MarineMax
Annual Report 2014

Plain-text annual report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2014 Commission File Number 1-14173 MarineMax, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware (State of Incorporation) 59-3496957 (I.R.S. Employer Identification No.) 2600 McCormick Drive Suite 200 Clearwater, Florida 33759 (727) 531-1700 (Address, including zip code, and telephone number, including area code, of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, par value $.001 per share Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1) No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:1) No   Indicate by check mark whether the registrant (1) has filed all reports required 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  No (cid:1) Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No (cid:1) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.450 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:1) 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 (cid:1) Non-accelerated filer (cid:1) (Do not check if a smaller reporting company)  Accelerated filer Smaller reporting company (cid:1) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:1) No  The aggregate market value of common stock held by non-affiliates of the registrant (22,598,548 shares) based on the closing price of the registrant’s common stock as reported on the New York Stock Exchange on March 31, 2014, which was the last business day of the registrant’s most recently completed second fiscal quarter, was $343,271,944. For purposes of this computation, all officers and directors of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers and directors are, in fact, affiliates of the registrant. As of December 1, 2014, there were outstanding 25,067,231 shares of the registrant’s common stock, par value $.001 per share. Portions of the registrant’s definitive proxy statement for the 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. Documents Incorporated by Reference Table of Contents Item 1 Item 1A Item 1B Item 2 Item 3 Item 4 Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures MARINEMAX, INC. ANNUAL REPORT ON FORM 10-K Fiscal Year Ended September 30, 2014 TABLE OF CONTENTS PART I PART II Item 5. Item 6 Item 7 Item 7A Item 8 Item 9 Item 9A Item 9B Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Item 10 Item 11 Item 12 Item 13 Item 14 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services Item 15 Exhibits, Financial Statement Schedules PART IV 1 24 37 38 40 40 41 44 45 53 53 53 54 56 58 58 58 58 58 58 Statement Regarding Forward-Looking Information The statements contained in this report on Form 10-K that are not purely historical are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements regarding our “expectations,” “anticipations,” “intentions,” “beliefs,” or “strategies” regarding the future. Forward-looking statements also include statements regarding revenue, margins, expenses, and earnings for fiscal 2015 and thereafter; our belief that our practices enhance our ability to attract more customers, foster an overall enjoyable boating experience, and offer boat manufacturers stable and professional retail distribution and a broad geographic presence; our assessment of our competitive advantages, including our no hassle sales approach, prime retail locations, premium product offerings, extensive facilities, strong management and team members, and emphasis on customer service and satisfaction before and after a boat sale; our belief that our core values of customer service and satisfaction and our strategies will enable us to achieve success and long-term growth when economic conditions improve; and our belief that our retailing strategies are aligned with the desires of consumers. All forward-looking statements included in this report are based on information available to us as of the filing date of this report, and we assume no obligation to update any such forward- looking statements. Our actual results could differ materially from the forward-looking statements. Among the factors that could cause actual results to differ materially are the factors discussed under Item 1A, “Risk Factors.” Table of Contents Item 1. Business Our Company PART I Introduction We are the largest recreational boat dealer in the United States. Through 54 retail locations in Alabama, Arizona, California, Connecticut, Florida, Georgia, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas, we sell new and used recreational boats, including pleasure and fishing boats, with a focus on premium brands in each segment. We also sell related marine products, including engines, trailers, parts, and accessories. In addition, we provide repair, maintenance, and slip and storage services; we arrange related boat financing, insurance, and extended service contracts; we offer boat and yacht brokerage sales; and we operate a yacht charter business. We are the nation’s largest retailer of Sea Ray, Boston Whaler, and Meridian recreational boats and yachts, all of which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately 40% of our revenue in fiscal 2014. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 26% and 10%, respectively, of our revenue in fiscal 2014. Brunswick is the world’s largest manufacturer of marine products and marine engines. We believe our sales represented approximately 8% of all Brunswick marine sales, including approximately 43% of its Sea Ray boat sales, during our fiscal 2014. We have agreements with Brunswick covering Sea Ray products and Boston Whaler products and are the exclusive dealer of Sea Ray and Boston Whaler boats in almost all of our geographic markets. We also are the exclusive dealer for Meridian Yachts in most of our geographic markets. We also are the exclusive dealer for Italy-based Azimut-Benetti Group, or Azimut, for Azimut mega-yachts, yachts, and other recreational boats for the United States. Sales of new Azimut boats accounted for approximately 14% of our revenue in fiscal 2014. Additionally, we are the exclusive dealer for certain other premium brands that serve certain industry segments in our markets as shown by the table on page four. We commenced operations as a result of the March 1, 1998 acquisition of five previously independent recreational boat dealers. Since that time, we have acquired 24 additional previously independent recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations. We attempt to capitalize on the experience and success of the acquired companies in order to establish a high national standard of customer service and responsiveness in the highly fragmented retail boating industry. As a result of our emphasis on premium brand boats, our average selling price for a new boat in fiscal 2014 was approximately $167,000, an increase of approximately 13% from approximately $148,000 in fiscal 2013, compared with the industry average selling price for calendar 2013 of approximately $41,000 based on industry data published by the National Marine Manufacturers Association. Our stores, which operated at least 12 months, averaged approximately $12.7 million in annual sales in fiscal 2014. We consider a store to be one or more retail locations that are adjacent or operate as one entity. Our same- store sales increased 11% in fiscal 2012, increased 11% in fiscal 2013, and increased 6% in fiscal 2014. We attempt to adopt the best practices developed by us and our acquired companies as appropriate to enhance our ability to attract more customers, foster an overall enjoyable boating experience, and offer boat manufacturers stable and professional retail distribution and a broad geographic presence. We believe that our full range of services, no hassle sales approach, prime retail locations, premium product offerings, extensive facilities, strong management and team members, and emphasis on customer service and satisfaction before and after a boat sale are competitive advantages that enable us to be more responsive to the needs of existing and prospective customers. We strive to provide superior customer service and support before, during, and after the sale. The U.S. recreational boating industry generated approximately $36.7 billion in retail sales in calendar 2013, which is down from the peak of $39.5 billion in calendar 2006. The retail sales include sales of new and used boats; marine products, such as engines, trailers, equipment, and accessories; and related expenditures, such as fuel, insurance, docking, storage, and repairs. Retail sales of new and used boats, engines, trailers, and accessories accounted for approximately $26.9 billion of these sales in 2013 based on industry data from the National Marine Manufacturers Table of Contents Association. The highly fragmented retail boating industry generally consists of small dealers that operate in a single market and provide varying degrees of merchandising, professional management, and customer service. We believe that many small dealers are finding it increasingly difficult to make the managerial and capital commitments necessary to achieve higher customer service levels and upgrade systems and facilities as required by boat manufacturers and often demanded by customers. We also believe that many dealers lack an exit strategy for their owners. We believe these factors contribute to our opportunity to gain a competitive advantage in current and future markets, through market expansions and acquisitions. Strategy Our goal is to enhance our position as the nation’s leading recreational boat dealer. Key elements of our operating and growth strategy include the following: • • • • • • • • • • • emphasizing customer satisfaction and loyalty by creating an overall enjoyable boating experience, beginning with a hassle-free purchase process, customer training, superior customer service, company-led events called Getaways! ® , and premier facilities; achieving efficiencies and synergies among our operations to enhance internal growth and profitability; promoting national brand name recognition and the MarineMax connection; offering additional marine products and services, including those with higher profit margins; expanding our Internet marketing; pursuing strategic acquisitions to capitalize upon the consolidation opportunities in the highly fragmented recreational boat dealer industry by acquiring additional dealers and related operations and improving their performance and profitability through the implementation of our operating strategies; opening additional retail facilities, including off-site retail displays such as mall stores, in our existing and new territories; emphasizing employee recruitment and retention through training, motivation, and development; emphasizing the best practices developed by us and our acquired dealers as appropriate throughout our dealerships; operating with a decentralized approach to the operational management of our dealerships; and utilizing common platform information technology throughout operations, which facilitates the interchange of information sharing and enhances cross-selling opportunities throughout our company. Development of the Company; Expansion of Business MarineMax was founded in January 1998. MarineMax itself, however, conducted no operations until the acquisition of five independent recreational boat dealers on March 1, 1998, and we completed our initial public offering in June 1998. Since the initial acquisitions in March 1998, we have acquired 24 additional recreational boat dealers, two boat brokerage operations, and two full-service yacht repair operations. Acquired dealers operate under the MarineMax name. We continually attempt to enhance our business by providing a full range of services, offering extensive and high-quality product lines, maintaining prime retail locations, pursuing the MarineMax One Price hassle-free sales approach, and emphasizing a high level of customer service and satisfaction. We also evaluate opportunities to expand our operations by acquiring recreational boat dealers to expand our geographic scope, expanding our product lines, opening new retail locations within our existing territories, and offering new products and services for our customers. 2 Table of Contents Acquisitions of additional recreational boat dealers represent an important strategy in our goal to enhance our position as the nation’s largest retailer of recreational boats. The following table sets forth information regarding the businesses that we have acquired and their geographic regions. Acquired Companies Bassett Boat Company of Florida Louis DelHomme Marine Gulfwind USA, Inc. Gulfwind South, Inc. Harrison’s Boat Center, Inc. and Harrison’s Marine Centers of Arizona, Inc. (1) Stovall Marine, Inc. Cochran’s Marine, Inc. and C & N Marine Corporation Sea Ray of North Carolina, Inc. Brevard Boat Company Sea Ray of Las Vegas (2) Treasure Cove Marina, Inc. Woods & Oviatt, Inc. Boating World Merit Marine, Inc. Suburban Boatworks, Inc. Hansen Marine, Inc. Duce Marine, Inc. (2) Clark’s Landing, Inc. (selected New Jersey locations and operations) Associated Marine Technologies, Inc. Gulfwind Marine Partners, Inc. Seaside Marine, Inc. Sundance Marine, Inc. (3) Killinger Marine Center, Inc. and Killinger Marine Center of Alabama, Inc. Emarine International, Inc. and Steven Myers, Inc. Imperial Marine Port Jacksonville Marine Port Arrowhead Marina, Inc. Great American Marina (4) Surfside — 3 Marina, Inc. Treasure Island Marina, LLC Bassett Marine, LLC Parker Boat Company Ocean Alexander Yachts Acquisition Date Geographic Region March 1998 March 1998 March 1998 West Central Florida March 1998 Southeast Florida Dallas and Houston, Texas Southwest Florida Northern California and Arizona Georgia March 1998 April 1998 July 1998 Minnesota July 1998 September 1998 September 1998 September 1998 October 1998 February 1999 March 1999 April 1999 August 1999 December 1999 April 2000 January 2001 North and South Carolina East Central Florida Nevada Northern Ohio Southeast Florida Dallas, Texas Southern New Jersey Central New Jersey Northeast Florida Utah Northern New Jersey Southeast Florida April 2002 West Florida July 2002 June 2003 Southern California Colorado September 2003 October 2003 June 2004 June 2004 Northwest Florida and Alabama Southeast Florida Baltimore, Maryland Northeast Florida January 2006 Missouri, Oklahoma February 2006 West Florida March 2006 February 2011 September 2012 Connecticut, Maryland, New York and Rhode Island Florida Panhandle Connecticut, Rhode Island, Western Massachusetts March 2013 April 2014 Central Florida Eastern United States (1) We subsequently closed the Northern California operations of Harrison Boat Center, Inc. (2) We subsequently closed the operations of Sea Ray of Las Vegas and Duce Marine, Inc. (3) We subsequently sold the operations of Sundance Marine, Inc. (4) Joint Venture 3 Table of Contents Apart from acquisitions, we have opened 31 new retail locations in existing territories, excluding those opened on a temporary basis for a specific purpose. We also monitor the performance of our retail locations and close retail locations that do not meet our expectations. Based on these factors and the recent depressed economic conditions, we have closed 59 retail locations since March 1998, excluding those opened on a temporary basis for a specific purpose, including 26 in fiscal 2009 and a total of 9 during the last three fiscal years. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. In connection with these discussions, we and each potential acquisition candidate exchange confidential operational and financial information; conduct due diligence inquiries; and consider the structure, terms, and conditions of the potential acquisition. In certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective dealer for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified 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. In addition to acquiring recreational boat dealers and opening new retail locations, we also add new product lines to expand our operations. The following table sets forth certain of our current product lines that we have added to our existing locations during the years indicated. Product Line Boston Whaler Hatteras Yachts Boston Whaler Meridian Yachts Grady White Boston Whaler Boston Whaler Meridian Yachts Azimut Atlantis Cabo Cabo Azimut Meridian Yachts Meridian Yachts Boston Whaler Harris FloteBote Nautique by Correct Craft Meridian Yachts Harris FloteBote Azimut Boston Whaler Harris FloteBote Scout Sailfish Scarab Jet Boats Atlantis Ocean Alexander Yachts Scout Aquila Fiscal Year 1998 1999 2000 2002 West Central Florida, Stuart, Florida, Dallas, Texas Florida North Palm Beach, Florida Geographic Regions 2002 2004 2005 2005 2006 2006 2006 2007 2008 2008 2009 2009 2010 2010 2010 2011 2012 2012 2012 2012 2013 2013 2013 2014 2014 2014 Florida, Georgia, North and South Carolina, New Jersey, Ohio, Minnesota, Texas, and Delaware Houston, Texas North and South Carolina Houston Chattanooga, Tennessee Northeast United States from Maryland to Maine Northeast United States from Maryland to Maine West coast of Florida East coast of Florida Florida Arizona and Colorado Maryland and Delaware Southwest Florida Arizona, Missouri, Minnesota, New Jersey, and Tennessee West Central Florida, Georgia, Minnesota, Missouri, and Tennessee California West Central Florida United States other than where previously held Pompano, Florida Alabama, North and Southwest Florida, Wrightsville, North Carolina, and Texas Southeast Florida, Maryland, and New Jersey Connecticut, Brevard and Jacksonville, Florida, the Florida panhandle, West Central Florida, New Jersey, New York, North Carolina, Ohio, Rhode Island, and Texas All geographic regions in which we operate Florida Eastern United States Texas, New York Worldwide, excluding China 4 Table of Contents We add brands with the intent to either offer a migration path for our existing customer base or fill a gap in our product offerings. As a result, we believe that new brands we offer are complementary and do not cannibalize the business generated from our other prominent brands. We also discontinue offering product lines from time to time, primarily based upon customer preferences. During the nine-year period from the commencement of our operations through our fiscal year ended September 30, 2007, our revenue increased from $291.0 million to more than $1.2 billion. Our revenue and net income increased in seven of those nine years over the prior year revenue and net income. This period was marked by an increase in retail locations from 41 on September 30, 1998 to 88 on September 30, 2007, resulting from acquisitions and opening new stores in existing territories. Our growth was interrupted during the fiscal year ended September 30, 2007, primarily as a result of factors related to the deteriorating housing market and general economic conditions. The substantially deteriorating economic and financial conditions, reduced consumer confidence and spending, increased fuel prices, reduction of credit availability, financial market declines, and asset value deterioration all contributed to substantially lower financial performance in the fiscal years ended September 30, 2008 and 2009, including significant net losses, followed by pre-tax losses in the fiscal years ended September 30, 2010 and 2011. We returned to profitability in fiscal 2012. Despite weakened industry conditions, we strive to maintain our core values of high customer service and satisfaction and plan to continue to pursue strategies that we believe will enable us to achieve long-term success and growth when economic conditions improve. As noted in the earlier table, we have capitalized on a number of brand expansion opportunities in the markets in which we operate. We believe our expanded product offerings have strengthened our same-store sales growth. As economic conditions permit, we plan to further expand our business through both acquisitions in new territories and new store openings in existing territories. In addition, we plan to continue to expand our other traditional and newly offered services, including conducting used boat sales at our retail locations, at offsite locations, and on the Internet; selling related marine products, including engines, trailers, parts, and accessories at our retail locations and at various offsite locations, and through our print catalog; providing maintenance, repair, and storage services at most of our retail locations; offering our customers the ability to finance new or used boats; offering extended service contracts; arranging insurance coverage, including boat property, credit-life, accident, disability, and casualty coverage; offering boat and yacht brokerage sales at most of our retail locations and at various offsite locations; and conducting our yacht charter business. Our expansion plans will depend, in large part, upon the return of normal economic conditions. We maintain our executive offices at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759, and our telephone number is (727) 531-1700. We were incorporated in the state of Delaware in January 1998. 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 24 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”). Our website is located at www.MarineMax.com . Through our website, we make available free of charge our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are available as soon as reasonably practicable after we electronically file those reports with the Securities and Exchange Commission (the “SEC”). We also post on our website the charters of our Audit, Compensation, and Nominating/Corporate Governance Committees; our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials contemplated by the SEC or the regulations of the New York Stock Exchange, or NYSE. These documents are also available in print to any stockholder requesting a copy from our corporate secretary at our principal executive offices. Because our common stock is listed on the NYSE, our Chief Executive Officer is 5 Table of Contents required to make an annual certification to the NYSE stating that he is not aware of any violation by us of the corporate governance listing standards of the NYSE. Our Chief Executive Officer made his annual certification to that effect to the NYSE on March 25, 2014. Business General We are the largest recreational boat dealer in the United States. Through 54 retail locations in Alabama, Arizona, California, Connecticut, Florida, Georgia, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas, we sell new and used recreational boats, including pleasure boats (such as sport boats, sport cruisers, sport yachts, and yachts), and fishing boats, with a focus on premium brands in each segment. We are the nation’s largest retailer of Sea Ray, Boston Whaler, and Meridian recreational boats and yachts, all of which are manufactured by Brunswick Corporation, or Brunswick. Sales of new Brunswick boats accounted for approximately 40% of our revenue in fiscal 2014. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 26% and 10%, respectively, of our revenue in fiscal 2014. Brunswick is the world’s largest manufacturer of marine products and marine engines. We believe our sales represented approximately 8% of all Brunswick marine sales, including approximately 43% of its Sea Ray boat sales, during our fiscal 2014. We have agreements with Brunswick covering Sea Ray products and Boston Whaler products and are the exclusive dealer of Sea Ray and Boston Whaler boats in almost all of our geographic markets. We also are the exclusive dealer for Meridian Yachts in most of our geographic markets. We also are the exclusive dealer for Italy-based Azimut-Benetti Group, or Azimut, for Azimut mega-yachts, yachts, and other recreational boats for the United States. Sales of new Azimut boats accounted for approximately 14% of our revenue in fiscal 2014. Additionally, we are the exclusive dealer for certain other premium brands that serve specific industry segments in our markets as shown by the table on page four. We also are involved in other boating-related activities. We sell used boats at our retail locations, online, and at various third-party marinas and other offsite locations; we sell marine engines and propellers, primarily to our retail customers as replacements for their existing engines and propellers; we sell a broad variety of parts and accessories at our retail locations and at various offsite locations, and through our print catalog; we offer maintenance, repair, and slip and storage services at most of our retail locations; we offer finance and insurance, or F&I, products at our retail locations and at various offsite locations and to our customers and independent boat dealers and brokers; we offer boat and yacht brokerage sales at most of our retail locations and at various offsite locations; and we conduct a yacht charter business in which we offer customers the opportunity to charter third-party and company owned power and sailing yachts in exotic locations. U.S. Recreational Boating Industry The total U.S. recreational boating industry generated approximately $36.7 billion in retail sales in calendar 2013, which is down from the peak of $39.5 billion in calendar 2006. The retail sales include retail sales of new and used recreational boats; marine products, such as engines, trailers, parts, and accessories; and related boating expenditures, such as fuel, insurance, docking, storage, and repairs. Retail sales of new and used boats, engines, trailers, and accessories accounted for approximately $26.9 billion of such sales in 2013. Annual retail recreational boating sales were $17.9 billion in 1988, but declined to a low of $10.3 billion in 1992 based on industry data published by the National Marine Manufacturers Association. We believe this decline was attributable to several factors, including a recession, the Gulf War, and the imposition throughout 1991 and 1992 of a luxury tax on boats sold at prices in excess of $100,000. The luxury tax was repealed in 1993, and retail boating sales increased each year thereafter except for 1998, 2003, and 2007 through 2010. The recreational boat retail market remains highly fragmented with little consolidation having occurred to date and consists of numerous boat retailers, most of which are small companies owned by individuals that operate in a single market and provide varying degrees of merchandising, professional management, and customer service. We believe that many boat retailers are encountering increased pressure from boat manufacturers to improve their levels of service and systems, increased competition from larger national retailers in certain product lines, and, in certain cases, business succession issues. 6 Table of Contents Strategy Our goal is to enhance our position as the nation’s leading recreational boat dealer. Key elements of our operating and growth strategy include the following. Emphasizing Customer Satisfaction and Loyalty . We seek to achieve a high level of customer satisfaction and establish long-term customer loyalty by creating an overall enjoyable boating experience beginning with a hassle-free purchase process. We further enhance and simplify the purchase process by helping to arrange financing and insurance at our retail locations with competitive terms and streamlined turnaround. We offer the customer a thorough in-water orientation of boat operations where available, as well as ongoing boat safety, maintenance, and use seminars and demonstrations for the customer’s entire family. We also continue our customer service after the sale by leading and sponsoring MarineMax Getaways! group boating trips to various destinations, rendezvous gatherings, and on-the-water organized events to provide our customers with pre-arranged opportunities to enjoy the pleasures of the boating lifestyle. We also endeavor to provide superior maintenance and repair services, often through mobile service at the customer’s wet slip and with extended service department hours and emergency service availability, that minimize the hassles of boat maintenance. Achieving Operating Efficiencies and Synergies . We strive to increase the operating efficiencies of and achieve certain synergies among our dealerships in order to enhance internal growth and profitability. We centralize various aspects of certain administrative functions at the corporate level, such as accounting, finance, insurance coverage, employee benefits, marketing, strategic planning, legal support, purchasing and distribution, and management information systems. Centralization of these functions reduces duplicative expenses and permits the dealerships to benefit from a level of scale and expertise that would otherwise be unavailable to each dealership individually. We also seek to realize cost savings from reduced inventory carrying costs as a result of purchasing boat inventories on a national level and directing boats to dealership locations that can more readily sell such boats; lower financing costs through our credit sources; and volume purchase discounts and rebates for certain marine products, supplies, and advertising. The ability of our retail locations to offer the complementary services of our other retail locations, such as offering customer excursion opportunities, providing maintenance and repair services at the customer’s boat location, and giving access to broader inventory selections, increases the competitiveness of each retail location. By centralizing these types of activities, our store managers have more time to focus on the customer and the development of their teams. Promoting Brand Name Recognition and the MarineMax Connection . We are promoting our brand name recognition to take advantage of our status as the nation’s only coast-to-coast marine retailer. This strategy also recognizes that many existing and potential customers who reside in Northern markets and vacation for substantial periods in Southern markets will prefer to purchase and service their boats from the same well- known company. We refer to this strategy as the “MarineMax Connection.” As a result, our signage emphasizes the MarineMax name at each of our locations, and we conduct national advertising in various print and other media. Offering Additional Products and Services, Including Those Involving Higher Profit Margins . We plan to continue to offer additional product lines and services throughout our dealerships and, when appropriate, online and various offsite locations. We are offering throughout our dealerships product lines that previously have been offered only at certain of our locations. We also obtain additional product lines through the acquisition of distribution rights directly from manufacturers and the acquisition of dealerships with distribution rights. In either situation, such expansion is typically done through agreements that appoint us as the exclusive dealer for a designated geographic territory. We plan to continue to grow our financing and insurance, parts and accessories, service, and boat storage businesses to better serve our customers and thereby increase revenue and improve profitability of these higher margin businesses. We also have implemented programs to increase the sale over the Internet of used boats. In addition, we have established a yacht charter business and are conducting programs to sell used boats, offer F&I products, and sell boating parts and accessories at various offsite locations. Marketing over the Internet . Our web initiatives span across multiple websites, including our core site, www.MarineMax.com . The websites provide customers with the ability to learn more about our company and our products. Our website generates direct sales and provides our stores with leads to potential customers for new and used boats, brokerage sales, finance and insurance products, and repair and maintenance services. In addition, we utilize various feeder websites and social networking websites to drive additional traffic and leads for our various product and service offerings. As mentioned above, we also maintain multiple online storefronts for customers to purchase used boats and a wide variety of boating parts and accessories. 7 Table of Contents Pursuing Strategic Acquisitions . We capitalize upon the significant consolidation opportunities available in the highly fragmented recreational boat dealer industry by acquiring independent dealers and improving their performance and profitability through the implementation of our operating strategies. The primary acquisition focus is on well-established, high-end recreational boat dealers in geographic markets not currently served by us, particularly geographic markets with strong boating demographics, such as areas within the coastal states and the Great Lakes region. We also may seek to acquire boat dealers that, while located in attractive geographic markets, have not been able to realize favorable market share or profitability and that can benefit substantially from our systems and operating strategies. We may expand our range of product lines, service offerings, and market penetration by acquiring companies that distribute recreational boat product lines or boating-related services different from those we currently offer. As a result of our considerable industry experience and relationships, we believe we are well positioned to identify and evaluate acquisition candidates and assess their growth prospects, the quality of their management teams, their local reputation with customers, and the suitability of their locations. We believe we are regarded as an attractive acquirer by boat dealers because of: (1) the historical performance and the experience and reputation of our management team within the industry; (2) our decentralized operating strategy, which generally enables the managers of an acquired dealer to continue their involvement in dealership operations; (3) the ability of management and employees of an acquired dealer to participate in our growth and expansion through potential stock ownership and career advancement opportunities; and (4) the ability to offer liquidity to the owners of acquired dealers through the receipt of common stock or cash. We have entered into an agreement regarding acquisitions with the Sea Ray Division of Brunswick. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement, as further described in “Business — Brunswick Agreement Relating to Acquisitions.” Opening New Facilities . We intend to continue to establish additional retail facilities in our existing and new markets when markets conditions improve. We believe that the demographics of our existing geographic territories support the opening of additional facilities, and we have opened 31 new retail facilities, excluding those opened on a temporary basis for a specific purpose, since our formation in January 1998. We also plan to reach new customers through various innovative retail formats developed by us, such as mall stores and floating retail facilities. We continually monitor the performance of our retail locations and close retail locations that do not meet our expectations or that were opened for a specific purpose that is no longer relevant. Based on these factors since March 1998, we have closed 59 retail locations, excluding those opened on a temporary basis for a specific purpose, including 26 in fiscal 2009. Emphasizing Employee Recruitment and Retention Through Training, Motivation, and Development . We devote substantial efforts to recruit employees that we believe to be exceptionally well qualified for their position and to train our employees to understand our core retail philosophies, which focus on making the purchase of a boat and its subsequent use as hassle-free and enjoyable as possible. Through our MarineMax University, or MMU, we teach our retail philosophies to existing and new employees at various locations and online, through MMU-online. MMU is a modularized and instructor-led educational program that focuses on our retailing philosophies and provides instruction on such matters as the sales process, customer service, F&I, accounting, leadership, and human resources. Emphasizing Best Practices . We emphasize the best practices developed by us and our acquired dealers as appropriate throughout our locations. As an example, we have implemented a no-haggle sales approach at each of our dealerships. Under the MarineMax One Price hassle- free sales approach, we sell our boats at prices generally representing a discount from the manufacturer’s suggested retail price, thereby eliminating the anxieties of price negotiations that occur in most boat purchases. In addition, we adopt the best practices developed by us and our acquired dealers as applicable, considering location, design, layout, product purchases, maintenance and repair services (including extended service hours and mobile or dockside services), product mix, employee training, and customer education and services. Operating with Decentralized Management . We maintain a generally decentralized approach to the operational management of our dealerships. The decentralized management approach takes advantage of the extensive experience of local managers, enabling them to implement policies and make decisions, including the appropriate product mix, based on the needs of the local market. Local management authority also fosters responsive customer service and promotes long- 8 Table of Contents term community and customer relationships. In addition, the centralization of certain administrative functions at the corporate level enhances the ability of local managers to focus their efforts on day-to-day dealership operations and the customers. Utilizing Technology Throughout Operations . We believe that our management information system, which currently is being utilized by each of our dealerships and was developed over a number of years through cooperative efforts with a common vendor, enhances our ability to integrate successfully the operations of our dealerships and future acquired dealers. The system facilitates the interchange of information and enhances cross-selling opportunities throughout our company. The system integrates each level of operations on a company-wide basis, including purchasing, inventory, receivables, financial reporting, budgeting, and sales management. The system also provides sales representatives with prospect and customer information that aids them in tracking the status of their contacts with prospects, automatically generates follow-up correspondence to such prospects, facilitates the availability of boats company-wide, locates boats needed to satisfy particular customer requests, and monitors the maintenance and service needs of customers’ boats. Our representatives also utilize the computer system to assist in arranging customer financing and insurance packages. Our managers use a web-based tool to access essentially all financial and operational data from anywhere at any time. Products and Services We offer new and used recreational boats and related marine products, including engines, trailers, parts, and accessories. While we sell a broad range of new and used boats, we focus on premium brand products. In addition, we assist in arranging related boat financing, insurance, and extended service contracts; provide boat maintenance and repair services; offer slip and storage accommodations; provide boat and yacht brokerage sales; and conduct a yacht charter business. New Boat Sales We primarily sell recreational boats, including pleasure boats and fishing boats. A number of the products we offer are manufactured by Brunswick, the leading worldwide manufacturer of recreational boats, including Sea Ray pleasure boats, Boston Whaler fishing boats, and Meridian Yachts. In fiscal 2014, we derived approximately 40% of our revenue from the sale of new boats manufactured by Brunswick. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 26% and 10%, respectively, of our revenue in fiscal 2014. We believe that we represented approximately 8% of all of Brunswick’s marine product sales during that period. Certain of our dealerships also sell luxury yachts, fishing boats, and pontoon boats provided by other manufacturers, including Italy-based Azimut. In fiscal 2014, we derived approximately 14% of our revenue from the sale of new boats manufactured by Azimut. During fiscal 2014, new boat sales accounted for 65.2% or $407.3 million of our revenue. We offer recreational boats in most market segments, but have a particular focus on premium quality pleasure boats and yachts as reflected by our fiscal 2014 average new boat sales price of approximately $167,000, an increase of approximately 13% from approximately $148,000 in fiscal 2013, compared with an estimated industry average selling price for calendar 2013 of approximately $41,000 based on industry data published by the National Marine Manufacturers Association. Given our locations in some of the more affluent, offshore boating areas in the United States and emphasis on high levels of customer service, we sell a relatively higher percentage of large recreational boats, such as mega- yachts, yachts, and sport cruisers. We believe that the product lines we offer are among the highest quality within their respective market segments, with well-established trade-name recognition and reputations for quality, performance, and styling. The following table is illustrative of the range and approximate manufacturer suggested retail price range of new boats that we currently offer, but is not all inclusive. Product Line and Trade Name Motor Yachts Azimut Hatteras Motor Yachts Ocean Alexander Yachts Overall Length Manufacturer Suggested Retail Price Range 40’ to 116’+ 54’ to 100’+ 72’ to 155’+ $600,000 to $12,000,000+ 2,000,000 to 10,000,000+ 3,500,000 to 35,000,000+ 9 Table of Contents Convertibles Hatteras Convertibles Cabo Pleasure Boats Sea Ray Atlantis Meridian Aquila Harris FloteBote Crest Fishing Boats Boston Whaler Grady White Scout Sailfish Ski Boats Nautique by Correct Craft Jet Boats Scarab 54’ to 77’+ 36’ to 52’ 19’ to 65’ 34’ to 58’ 34’ to 54’ 38’ to 48’ 16’ to 28’ 19’ to 25’ 11’ to 42’ 18’ to 37’ 17’ to 35’ 19’ to 32’ 21’ to 25’ 19’ to 26’ 2,000,000 to 7,000,000+ 500,000 to 2,000,000+ 25,000 to 3,000,000 $450,000 to $2,300,000+ 400,000 to 1,800,000 480,000 to 1,200,000 15,000 to 150,000 20,000 to $90,000 12,000 to 1,000,000 40,000 to 600,000 20,000 to 500,000 37,000 to 275,000 70,000 to 190,000 20,000 to 80,000 Motor Yachts . Hatteras Yachts, Ocean Alexander Yachts, and Azimut are three of the world’s premier yacht builders. The motor yacht product lines typically include state-of-the-art designs with live-aboard luxuries. Hatteras offers a flybridge with extensive guest seating; covered aft deck, which may be fully or partially enclosed, providing the boater with additional living space; an elegant salon; and multiple staterooms for accommodations. Azimut yachts are known for their Americanized open layout with Italian design and powerful performance. The luxurious interiors of Azimut yachts are accented by windows and multiple accommodations that have been designed for comfort. Ocean Alexander Yachts are known for their excellent engineering, performance, and functionality combined with luxuries typically found on larger mega yachts. Convertibles . Hatteras Yachts and Cabo Yachts are two of the world’s premier convertible yacht builders and offer state-of-the-art designs with live-aboard luxuries. Convertibles are primarily fishing vessels, which are well equipped to meet the needs of even the most serious tournament-class competitor. Hatteras features interiors that offer luxurious salon/galley arrangements, multiple staterooms with private heads, and a cockpit that includes a bait and tackle center, fishbox, and freezer. Cabo is known for spacious cockpits and accessibility to essentials, such as bait chests, livewells, bait prep centers, and tackle lockers. Cabo interiors offer elegance, highlighted by teak woodwork, halogen lighting, and ample storage areas. Pleasure Boats . Sea Ray and Meridian pleasure boats target both the luxury and the family recreational boating markets and come in a variety of configurations to suit each customer’s particular recreational boating style. Sea Ray sport yachts and yachts serve the luxury segment of the recreational boating market and include top-of-the-line living accommodations with a salon, a fully equipped galley, and multiple staterooms. Sea Ray sport yachts and yachts are available in cabin, bridge cockpit, and cruiser models. Sea Ray sport boat and sport cruiser models are designed for performance and dependability to meet family recreational needs and include many of the features and accommodations of Sea Ray’s sport yacht and yacht models. Meridian sport yachts and yachts are known for their solid performance and thoughtful use of space with 360-degree views and spacious salon, galley, and stateroom accommodations. Meridian sport yachts and yachts are generally available in sedan and motoryacht models. All Sea Ray and Meridian pleasure boats feature custom instrumentation that may include an electronics package; various hull, deck, and cockpit designs that can include a swim platform; bow pulpit and raised bridge; and various amenities, such as swivel bucket helm seats, lounge seats, sun pads, wet bars, built-in ice chests, and refreshment centers. Most Sea Ray and Meridian pleasure boats feature Mercury or MerCruiser engines. We believe Atlantis sport cruisers offer a unique-on-the-water experience with the Azimut expertise expressed in a design concept that merges sportiness with the comfort and relative ease of navigation. Aquila power catamarans provide form, function, and offer practicality and comfort with trend setting innovation. Harris FloteBote is one of the most innovative and premium pontoon boats offered and provides a variety of models to fit boaters’ needs. Crest provides a variety of high quality pontoon models to meet family recreational needs. 