-1
Registration Statement and applicable requirements under Federal laws and
regulations (except for the inclusion of all exhibits required to be filed
therewith with respect to the Draft Registration Statement and the Registration
Statement prior to its effective date), provided that the foregoing does not
apply to any information that the Company and the Stockholders have furnished to
RV Centers in writing specifically for inclusion in the Registration Statement.
5.19 DISCLOSURE. The Draft Registration Statement delivered to the
Company and the Stockholders does not as of the date hereof contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing does not apply to
statements contained in or omitted from any of such documents made or omitted in
reliance upon, and in conformity with, information furnished to RV Centers by
the Company or the Stockholders in writing specifically for inclusion in the
Registration Statement. The Registration Statement, when it becomes effective,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and each prospectus included therein, on the date of
filing thereof with the SEC and at the Closing Date and the Consummation Date,
will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, information furnished to RV Centers by
the Company or the Stockholders in writing specifically for inclusion therein.
6. COVENANTS PRIOR TO CLOSING
6.1 ACCESS AND COOPERATION; DUE DILIGENCE.
(a) Between the date of this Agreement and the Consummation Date, the
Company will afford to the officers and authorized representatives of RV Centers
reasonable access during normal business hours to all of the Company's sites,
properties, books and records and will furnish RV Centers with such additional
financial and operating data and other information as to the business and
properties of the Company as RV Centers may from time to time reasonably
request. The Company will cooperate with RV Centers, its representatives,
auditors and counsel in the preparation of any documents or other material which
may be required in connection with any documents or materials required by this
Agreement. RV Centers will treat all information obtained in connection with the
negotiation and performance of this Agreement or the due diligence
investigations conducted with respect to the Company as confidential in
accordance with the provisions of Section 13 hereof.
(b) Between the date of this Agreement and the Consummation Date, RV
Centers will afford to the officers and authorized representatives of the
Company and/or the Stockholder access
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to all of RV Centers's sites, properties, books and records and will furnish the
Company and/or the Stockholder with such additional financial and operating data
and other information as to the business and properties of RV Centers as the
Company and/or the Stockholder may from time to time reasonably request. RV
Centers will cooperate with the Company and/or the Stockholder, their
representatives, auditors and counsel in the preparation of any documents or
other material which may be required in connection with any documents or
materials required by this Agreement. The Company and/or the Stockholder will
cause all information obtained in connection with the negotiation and
performance of this Agreement (including information regarding each of the Other
Founding Companies) to be treated as confidential in accordance with the
provisions of Section 13 hereof.
6.2 CONDUCT OF BUSINESS PENDING CLOSING. Except as set forth on
Schedule 6.2, between the date of this Agreement and the Consummation Date, the
Company will:
(i) carry on its respective businesses in the ordinary course,
consistent with past practice, and not introduce any material new
method or changes in operation or accounting;
(ii) use all commercially reasonable efforts to maintain its
respective properties, equipment and facilities, including those held
under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform all of its obligations under agreements relating
to or affecting its assets, properties, equipment or rights, the
nonperformance of which could have a Material Adverse Effect on the
Company;
(iv) use all reasonable efforts to keep in full force and
effect present insurance policies or other comparable insurance
coverage;
(v) use reasonable efforts to maintain and preserve its
business organization intact, retain its respective key employees and
maintain its respective material relationships with suppliers,
customers and others having business relations with the Company;
(vi) maintain compliance with all permits, laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities, the
noncompliance with which could have a Material Adverse Effect on the
Company;
(vii) maintain present debt and lease instruments in
accordance with their terms and not enter into new or amended debt or
lease instruments without the knowledge and written consent of RV
Centers (which consent shall not be unreasonably withheld) provided
that debt or lease instruments may be replaced without the consent of
RV Centers if the replacement instruments are on terms at least as
favorable to the Company as the instruments being replaced;
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(viii) maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for
ordinary and customary bonus and salary increases for employees in
accordance with past practices; notwithstanding the foregoing, the
Company will not pay or agree to pay salary, bonus, sales commissions,
fees or any other form of compensation, directly or indirectly, to the
Stockholders or any members of their family in excess of the aggregate
monthly compensation provided for in Annex I hereto; and
(ix) pay all of its obligations, including but not limited to
taxes, loans and manufacturers' invoices, as they become due and
payable and not prepay any of its obligations.
6.3 PROHIBITED ACTIVITIES. Except as set forth on Schedule 6.3 or on
Annex I to this Agreement, between the date hereof and the Consummation Date,
the Company will not, without prior written consent of RV Centers:
(i) make any change in its Charter Documents;
(ii) issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any kind
other than in connection with the exercise of options or warrants
listed in Schedule 4.4;
(iii) declare or pay any dividend, or make any distribution in
respect of its stock whether now or hereafter outstanding, or purchase,
redeem or otherwise acquire or retire for value any shares of its
stock;
(iv) enter into any contract or commitment or incur or agree
to incur any liability or make any capital expenditures, except if it
is in the normal course of business (consistent with past practice) or
involves an amount per contract, commitment, liability or expenditure,
in the aggregate, not in excess of $100,000 except for purchases and
sales of recreational vehicles inventory in the ordinary course of
business;
(v) create or assume to exist any mortgage, pledge or other
lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens
incurred in connection with the acquisition of equipment, (excluding
rolling stock inventory) with an aggregate cost, per item, not in
excess of $25,000 necessary or desirable for the conduct of the
businesses of the Company, (2) (A) liens for taxes either not yet due
or being contested in good faith and by appropriate proceedings (and
for which contested taxes adequate reserves have been established and
are being maintained) or (B) materialmen's, mechanics', workers',
repairmen's, employees' or other like liens arising in the ordinary
course of business (the liens set forth in clause (2) being referred to
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herein as "Statutory Liens"), or (3) liens set forth on Schedule
4.10(b), 4.15(b) and/or 4.16 hereto;
(vi) sell, assign, lease or otherwise transfer or dispose of
any property or equipment with a net book value in excess of $25,000
except in the normal course of business;
(vii) consummate or enter into any commitment for the
acquisition of any business or the start-up of any new business;
(viii) merge or consolidate or agree to merge or consolidate
with or into any other corporation;
(ix) waive any material rights or claims of the Company,
provided that the Company may negotiate and adjust bills and accounts
in the course of good faith disputes with customers in a manner
consistent with past practice, provided, further, that such adjustments
shall not be deemed to be included in Schedule 4.11 unless specifically
listed thereon;
(x) commit a material breach of or amend or terminate any
material agreement, permit, license or other right of the Company;
(xi) enter into any other transaction outside the ordinary
course of its business or prohibited hereunder; or
(xii) pay or agree to pay salary, bonus, sales commissions,
fees or any other form of compensation, directly or indirectly, to the
Stockholders or any members of their family in excess of the aggregate
monthly compensation provided for in Annex I hereto.
6.4 NO SHOP. None of the Stockholders or the Company, nor any
agent, officer, director, trustee or any representative of any of the foregoing
will, during the period commencing on the date of this Agreement and ending
with the earlier to occur of the Consummation Date or the termination of this
Agreement in accordance with its terms, directly or indirectly:
(i) solicit or initiate the submission of proposals or offers
from any person for,
(ii) participate in any discussions pertaining to, or
(iii) furnish any information to any person other than RV
Centers or its authorized agents relating to,
any acquisition or purchase of all or a material amount of the assets of, or any
equity interest in, the Company or a merger, consolidation, share exchange or
business combination of the Company.
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6.5 AGREEMENTS. Except as disclosed on Schedule 6.5, the Stockholders
and the Company shall terminate (i) any stockholders agreements, voting
agreements, voting trusts, options, warrants and employment agreements between
the Company and any employee listed on Schedule 8.11 hereto and (ii) except as
otherwise provided in this Agreement, any existing agreement between the Company
and any Stockholder, on or prior to the Consummation Date, provided that nothing
herein shall prohibit or prevent the Company from paying (either prior to or on
the Closing Date) notes or other obligations from the Company to the
Stockholders in accordance with the terms thereof, which terms have been
disclosed to RV Centers. Such termination agreements are listed on Schedule 6.5
and copies thereof are attached thereto.
6.6 NOTIFICATION OF CERTAIN MATTERS. The Stockholders and the Company
shall give prompt notice to RV Centers of the Company's or any Stockholder's
knowledge of (i) the occurrence or non-occurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
of the Company or the Stockholders contained herein to be untrue or inaccurate
in any material respect at or prior to the Closing and (ii) any material failure
of any Stockholder or the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder. RV Centers shall give prompt notice to the Company of RV Centers's
knowledge of (i) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause any representation or warranty
of RV Centers contained herein to be untrue or inaccurate in any material
respect at or prior to the Closing and (ii) any material failure of RV Centers
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder. The delivery of any notice pursuant to this
Section 6.6 shall not be deemed to (i) modify the representations or warranties
hereunder of the party delivering such notice, which modification may only be
made pursuant to Section 6.7, (ii) modify the conditions set forth in Sections 7
and 8, or (iii) limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
6.7 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until 24 hours prior to the
anticipated effectiveness of the Registration Statement to supplement or amend
promptly the Schedules hereto with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the Schedules or which may have
been omitted from the schedules previously provided by the Company; provided
however, that supplements and amendments to Schedules 4.10(b), 4.11, 4.14,
4.15(a), and 4.15(b) shall only have to be delivered at the Closing Date, unless
such Schedule is to be amended to reflect an event occurring other than in the
ordinary course of business. Notwithstanding the foregoing sentence, no
amendment or supplement to a Schedule prepared by the Company that constitutes
or reflects an event or occurrence that would have a Material Adverse Effect on
the Company may be made unless RV Centers consents to such amendment or
supplement; and provided further, that no amendment or supplement to a Schedule
prepared by RV Centers that constitutes or reflects an event or occurrence that
would have a Material Adverse Effect on RV Centers may be made unless a majority
of the Founding Companies consent to such amendment or supplement. For all
purposes of this
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Agreement, including without limitation for purposes of determining whether the
conditions set forth in Sections 7.1 and 8.1 have been fulfilled, the Schedules
hereto shall be deemed to be the Schedules as amended or supplemented pursuant
to this Section 6.7. In the event that the Company seeks to amend or supplement
a Schedule pursuant to this Section 6.7 to reflect an item not known to the
Company or the Stockholders at the time of entering into this Agreement or an
event occurring after the date of this Agreement, and RV Centers does not
consent, in its reasonable discretion, to such amendment or supplement, this
Agreement shall be deemed terminated by mutual consent as set forth in Section
11.1(i) hereof. In the event that RV Centers seeks to amend or supplement a
Schedule pursuant to this Section 6.7 and a majority of the Founding Companies
do not consent to such amendment or supplement, this Agreement shall be deemed
terminated by mutual consent as set forth in Section 11.1(i) hereof. No party to
this Agreement shall be liable to any other party if this Agreement shall be
terminated pursuant to the provisions of this Section 6.7 with respect to an
attempt to supplement or amend a Schedule to reflect an item not known to RV
Centers or the Company or Stockholders, as applicable, at the time of execution
or occurring after the date of execution of this Agreement. No amendment of or
supplement to a Schedule shall be made later than 24 hours prior to the
anticipated effectiveness of the Registration Statement, subject to the proviso
in the first sentence.
6.8 COOPERATION IN PREPARATION OF REGISTRATION STATEMENT. The Company
and the Stockholders shall furnish or use reasonable efforts to cause to be
furnished to RV Centers and the Underwriters all of the information concerning
the Company and the Stockholders and their Affiliates as RV Centers may
reasonably request required for inclusion in, and will cooperate with RV Centers
and the Underwriters in the preparation of, the Registration Statement and the
prospectus included therein (including audited and unaudited financial
statements, prepared in accordance with GAAP, in form suitable for inclusion in
the Registration Statement). The parties hereto agree that the disclosure of
information with respect to the Company and the Stockholders and their
affiliates in the Registration Statement and while marketing the securities of
RV Centers in the IPO shall not be a violation of any confidentiality agreement,
including Article 13 of this Agreement, among the parties hereto or their
officers or stockholders. The Company and the Stockholders agree promptly to
advise RV Centers if at any time during the period in which a prospectus
relating to the offering is required to be delivered under the 1933 Act, any
information contained in the prospectus concerning the Company or the
Stockholders or their Affiliates becomes incorrect or incomplete in any material
respect and to provide the information needed to correct such inaccuracy.
