e10vq

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H7t9X4hOOUzN2FQ0TzCx7/yB4GkzbpUlq7FG5a3wrzATLD9hIBucM4qHtVnuy/En 1U5eYyK9Rqxlwobp7OasLg== 0000950153-09-000114.txt : 20090209 0000950153-09-000114.hdr.sgml : 20090209 20090209165119 ACCESSION NUMBER: 0000950153-09-000114 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090209 DATE AS OF CHANGE: 20090209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINEMAX INC CENTRAL INDEX KEY: 0001057060 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 593496957 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14173 FILM NUMBER: 09581837 BUSINESS ADDRESS: STREET 1: 18167 US 19 N STREET 2: SUITE 499 CITY: CLEARWATER STATE: FL ZIP: 33764 BUSINESS PHONE: 8135311700 MAIL ADDRESS: STREET 1: 18167 US 19 N STREET 2: SUITE 499 CITY: CLEARWATER STATE: FL ZIP: 33764 10-Q 1 p14085e10vq.htm FORM 10-Q e10vq

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2008.

Commission File No. 1-14173

MARINEMAX, INC.

(Exact name of registrant as specified in its charter)


Delaware		59-3496957
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification Number)
organization)

18167 U.S. Highway 19 North, Suite 300
Clearwater, Florida		33764
(Address of principal executive offices)		(ZIP Code)

727-531-1700
(Registrant’s telephone number, including area code)

Indicate by check whether the registrant: (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The number of outstanding shares of the registrant’s Common Stock on January 31, 2008 was 18,512,104.

MARINEMAX, INC. AND SUBSIDIARIES

Table of Contents


Item No.	Page
PART I FINANCIAL INFORMATION
1. Financial Statements (Unaudited):
Condensed Consolidated Statements of Operations for the Three Months Ended December 31, 2007 and 2008		3
Condensed Consolidated Balance Sheets as of September 30, 2008 and December 31, 2008		4
Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended December 31, 2007 and 2008		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended December 31, 2008		6
Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2007 and 2008		7
Notes to Condensed Consolidated Financial Statements		8

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

3. Quantitative and Qualitative Disclosures About Market Risk		21

4. Controls and Procedures		21

PART II OTHER INFORMATION
1. Legal Proceedings		23
1A. Risk Factors		23
2. Unregistered Sales of Equity Securities and Use of Proceeds		23
3. Defaults upon Senior Securities		23
4. Submission of Matters to a Vote of Security Holders		23
5. Other Information		23
6. Exhibits		23

SIGNATURES		24
EX-10.21(C)
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(Unaudited)


	Three Months Ended
	December 31,
	2007			2008
Revenue	$	215,268		$	100,224
Cost of sales		167,144			76,521

Gross profit		48,124			23,703

Selling, general, and administrative expenses		53,191			38,862

Loss from operations		(5,067	)		(15,159	)

Interest expense		5,881			4,062


Loss before income tax benefit		(10,948	)		(19,221	)

Income tax benefit		(4,529	)		(4,881	)

Net loss	$	(6,419	)	$	(14,340	)


Basic and diluted net loss per common share	$	(0.35	)	$	(0.78	)


Weighted average number of common shares used in computing net loss per common share:

Basic		18,364,676			18,500,794


Diluted		18,364,676			18,500,794

See accompanying notes to condensed consolidated financial statements.

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)


	September 30,			December 31,
	2008			2008
				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	30,264		$	14,829
Accounts receivable, net		35,675			20,765
Inventories, net		468,629			440,854
Prepaid expenses and other current assets		7,949			7,706
Deferred tax assets		307			298

Total current assets		542,824			484,452

Property and equipment, net		113,869			112,790
Other long-term assets		3,424			3,827
Deferred tax assets		1,206			1,206

Total assets	$	661,323		$	602,275


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,481		$	7,422
Customer deposits		6,505			5,338
Accrued expenses		25,380			19,284
Short-term borrowings		372,000			329,000

Total current liabilities		408,366			361,044

Other long-term liabilities		4,374			5,597

Total liabilities		412,740			366,641

STOCKHOLDERS’ EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding at September 30, 2008 and December 31, 2008		—			—
Common stock, $.001 par value, 24,000,000 shares authorized, 19,215,387 and 19,294,507 shares issued and 18,424,487 and 18,503,607 shares outstanding at September 30, 2008 and December 31, 2008, respectively		19			19
Additional paid-in capital		178,830			180,221
Retained earnings		85,544			71,204
Treasury stock, at cost, 790,900 shares held at September 30, 2008 and December 31, 2008.		(15,810	)		(15,810	)

Total stockholders’ equity		248,583			235,634

Total liabilities and stockholders’ equity	$	661,323		$	602,275

See accompanying notes to condensed consolidated financial statements.

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(Amounts in thousands)

(Unaudited)


	Three Months Ended
	December 31,
	2007			2008
Net loss	$	(6,419	)	$	(14,340	)

Other comprehensive (loss) income:
Change in fair market value of derivative instruments, net of tax benefit of $32 for the three months ended December 31, 2007		(51	)		—

Comprehensive loss	$	(6,470	)	$	(14,340	)

See accompanying notes to condensed consolidated financial statements.

MARINEMAX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(Amounts in thousands, except share data)


					Additional									Total
	Common Stock				Paid-in			Retained			Treasury			Stockholders’
	Shares		Amount		Capital			Earnings			Stock			Equity

BALANCE, September 30, 2008		18,424,487	$	19	$	178,830		$	85,544		$	(15,810	)	$	248,583


Net loss		—		—		—			(14,340	)		—			(14,340	)
Shares issued under employee stock purchase plan		67,172		—		411			—			—			411
Net shares issued upon the vesting of equity awards		11,948		—		(19	)		—			—			(19	)
Stock-based compensation		—		—		999			—			—			999

BALANCE, December 31, 2008		18,503,607	$	19	$	180,221		$	71,204		$	(15,810	)	$	235,634

See accompanying notes to condensed consolidated financial statements.

MARINEMAX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)


	Three Months Ended
	December 31,
	2007			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,419	)	$	(14,340	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,337			2,147
Deferred income tax provision		172			9
(Gain) loss on sale of property and equipment		(19	)		77
Cumulative effect of adoption of FIN 48 (Note 6)		(115	)		—
Stock-based compensation expense		1,785			999
Tax benefits from equity awards		197			119
Excess tax benefits from stock-based compensation		(168	)		—
(Increase) decrease in —
Accounts receivable, net		5,156			14,791
Inventories, net		(54,805	)		27,775
Prepaid expenses and other assets		(1,562	)		(221	)
(Decrease) increase in —
Accounts payable		(5,169	)		2,941
Customer deposits		(11,747	)		(1,167	)
Accrued expenses		460			(4,873	)

Net cash provided by (used in) operating activities		(69,897	)		28,257


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,412	)		(1,084	)
Proceeds from sale of property and equipment		20			—

Net cash used in investing activities		(2,392	)		(1,084	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on short-term borrowings		65,000			(43,000	)
Repayments of long-term debt		(1,092	)		—
Net proceeds from issuance of common stock under incentive compensation and employee purchase plans		1,638			392
Purchase of treasury stock		(1,035	)		—
Excess tax benefits from stock-based compensation		168			—

Net cash provided by (used in) financing activities		64,679			(42,608	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(7,610	)		(15,435	)
CASH AND CASH EQUIVALENTS, beginning of period		30,375			30,264

CASH AND CASH EQUIVALENTS, end of period	$	22,765		$	14,829


Supplemental Disclosures of Cash Flow Information:
Cash paid for:
Interest	$	5,731		$	3,968
Income taxes	$	2,027		$	—

See accompanying notes to condensed consolidated financial statements.

MARINEMAX, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. COMPANY BACKGROUND:

We are the largest recreational boat retailer in the United States. We engage primarily in the retail sale, brokerage, and service of new and used boats, motors, trailers, marine parts, and accessories and offer slip and storage accommodations in certain locations. In addition, we arrange related boat financing, insurance, and extended service contracts. As of December 31, 2008, we operated through 75 retail locations in 22 states, consisting of Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Maryland, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, and Utah.

We are the nation’s largest retailer of Sea Ray, Boston Whaler, Meridian, Cabo, and Hatteras recreational boats and yachts, all of which are manufactured by Brunswick Corporation (Brunswick). Sales of new Brunswick boats accounted for approximately 49% of our revenue in fiscal 2008. Brunswick is the world’s largest manufacturer of marine products and marine engines. We believe we represented in excess of 10% of all Brunswick marine sales, including approximately 40% of its Sea Ray boat sales, during our 2008 fiscal year.

We have dealership agreements with Sea Ray, Boston Whaler, Cabo, Hatteras, Meridian, and Mercury Marine, all subsidiaries or divisions of Brunswick. We also have dealer agreements with Azimut. These agreements allow us to purchase, stock, sell, and service these manufacturers’ boats and products. These agreements also allow us to use these manufacturers’ names, trade symbols, and intellectual properties in our operations.

We are parties to a multi-year dealer agreement with Brunswick covering Sea Ray products that appoints us as the exclusive dealer of Sea Ray boats in our geographic markets. We are party to a multi-year dealer agreement with Hatteras Yachts that gives us the exclusive right to sell Hatteras Yachts throughout the states of Florida (excluding the Florida panhandle), New Jersey, New York, and Texas. We are also the exclusive dealer for Cabo Yachts throughout the states of Florida, New Jersey, and New York through a multi-year dealer agreement. We are also the exclusive dealer for Italy-based Azimut-Benetti Group’s product line, Azimut Yachts, for the Northeast United States from Maryland to Maine and for the state of Florida through a multi-year dealer agreement. We believe the non-Brunswick brands offer a migration for our existing customer base or fill a void in our product offerings, and accordingly, do not compete with the business generated from our other prominent brands.

As is typical in the industry, we deal with manufacturers, other than Sea Ray, Hatteras, Cabo and Azimut Yachts, under renewable annual dealer agreements, each of which gives us the right to sell various makes and models of boats within a given geographic region. Any change or termination of these agreements, or the agreements discussed above, for any reason, or changes in competitive, regulatory, or marketing practices, including rebate or incentive programs, could adversely affect our results of operations. Although there are a limited number of manufacturers of the type of boats and products that we sell, we believe that adequate alternative sources would be available to replace any manufacturer other than Brunswick as a product source. These alternative sources may not be available at the time of any interruption, and alternative products may not be available at comparable terms, which could affect operating results adversely.

General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties regarding future economic prospects could reduce consumer spending in the markets we serve and adversely affect our business. Economic conditions in areas in which we operate dealerships, particularly Florida in which we generated 46%, 44%, and 43% of our revenue during fiscal 2006, 2007, and 2008, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing and military base closings, also could adversely affect our operations in certain markets.

In an economic downturn, consumer discretionary spending levels generally decline, at times resulting in disproportionately large reductions in the sale of luxury goods. Consumer spending on luxury goods also may decline as a result of lower consumer confidence levels, even if prevailing economic conditions are favorable. Although we have expanded our operations during periods of stagnant or modestly declining industry trends, the cyclical nature of the recreational boating industry or the lack of industry growth could adversely affect our

business, financial condition, or results of operations in the future. Any period of adverse economic conditions or low consumer confidence has a negative effect on our business.

Lower consumer spending resulting from a downturn in the housing market and other economic factors adversely affected our business in fiscal 2007 and continued weakness in consumer spending resulting from substantial weakness in the financial markets and deteriorating economic conditions had a very substantial negative effect on our business in fiscal 2008 and 2009. These conditions caused us to defer our acquisition program, slow our new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close some of our retail locations, and reduce our headcount. We cannot predict the length or severity of these unfavorable economic or financial conditions or the extent to which they will adversely affect our operating results nor can we predict the effectiveness of the measures we have taken to address this environment or whether additional measures will be necessary.

2. BASIS OF PRESENTATION:

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2008. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. All adjustments, consisting of only normal recurring adjustments considered necessary for fair presentation, have been reflected in these unaudited condensed consolidated financial statements. The operating results for the three months ended December 31, 2008 are not necessarily indicative of the results that may be expected in future periods.

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. The estimates made by us in the accompanying unaudited condensed consolidated financial statements include valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets, and valuation of accruals. Actual results could differ from those estimates.

Unless the context otherwise requires, all references to “MarineMax” mean MarineMax, Inc. prior to its acquisition of five previously independent recreational boat dealers in March 1998 (including their related real estate companies) and all references to the “Company,” “our company,” “we,” “us,” and “our” mean, as a combined company; MarineMax, Inc. and the 20 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations acquired to date (the “acquired dealers,” and together with the brokerage and repair operations, “operating subsidiaries” or the “acquired companies”).

In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported unaudited condensed consolidated financial statements to conform to the unaudited condensed consolidated financial statement presentation of the current period. The unaudited condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly owned. All significant intercompany transactions and accounts have been eliminated.

3. NEW ACCOUNTING PRONOUNCEMENTS:

In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141R, “Business Combinations” (SFAS 141R). SFAS 141R will require among other things, the expensing of direct transaction costs, in process research and development to be capitalized, certain contingent assets and liabilities to be recognized at fair value and earn-out arrangements may be required to be measured at fair value recognized each period in earnings. In addition, certain material adjustments will be required to be made to purchase accounting entries at the initial acquisition date and will cause revisions to previously issued financial information in subsequent filings. SFAS is effective for transactions occurring after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may have a material impact on our consolidated

financial position, results from operations and cash flows should we enter into a material business combination after the standards effective date.

4. GOODWILL AND OTHER INTANGIBLE ASSETS:

We account for goodwill and identifiable intangible assets in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). Under this standard, we assess the impairment of goodwill and identifiable intangible assets at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The first step in the assessment is the estimation of fair value. If step one indicates that impairment potentially exists, we perform the second step to measure the amount of impairment, if any. Goodwill and identifiable intangible asset impairment exists when the estimated fair value is less than its carrying value.