10 Table of Contents Fishing Boats . The fishing boats we offer, such as Boston Whaler, Grady White, Scout, and Sailfish, range from entry level models to advanced models designed for fishing and water sports in lakes, bays, and off-shore waters, with cabins with limited live-aboard capability. The fishing boats typically feature livewells, in-deck fishboxes, rodholders, rigging stations, cockpit coaming pads, and fresh and saltwater washdowns. Ski Boats . The ski boats we offer are Nautique by Correct Craft, which range from entry level models to advanced models and all of which are designed to achieve an ultimate wake for increased skier and wakeboarder performance and safety. With a variety of designs and options, Nautique ski boats appeal to the competitive and recreational user alike. Jet Boats . The Scarab jet boats we offer range from entry level models to advanced models, all of which are designed for performance and with exclusive design elements to meet family recreational needs. With a variety of designs and options, the jet boats we offer will appeal to a broad audience of jet boat enthusiasts as well as existing customers. Used Boat Sales We sell used versions of the new makes and models we offer and, to a lesser extent, used boats of other makes and models generally taken as trade-ins. During fiscal 2014, used boat sales accounted for 16.8% or $104.9 million of our revenue, and 69.7% of the used boats we sold were Brunswick models. Our used boat sales depend on our ability to source a supply of high-quality used boats at attractive prices. We acquire substantially all of our used boat inventory through customer trade-ins. We intend to continue to increase our used boat business as a result of the availability of quality used boats generated from our new boat sales efforts, the increasing number of used boats that are well-maintained through our service initiatives, our ability to market used boats throughout our combined dealership network to match used boat demand, and the experience of our yacht brokerage operations. Additionally, substantially all of our used boat inventory is posted on our website, which expands the awareness and availability of our products to a large audience of boating enthusiasts. We also sell used boats at various marinas and other offsite locations throughout the country. To further enhance our used boat sales, we offer the Brunswick Product Protection warranty plan available for used Brunswick boats less than nine years old. The Brunswick Product Protection plan applies to each qualifying used Brunswick boat, which has passed a 48-point inspection, and provides protection against failure of most mechanical parts for up to three years. We believe these programs enhance our sales of used Brunswick boats by motivating purchasers of used Brunswick boats to complete their purchases through our Brunswick dealerships. Marine Engines, Related Marine Equipment, and Boating Parts and Accessories We offer marine engines and propellers, substantially all of which are manufactured by Mercury Marine, a division of Brunswick. We sell marine engines and propellers primarily to retail customers as replacements for their existing engines or propellers. Mercury Marine has introduced various new engine models that reduce engine emissions to comply with current Environmental Protection Agency requirements. See “Business — Environmental and Other Regulatory Issues.” An industry leader for over seventy-five years, Mercury Marine specializes in state- of-the-art marine propulsion systems and accessories. Many of our dealerships have been recognized by Mercury Marine as “Premier Service Dealers.” This designation is generally awarded based on meeting certain standards and qualifications. We also sell a broad variety of marine parts and accessories at our retail locations, at various offsite locations, and through our print catalog. These marine parts and accessories include marine electronics; dock and anchoring products, such as boat fenders, lines, and anchors; boat covers; trailer parts; water sport accessories, such as tubes, lines, wakeboards, and skies; engine parts; oils; lubricants; steering and control systems; corrosion control products, service products; high-performance accessories, such as propellers and instruments; and a complete line of boating accessories, including life jackets, inflatables, and water sports equipment. We also offer novelty items, such as shirts, caps, and license plates bearing the manufacturer’s or dealer’s logos. In all of our parts and accessories business, we utilize our industry knowledge and experience to offer boating enthusiasts high-quality products with which we have experience. 11 Table of Contents The sale of marine engines, related marine equipment, and boating parts and accessories, which are all tangible products, accounted for 5.1% or $32.3 million of our fiscal 2014 revenue. Maintenance, Repair, and Storage Services Providing customers with professional, prompt maintenance and repair services is critical to our sales efforts and contributes to our success. We provide maintenance and repair services at most of our retail locations, with extended service hours at certain of our locations. In addition, in many of our markets, we provide mobile maintenance and repair services at the location of the customer’s boat. We believe that this service commitment is a competitive advantage in the markets in which we compete and is critical to our efforts to provide a trouble-free boating experience. To further this commitment, in certain of our markets, we have opened stand-alone maintenance and repair facilities in locations that are more convenient for our customers and that increase the availability of such services. We also believe that our maintenance and repair services contribute to strong customer relationships and that our emphasis on preventative maintenance and quality service increases the potential supply of well-maintained boats for our used boat sales. We perform both warranty and non-warranty repair services, with the cost of warranty work reimbursed by the manufacturer in accordance with the manufacturer’s warranty reimbursement program. For warranty work, most manufacturers, including Brunswick, reimburse a percentage of the dealer’s posted service labor rates, with the percentage varying depending on the dealer’s customer satisfaction index rating and attendance at service training courses. We derive the majority of our warranty revenue from Brunswick products, as Brunswick products comprise the majority of products sold. Certain other manufacturers reimburse warranty work at a fixed amount per repair. Because boat manufacturers permit warranty work to be performed only at authorized dealerships, we receive substantially all of the warranted maintenance and repair work required for the new boats we sell. The third-party extended warranty contracts we offer also result in an ongoing demand for our maintenance and repair services for the duration of the term of the extended warranty contract. Our maintenance and repair services are performed by manufacturer-trained and certified service technicians. In charging for our mechanics’ labor, many of our dealerships use a variable rate structure designed to reflect the difficulty and sophistication of different types of repairs. The percentage markups on parts are similarly based on manufacturer suggested prices and market conditions for different parts. At many of our locations, we offer boat storage services, including in-water slip storage and inside and outside land storage. These storage services are offered at competitive market rates and include in-season and winter storage. Maintenance, repair, and storage services accounted for 7.2% or $45 million of our revenue during fiscal 2014 of which, 4.8% or $29.8 million related to repair services, 1.0% or $6.5 million related to parts and accessories for repairs, and 1.4% or $8.7 million related to income from storage service rentals. This includes warranty and non-warranty services. F&I Products At each of our retail locations and at various offsite locations where applicable, we offer our customers the ability to finance new or used boat purchases and to purchase extended service contracts and arrange insurance coverage, including boat property, credit life, and accident, disability, and casualty insurance coverage (collectively, “F&I”). We have relationships with various national marine product lenders under which the lenders purchase retail installment contracts evidencing retail sales of boats and other marine products that are originated by us in accordance with existing pre-sale agreements between us and the lenders. These arrangements permit us to receive a portion of the finance charges expected to be earned on the retail installment contract based on a variety of factors, including the credit standing of the buyer, the annual percentage rate of the contract charged to the buyer, and the lender’s then current minimum required annual percentage rate charged to the buyer on the contract. This participation is subject to repayment by us if the buyer prepays the contract or defaults within a designated time period, usually 90 to 180 days. To the extent required by applicable state law, our dealerships are licensed to originate and sell retail installment contracts financing the sale of boats and other marine products. 12 Table of Contents We also offer third-party extended service contracts under which, for a predetermined price, we provide all designated services pursuant to the service contract guidelines during the contract term at no additional charge to the customer above a deductible. While we sell all new boats with the boat manufacturer’s standard hull and engine warranty, extended service contracts provide additional coverage beyond the time frame or scope of the manufacturer’s warranty. Purchasers of used boats generally are able to purchase an extended service contract, even if the selected boat is no longer covered by the manufacturer’s warranty. Generally, we receive a fee for arranging an extended service contract. Most required services under the contracts are provided by us and paid for by the third-party contract holder. We also are able to assist our customers with the opportunity to purchase credit life insurance, accident and disability insurance, and property and casualty insurance. Credit life insurance policies provide for repayment of the boat financing contract if the purchaser dies while the contract is outstanding. Accident and disability insurance policies provide for payment of the monthly contract obligation during any period in which the buyer is disabled. Property and casualty insurance covers loss or damage to the boat. We do not act as an insurance broker or agent or issue insurance policies on behalf of insurers. We do, however, provide marketing activities and other related services to insurance companies and brokers for which we receive marketing fees. One of our strategies is to generate increased marketing fees by offering more competitive insurance products. During fiscal 2014, fee income generated from F&I products accounted for 2.6% or $16.1 million of our revenue. We believe that our customers’ ability to obtain competitive financing quickly and easily at our dealerships complements our ability to sell new and used boats. We also believe our ability to provide customer-tailored financing on a “same-day” basis gives us an advantage over many of our competitors, particularly smaller competitors that lack the resources to arrange boat financing at their dealerships or that do not generate sufficient volume to attract the diversity of financing sources that are available to us. Brokerage Sales Through employees or subcontractors that are licensed boat or yacht brokers where applicable, we offer boat or yacht brokerage sales at most of our retail locations. For a commission, we offer for sale brokered boats or yachts, listing them on various internet sites, advising our other retail locations of their availability through our integrated computer system, and posting them on our web site, www.MarineMax.com . Often sales are co-brokered, with the commission split between the buying and selling brokers. We believe that our access to potential used boat customers and methods of listing and advertising customers’ brokered boats or yachts is more extensive than is typical among brokers. In addition to generating revenue from brokerage commissions, our brokerage sales also enable us to offer a broad array of used boats or yachts without increasing related inventory costs. During fiscal 2014, brokerage sales commissions accounted for 2.5% or $15.4 million of our revenue. Our brokerage customers generally receive the same high level of customer service as our new and used boat customers. Our waterfront retail locations enable in-water demonstrations of an on-site brokered boat. Our maintenance and repair services, including mobile service, also are generally available to our brokerage customers. The purchaser of a boat brokered through us also can take advantage of MarineMax Getaways! weekend and day trips and other rendezvous gatherings and in-water events, as well as boat operation and safety seminars. We believe that the array of services we offer are unique in the brokerage business. Yacht Charter We recently launched a yacht charter business in which we offer customers the opportunity to charter power and sailing yachts in exotic destinations, starting with our initial location in the British Virgin Islands. In this business, we sell specifically designed yachts to third parties for inclusion in our yacht charter fleet; enter into yacht management agreements under which yacht owners enable us to put their yachts in our yacht charter program for a period of four to five years for a fixed monthly fee payable by us; provide our services in storing, insuring, and maintaining their yachts; and charter these yachts to vacation customers at agreed fees payable to us. The yacht owners will be able to utilize the yachts for personal use for a designated number of weeks during the term of the management agreement and take possession of their yachts following the expiration of the yacht management agreements. During fiscal 2014, the income from rentals of chartering power and sailing yachts accounted for 0.6% or $3.6 million of our revenue. 13 Table of Contents Offsite Sales We sell used boats, offer F&I products, and sell parts and accessories at various third-party offsite locations, including marinas. Retail Locations We sell our recreational boats and other marine products and offer our related boat services through 54 retail locations in Alabama, Arizona, California, Connecticut, Florida, Georgia, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas. Each retail location generally includes an indoor showroom (including some of the industry’s largest indoor boat showrooms) and an outside area for displaying boat inventories, a business office to assist customers in arranging financing and insurance, and maintenance and repair facilities. Many of our retail locations are waterfront properties on some of the nation’s most popular boating locations, including the San Diego Bay in California; Norwalk Harbor and Westbrook Harbor in Connecticut; multiple locations on the Intracoastal Waterway, the Atlantic Ocean, Biscayne Bay, Boca Ciega Bay, Naples Bay, Tampa Bay, and the Saint Andrews Bay in Florida; Lake Lanier in Georgia; Chesapeake Bay in Maryland; Lake Minnetonka, and the St. Croix River in Minnesota; Lake of the Ozarks and Table Rock Lake in Missouri; Barnegat Bay, Lake Hopatcong, Little Egg Harbor Bay, and the Manasquan River in New Jersey; Great South Bay, the Hudson River, and Huntington Harbor in New York; Masonboro Inlet in North Carolina; Lake Erie in Ohio; Grand Lake in Oklahoma; Newport Harbor and Greenwich Bay in Rhode Island; Tennessee River in Tennessee; and Clear Lake and Lake Lewisville in Texas. Our waterfront retail locations, most of which include marina-type facilities and docks at which we display our boats, are easily accessible to the boating populace, serve as in-water showrooms, and enable the sales force to give customers immediate in-water demonstrations of various boat models. Most of our other locations are in close proximity to water. Operations Dealership Operations and Management We have adopted a generally decentralized approach to the operational management of our dealerships. While certain administrative functions are centralized at the corporate level, local management is primarily responsible for the day-to-day operations of the retail locations. Each retail location is managed by a store manager, who oversees the day-to-day operations, personnel, and financial performance of the individual store, subject to the direction of a regional manager, who generally has responsibility for the retail locations within a specified geographic region. Typically, each retail location also has a staff consisting of an F&I manager, a parts manager, and a service manager, sales representatives, maintenance and repair technicians, and various support personnel. We attempt to attract and retain quality employees by providing them with ongoing training to enhance sales professionalism and product knowledge, career advancement opportunities within a larger company, and favorable benefit packages. We maintain a formal training program, called MarineMax University or MMU, which provides training for employees in all aspects of our operations. Training sessions are held at our various regional locations covering a variety of topics. MMU-online offers various modules over the Internet. Highly trained, professional sales representatives are an important factor to our successful sales efforts. These sales representatives are trained at MMU to recognize the importance of fostering an enjoyable sales process, to educate customers on the operation and use of the boats, and to assist customers in making technical and design decisions in boat purchases. The overall focus of MMU is to teach our core retailing values, which focus on customer service. Sales representatives receive compensation primarily on a commission basis. Each store manager is a salaried employee with incentive bonuses based on the performance of the managed dealership. Maintenance and repair service managers receive compensation on a salary basis with bonuses based on the performance of their departments. Our management information system provides each store and department manager with daily financial and operational information, enabling them to monitor their performance on a daily, weekly, and monthly basis. We have a uniform, fully integrated management information system serving each of our dealerships. 14 Table of Contents Sales and Marketing Our sales philosophy focuses on selling the pleasures of the boating lifestyle. We believe that the critical elements of our sales philosophy include our appealing retail locations, no-hassle sales approach, highly trained sales representatives, high level of customer service, emphasis on educating the customer and the customer’s family on boating, and providing our customers with opportunities for boating through our MarineMax Getaways!. We strive to provide superior customer service and support before, during, and after the sale. Our team and customers are United by Water®. Each retail location offers the customer the opportunity to evaluate a variety of new and used boats in a comfortable and convenient setting. Our full-service retail locations facilitate a turn-key purchasing process that includes attractive lender financing packages, extended service agreements, and insurance. Many of our retail locations are located on waterfronts and marinas, which attract boating enthusiasts and enable customers to operate various boats prior to making a purchase decision. The brands we offer are diverse in size and use. Spread across our customer activities of leisure, fishing, watersports, luxury, and vacations. We believe the transformative qualities of the water should be shared by everyone, so we created our boat lineup accordingly. Our promise gives them meaning and reason to exist next to one another on our showroom floor. We sell our boats at posted MarineMax “One” Prices that generally represent a discount from the manufacturer’s suggested retail price. Our sales approach focuses on customer service by minimizing customer anxiety associated with price negotiation. As a part of our sales and marketing efforts, our online marketing activity is important, with the majority of leads coming through our website, www.MarineMax.com , and emails used as the primary marketing tool for our stores to connect with their customers. Social media is a growing venue for customer engagement with stores and prospecting of new leads. We also participate in boat shows and in-the-water sales events at area boating locations, typically held in January and February and toward the end of the boating season, in each of our markets and in certain locations in close proximity to our markets. These shows and events are normally held at convention centers or marinas, with area dealers renting space. Boat shows and other offsite promotions are an important venue for generating sales orders. The boat shows also generate a significant amount of interest in our products resulting in boat sales after the show. We emphasize customer education through one-on-one education by our sales representatives and, at some locations, our delivery captains, before and after a sale, and through in-house seminars for the entire family on boating safety, the use and operation of boats, and product demonstrations. Typically, one of our delivery captains or the sales representative delivers the customer’s boat to an area boating location and thoroughly instructs the customer about the operation of the boat, including hands-on instructions for docking and trailering the boat. To enhance our customer relationships after the sale, we lead and sponsor MarineMax Getaways! group boating trips to various destinations, rendezvous gatherings, and on-the-water organized events that promote the pleasures of the boating lifestyle. Each company-sponsored event, planned and led by a company employee, also provides a favorable medium for acclimating new customers to boating, sharing exciting boating destinations, creating friendships with other boaters, and enabling us to promote new product offerings to boating enthusiasts. As a result of our relative size, we believe we have a competitive advantage within the industry by being able to conduct an organized and systematic advertising and marketing effort. Part of our marketing effort includes an integrated customer relationship management system that tracks the status of each sales representative’s contacts with a prospect, automatically generates follow-up correspondence, and facilitates company-wide availability of a particular boat or other marine product desired by a customer. Suppliers and Inventory Management We purchase substantially all of our new boat inventory directly from manufacturers, which allocate new boats to dealerships based on the amount of boats sold by the dealership. We also exchange new boats with other dealers to accommodate customer demand and to balance inventory. 15 Table of Contents We purchase new boats and other marine-related products from Brunswick, which is the world’s largest manufacturer of marine products, including Sea Ray, Boston Whaler, Harris FloteBote, and Meridian. We also purchase new boats and other marine related products from other manufacturers, including Azimut, Cabo, Hatteras, Grady White, Scout, Sailfish, Malibu, and Nautique by Correct Craft. In fiscal 2014, sales of new Brunswick and Azimut boats accounted for approximately 40% and 14% of our revenue, respectively. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 26% and 10%, respectively, of our revenue in fiscal 2014. No purchases of new boats and other marine related products from any other manufacturer accounted for more than 10% of our revenue in fiscal 2014. We believe our Sea Ray boat purchases represented approximately 43% of Sea Ray’s new boat sales, and approximately 8% of all Brunswick marine product sales during fiscal 2014. We have entered into multi-year agreements with Brunswick covering Sea Ray, Boston Whaler, and Meridian products. We also have a multi-year agreement with Azimut-Benetti Group for its Azimut product line. We typically deal with each of our manufacturers, other than Brunswick and Azimut-Benetti Group, under an annually renewable, non-exclusive dealer agreement. The dealer agreements do not restrict our right to sell any product lines or competing products provided that we are in compliance with the material obligations of our dealer agreements. The terms of each dealer agreement appoints a designated geographical territory for the dealer, which is exclusive to the dealer provided that the dealer is able to meet the material obligations of its dealer agreement. Manufacturers generally establish prices on an annual basis, but may change prices at their sole discretion. Manufacturers typically discount the cost of inventory and offer inventory financing assistance during the manufacturers’ slow seasons, generally October through March. To obtain lower cost of inventory, we strive to capitalize on these manufacturer incentives to take product delivery during the manufacturers’ slow seasons. This permits us to gain pricing advantages and better product availability during the selling season. Arrangements with certain other manufacturers may restrict our right to offer some product lines in certain markets. We transfer individual boats among our retail locations to fill customer orders that otherwise might take substantially longer to fill from the manufacturer. This reduces delays in delivery, helps us maximize inventory turnover, and assists in minimizing potential overstock or out-of- stock situations. We actively monitor our inventory levels to maintain levels appropriate to meet current anticipated market demands. We are not bound by contractual agreements governing the amount of inventory that we must purchase in any year from any manufacturer, but the failure to purchase at agreed upon levels may result in the loss of certain manufacturer incentives or dealership rights. We participate in numerous end-of- summer manufacturer boat shows, which manufacturers sponsor to sell off their remaining inventory at reduced costs before the introduction of new model year products, typically beginning in September. Inventory Financing Marine manufacturers customarily provide interest assistance programs to retailers. The interest assistance varies by manufacturer and may include periods of free financing or reduced interest rate programs. The interest assistance may be paid directly to the retailer or the financial institution depending on the arrangements the manufacturer has established. We believe that our financing arrangements with manufacturers are standard within the industry. We account for consideration received from our vendors in accordance with FASB Accounting Standards Codification 605-50, “Revenue Recognition–Customer Payments and Incentives” (“ASC 605-50”). ASC 605-50 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 ASC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. We are party to an Inventory Financing Agreement (the “Amended Credit Facility”) with GE Commercial Distribution Finance Corporation. The Amended Credit Facility provides a floor plan financing commitment of up to $235.0 million. The Amended Credit Facility matures in August 2017 and is subject to extension for two one-year periods, with lender approval. 16 Table of Contents The interest rate under the Amended Credit Facility is 345 basis points above the one-month London Inter-Bank Offering Rate (“LIBOR”). There is an unused line fee of ten basis points on the unused portion of the line. The Amended Credit Facility has certain financial covenants. The covenants include provisions that our leverage ratio not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. As of September 30, 2014, we were in compliance with all the covenants under the Amended Credit Facility. The initial advance under the Amended Credit Facility was used to pay off our prior credit facility. Subsequent advances will be initiated by the acquisition of eligible new and used inventory or will be re-advances against eligible new and used inventory that has been partially paid- off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type of inventory and the value of the inventory. The collateral for the Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Amended Credit Facility. As of September 30, 2014, we owed $124.4 million under the Amended Credit Facility. Outstanding short-term borrowings accrued interest at a rate of 3.6% as of September 30, 2014, and the Amended Credit Facility provided us with an additional net borrowing availability of approximately $38.2 million, based upon the outstanding borrowing base availability. We have no indebtedness associated with our real estate holdings. Management Information System We believe that our management information system, which is utilized by each of our dealerships and was developed over a number of years through cooperative efforts with a common vendor, enhances our ability to integrate successfully the operations of our dealerships and future acquisitions, facilitates the interchange of information, and enhances cross-selling opportunities throughout our company. The system integrates each level of operations on a company-wide basis, including purchasing, inventory, receivables, financial reporting, budgeting, and sales management. The system enables us to monitor each dealership’s operations in order to identify quickly areas requiring additional focus and to manage inventory. The system also provides sales representatives with prospect and customer information that aids them in tracking the status of their contacts with prospects, automatically generates follow-up correspondence to such prospects, facilitates the availability of a particular boat company-wide, locates boats needed to satisfy a particular customer request, and monitors the maintenance and service needs of customers’ boats. Company representatives also utilize the system to assist in arranging financing and insurance packages. Brunswick Agreement Relating to Acquisitions We and the Sea Ray Division of Brunswick are parties to an agreement that provides a process for the acquisition of additional Sea Ray boat dealers that we elect to acquire. The agreement extends through August 31, 2017, with automatic annual one-year extensions at each twelve month anniversary of the agreement, provided that our dealer agreements with the Sea Ray Division of Brunswick are still then in effect. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement. Among other things, the agreement provides for us to provide Sea Ray with a business plan for each proposed acquisition, including historical financial and five-year projected financial information regarding the acquisition candidate; marketing and advertising plans; service capabilities and managerial and staff personnel; information regarding the ability of the candidate to achieve performance standards within designated periods; and information regarding the success of our previous acquisitions of Sea Ray dealers. The agreement also contemplates Sea Ray reaching a good faith determination whether the acquisition would be in its best interest based on our dedication and focus of resources on the Sea Ray brand and Sea Ray’s consideration of any adverse effects that the approval would have on the resulting territory configuration of adjacent or other dealers and the absence of any violation of applicable laws or rights granted by Sea Ray to others. 17 Table of Contents Dealer Agreements with Brunswick We and the Sea Ray Division of Brunswick and Boston Whaler, Inc. are parties to Sales and Service Agreements relating to Sea Ray and Boston Whaler products respectively, effective September 1, 2014 and extending through August 31, 2017 with automatic annual one-year extensions at each twelve-month anniversary of the agreement, provided that we are not in breach of a material term of the agreement, following written notice and expiration of applicable cure periods without cure (certain termination provisions are summarized below). The agreements appoint certain of our operating subsidiaries as a dealer for the retail sale, display, and servicing of all Sea Ray or Boston Whaler products, parts, and accessories currently or in the future sold by Sea Ray or Boston Whaler, as applicable. The agreements specify a designated geographical territory and dealer region or location for the dealer, which is exclusive to the dealer. The agreement also specifies retail locations, which the dealer may not close, change, or add to without the prior written consent of the relevant manufacturer, provided that such manufacturer may not unreasonably withhold its consent. The manufacturer reserves the right to modify the territory or appoint other dealers to sell, display, and service product from dealer locations within the territory at any time if we close a dealer location without prior written notice to Sea Ray and prior written approval by Sea Ray, which will not be unreasonably withheld or in the case of Boston Whaler, in the event that a dealer location fails to meet performance standards while carrying competitive product following written notice and a period of 60 days to cure or 6 months for matters for which a cure cannot be completed in 60 days. The agreements also restrict the dealer from selling, advertising (other than in recognized and established marine publications), soliciting for sale, or offering for resale any products outside its territory except as otherwise provided by the relevant manufacturer’s advertising policy or other applicable policy as long as similar restrictions also apply to all domestic dealers selling comparable products. In addition, the agreements provide for the lowest product prices charged by the relevant manufacturer from time to time to other domestic dealers, subject to the dealer meeting all the requirements and conditions of applicable programs and the right of the manufacturer in good faith to charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and non-ordinary business circumstances, or for limited duration promotional programs. Among other things, the dealer agreements require each dealer to achieve performance standards including inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to the manufacturer’s current buying program, unit retail sales, customer satisfaction and marketing support. The sales performance will be in accordance with fair and reasonable standards and sales levels established by the manufacturer in collaboration with the dealer based on factors such as population, sales potential, market share percentage of products sold in the territory compared with competitive products sold in the territory, product availability, local economic conditions, competition, past sales history, historical product mix and stocking practices, existing product inventory, number of retail locations, and other special circumstances that may affect the sale of the relevant products or the dealer, in each case established in a manner similar to those applied to domestic dealers selling comparable products. The dealer is also required to maintain at each retail location, or at another acceptable location, a service department that is properly staffed and equipped to service Sea Ray or Boston Whaler products, as applicable, promptly and professionally and to maintain parts and supplies to service such products properly on a timely basis, to provide or arrange for warranty and service work for such products. Sea Ray and Boston Whaler respectively have each agreed to indemnify us against any losses to third parties resulting from their respective negligent acts or omissions involving the design or manufacture of any of its products or any breach by it of the agreement. We have agreed to indemnify Sea Ray or Boston Whaler respectively against any losses to third parties resulting from our negligent acts or omissions involving the dealer’s application, use, or repair of Sea Ray or Boston Whaler products respectively, statements or representation not specifically authorized by the relevant manufacturer, the installation of any after-market components or any other modification or alteration of the products, and any breach by us of the agreement. The agreements may be terminated: • by the manufacturer, upon 60 days’ prior written notice, if we do not have an ability to purchase products via flooring or self-financing or fail to meet our financial obligations as they become due to the relevant manufacturer or to our lenders; 18 Table of Contents • • as to any dealer region, or in the case of Boston Whaler, any dealer location, if we are failing to meet performance standards and begin selling, displaying or advertising products that are competitive with the products being sold under the agreement (other than products of another Brunswick brand or new products currently carried), if we do not cure our failure within 90 days after written notice, or if we are meeting the performance standards and then starts failing to meet performance standards after beginning selling, displaying or advertising products that are competitive with products sold under the agreement (other than products of another Brunswick brand or new products currently carried) and do not cure our failure within 6 months after written notice, or with respect to Boston Whaler and dealer’s locations in New York, in the event such dealer location fails to meet performance standards and does not cure such failure within 6 months after written notice; with respect to the Sea Ray agreements, by either party upon prior written notice to the other given within 60 days after the 6 th anniversary of the agreement, with termination effective at the end of the 7 th year, failing which the agreement will renew for a 3 year term beginning on the 7 th anniversary; with respect to the Boston Whaler agreements, by either party upon prior written notice to the other given within 60 days after the 4 th anniversary of the agreement, with termination effective at the end of the 5 th year, or which the agreement will renew for a 2 year term beginning on the 5 th anniversary; • with respect to Sea Ray, following the 7th anniversary of the agreement, upon 24 months’ notice (or with respect to Boston Whaler, following the 5 th anniversary of the agreement, upon 12 months’ notice), in the event of a material breach or default of any of the material obligations, performance standards, covenants, representations, warranties or duties imposed in the agreement or in the applicable manufacturer’s policies or programs applicable to domestic dealers which breach is not cured during the notice period and through the parties working in good faith to resolve any issue; • • • by Sea Ray or Boston Whaler, as applicable, or us upon 60 days’ written notice if the other makes a fraudulent misrepresentation that is material to the agreement or in the event of the insolvency, bankruptcy, or receivership of the other; by Sea Ray or Boston Whaler, as applicable, in the event of the assignment of the agreement by the dealer without the prior written consent of Sea Ray or Boston Whaler, as applicable; by Sea Ray or Boston Whaler, as applicable, upon at least 60 days’ prior written notice in the event of the commission by dealer of an act of fraud upon Sea Ray or Boston Whaler, as applicable, or the commission by us or one of our officers of a felony or act of fraud which is materially detrimental to Sea Ray’s or Boston Whaler’s respective reputation or business or which materially impairs our ability to perform our duties under the agreement or we fail to pay any lender financing products under the agreement after the sale of products by us; or • upon the mutual consent of Sea Ray or Boston Whaler, as applicable, and us. Either party may elect to not extend the term at the expiration of each applicable 12 month period in the event of a material breach or default by the other of any of the material obligations, performance standards, covenants, representations, warranties, or duties imposed by the agreement or the manufacturer’s manual that is not remedied or cured following notice thereof. In the event of a remedy or cure, the additional 12 month period shall be added to the term. Dealer Agreements with Azimut We are parties to Dealership Agreements with Azimut Benetti S.P.a. for the retail sale, display, and servicing of designated Azimut products and parts sold by Azimut. The Dealership Agreements extend through September 1, 2015, subject to additional one year periods added each year provided that we are able to agree in good faith on acceptable retail sales goals. The dealership agreements grant us the exclusive right to sell the Azimut products and parts in designated geographical areas. Among other things, each dealership agreement requires the applicable dealer to: • • • display the Azimut products in the most appropriate and effective manner; maintain an adequate inventory of Azimut products and meet mutually agreed upon minimum purchase requirements; use commercially reasonable best efforts to establish the best image for Azimut and to promote the sales of the products; 19 Table of Contents • • • • • • • • • operate through at least one permanent office to ensure adequate promotion of the products; maintain adequate signage to show Azimut at its offices or service yards; promote the products at various events and meetings; advertise and market the products in accordance with agreed upon marketing plans and budgets; attend boat shows and display a full range of boats; maintain appropriate and adequate after-sale service; provide assistance under warranty for all boats in the geographical area; comply with Azimut’s warranty procedures; and perform maintenance services for Azimut boats. Azimut has agreed to indemnify each of our dealers against any losses resulting from an alleged breach of warranty or injury or damage caused by a defect in design, manufacture or assembly of a product. Each of our dealers has agreed to indemnify Azimut against any losses resulting from the dealer’s failure to comply with any material obligation with respect to a product or customer; any actual negligence, errors or omissions in connection with the sale, preparation, repairs, or service of products; any modification of products except as approved by Azimut; a breach of any material agreement; or unauthorized warranties, misleading statements, misrepresentations or deceptive or unfair practices. Each dealer agreement may be terminated upon 30 days prior written notice in event that the defaulting party has not remedied a default during such period, in the event of any of the following: • • • • • • • • • • by Azimut or dealer, for failure of the other to maintain a necessary license; by Azimut or dealer, for the change, transfer, or attempted transfer by the other party of the whole or any part of the agreement other than to an affiliate as part of a corporate restructuring or any change in control without the prior consent of Azimut; by Azimut or dealer, for the knowing submission of an intentional fraudulent statement, application, request, refund, credit, or warranty claim; by Azimut or dealer, for the knowing use of a deceptive or fraudulent practice in the sale of a product; by Azimut or dealer, for the indictment for or conviction of a crime or violation of law which will have an adverse and material effect on the other’s reputation or operations; by Azimut or dealer, for the other entering into an agreement or understanding to fix prices for the products; by dealer for Azimut’s material and continuous failure to supply product or appointing another dealer in the territory or failure to fulfill warranty obligations; by Azimut for dealer’s abandonment of operations or failure to maintain business as a going concern; by Azimut for dealer’s material and continuous failure to represent, promote, sell, or service the products, achieve minimum yearly sales or comply with purchase orders as agreed by the parties considering various factors such as the economy, the Euro impact, product availability, and growth potential; by Azimut or dealer for the insolvency, bankruptcy, commencement of bankruptcy proceedings, appointment of a receiver or other officer with similar powers, levy under attachment, garnishment or execution, or similar process, which is not vacated or removed within ten days; and • by mutual agreement of the dealer and Azimut. Upon termination of the dealer agreements by Azimut without cause, termination by dealer with cause and nonrenewal and expiration, Azimut is required to repurchase unsold inventory within sixty days of termination. 20 Table of Contents Employees As of September 30, 2014, we had 1,228 employees, 1,128 of whom were in store-level operations and 100 of whom were in corporate administration and management. We are not a party to any collective bargaining agreements. We consider our relations with our employees to be excellent. Trademarks and Service Marks We have registered trade names and trademarks with the U.S. Patent and Trademark Office for various names, including “MarineMax,” “MarineMax Getaways!,” “MarineMax Care,” “Delivering the Dream,” “MarineMax Delivering the Boating Dream,” “Newcoast Financial Services,” “MarineMax Boating Gear Center,” “MarineMax Vacations,” “United by Water” and “Women on Water.” We have registered the name “MarineMax” in the European Community, China, Australia, and Cuba; “Maximizing Your Enjoyment on the Water” in the European Community, Cuba, and Australia; and “United by Water” in the European Community, Australia and Cuba We have trade names and trademarks registered in Canada for various names, including “MarineMax,” “Delivering the Dream,” and “The Water Gene.” We have various trade name and trademark applications including “MarineMax,” “United by Water,” and “Maximizing Your Enjoyment on Water” pending in Australia, Brazil, China, Cuba, European Union, and India. There can be no assurance that any of these applications will be granted. Seasonality and Weather Conditions Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. Over the three-year period ended September 30, 2014, the average revenue for the quarters ended December 31, March 31, June 30, and September 30 represented approximately 18%, 25%, 31%, and 26%, respectively, of our average annual revenues. 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 generally stimulates boat sales and typically allows us to reduce our inventory levels and related short-term borrowings throughout the remainder of the fiscal year. Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to 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 affected 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. Environmental and Other Regulatory Issues Our operations are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, ordinances, and regulations. While we believe that we maintain all requisite licenses and permits and are in compliance with all applicable federal, state, and local regulations, there can be no assurance that we will be able to maintain all requisite licenses and permits. The failure to satisfy those and other regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations. The adoption of additional laws, rules, and regulations could also have a material adverse effect on our business. Various federal, state, and local regulatory agencies, including the Occupational Safety and Health Administration, or OSHA, the United States Environmental Protection Agency, or EPA, and similar federal and local agencies, have jurisdiction over the operation of our dealerships, repair facilities, and other operations with respect to matters such as consumer protection, workers’ safety, and laws regarding protection of the environment, including air, water, and soil. The EPA has various air emissions regulations for outboard marine engines that impose more strict emissions standards for two-cycle, gasoline outboard marine engines. The majority of the outboard marine engines we sell are manufactured by Mercury Marine. Mercury Marine’s product line of low-emission engines, including the OptiMax, Verado, and other four-stroke outboards, have achieved the EPA’s mandated 2006 emission levels. Any increased costs of producing engines resulting from EPA standards, or the inability of our manufacturers to comply with EPA requirements, could have a material adverse effect on our business. 