Subject to the Company's right to review and approve such information in the
Registration Statement set forth in Section 4.33 above, only insofar as the
information relates solely to the Company or the Stockholders or their
affiliates, the Company represents and warrants as to such information with
respect to itself, and each Stockholder represents and warrants, as to such
information with respect to the Company and himself or herself, that the
Registration Statement will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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6.9 FINAL FINANCIAL STATEMENTS. The Company shall provide at least five
(5) business days prior to the Consummation Date the consolidated balance sheets
of the Company, audited as of December 31, 1998 and unaudited as of the end of
all fiscal months following December 31, 1998 and ending at least 25 days prior
to the Consummation Date, and the consolidated statement of income, cash flows
and retained earnings of the Company, audited for the quarter ending December
31, 1998 and unaudited for the same months as the balance sheets. Such financial
statements shall have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated (except as noted therein), and
will present fairly the financial position and results of operations of the
Company for the periods indicated therein.
6.10 FURTHER ASSURANCES. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents or take such other action as may be reasonably necessary or
appropriate to carry out the transactions contemplated herein.
6.11 COMPLIANCE WITH THE ▇▇▇▇-▇▇▇▇▇ ACT. All parties to this Agreement
hereby recognize that one or more filings under the ▇▇▇▇-▇▇▇▇▇ Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the ▇▇▇▇-▇▇▇▇▇
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the ▇▇▇▇-▇▇▇▇▇ Act, (ii) such compliance by
the Stockholders and the Company shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 8 of this Agreement,
and such compliance by RV Centers shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 7 of this Agreement,
and (iii) the parties agree to cooperate and use their best efforts to cause all
filings required under the ▇▇▇▇- ▇▇▇▇▇ Act to be made. If filings under the
▇▇▇▇-▇▇▇▇▇ Act are required, the costs and expenses thereof (including filing
fees) shall be borne by RV Centers. The obligation of each party to consummate
the transactions contemplated in this Agreement is subject to the expiration or
termination of the waiting period under the ▇▇▇▇-▇▇▇▇▇ Act, if applicable.
6.12 TRANSFERS OF PERMITS AND INTANGIBLES. The Stockholders shall use
commercially reasonable efforts to cause all trademarks, trade names, patents,
patent applications, copyrights and other intellectual property owned or held by
employees of the Company which are material to the operations of the business of
the Company to be assigned or licensed to the Company for no additional
consideration.
6.13 DIVIDENDS. The Company may, after the Balance Sheet Date and
before the Consummation Date, pay to the Stockholder only the dividends or
distributions expressly permitted by Annex I hereto.
6.14 AUTHORIZED CAPITAL. Prior to the Consummation Date, RV Centers
shall maintain its authorized capital stock as set forth in the Registration
Statement filed with the SEC except for stock splits, such changes in authorized
capital stock as are made to respond to comments made by the SEC or requirements
of any exchange or automated trading system for which application is made
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to register the RV Centers Stock and any changes necessary or advisable in order
to permit the delivery of the opinion contemplated by Section 7.3 hereof.
6.15 YEAR 2000 COMPLIANCE COST ESTIMATES. Promptly upon execution
hereof, the Company and its Subsidiaries will undertake an investigation of all
Information Technology suppliers and vendors to determine whether all
Information Technology products purchased, leased, licensed or used by or in
connection with the Company or its Subsidiaries, or their respective Information
Technology, is Year 2000 compliant and, if not, the steps required to make it
Year 2000 compliant. Within thirty-five (35) days hereof, the Company shall
provide to RV Centers in writing an estimate of the total cost of, and the time
required, to make all the Company's Information Technology Year 2000 compliant.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS AND
COMPANY
The obligations of the Stockholders and the Company with respect to
actions to be taken on the Closing Date are subject to the satisfaction or
waiver on or prior to the Closing Date of all of the following conditions,
except Section 7.8. The obligations of the Stockholders and the Company with
respect to actions to be taken on the Consummation Date are subject to the
satisfaction or waiver on or prior to the Consummation Date of the conditions
set forth in Sections 7.1, 7.2, 7.3, 7.5, 7.6, 7.7 and 7.8. As of the Closing
Date or, with respect to the conditions set forth in Sections 7.1, 7.2, 7.3,
7.5, 7.6, 7.7 and 7.8, as of the Consummation Date, if any such conditions have
not been satisfied, the Stockholders (acting in unison) shall have the right to
terminate this Agreement, or in the alternative, waive any condition not so
satisfied. Any act or action of the Stockholders in consummating the Closing or
delivering the certificates representing Company Stock as of the Consummation
Date shall constitute a waiver of any conditions not so satisfied. However, no
such waiver shall be deemed to affect the survival of the representations and
warranties of RV Centers contained in Section 5 hereof.
7.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of RV Centers contained in this Agreement shall
be true and correct in all material respects as of the Closing Date and the
Consummation Date as though such representations and warranties had been made as
of that time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by RV Centers on or before the Closing Date and the
Consummation Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and the Consummation Date, respectively, and signed by the President or any
Vice President of RV Centers shall have been delivered to the Stockholders.
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7.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock or the IPO or the
consummation of the Other Agreements in a manner that would have a Material
Adverse Effect upon RV Centers or any of its stockholders or Subsidiaries.
7.3 OPINIONS. The Company shall have received (i) an opinion from
counsel for RV Centers, dated the Closing Date, in the form annexed hereto as
Annex III, and (ii) an opinion, from Ernst & Young LLP, dated the Closing Date,
that the RV Centers Plan of Organization will qualify as a tax-free transfer of
property under Section 351 of the Code and that the Stockholders will not
recognize gain to the extent the Stockholders exchange stock of the Company
Stock for RV Centers Stock (but not cash or other property) pursuant to the RV
Centers Plan of Organization.
7.4 REGISTRATION STATEMENT; MINIMUM VALUE. The Registration Statement
shall have been declared effective by the SEC and not subject to any stop order
proceedings and the underwriters named therein shall have agreed to acquire on a
firm commitment basis, subject to the conditions set forth in the underwriting
agreement, shares of RV Centers Stock on terms such that the aggregate value of
the cash and the shares of RV Centers Stock to be received by the Stockholders
is not less than the Minimum Value set forth on Annex I.
7.5 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made and no action
or proceeding shall have been instituted or threatened to restrain or prohibit
the transactions contemplated herein and no governmental agency or body shall
have taken any other action or made any request of the Company as a result of
which the Company deems it inadvisable to proceed with the transactions
hereunder. All consents and approvals of third parties listed on Schedule
4.23(c) shall have been obtained.
7.6 GOOD STANDING CERTIFICATES. RV Centers shall have delivered to the
Company a certificate, dated as of a date no later than ten days prior to the
Closing Date, duly issued by the Delaware Secretary of State and in each state
in which RV Centers is authorized to do business, showing that RV Centers is in
good standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for RV Centers for all periods prior to the Closing
have been filed and paid and RV Centers shall be in good standing in such states
on the Closing Date and the Consummation Date.
7.7 NO MATERIAL ADVERSE CHANGE. No event or circumstance or series of
events shall have occurred with respect to RV Centers which would constitute a
Material Adverse Effect and no change in the disclosures in the Draft
Registration Statement shall have been made which reflects a Material Adverse
Effect on RV Centers.
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7.8 CLOSING OF IPO. The closing of the sale of the RV Centers Stock to
the Underwriters in the IPO shall have occurred on the Consummation Date.
7.9 SECRETARY'S CERTIFICATE. The Company shall have received a
certificate or certificates, dated the Closing Date and signed by the secretary
of RV Centers, certifying the truth and correctness of attached copies of RV
Centers's Certificate of Incorporation (including amendments thereto), By-Laws
(including amendments thereto), and resolutions of the board of directors and,
if required, the stockholders of RV Centers approving RV Centers's entering into
this Agreement and the consummation of the transactions contemplated herein.
7.10 EMPLOYMENT AGREEMENTS. The Company shall have offered to enter
into an employment agreement, substantially in the form of Annex V, with each of
the persons listed in Schedule 8.11.
7.11 OTHER FOUNDING COMPANIES. A sufficient number of the transactions
contemplated by the Other Agreements with the Other Founding Companies are not
consummated for any reason and as a result (i) RV Centers is unable to list the
RV Centers Stock on the New York Stock Exchange, the American Exchange or The
Nasdaq National Stock Market, subject to official notice of issuance, on or
prior to the Closing Date or (ii) the combined revenue of the Founding Companies
for which the transactions contemplated by this Agreement and the Other
Agreements are consummated is less than $175 million based on the 12-month
period ended December 31, 1998.
7.12 MANAGEMENT LOCK-UP AGREEMENTS. The Chairman, Vice Chairman, other
senior management of RV Centers, J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, III and A. ▇▇▇▇ ▇▇▇▇▇ shall
have entered into agreements with RV Centers imposing substantially the same
transfer restrictions as provided in Section 14.1 hereof, on seventy-five
percent (75%) of the shares of RV Centers Stock held by such individuals, their
spouses and children and trusts for the benefit of such individuals.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF RV CENTERS
The obligations of RV Centers with respect to actions to be taken on
the Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the following conditions, except Section 8.12. The
obligations of RV Centers with respect to actions to be taken on the
Consummation Date are subject to the satisfaction or waiver on or prior to the
Consummation Date of the conditions set forth in Sections 8.1, 8.2, 8.4 and
8.12. As of the Closing Date or, with respect to the conditions set forth in
Sections 8.1, 8.2, 8.4 and 8.12, as of the Consummation Date, if any such
conditions have not been satisfied, RV Centers shall have the right to terminate
this Agreement, or waive any such condition. Any act or action of RV Centers in
consummating the Closing or delivering the certificates representing RV Centers
Stock as of the Consummation Date shall constitute a waiver of any conditions
not so satisfied. However, no such waiver shall be deemed to affect the survival
of the representations and warranties contained in Section 4 hereof.
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8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All the
representations and warranties of the Stockholders and the Company contained in
this Agreement shall be true and correct in all material respects as of the
Closing Date and the Consummation Date with the same effect as though such
representations and warranties had been made on and as of such date; all of the
terms, covenants and conditions of this Agreement to be complied with or
performed by the Stockholders and the Company on or before the Closing Date or
the Consummation Date, as the case may be, shall have been duly performed or
complied with in all material respects; and the Stockholders shall have
delivered to RV Centers certificates dated the Closing Date and the Consummation
Date, respectively, and signed by them to such effect.
8.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock or the IPO.
8.3 SECRETARY'S CERTIFICATE. RV Centers shall have received a
certificate, dated the Closing Date and signed by the secretary of the Company,
certifying the truth and correctness of attached copies of the Company Charter
(including amendments thereto), By-Laws (including amendments thereto), and
resolutions of the board of directors and the Stockholders approving the
Company's entering into this Agreement and the consummation of the transactions
contemplated herein.
8.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to the Company which would constitute a Material Adverse
Effect, and the Company shall not have suffered any material loss or damages to
any of its properties or assets, whether or not covered by insurance, which
change, loss or damage materially affects or impairs the ability of the Company
to conduct its business.
8.5 STOCKHOLDERS' RELEASE. The Stockholders shall have delivered to RV
Centers an instrument dated the Closing Date, which shall be effective only upon
the occurrence of the Consummation Date, releasing the Company and RV Centers
from (i) any and all claims of the Stockholders against the Company and RV
Centers and (ii) obligations of the Company and RV Centers to the Stockholders,
except for (A) continuing obligations to Stockholders relating to their
employment by the Company pursuant to employment agreements entered into as
specified in Section 8.11 hereof, (B) obligations arising under this Agreement
or the transactions contemplated hereby and (C) claims of Stockholders against
the Company for unreimbursed business expenses incurred by the Stockholders on
behalf of the Company (other than expenses related to the transactions
contemplated by this Agreement) prior to the Consummation Date or unreimbursed
medical expenses of the Stockholders incurred prior to the Consummation Date
which are covered by the Company's existing health insurance coverage. In the
event that the Consummation Date does not occur, then the release instrument
referenced herein shall be void and of no further force or effect.