During the three months ended June 30, 2008, we experienced a significant decline in stock market valuation, driven primarily by weakness in the marine retail industry, and an overall soft economy, which hindered our financial performance. Accordingly, we completed a step one analysis (as noted above) and estimated the fair value of the reporting unit as prescribed by SFAS 142, which indicated potential impairment. As a result, we completed a fair value analysis of indefinite lived intangible assets and a step two goodwill impairment analysis, as required by SFAS 142. We determined that all indefinite lived intangible assets and goodwill were impaired and recorded a non-cash charge of $121.1 million based on our assessment. We will not be required to make any current or future cash expenditures as a result of this impairment charge.

5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY:

We account for derivative instruments in accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Certain Hedging Activities” (SFAS 133), as amended by Statement of Financial Accounting Standards No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activity, an Amendment of SFAS 133” (SFAS 138) and Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (SFAS 149), (collectively SFAS 133). Under these standards, all derivative instruments are recorded on the balance sheet at their respective fair values.

We utilize certain derivative instruments, from time to time, including interest rate swaps and forward contracts, to manage variability in cash flows associated with interest rates and forecasted purchases of boats and yachts from certain of our foreign suppliers in euros. At December 31, 2008, no such instruments were outstanding.

6. INCOME TAXES:

We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109) and Financial Accounting Standard Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). Under SFAS 109, we recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized by considering all available positive and negative evidence.

Substantially all of our goodwill and intangibles were deductible for tax purposes. During the fiscal year ended September 30, 2008, we wrote-off all of our goodwill and indefinite lived intangible assets. The write-off, combined with other timing differences, gave rise to a net operating loss, which resulted in a net deferred tax asset of approximately $41.3 million. Pursuant to SFAS 109, we must consider all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. Under the provisions of SFAS 109, we determined that our net deferred tax asset needed to be reserved given recent earnings and industry trends. Accordingly, recording of the valuation allowance resulted in a non-cash charge of approximately $39.2 million.

7. SHORT-TERM BORROWINGS:

During December 2008, we entered into an amendment of our second amended and restated credit and security agreement originally entered into in June 2006. The amendment modified the amount of borrowing availability, financial covenants, inventory advance rates, and the collateral that secures the borrowings. With the amendment, the credit facility provides us a line of credit with asset-based borrowing availability of up to $425 million, stepping down to $350 million by September 30, 2009 and $300 million by May 31, 2010. However, the amendment also contains a provision that allows us to obtain commitments from existing or additional lenders, thereby increasing the capacity of the credit facility, up to $500 million, and enables us to obtain advances of up to $20 million against certain of our owned real estate. Amounts under the credit facility may be used for working capital and inventory financing, with the amount of permissible borrowings determined pursuant to a borrowing base formula. The credit facility also permits approved-vendor floorplan borrowings of up to $20 million. The amendment replaces the fixed charge coverage ratio with an interest coverage ratio for years ending on or after September 30, 2010; it includes a cumulative earnings before interest, taxes, depreciation, and amortization, or EBITDA (as defined in the agreement), covenant for each quarter; it modifies the current ratio requirements; it reduces the amount of allowable capital expenditures; it requires approval for any stock repurchases; and it requires approval for acquisitions. The amended credit facility provides for interest at the London Interbank Offered Rate (LIBOR) plus 425 basis points through September 30, 2010 and thereafter at LIBOR plus 150 to 400 basis points, pursuant to a performance pricing grid based upon our interest coverage ratio, as defined. Borrowings under the credit facility are secured by our inventory, accounts receivable, equipment, furniture, fixtures, and real estate. The amended credit facility matures in May 2011, with two one-year renewal options, subject to lender approval. As of December 31, 2008, we were in compliance with all of the credit facility covenants and our additional available borrowings under our credit facility were approximately $40 million.

As is common in our industry, we receive interest assistance directly from boat manufacturers, including Brunswick. The interest assistance programs vary by manufacturer and generally include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to us or our lender depending on the arrangements the manufacturer has established. We classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders.

The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the holding costs of that inventory as well as the ability and willingness of our customers to finance boat purchases. As of December 31, 2008, we had no long-term debt. However, we rely on our credit facility to purchase our inventory of boats. Our ability to borrow under our credit facility depends on our ability, including further actions which may be necessary, to continue to satisfy our covenants and other obligations under our credit facility. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Our access to funds under our credit facility also depends upon the ability of the banks that are parties to that facility to meet their funding commitments, particularly if they experience shortages of capital or experience excessive volumes of borrowing requests from others during a short period of time. A continuation of depressed economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties could interfere with our ability to utilize the credit agreement to fund our operations. Any inability to utilize our credit facility or the acceleration of amounts owed, resulting from a covenant violation, insufficient collateral, or lender difficulties, could require us to seek other sources of funding to repay amounts outstanding under the credit agreement or replace or supplement our credit agreement, which may not be possible at all or under commercially reasonable terms.

Similarly, the decreases in the availability of credit and increases in the cost of credit adversely affect the ability of our customers to purchase boats from us and thereby adversely affect our ability to sell our products and impact the profitability of our finance and insurance activities. Tight credit conditions, during fiscal 2008 and continuing in fiscal 2009, adversely affected the ability of customers to finance boat purchases, which had a negative affect on our operating results.

STOCK-BASED COMPENSATION:

Upon adoption of SFAS 123R, we used the Black-Scholes valuation model for valuing all stock-based compensation and shares granted under the ESPP. We measure compensation for restricted stock awards and restricted stock units at fair value on the grant date based on the number of shares expected to vest and the quoted market price of our common stock. We recognize compensation cost for all awards in earnings, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award.

During the three months ended December 31, 2007 and 2008, we recognized stock-based compensation expense of approximately $1.8 million and $1.0 million, respectively, in selling, general, and administrative expenses on the condensed consolidated statements of operations. Tax benefits realized for tax deductions from option exercises for the three months ended December 31, 2007 and 2008, were approximately $197,000 and $0, respectively.

Cash received from option exercises under all share-based payment arrangements for the three months ended December 31, 2007 and 2008, was approximately $1.6 million and $410,000, respectively. We currently expect to satisfy share-based awards with registered shares available to be issued.

9. THE INCENTIVE STOCK PLANS:

During February 2007, our stockholders approved a proposal to approve our 2007 Incentive Compensation Plan (2007 Plan), which replaced our 1998 Incentive Stock Plan (1998 Plan). Our 2007 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards, and performance awards (collectively awards), that may be settled in cash, stock, or other property. Our 2007 Plan is designed to attract, motivate, retain, and reward our executives, employees, officers, directors, and independent contractors by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The total number of shares of our common stock that may be subject to awards under the 2007 Plan is equal to 1,000,000 shares, plus (i) any shares available for issuance and not subject to an award under the 1998 Plan, (ii) the number of shares with respect to which awards granted under the 2007 Plan and the 1998 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2007 Plan and the 1998 Plan, the number of shares that are not issued as a result of the award being settled for cash or otherwise not issued in connection with the exercise or payment of the award; and (iv) the number of shares that are surrendered or withheld in payment of the exercise price of any award or any tax withholding requirements in connection with any award granted under the 2007 Plan and the 1998 Plan. The 2007 Plan terminates in February 2017, and awards may be granted at any time during the life of the 2007 Plan. The date on which awards vest are determined by the Board of Directors or the Plan Administrator. The exercise prices of options are determined by the Board of Directors or the Plan Administrator and are at least equal to the fair market value of shares of common stock on the date of grant. The term of options under the 2007 Plan may not exceed ten years. The options granted have varying vesting periods. To date, we have not settled or been under any obligation to settle any awards in cash.

The following table summarizes option activity from September 30, 2008 through December 31, 2008:


											Weighted
									Weighted		Average
	Shares						Aggregate		Average		Remaining
	Available			Options			Intrinsic Value		Exercise		Contractual
	for Grant			Outstanding			(in thousands)		Price		Life

Balance at September 30, 2008		1,215,006			1,740,128		$	—	$	18.41		5.1
Options authorized		—			—			—		—
Options granted		(1,171,700	)		1,171,700			—		2.97
Options cancelled/forfeited/expired		34,226			(34,226	)		—		18.98
Restricted stock awards forfeited		65,550			—			—		—
Options exercised		—			—			—		—

Balance at December 31, 2008		143,082			2,877,602		$	—		12.12		6.9


Exercisable at December 31, 2008		—			1,151,981		$	—	$	15.07		4.1

The weighted-average grant date fair value of options granted during the three months ended December 31, 2007, and 2008, was $8.12, and $7.40, respectively. The total intrinsic value of options exercised during the three months ended December 31, 2007, and 2008 was approximately $485,000, and $0, respectively.

As of December 31, 2007 and 2008, there was approximately $3.6 million and $3.5 million, respectively, of unrecognized compensation costs related to non-vested options that are expected to be recognized over a weighted average period of 3.1 years and 2.6 years, respectively. The total fair value of options vested during the three months ended December 31, 2007, and 2008 was approximately $1.1 million and $1.8 million, respectively.

We continued using the Black-Scholes model to estimate the fair value of options granted during fiscal 2009. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

The following are the weighted-average assumptions used for each respective period:


	Three Months Ended
	December 31,
	2007			2008

Dividend yield		0.0	%		0.0	%
Risk-free interest rate		3.7	%		2.2	%
Volatility		43.4	%		63.4	%
Expected life	7.5 years			6.1 years

10. EMPLOYEE STOCK PURCHASE PLAN (THE STOCK PURCHASE PLAN):

During February 2008, our stockholders approved our 2008 Employee Stock Purchase Plan (2008 Plan). The 2008 Plan provides for up to 500,000 shares of common stock to be available for purchase by our regular employees who have completed at least one year of continuous service. The Stock Purchase Plan provides for implementation of up to 10 annual offerings beginning on the first day of October starting in 2008, with each offering terminating on September 30 of the following year. Each annual offering may be divided into two six-month offerings. For each offering, the purchase price per share will be the lower of (i) 85% of the closing price of the common stock on the first day of the offering or (ii) 85% of the closing price of the common stock on the last day of the offering. The purchase price is paid through periodic payroll deductions not to exceed 10% of the participant’s earnings during each offering period. However, no participant may purchase more than $25,000 worth of common stock annually.

We continued using the Black-Scholes model to estimate the fair value of options granted to purchase shares issued pursuant to the Stock Purchase Plan. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. Volatility is based on the historical volatility of our common stock. The risk-free rate for periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

The following are the weighted-average assumptions used for each respective period:


	Three Months Ended
	December 31,
	2007			2008

Dividend yield		0.0	%		0.0	%
Risk-free interest rate		3.7	%		1.3	%
Volatility		46.9	%		178.5	%
Expected life	six-months			six-months

11. RESTRICTED STOCK AWARDS:

During fiscal 2007 and 2008, we granted non-vested (restricted) stock awards or restricted stock units (collectively restricted stock awards) to certain key employees pursuant to the 1998 Plan or the 2007 Plan. The restricted stock awards have varying vesting periods, but generally become fully vested at either the end of year four or the end of year five, depending on the specific award. The awards granted in fiscal 2008 require certain levels of performance by us before they are earned. Such performance metrics must be achieved by September 2011 or the awards will be forfeited. The stock underlying the vested restricted stock units will be delivered upon vesting.

We accounted for the restricted stock awards granted during fiscal 2007 and 2008 using the measurement and recognition provisions of SFAS 123R. Accordingly, the fair value of the restricted stock awards is measured on the grant date and recognized in earnings over the requisite service period for each separately vesting portion of the award.

The following table summarizes restricted stock award activity from September 30, 2008 through December 31, 2008:


				Weighted
				Average Grant
	Shares			Date Fair Value

Non-vested balance at September 30, 2008		830,000		$	23.25
Changes during the period
Awards granted		—		$	—
Awards vested		(179,753	)	$	26.19
Awards forfeited		(65,550	)	$	23.93

Non-vested balance at December 31, 2008		584,697		$	22.28

As of December 31, 2008, we had approximately $5.7 million of total unrecognized compensation cost related to restricted stock awards granted under the plan. We expect to recognize that cost over a weighted-average period of 2.9 years.

12. NET LOSS PER SHARE:

The following is a reconciliation of the shares used in the denominator for calculating basic and diluted loss per share:


	Three Months Ended
	December 31,
	2007		2008
Weighted average common shares outstanding used in calculating basic loss per share		18,364,676		18,500,794

Effect of dilutive options		—		—


Weighted average common and common equivalent shares used in calculating diluted loss per share		18,364,676		18,500,794

Options to purchase 403,903 and 67,103 shares of common stock were outstanding at December 31, 2007 and 2008, respectively, but as a result of our net loss, were not included in the computation of diluted loss per share because their effect would be anti-dilutive. Options to purchase 1,222,200 and 2,074,264 shares of common stock were outstanding at December 31, 2007 and 2008, respectively, but were not included in the computation of loss per share because the options’ exercise prices were greater than the average market price of our common stock, and therefore, their effect would be anti-dilutive.

13. COMMITMENTS AND CONTINGENCIES:

We are party to various legal actions arising in the ordinary course of business. The ultimate liability, if any, associated with these matters was not believed to be material at December 31, 2008. While it is not feasible to determine the actual outcome of these actions as of December 31, 2008, we do not believe that these matters will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.


ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include statements relating to our future economic performance, plans and objectives for future operations, and projections of revenue and other financial items that are based on our beliefs as well as assumptions made by and information currently available to us. Actual results could differ materially from those currently anticipated as a result of a number of factors, including those listed under “Business-Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2008.