21 Table of Contents Certain of our facilities own and operate underground storage tanks, or USTs, for the storage of various petroleum products. The USTs are generally subject to federal, state, and local laws and regulations that require testing and upgrading of USTs and remediation of contaminated soils and groundwater resulting from leaking USTs. In addition, if leakage from company-owned or operated USTs migrates onto the property of others, we may be subject to civil liability to third parties for remediation costs or other damages. Based on historical experience, we believe that our liabilities associated with UST testing, upgrades, and remediation are unlikely to have a material adverse effect on our financial condition or operating results. As with boat dealerships generally, and parts and service operations in particular, our business involves the use, handling, storage, and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials, such as motor oil, waste motor oil and filters, transmission fluid, antifreeze, freon, waste paint and lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline, and diesel fuels. Accordingly, we are subject to regulation by federal, state, and local authorities establishing requirements for the use, management, handling, and disposal of these materials and health and environmental quality standards, and liability related thereto, and providing penalties for violations of those standards. We are also subject to laws, ordinances, and regulations governing investigation and remediation of contamination at facilities we operate to which we send hazardous or toxic substances or wastes for treatment, recycling, or disposal. We do not believe we have any material environmental liabilities or that compliance with environmental laws, ordinances, and regulations will, individually or in the aggregate, have a material adverse effect on our business, financial condition, or results of operations. However, soil and groundwater contamination has been known to exist at certain properties owned or leased by us. We have also been required and may in the future be required to remove aboveground and underground storage tanks containing hazardous substances or wastes. As to certain of our properties, specific releases of petroleum have been or are in the process of being remedied in accordance with state and federal guidelines. We are monitoring the soil and groundwater as required by applicable state and federal guidelines. In addition, the shareholders of the acquired dealers have indemnified us for specific environmental issues identified on environmental site assessments performed by us as part of the acquisitions. We maintain insurance for pollutant cleanup and removal. The coverage pays for the expenses to extract pollutants from land or water at the insured property, if the discharge, dispersal, seepage, migration, release, or escape of the pollutants is caused by or results from a covered cause of loss. We also have additional storage tank liability insurance and “Superfund” coverage where applicable. In addition, certain of our retail locations are located on waterways that are subject to federal or state laws regulating navigable waters (including oil pollution prevention), fish and wildlife, and other matters. Three of the properties we own were historically used as gasoline service stations. Remedial action with respect to prior historical site activities on these properties has been completed in accordance with federal and state law. Also, one of our properties is within the boundaries of a “Superfund” site, although it has not been nor is expected to be identified as a contributor to the contamination in the area. We, however, do not believe that these environmental issues will result in any material liabilities to us. Additionally, certain states have required or are considering requiring a license in order to operate a recreational boat. While such licensing requirements are not expected to be unduly restrictive, regulations may discourage potential first-time buyers, thereby limiting future sales, which could adversely affect our business, financial condition, and results of operations. Product Liability The products we sell or service may expose us to potential liabilities for personal injury or property damage claims relating to the use of those products. Historically, the resolution of product liability claims has not materially affected our business. Our manufacturers generally maintain product liability insurance, and we maintain third-party product liability insurance, which we believe to be adequate. However, we may experience legal claims in excess of our insurance coverage, and those claims may not be covered by insurance. Furthermore, any significant claims against us could adversely affect our business, financial condition, and results of operations and result in negative publicity. Excessive insurance claims also could result in increased insurance premiums. 22 Table of Contents Competition We operate in a highly competitive environment. In addition to facing competition generally from recreation businesses seeking to attract consumers’ leisure time and discretionary spending dollars, the recreational boat industry itself is highly fragmented, resulting in intense competition for customers, quality products, boat show space, and suitable retail locations. We rely to a certain extent on boat shows to generate sales. Our inability to participate in boat shows in our existing or targeted markets could have a material adverse effect on our business, financial condition, and results of operations. We compete primarily with single-location boat dealers and, with respect to sales of marine equipment, parts, and accessories, with national specialty marine stores, catalog retailers, sporting goods stores, and mass merchants. Competition among boat dealers is generally based on the quality of available products, the price and value of the products, and attention to customer service. There is significant competition both within markets we currently serve and in new markets that we may enter. We compete in each of our markets with retailers of brands of boats and engines we do not sell in that market. In addition, several of our competitors, especially those selling boating accessories, are large national or regional chains that have substantial financial, marketing, and other resources. However, we believe that our integrated corporate infrastructure and marketing and sales capabilities, our cost structure, and our nationwide presence enable us to compete effectively against these companies. Private sales of used boats represent an additional significant source of competition. Executive Officers The following table sets forth information concerning each of our executive officers as of December 1, 2014: Name William H. McGill Jr. Michael H. McLamb Charles A. Cashman William Brett McGill Paulee C. Day Anthony E. Cassella, Jr Age 70 Chairman of the Board, President, Chief Executive Officer, and Director 49 Executive Vice President, Chief Financial Officer, Secretary, and Director 51 Vice President of East Operations 46 Vice President of West Operations 45 Vice President, General Counsel, and Assistant Secretary 45 Vice President and Chief Accounting Officer Position William H. McGill Jr. has served as the Chief Executive Officer of MarineMax since January 23, 1998 and as the Chairman of the Board and as a director of our company since March 6, 1998. Mr. McGill served as the President of our company from January 23, 1988 until September 8, 2000 and re-assumed the position on July 1, 2002. Mr. McGill was the principal owner and president of Gulfwind USA, Inc., one of our operating subsidiaries, from 1973 until its merger with us. Michael H. McLamb has served as Executive Vice President of our company since October 2002, as Chief Financial Officer since January 23, 1998, as Secretary since April 5, 1998, and as a director since November 1, 2003. Mr. McLamb served as Vice President and Treasurer of our company from January 23, 1998 until October 22, 2002. Mr. McLamb, a certified public accountant, was employed by Arthur Andersen LLP from December 1987 to December 1997, serving most recently as a senior manager. Charles A. Cashman has served as Vice President of East Operations of our company since May 2012 and was appointed as an executive officer by our Board of Directors in November 2012. Mr. Cashman served as Regional President of East Florida from October 2008 to May 2012, and as District Manager of the East Coast of Florida from March 2007 to October 2008. Mr. Cashman served several other positions of increasing responsibility, including Sales Consultant, Sales Manager, and General Manager, since joining our company in 1992. William Brett McGill has served as Vice President of West Operations of our company since May 2012 and was appointed as an executive officer by our Board of Directors in November 2012. Mr. McGill served as one of our Regional Presidents from March 2006 to May 2012, as Vice President of Information Technology, Service and Parts of our company from October 2004 to March 2006, and as Director of Information Services from March 1998. Mr. McGill began his professional career with a software development firm, Integrated Dealer Systems, prior to joining our company in 1996. William Brett McGill is the son of William H. McGill, Jr. 23 Table of Contents Paulee C. Day has served as Vice President of our company since February 2009 and as General Counsel and Assistant Secretary since January 2003. Ms. Day, an active member of the Florida Bar, was employed by Maxxim Medical from May 1999 to November 2002, serving as Vice President, General Counsel, and Secretary. Prior to that time, Ms. Day was Corporate Attorney at Eckerd Corporation from June 1997 through May 1999 and a corporate attorney at the law firm Trenam, Kemker, Scharf, Barkin, Frye, O’Neill and Mullis, P.A. from January 1995 through June 1997. Anthony E. Cassella, Jr. has served as Vice President of Accounting and Shared Services since February 2011, and was appointed as Chief Accounting Officer on October 9, 2014. Mr. Cassella served as Director of Shared Services from October 2007 until February 2011 and Regional Controller from March 1999 until October 2007. Mr. Cassella was the Controller of Merit Marine which the Company acquired in March 1999. Mr. Cassella, a certified public accountant, worked in public accounting from June 1991 to February 1998, serving most recently as manager. Item 1A. Risk Factors General economic conditions and consumer spending patterns can negatively impact our operating results, and the severe recession that began in late 2007 has adversely affected the boating industry and our company. 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 approximately 49%, 51%, and 52% of our revenue during fiscal 2012, 2013, and 2014, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as Hurricane Sandy, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico, also could adversely affect, and in certain instances have adversely affected, 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. As a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. 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 and depressed economic conditions had a substantial negative effect on our business in each subsequent fiscal year. Our revenue decreased from $1.2 billion in fiscal 2007, to $885.4 million in fiscal 2008, to $588.6 million in fiscal 2009, to $450.3 million in fiscal 2010, and increased to $480.9 million in fiscal 2011, to $524.5 million in fiscal 2012, to $584.5 million in fiscal 2013, and to $624.7 million in fiscal 2014. Our earnings decreased from a net income of $20.1 million in fiscal 2007 to a net loss of $134.3 million in fiscal 2008 (including a $122.1 million goodwill impairment charge), a net loss of $76.8 million in fiscal 2009, net income of $2.5 million in fiscal 2010 (including a $19.2 million tax refund), a net loss of $11.5 million in fiscal 2011, a net income of $1.1 million in fiscal 2012, a net income of $15.0 million in fiscal 2013 (including a $11.7 million recovery from the Deepwater Horizon Settlement Program), and a net income of $11.3 million in fiscal 2014 (including a $555,000 recovery from the Deepwater Horizon Settlement Program). These substantially deteriorating economic and financial conditions had a greater impact on many other participants in the boating industry, with certain manufacturers and dealers ceasing business operations or filing for bankruptcy. While the reduction in boating industry participants might have a long-term positive impact on our company’s competitive position, on a market by market basis, we are facing and expect to continue to face short-term competitive pressure resulting from decreased selling prices as a result of forced sales due to a competitor failing in the market place. 24 Table of Contents These conditions have caused us to reduce substantially our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. While we believe the steps we have taken to date will enable us to emerge from the current economic environment as a stronger and more profitable company, we cannot predict the length or severity of these unfavorable economic, financial, or industry 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. A continuation of depressed economic or industry factors could have additional negative effects on our company, including interfering with our supply of certain brands by manufacturers, reduced marketing and other support by manufacturers, decreased revenue, additional pressures on margins, and our failure to satisfy covenants under our credit agreement. The availability and costs of borrowed funds can adversely affect our ability to obtain adequate boat inventory and the ability and willingness of our customers to finance boat purchases. The availability and costs of borrowed funds can adversely affect our ability to obtain and maintain 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 September 30, 2014, we had no long-term debt. We rely on our credit facility to purchase and maintain our inventory of boats. Our ability to borrow under our credit facility depends on our ability to continue to satisfy our covenants and other obligations under our credit facility. The aging of our inventory limits our borrowing capacity as defined provisions in our credit facility reduce the allowable advance rate as our inventory ages. Our access to funds under our credit facility also depends upon the ability of our lenders, 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. Depressed economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to maintain compliance with our debt covenants and to utilize our credit facility to fund our operations. Accordingly, it may be necessary for us to close additional stores, further reduce our expense structure, or modify the covenants with our lenders. 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 our credit facility or replace or supplement our credit facility, which may not be possible at all or under commercially reasonable terms. Our Amended Credit Facility with GE Commercial Distribution Finance Corporation provides a floor plan financing commitment of up to $235.0 million. The collateral for our Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged as collateral for the Amended Credit Facility. As of September 30, 2014, we were in compliance with all of the covenants under the Amended Credit Facility and our additional available borrowings under our credit facility was approximately $38.2 million based upon the outstanding borrowing base availability. Similarly, 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 impacts the profitability of our finance and insurance activities. Tight credit conditions during each fiscal year beginning with fiscal 2008 and continuing through fiscal 2011 adversely affected the ability of customers to finance boat purchases, which had a negative effect on our operating results. Our strategies to enhance our performance may not be successful. We are increasing our efforts to grow our financing and insurance, parts and accessory, service, yacht charter, and boat storage businesses to better serve our customers and thereby increase revenue and improve profitability as a result of these higher margin businesses. In addition, we have implemented programs to increase the sale over the Internet of used boats, parts, accessories, and a wide range of boating supplies and products. These efforts and programs are designed to increase our revenue and reduce our dependence on the sale of new boats. These business initiatives will require us to add personnel, invest capital, enter businesses in which we do not have extensive experience, and encounter substantial competition. As a result, our strategies to enhance our performance may not be successful and we may increase our expenses or write off such investments if not successful. 25 Table of Contents Our success depends to a significant extent on the well being, as well as the continued popularity and reputation for quality of the boating products, of our manufacturers, particularly Brunswick’s Sea Ray, Boston Whaler, and Meridian boat lines and Azimut-Benetti Group’s Azimut products. Approximately 40% of our revenue in fiscal 2014 resulted from sales of new boats manufactured by Brunswick, including approximately 26% from Brunswick’s Sea Ray division, 10% from Brunswick’s Boston Whaler division, and approximately 4% from Brunswick’s other divisions. Additionally, approximately 14% of our revenue in fiscal 2014 resulted from sales of new boats manufactured by Azimut-Benetti Group. The remainder of our fiscal 2014 revenue from new boat sales resulted from sales of products from a limited number of other manufacturers, none of which accounted for more than 10% of our revenue. We depend on our manufacturers to provide us with products that compare favorably with competing products in terms of quality, performance, safety, and advanced features, including the latest advances in propulsion and navigation systems. Any adverse change in the production efficiency, product development efforts, technological advancement, marketplace acceptance, marketing capabilities, and financial condition of our manufacturers, particularly Brunswick and Azimut-Benetti Group given our reliance on Sea Ray, Boston Whaler, Meridian and Azimut, would have a substantial adverse impact on our business. Any difficulties encountered by any of our manufacturers, particularly Brunswick and Azimut-Benetti Group, resulting from economic, financial, or other factors could adversely affect the quality and amount of products that they are able to supply to us and the services and support they provide to us. The interruption or discontinuance of the operations of Brunswick, Azimut-Benetti Group, or other manufacturers could cause us to experience shortfalls, disruptions, or delays with respect to needed inventory. Although we believe that adequate alternate sources would be available that could replace any manufacturer other than Brunswick and Azimut-Benetti Group as a product source, those alternate sources may not be available at the time of any interruption, and alternative products may not be available at comparable quality and prices. We have dealer agreements with Brunswick covering Sea Ray and Boston Whaler products. Each dealer agreement has a multi-year term and provides for the lowest product prices charged by the Sea Ray division of Brunswick or Boston Whaler, as applicable, from time to time to other domestic Sea Ray or Boston Whaler dealers, as applicable. These terms are subject to: • • the dealer meeting all the requirements and conditions of the manufacturer’s applicable programs; and the right of Brunswick in good faith to charge lesser prices to other dealers • • • to meet existing competitive circumstances; for unusual and non-ordinary business circumstances; or for limited duration promotional programs. Each dealer agreement designates a specific geographical territory for the dealer, which is exclusive to the dealer provided that the dealer is able to meet the material obligations of its dealer agreement. In March 2006, we became the exclusive dealer for Azimut-Benetti Group’s Azimut product line for the Northeast United States. Our geographic territory was expanded to include Florida in September 2008 and to the entire country in July 2012. The Azimut dealer agreement provides a geographic territory to promote the product line and to network with the appropriate clientele through various independent locations designated for Azimut retail sales. Our dealer agreement is multi-year term but requires us to be in compliance with its terms and conditions. As is typical in the industry, we generally deal with manufacturers, other than the Sea Ray division of Brunswick and Azimut, under renewable annual dealer agreements. These agreements do not contain any contractual provisions concerning product pricing or required purchasing levels. Pricing is generally established on a model year basis, but is subject to change in the manufacturer’s sole discretion. Any change or termination of these arrangements for any reason could adversely affect product availability and cost and our financial performance. 