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8.6 TERMINATION OF RELATED PARTY AGREEMENTS. Except as set forth on
Schedule 8.6, all existing agreements between the Company and the Stockholders
(and between the Company and entities controlled by the Stockholders) shall have
been canceled effective prior to or as of the Consummation Date.
8.7 OPINION OF COUNSEL. RV Centers and the Underwriters shall have
received an opinion from Counsel to the Company and the Stockholders, dated the
Closing Date, substantially in the form annexed hereto as Annex IV.
8.8 CONSENTS AND APPROVALS. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on Schedule 4.23(c), other than
manufacturers of recreational vehicles, shall have been obtained; provided,
however, Company shall have used its best efforts, in cooperation with RV
Centers, to obtain the consent of the recreational vehicle manufacturers listed
in Schedule 4.23(c); and no action or proceeding shall have been instituted or
threatened to restrain or prohibit the purchase and sale of the Company Stock
and no governmental agency or body shall have taken any other action or made any
request of RV Centers as a result of which RV Centers deems it inadvisable to
proceed with the transactions hereunder.
8.9 GOOD STANDING CERTIFICATES. The Company shall have delivered to RV
Centers a certificate, dated as of a date no earlier than ten days prior to the
Closing Date, duly issued by the appropriate governmental authority in the State
of Incorporation and, unless waived by RV Centers, in each state in which the
Company is authorized to do business, showing the Company is in good standing
and authorized to do business and that all state franchise and/or income tax
returns and taxes for the Company for all periods prior to the Closing have been
filed and paid.
8.10 REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective by the SEC.
8.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on Schedule 8.11
shall have entered into an employment agreement substantially in the form of
Annex V hereto.
8.12 CLOSING OF IPO. The closing of the sale of the RV Centers Stock to
the Underwriters in the IPO shall have occurred simultaneously with the
Consummation Date hereunder and the Stockholders shall have delivered to the
Underwriters such customary closing documents as they may reasonably request.
8.13 FIRPTA CERTIFICATE. Each Stockholder (other than the stockholders
which are foreign entities or foreign residents) shall have delivered to RV
Centers a certificate to the effect that he is not a foreign person pursuant to
Section 1.1445-2(b) of the Treasury regulations.
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8.14 RESIGNATIONS OF DIRECTORS. Any directors of the Company shall have
resigned as directors of the Company.
8.15 LEASE AGREEMENTS. If the Company leases property from any
Stockholder or Affiliate of a Stockholder, the Company and such Stockholder or
Affiliate shall have entered into a lease agreement, substantially in the form
attached as Annex VI hereto, and the Company shall be released from any
liability for loans used to purchase the property.
9. COVENANTS OF RV CENTERS AND THE STOCKHOLDERS AFTER CLOSING
9.1 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as
contemplated by this Agreement or the Registration Statement, after the
Consummation Date, RV Centers shall not and shall not permit any of its
Subsidiaries to undertake any act that would jeopardize the tax-free status of
the exchange of Company Stock for RV Centers Stock (but not cash or other
property), including without limitation the retirement or reacquisition,
directly or indirectly, of all or part of the RV Centers Stock issued in
connection with the transactions contemplated herein.
9.2 PREPARATION AND FILING OF TAX RETURNS.
(i) The Company, if possible, or otherwise the Stockholders
shall file or cause to be filed all tax returns (federal, state, local
or otherwise) of any Acquired Party for all taxable periods that end on
or before the Consummation Date, and shall permit RV Centers to review
all such tax returns prior to such filings except with respect to
information pertaining to members of a consolidated group other than
the Company. Unless the Company is a C corporation, the Stockholders
shall pay or cause to be paid all Tax liabilities (in excess of all
amounts already paid with respect thereto or properly accrued or
reserved with respect thereto on the Company's Financial Statements)
shown by such tax returns to be due or otherwise attributable to such
tax returns.
(ii) If the Company is an S corporation, then upon filing the
final tax returns covering the Company's earnings for the year ended
December 31, 1998 and the period from January 1, 1999 to the
Consummation Date, Stockholders shall provide to RV Centers copies of
the Forms 1120S and Schedule K-1s and equivalent state income tax forms
so filed. If the amount of dividends or distributions made pursuant to
Annex I in anticipation of such taxes exceeds the "Calculated Tax
Amount," as defined below, for the applicable period, then Stockholders
shall repay any excess amount to the Company within 10 days of the
filing of the Form 1120S, or equivalent and provide a written
calculation of the Calculated Tax Amount. If the amount of dividends or
distributions made pursuant to Annex I in anticipation of such taxes is
less than the Calculated Tax Amount for the applicable period, then the
Company shall reimburse Stockholders for the amount of such deficiency
within 10 days of receiving a copy of the filed Form 1120S, Schedule
K-1s or equivalent and a written calculation of the Calculated Tax
Amount. The Calculated Tax Amount shall mean the amount of federal and
state income taxes that was owed on each Stockholder's income from
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the Company, for the periods from July 1, 1998 to December 31, 1998 and
from January 1, 1999 to the Consummation Date, assuming a federal tax
rate of 39.6% and the applicable state tax rate (net of federal
benefits).
(iii) RV Centers shall file or cause to be filed all separate
Returns of, or that include, any Acquired Party for all taxable periods
ending after the Consummation Date.
(iv) Each party hereto shall, and shall cause its Subsidiaries
and Affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in
filing any Return, amended Return or claim for refund, determining a
liability for Taxes or a right to refund of Taxes or in conducting any
audit or other proceeding in respect of Taxes. Such cooperation and
information shall include providing copies of all relevant portions of
relevant Returns, together with relevant accompanying schedules and
relevant work papers, relevant documents relating to rulings or other
determinations by Taxing Authorities and relevant records concerning
the ownership and Tax basis of property, which such party may possess.
Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party
required to file Returns pursuant to this Agreement shall bear all
costs of filing such Returns.
(v) Each of the Company, RV Centers and each Stockholder shall
comply with the tax reporting requirements of Section 1.351-3 of the
Treasury Regulations promulgated under the Code, and treat the
transaction as a tax-free contribution under Section 351(a) of the Code
subject to gain, if any, recognized on the receipt of cash or other
property under Sections 351(b) or 357(c) of the Code.
9.3 DIRECTORS. Upon execution of this Agreement by the Company and
Stockholders and execution of similar agreements by the Other Founding Companies
and their stockholders, each Founding Company shall vote for five
representatives to become Directors of RV Centers. No cumulative voting is
permitted. RV Centers shall appoint those five persons receiving the most votes
as directors promptly following the Consummation Date. The other six persons
identified in the Registration Statement shall also be appointed Directors at
the same time, if not presently on the RV Centers Board of Directors.
9.4 RELEASE FROM GUARANTEES; REPAYMENT OF CERTAIN OBLIGATIONS. RV
Centers shall use reasonable efforts to have the Stockholders released from any
and all guarantees of the Company's indebtedness, including bond obligations,
identified on Schedule 9.4. Prior to obtaining the release of such guarantees,
RV Centers shall, if requested, provide its guarantee of such indebtedness to
the lenders thereof. In the event that RV Centers cannot obtain such releases
from the lenders of any such guaranteed indebtedness identified on Schedule 9.4
on or prior to 180 days subsequent to the Consummation Date, RV Centers shall
promptly pay off or otherwise refinance or retire such indebtedness such that
the Stockholders' personal liability shall be released. RV
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Centers will indemnify the Stockholders against any loss or damage suffered as a
result of the personal guarantees.
9.5 ACCESS TO RECORDS. RV Centers agrees (i) to hold all of the books
and records of the Company existing on the Consummation Date and not to destroy
or dispose of any such books and records for a period of 5 years from the
Consummation Date or such longer time as may be required by law, and (ii)
following the Consummation Date to afford Stockholders, their accountants and
counsel, during normal business hours, upon reasonable request, access to such
books, records and other data of the Company to the extent that such access may
be requested for a legitimate purpose at no cost to Stockholder (other than for
reasonable out-of-pocket expenses).
10. INDEMNIFICATION
The Stockholders and RV Centers each make the following covenants that
are applicable to them, respectively:
10.1 INDEMNIFICATION BY THE STOCKHOLDERS. The Stockholders covenant and
agree that they, jointly and severally, will indemnify, defend, protect and hold
harmless RV Centers and the Company at all times, from and after the date of
this Agreement until the Expiration Date (provided that for purposes of Section
10.1(iii) below, the Expiration Date shall be the date on which the applicable
statute of limitations expires), from and against all claims, damages (including
consequential, punitive or exemplary), actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees, consulting fees and expenses of
investigation and environmental response) incurred by RV Centers and the Company
as a result of or arising from (i) any breach of the representations and
warranties of the Stockholders or the Company set forth herein or on the
schedules or certificates delivered in connection herewith, (ii) any breach of
any agreement on the part of the Stockholders or, prior to the Consummation
Date, the Company under this Agreement, or (iii) any liability under the 1933
Act, the 1934 Act or other Federal or state law or regulation, at common law or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact relating to the Company or the Stockholders which
was based upon and in conformity with information provided in writing to RV
Centers or its counsel by the Company or the Stockholders expressly for use in
the Registration Statement or any prospectus forming a part thereof and is
contained in the Registration Statement or any prospectus forming a part
thereof, or any amendment thereof or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
relating to the Company or the Stockholders required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading to the extent such omission or alleged
omission is based upon the failure of the Company or the Stockholders to provide
to RV Centers the information containing that fact in any Schedule hereto or
otherwise to provide the information to RV Centers in writing, but such
indemnity shall not apply to the extent that such untrue statement (or alleged
untrue statement) was made in, or omission (or alleged omission) occurred in,
any preliminary prospectus and the
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Stockholders provided, in writing, corrected information to RV Centers counsel
and to RV Centers for inclusion in the final prospectus, and such information
was not so included or properly delivered, and provided further, that no
Stockholder shall be liable for any indemnification obligation pursuant to this
Section 10.1 to the extent solely attributable to a breach of any
representation, warranty or agreement made herein individually by any other
Stockholder.
RV Centers acknowledges and agrees that other than the representations
and warranties of the Company or the Stockholders specifically contained in this
Agreement, there are no representations or warranties of the Company or the
Stockholders, either express or implied, with respect to the transactions
contemplated by this Agreement, the Company or its assets, liabilities and
business.
RV Centers and the Company further acknowledge and agree that their
sole and exclusive remedy with respect to any and all claims for breach of this
Agreement and the transactions contemplated in this Agreement, shall be pursuant
to the indemnification provisions set forth in this Section 10. RV Centers and
the Company hereby waive to the fullest extent permitted under applicable law,
any and all other rights, claims and causes of action they or any indemnified
person may have against the Company or any Stockholder relating to this
Agreement or the transactions arising under or based upon any federal, state,
local or foreign statute, law, rule, regulation or otherwise.
10.2 INDEMNIFICATION BY RV CENTERS. RV Centers covenants and agrees
that it will indemnify, defend, protect and hold harmless the Stockholders at
all times from and after the date of this Agreement until the Expiration Date
(provided that for purposes of Section 10.2(iii) below, the Expiration Date
shall be the date on which the applicable statute of limitations expires), from
and against all claims, damages (including consequential, punitive or
exemplary), actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees, consulting fees and expenses of investigation and environmental
response) incurred by the Stockholders as a result of or arising from (i) any
breach by RV Centers of their representations and warranties set forth herein or
on the schedules or certificates delivered in connection herewith, (ii) any
breach of any agreement on the part of RV Centers under this Agreement; or (iii)
any liability under the 1933 Act, the 1934 Act or other Federal or state law or
regulation, at common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact relating to RV Centers
or any of the Founding Companies contained in any preliminary prospectus, the
Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact relating to RV
Centers, any of the Founding Companies or their respective stockholders,
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading, except to
the extent such statement or omission is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission, made therein in
reliance upon, and in conformity with, the representations and warranties of the
Company or the Stockholders
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specifically contained in this Agreement or other information furnished to RV
Centers by the Company or the Stockholders in writing specifically for inclusion
therein.