General

We are the largest recreational boat retailer in the United States with fiscal 2008 revenue in excess of $880 million. Through 75 retail locations in 22 states, we sell new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. We also arrange related boat financing, insurance, and extended warranty contracts; provide boat repair and maintenance services; offer yacht and boat brokerage services; and, where available, offer slip and storage accommodations.

MarineMax was incorporated in January 1998. We commenced operations with the acquisition of five independent recreational boat dealers on March 1, 1998. Since the initial acquisitions in March 1998, we have significantly expanded our operations through the acquisition of 20 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair facilities. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues, including, in some cases, management succession and related matters. As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated.

Lower consumer spending resulting from a downturn in the housing market and other economic factors adversely affected our business in fiscal 2007 and continued weakness in consumer spending resulting from substantial weakness in the financial markets and deteriorating economic conditions had a very substantial negative effect on our business in fiscal 2008. These conditions caused us to defer our acquisition program, slow our new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close some of our retail locations, and reduce our headcount. We cannot predict the length or severity of these unfavorable economic or financial conditions or the extent to which they will adversely affect our operating results nor can we predict the effectiveness of the measures we have taken to address this environment or whether additional measures will be necessary.

Although economic conditions have adversely affected our operating results, we have capitalized on our core strengths to substantially outperform the industry and deliver market share gains. Our ability to deliver an increase in market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to preserve and grow market share will yield an increase in future revenue. As general economic trends improve, we expect our core strengths and retailing strategies will position us to capitalize on growth opportunities as they occur and will allow us to emerge from this challenging environment with greater earnings potential.

Application of Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results.

In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Revenue Recognition

We recognize revenue from boat, motor, and trailer sales, and parts and service operations at the time the boat, motor, trailer, or part is delivered to or accepted by the customer or service is completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. We recognize revenue from slip and storage services on a straight-line basis over the term of the slip or storage agreement. We recognize commissions earned by us for placing notes with financial institutions in connection with customer boat financing when we recognize the related boat sales. We also recognize marketing fees earned on credit life, accident and disability, and hull insurance products sold by third-party insurance companies at the later of customer acceptance of the insurance product as evidenced by contract execution or when the related boat sale is recognized. We also recognize commissions earned on extended warranty service contracts sold on behalf of third-party insurance companies at the later of customer acceptance of the service contract terms, as evidenced by contract execution or recognition of the related boat sale.

Certain finance and extended warranty commissions and marketing fees on insurance products may be charged back if a customer terminates or defaults on the underlying contract within a specified period of time. Based upon our experience of repayments and defaults, we maintain a chargeback allowance that was not material to our financial statements taken as a whole as of December 31, 2008. Should results differ materially from our historical experiences, we would need to modify our estimate of future chargebacks, which could have a material adverse effect on our operating margins.

Vendor Consideration Received

We account for consideration received from our vendors in accordance with Emerging Issues Task Force Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor” (EITF 02-16). EITF 02-16 most significantly requires us to classify interest assistance received from manufacturers as a reduction of inventory cost and related cost of sales as opposed to netting the assistance against our interest expense incurred with our lenders. Pursuant to EITF 02-16, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses.

Inventories

Inventory costs consist of the amount paid to acquire the inventory, net of vendor consideration and purchase discounts, the cost of equipment added, reconditioning costs, and transportation costs relating to acquiring inventory for sale. We state new boat, motor, and trailer inventories at the lower of cost, determined on a specific-identification basis, or market. We state used boat, motor, and trailer inventories, including trade-in’s, at the lower of cost, determined on a specific-identification basis, or market. We state parts and accessories at the lower of cost, determined on the first-in, first-out basis, or market. We utilize our historical experience, the aging of the inventories, and our consideration of current market trends as the basis for determining lower of cost or market valuation allowance. As of December 31, 2008 our lower of cost or market valuation allowance was not material to the consolidated financial statements taken as a whole. If events occur and market conditions change, causing the fair value to fall below carrying value, the lower of cost or market valuation allowance could increase.

Valuation of Goodwill and Other Intangible Assets

During the three months ended June 30, 2008, we experienced a significant decline in stock market valuation driven primarily by weakness in the marine retail industry and an overall soft economy, which hindered our financial performance. Accordingly, we completed a step one analysis (as noted above) and estimated the fair value of the reporting unit as prescribed by SFAS 142, which indicated potential impairment. As a result, we completed a fair value analysis of indefinite lived intangible assets and a step two goodwill impairment analysis, as required by SFAS 142. We determined that all indefinite lived intangible assets and goodwill were impaired and recorded a non-cash charge of $121.1 million based on our assessment. We will not be required to make any current or future cash expenditures as a result of this impairment charge.

Impairment of Long-Lived Assets

Statement of Financial Accounting Standards No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” (SFAS 144), requires that long-lived assets, such as property and equipment and purchased intangibles subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent our best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized in accordance with SFAS 144 is permanent and may not be restored. As of September 30, 2008, we had not recognized any impairment of long-lived assets in connection with SFAS 144 based on our reviews.

During the three months ended June 30, 2008, we experienced a significant decline in stock market valuation driven primarily by weakness in the marine retail industry and an overall soft economy, which has hindered our financial performance. As a result of this weakness, we realized a goodwill and intangible asset impairment charge, as noted above. Based on these events, we reviewed the valuation of our investment in Gulfport in accordance with APB 18 and recoverability of the assets contained within the joint venture. APB 18 requires that a loss in value of an investment which is other than a temporary decline should be recognized. We reviewed our investment and assets contained within the Gulfport joint venture, which consists of land, buildings, equipment, and goodwill. As a result, we determined that our investment in the joint venture was impaired and recorded a non-cash charge of $1.0 million based on our assessment. We will not be required to make any current or future cash expenditures as a result of this impairment charge.

Income Taxes

Substantially all of our goodwill and intangibles were deductible for tax purposes. During the year ended September 30, 2008, we wrote-off all of our goodwill and indefinite lived intangible assets. The write-off combined with other timing differences, gave rise to a net operating loss, which resulted in a net deferred tax asset of approximately $41.3 million. Pursuant to SFAS 109, we must consider all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. Under the provisions of SFAS 109, we determined that our net deferred tax asset needed to be reserved given recent earnings and industry trends. Accordingly, recording of the valuation allowance resulted in a non-cash charge of approximately $39.2 million.

Stock-Based Compensation

Consolidated Results of Operations

The following discussion compares the three months ended December 31, 2008 with the three months ended December 31, 2007 and should be read in conjunction with the Condensed Consolidated Financial Statements, including the related notes thereto, appearing elsewhere in this Report.

Three Months Ended December 31, 2008 Compared with Three Months Ended December 31, 2007

Revenue. Revenue decreased $115.0 million, or 53.4%, to $100.2 million for the three months ended December 31, 2008 from $215.3 million for the three months ended December 31, 2007. Of this decrease, $114.3 million was attributable to a 52% decline in comparable-store sales and approximately $700,000 was attributable to stores opened that are not eligible for inclusion in the comparable-store base for the three months ended December 31, 2008. The decline in our comparable-store sales was due to softer economic conditions, which adversely impacted our retail sales.

Gross Profit. Gross profit decreased $24.4 million, or 50.7%, to $23.7 million for the three months ended December 31, 2008 from $48.1 million for the three months ended December 31, 2007. Gross profit as a percentage of revenue increased to 23.7% for the three months ended December 31, 2008 from 22.4% for the three months ended December 31, 2007. The increase in gross profit as a percentage of revenue was driven by the shift in product mix of new boat sales and an increase in our higher margin service and parts business.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased $14.3 million, or 26.9%, to $38.9 million for the three months ended December 31, 2008 from $53.2 million for the three months ended December 31, 2007. The overall decrease in selling, general, and administrative expenses was due primarily to the decline in personnel costs, resulting from reductions in workforce, reduced commissions, reductions in manager bonuses, and reductions in marketing and travel and entertainment expenses. Selling, general, and administrative expenses as a percentage of revenue increased approximately 14.1% to 38.8% for the three months ended December 31, 2008 from 24.7% for the three months ended December 31, 2007, as a result of the decline in same-store sales.

Interest Expense. Interest expense decreased $1.8 million, or 31%, to $4.1 million for the three months ended December 31, 2008 from $5.9 million for the three months ended December 31, 2007. The decrease was primarily a result of decreased borrowings on our credit facility and mortgages coupled with the more favorable interest rate environment. Interest expense as a percentage of revenue increased to 4.1% for the three months ended December 31, 2008 from 2.7% for the three months ended December 31, 2007 due to the overall decline in revenue.

Income Tax Benefit. Income tax benefit increased $352,000, or 7.8%, to $4.9 million for the three months ended December 31, 2008 from $4.5 million for the three months ended December 31, 2007. Our effective income tax rate decreased to approximately 25.4% for the three months ended December 31, 2008, from 41.4% for the three months ended December 31, 2007, primarily due to the limitation on our net operating loss carry back coupled with changes in our valuation allowances associated with our deferred tax assets.

Liquidity and Capital Resources

Our cash needs are primarily for working capital to support operations, including new and used boat and related parts inventories, off-season liquidity, and growth through acquisitions and new store openings. We regularly monitor the aging of our inventories and current market trends to evaluate our current and future inventory needs. We also use this evaluation in conjunction with our review of our current and expected operating performance and expected growth to determine the adequacy of our financing needs. These cash needs have historically been financed with cash generated from operations and borrowings under our credit facility. Our ability to utilize our credit facility to fund operations depends upon the collateral levels and compliance with the covenants of the credit facility. Turmoil in the credit markets and weakness in the retail markets may interfere with our ability to remain in compliance with the covenants of the credit facility and therefore utilize the credit facility to fund operations. At December 31, 2008, we were in compliance with all of the credit facility covenants. We currently depend upon dividends and other payments from our dealerships and our credit facility to fund our current operations and meet our cash needs. Currently, no agreements exist that restrict this flow of funds from our dealerships.

For the three months ended December 31, 2007, cash used in operating activities approximated $69.9 million. For the three months ended December 31, 2007, cash used in operating activities was primarily used to increase inventories to ensure appropriate inventory levels and decrease accounts payable to tax authorities, partially offset by decreased accounts receivable from our manufacturers. For the three months ended December 31, 2008, cash provided by operating activities approximated $28.3 million. For the three months ended December 31, 2008, cash provided by operating activities was primarily generated by the reductions in inventories and accounts receivable partially offset by net loss, decreased customer deposits and accrued expenses.

For the three months ended December 31, 2007 and 2008, cash used in investing activities approximated $2.4 million and $1.1 million, respectively, and was primarily used to purchase property and equipment associated with improving and relocating existing retail facilities.

For the three months ended December 31, 2007, cash provided by financing activities approximated $64.7 million. For the three months ended December 31, 2007, cash provided by financing activities was primarily attributable to net borrowings of short-term borrowings as a result of increased inventory levels and net proceeds from common shares issued upon the exercise of stock options and stock purchases under our Employee Stock Purchase Plan, partially offset by repayments of long-term debt. For the three months ended December 31, 2008, cash used in financing activities approximated $42.6 million. For the three months ended December 31, 2008, cash used in financing activities was primarily attributable to net repayments of short-term borrowings as a result of decreased inventory levels and net proceeds from stock purchases under our Employee Stock Purchase Plan.

charge coverage ratio with an interest coverage ratio for years ending on or after September 30, 2010; it includes a cumulative earnings before interest, taxes, depreciation, and amortization, or EBITDA (as defined in the agreement), covenant for each quarter; it modifies the current ratio requirements; it reduces the amount of allowable capital expenditures; it requires approval for any stock repurchases; and it requires approval for acquisitions. The amended credit facility provides for interest at the London Interbank Offered Rate (LIBOR) plus 425 basis points through September 30, 2010 and thereafter at LIBOR plus 150 to 400 basis points, pursuant to a performance pricing grid based upon our interest coverage ratio, as defined. Borrowings under the credit facility are secured by our inventory, accounts receivable, equipment, furniture, fixtures, and real estate. The amended credit facility matures in May 2011, with two one-year renewal options, subject to lender approval. As of December 31, 2008, we were in compliance with all of the credit facility covenants.

As of December 31, 2008, our indebtedness totaled approximately $329 million associated with financing our inventory and working capital needs. At December 31, 2007 and 2008, the interest rate on the outstanding short-term borrowings was 6.1% and 5.7%, respectively. At December 31, 2008, our additional available borrowings under our credit facility were approximately $40 million.

We issued a total of 79,120 shares of our common stock in conjunction with our Incentive Stock Plans and Employee Stock Purchase Plan during the three months ended December 31, 2008 in exchange for approximately $410,000 in cash. Our Incentive Stock Plans provide for the grant of incentive and non-qualified stock options to acquire our common stock, the grant of restricted stock awards and restricted stock units, the grant of common stock, the grant of stock appreciation rights, and the grant of other cash awards to key personnel, directors, consultants, independent contractors, and others providing valuable services to us. Our Employee Stock Purchase Plan is available to all our regular employees who have completed at least one year of continuous service.

Except as specified in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the attached unaudited condensed consolidated financial statements, we have no material commitments for capital for the next 12 months. We believe that our existing capital resources will be sufficient to finance our operations for at least the next 12 months, except for possible significant acquisitions.

Impact of Seasonality and Weather on Operations

Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. With the exception of Florida, we generally realize significantly lower sales and higher levels of inventories, and related short-term borrowings, in the quarterly periods ending December 31 and March 31. The onset of the public boat and recreation shows in January stimulates boat sales and allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business could become substantially more seasonal as we acquire dealers that operate in colder regions of the United States.

Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, drought conditions (or merely reduced rainfall levels) or excessive rain may close area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our products. In addition, unseasonably cool weather and prolonged winter conditions may lead to a shorter selling season in certain locations. Hurricanes and other storms could result in disruptions of our operations or damage to our boat inventories and facilities, as has been the case when Florida and other markets were hit by hurricanes. Although our geographic diversity is likely to reduce the overall impact to us of adverse weather conditions in any one market area, these conditions will continue to represent potential, material adverse risks to us and our future financial performance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 2008, all of our short-term debt bore interest at a variable rate, tied to LIBOR as a reference rate. Changes in the underlying LIBOR interest rate or the spread charged under our performance pricing grid on our short-term debt could affect our earnings. For example, a hypothetical 100 basis point increase in the interest rate on our short-term debt would result in an increase of approximately $3.3 million in annual pre-tax interest expense. This estimated increase is based upon the outstanding balance of our short-term debt as of December 31, 2008 and assumes no mitigating changes by us to reduce the outstanding balances, no additional interest assistance that could be received from vendors due to the interest rate increase, and no changes in the base LIBOR rate.

Products purchased from Italian-based manufacturers are subject to fluctuations in the euro to U.S. dollar exchange rate, which ultimately may impact the retail price at which we can sell such products. Accordingly, fluctuations in the value of the euro as compared with the U.S. dollar may impact the price points at which we can sell profitably Italian products, and such price points may not be competitive with other product lines in the United States. Accordingly, such fluctuations in exchange rates ultimately may impact the amount of revenue, cost of goods sold, cash flows, and earnings we recognize for Italian product lines. We cannot predict the effects of exchange rate fluctuations on our operating results. In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with forecasted purchases of boats and yachts from Italian-based manufacturers. We are not currently engaged in foreign currency exchange hedging transactions to manage our foreign currency exposure. If and when we do engage in foreign currency exchange hedging transactions, we cannot assure that our strategies will adequately protect our operating results from the effects of exchange rate fluctuations.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed by us in Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in Internal Controls

During the quarter ended December 31, 2008, there were no changes in our internal controls over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future

conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Exhibits 31.1 and 31.2 are the Certifications of the CEO and the CFO, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Not applicable.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS


10.21(c)		Fourth Amendment to Second Amended and Restated Credit and Security Agreement executed on December 15, 2008, among MarineMax, Inc. and its subsidiaries, as Borrowers, and Bank of America, N.A., Keybank, N.A., General Electric Commercial Distribution Finance Corporation, Wachovia Bank, N.A., Wells Fargo Bank, N.A., U.S. Bank, N.A., Branch Banking and Trust Company, and Bank of the West, as Lenders.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			MARINEMAX, INC.
February 9, 2009	By:	/s/ Michael H. McLamb
		Michael H. McLamb
		Executive Vice President, Chief Financial Officer, Secretary, and Director (Principal Accounting and Financial Officer)

INDEX TO EXHIBITS


10.21(c)		Fourth Amendment to Second Amended and Restated Credit and Security Agreement executed on December 15, 2008, among MarineMax, Inc. and its subsidiaries, as Borrowers, and Bank of America, N.A., Keybank, N.A., General Electric Commercial Distribution Finance Corporation, Wachovia Bank, N.A., Wells Fargo Bank, N.A., U.S. Bank, N.A., Branch Banking and Trust Company, and Bank of the West, as Lenders.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-10.21(C) 2 p14085exv10w21xcy.htm EX-10.21(C) exv10w21xcy

Exhibit 10.21(c)

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

FOURTH AMENDMENT
TO SECOND AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT

This FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this “Fourth Amendment”) is entered into as of December 15, 2008 (the “Effective Date”), by and among MARINEMAX, INC., a Delaware corporation (the “Company”) and each of the six (6) other Borrowers set forth on Schedule I attached hereto and by the reference incorporated herein (each of the Company and each of such six (6) Persons other than the Company, singularly, a “Borrower,” and the Company and all of such Persons other than the Company, collectively, the “Borrowers”), KEYBANK NATIONAL ASSOCIATION, a national banking association, both individually (in such capacity, “KeyBank”) and as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders (as hereinafter defined), BANK OF AMERICA, N.A., a national banking association, individually (in such capacity, “BOA”), as collateral agent (in such capacity, the “Collateral Agent”) and as documentation agent (in such capacity, the “Documentation Agent”) and the various other financial institutions as are or may become parties hereto, including, as of the date hereof, GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION, a Nevada corporation (“GE Commercial”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (“Wachovia”), WELLS FARGO BANK, N.A., a national banking association (“Wells Fargo”), U.S. BANK NATIONAL ASSOCIATION, a national banking association (“US Bank”), BRANCH BANKING & TRUST COMPANY, a North Carolina corporation (“BB&T”), and BANK OF THE WEST, a California corporation (“Bank of the West”) (KeyBank, BOA, GE Commercial, Wachovia, Wells Fargo, US Bank, BB&T, Bank of the West, and such other financial institutions, collectively, the “Lenders”), amending that Second Amended and Restated Credit and Security Agreement dated as of June 19, 2006, by and among Borrowers and Lenders as heretofore amended by the First Amendment to Second Amended and Restated Credit and Security Agreement dated as of May 31, 2007, the Second Amendment to Second Amended and Restated Credit and Security Agreement dated as of October 1, 2007, and the Third Amendment to Second Amended and Restated Credit and Security Agreement dated as of March 7, 2008 (the “Agreement”). Unless otherwise defined in this Fourth Amendment, all defined terms used in this Fourth Amendment shall have the meanings ascribed to such terms in the Agreement. This Fourth Amendment is entered into in consideration of, and upon, the terms, conditions and agreements set forth herein.

1. Background. Borrowers and Lenders desire to amend certain provisions of the Agreement effective as of the date of this Fourth Amendment.

2. Definitions. Section 1.01 of the Agreement is hereby amended as follows:

(a) Added Definitions. The following new defined terms are hereby added to Section 1.01 of the Agreement:

[****] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

“Additional Real Estate Collateral” shall mean all Real Property Interests with respect to owned real estate, wherever situated, that is now owned or hereafter acquired by the Borrowers, or any of them, save and except for (a) the Pledged Real Estate Collateral, and (b) the Gulfport Property.

“[****]” shall mean boats, vessels, and yachts manufactured by [****].

“EBITDA” shall mean, for any period, the earnings before interest, Taxes, Statement of Financial Accounting Standards No. 123R stock-based compensation, depreciation, amortization, and any intangible asset impairment charge deducted in determining the earnings of the Borrowers on a consolidated basis for such period; provided, however, that for each of the four quarterly periods of the Borrowers ending on December 31, 2008, March 31, 2009, June 30, 2009 and September 30, 2009, EBITDA shall be calculated by adding back nonrecurring restructuring charges associated with business location closings, leasehold improvement impairment charges, lease termination charges, Lender closing costs associated with the Fourth Amendment to this Agreement, and actual [****] inventory repurchase settlement writedowns up to a maximum of [****].

“EBITDA/Interest Coverage Ratio” shall mean, for any period, the ratio of the Borrowers’ EBITDA to the Borrowers’ total interest expense determined on a consolidated basis for such period.

“EDR” shall have the meaning set forth in Section 4.07.

“ESA” shall have the meaning set forth in Section 4.07.

“Gulfport Property” shall mean the Real Property Interests in the real estate at Gulfport Marina (Florida) owned by a joint venture in which the Borrowers have only an approximate 36% interest.

“Inspection Increase Event 1” shall mean the event that shall have occurred if, as reflected on each of the relevant monthly Borrowing Base Certificates submitted during any period of two consecutive calendar months, the unpaid principal balance of Advances under this Agreement plus accrued but unpaid interest minus the Pledged Real Estate Loan Value shall equal or exceed eighty percent (80%) but shall not be greater than ninety (90%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory. An Inspection Increase Event 1 shall be deemed to have occurred if following an Inspection Increase Event 2 there shall be an Inspection Reinstatement Event but the unpaid principal balance of Advances under this Agreement plus accrued but unpaid interest thereon minus the Pledged Real Estate Loan Value nevertheless shall equal or exceed eighty percent (80%) but shall not be greater than ninety (90%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory, all as reflected

each of the relevant monthly Borrowing Base Certificates submitted during any period of two consecutive calendar months.

“Inspection Increase Event 2” shall mean the event that shall have occurred if, as reflected on each of the relevant monthly Borrowing Base Certificates submitted during any period of two consecutive calendar months, the unpaid principal balance of Advances under this Agreement plus accrued but unpaid interest minus the Pledged Real Estate Loan Value shall exceed ninety percent (90%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory.

“Interest Rate Swap” shall mean a financial derivative contract between parties in which each agrees to exchange payments tied to two different interest rates or indices for a specified period of time, generally based on a notional principal amount.

“Issuing Bank” shall mean BOA, in its capacity as an issuer of Letters of Credit pursuant to Section 2.01(a) and Section 2.13.

“LC Commitment” shall mean that portion of the Commitment Amount that may be used by the Borrowers for the issuance of Letters of Credit in an aggregate face amount not to exceed seven million dollars ($7,000,000).

“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a Letter of Credit.

“LC Documents” shall mean the Letters of Credit and all applications, agreements and instruments relating to the Letters of Credit.

“LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements that have not been reimbursed by or on behalf of the Borrowers at such time. The LC Exposure of any Lender shall be its Pro Rata Percentage of the total LC Exposure at such time.

“Letter of Credit” shall mean any stand-by letter of credit issued pursuant to Section 2.01 by the Issuing Bank for the account of the Borrower pursuant to the LC Commitment.

“Letter of Credit Fee” shall have the meaning set forth in Section 2.01(a)(3).

“Mortgage” shall have the meaning set forth in Section 4.07.

“Pledged Real Estate Collateral” shall mean all of the Real Property Interests in respect of the particular owned real estate of the Borrowers identified in Exhibit 4.07 to this Agreement, together with such additional or substitute Real

Property Interests, if any, as hereafter may be designated as Pledged Real Estate Collateral by written amendment to this Agreement.

“Pledged Real Estate Loan Value” shall mean, at any date of calculation, the maximum amount that the Borrowers shall be entitled to borrow or retain under Section 4.07 in respect of the Pledged Real Estate Collateral, with such amount to be the lesser of (a) fifty percent (50%) of the appraised value (determined in accordance with Section 4.07) of the Pledged Real Estate Collateral with respect to which all steps have been taken to include such property in the Borrowing Base, and (b) twenty million dollars ($20,000,000).

“Title Commitment” shall mean a commitment for title insurance provided to the Collateral Agent with respect to each parcel of Additional Real Estate Collateral.

“Title Policy” shall mean an ALTA mortgagee’s title insurance policy written by a title insurance company acceptable to the Collateral Agent in an amount equal to the value of Pledged Real Estate Collateral and containing no exceptions other than with respect to Permitted Liens.

(b) Changed Definitions. The definitions of the following terms heretofore defined in the Agreement are hereby amended to read in their entirety as follows:

“Borrowing Base” shall mean the greatest amount that may be borrowed or retained by the Borrowers in respect of the Commitment, which at any date of calculation, shall be determined by applying the then applicable Availability Reserve, if any, to the sum of the following determined on a consolidated basis for all of the Borrowers:

(a) the sum of (1) ninety percent (90%) of the original invoice price (including freight charges, but excluding, to the extent that the same are included in the Borrowing Base as Accounts, any earned volume purchase rebates, earned advertising rebates, verifiable price protection, and earned incentives, credits, or similar items) of Eligible New Inventory that is aged not more than three hundred sixty-five (365) days from date of delivery to the Borrowers, (2) eighty percent (80%) of the original invoice price (including freight charges, but excluding, to the extent that the same are included in the Borrowing Base as Accounts, any earned volume purchase rebates, earned advertising rebates, verifiable price protection, and earned incentives, credits, or similar items) of Eligible New Inventory that is aged more than three hundred sixty-five (365) days, but not more than seven hundred thirty (730) days, from date of delivery to the Borrowers, and (3) sixty-five percent (65%) of the original invoice price (including freight charges, but excluding, to the extent that the same are included in the Borrowing Base as Accounts, any earned volume purchase rebates, earned advertising

[****] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

rebates, verifiable price protection, and earned incentives, credits, or similar items) of Eligible New Inventory that is aged more than seven hundred thirty (730) days, but not more than one thousand ninety-five (1,095) days, from date of delivery to the Borrowers; provided, however, that (A) the amount includable in the Borrowing Base on account of Loose Outboard Motors in the Eligible New Inventory shall never exceed one million, five hundred thousand dollars ($1,500,000), it being agreed that all Loose Outboard Motors over such amount shall be included in the Borrowing Base only as Eligible Parts Inventory; (B) prior to May 1, 2009 the amount includable in the Borrowing Base on account of both the Eligible New Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****], and after May 1, 2009 the amount includable in the Borrowing Base on account of both the Eligible New Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****]; (C) prior to May 1, 2009, the amount includable in the Borrowing Base on account of both the Eligible New Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****], and after May 1, 2009 the amount includable in the Borrowing Base on account of both the Eligible New Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****]; (D) prior to May 1, 2009, the amount includable in the Borrowing Base on account of (i) the Eligible New Inventory of [****] and (ii) the Eligible Used Inventory of [****] shall not exceed in the aggregate [****], and after May 1, 2009, the amount includable in the Borrowing Base on account of (x) the Eligible New Inventory of [****] and (y) the Eligible Used Inventory of [****] shall not exceed in the aggregate [****]; and provided further, that if Lenders receive, with respect to particular Eligible New Inventory aged not more than three hundred sixty-five (365) days either, (i) a five percent (5.0%) manufacturer’s guaranty, satisfactory to Required Lenders in their reasonable discretion, with respect to such Eligible New Inventory, or (ii) a manufacturer’s repurchase agreement, that is reasonably satisfactory to Required Lenders, at a purchase price of ninety-five percent (95%) of the Eligible New Inventory value, the advance with respect to the Eligible New Inventory covered by such guaranty or repurchase agreement will be increased by five percent (5.0%) to ninety-five percent (95%), notwithstanding anything to the contrary in this clause (a).