26 Table of Contents Boat manufacturers exercise substantial control over our business. We depend on our dealer agreements. Through dealer agreements, boat manufacturers, including Brunswick and Azimut, exercise significant control over their dealers, restrict them to specified locations, and retain approval rights over changes in management and ownership, among other things. The continuation of our dealer agreements with most manufacturers, including Brunswick and Azimut, depends upon, among other things, our achieving stated goals for customer satisfaction ratings and market share penetration in the market served by the applicable dealership. Failure to meet the customer satisfaction, market share goals, and other conditions set forth in any dealer agreement could have various consequences, including the following: • • • • • • • the termination of the dealer agreement; the imposition of additional conditions in subsequent dealer agreements; limitations on boat inventory allocations; reductions in reimbursement rates for warranty work performed by the dealer; loss of certain manufacturer to dealer incentives; denial of approval of future acquisitions; or the loss of exclusive rights to sell in the geographic territory. These events could have a material adverse effect on our competitive position and financial performance. The failure to receive rebates and other dealer incentives on inventory purchases or retail sales could substantially reduce our margins. We rely on manufacturers’ programs that provide incentives for dealers to purchase and sell particular boat makes and models or for consumers to buy particular boat makes or models. Any eliminations, reductions, limitations, or other changes relating to rebate or incentive programs that have the effect of reducing the benefits we receive, whether relating to the ability of manufacturers to pay or our ability to qualify for such incentive programs, could increase the effective cost of our boat purchases, reduce our margins and competitive position, and have a material adverse effect on our financial performance. Fuel prices and supply may affect our business. All of the recreational boats we sell are powered by diesel or gasoline engines. Consequently, an interruption in the supply, or a significant increase in the price or tax on the sale of fuel on a regional or national basis could have a material adverse effect on our sales and operating results. Increases in fuel prices (such as those that occurred during fiscal 2008) negatively impact boat sales. At various times in the past, diesel or gasoline fuel has been difficult to obtain. The supply of fuels may be interrupted, rationing may be imposed, or the price of or tax on fuels may significantly increase in the future, adversely impacting our business. The availability of boat insurance is critical to our success. The ability of our customers to secure reasonably affordable boat insurance that is satisfactory to lenders that finance our customers’ purchases is critical to our success. Historically, affordable boat insurance has been available. With the hurricanes that have impacted the state of Florida and other markets over the past several years, insurance rates have escalated and insurance coverage has become more difficult to obtain. In addition, as a severe storm approaches land, insurance providers cease underwriting until the storm has passed. This loss of insurance prevents lenders from lending. As a result, sales of boats can be temporarily halted making our revenue difficult to predict and causing sales to be delayed or potentially cancelled. Any difficulty of customers to obtain affordable boat insurance could impede boat sales and adversely affect our business. Other recreational activities and poor industry perception can adversely affect the levels of boat purchases. Other recreational activities and poor industry perception can adversely affect the levels of boat purchases. As a seller of high-end consumer products, we must compete for discretionary spending with a wide variety of other 27 Table of Contents recreational activities and consumer purchases. In addition, perceived hassles of boat ownership and relatively poor customer service and customer education throughout the retail boat industry represent impediments to boat purchases. Our customer-centric strategy is intended to overcome these perceptions. Adverse federal tax policies can have a negative effect on us. Changes in federal and state tax laws, such as an imposition of luxury taxes on new boat purchases, increases in prevailing tax rates, and removal of certain interest deductions, also influence consumers’ decisions to purchase products we offer and could have a negative effect on our sales. For example, during 1991 and 1992, the federal government imposed a luxury tax on new recreational boats with sales prices in excess of $100,000, which coincided with a sharp decline in boating industry sales from a high of more than $17.9 billion in 1988 to a low of $10.3 billion in 1992. Any increase in tax rates, including those on capital gains and dividends, particularly those on high-income taxpayers, could adversely affect our boat sales. In addition to our traditional repeat and referral business in our physical locations, online channels are increasingly significant in serving our existing customer base and reaching new customers. Our continued expansion and success will be negatively impacted if we are not able to fully exploit these channels. Our on-line channels are subject to a number of risks and uncertainties that are beyond our control, including the following: • • • • • • • • • • changes in technology; changes in consumer willingness to conduct business electronically, including increasing concerns with consumer privacy and risk and changing laws, rules, and regulations, such as the imposition of taxes.; technology or security impediments that may inhibit our ability to electronically market our products and services; changes in applicable federal, state and commercial regulation, such as the Federal Trade Commission Act, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, purchasing card industry requirements, Office of Foreign Assets Control regulations and similar types of international laws; failure of our service providers to perform their services properly and in a timely and efficient manner; failures in our infrastructure or by third parties, such as telephone or electric power service, resulting in website downtime or other problems; failure by us to accurately and timely respond to customers, process orders or deliver services, which may negatively impact both future online and in-store purchases by such customers; inability of our suppliers or service partners to fulfill customer orders, which may negatively impact customer satisfaction; our failure to assess and evaluate our online product and service offering to ensure that our products and services are desired by boating enthusiasts; and the potential exposure to liability with respect to third-party information, including copyright, trademark infringement, or other wrongful acts of third parties; false or erroneous information provided by third parties; or illegal activities by third parties, such as the sale of stolen boats or other goods. Further, we may also be vulnerable to competitive pressures from the growing electronic commerce activity in our market, both as they may impact our own on-line business, and as they may impact the operating results and investment values of our existing physical locations. We recently implemented new business initiatives that involve expenses but have not produced meaningful revenue. We recently implemented programs to increase sales of boats, boating parts, and accessories, as well as the offer of finance and insurance, or F&I, products at various offsite locations; and the charter of power and sailing yachts in the 28 Table of Contents British Virgin Islands. None of these recently implemented programs have produced any meaningful revenue to date. We can provide no assurance whether these programs will be successful or that we will recover the costs we have incurred in their implementation. Our recently launched yacht charter business exposes us to certain risks. Our recently launched yacht charter business entails the sale by us of specifically designed yachts to third parties for inclusion in our yacht charter fleet; a yacht management agreement under which yacht owners enable us to put their yachts in our yacht charter program for a period of four to five years for a fixed monthly fee payable by us; our services in storing, insuring, and maintaining their yachts; and the charter by us of these yachts to vacation customers at agreed fees payable to us. Our failure to find purchasers for yachts intended for our charter fleet will increase our boat inventory and related operating costs; lack of sales into our charter fleet may result in increased losses due to market adjustments of our yacht charter inventory; and our failure to generate a sufficient number of vacation charter customers will require us to absorb all the costs of the monthly fees to the yacht owners as well as other operating costs. Customers consider safety and reliability a primary concern in selecting a yacht charter provider. The yacht charter business may present a number of safety risks, including catastrophic disaster, adverse weather and marine conditions, mechanical failure and collision. If we are unable to maintain acceptable records for safety and reliability, our ability to retain current customers and attract new customers may be adversely affected. Additionally, any safety issue encountered during a yacht charter may result in claims against us as well as negative publicity. These events could have a material adverse effect on the competitive position and financial performance of both our yacht charter business and our core boat sales business. The yacht charter business is also highly fragmented, consisting primarily of local operators and franchisees. Competition among charter operators is based on location, the type and size of yachts offered, charter rates, destinations serviced, and attention to customer service. Yacht charters also face competition from other travel and leisure options, including, but not limited to, cruises, hotels, resorts, theme parks, organized tours, land-based casino operators, and vacation ownership properties. We therefore risk losing business not only to other charter operators, but also to vacation operators that provide such alternatives. Our success depends, in part, on our ability to continue to make successful acquisitions and to integrate the operations of acquired dealers and each dealer we acquire in the future. Since March 1, 1998, we have acquired 24 recreational boat dealers, two boat brokerage operations, and two full-service yacht repair facilities. Each acquired dealer operated independently prior to its acquisition by us. Our success depends, in part, on our ability to continue to make successful acquisitions and to integrate the operations of acquired dealers, including centralizing certain functions to achieve cost savings and pursuing programs and processes that promote cooperation and the sharing of opportunities and resources among our dealerships. We may not be able to oversee the combined entity efficiently or to implement effectively our growth and operating strategies. To the extent that we successfully pursue our acquisition strategy, our resulting growth will place significant additional demands on our management and infrastructure. Our failure to pursue successfully our acquisition strategies or operate effectively the combined entity could have a material adverse effect on our rate of growth and operating performance. Unforeseen expenses, difficulties, and delays frequently encountered in connection with rapid expansion through acquisitions could inhibit our growth and negatively impact our profitability. Our growth strategy of acquiring additional recreational boat dealers involves significant risks. This strategy entails reviewing and potentially reorganizing acquired business operations, corporate infrastructure and systems, and financial controls. Unforeseen expenses, difficulties, and delays frequently encountered in connection with rapid expansion through acquisitions could inhibit our growth and negatively impact our profitability. We may be unable to identify suitable acquisition candidates or to complete the acquisitions of candidates that we identify. Increased competition for acquisition candidates or increased asking prices by acquisition candidates may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in the returns required by our acquisition criteria. Acquisitions also may become more difficult or less attractive in the future as we acquire more of the most attractive dealers. In addition, we may encounter difficulties in integrating the operations of acquired dealers with our own operations or managing acquired dealers profitably without substantial costs, delays, or other operational or financial problems. 29 Table of Contents We may issue common or preferred stock and incur substantial indebtedness in making future acquisitions. The size, timing, and integration of any future acquisitions may cause substantial fluctuations in operating results from quarter to quarter. Consequently, operating results for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year. These fluctuations could adversely affect the market price of our common stock. Our ability to continue to grow through the acquisition of additional dealers will depend upon various factors, including the following: • • • • • • the availability of suitable acquisition candidates at attractive purchase prices; the ability to compete effectively for available acquisition opportunities; the availability of borrowed funds or common stock with a sufficient market price to complete the acquisitions; the ability to obtain any requisite manufacturer or governmental approvals; the ability to obtain approval of our lenders under our current credit agreement; and the absence of one or more manufacturers attempting to impose unsatisfactory restrictions on us in connection with their approval of acquisitions. As a part of our acquisition strategy, we frequently engage in discussions with various recreational boat dealers regarding their potential acquisition by us. In connection with these discussions, we and each potential acquisition candidate exchange confidential operational and financial information, conduct due diligence inquiries, and consider the structure, terms, and conditions of the potential acquisition. In certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time, grants us an option to purchase the prospective dealer for a designated price during a specific time period, and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information and converting its accounting system to the system specified 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. We may be required to obtain the consent of Brunswick and various other manufacturers prior to the acquisition of other dealers. In determining whether to approve acquisitions, manufacturers may consider many factors, including our financial condition and ownership structure. Manufacturers also may impose conditions on granting their approvals for acquisitions, including a limitation on the number of their dealers that we may acquire. Our ability to meet manufacturers’ requirements for approving future acquisitions will have a direct bearing on our ability to complete acquisitions and effect our growth strategy. There can be no assurance that a manufacturer will not terminate its dealer agreement, refuse to renew its dealer agreement, refuse to approve future acquisitions, or take other action that could have a material adverse effect on our acquisition program. We and the Sea Ray Division of Brunswick have an agreement extending through August 31, 2017, with automatic annual one-year extensions at each twelve month anniversary of the agreement, provided that our dealer agreements with the Sea Ray Division of Brunswick are still then in effect. The agreement provides a process for the acquisition of additional Sea Ray boat dealers that desire to be acquired by us. Under the agreement, acquisitions of Sea Ray dealers will be mutually agreed upon by us and Sea Ray with reasonable efforts to be made to include a balance of Sea Ray dealers that have been successful and those that have not been. The agreement provides that Sea Ray will not unreasonably withhold its consent to any proposed acquisition of a Sea Ray dealer by us, subject to the conditions set forth in the agreement. Among other things, the agreement requires us to provide Sea Ray with a business plan for each proposed acquisition, including historical financial and five-year projected financial information regarding the acquisition 30 Table of Contents candidate; marketing and advertising plans; service capabilities and managerial and staff personnel; information regarding the ability of the candidate to achieve performance standards within designated periods; and information regarding the success of our previous acquisitions of Sea Ray dealers. The agreement also contemplates Sea Ray reaching a good faith determination whether the acquisition would be in its best interest based on our dedication and focus of resources on the Sea Ray brand and Sea Ray’s consideration of any adverse effects that the approval would have on the resulting territory configuration and adjacent or other dealers sales and the absence of any violation of applicable laws or rights granted by Sea Ray to others. Our growth strategy also entails expanding our product lines and geographic scope by obtaining additional distribution rights from our existing and new manufacturers. We may not be able to secure additional distribution rights or obtain suitable alternative sources of supply if we are unable to obtain such distribution rights. The inability to expand our product lines and geographic scope by obtaining additional distribution rights could have a material adverse effect on the growth and profitability of our business. Our growth strategy may require us to secure significant additional capital, the amount of which will depend upon the size, timing, and structure of future acquisitions and our working capital and general corporate needs. If we finance future acquisitions in whole or in part through the issuance of common stock or securities convertible into or exercisable for common stock, existing stockholders will experience dilution in the voting power of their common stock and earnings per share could be negatively impacted. The extent to which we will be able and willing to use our common stock for acquisitions will depend on the market value of our common stock and the willingness of potential sellers to accept our common stock as full or partial consideration. Our inability to use our common stock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings in order to pursue our acquisition program could materially limit our growth. Any borrowings made to finance future acquisitions or for operations could make us more vulnerable to a downturn in our operating results, a downturn in economic conditions, or increases in interest rates on borrowings that are subject to interest rate fluctuations. If our cash flow from operations is insufficient to meet our debt service requirements, we could be required to sell additional equity securities, refinance our obligations, or dispose of assets in order to meet our debt service requirements. In addition, our credit arrangements contain financial covenants and other restrictions with which we must comply, including limitations on the incurrence of additional indebtedness. Adequate financing may not be available if and when we need it or may not be available on terms acceptable to us. The failure to obtain sufficient financing on favorable terms and conditions could have a material adverse effect on our growth prospects and our business, financial condition, and results of operations. Our internal growth and operating strategies of opening new locations and offering new products involve risk. In addition to pursuing growth by acquiring boat dealers, we intend to continue to pursue a strategy of growth through opening new retail locations and offering new products in our existing and new territories. Accomplishing these goals for expansion will depend upon a number of factors, including the following: • • • • • • our ability to identify new markets in which we can obtain distribution rights to sell our existing or additional product lines; our ability to lease or construct suitable facilities at a reasonable cost in existing or new markets; our ability to hire, train, and retain qualified personnel; the timely and effective integration of new retail locations into existing operations; our ability to achieve adequate market penetration at favorable operating margins without the acquisition of existing dealers; and our financial resources. Our dealer agreements with Brunswick require Brunswick’s consent to open, close, or change retail locations that sell Sea Ray or Boston Whaler products as applicable, and other dealer agreements generally contain similar provisions. We may not be able to open and operate new retail locations or introduce new product lines on a timely or profitable basis. Moreover, the costs associated with opening new retail locations or introducing new product lines may adversely affect our profitability. 31 Table of Contents As a result of these growth strategies, we expect to continue to expend significant time and effort in opening and acquiring new retail locations and introducing new products. Our systems, procedures, controls, and financial resources may not be adequate to support expanding operations. The inability to manage our growth effectively could have a material adverse effect on our business, financial condition, and results of operations. Our planned growth also will impose significant added responsibilities on members of senior management and require us to identify, recruit, and integrate additional senior level managers. We may not be able to identify, hire, or train suitable additions to management. Our business, as well as the entire recreational boating industry, is highly seasonal, with seasonality varying in different geographic markets. During the three-year period ended September 30, 2014, the average revenue for the quarterly periods ended December 31, March 31, June 30, and September 30 represented approximately 18%, 25%, 31%, and 26%, respectively, of our average annual revenue. 