10.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 10.1, 10.2, or 10.6
hereof (hereinafter the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or the commencement of such action or proceeding.
Such notice shall state the nature and the basis of such claim and a reasonable
estimate of the amount thereof. The Indemnifying Party shall have the right to
defend and settle, at its own expense and by its own counsel, any such matter so
long as the Indemnifying Party pursues the same in good faith and diligently,
provided that the Indemnifying Party shall not settle any such proceeding
without the written consent of the Indemnified Party. If the Indemnifying Party
undertakes to defend or settle, it shall promptly notify the Indemnified Party
of its intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in the defense thereof and in any settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records or information reasonably
requested by the Indemnifying Party that are in the Indemnified Party's
possession or control. All Indemnified Parties shall use the same counsel, which
shall be the counsel selected by Indemnifying Party, provided that if counsel to
the Indemnifying Party shall have a conflict of interest that prevents counsel
for the Indemnifying Party from representing Indemnified Party, Indemnified
Party shall have the right to participate in such matter through counsel of its
own choosing and Indemnifying Party will reimburse the Indemnified Party for the
reasonable expenses of its counsel.
After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability, except (i) as set forth in the preceding
sentence and (ii) to the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified Party shall be reimbursed by
the Indemnifying Party for reasonable additional legal expenses and
out-of-pocket expenses.
If the Indemnifying Party desires to accept a final and
complete settlement of any such Third Person claim involving only the payment of
money and the Indemnified Party refuses to consent to such settlement, then the
Indemnifying Party's liability under this Section with respect to such Third
Person claim shall be limited to the amount so offered in settlement by said
Third Person. Upon agreement as to such settlement between said Third Person and
the Indemnifying Party, the Indemnifying Party shall, in exchange for a complete
release from the Indemnified Party, promptly pay to the Indemnified Party the
amount agreed to in such settlement and the Indemnified Party shall, from that
moment on, bear full responsibility for any additional costs of defense which
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it subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party for the settlement
and any other liabilities or expenses incurred by the Indemnified Party in
connection therewith, provided, however, that under no circumstances shall the
Indemnified Party settle any Third Person claim without the written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. All settlements hereunder shall effect a complete release of the
Indemnified Party, unless the Indemnified Party otherwise agrees in writing.
10.4 EXCLUSIVE REMEDY. The indemnification provided for in this Section
10 shall (except as prohibited by ERISA) be the exclusive remedy in any action
seeking damages or any other form of monetary relief brought by any party to
this Agreement against another party, provided that, nothing herein shall be
construed to limit the right of a party, in a proper case, to seek injunctive
relief for a breach of this Agreement.
10.5 LIMITATIONS ON INDEMNIFICATION. (a) RV Centers and the other
persons or entities indemnified pursuant to Section 10.1 or any other indemnity
hereunder, shall not assert any claim for indemnification pursuant to Section
10.1 against the Stockholders until such time as the aggregate of all claims
which such persons may have against such Stockholders shall exceed an amount
(the "Threshold Amount") equal to one percent of the sum of (x) the cash paid to
the Stockholders on the Consummation Date pursuant to Section 2.1 and (y) the
value of the RV Centers Stock delivered to the Stockholders on the Consummation
Date pursuant to Section 2.1 valued at the initial public offering price as set
forth in the Registration Statement, and then only to the extent of claims in
excess of such sum. Stockholders shall not assert any claim for indemnification
hereunder against RV Centers until such time as the aggregate of all claims
which Stockholders may have against RV Centers shall exceed the Threshold
Amount. The Threshold Amount shall increase to equal one percent of the sum of
(x) plus (y) plus the Additional Consideration, if any, described on Annex I
hereto, upon the payment to the Stockholder of the Additional Consideration,
exclusive of any interest earned on the Additional Cash (as such terms are
defined on Annex I).
(b) No person shall be entitled to indemnification under this Section
10 if and to the extent that such person's claim for indemnification is directly
or indirectly related to a breach by such person of any representation,
warranty, covenant or other agreement set forth in this Agreement.
(c) Notwithstanding any other term of this Agreement, no Stockholder
shall be liable under this Section 10 for an amount which exceeds eighty-five
percent (85%) of the amount of proceeds (including cash and RV Centers Stock)
actually received by such Stockholder (valued as of the Consummation Date) in
connection with the purchase and sale of the Company Stock, exclusive of
interest earned on the Additional Cash. For purposes of this paragraph, the RV
Centers
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Stock shall be valued at the initial public offering price to the public as set
forth in the final prospectus deemed by Rule 430A of the 1933 Act Regulations to
constitute a part of the Registration Statement.
(d) A Stockholder may pay any indemnification obligation under Section
10 by means of the payment of cash or a combination of the payment of cash and
the delivery to RV Centers of shares of RV Centers Stock; provided that the
percentage of the indemnification obligation satisfied by means of the delivery
of shares of RV Centers Stock does not exceed the percentage of RV Centers Stock
comprising the total consideration paid to such Stockholder by RV Centers to
such Stockholder pursuant to Annex I. For the purpose of crediting Stockholders
for payments made to RV Centers by means of delivery of shares of RV Centers
Stock, the RV Centers Stock shall be valued at the average closing price as
reported on the New York Stock Exchange (or other national exchange or quotation
system) on the five trading days immediately preceding delivery of the shares
pursuant to this section.
(e) In determining the amount of any loss, liability or expense for
which any party is entitled to indemnification under this Agreement, the gross
amount thereof will be reduced by any correlative insurance proceeds or other
third party indemnity or reimbursement proceeds actually realized by such party
(or, in the case of RV Centers, by RV Centers, the Company or any Subsidiary of
RV Centers or the Company) and such correlative insurance proceeds or other
third party indemnity or reimbursement proceeds shall be net of any insurance
premium or other incremental cost or expense owed or payable to any third party
which becomes due as a result of such claim. RV Centers shall use commercially
reasonable efforts to pursue any available insurance coverage or other rights of
indemnity or reimbursement from third parties with respect to any such loss,
liability or expense.
(f) The limitations on liability set forth in this Section 10.5 shall
not apply to breaches of representations, warranties or covenants set forth in
Sections 4.3, 4.22 and 4.29(c).
(g) Notwithstanding anything contained herein to the contrary, the
Stockholders shall indemnify, defend and hold harmless the Company, RV Centers
and their Affiliates, officers, directors and employees, from and against all
claims, losses, damages of any type, and all expenses, including attorneys fees,
arising from any claims made by ▇▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇, including those
claims asserted in the action "▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ v. Aberdeen RV
Center, Inc. And Jayco, Inc." currently in the Northern District of Alabama,
Western Division, Case No. CV-C-1003-W. Such indemnification shall be without
regard to whether the amount of damages exceeds the Threshold Amount.
10.6 TAX INDEMNIFICATION BY THE STOCKHOLDERS. The Stockholders covenant
and agree that they, jointly and severally, will indemnify, defend, protect and
hold harmless RV Centers and the Company from and against the entirety of any
adverse consequences the Company or RV Centers may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any liability of the
Company and its subsidiaries for the unpaid Taxes of any past, current or future
member of the
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consolidated tax group of which the Company is or was a member on or prior to
the Consummation Date pursuant to Reg. ss.1.1502-6 (or any similar provision of
state, local, or foreign law), for any periods prior to the Closing Date, as a
transferee or successor, by contract, or otherwise.
11. TERMINATION OF AGREEMENT
11.1 TERMINATION. This Agreement may be terminated at any time prior to
the Consummation Date solely:
(i) by mutual consent of the boards of directors of RV Centers
and the Company;
(ii) by the Stockholders or the Company (acting through its
board of directors), on the one hand, or by RV Centers (acting through
its board of directors), on the other hand, if the transactions
contemplated by this Agreement to take place at the Closing shall not
have been consummated by July 31, 1999 unless the failure of such
transactions to be consummated is due to the willful failure of the
party seeking to terminate this Agreement to perform any of its
obligations under this Agreement to the extent required to be performed
by it prior to or on the Consummation Date;
(iii) by the Stockholders or the Company, on the one hand, or
by RV Centers, on the other hand, if a material breach or default shall
be made by the other party in the observance or in the due and timely
performance of any of the covenants or agreements contained herein, and
the curing of such default shall not have been made on or before the
Consummation Date or by the Stockholders or the Company, if the
conditions set forth in Section 7 hereof have not been satisfied or
waived as of the Closing Date or the Consummation Date, as applicable,
or by RV Centers, if the conditions set forth in Section 8 hereof have
not been satisfied or waived as of the Closing Date or the Consummation
Date, as applicable; or
(iv) pursuant to Section 3 hereof.
11.2 LIABILITIES IN EVENT OF TERMINATION. Except as provided in Section
6.7, the termination of this Agreement will in no way limit any obligation or
liability of any party based on or arising from a breach or default by such
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement including, but not limited to, legal and
audit costs and out of pocket expenses.
11.3 RETURN OF STOCK CERTIFICATES. If at the time of termination
Stockholders have delivered their Company stock certificates, such certificates
will be promptly returned upon termination.
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12. NONCOMPETITION
12.1 PROHIBITED ACTIVITIES. Except for the activities of the
Stockholders and their Affiliates as set forth in Schedule 12.1 (which shall be
deemed to be permitted activities under this Section 12.1), the Stockholders
will not, without the prior written consent of RV Centers, for a period of five
(5) years following the Consummation Date, for any reason whatsoever, directly
or indirectly, for themselves or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation or business of whatever
nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a sales
representative, in any business or operation selling any products or
services in direct competition with any products or services sold by RV
Centers or any Subsidiary thereof, within one hundred (100) miles of
where RV Centers or any Other Founding Company conducted business prior
to the Effective Time (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of RV Centers or any Subsidiary thereof in a
sales or service representative or managerial capacity for the purpose
or with the intent of enticing such employee away from or out of the
employ of RV Centers or any Subsidiary thereof;
(iii) call upon any Person or entity which is, at that time,
or which has been, within one (1) year prior to the Consummation Date,
a customer of RV Centers or any Subsidiary thereof, of the Company or
of any of the Other Founding Companies within the Territory for the
purpose of soliciting or selling products or services in direct
competition with any products or services sold by RV Centers or any
Subsidiary thereof within the Territory;
(iv) call upon any prospective acquisition candidate, on any
Stockholder's own behalf or on behalf of any competitor which candidate
was, to the actual knowledge of such Stockholder after reasonable
inquiry, either called upon by RV Centers or any Subsidiary thereof or
for which RV Centers or any Subsidiary thereof made an acquisition
analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
the Company to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever except to the extent that the
Company has in the past disclosed such information to the public for
valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit any Stockholder from acquiring as a passive investment (i) not more
than three percent (3%) of the capital stock of a competing business whose stock
is traded on a national securities exchange, the NASDAQ Stock Market or on an
over-the-counter or similar market, or (ii) not more than five percent (5%) of
the capital stock of a competing business whose stock is not publicly traded.
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12.2 DAMAGES. Because of the difficulty of measuring economic losses to
RV Centers as a result of a breach of the covenant set forth in Section 12.1,
and because of the immediate and irreparable damage that could be caused to RV
Centers for which it would have no other adequate remedy, each Stockholder
agrees that the covenant set forth in Section 12.1 may be enforced by RV
Centers, in the event of breach by such Stockholder, by injunctions and
restraining orders.
12.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 12 impose a reasonable restraint on the
Stockholders in light of the activities and business of RV Centers and the
Subsidiaries thereof on the date of the execution of this Agreement and the
current plans of RV Centers; but it is also the intent of RV Centers and the
Stockholders that such covenants be construed and enforced in accordance with
the changing activities, business and locations of RV Centers and its
subsidiaries throughout the term of this covenant, including, with respect to
subparagraph 12.1(i), any new locations in which RV Centers or its subsidiaries
conducts business during the term of this covenant.