(b) the sum of (1) eighty percent (80%) of NADA Wholesale Value of Eligible Used Inventory that has been held by the Borrowers for not more than one hundred eighty (180) days from the date of receipt, plus (2) seventy-two percent (72%) of the NADA Wholesale Value of Eligible Used Inventory that has been held by the Borrowers for more than one hundred eighty (180) days from the date of receipt, but not more than three hundred sixty-five (365) days; provided, however, that (A) the amount includable in the Borrowing Base on account of Eligible Used Inventory shall never exceed twenty-five percent (25%) of the aggregate of (i) Eligible New Inventory, and (ii) Eligible Used Inventory; (B) the amount includable in the Borrowing Base on account of both the Eligible New

[****] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****]; (C) the amount includable in the Borrowing Base on account of both the Eligible New Inventory of [****] and the Eligible Used Inventory of [****] shall not exceed in the aggregate [****]; (D) the amount includable in the Borrowing Base on account of (i) the Eligible New Inventory of [****] and (ii) the Eligible Used Inventory of [****] shall not exceed in the aggregate [****] and after May 1, 2009, the amount includable in the Borrowing Base on account of (x) the Eligible New Inventory of [****] and (y) the Eligible Used Inventory of [****] shall not exceed in the aggregate [****];

(c) eighty percent (80%) of the net book value of Eligible Accounts; provided, however, that the amount includable in the Borrowing Base on account of Eligible Accounts shall never exceed thirty million dollars ($30,000,000);

(d) the lesser of (1) twelve million dollars ($12,000,000), or (2) sixty percent (60%) of the cost (excluding freight charges) of Eligible Parts Inventory net of any reserve required by GAAP for damaged, obsolete, or slow-moving items in such inventory; and

(e) the Pledged Real Estate Loan Value of the Pledged Real Estate Collateral with respect to which all of the steps contemplated by Section 4.07 of the Agreement have been completed to the satisfaction of the Collateral Agent.

No Property of the Borrowers shall be included in the Borrowing Base if (1) the Collateral Agent, for the benefit of the Lenders, does not have a first priority security interest under the Uniform Commercial Code, to the extent applicable, subject only to Permitted Liens, in such Property, (2) any other Person has a Preferred Ship’s Mortgage on a Documented Vessel included in the Borrowing Base that has not been extinguished by payment in full and delivery of a written satisfaction of such Preferred Ship’s Mortgage, irrespective of whether such satisfaction has been filed with the Coast Guard or whether such Preferred Ship’s Mortgage is a Permitted Lien, or (3) any other Person has a perfected purchase money security interest in such Property, irrespective of whether such purchase money security interest is a Permitted Lien.

“Borrowing Base Certificate” shall mean a certificate in the form of Exhibit B to the Fourth Amendment to this Agreement (as the form may be modified with the consent of the Required Lenders from time to time), in form and detail satisfactory to the Required Lenders setting forth the calculation of the Borrowing Base as of the date of such certificate.

“Commitment Amount” shall mean (a) effective as of the date of the Fourth Amendment to this Agreement, four hundred twenty-five million dollars ($425,000,000), (b) effective as of the earlier of the date when [****] (but in no event later than April 30, 2009), four hundred million dollars ($400,000,000), (c)

[****] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

effective as of May 1, 2009, three hundred seventy-five million dollars ($375,000,000), (d) effective as of September 30, 2009, three hundred fifty million dollars ($350,000,000), and (e) effective as of May 31, 2010, three hundred million dollars ($300,000,000). All such reductions in the Commitment Amount shall reduce the Commitments of the Lenders in accordance with their Pro Rata Percentages, as follows:


	Pro Rata			Amend No. 4						September 30,
Lenders	Percentage			Date		[]		May 1, 2009		2009		May 31, 2010
BOA		27.0000	%	$	114,750,000	$	108,000,000	$	101,250,000	$	94,500,000	$	81,000,000
KeyBank		20.0000	%	$	85,000,000	$	80,000,000	$	75,000,000	$	70,000,000	$	60,000,000
GE Commercial		18.0000	%	$	76,500,000	$	72,000,000	$	67,500,000	$	63,000,000	$	54,000,000
Wachovia		10.0000	%	$	42,500,000	$	40,000,000	$	37,500,000	$	35,000,000	$	30,000,000
Wells Fargo		7.0000	%	$	29,750,000	$	28,000,000	$	26,250,000	$	24,500,000	$	21,000,000
US Bank		6.0000	%	$	25,500,000	$	24,000,000	$	22,500,000	$	21,000,000	$	18,000,000
BB&T		6.0000	%	$	25,500,000	$	24,000,000	$	22,500,000	$	21,000,000	$	18,000,000
Bank of the West		6.0000	%	$	25,500,000	$	24,000,000	$	22,500,000	$	21,000,000	$	18,000,000


		100.0000	%	$	425,000,000	$	400,000,000	$	375,000,000	$	350,000,000	$	300,000,000

Notwithstanding the foregoing, the Commitment Amount may be increased by virtue of any exercise of the accordion feature set forth in Section 2.01(a)(2) of the Agreement as amended by the Fourth Amendment to this Agreement.

“Default Rate” shall mean the rate of interest or the Letter of Credit Fees applicable during the continuance of an Event of Default, which (a) until September 30, 2010, shall be based on a LIBOR Margin and a Letter of Credit Fee of six hundred twenty-five (625) basis points (i.e. 6.25%), and (b) commencing October 1, 2010, shall be two hundred (200) basis points (i.e. 2%) in excess of the Pricing Tier V LIBOR Margin and Letter of Credit Fee as shown in Section 2.05.

“Inspection Increase Event” shall mean either Inspection Increase Event 1 or Inspection Increase Event 2.

“Inspection Reinstatement Event” shall mean the event that shall have occurred if (a) at any time after the occurrence of an Inspection Increase Event 2 as reflected on each of the relevant monthly Borrowing Base Certificates submitted during any period of three consecutive calendar months, the unpaid principal balance of Advances under this Agreement plus accrued but unpaid interest minus the Pledged Real Estate Loan Value shall be less than ninety percent (90%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory, (b) at any time after the occurrence of an Inspection Increase Event 1 as reflected on each of the relevant monthly Borrowing Base Certificates submitted during any period of three consecutive

calendar months, the unpaid principal balance of Advances under this Agreement plus accrued but unpaid interest thereon minus the Pledged Real Estate Loan Value shall be less than eighty percent (80%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory, and (c) in the case of either (a) or (b) above, the Required Lenders, in their reasonable discretion, shall have agreed in writing to cancel a corresponding Inspection Increase Event.

“Loan Documents” shall mean this Agreement and all Promissory Notes, financing statements, Preferred Ship’s Mortgages, LC Documents, Interest Rate Swaps, certificates, instruments and agreements (a) delivered by any Borrower hereunder, (b) heretofore delivered by any Borrower pursuant to the Credit and Security Agreement dated as of December 18, 2001, or (c) heretofore delivered by any Borrower pursuant to the Amended and Restated Credit and Security Agreement dated as of February 3, 2005, as heretofore amended, and not expressly superseded by the documents delivered pursuant to this Agreement, in each case as the same shall be modified or extended in accordance with its terms.

“Obligations” shall mean all obligations (monetary or otherwise) of the Borrowers arising under or in connection with this Agreement, the Promissory Notes, the Letters of Credit, any Interest Rate Swap with any Lender or group of Lenders, and each other Loan Document.

“Permitted Liens” shall mean:

(a) Liens securing payment of the Obligations, granted pursuant to any Loan Document;

(b) the existing Liens identified in Exhibit D, to the extent that they secure the indebtedness (and only the indebtedness) identified in such Exhibit;

(c) Liens effected by or relating to Approved Vendor Financings, Capital Leases and other Debt permitted under Section 6.02(c) and (d) hereof, to the extent such Liens encumber only the Property of the Borrowers leased thereunder or acquired with the proceeds thereof;

(d) Liens on Seller Collateral securing Seller Notes;

(e) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on the Borrowers’ books;

(f) Liens of carriers, warehousemen, mechanics, materialmen, and landlords incurred in the ordinary course of business for sums not materially overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set

aside on the Borrowers’ books; provided, however, that Liens of landlords are permitted only to the extent that (1) the same are subordinate to the Collateral Agent’s Lien on the Collateral for the benefit of the Lenders, or (2) the Required Lenders shall have agreed in writing to waive subordination of such landlord’s Lien to the Collateral Agent’s Lien on the Collateral for the benefit of the Lenders;

(g) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds;

(h) judgment Liens in existence less than thirty (30) days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to the applicable deductible) by insurance maintained with responsible insurance companies;

(i) solely with respect to the Pledged Real Estate Collateral, such minor imperfections in title and other encumbrances as shall be shown as exceptions acceptable to the Collateral Agent on the Title Policy for such Pledged Real Estate Collateral;

(j) solely with respect to the Additional Real Estate Collateral, (1) such minor imperfections in title and other encumbrances as shall be shown as exceptions acceptable to the Collateral Agent on the Title Commitment for such Additional Real Estate Collateral, and (2) any Lien securing financing of Additional Real Estate Collateral in connection with a transaction complying in all respects with Section 4.08(g) of this Agreement;

(k) with respect to Real Property Interests other than Pledged Real Estate Collateral and Additional Real Estate Collateral, Liens on Real Property Interests not created at the time when there is any Event of Default under this Agreement;

(l) Liens inferior to the Lien of the Collateral Agent (for the benefit of the Lenders) granted to parties providing financial derivative products to the Borrowers (e.g., interest rate swaps or foreign exchange forward contracts); and

(m) any other Lien which all of the Lenders may approve in their reasonable discretion.

“Pricing Tier” shall mean the agreed pricing tiers for the calculation of LIBOR Margin and Undrawn Commitment Fees which are based on the EBITDA/Interest Coverage Ratio applicable to the Borrowers for the preceding fiscal quarter, with such pricing tier to be applicable from the first day of the calendar month following the public release of the Borrowers’ financial reports for the immediately preceding fiscal quarter through the last day of the calendar

month during which the Borrowers shall publicly release their financial reports for the immediately succeeding fiscal quarter, as follows:


Pricing Tier		EBITDA/Interest Coverage Ratio
\|
Tier I		> = 3.50
Tier II		> = 3.00, but < 3.50
Tier III		> = 2.25, but < 3.00
Tier IV		> = 1.25, but < 2.25
Tier V		> = 1.00, but< 1.25

By way of example and not limitation, (a) if the Borrowers publicly release their financial reports for the fiscal quarter ended March 31 on April 25 and publicly release their financial reports for the fiscal quarter ended June 30 on August 5, then from May 1 until August 31 the Pricing Tier in effect shall be the Pricing Tier determined in accordance with the financial reports released on April 25, and (b) if the EBITDA/Interest Coverage Ratio for the fiscal quarter ended March 31 is greater than or equal to 3.00 but less than 3.50, then during the period specified in (a) above the Borrowers would be in Pricing Tier II. If for any reason the Borrowers fail to provide the financial statements necessary to calculate the EBITDA/Interest Coverage Ratio within thirty (30) days after written notice from the Administrative Agent, the Default Rate shall apply retroactively from the date when such necessary financial statements originally were due (without reference to such written notice from the Administrative Agent or such thirty-day period) until such necessary financial statements are provided by Borrowers.

“Required Lenders” shall mean, at any time, any Lenders holding at least sixty-six and two thirds percent (66-2/3%) of the sum of the Commitments, or if the Commitments have been terminated, the then aggregate outstanding principal amount of the Advances and shall also represent a majority of the number of Lenders; provided, however, that “Required Lenders” shall be one hundred percent (100%) of the Lenders with respect to any action taken or proposed to be taken by the Lenders: (a) to increase the Commitment of the Lenders or the Commitment Amount; (b) to reduce or waive payment of any principal, interest, or fees payable to the Lenders (it being agreed, however, that the Administrative Agent or the Collateral Agent, as applicable, without the consent of any other Lender, may reduce or waive fees payable to the Administrative Agent or the Collateral Agent, as applicable); (c) to modify or waive compliance with any of the Borrowers’ financial covenants, or to change the manner in which such financial covenants are calculated; (d) to make any material extension of scheduled maturities or times for payment; (e) to establish or revise any Availability Reserve, to make changes in the Borrowing Base, to increase advance rates with respect to the Borrowing Base or to make changes in the types of Collateral eligible for inclusion in the Borrowing Base; (f) to release any Collateral or any Borrower, other than as specifically required by the terms of the

Loan Documents; (g) to sell, transfer, encumber, or release any assets needing the consent of the Required Lenders under Section 6.07; (h) to change the structure of the financing contemplated by this Agreement; (i) to change the definition of “Required Lenders”; or (j) to change the composition of the Lenders in a manner which would dilute the voting rights of any Lender, except as otherwise provided in Article IX of this Agreement.

“Termination Date” shall mean May 31, 2011; provided, however, that upon the Company’s request such date may be extended for two successive periods of one year each with the prior written consent of all of the Lenders for each such annual extension.

“Used Inventory” shall mean Inventory of the Borrowers that has been (a) previously sold at retail, (b) registered or titled in any state or jurisdiction, or registered as a Documented Vessel, or (c) purchased or acquired by the Borrowers from a source other than the manufacturer.

(c) Deleted Definitions. The definitions of “Fixed Charges Coverage Ratio,” “Maintenance Capital Expenditures” (which is used solely within the definition of “Fixed Charges Coverage Ratio”), “Total Funded Debt,” and “Funded Debt Ratio” are hereby deleted from the Agreement.

3. Changes to Section 2.01(a) Relating to the Revolving Loans and Letters of Credit. Section 2.01(a) is hereby revised to read in its entirety as follows:

2.01 Advances.

(a) Commitment for Revolving Credit. The Lenders severally agree, subject to the terms and conditions set forth herein, to make Advances to the Borrowers in respect of the Commitment from time to time until the Termination Date. The following rules shall govern the amount of the Advances:

(1) The aggregate outstanding amount of such Advances may equal but shall never exceed the lesser of (A) the Commitment Amount, and (B) the Borrowing Base. For purpose of this test, any Letter of Credit outstanding under paragraph (3) below shall be deemed an Advance.

(2) Borrowers and Lenders agree to add an accordion feature to the Commitment. Consequently, if (A) no Default or Event of Default exists or would result therefrom, (B) Borrowers obtain commitments from Lenders and/or other persons who would qualify as assignees for such increased amounts, (C) any new Lender suggested by Borrowers is approved by the Required Lenders, and (D) appropriate definitive loan documentation is executed and delivered by the parties, at Borrowers’ election the aggregate maximum principal amount of the Commitments may be increased from time to time after the Effective Date, provided, however, that (i) the aggregate amount of the Commitment Amount does not exceed five hundred million dollars ($500,000,000), (ii) each such increase shall be in a minimum amount of thirty million dollars ($30,000,000),

and with each new Lender to have a minimum commitment of at least eighteen million dollars ($18,000,000), and (iii) Borrowers shall first offer to the existing Lenders the right to commit to the increased amount, but no existing Lender shall be required to commit to any such increased amount. No such increase shall increase any sub-limit set forth in this Agreement, and no Lender shall be obligated to participate in any such increase.

(3) There is hereby established a sub-limit for Letters of Credit in the aggregate amount not exceeding the LC Commitment of seven million dollars ($7,000,0000). The issuance of any Letter of Credit pursuant to the LC Commitment shall be subject to the further terms specified in Section 2.13 of this Agreement. In connection with any outstanding Letter of Credit, Borrowers will accrue an annual letter of credit fee (the “Letter of Credit Fee”) equal to the higher of (A) five hundred dollars ($500), or (B) the amount determined in accordance with Section 2.05 of this Agreement on an Advance equal to the maximum amount available to be drawn under such Letter of Credit. The minimum Letter of Credit Fee for any Letter of Credit (irrespective of the amount or duration of such Letter of Credit) shall be five hundred dollars ($500). The accrued Letter of Credit Fee for each Letter of Credit shall be payable quarterly in arrears, commencing on the effective date of the Letter of Credit. In addition to the Letter of Credit Fee, at the time of issuance of each Letter of Credit Borrowers and the Issuing Bank shall negotiate an issuance fee for such Letter of Credit to be paid at the time of issuance and to be retained by the Issuing Bank.

(4) No Lender shall be permitted or required to make any Advance in respect of the Commitment if, after giving effect thereto, the principal amount of such Lender’s total outstanding Advances would exceed such Lender’s Pro Rata Percentage of the Commitment Amount.

Because the Commitment creates a revolving credit facility, the Borrowers may borrow under the Commitment, repay such Advances without premium or penalty, and reborrow prior to the Termination Date in accordance with this Agreement.

4. Changes to Section 2.05 Relating to the Loan Rate and Letter of Credit Fee. Section 2.05 of the Agreement is hereby amended to read in its entirety as follows:

2.05. Interest on Advances; Letter of Credit Fees.

(a) All Advances shall bear interest at the applicable Loan Rate in effect from time to time, with the Loan Rate to be determined based upon the LIBOR Margin applicable at the date of determination.

(b) From the date of the Fourth Amendment to this Agreement until the first day of the calendar month following the public release of the Borrowers’ financial reports for the fiscal year ending September 30, 2010, the Loan Rate will be the sum of (1) the LIBOR, and (2) an agreed LIBOR Margin of 4.25%, and the applicable Letter of Credit Fee shall be 4.25%. Commencing

October 1, 2010, the Loan Rate applicable at any time shall equal the sum of (A) the LIBOR, and (B) the LIBOR Margin determined on the basis of the Borrowers’ Pricing Tier. During the periods referred to in the preceding sentence, the applicable LIBOR Margin and Letter of Credit Fee for each Pricing Tier shall be as follows:


Borrowers’ Pricing Tier	LIBOR Margin and Letter of Credit Fee
Pricing Tier I		1.50	%
Pricing Tier II		1.75	%
Pricing Tier III		2.25	%
Pricing Tier IV		3.00	%
Pricing Tier V		4.00	%

(c) Interest will be calculated on a simple interest basis for a year of three hundred sixty (360) days, based on actual days elapsed.

(d) Notwithstanding any other provisions of this Section, during the continuance of any Event of Default the Borrowers shall pay interest at the Default Rate on (1) the unpaid principal balance of the Advances, and (2) to the fullest extent permitted by Law, any interest, fee, or other amount payable hereunder that is not paid when due. In addition, during any such period the Letter of Credit Fee on any outstanding Letter of Credit shall be increased to the Default Rate.

5. Change to Section 2.08 Relating to Undrawn Commitment Fee. Section 2.08 of the Agreement is hereby amended to read in its entirety as follows:

2.08 Undrawn Commitment Fee. Effective as of the date of the Fourth Amendment to this Agreement, the Borrowers shall pay to the Administrative Agent for the account of the Lenders an Undrawn Commitment Fee calculated as follows:

(a) The Undrawn Commitment Fee shall be payable on the amount by which the Commitment Amount shall exceed the average principal amount of Advances outstanding (including LC Exposure) under the Commitment during such calendar month.

(b) From the date of the Fourth Amendment to this Agreement until the first day of the calendar month following the public release of the Borrowers’ financial reports for the fiscal year ending September 30, 2010, the Undrawn Commitment Fee will be 0.25%. Commencing with the first day of the calendar month following the public release of the Borrowers’ financial reports for the fiscal year ending September 30, 2010, the Undrawn Commitment Fee will be determined on the basis of the Borrowers’ Pricing Tier, as follows.


Borrowers’ Pricing Tier	Undrawn Commitment Fee
Pricing Tier I		0.15	%
Pricing Tier II		0.20	%
Pricing Tier III		0.25	%
Pricing Tier IV		0.25	%
Pricing Tier V		0.35	%

(c) The Undrawn Commitment Fee shall be calculated on a monthly basis but shall be payable quarterly in arrears on the Interest Payment Dates in February, May, August, and November.

6. Addition of New Section 2.13 Relating to Letters of Credit. A new Section 2.13 is hereby added to the Agreement, reading in its entirety as follows:

2.13. Procedures Relating to Letters of Credit. The rules governing the issuance of Letters of Credit shall be as follows:

(a) Between the date of the Fourth Amendment to this Agreement and the date that is one year prior to the Termination Date, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to this Section 2.13(d), agrees to issue, at the request of the Borrowers, Letters of Credit for the account of the Borrowers on the terms and conditions hereinafter set forth; provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Termination Date, (ii) each Letter of Credit shall be in a stated amount of at least $100,000; and (iii) the Borrowers may not request any Letter of Credit, if, after giving effect to such issuance (A) the aggregate LC Exposure would exceed the LC Commitment, or (B) the aggregate LC Exposure plus the amount of other outstanding Advances would exceed the Commitment Amount. Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in such Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. If at any time prior to the Termination Date this Agreement should be terminated by virtue of the Borrowers’ refinancing the indebtedness contemplated hereby, the Borrowers’ shall arrange to replace and secure the return of each of the outstanding Letters of Credit prior to the termination of this Agreement.

(b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrowers shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least five (5) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit

is to be issued (or amended, extended or renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Section 2.02, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrowers shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided, however, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control.

(c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in Section 2.13(a), or (2) that one or more conditions specified in Section 2.02 are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices.

(d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrowers and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided, however, that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrowers shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrowers shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrowers intend to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Advances, the Borrowers shall be deemed to have timely given an Advance Request to the Administrative Agent requesting the Lenders to make an Advance Request on the date on which such drawing is honored in an exact amount due to the Issuing Bank. The Administrative Agent shall notify the Lenders of such Advance, and each Lender

shall make the proceeds of its portion of the Advance available to the Administrative Agent for the account of the Issuing Bank. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement.

(e) If for any reason an Advance may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to Subsection 2.13(a) in an amount equal to its Pro Rata Percentage of such LC Disbursement on and as of the date which such Advance should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Commitment, (iii) any adverse change in the condition (financial or otherwise) of the Borrowers, (iv) any breach of this Agreement by the Borrowers or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Percentage of such payment; provided, however, that if such payment is required to be returned for any reason to the Borrowers or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it.

(f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to paragraph (e) of this Section 2.13 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Default Rate.

(g) Promptly following the end of each fiscal quarter of the Borrowers, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrowers a report describing the aggregate Letters of Credit outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding.

(h) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:

(i) Any lack of validity or enforceability of any Letter of Credit or this Agreement;

(ii) The existence of any claim, set-off, defense or other right which the Borrowers may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

(iii) Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

(iv) Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit;

(v) Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder; or

(vi) The existence of a Default or an Event of Default.

Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided, however, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto

expressly agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(i) Each Letter of Credit shall be subject to the Uniform Customs and Practices for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as the same may be amended from time to time, and, to the extent not inconsistent therewith, the laws of the State of Georgia governing this Agreement.

7. Change to Section 4.01. Section 4.01 of the Agreement is hereby amended to read in its entirety as follows:

4.01. Security Interests in Collateral. As security for the Obligations, the Borrowers hereby grant to the Collateral Agent for the benefit of the Lenders a continuing security interest in and Lien on all of the Borrowers’ Accounts, Chattel Paper, Inventory, Equipment, General Intangibles, Investment Property, Instruments, Deposit Accounts, Documents, Pledged Real Estate Collateral, and Additional Real Estate Collateral, in each case whether now owned or existing or hereafter acquired or arising, wherever located, all insurance policies, insurance proceeds, books and records relating to the foregoing, and all cash and non-cash proceeds and products thereof, all exclusive of the Excluded Property (collectively, the “Collateral”). Notwithstanding the foregoing, the security interest and Lien granted hereby with respect to any Obligation consisting of an Interest Rate Swap shall be junior, subordinate, and inferior to the security interest and Lien granted hereby for every other Obligation.

8. Changes to Section 4.02. Section 4.02 of the Agreement is hereby amended to read in its entirety as follows:

4.02. Excluded Property. The Collateral shall not include, however, any of the following property of the Borrowers (collectively, the “Excluded Property”):

(a) any Accounts, Chattel Paper, General Intangibles, Investment Property, or Instruments that by its terms can not be assigned or transferred by a Borrower or can be assigned or transferred only with the consent of another Person and such consent has not been obtained;

(b) all ownership interests in Subsidiaries, including any Investment Property, membership interest, or partnership interests evidencing such ownership interests in Subsidiaries, all Rights with respect to such ownership interests, and all Rights in Subsidiaries; and

(c) Property of customers, including boats, motors and, trailers, in Borrowers’ possession (1) for repair, or (2) on consignment for sale, but only to the extent that the same are not included (as Eligible Used Inventory or otherwise) in the Borrowing Base, it being specifically agreed that such Property is not to be included in the Borrowing Base.

9. Addition of New Sections 4.07, 4.08, and 409. New Sections 4.07, 4.08, and 4.09 are hereby added to the Agreement, reading in their entirety as follows:

4.07 Concerning the Pledged Real Estate Collateral. Subject to the terms of this Agreement including this Section 4.07, the Borrowers will be able to obtain or retain in respect of the Commitment a maximum of twenty million dollars ($20,000,000) of Advances secured by first priority mortgages, in form and substance acceptable to the Lenders and subject only to Permitted Liens (“Mortgages”), on the Pledged Real Estate Collateral and the Additional Real Estate Collateral. The Mortgages shall run in favor of the Collateral Agent for the benefit of the Lenders. The actual amount at any time advanced under this Section 4.07 in respect of the Pledged Real Estate Collateral shall never exceed the then applicable Pledged Real Estate Loan Value. Advances under this Section 4.07 will be subject to the following terms and conditions:

(a) Irrespective of the amount advanced by the Lenders under this Section 4.07, the Mortgages shall encumber for a total of one hundred million dollars ($100,000,000) plus interest and costs and expenses of collection (including reasonable attorneys’ and paralegals’ fees incurred in negotiations, in lower courts, and in appellate, administrative, and bankruptcy proceedings) (1) all of the Pledged Real Estate Collateral, and (2) all of the Additional Real Estate Collateral. In order to limit the documentary stamps, non-recurring intangible taxes, and similar costs payable on particular parcels of Pledged Real Estate Collateral or Additional Real Estate Collateral, the Collateral Agent may agree to limit the recovery under the Mortgages for such parcels.

(b) As a condition to including in the Borrowing Base any individual parcel of Pledged Real Estate Collateral, the Borrowers will be required to provide the Collateral Agent for the benefit of Lenders with an MAI appraisal of such property satisfactory to the Collateral Agent in all respects. Without limiting the generality of the foregoing, such MAI appraisal would be required to show that the individual property has a fair market value of at least twice the amount included in the Borrowing Base in respect of such individual property. MAI appraisals will be ordered by the Collateral Agent at the expense of the Borrowers.

(c) As a condition to including in the Borrowing Base any individual parcel of Pledged Real Estate Collateral with a value of one million dollars ($1,000,000) or more, the Borrowers will be required to provide the Collateral Agent for the benefit of Lenders with a Phase I Environmental Site Assessment (“ESA”) of such property showing that such property is free from risk, in the Collateral Agent’s sole judgment, from all hazardous substances, toxic substances or hazardous waste, as defined by any federal, state or local law or regulation, and free from all other contamination, which even if not so regulated, is known to pose a health hazard to any person.