12.4 SEVERABILITY; REFORMATION. The covenants in this Section 12 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
12.5 INDEPENDENT COVENANT. All of the covenants in this Section 12
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any Stockholder
against RV Centers or any Subsidiary thereof, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by RV
Centers of such covenants. It is specifically agreed that the period of five (5)
years stated at the beginning of this Section 12, during which the agreements
and covenants of each Stockholder made in this Section 12 shall be effective,
shall be computed by excluding from such computation any time during which such
Stockholder is in violation of any provision of this Section 12. The covenants
contained in Section 12 shall not be affected by any breach of any other
provision hereof by any party hereto and shall have no effect if the
transactions contemplated in this Agreement are not consummated.
12.6 MATERIALITY. The Company and the Stockholders hereby agree that
this covenant is a material and substantial part of this transaction.
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13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, the Other Founding Companies,
and/or RV Centers, such as operational policies, customer lists, and pricing and
cost policies that are valuable, special and unique assets of the Company's, the
Other Founding Companies' and/or RV Centers's respective businesses. The
Stockholders agree that they will not disclose such confidential information to
any person, firm, corporation, association or other entity for any purpose or
reason whatsoever, except (a) to authorized representatives of RV Centers,
provided that such representatives agree to the confidentiality provisions of
this Section 13.1, (b) following the Closing, such information may be disclosed
by the Stockholders as is required in the course of performing their duties for
RV Centers or the Company and (c) to counsel and other advisers, provided that
such advisers (other than counsel) agree to the confidentiality provisions of
this Section 13.1, unless (i) such information becomes known to the public
generally through no fault of the Stockholders, (ii) disclosure is required by
law or the order of any governmental authority under color of law, provided,
that prior to disclosing any information pursuant to this clause (ii), the
Stockholders shall, if possible, give prior written notice thereof to RV Centers
and provide RV Centers with the opportunity to contest such disclosure, or (iii)
the disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party. In the
event of a breach or threatened breach by any of the Stockholders of the
provisions of this Section, RV Centers shall be entitled to an injunction
restraining such Stockholders from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting RV
Centers from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages. In the event the transactions
contemplated in this Agreement are not consummated, Stockholders shall have none
of the above-mentioned restrictions on their ability to disseminate confidential
information with respect to the Company.
13.2 RV CENTERS. RV Centers recognizes and acknowledges that it had in
the past and currently has access to certain confidential information of the
Company and the Stockholders, such as operational policies, and pricing and cost
policies that are valuable, special and unique assets of the Company's business.
RV Centers agrees that, prior to the Closing, or if the transactions
contemplated in this Agreement are not consummated, it will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to authorized
representatives of the Company, provided that such representatives agree to the
confidentiality provisions of this Section 13.2, (b) to counsel and other
advisers, provided that such advisers (other than counsel) agree to the
confidentiality provisions of this Section 13.2, (c) to the Other Founding
Companies and their representatives pursuant to Section 6.1(a), unless (i) such
information becomes known to the public generally through no fault of RV
Centers, (ii) disclosure is required by law or the order of any governmental
authority under color of law, provided, that prior to disclosing any information
pursuant to this clause (ii), RV Centers shall, if possible, give prior written
notice thereof to the Company and the Stockholders and provide the Company and
the Stockholders with the opportunity to contest such disclosure, or (iii)
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the disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party, and (d)
to the public to the extent necessary or advisable in connection with the filing
of the Registration Statement and the IPO and the securities laws applicable
thereto. In the event of a breach or threatened breach by RV Centers of the
provisions of this Section, the Company and the Stockholders shall be entitled
to an injunction restraining RV Centers from disclosing, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
the Company and the Stockholders from pursuing any other available remedy for
such breach or threatened breach, including the recovery of damages.
13.3 DAMAGES. Because of the difficulty of measuring economic losses as
a result of the breach of the foregoing covenants in Section 13.1 and 13.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against the other parties by injunctions and restraining orders.
13.4 SURVIVAL. The obligations of the parties under this Article 13
shall survive the termination of this Agreement.
14. TRANSFER RESTRICTIONS
14.1 TRANSFER RESTRICTIONS. For a period of two years from the Closing
Date, with respect to 80% of the shares of RV Centers Stock received by such
Stockholder pursuant to this Agreement, and for a period of one year from the
Closing Date, with respect to the remaining 20% of such shares, no Stockholder
shall (i) sell, assign, exchange, transfer, pledge, or otherwise dispose of any
such shares of RV Centers Stock or any securities convertible into, exchangeable
or exercisable for any such shares of RV Centers Stock, (ii) grant any option to
purchase, or otherwise enter into any contract or arrangement to sell, assign,
transfer, pledge or otherwise dispose of, any such shares of RV Centers Stock,
or (iii) enter into any swap, collar, short sale or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequences of ownership of the RV Centers Stock, whether any such
swap, collar, short sale, agreement or transaction is to be settled by delivery
of shares of RV Centers Stock or other securities, by the delivery or payment of
cash or otherwise. Provided, however, Stockholder may pledge such shares as
security, subject to the foregoing restrictions, for a loan by a lender who
acknowledges and agrees to such restrictions in writing. The foregoing
restrictions shall not apply, however, to (a) the sale of shares of RV Centers
Stock, and entering into agreements relating to the sale of shares of RV Centers
Stock, pursuant to Section 16 hereof, or (b) transfers to (I) immediate family
members of such Stockholder who agree to be bound by the restrictions set forth
in this Section 14.1, (II) trusts, limited partnerships or other estate planning
entities for the benefit of such Stockholder or family members of such
Stockholder which have agreed, through action taken by the trustees, partners or
other persons having authority to bind the trust, limited partnership or other
estate planning entity, to be bound by such restrictions and to be liable for
the transferring Stockholder's indemnification obligations hereunder, (III) any
charitable organization that qualifies for receipt of charitable contributions
under Section 170(c) of the Code which agrees to be bound by such restrictions
and
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to be liable for the transferring Stockholder's indemnification obligations
hereunder, or (c) for transfers of RV Centers Stock to RV Centers pursuant to
Section 10.5(d).
The certificates evidencing the RV Centers Stock delivered to the
Stockholders pursuant to Section 3 of this Agreement will bear a legend
substantially in the form set forth below and containing such other information
as RV Centers may deem necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF WITHOUT THE WRITTEN
CONSENT OF THE ISSUER OR PURSUANT TO CERTAIN LIMITED EXCEPTIONS CONTAINED IN
SECTION 14.1 TO THAT CERTAIN ACQUISITION AGREEMENT BETWEEN RV CENTERS, INC. AND
AMERICAN RV CENTERS, INC. DATED JANUARY 12, 1999, AND THE ISSUER SHALL NOT BE
REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION PRIOR TO _______ [INSERT THE
ACTUAL SECOND ANNIVERSARY OF CLOSING DATE] EXCEPT FOR THE ABOVE-REFERENCED
LIMITED EXCEPTIONS. UPON THE WRITTEN REQUEST OF THE HOLDER OF THIS CERTIFICATE,
THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED
WITH THE TRANSFER AGENT) AFTER THE DATE SPECIFIED ABOVE.
15. FEDERAL SECURITIES ACT REPRESENTATIONS
15.1 COMPLIANCE WITH LAW. The Stockholders acknowledge that the shares
of RV Centers Stock to be delivered to the Stockholders pursuant to this
Agreement have not been and will not be registered under the 1933 Act (except as
provided in Section 16 hereof) and therefore may not be resold without
compliance with the 1933 Act. The RV Centers Stock to be acquired by such
Stockholders pursuant to this Agreement is being acquired solely for their own
respective accounts, for investment purposes only, and with no present intention
of distributing, selling or otherwise disposing of it in connection with a
distribution. The Stockholders covenant, warrant and represent that none of the
shares of RV Centers Stock issued to such Stockholders will be offered, sold,
assigned, pledged, hypothecated, transferred or otherwise disposed of except
after full compliance with all of the applicable provisions of the 1933 Act and
the rules and regulations of the SEC or pursuant to exceptions therefrom. All
the RV Centers Stock shall bear the following legend in addition to the legend
required under Section 14 of this Agreement:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IF THE HOLDER
HEREOF COMPLIES WITH THE ACT AND APPLICABLE SECURITIES LAW OR SUCH SHARES ARE
SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION THEREFROM.
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15.2 ECONOMIC RISK; SOPHISTICATION. The Stockholders represent and
warrant that they are able to bear the economic risk of an investment in the RV
Centers Stock to be acquired pursuant to this Agreement and can afford to
sustain a total loss of such investment. Each Stockholder has substantial
knowledge and experience in making investment decisions of this type (or is
relying on qualified purchaser representatives with such knowledge and
experience in making this decision), and is capable, either individually or with
such purchaser representatives, of evaluating the merits and risks of this
investment. The Stockholders who are parties hereto have had an adequate
opportunity to ask questions and receive answers from the officers of RV Centers
concerning any and all matters relating to the transactions described herein
including, without limitation, the background and experience of the current and
proposed officers and directors of RV Centers, the plans for the operations of
the business of RV Centers, the business, operations and financial condition of
the Founding Companies other than the Company, and any plans for additional
acquisitions and the like. The Stockholders have asked any and all questions in
the nature described in the preceding sentence and all questions have been
answered to their satisfaction. Except as set forth on Schedule 15.2, each
Stockholder is an "accredited investor" as defined in Rule 501 of the 1933 Act.
16. REGISTRATION RIGHTS
16.1 PIGGYBACK REGISTRATION RIGHTS. At any time following the
Consummation Date, whenever RV Centers proposes to register any RV Centers Stock
for its own or others' accounts under the 1933 Act for a public offering, other
than (i) any shelf or other registration of shares to be used as consideration
for acquisitions of additional businesses by RV Centers and (ii) registrations
relating to employee benefit plans, RV Centers shall promptly give each of the
Stockholders written notice of its intent to do so. Upon the written request of
any of the Stockholders given within 10 days after receipt of such notice, RV
Centers shall cause to be included in such registration all of the RV Centers
Stock issued to such Stockholders pursuant to this Agreement (including any
stock issued as or issuable upon the conversion or exchange of any convertible
security, warrant, right or other security which is issued by RV Centers as a
stock split, dividend or other distribution with respect to, or in exchange for,
or in replacement of such RV Centers Stock) which any such Stockholder requests,
other than shares of RV Centers Stock which may be sold under Rule 144(k) (or
any similar or successor provision) promulgated under the 1933 Act, and other
than shares of RV Centers Stock that have been theretofore sold by the
Stockholder in accordance with the 1933 Act, provided that RV Centers shall have
the right to reduce pro rata the number of shares of each selling stockholder
included in such registration to the extent that inclusion of such shares could,
in the written opinion of tax counsel to RV Centers or its independent auditors,
jeopardize the status of the transactions contemplated hereby and by the
Registration Statement as a tax-free organization under Section 351 of the Code.
In addition, if RV Centers is advised in writing in good faith by any managing
underwriter of an underwritten offering of the securities being offered pursuant
to any registration statement under this Section 16.1 that the number of shares
to be sold by persons other than RV Centers is greater than the number of such
shares which can be offered without adversely affecting the success of the
offering, RV Centers may reduce pro rata (among the Stockholders and all other
selling security holders in the offering) the number of shares offered for the
accounts of
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such persons (based upon the number of shares held by such person) to a number
deemed satisfactory by such managing underwriter.
The right to cause RV Centers to register shares of RV
Centers Stock under this Agreement may be assigned to any transferee or assignee
of any Stockholder permitted under Section 14.1.
16.2 REGISTRATION PROCEDURES. Whenever RV Centers is required to
register shares of RV Centers Stock pursuant to Section 16.1, RV Centers will,
as expeditiously as possible:
(i) Prepare and file with the SEC a registration statement
with respect to such shares and use commercially reasonable efforts to
cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments
or supplements or term sheets thereto, RV Centers will furnish a
representative of the Stockholders with copies of all such documents
proposed to be filed and provide the Stockholders an opportunity to
comment on the information therein relating to the Stockholders) as
promptly as practical;
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and the prospectus correct for a period of not less
than 120 days;
(iii) Furnish to each Stockholder who so requests such number
of copies of such registration statement, each amendment and supplement
thereto and the prospectus included in such registration statement
(including each preliminary prospectus and any term sheet associated
therewith), and such other documents as such Stockholder may reasonably
request in order to facilitate the disposition of the relevant shares;
(iv) Use commercially reasonable efforts to register or
qualify the securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as shall
be reasonably requested by the Stockholders, and to keep such
registration or qualification effective during the period such
registration statement is required to be kept effective, provided that
RV Centers shall not be required to become subject to taxation, to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions;
(v) Cause all such shares of RV Centers Stock to be listed or
included on any securities exchanges or trading systems on which
similar securities issued by RV Centers are then listed or included;
and
(vi) Notify each Stockholder at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act within
the period that RV Centers is required to
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keep the registration statement effective of the happening of any event
as a result of which the prospectus included in such registration
statement (as then in effect), together with any associated term sheet,
contains an untrue statement of a material fact or omits any fact not
misleading, and, at the request of such Stockholder, RV Centers will
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the covered shares, such
prospectus will not contain an untrue statement of material fact or
omit to state any fact not misleading.
All expenses incurred in connection with the registration under this
Article 16 and compliance with securities and blue sky laws (including all
registration, filing, listing, escrow agent, qualification, legal, printer and
accounting fees, but excluding underwriting commissions and discounts), shall be
borne by RV Centers.
16.3 INDEMNIFICATION.
(a) In connection with any registration under Section 16.1, RV
Centers shall indemnify, to the extent permitted by law, each selling
Stockholder (an "Indemnified Stockholder") against all losses, claims, damages,
liabilities and expenses arising out of or resulting from any untrue or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or associated term sheet or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading except insofar as the
same are caused by or contained in or omitted from any information furnished in
writing to RV Centers by such Indemnified Stockholder expressly for use therein
or by any Indemnified Stockholder's failure to deliver a copy of the
registration statement or prospectus or any amendment or supplements thereto
after RV Centers has furnished such Indemnified Stockholder with a sufficient
number of copies of the same.
(b) In connection with any registration under Section 16.1,
each Stockholder shall furnish to RV Centers in writing such information as is
reasonably requested by RV Centers for use in any such registration statement or
prospectus and will indemnify, to the extent permitted by law, RV Centers, its
directors and officers and each person who controls RV Centers (within the
meaning of the ▇▇▇▇ ▇▇▇) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement or material fact
or any omission or alleged omission of a material fact required to be stated in
the registration statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading, but only to the extent
that such untrue or alleged untrue statement or omission or alleged omission is
contained in or omitted from information so furnished in writing by such
Stockholder specifically for use in preparing the registration statement.
Notwithstanding the foregoing, the liability of a Stockholder under this Section
16.3 shall be limited to an amount equal to the net proceeds actually received
by such Stockholder from the sale of the relevant shares covered by the
registration statement.
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(c) Any person entitled to indemnification hereunder will (i)
give prompt notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) unless in such indemnified parties' reasonable
judgment, a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. Any failure to give prompt notice shall deprive a party of
its right to indemnification hereunder only to the extent that such failure
shall have adversely affected the indemnifying party. If the defense of any
claim is assumed, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party that is not entitled or elects not
to assume the defense of a claim, will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
16.4 UNDERWRITING AGREEMENT. In connection with each registration
pursuant to Sections 16.1 covering an underwritten registered offering, RV
Centers and each participating Stockholder agree to enter into a written
agreement with the managing underwriters in such form and containing such
provisions as are customary in the securities business for such an arrangement
between such managing underwriters and companies of RV Centers's size and
investment stature, including a customary indemnification agreement; provided,
however, that the Stockholders shall be excluded from any indemnification of the
underwriters other than with respect to information provided by the Stockholders
to RV Centers or the managing underwriters specifically for use in the
registration statement.
16.5 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the SEC that may permit the sale of RV
Centers stock to the public without registration, RV Centers agrees to use
commercially reasonable efforts to:
(i) make and keep public information regarding RV Centers
available as those terms are understood and defined in Rule 144 under
the 1933 Act for a period of four years beginning 90 days following the
effective date of the Registration Statement;
(ii) file with the SEC in a timely manner all reports and
other documents required of RV Centers under the 1933 Act and the 1934
Act at any time after it has become subject to such reporting
requirements; and
(iii) so long as a Stockholder owns any restricted RV Centers
Stock, furnish to each Stockholder forthwith upon written request a
written statement by RV Centers as to its compliance with the current
public information requirements of Rule 144 (at any time from and after
90 days following the effective date of the Registration Statement),
and of the 1933 Act and the 1934 Act (any time after it has become
subject to such reporting requirements), a copy of the most recent
annual or quarterly report of RV Centers, and such other reports
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and documents so filed as a Stockholder may reasonably request in
availing itself of any rule or regulation of the SEC allowing a
Stockholder to sell any such shares without registration.
16.6 AVAILABILITY OF RULE 144. RV Centers shall not be obligated to
register shares of RV Centers Stock held by a Stockholder at any time when the
resale provisions of Rule 144(k) (or any similar or successor provision)
promulgated under the 1933 Act are available to such Stockholder.
17. GENERAL
17.1 COOPERATION. The Company, the Stockholders and RV Centers shall
each deliver or cause to be delivered to the other on the Consummation Date, and
at such other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. The Company will cooperate and use its reasonable efforts to
have the present officers, directors and employees of the Company cooperate with
RV Centers on and after the Consummation Date in furnishing information,
evidence, testimony and other assistance in connection with any tax return
filing obligations, actions, proceedings, arrangements or disputes of any nature
with respect to matters pertaining to all periods prior to the Consummation
Date.
17.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors of RV Centers, and the heirs and legal representatives of the
Stockholders.
17.3 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholders,
the Company and RV Centers and supersede any prior agreement and understanding
relating to the subject matter of this Agreement. This Agreement, upon
execution, constitutes a valid and binding agreement of the parties hereto
enforceable in accordance with its terms and subject to Section 6.7 may be
modified or amended only by a written instrument executed by the Stockholders,
the Company and RV Centers, acting through their respective officers or
trustees, duly authorized by their respective Boards of Directors. Any
disclosure made on any Schedule delivered pursuant hereto shall be deemed to
have been disclosed for purposes of any other Schedule required hereby, provided
that the Company shall make a good faith effort to cross reference disclosure,
as necessary or advisable, between related Schedules.
17.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument. A telecopied
facsimile of an executed counterpart of this Agreement shall be sufficient to
evidence the binding agreement of each party to the terms hereof. However, each
party agrees to return to the other parties an original, duly executed
counterpart of this Agreement promptly after delivery of a telecopied facsimile
thereof.
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17.5 BROKERS AND AGENTS. Except as disclosed on Schedule 17.5, each
party represents and warrants that it employed no broker or agent in connection
with this transaction and agrees to indemnify the other parties hereto against
all loss, cost, damages or expense arising out of claims for fees or commission
of brokers employed or alleged to have been employed by such indemnifying party.
17.6 EXPENSES. Whether or not the transactions herein contemplated
shall be consummated, RV Centers will pay or reimburse ▇▇▇▇▇ ▇▇▇▇▇ Funding I,
L.L.C. and its Affiliates for the fees, expenses and disbursements of RV Centers
and its agents, representatives, accountants and counsel incurred in connection
with the subject matter of this Agreement and any amendments thereto and the
IPO, including all costs and expenses incurred in the performance and compliance
with all conditions to be performed by RV Centers under this Agreement, the fees
and expenses of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., and any other person or entity retained
by RV Centers or ▇▇▇▇▇ ▇▇▇▇▇ Funding I, L.L.C. ("BKF") and the costs of
preparing the Registration Statement. All expenses, including, but not limited
to, all professional fees of accountants, lawyers, tax consultants and others,
incurred by the Stockholders in connection with this Agreement shall be paid by
the Stockholders or the Company; provided, however, that any such amount paid by
the Company shall be disclosed to RV Centers in writing prior to Closing and
deducted from the cash payable to Stockholders pursuant to Part A of Annex I.
Upon consummation of the transactions contemplated herein, BKF will pay up to
$150,000 of the fees charged by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇.▇., counsel to Company
and the Other Founding Companies; Stockholders and the stockholders of the Other
Founding Companies shall pay all amounts in excess of $150,000 to be shared pro
rata based upon the relative values of the Founding Companies. Each Stockholder
shall pay all sales, use, transfer, real property transfer, recording, gains,
stock transfer and other similar taxes and fees ("Transfer Taxes") imposed in
connection with the purchase and sale of the Company Stock, other than Transfer
Taxes, if any, imposed by the State of Delaware. Each Stockholder shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, each Stockholder acknowledges that he, and not the Company or RV
Centers, will pay all taxes due by him upon receipt of the consideration payable
pursuant to Section 3 hereof. Without limiting Stockholders' ability to rely on
the tax opinion, the Stockholders acknowledge that the risks of the transactions
contemplated herein include tax risks, with respect to which the Stockholders
are relying partially on the opinion contemplated by Section 7.3 hereof and
representations by RV Centers.
17.7 NOTICES. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party.
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(a) If to RV Centers, addressed to:
RV Centers, Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with copies to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(b) If to the Stockholders, addressed to them at their addresses set
forth on the signature pages hereto, with copies to:
Austin B. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(c) If to the Company, addressed to it at:
American RV Centers, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
with copies to:
Austin B. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 17.7 from time to time.
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17.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware, excluding any conflicts of law rule or
principle that might refer same to the laws of another jurisdiction.
17.9 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.10 TIME. Time is of the essence with respect to this Agreement.
17.11 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby. No provision of this Agreement shall be interpreted or construed
against any party solely because that party or its legal representative drafted
such provision.
17.12 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
17.13 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
17.14 AMENDMENTS AND WAIVERS. Subject to Section 6.7, any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived only with the written consent of RV Centers, the Company and Stockholders
who hold or held at least 51% of the Company Stock. Any amendment or waiver
effected in accordance with this Section 17.14 shall be binding upon each of the
parties hereto, any other person receiving RV Centers Stock in connection with
the purchase and sale of the Company Stock and each future holder of such RV
Centers Stock.
17.15 DISPUTE RESOLUTION. Except with respect to disputes involving
parties other than the parties to this Agreement, no party to this Agreement
shall institute a proceeding in any court or administrative agency to resolve a
dispute arising under this Agreement before that party has sought to resolve the
dispute through direct negotiation with the other party or parties. If the
dispute is not resolved within two weeks after a demand for direct negotiation,
the parties shall attempt to resolve the dispute through mediation. If the
parties do not promptly agree on a mediator, the parties shall request the
Association of Attorney Mediators in ▇▇▇▇▇▇ County, Texas to appoint a mediator
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certified by the Supreme Court of Texas. If the mediator is unable to facilitate
a settlement of the dispute within a reasonable period of time, as determined by
the mediator, the mediator shall issue a written statement to the parties to
that effect and any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Houston, Texas, in accordance
with the rules promulgated by the American Arbitration Association then in
effect. Each party shall choose one arbitrator and those arbitrators shall agree
upon the third arbitrator; if they cannot agree upon a third arbitrator within
20 days, the American Arbitration Association shall appoint the third
arbitrator. A decision by a majority of the arbitration panel shall be final and
binding. Judgment may be entered on the arbitrators' award in any court having
jurisdiction. The costs and expenses, including reasonable attorneys' fees, of
the prevailing party in any dispute arising under this Agreement will be
promptly paid by the other party or parties.