(d) As a condition to including in the Borrowing Base any individual parcel of Pledged Real Estate Collateral with a value of less than one million dollars ($1,000,000), Borrower shall complete an Environmental Questionnaire provided by the Collateral Agent; the Lenders will check (at the Borrowers’ expense) the Environmental Data Resource (“EDR”) environmental Loan Check database unless the Required Lenders otherwise require with respect to any particular property or properties. Any such EDR Loan Check must show, consistent with the limitations of the medium, that such property is free from risk, in the Collateral Agent’s sole judgment, from all hazardous substances, toxic substances or hazardous waste, as defined by any federal, state or local law or regulation, and free from all other contamination, which even if not so regulated, is known to pose a health hazard to any person. Irrespective of the value of the property Borrowers will in any event provide to Lenders within fifteen (15) days following the Effective Date of the Fourth Amendment to this Agreement copies of any ESAs they may have with respect to any of the Pledged Real Estate.

(e) As a condition to including in the Borrowing Base any individual parcel of Pledged Real Estate Collateral located in a flood zone, Borrowers must obtain at their expense federal flood insurance on such property on terms satisfactory to the Collateral Agent.

(f) As a condition to including in the Borrowing Base any individual parcel of Pledged Real Estate Collateral, the Collateral Agent shall receive at the Borrowers’ expense an acceptable Title Policy in favor of the Collateral Agent showing that the Mortgage on such property is a first mortgage subject to no encumbrances other than Permitted Liens. In addition, the Title Policy shall show that all real estate taxes and other governmental charges which are due in respect of such property shall have been paid current. Except for an exception for taxes for the current year which are not due and payable, all ALTA standard exceptions (i.e. defects first appearing between the date of the commitment and the date of the mortgage, taxes, matters that would be disclosed by an accurate survey, rights or claims of parties in possession not shown by the pubic records, easements or claims of easements not shown by the public records, and liens for services labor or material imposed by law and not shown by the public records) shall be deleted from the Title Policy. Each Title Policy shall contain such endorsements as may be required by Lenders. Surveys will be provided as necessary to obtain such exception-free Title Policy. The cost of the

Title Policy will be charged to the Borrowers at settlement, and the closing agent will be selected by Collateral Agent.

(g) As a condition to including in the Borrowing Base any parcel of Pledged Real Estate Collateral, Borrowers shall provide the Collateral Agent with evidence of property, casualty, and liability insurance coverage (i) insuring such Pledged Real Estate Collateral against fire and other casualty for its full insurable value (net of a deductible not to exceed 5% of the insurable value of any individual insured property) and naming the Collateral Agent as loss payee, and (ii) insuring the Borrowers and the Collateral Agent (as an additional insured) from premises liability related to such Pledged Real Estate Collateral (net of a deductible approved by the Collateral Agent). All of such insurance shall be provided by insurers and on terms satisfactory to the Collateral Agent. The Mortgages for the Pledged Real Estate Collateral will require the Borrowers to continue to maintain such insurance for so long as the Mortgages have not been satisfied.

(h) Borrowers will be responsible for all costs associated with the Pledged Real Estate Collateral, including appraisals, evaluations, environmental site assessments, EDR Loan Check, title insurance, flood insurance premiums, insurance premiums, surveys, documentary stamps, non-recurring intangible taxes, recording charges, and other costs.

(i) Recording of the Mortgages on the Pledged Real Estate Collateral will take place within ninety (90) days following the Effective Date of the Fourth Amendment to this Agreement. No collateral value for the Pledged Real Estate shall be included in the Borrowing Base until all of the foregoing documentation has been completed to the satisfaction of the Collateral Agent

4.08 Additional Real Estate Collateral. In addition to the Pledged Real Estate Collateral, the Borrowers will provide the Collateral Agent with a first priority Mortgage on all of the Additional Real Estate Collateral. The Mortgages shall encumber for a total of one hundred million dollars ($100,000,000) plus interest and costs and expenses of collection (including reasonable attorneys’ and paralegals’ fees incurred in negotiations, in lower courts, and in appellate, administrative, and bankruptcy proceedings) (1) all of the Pledged Real Estate Collateral, and (2) all of the Additional Real Estate Collateral. In order to limit the documentary stamps, non-recurring intangible taxes, and similar costs payable on particular parcels of Pledged Real Estate Collateral or Additional Real Estate Collateral, the Collateral Agent may agree to limit the recovery under the Mortgages for such parcels. The following additional terms shall apply to the Additional Real Estate Collateral:

(a) Borrowers will receive no credit to the Borrowing Base as a consequence of the Mortgages on the Additional Real Estate Collateral.

(b) MAI appraisals will not be required on Additional Real Estate Collateral.

(c) ESAs normally will not be required on Additional Real Estate Collateral. Borrowers will in any event provide to Collateral Agent for the benefit of Lenders copies of any ESAs they may have with respect to any of the Additional Real Estate Collateral for additional action as directed by Collateral Agent. Collateral Agent for the benefit of Lenders may perform EDR Loan Checks with respect to Additional Real Estate Collateral.

(d) Borrowers shall provide to Collateral Agent for the benefit of Lenders in respect of each parcel of Additional Real Estate Collateral (i) a Title Commitment, except that (A) no survey shall be required except at the direction of the Collateral Agent, and (B) no policy shall be issued in respect of such title insurance commitment, and (ii) within fifteen (15) days following the Effective Date of the Fourth Amendment to this Agreement, copies of any existing title insurance policies and surveys with respect to such property that the Borrowers have in their possession.

(e) Borrowers shall purchase at their own expense federal flood insurance for any parcel of Additional Real Estate Collateral located in a flood zone.

(f) Recording of Mortgages for Additional Real Estate Collateral will occur within sixty (60) days after the Effective Date of the Fourth Amendment to this Agreement.

(g) With the consent of all of the Lenders, Borrowers may sell to an unaffiliated party or finance with an unaffiliated party any Additional Real Estate Collateral as long as the entire net proceeds of such sale or financing are used to pay down the Advances. In connection with any such sale or financing approved by all of the Lenders, the Collateral Agent shall be authorized to execute any documents releasing the affected Additional Real Estate Collateral for purposes of closing the transaction.

(h) Borrowers will be responsible for all costs associated with the Additional Real Estate Collateral, including appraisals (if any), evaluations, EDR Loan Check, Title Commitments (but not Title Policies), flood insurance premiums, surveys (if any), documentary stamps, non-recurring intangible taxes, recording charges, and other costs.

4.09. Negative Pledge as to Gulfport Property. Borrowers agree that neither Borrowers nor the entity owning the Gulfport Property shall encumber such property or the Borrowers’ interest therein (including any Borrowers’ interest in the related entity) for so long as this Agreement has not been satisfied in full.

7. Changes to Section 6.01 Relating to Financial Covenants. Section 6.01 of the Agreement relating to financial covenants is hereby amended to read in its entirety as follows:

6.01. Financial Covenants.

(a) The Borrowers shall maintain, on a consolidated basis, a Current Ratio of at least: (1) 1.25 to 1 for the calendar months ending May 31, June 30, July 31, August 31, September 30, and October 31 of each year, and (2) 1.20 to 1 for the calendar months ending November 30, December 31, January 31, February 28 or 29, as applicable, March 31, and April 30 of each year.

(b) The Borrowers shall maintain, on a consolidated basis, a Leverage Ratio of not more than (1) 4.00 to 1 for the calendar months ending May 31, June 30, July 31, August 31, September 30, and October 31 of each year, and (2) 5.0 to 1 for the calendar months ending November 30, December 31, January 31, February 28 or 29, as applicable, March 31, and April 30 of each year.

(c) For the four fiscal quarters starting with the fiscal quarter ending December 31, 2008 and ending with the fiscal quarter ending September 30, 2009, the cumulative EBITDA of the Borrowers, on a consolidated basis, shall not be less than (1) for the fiscal quarter ending December 31, 2008, a negative EBITDA of $15,000,000 (i.e. -$15,000,000), (2) for the fiscal quarter ending March 31, 2009, a negative EBITDA of $20,000,000 (i.e. -$20,000,000), (3) for the fiscal quarter ending June 30, 2009, a negative EBITDA of $15,000,000 (i.e. -$15,000,000), and (4) for the fiscal quarter ending September 30, 2009, a negative EBITDA of $10,000,000 (i.e. -$10,000,000). For the three fiscal quarters starting with the fiscal quarter ending December 31, 2009 and ending with the fiscal quarter ending June 30, 2010, the cumulative EBITDA of the Borrowers, on a consolidated basis, shall not be less than (A) for the fiscal quarter ending December 31, 2009, a negative EBITDA of $10,000,000 (i.e. -$10,000,000), (B) for the fiscal quarter ending March 31, 2010, a negative EBITDA of $10,000,000 (i.e. -$10,000,000), and (C) for the fiscal quarter ending June 30, 2010, a positive EBITDA of $5,000,000.

(d) Commencing as of September 30, 2010 the Borrowers shall maintain, on a consolidated basis, an EBITDA/Interest Coverage Ratio as follows:

(1) For the periods of four fiscal quarters ending on September 30, 2010 and December 31, 2010, a minimum EBITDA/Interest Coverage Ratio of 1.00:1.00; and

(2) For the period of four fiscal quarters ending on March 31, 2011, a minimum EBITDA/Interest Coverage Ratio of 1.10:1.00.

The EBITDA/Interest Coverage Ratio will be measured as of the end of each such fiscal quarter of the Borrowers for a rolling period of four fiscal quarters. The EBITDA/Interest Coverage Ratio is in lieu of the former minimum “Fixed

Charges Coverage Ratio,” which has been deleted from this Agreement as of the Effective Date of the Fourth Amendment to this Agreement.

8. Changes to Section 6.07 Relating to Disposition of Assets. Section 6.07 of the Agreement relating to disposition of assets is hereby amended to read in its entirety as follows:

6.07. Disposition of Assets. No Borrower shall sell, transfer, encumber or lease any of its assets without the consent of the Required Lenders, which consent shall not be unreasonably withheld, except the following shall be allowed without such consent (a) sales or leases of Inventory in the ordinary course of business, (b) dispositions of obsolete or useless assets, (c) transfers of assets between Borrowers not violating Section 6.16, (d) dispositions of Retail Paper in the ordinary course of business, (e) transfers or other dispositions of Additional Real Estate Collateral in strict compliance with Section 4.08(g), and (f) Permitted Liens. Upon any sale of Retail Paper by any of the Borrowers in the ordinary course of business, the Collateral Agent’s Liens in such Retail Paper for the benefit of the Lenders shall be automatically released, without any further action by the Lenders or the Collateral Agent.

9. Changes to Section 6.08 Relating to Mergers, Acquisitions, and Investments. Section 6.08 of the Agreement relating to mergers, Acquisitions, and Investments is hereby amended to read in its entirety as follows:

(a) The Company shall not merge into, or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, without the Required Lenders’ prior written consent (which consent shall not be unreasonably withheld), except for mergers or consolidations of a wholly-owned Subsidiary of Company with or into Company. The Borrowers shall not make any Investment in excess of one hundred thousand dollars ($100,000) in the aggregate at any time outstanding in any Person (other than in the Borrowers), without the Required Lenders’ prior written consent (which consent shall not be unreasonably withheld).

(b) The Borrowers shall not consummate or obligate themselves to consummate any Acquisition without the prior written consent of the Required Lenders. The Borrowers shall notify the Lenders in writing of any pending Acquisition at least thirty (30) days prior to consummating or becoming obligated to consummate any Acquisition. In connection with such notice, the Borrowers shall provide the Lenders the information necessary to cause the newly acquired company(ies) to become obligated to the Lenders as additional Borrower(s) under the terms of this Agreement and the Loan Documents at the closing of such Acquisition by delivering to the Administrative Agent a Joinder Agreement in the form of Exhibit G to this Agreement. Such notice shall be accompanied by a certificate of the Company’s chief financial officer to the effect that, assuming that the Required Lenders approve the Acquisition, upon closing, as illustrated by applicable pro forma financial statements, the Borrowers will be in compliance with all terms and conditions of this Agreement and the Loan

Documents and such further certifications as the Required Lenders reasonably may require.

(c) If any Borrower shall form any new Subsidiary, the Borrowers shall cause each such new Subsidiary to become obligated as a Borrower under this Agreement by delivering to the Administrative Agent a Joinder Agreement in the form of Exhibit G to this Agreement. Such new Borrower shall grant a first priority security interest in its Property constituting Collateral to the Collateral Agent for the benefit of the Lenders.

10. Changes to Section 6.12(c) Relating to Reporting Requirements. Section 6.12(c) of the Agreement relating to reporting requirements is hereby amended to read in its entirety as follows:

(1) As soon as available and in any event within thirty (30) days after the end of each calendar month of January, February, April, May, July, August, October, and November, a balance sheet and statement of income of Borrowers for such completed calendar month prepared on a consolidated basis in accordance with GAAP in reasonable detail, and certified by an officer of Company (in a manner satisfactory to the Required Lenders) as fairly presenting the financial condition and results of operations of the Borrowers, together with a Compliance Certificate;

(2) As soon as available and in any event within thirty (30) days after the end of each fiscal quarter, a balance sheet and statement of income of Borrowers for such fiscal quarter and for the portion of the fiscal year ending with such fiscal quarter, prepared on a consolidated basis in accordance with GAAP in reasonable detail, and certified by an officer of Company (in a manner satisfactory to the Required Lenders) as fairly presenting the financial condition and results of operations of the Borrowers, together with a Compliance Certificate;

11. Changes to Section 6.13 Relating to Restricted Payments. Section 6.13 of the Agreement relating to Restricted Payments is hereby amended to read in its entirety as follows:

6.13 Restricted Payments. Without the prior written consent of the Required Lenders, the Borrowers shall not declare or pay any dividends or make any other payments on their capital stock or purchase, redeem, or otherwise retire any equity securities or any warrant, option, or other right to acquire such equity securities, or make any other payment or distribution (other than a dividend payable solely in the Company’s common shares), either direct or indirect, to its shareholders (whether in respect of stock or in respect of indebtedness) (“Restricted Payments”) except for:

(a) payments between the Borrowers, except for any such payment that would be a violation of Section 6.16 of this Agreement; or

(b) payments by any Subsidiary of any dividend or other distribution to the Company or to another Subsidiary as long as the Company does not distribute to shareholders any such dividend or other distribution, except as otherwise permitted by this Section.