17.16 REFERENCES, GENDER, NUMBER. All references in this Agreement to a
"Section," or "subsection" shall be to a Section, or subsection of this
Agreement, unless the context requires otherwise. Unless the context otherwise
requires, the words "this Agreement," "hereof," "hereunder," "herein," or words
of similar import shall refer to this Agreement as a whole and not to a
particular Section, subsection, clause or other subdivision hereof. Whenever the
context requires, the words used herein shall include the masculine, feminine
and neuter gender, and the singular and the plural.
17.17 SOLE STOCKHOLDER. Notwithstanding anything in this Agreement to
the contrary, if there is only a single Stockholder, all references herein to
"Stockholders," "each of the Stockholders," "any Stockholder" and any other
reference to Stockholders in the plural context, as well as any reference to any
potential liability or obligation of the Stockholders being "joint and several,"
shall be deemed to mean and include only the sole Stockholder of the Company.
17.18 SCHEDULES AND ANNEXES. Each schedule and annex attached to this
Agreement is incorporated herein by reference and made a part hereof. The
disclosures made on any schedule or annex hereto with respect to any
representation or warranty shall be deemed to be made with respect to any other
representation or warranty requiring the same or similar disclosure to the
extent that the relevance of such disclosure to other representations and
warranties is evident from the face of such schedule or annex.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
RV CENTERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board,
Chief Executive Officer and
President
AMERICAN RV CENTERS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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STOCKHOLDERS:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
----------------------------- -----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Social Security Number
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-65-
74
ANNEX I -
AMERICAN RV CENTERS, INC.
(TENNESSEE)
TO THE ACQUISITION AGREEMENT
DATED AS OF JANUARY 12, 1999
BY AND AMONG
RV CENTERS, INC.
AMERICAN RV CENTERS, INC. (TENNESSEE)
AND ITS STOCKHOLDER
CONSIDERATION TO BE PAID TO THE STOCKHOLDER
A. CONSIDERATION TO BE PAID TO STOCKHOLDER AT CLOSING
One Million Three Hundred Thirty-Nine Thousand Five Hundred Dollars
($1,339,500) in cash and the value of outstanding Common Stock of RV Centers,
Inc. ("RV Centers") (assuming a public offering price of $12.50 per share),
consisting of: (A) Seventy-Nine Thousand Eight Hundred (79,800) shares of RV
Centers Common Stock, and (B) Three Hundred Forty-Two Thousand Dollars
($342,000) cash; provided however, that the aggregate consideration shall not be
less than the minimum value set forth below.
Consideration to be paid to the
STOCKHOLDER:
--------------------------------
Number of
Company Shares of RV Centers
Stockholder Shares Owned Common Stock Cash
----------- ------------ -------------------- ---------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 100 79,800 $ 342,000
MINIMUM VALUE: One Million One Hundred Forty Thousand Dollars ($1,140,000)
ASSETS TO BE REMOVED FROM THE COMPANY: RV Centers and the Stockholder agree
that, after the Balance Sheet Date, no assets other than the following
assets, along with any associated debt, may be removed from the
Company, such assets to become the property of the Stockholder and any
associated debt to become the liability of the Stockholder:
Lease of BMW 540i, as described in Schedules 4.14(z) and 4.25.
Page 1 of Annex I
75
ANNEX I -
AMERICAN RV CENTERS, INC.
(TENNESSEE)
ALLOWABLE DIVIDENDS: With the exception of the following, no dividends or
distributions will be paid subsequent to June 30, 1998:
1. An amount equal to the reasonably estimated federal
and state (net of federal benefit) income taxes owed
on S-corporation profits of the Company for the
period from July 1, 1998 to December 31, 1998.
2. An amount equal to the reasonably estimated federal
and state (net of federal benefit) income taxes owed
on S-corporation profits of the Company for the
period from January 1, 1999 to the Consummation Date.
3. If Company is an S Corporation at the date of this
Agreement, at any time and from time to time up until
five days prior to the Consummation Date, Company may
distribute to the Stockholder cash up to the lesser
of (A) the amount of such corporation's "accumulated
adjustment account" (as such term is used in the
Internal Revenue Code of 1986, as amended) as of the
Consummation Date, and (B) the total amount of cash
to be paid to the Stockholder as provided above. If
any such distributions are made, Stockholder shall
provide written notice of the amount of such
distributions to RV Centers no later than five days
prior to the Consummation Date, and the total amount
of such distributions shall be deducted from the cash
to be paid to the Stockholder pursuant to this Annex
I.
ALLOWABLE MONTHLY COMPENSATION: The Company has not since June 30, 1998, and
will not after the date hereof, pay or agree to pay salary, bonus, sales
commissions, fees or any other form of compensation, directly or indirectly, to
the Stockholder or any members of his family in excess of an aggregate of Six
Thousand Dollars ($6,000) per month, plus Two Hundred Forty Thousand Dollars
($240,000) in cash as payment for bonuses accrued in the financial statements as
of June 30, 1998. Notwithstanding the foregoing, family members, who are not
Stockholders and who are currently employed by the Company and are disclosed on
Schedule 4.18, may continue to receive their current salary.
B. ADDITIONAL CONSIDERATION TO BE PAID TO STOCKHOLDER
On the Consummation Date, RV Centers shall deposit $176,000 in cash
(the "Additional Cash") in an interest-bearing escrow account of its designation
and shall reserve for issuance 41,000 shares of RV Centers Common Stock (the
"Reserved Shares"). The Reserved Shares shall not be registered under the
Securities Act of 1933 and shall be subject to the restrictions set forth in the
Agreement, including, without limitation, the transfer restrictions set forth in
Section 14 therein. The
Page 2 of Annex I
76
ANNEX I -
AMERICAN RV CENTERS, INC.
(TENNESSEE)
Additional Cash (and any interest accrued thereon) and Reserved Shares shall
collectively be referred to as the "Additional Consideration". RV Centers shall
pay the Stockholder the Additional Consideration, pursuant to the terms set
forth herein, in the event that the Company and American RV Centers, Inc., a
Mississippi corporation (the "Mississippi Store") (each a "Store" and
collectively the "Stores") achieves either of the following targets for "Pretax
Income" (as hereafter defined) during the first complete twelve (12) months
immediately following the Consummation Date (the "Earn-out Period"):
1. The Mississippi Store earns not less than $100,000 of Pretax Income
and the Company achieves not less than $250,000 of Pretax Income; or
2. The Stores achieve combined Pretax Income of not less than $545,000.
Notwithstanding the foregoing, in the event of (i) any Change in
Control (as such term is defined in the standard RV Centers Founder's Employment
Agreement) of RV Centers that is consummated during the Earn-out Period or (ii)
the termination of the Stockholder's Advisory Agreement by the Company without
Good Cause during the Earn-out Period, the foregoing targets for Pretax Income
shall be deemed to have been met or waived and the Additional Consideration
shall be paid to the Stockholder within thirty (30) days of the Change in
Control or Termination without Good Cause. For purposes of this Annex I, "Good
Cause," shall mean: (i) Stockholder's breach of any material provision of the
Advisory Agreement (continuing for ten (10) days after receipt of written notice
of need to cure); (ii) Stockholder's gross negligence in the performance or
intentional nonperformance (continuing for ten (10) days after receipt of
written notice of need to cure) of any of Stockholder's material duties and
responsibilities under the Advisory Agreement which is harmful or injurious to
the Company, the Mississippi Store or RV Centers; (iii) Stockholder's
dishonesty, fraud or willful misconduct with respect to the business or affairs
of the Company, the Mississippi Store or RV Centers which materially and
adversely affects the operations or reputation of the Company, the Mississippi
Store or RV Centers; (iv) Stockholder's conviction of a felony crime; or (v)
Stockholder's violation of the Company's substance abuse policy that would
result in discharge under such policy as applied to the Company's employees
generally.
DETERMINATION OF PRE-TAX INCOME: For purposes hereof, "Pretax Income" shall be
the net profit of the Company and/or (as applicable) of the Mississippi Store
before federal and state income taxes and extraordinary items, computed in
accordance with generally accepted accounting principles ("GAAP"), consistently
applied, except as follows (to the extent the following matters are not
consistent with GAAP):
a. Pretax Income shall not include gains or losses from the sale of any
fixed assets owned by either or both Stores;
Page 3 of Annex I
77
ANNEX I -
AMERICAN RV CENTERS, INC.
(TENNESSEE)
b. Revenues and costs of sales shall be allocated to the Company and
the Mississippi Store based on the Store which is in possession of the goods at
the time of the inception of the sale and the location at which services are
provided (or, in the event that services are provided off-site, such services
shall be allocated to the Store from which the request for such services
originated);
c. General and administrative expenses will be charged to the Store
which incurs the cost or which receives the benefit from such expenditure, and
cost incurred for the benefit of both Stores (e.g., advertising, accounting,
travel and entertainment, bulk supplies purchased, and other joint expenditures)
shall be allocated between the Stores based on the ratio of the gross revenues
of the Stores during the Earn-out Period and determined in accordance with GAAP;
d. Employment, consulting and similar expenses shall be charged to the
Store employing or otherwise contracting with such Person; provided, however,
that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ salary, benefits and similar consideration shall be
allocated 100% to the Company, and ▇▇▇▇▇ ▇▇▇▇▇▇'▇ salary, benefits and similar
consideration shall be allocated 50% to each Store;
e. Intercompany sales and expenses and those sales and expenses which
are not made on an arms-length basis shall not be included in the determination
of Pretax Income;
f. No corporate overhead from RV Centers shall be allocated to either
Store; and
g. In the event that RV Centers or any of its Affiliates makes advances
to or any payments on indebtedness owed by the Company or the Mississippi Store,
the interest payable on such advances and/or indebtedness shall be charged to
the Store receiving the cash benefit of the advance and/or repayment of
indebtedness as a deemed interest expense at the lesser of (1) the floor plan
borrowing rate of the Store applicable to such indebtedness or (2) the RV
Centers standard intercompany borrowing rate charged to all Subsidiaries, in
effect during the Earn-out Period.
The determination of Pretax Income shall initially be made by each
Store and forwarded to RV Centers on an individual and consolidated basis no
later than thirty (30) days after the Earn-out Period. Such amounts shall then
be subject to audit by the accountants of RV Centers, such audit to be completed
no later than sixty (60) days following receipt of the calculations by RV
Centers. Within thirty (30) days of the completion of the audit of the Stores
and the determination of the Pretax Income by the RV Centers accountants, such
results shall be jointly reviewed by the Stockholder, the Company, the
Mississippi Store and RV Centers. Any disputes over the determination of Pretax
Income shall be resolved in accordance with Section 17.15 of the Agreement. If
neither of the Pretax Income targets are met, the Additional Consideration shall
revert to and become the sole property of RV Centers.
Page 4 of Annex I
78
ANNEX I -
AMERICAN RV CENTERS, INC.
(TENNESSEE)
ALLOCATION OF ADDITIONAL CONSIDERATION. The Additional Consideration paid to the
Stockholder, if any, shall be allocated 72% to the Company and 28% to the
Mississippi Store.
Page 5 of Annex I
79
ANNEX III
FORM OF OPINION OF COUNSEL
TO RV CENTERS, INC.
, 1998
---------------------------
---------------------------
---------------------------
Ladies and Gentlemen:
We have acted as counsel to RV Centers, Inc., a Delaware corporation
("RV Centers"), in connection with the transactions contemplated by the
Acquisition Agreement (the "Agreement") dated as of , 1998, among RV Centers,
[Founding Company] and the stockholders named therein (the "Stockholders"). This
opinion is being delivered to you pursuant to Section 8.3 of the Agreement. All
capitalized terms used herein, unless expressly defined herein, shall have the
meanings ascribed to such terms in the Agreement.
We have examined originals, or copies certified or otherwise identified
to our satisfaction, of the Agreement and such documents and records as we
deemed to be necessary as a basis for the opinion hereinafter expressed. With
respect to such examination, we have assumed the genuineness of all signatures
appearing on all documents presented to us as originals, and the conformity to
the originals of all documents presented to us as conformed or reproduced
copies. We also have assumed the due execution and delivery of the Agreement by
all parties thereto other than RV Centers. In addition, we have relied on
certificates of officers of RV Centers and certificates of public officials as
to certain matters of fact relating to this opinion and have made such
investigations of law as we have deemed necessary and relevant as the basis
hereof.
Based upon the foregoing and such consideration of matters of law as we
deemed to be relevant, and subject to the limitations, qualifications and
assumptions set forth herein, we are of the following opinion:
1. RV Centers has been duly incorporated and is validly existing and in
good standing under the laws of the State of Delaware.
2. The Agreement has been duly authorized, executed and delivered by RV
Centers and constitutes a legal, valid and binding agreement of RV Centers,
enforceable against it in accordance
Page 1 of Annex III
80
with its terms. RV Centers has taken all corporate action necessary to authorize
the execution, delivery and performance of the Agreement.
3. The authorized capital stock of RV Centers consists of shares
of Common Stock, par value $.01 per share (the "RV Centers Common Stock"); and
shares of Preferred Stock par value $.01 per share (the "Preferred Stock"). As
of , 1998, there were outstanding shares of RV Centers Common Stock [and
no shares of Preferred Stock] which were duly and validly authorized and issued
and, to our knowledge, fully paid and nonassessable and not issued in violation
of the preemptive rights of any stockholder of RV Centers. Each share of RV
Centers Common Stock to be issued to the Stockholders has been duly and validly
authorized and upon issuance on consummation of the transactions set forth in
the Agreement such shares will be validly issued, fully paid and nonassessable
and, to our knowledge, none of such shares will have been issued in violation of
the preemptive rights of any stockholder of RV Centers.
4. To our knowledge, except as set forth in the Prospectus, (a) RV
Centers is not in violation of any order issued by any court or governmental
agency and (b) there is no action, suit or proceeding pending or threatened
against RV Centers before any court, arbitrator or governmental authority.
5. To our knowledge, RV Centers is not in default, nor has it received
any notice of default, under any contract or agreement to which it is a party,
except where such default would not have a material adverse effect on RV
Centers.
6. No notice to, consent, authorization, approval or order of any court
or governmental agency or body or, to our knowledge, any other person is
required in connection with the execution, delivery or performance by RV Centers
of the Agreement, except for such notices, consents, authorizations, approvals
or orders as have already been made or obtained.
7. The execution of the Agreement and the performance by RV Centers of
its obligations thereunder will not violate any of the terms or provisions of
its Certificate of Incorporation or Bylaws or, to our knowledge, conflict with,
violate or result in any breach of or default under any lease, instrument,
license, permit or any other agreement or instrument to which it is a party or
by which it may be bound or to which any of its properties is subject, except
where such violation, breach or default would not have a material adverse effect
on RV Centers and its subsidiaries, taken as a whole.
The opinions expressed herein are, with your concurrence, predicated on
and qualified in their entirety by the following:
(i) This opinion is limited to the laws of the State of Texas, the
General Corporation Law of the State of Delaware and the
relevant law of the United States of America (other than laws
applicable to patents, copyrights and trademarks).
Page 2 of Annex III
81
(ii) Our opinion in paragraph 2, above regarding the enforceability
of the Agreement is subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and to principles
of equity. Furthermore, the enforceability of any indemnity
and contribution obligations contained in the Agreement may be
limited under applicable law or public policy.
(iii) In rendering the opinion herein related to the absence of any
litigation, suits or proceedings, we express no opinion with
respect to the possible effect of administrative and
legislative actions and proceedings as to which RV Centers is
not a named party.
(iv) Whenever our opinion is based on circumstances "to our
knowledge," we have relied exclusively on certificates of
officers (after discussion of the contents thereof with such
officers) of RV Centers or certificates of others as to the
existence or nonexistence of the circumstances upon which such
opinion is predicated. We have no reason to believe, however,
that any such certificate is untrue or inaccurate in any
material respect.
We understand that we have no obligation to update this opinion to
reflect any facts or circumstances occurring after the date hereof, provided
however, that unless we otherwise notify you on or prior to the Consummation
Date that this opinion may no longer be relied upon, you shall be entitled to
rely on this opinion as of the Consummation Date if it were dated on such date.
This opinion is delivered to you solely as a party to the Agreement and
may not be quoted, circulated or published in whole or in part, or furnished to
any other Person without our express consent. The opinions set forth are limited
to matters expressly set forth and no opinion is to be implied or may be
inferred beyond the matters expressly stated.
Very truly yours,
Page 3 of Annex III
82
ANNEX IV
FORM OF OPINION OF COUNSEL TO COMPANY
AND STOCKHOLDERS
,1998
RV Centers, Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
[Underwriters]
[International Underwriters, if any]
Ladies and Gentlemen:
We have acted as counsel to ____________________________, a
___________________ corporation (the "Company"), in connection with the
transactions contemplated by the Acquisition Agreement (the "Agreement"), dated
as of , 1998, among RV Centers, Inc., a Delaware corporation, the Company and
the stockholders named therein (the "Stockholders"). This opinion is being
delivered to you pursuant to Section 9.7 of the Agreement. All capitalized terms
used herein, unless expressly defined herein, shall have the meanings ascribed
to such terms in the Agreement.
We have examined originals, or copies certified or otherwise identified
to our satisfaction of the Agreement and such documents and records as we deemed
to be necessary as the basis for the opinion hereinafter expressed. [Documents
and records may be listed.] With respect to such examination, we have assumed
the genuineness of all signatures appearing on all documents presented to us as
originals, and the conformity to the originals of all documents presented to us
as conformed or reproduced copies. We also have assumed the due execution and
delivery of the Agreement by all parties thereto other than the Company. In
addition, we have relied without independent inquiry on the representations and
warranties of the Company and the Stockholders contained in the Agreement, the
certificate of officers of the Company and certificates of public officials as
to certain matters of fact relating to this opinion.
Based upon the foregoing and such consideration of matters of law as we
deemed to be relevant, and subject to the limitations, qualifications and
assumptions set forth herein, we are of the following opinion:
Page 1 of Annex IV
83
1. The Company has been duly incorporated and is validly existing and
has all requisite corporate power and authority to own and operate its
properties, to lease the properties it operates under lease and to conduct its
business as currently conducted. The Company has no subsidiaries.
2. The authorized capital stock of the Company is as represented in the
Agreement and, based solely on our review of the stock records of the Company,
the outstanding capital stock of the Company is as represented in the Agreement.
Each share of such stock has been duly and validly authorized and issued and, to
our knowledge, is fully paid and nonassessable and was not issued in violation
of the preemptive rights of any stockholder.
3. To our knowledge, there are no outstanding securities of the Company
convertible into or exercisable or exchangeable for or evidencing the right to
purchase or subscribe for any shares of capital stock of the Company and there
are no outstanding or authorized options, warrants or rights of any character
obligating the Company to issue or sell any shares of its capital stock or any
securities convertible into or exercisable or exchangeable for or evidencing the
right to purchase or subscribe for any shares of such stock.
4. The Agreement has been duly authorized, executed and delivered by
the Company and the Stockholder and constitutes a legal, valid and binding
agreement of the Company and the Stockholder, enforceable against the Company
and such Stockholder in accordance with its terms. The Company and its
Stockholders have taken all corporate action necessary to authorize the
execution, delivery and performance by the Company of the Agreement and the
consummation by the Company of the transactions contemplated thereby.
5. To our knowledge, and except as is set forth in the Schedules to the
Agreement, the Company is not in material default, nor has it received any
notice of default, in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any other agreement, indenture or instrument material to the conduct of the
business of the Company, to which the Company is a party or by which the Company
or its property is bound.
6. To our knowledge, except to the extent set forth in the Schedules to
the Agreement, the Company is not in violation of any order issued by any court
or governmental agency and there is no action, suit or proceeding pending or
threatened against the Company before any court, arbitrator or governmental
authority.
7. To our knowledge, no notice to, consent, authorization, approval or
order of or filings with any court or governmental agency or body or, to our
knowledge, any other person is required in connection with the execution,
delivery or performance of the Agreement, or the consummation of the
transactions therein contemplated, by the Company or any of the Stockholders,
except for such notices, consents, authorizations, approvals, orders or filings
as have already been made or obtained, as applicable.
Page 2 of Annex IV
84
8. The execution of the Agreement and the performance by the Company
and the Stockholders of their respective obligations thereunder do not and will
not violate any of the terms or provisions of the Company's Articles of
Incorporation or By-laws or, to our knowledge, conflict with, violate or result
in any breach of or default under any lease, instrument, license, permit or any
other agreement or instrument to which the Company is a party or by which the
Company may be bound or to which any of the properties of the Company is
subject.
9. To our knowledge, there is no pending or threatened action, suit or
proceeding that (a) questions the validity of the Agreement or the Employment
Agreement or any action taken or to be taken by the Company or any Stockholder
in connection with the Agreement or the Employment Agreement, at law or in
equity, before or by any governmental authority or before any court or
arbitrator or (b) if adversely determined, would have a material adverse effect
(i) on the condition (financial or other), earnings, business, operations or
prospects of the Company, (ii) on the ability of the Company to perform its
obligations under the Agreement or (iii) on the ability of any Stockholder to
perform his obligations under the Agreement or the Employment Agreement.
The opinions expressed herein are, with your concurrence, predicated on
and qualified in their entirety by the following:
(A) This opinion is limited to the laws of the State of Tennessee
and the relevant law of the United States of America (other
than laws applicable to patents, copyrights and trademarks),
and we express no opinion as to the application or effect of
the law of any other jurisdiction. Moreover, we express no
opinion with respect to any of the following:
(i) federal or state antitrust laws and regulations
(including without limitation, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976);
(ii) federal or state securities laws and regulations;
(iii) federal or state labor or employee benefit laws and
regulations;
(iv) compliance with fiduciary duty requirements;
(v) federal or state tax laws and regulations;
(vi) federal patent, copyright and trademark, state
trademark and other federal or state intellectual
property laws and regulations;
(vii) federal or state racketeering laws and regulations;
(viii) federal or state health and safety laws and
regulations;
(ix) federal or state criminal laws of general
application;
Page 3 of Annex IV
85
(x) federal or state nondiscrimination laws and
regulations of general application; or
(xi) federal, state or local environmental, zoning or
building codes, land use or other similar laws,
ordinances, rules or regulations.
We note that the agreement is, by its express terms, to be governed by
the laws of Delaware. We express no opinion how a court sitting in Delaware
would apply or interpret Tennessee law nor how a court in Tennessee would apply
or interpret Delaware law. Accordingly, for the purpose of this opinion, we have
assumed that the Agreement will be governed by the laws of Tennessee
notwithstanding these express terms.
(B) Our opinion relating to validity, binding effect and
enforceability in Paragraph 4 above is subject to: (i)
limitations imposed by any applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, preferential transfer,
moratorium and similar laws affecting creditors' rights
generally, (ii) the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or
at law), including concepts of good faith, fair dealing,
commercial reasonableness and unconscionability, and (iii)
limitations imposed by public policy under certain
circumstances on the enforceability of provisions indemnifying
a party against liability for its own wrongful or negligent
acts and limitations on the enforceability of indemnification
provisions required by applicable state or federal securities
law. We express no opinion concerning (x) the enforceability
of the choice of Delaware law to govern the Agreement, if an
action arising out of the Agreement or its performance were
commenced in a court sitting in Tennessee, (y) the
enforceability of provisions relating to the waiver or rights,
remedies and defenses, or (z) the enforceability of the
noncompetition covenants set forth in the Agreement.
(C) Whenever our opinion is based on circumstances "to our
knowledge," we have relied exclusively on certificates of
officers (after the discussion of the contents thereof with
such officers) of the Company or certificates of others as to
the existence or nonexistence of the circumstances upon which
such opinion is predicated. Nothing has come to the attention
of the attorneys of the Firm in the course of our
representation of the Company in connection with the Agreement
which causes us to believe that any such certificate is untrue
or inaccurate in any material respect.
This opinion is delivered to you solely and may not be quoted,
circulated or published in whole or in part or delivered to any other person
without our express written consent. The Underwriters [and International
Underwriters] are entitled to rely upon this opinion.
Very truly yours,
Page 4 of Annex IV