12. Changes to Section 6.14 Relating to Capital Expenditures. Section 6.14 relating to Capital Expenditures is hereby amended to read in its entirety as follows:

6.14. Limitations on Capital Expenditures. The Borrowers shall not without the prior written consent of the Required Lenders, which consent shall not be unreasonably withheld, make:

(a) capital expenditures for leasehold improvements of more than four million five hundred thousand dollars ($4,500,000) in any year; and

(b) other capital expenditures exceeding five million dollars ($5,000,000) per year, exclusive of monies spent on acquiring assets as part of an acquisition that has been approved by the Lenders.

13. Changes to Section 7.01(c) Relating to Events of Default. Section 7.01(c) relating to Events of Default shall be amended to read in its entirety as follows:

(c) Borrowers shall fail to perform or observe any other term or covenant contained in any of their respective Loan Documents, and such Default shall not be cured within thirty (30) days after the earlier of knowledge thereof by an officer of Borrowers, or after written notice of the Default is delivered by the Administrative Agent to the Company.

14. Changes to Section 8.01(b)(3)(B) Relating to Inspections. Section 8.01(b)(3)(B) relating to inspections by the Collateral Agent shall be amended to read in its entirety as follows:

(B) (i) After the occurrence of an Inspection Increase Event 1 and prior to the occurrence of a corresponding Inspection Reinstatement Event or an Inspection Increase Event 2:

(x) The Collateral Agent will complete an inspection of the Eligible New Inventory and the Eligible Used Inventory every two (2) months.

(y) During each two-month period, the Collateral Agent will inspect Units having an aggregate value on the Borrowers’ books at least equal to twenty-five percent (25%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory described in the most recent Borrowing Base Certificate.

(z) At least once during each rolling eight-month period, the Collateral Agent will inspect all Eligible New Inventory and Eligible

[****] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

Used Inventory at each location at which Eligible New Inventory and Eligible Used Inventory are located.

(ii) After the occurrence of an Inspection Increase Event 2 and prior to the occurrence of a corresponding Inspection Reinstatement Event or an Inspection Increase Event 1:

(x) The Collateral Agent will complete an inspection of the Eligible New Inventory and the Eligible Used Inventory every month.

(y) During each monthly period, the Collateral Agent will inspect Units having an aggregate value on the Borrowers’ books at least equal to fifty percent (50%) of the portion of the Borrowing Base consisting of Eligible New Inventory and Eligible Used Inventory described in the most recent Borrowing Base Certificate.

(z) At least once during each rolling three-month period, the Collateral Agent will inspect all Eligible New Inventory and Eligible Used Inventory at each location at which Eligible New Inventory and Eligible Used Inventory are located.

15. Changes to Section 8.07(b) Relating to Inspection Fees. Section 8.07(b) relating to inspections by the Collateral Agent shall be amended to read in its entirety as follows:

(b) For every month that the Collateral Agent conducts an inspection Borrowers will pay the Collateral Agent a fee of five hundred dollars ($500) plus seventy-five dollars ($75) per location inspected (except that now such $75 fee shall be paid in respect of the Company’s headquarters location), and three dollars ($3) for each Unit inspected in the manner contemplated by Section 8.01(b). On a monthly basis the Collateral Agent will submit an invoice for its inspection fees to the Administrative Agent and Borrowers, and the Administrative Agent will include such inspection fees in its monthly invoice to Borrowers. If Borrowers fail to pay such inspection fees, Lenders shall pay them in accordance with their Pro Rata Percentages.

16. Changes to Section 9.02 Relating to Notices. Section 9.02(c) relating to notices to BOA is hereby amended to read in its entirety as follows:

(c)

If to BOA as the Collateral Agent or as a Lender:
[****]

with a copy to:

[****]

17. Changes to Section 9.06 Relating to Replacement or Addition of Lenders. Section 9.06 relating to the replacement or addition of Lenders is hereby amended to read in its entirety as follows:

9.06 Replacement or Addition of Lenders.

(a) If any Lender defaults in the performance of its obligations under this Agreement, the Borrowers, with the consent of all of the Lenders other than the defaulting Lender, shall have the right to replace the defaulting Lender.

(b) If the Borrowers (if not in material Default) and the Required Lenders shall desire to replace any Lender, they may, upon thirty (30) days prior written notice to the Lender and with or without cause, replace such Lender with another Lender selected and approved by the Borrowers (if not in material Default) and the Required Lenders and named in such notice to the Lender being replaced. The Borrowers, if they shall have supported such replacement, or the other Lenders (based on their respective Pro Rata Percentages, but calculated as hereinafter provided), if the Borrowers shall not have supported such replacement (by virtue of the fact that the Borrowers were in material Default) shall pay to the replaced Lender all costs, expenses, and reasonable attorneys’ fees that the replaced Lender incurs in connection with assigning to the replacement Lender without recourse its interests as a Lender under the Loan Documents. Any payments required to be made by the other Lenders to the replaced Lender shall be apportioned among the other Lenders based on their respective Pro Rata Percentages, so that each other Lender’s share of the amounts payable by the Lenders under this Section shall equal that fraction of the total of which (1) the numerator is such other Lender’s Pro Rata Percentage, and (2) the denominator is the total Pro Rata Percentages of all such other Lenders.

(c) If any Lender replaced under this Section shall have been an Agent (other than the Documentation Agent, which has no duties after the date of this Agreement), then such Agent shall be deemed removed at the effective date of such Lender’s replacement, and the procedure for selection of a successor Agent shall be as set forth in Section 8.08 of this Agreement.

(d) If the Borrowers (if not in material Default) and the Required Lenders shall desire to add any Lender (other than in replacement of a Lender under (b) above), they may, upon thirty (30) days prior written notice to each Lender and with or without cause add another Lender selected and approved by the Borrowers (if not in material Default) and the Required Lenders and named in such notice to the Lenders. Upon such addition of a Lender, the added Lender shall purchase a share of the Commitment as approved by Borrowers and the Required Lenders and thereupon shall effect a reduction (based on the Pro Rata Percentages of the Lenders) in each of the existing Lender’s Pro Rata Percentages of the Commitment.

18. Amendment Fees. At the time of closing on this Fourth Amendment, Borrowers shall pay the Lenders an amendment fee of two hundred fifty thousand dollars ($250,000), with such amendment fee to be divided among the Lenders based on their respective Pro Rata Percentages. Borrowers also shall reimburse the Administrative Agent and the Collateral Agent for their legal fees and expenses in connection with the execution and delivery of this Fourth Amendment.

19. Representations and Warranties of the Borrowers. The Borrowers represent and warrant to the Agent, the Collateral Agent, and the Lenders as follows:

(a) Authorization. This Fourth Amendment and each related Loan Document has been duly authorized by all necessary action on the part of each of the Borrowers, has been duly executed and delivered by each of the Borrowers, and constitutes a valid and binding agreement of each of the Borrowers enforceable against such Borrower in accordance with its terms.

(b) Security Documents. The Mortgages and other related documents to be executed and delivered by Borrowers as contemplated hereby shall be adequate to perfect the Collateral Agent’s Lien on the Pledged Real Estate Collateral or the Additional Real Estate Collateral described therein, as applicable.

20. Opinion of Counsel. This Fourth Amendment shall not become effective until the Agent, the Collateral Agent, and the Lenders shall have received an opinion of counsel to the Company and the other Borrowers reasonably satisfactory to the Agent, the Collateral Agent, and the Lenders to the effect set for in Sections 19(a) and 19(b) of this Fourth Amendment; provided, however, that such opinion of counsel may be subject to customary qualifications; and provided further that no opinion with respect to Section 19(b) of this Fourth Amendment shall be required until such time as the related Mortgages shall have been executed and delivered by the Borrowers in the manner contemplated by Section 4.07 or Section 4.08, as applicable.

21. Filing of New or Amended Financing Statements. The Borrowers hereby authorize the Collateral Agent to file new or amended financing statements in order to conform the description of the Collateral to this Fourth Amendment.

22. Effect on Agreement. Except as specifically amended and modified by this Fourth Amendment, all terms, conditions, covenants and agreements set forth in the Agreement shall remain in full force and effect. The miscellaneous provisions of Article IX of the Agreement shall apply with equal force to this Fourth Amendment.

23. Counterparts. This Fourth Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one agreement.

[SIGNATURES FOLLOW]

IN WITNESS WHEREOF, this Fourth Amendment to the Second Amended and Restated Credit and Security Agreement has been executed and delivered by the parties (including 100% of the Lenders) as of the day and year first above written.


	“BORROWERS” MARINEMAX, INC., a Delaware corporation
	By:	/s/ Kurt M. Frahn
		Kurt M. Frahn, Vice President


	MARINEMAX EAST, INC., a Delaware corporation
	By:	/s/ Kurt M. Frahn
		Kurt M. Frahn, Assistant Secretary


	MARINEMAX SERVICES, INC., a Delaware corporation
	By:	/s/ Kurt M. Frahn
		Kurt M. Frahn, Assistant Secretary


	MARINEMAX REALTY, LLC, a Delaware limited liability company NEWCOAST FINANCIAL SERVICES, LLC, a Delaware limited liability company
	By: MARINEMAX, INC., sole member


	By:	/s/ Kurt M. Frahn
		Kurt M. Frahn, Vice President


	MARINEMAX NORTHEAST, LLC, a Delaware limited liability company BOATING GEAR CENTER, LLC, a Delaware limited liability company

	By:	MARINEMAX EAST, INC., sole member


	By:	/s/ Kurt M. Frahn
		Kurt M. Frahn, Assistant Secretary

Signature Page


“LENDERS” KEYBANK NATIONAL ASSOCIATION, a national banking association
By:	/s/ Brian T. McDevitt
	Name:	Brian T. McDevitt
	Title:	Vice President

BANK OF AMERICA, N.A., successor by merger to Banc of America Specialty Finance, Inc.
By:	/s/ L. Ransom Burts
	Name:	L. Ransom Burts
	Title:	Senior Vice President

GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION, a Nevada corporation
By:	/s/ Bruce Van Wagoner
	Name:	Bruce Van Wagoner
	Title:	GE CDF Marine Group President

WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
By:	/s/ Leslie Fredericks
	Name:	Leslie Fredericks
	Title:	Vice President

WELLS FARGO BANK, N.A., a national banking association
By:	/s/ Ronald P. Christensen
	Name:	Ronald P. Christensen
	Title:	Vice President

Signature Page


U.S. BANK NATIONAL ASSOCIATION, a national banking association
By:	/s/ Silvia K. Boulger
	Name:	Silvia K. Boulger
	Title:	Vice President

BRANCH BANKING & TRUST COMPANY, a North Carolina corporation
By:	/s/ Brigitta Lawton
	Name:	Brigitta Lawton
	Title:	Senior Vice President

BANK OF THE WEST, a California corporation
By:	/s/ James Chesser
	Name:	James Chesser
	Title:	Vice President

“ADMINISTRATIVE AGENT” KEYBANK NATIONAL ASSOCIATION, a national banking association
By:	/s/ Brian T. McDevitt
	Name:	Brian T. McDevitt
	Title:	Vice President

“COLLATERAL AGENT” and “DOCUMENTATION AGENT” BANK OF AMERICA, N.A., successor by merger to Banc of America Specialty Finance, Inc.
By:	/s/ L. Ransom Burts
	Name:	L. Ransom Burts
	Title:	Senior Vice President

Signature Page

Schedule I

1. MARINEMAX EAST, INC., a Delaware corporation
2 MARINEMAX SERVICES, INC., a Delaware corporation
3. MARINEMAX REALTY, LLC, a Delaware limited liability company
4. NEWCOAST FINANCIAL SERVICES, LLC, a Delaware limited liability company
5. MARINEMAX NORTHEAST, LLC, a Delaware limited liability company
6. BOATING GEAR CENTER, LLC, a Delaware limited liability company

Schedule 1

Exhibit B

BORROWING BASE CERTIFICATE

Exhibit B

EX-31.1 3 p14085exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATION

I, William H. McGill Jr., certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of MarineMax, Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ WILLIAM H. MCGILL JR.
	William H. McGill Jr.
	Chief Executive Officer

Date: February 9, 2009

EX-31.2 4 p14085exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATION

I, Michael H. McLamb, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of MarineMax, Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ MICHAEL H. MCLAMB
	Michael H. McLamb
	Chief Financial Officer

Date: February 9, 2009

EX-32.1 5 p14085exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACTS OF 2002

In connection with the Quarterly Report of MarineMax, Inc., (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William H. McGill Jr., Chief Executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

	(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ WILLIAM H. MCGILL JR.
	William H. McGill Jr.
	Chief Executive Officer

Date: February 9, 2009

EX-32.2 6 p14085exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACTS OF 2002

In connection with the Quarterly Report of MarineMax, Inc., (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael H. McLamb, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

	(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ MICHAEL H. MCLAMB
	Michael H. McLamb
	Chief Financial Officer

Date: February 9, 2009

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