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 if we acquire dealers that operate in colder regions of the United States. Weather and environmental conditions may adversely impact our business. Weather and environmental conditions may adversely impact our operating results. For example, drought conditions, reduced rainfall levels, excessive rain and environmental conditions, such as the BP oil spill in the Gulf of Mexico, may force boating areas to close or render boating dangerous or inconvenient, thereby curtailing customer demand for our products. While we traditionally maintain a full range of insurance coverage for any such events, there can be no assurance that such insurance coverage is adequate to cover losses that we sustain as a result of such disasters. In addition, unseasonably cool weather and prolonged winter conditions may lead to shorter selling seasons in certain locations. Many of our dealerships sell boats to customers for use on reservoirs, thereby subjecting our business to the continued viability of these reservoirs for boating use. Although our geographic diversity and any future geographic expansion should reduce the overall impact on us of adverse weather and environmental conditions in any one market area, weather and environmental conditions will continue to represent potential material adverse risks to us and our future operating performance. In addition, hurricanes and other storms could result in the disruption of our operations or damage to our boat inventories and facilities as has been the case when Florida and other markets have been affected by hurricanes. While we traditionally maintain property and casualty insurance coverage for damage caused by hurricanes and other storms, there can be no assurance that such insurance coverage is adequate to cover losses that we may sustain as a result of hurricanes and other storms such as damage from Hurricane Sandy. We maintain insurance for property damage and business interruption, subject to deductibles. We face intense competition. We operate in a highly competitive environment. In addition to facing competition generally from non-boating recreation businesses seeking to attract discretionary spending dollars, the recreational boat industry itself is highly fragmented and involves intense competition for customers, product distribution rights, and suitable retail locations, particularly on or near waterways. Competition increases during periods of stagnant industry growth. During the most recent recession, we have also faced competition from banks liquidating repossessed boats. We compete primarily with single-location boat dealers and, with respect to sales of marine parts, accessories, and equipment, with national specialty marine parts and accessories stores, catalog retailers, sporting goods stores, and mass merchants. Competition among boat dealers is based on the quality of available products, the price and value of the 32 Table of Contents products, and attention to customer service. There is significant competition both within markets we currently serve and in new markets that we may enter. We compete in each of our markets with retailers of brands of boats and engines we do not sell in that market. In addition, several of our competitors, especially those selling marine equipment and accessories, are large national or regional chains that have substantial financial, marketing, and other resources. Private sales of used boats represent an additional source of competition. Due to various matters, including environmental concerns, permitting and zoning requirements, and competition for waterfront real estate, some markets in the United States have experienced an increased waiting list for marina and storage availability. In general, the markets in which we currently operate are not experiencing any unusual difficulties. However, marine retail activity could be adversely effected in markets that do not have sufficient marine and storage availability to satisfy demand. We depend on income from financing, insurance, and extended service contracts. A portion of our income results from referral fees derived from the placement or marketing of various finance and insurance, or F&I, products, consisting of customer financing, insurance products, and extended service contracts, the most significant component of which is the participation and other fees resulting from our sale of customer financing contracts. The availability of financing for our boat purchasers and the level of participation and other fees we receive in connection with such financing depend on the particular agreement between us and the lender and the current rate environment. Lenders may impose terms in their boat financing arrangements with us that may be unfavorable to us or our customers, resulting in reduced demand for our customer financing programs and lower participation and other fees. Laws or regulations may be enacted nationally or locally which could result in fees from lenders being eliminated or reduced, materially impacting our operating results. Customer financing became more difficult to secure during fiscal 2008, which continued in each subsequent fiscal year through fiscal 2011. Changes, including the lengthening of manufacturer warranties, may reduce our ability to offer and sell extended service contracts which may have a material adverse impact on our ability to sell F&I products. The Dodd-Frank Act established a new consumer financial protection agency with broad regulatory powers. Although boat dealers are generally excluded, the Dodd-Frank Act could lead to additional, indirect regulation of boat dealers through its regulation of other financial institutions which provide such financing to our customers. The reduction of profit margins on sales of F&I products or the lack of demand for or the unavailability of these products could have a material adverse effect on our operating margins. We depend on key personnel. Our success depends, in large part, upon the continuing efforts and abilities of our executive officers. Although we have employment agreements with certain of our executive officers, we cannot assure that these or other executive personnel will remain with us. Expanding our operations may require us to add additional executive personnel in the future. As a result of our decentralized operating strategy, we also rely on the management teams of our dealerships. In addition, we likely will depend on the senior management of any significant businesses we acquire in the future. The loss of the services of one or more of these key employees before we are able to attract and retain qualified replacement personnel could adversely affect our business. The products we sell or service may expose us to potential liability for personal injury or property damage claims relating to the use of those products. Manufacturers of the products we sell generally maintain product liability insurance. We also maintain third-party product liability insurance that we believe to be adequate. We may experience claims that are not covered by or that are in excess of our insurance coverage. The institution of any significant claims against us could subject us to damages, result in higher insurance costs, and harm our business reputation with potential customers. 33 Table of Contents Environmental and other regulatory issues may impact our operations. Our operations are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, ordinances, and regulations. The failure to satisfy those and other regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations. In addition, failure to comply with environmental, health or safety requirements, U.S. trade sanctions, the U.S. Foreign Corrupt Practices Act and other applicable laws or regulations could result in the assessment of damages, the imposition of penalties, changes to our processes, or a cessation of our operations, as well as damage to our image and reputation, all of which could have a material adverse effect on our business. Various federal, state, and local regulatory agencies, including the Occupational Safety and Health Administration, or OSHA, the United States Environmental Protection Agency, or EPA, and similar federal and local agencies, have jurisdiction over the operation of our dealerships, repair facilities, and other operations, with respect to matters such as consumer protection, workers’ safety, and laws regarding protection of the environment, including air, water, and soil. The EPA promulgated emissions regulations for outboard marine engines that impose stricter emissions standards for two-cycle, gasoline outboard marine engines. The majority of the outboard marine engines we sell are manufactured by Mercury Marine. Mercury Marine’s product line of low-emission engines, including the OptiMax, Verado, and other four-stroke outboards, have achieved the EPA’s mandated 2006 emission levels. Any increased costs of producing engines resulting from EPA standards, which could be passed on to us, or the inability of our manufacturers to comply with EPA requirements, could have a material adverse effect on our business. Certain of our facilities own and operate underground storage tanks, or USTs, for the storage of various petroleum products. USTs are generally subject to federal, state, and local laws and regulations that require testing and upgrading of USTs and remediation of contaminated soils and groundwater resulting from leaking USTs. In addition, we may be subject to civil liability to third parties for remediation costs or other damages if leakage from our owned or operated USTs migrates onto the property of others. Our business involves the use, handling, storage, and contracting for recycling or disposal of hazardous or toxic substances or wastes, including environmentally sensitive materials, such as motor oil, waste motor oil and filters, transmission fluid, antifreeze, freon, waste paint and lacquer thinner, batteries, solvents, lubricants, degreasing agents, gasoline, and diesel fuels. Accordingly, we are subject to regulation by federal, state, and local authorities establishing investigation and health and environmental quality standards, and liability related thereto, and providing penalties for violations of those standards. We also are subject to laws, ordinances, and regulations governing investigation and remediation of contamination at facilities we operate or to which we send hazardous or toxic substances or wastes for treatment, recycling, or disposal. In particular, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA or “Superfund,” imposes joint, strict, and several liability on: • • • owners or operators of facilities at, from, or to which a release of hazardous substances has occurred; parties that generated hazardous substances that were released at such facilities; and parties that transported or arranged for the transportation of hazardous substances to such facilities. A majority of states have adopted Superfund statutes comparable to and, in some cases, more stringent than CERCLA. If we were to be found to be a responsible party under CERCLA or a similar state statute, we could be held liable for all investigative and remedial costs associated with addressing such contamination. In addition, claims alleging personal injury or property damage may be brought against us as a result of alleged exposure to hazardous substances resulting from our operations. In addition, certain of our retail locations are located on waterways that are subject to federal or state laws regulating navigable waters (including oil pollution prevention), fish and wildlife, and other matters. 34 Table of Contents Soil and groundwater contamination has been known to exist at certain properties owned or leased by us. We have also been required and may in the future be required to remove aboveground and underground storage tanks containing hazardous substances or wastes. As to certain of our properties, specific releases of petroleum have been or are in the process of being remediated in accordance with state and federal guidelines. We are monitoring the soil and groundwater as required by applicable state and federal guidelines. We also may have additional storage tank liability insurance and Superfund coverage where applicable. Environmental laws and regulations are complex and subject to frequent change. Compliance with amended, new, or more stringent laws or regulations, more strict interpretations of existing laws, or the future discovery of environmental conditions may require additional expenditures by us, and such expenditures may be material. Three of the properties we own were historically used as gasoline service stations. Remedial action with respect to prior historical site activities on these properties has been completed in accordance with federal and state law. Also, one of our properties is within the boundaries of a Superfund site, although it has not been identified as a contributor to the contamination in the area. Additionally, certain states have required or are considering requiring a license in order to operate a recreational boat. These regulations could discourage potential buyers, thereby limiting future sales and adversely affecting our business, financial condition, and results of operations. The market price of our common stock could be subject to wide fluctuations as a result of many factors. Factors that could affect the trading price of our common stock include the following: • • • • • • • • • • • • • variations in our operating results; the thin trading volume and relatively small public float of our common stock; our ability to continue to secure adequate levels of financing; variations in same-store sales; general economic, political, and market conditions; changes in earnings estimates published by analysts; the level and success of our acquisition program and new store openings; the success of dealership integration; relationships with manufacturers; seasonality and weather conditions; governmental policies and regulations; the performance of the recreational boat industry in general; and factors relating to suppliers and competitors. In addition, market demand for small-capitalization stocks, and price and volume fluctuations in the stock market unrelated to our performance could result in significant fluctuations in the market price of our common stock. The performance of our common stock could adversely affect our ability to raise equity in the public markets and adversely affect our acquisition program. 35 Table of Contents The issuance of additional capital stock in the future, including shares that we may issue pursuant to stock-based grants, including stock option grants, and future acquisitions, may result in dilution in the net tangible book value per share of our common stock. Our board of directors has the legal power and authority to determine the terms of an offering of shares of our capital stock, or securities convertible into or exchangeable for these shares, to the extent of our shares of authorized and unissued capital stock. The issuance of additional common stock in the future, including shares that we may issue pursuant to stock-based grants, including stock option grants, and future acquisitions, may result in dilution in the net tangible book value per share of our common stock. A substantial number of shares are eligible for future sale. As of September 30, 2014, there were 24,211,907 shares of our common stock outstanding. Substantially all of these shares are freely tradable without restriction or further registration under the securities laws, unless held by an “affiliate” of our company, as that term is defined in Rule 144 under the securities laws. Shares held by affiliates of our company, which generally include our directors, officers, and certain principal stockholders, are subject to the resale limitations of Rule 144 described below. Outstanding shares of common stock issued in connection with the acquisition of any acquired dealers are available for resale beginning six months after the respective dates of the acquisitions, subject to compliance with the provisions of Rule 144 under the securities laws. Through September 30, 2014, we have issued options to purchase approximately 5,090,292 shares of common stock and 558,999 restricted stock awards under our incentive stock plans, and we issued 647,115 shares of common stock under our employee stock purchase plan. We have filed a registration statement under the securities laws to register the common stock to be issued under these plans. As a result, shares issued under these plans will be freely tradable without restriction unless acquired by affiliates of our company, who will be subject to the volume and other limitations of Rule 144. We may issue additional shares of common stock or preferred stock under the securities laws as part of any acquisition we may complete in the future. If issued pursuant to an effective registration statement, these shares generally will be freely tradable after their issuance by persons not affiliated with us or the acquired companies. We do not pay cash dividends. We have never paid cash dividends on our common stock and we have no current intention to do so for the foreseeable future. Certain provisions of our restated certificate of incorporation and bylaws and Delaware law may make a change in the control of our company more difficult to complete, even if a change in control were in the stockholders’ interest or might result in a premium over the market price for the shares held by the stockholders. Our certificate of incorporation and bylaws divide our board of directors into three classes of directors elected for staggered three-year terms. The certificate of incorporation also provides that the board of directors may authorize the issuance of one or more series of preferred stock from time to time and may determine the rights, preferences, privileges, and restrictions and fix the number of shares of any such series of preferred stock, without any vote or action by our stockholders. The board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The certificate of incorporation also allows our board of directors to fix the number of directors and to fill vacancies on the board of directors. We also are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an “interested stockholder,” unless the business combination is approved in a prescribed manner. Certain of our dealer agreements could also make it difficult for a third party to attempt to acquire a significant ownership position in our company. 36 Table of Contents Our sales of yachts produced by the Azimut-Benetti Group in Italy and motor and sailing yachts produced by Sino Eagle in China expose us to international political, economic, and other risks. Our sales of yachts produced by the Azimut-Benetti Group in Italy and yachts for our yacht charter fleet produced by Sino Eagle in China expose us to international political, economic, and other risks. Protectionist trade legislation in the United States, Italy, or China, such as a change in current tariff structures, export or import compliance laws, or other trade policies could adversely affect our ability to import yachts from these foreign suppliers under economically favorable terms and conditions. Our foreign purchase of yachts create a number of logistical and communications challenges. The economic, political, and other risks we face resulting from these foreign purchases include the following: • • • • • • • • • • • • • compliance with U.S. and local laws and regulatory requirements as well as changes in those laws and requirements; transportation delays or interruptions and other effects of less developed infrastructures; limitations on imports and exports; foreign exchange rate fluctuations; imposition of restrictions on currency conversion or the transfer of funds; tariffs and duties and other trade barrier restrictions; maintenance of quality standards; unexpected changes in regulatory requirements; differing labor regulations; potentially adverse tax consequences; possible employee turnover or labor unrest; the burdens and costs of compliance with a variety of foreign laws; and political or economic instability. Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and data. Increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cyber-related attacks pose a risk to the security of our and our customers’, suppliers’ and third-party service providers’ products, systems and networks and the confidentiality, availability and integrity of our data. While we attempt to mitigate these risks by employing a number of measures, including employee training, systems, monitoring and testing, and maintenance of protective systems and contingency plans, we remain potentially vulnerable to additional known or unknown threats. We may also have access to sensitive, confidential or personal data or information that is subject to privacy, security laws, and regulations. Despite our efforts to protect sensitive, confidential or personal data or information, we may be vulnerable to security breaches, theft, misplaced or lost data, programming errors, employee errors and/or malfeasance that could potentially lead to the compromising of sensitive, confidential or personal data or information, improper use of our systems, unauthorized access, use, disclosure, modification or destruction of information, and operational disruptions. In addition, a cyber-related attack could result in other negative consequences, including damage to our reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action. Item 1B. Unresolved Staff Comments Not applicable. 37 Table of Contents Item 2. Properties We lease our corporate offices in Clearwater, Florida. We also lease 32 of our retail locations under leases, many of which contain multi- year renewal options and some of which grant us a first right of refusal to purchase the property at fair value. In most cases, we pay a fixed rent at negotiated rates. In substantially all of the leased locations, we are responsible for taxes, utilities, insurance, and routine repairs and maintenance. We own the property associated with 28 other retail locations we operate and one joint venture as noted below. Additionally, we own four retail locations that are currently closed as noted below. A store is considered one or more retail locations that are adjacent or operate as one entity. The following table reflects the status, approximate size, and facilities of the various retail locations we operate as of the date of this report. Location Type Square Footage(1) Facilities at Property Since(2) Waterfront Operated Company owned 4,000 Retail and service 1998 Company owned 34,000 Retail and service 1992 — — Third-party lease 700 Retail only 2011 San Diego Bay Location Alabama Gulf Shores Arizona Tempe California San Diego Connecticut Norwalk Westbrook Florida Cape Haze(4) Clearwater Cocoa Dania Daytona Beach Fort Lauderdale Fort Myers Jacksonville Key Largo Miami Miami Naples Third-party lease Third-party lease Company owned Company owned Company owned Company owned Third-party lease Third-party lease Third-party lease Company owned Third-party lease Company owned Company owned Company owned North Palm Beach Company owned Orlando Panama City Pensacola Pompano Beach Third-party lease Third-party lease Third-party lease Company owned Pompano Beach Company owned Sarasota Third-party lease St. Petersburg(3) Stuart Joint venture Company owned 7,000 Retail and service 4,200 Retail and service 1994 1998 Norwalk Harbor Westbrook Harbor 18,000 Retail, 8 wet slips 42,000 Retail and service; 20 wet slips 15,000 Retail and service 32,000 Repair and service; 16 wet slips 16,000 Retail and service 2,400 Retail only 5,000 Retail, service, and storage 15,000 Retail and service 8,900 7,200 Retail and service; 6 wet slips Retail and service; 15 wet slips 19,600 5,000 Service only; 11 wet slips Retail and service; 14 wet slips Retail and service; 8 wet slips 22,800 18,389 Retail and service 10,500 Retail only; 8 wet slips 24,300 Retail and service 5,400 23,000 Retail and service; 16 wet slips Retail and service; 24 wet slips Retail, service, and storage; 15 wet slips 15,000 Yacht service, 20 wet slips Retail and service; 66 wet slips 29,100 26,500 38 — 1973 Intracoastal Waterway Tampa Bay 1968 1991 — Port Everglades 2007 1977 1983 2004 2002 — Intracoastal Waterway — — Card Sound 1980 Little River 2005 1997 Little River Naples Bay — Intracoastal Waterway 1984 2011 1974 1990 — Saint Andrews Bay — Intracoastal Waterway 2005 Intracoastal Waterway 1972 Sarasota Bay 2006 2002 Boca Ciega Bay Intracoastal Waterway Table of Contents Location Tampa(4) Venice Location Type Company owned Company owned Georgia Buford (Atlanta) Cumming (Atlanta) Company owned Third-party lease Maryland Baltimore Joppa Kent Island White Marsh(4) Minnesota Bayport Excelsior Rogers Missouri Branson Lake Ozark Laurie Osage Beach Springfield(4) New Jersey Brant Beach Third-party lease Company owned Third-party lease Company owned Third-party lease Third-party lease Company owned Third-party lease Company owned Company owned Company owned Company owned Third-party lease Brick Company owned Lake Hopatcong Third-party lease Ship Bottom Somers Point Third-party lease Third-party lease Square Footage(1) Facilities at Property Since(2) 13,100 Retail and service 62,000 Retail, service, and storage; 90 wet slips — 1972 Operated Waterfront — Intracoastal Waterway 13,500 Retail and service 13,000 Retail and service; 50 wet slips 2001 1981 — Lake Lanier 7,600 28,400 Retail and service; 17 wet slips Retail, service, and storage; 294 wet slips 2005 Baltimore Inner Harbor 1966 Gunpowder River 8,300 Retail only 19,800 Retail and service 2013 — Kent Narrows — 450 Retail only; 10 wet slips 2,500 Retail only; 14 wet slips 70,000 Retail, service, and storage 1996 2013 1991 St Croix River Lake Minnetonka — 1,500 Retail only; 6 wet slips 60,300 Retail, service, and storage; 300 wet slips 2000 1987 Table Rock Lake Lake of the Ozarks 700 Retail and service 2,000 Retail and service 12,200 Retail and service — — — — — — 3,800 20,000 4,600 Retail, service, and storage; 36 wet slips Retail, service, and storage; 225 wet slips Retail and service; 80 wet slips 19,300 Retail and service 31,000 Retail, service, and storage; 33 wet slips 1965 1977 1998 Barnegat Bay Manasquan River Lake Hopatcong 1972 1987 — Little Egg Harbor Bay New York Copiague Huntington Third-party lease Third-party lease 15,000 Retail only 1,200 1993 1995 Lindenhurst (Marina) Third-party lease Retail and service 14,600 Retail, marina, service, and storage; 370 wet slips 1968 Third-party lease 1,200 Retail only; 75 wet slips 1996 — Huntington Harbor and Long Island Sound Neguntatogue Creek to Great South Bay Hudson River Manhattan North Carolina Southport Wrightsville Beach Ohio Port Clinton Third-party lease Third-party lease Company owned 1,600 Retail only 34,500 Retail, service, and storage 2008 1996 Cape Fear River Masonboro Inlet 80,000 Retail, service and storage; 8 wet slips 1997 Lake Erie 39 Table of Contents Location Oklahoma Afton Rhode Island Newport Warwick Tennessee Chattanooga Texas Lewisville (Dallas) Seabrook British Virgin Islands Tortola Location Type Third-party lease Square Footage(1) 3,500 Operated Facilities at Property Since(2) Waterfront Retail and service; 23 wet slips 2003 Grand Lake Third-party lease Third-party lease 700 Retail only 4,400 Retail and service 2011 1998 Newport Harbor Greenwich Bay Third-party lease 3,000 Retail only; 12 wet slips 2005 Tennessee River Company owned Company owned 22,000 Retail and service 32,000 Retail and service; 30 wet slips 2002 2002 — Clear Lake Third-party lease 1,050 Vacation Charters; 12 wet slips 2011 Maya Cove (1) Square footage is approximate and does not include outside sales space or dock or marina facilities. (2) Operated since date is the date the facility was opened by us or opened prior to its acquisition by us. (3) (4) Owned location that is currently closed. Joint venture entered into with Brunswick to acquire marina and service facility. Item 3. Legal Proceedings We are party to various legal actions arising in the ordinary course of business. While it is not feasible to determine the actual outcome of these actions as of September 30, 2014, we do not believe that these matters will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. On January 26, 2012, certain former shareholders of Surfside - 3 Marina, Inc., a company we acquired in March 2006, filed a lawsuit in the United States District Court for the Eastern District of New York, naming the Company and certain of our directors and officers as defendants. The lawsuit alleged, in twelve counts, a failure to timely lift stock transfer restrictions on stock acquired by the plaintiffs in the acquisition, which allegedly delayed the plaintiffs from selling the shares while the defendants sold shares in the marketplace. The lawsuit claimed damages in excess of $7 million. On December 3, 2012, the District Court issued an order dismissing all of our directors and officers from the action and dismissing eleven of the twelve counts, leaving only the breach of contract claim against the Company to proceed and allowing the plaintiff to replead their alleged common law fraud claim within 30 days. On January 3, 2013, the plaintiffs filed a Second Amended Complaint, re-alleging their breach of contract claim, as well as three fraud claims against the Company and certain directors and officers. The Second Amended Complaint alleges damages in excess of $10 million. On March 7, 2013, the District Court issued an order dismissing the three fraud claims against the Company and our directors and officers. On March 21, 2013, we filed an Answer to the Second Amended Complaint, denying any liability to the plaintiffs. On July 15, 2013, we filed a Motion for Summary Judgment dismissing the plaintiffs’ remaining breach of contract claim against the Company. On August 22, 2013, the District Court granted our Motion for Summary Judgment and entered judgment for the Company. On September 20, 2013, the plaintiffs filed their Notice of Appeal. On August 28, 2014, the United States Court of Appeals for the Second Circuit issued a summary order affirming the district court judgment and issued its mandate on September 18, 2014. Accordingly, because the plaintiffs have failed to file a timely petition for certiorari to the United States Supreme Court, this case is now definitively resolved. Item 4. Mine Safety Disclosures Not applicable. 40 Table of Contents PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information, Holders Our common stock is listed on the New York Stock Exchange under the symbol HZO. The following table sets forth high and low sale prices of the common stock for each calendar quarter indicated as reported on the New York Stock Exchange. 2012 First quarter Second quarter Third quarter Fourth quarter 2013 First quarter Second quarter Third quarter Fourth quarter 2014 First quarter Second quarter Third quarter Fourth quarter (through December 1, 2014) High Low $ 9.28 $ 11.24 $ 10.03 $ 9.05 $ 14.18 $ 13.72 $ 13.04 $ 16.95 $ 17.06 $ 16.90 $ 19.37 $ 19.70 $ 6.34 $ 7.84 $ 6.82 $ 7.17 $ 8.60 $ 10.85 $ 10.17 $ 12.01 $ 13.33 $ 14.47 $ 15.20 $ 15.63 On December 1, 2014, the closing sale price of our common stock was $18.60 per share. On December 1, 2014, there were approximately 100 record holders and approximately 4,700 beneficial owners of our common stock. Dividends We have never declared or paid cash dividends on our common stock. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations, and capital requirements as well as other factors deemed relevant by our board of directors. Purchases of Equity Securities by the Issuer The following table presents information with respect to our repurchases of our common stock during the three months ended September 30, 2014. 41 Table of Contents Period July 1, 2014 to July 31, 2014 August 1, 2014 to August 31, 2014 September 1, 2014 to September 30, 2014 Total Total Number of Shares Purchased (1) — — 31,931 31,931 Average Price Paid per Share $ — — 16.44 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs — — — — Maximum Value of Shares that may be Purchased Under the Plans or Programs — — — (1) All of the shares reported above as purchased are attributable to shared tendered by employees for the payment of applicable withholding taxes. 42 Table of Contents Performance Graph The following line graph compares cumulative total stockholder returns for the five years ended September 30, 2014 for (i) our common stock, (ii) the Russell 2000 Index, and (iii) the Nasdaq Retail Trade Index. The graph assumes an investment of $100 on September 30, 2009. The calculations of cumulative stockholder return on the Russell 2000 Index and the Nasdaq Retail Trade Index include reinvestment of dividends. The calculation of cumulative stockholder return on our common stock does not include reinvestment of dividends because we did not pay any dividends during the measurement period. The historical performance shown is not necessarily indicative of future performance. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among MarineMax, Inc., the Russell 2000 Index, and the NASDAQ Retail Trade Index * $100 invested on 9/30/09 in stock or index, including reinvestment of dividends. Fiscal year ending September 30. Copyright© 2014 Russell Investment Group. All rights reserved. The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or Exchange Act, or otherwise subject to the liability of that section. The performance graph above will not be deemed incorporated by reference into any filing of our company under the Exchange Act or the Securities Act of 1933, as amended. 43 Table of Contents Item 6. Selected Financial Data The following table contains certain financial and operating data and is qualified by the more detailed consolidated financial statements and notes thereto included elsewhere in this report. The balance sheet and statement of operations data were derived from the consolidated financial statements and notes thereto that have been audited by Ernst & Young LLP and KPMG LLP, respectively, for the applicable years when each served as our independent registered certified public accounting firm. The financial data shown below should be read in conjunction with the consolidated financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report. Statement of Operations Data: Revenue Cost of sales Gross profit Selling, general, and administrative expenses (Loss) income from operations Interest expense, net (Loss) income before income tax benefit (provision) Income tax benefit (provision) Net (loss) income Net (loss) income per share: Diluted Weighted average number of shares: Diluted Other Data (as of year-end): Number of retail locations (1) 2010 450,340 339,533 110,807 123,972 (13,165 ) 3,926 (17,091 ) 19,588 2,497 0.11 $ $ $ Fiscal Year Ended September 30, 2012 (Amounts in thousands except share, per share, and retail location data) 2013 2011 $ $ $ 480,894 361,400 119,494 127,896 (8,402 ) 3,488 (11,890 ) 367 (11,523 ) (0.52 ) $ $ $ 524,456 391,173 133,283 127,913 5,370 4,447 923 176 1,099 0.05 $ $ $ 584,497 433,644 150,853 132,505 18,348 4,218 14,130 894 15,024 0.63 $ $ $ 2014 624,692 462,872 161,820 146,433 15,387 4,024 11,363 (91 ) 11,272 0.46 22,597,953 22,375,271 22,335,918 24,003,728 24,655,262 56 54 53 54 54 Sales per store (2) (4) $ 8,779 $ 9,913 $ 10,646 $ 12,757 $ 12,658 Same-store sales growth (3) (4) (17 )% 8 % 11 % 11 % 6 % 2010 2011 September 30, 2012 2013 2014 Balance Sheet Data: Working capital Total assets Goodwill Long-term debt (including current portion) (5) Total stockholders’ equity $ 102,951 $ 95,536 $ 101,745 $ 116,439 $ 126,126 336,760 363,129 365,121 381,902 402,681 — — 802 — — — — — 202,030 195,000 200,944 221,812 239,295 802 452 Includes only those retail locations open at period end. Includes only those stores open for the entire preceding 12-month period. (1) (2) (3) New and acquired stores are included in the comparable base at the end of the store’s thirteenth month of operations. (4) A store is one or more retail locations that are adjacent or operate as one entity. Sales per store and same-store sales growth is intended only as supplemental information and is not a substitute for revenue or net income presented in accordance with generally accepted accounting principles. (5) Amount excludes our short-term borrowings for working capital and inventory financing. 44 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following should be read in conjunction with Part I, including the matters set forth in the “Risk Factors” section of this report, and our Consolidated Financial Statements and notes thereto included elsewhere in this report. Overview We are the largest recreational boat retailer in the United States with fiscal 2014 revenue in excess of $620 million. Through our current 54 retail locations in 17 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 service contracts; provide boat repair and maintenance services; offer yacht and boat brokerage sales; and, where available, offer slip and storage accommodations. We recently implemented programs to increase sales of boats, boating parts, and accessories, as well as the offer of finance and insurance, or F&I, products at various offsite locations; and the charter of power and sailing yachts in the British Virgin Islands. None of these recently implemented programs have had a material effect on our consolidated financial statements. 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 acquired 24 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. We completed a relatively small acquisition in each of the fiscal years ended September 30, 2012, 2013, and 2014. 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 approximately 49%, 51%, and 52% of our revenue during fiscal 2012, 2013, and 2014, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, and inclement weather such as Hurricane Sandy, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico, also could adversely affect, and in certain instances have adversely affected, 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. As a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. 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 may adversely affect our business, financial condition, and results of operations. 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 and depressed economic conditions had a substantial negative effect on our business in each subsequent fiscal year. These conditions have caused us to substantially reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. Acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies when more normal economic conditions return. However, we cannot predict the length or severity of these unfavorable economic or financial conditions or the extent to which they will continue to 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. 45 Table of Contents Although economic conditions have adversely affected our operating results, we have capitalized on our core strengths to substantially outperform the industry, resulting in market share gains. Our ability to capture such market share supports the alignment of our retailing strategies with the desires of consumers. We believe the steps we have taken to address weak market conditions 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 economic 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 experiences 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 the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract or when service is completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. 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 recognize marketing fees earned on credit, life, accident, disability, gap, 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 terminations and defaults, we maintain a chargeback allowance that was not material to our financial statements taken as a whole as of September 30, 2014. 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. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our estimate of future chargebacks which would result in a material effect on our operating results. Vendor Consideration Received We account for consideration received from our vendors in accordance with FASB Accounting Standards Codification 605-50, “Revenue Recognition - Customer Payments and Incentives” (“ASC 605-50”). ASC 605-50 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 ASC 605-50, amounts received by us under our co-op assistance programs from our manufacturers are netted against related advertising expenses. Our consideration received from our vendors contains uncertainties because the calculation requires 46 Table of Contents management to make assumptions and to apply judgment regarding a number of factors, including our ability to collect amounts due from vendors and the ability to meet certain criteria stipulated by our vendors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our vendor considerations which would result in a material effect on our operating results. Inventories Inventory costs consist of the amount paid to acquire 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 and used boat, motor, and trailer inventories 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 an average cost 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 a lower of cost or market valuation allowance. Our lower of cost or market valuation allowance contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding the amount at which the inventory will ultimately be sold which considers forecasted market trends, model changes, and new product introductions. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our lower of cost or market valuation allowance which would result in a material effect on our operating results. As of September 30, 2013 and September 30, 2014, our lower of cost or market valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $2.2 million, respectively. 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. Goodwill We account for goodwill in accordance with FASB Accounting Standards Codification 350, “Intangibles - Goodwill and Other” (“ASC 350”), which provides that the excess of cost over net assets of businesses acquired is recorded as goodwill. The acquisitions of Bassett Marine, LLC and Parker Boat Company resulted in goodwill of $802,000. In accordance with ASC 350, we review goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the fourth fiscal quarter. If the carrying amount of goodwill exceeds its fair value we would recognize an impairment loss in accordance with ASC 350. As of September 30, 2014, and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. As a result, we were not required to perform the two-step goodwill impairment test. The qualitative assessment requires us to make judgments and assumptions regarding macroeconomic and industry conditions, our financial performance, and other factors. We do not believe there is a reasonable likelihood that there will be a change in the judgments and assumptions used in our qualitative assessment which would result in a material effect on our operating results. Impairment of Long-Lived Assets FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), 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. Our impairment loss calculations contain uncertainties because they require us to make assumptions and to apply judgment in order to estimate expected future cash flows. Any impairment recognized in accordance with ASC 360- 10-40 is permanent and may not be restored. Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of September 30, 2014. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions used to test for recoverability which would result in a material effect on our operating results. 47 Table of Contents Stock-Based Compensation We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”). In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our Employee Stock Purchase Plan. 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. For restricted stock units with market conditions, we utilize a Monte Carlo simulation embedded in a lattice model to determine the fair value. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Our valuation models and generally accepted valuation techniques require us to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the volatility of our stock price, expected dividend yield, employee turnover rates and employee stock option exercise behaviors. We do not believe there is a reasonable likelihood that there will be a change in the future estimates or assumptions we use to calculate our stock-based compensation which would result in a material effect on our operating results. Income Taxes We account for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740, 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 bases. 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. Pursuant to ASC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. ASC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. As of September 30, 2014, we have no available taxable income in prior carryback years, reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. Although as of September 30, 2014, we were no longer in a three year cumulative loss position for financial reporting purposes in our significant jurisdictions, we believe there is sufficient negative evidence concerning our projected future taxable income and, therefore, the realization of our deferred tax assets. Our future taxable income is inherently difficult to project and subject to uncertainty due to many factors including the impact of general economic conditions and the cyclical nature of our operations which historically has resulted in losses in the first half of our fiscal year. Additionally, historically it has been difficult to project our industry’s trends and therefore our results. Based on our analysis of the available evidence we determined that our deferred tax assets needed a full valuation allowance as of September 30, 2013 and September 30, 2014. We will continue to evaluate the need for a valuation allowance. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. Under ASC 740, the impact of uncertain tax positions taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained As such, we are required to make subjective assumptions and judgments regarding our effective tax rate and our income tax exposure. Our effective income tax rate is affected by changes in tax law in the jurisdictions in which we currently operate, tax jurisdictions of new retail locations, our earnings, and the results of tax audits. We believe that the judgments and estimates discussed herein are reasonable. For a more comprehensive list of our accounting policies, including those which involve varying degrees of judgment, see Note 2 — “Significant Accounting Policies” of Notes to Consolidated Financial Statements. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-9), a converged standard on revenue recognition. The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the 48 Table of Contents consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. ASU 2014-9 is effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Early adoption is not permitted. We currently do not believe the adoption of this standard will have a material impact on our consolidated financial statements Results of Operations The following table sets forth certain financial data as a percentage of revenue for the periods indicated: Revenue Cost of sales Gross profit Selling, general, and administrative expenses Income from operations Interest expense Income before income taxes Income tax benefit (provision) Net income 2012 Fiscal Year Ended September 30, 2013 (Amounts in thousands) 2014 $ 524,456 100.0 % $ 584,497 100.0 % $ 624,692 462,872 391,173 74.6 % 161,820 133,283 25.4 % 146,433 127,913 24.4 % 15,387 5,370 1.0 % 4,024 4,447 0.9 % 11,363 923 0.2 % (91 ) 176 0.0 % $ 1,099 0.2 % $ 15,024 2.6 % $ 11,272 433,644 74.2 % 150,853 25.8 % 132,505 22.7 % 18,348 3.1 % 4,218 0.7 % 14,130 2.4 % 894 0.2 % 100.0 % 74.1 % 25.9 % 23.4 % 2.5 % 0.6 % 1.9 % 0.0 % 1.9 % Fiscal Year Ended September 30, 2014 Compared with Fiscal Year Ended September 30, 2013 Revenue. Revenue increased $40.2 million, or 6.9%, to $624.7 million for the fiscal year ended September 30, 2014 from $584.5 million for the fiscal year ended September 30, 2013. Of this increase, $37.7 million was attributable to a 6% increase in comparable-store sales. The increase in our comparable-store sales was due to incremental increases in new boat sales and incremental increases in brokerage sales, parts and accessories, storage services, and charter rentals. Improving industry conditions resulting from improved economic conditions contributed to our comparable-store sales growth. Gross Profit. Gross profit increased $11.0 million, or 7.3%, to $161.8 million for the fiscal year ended September 30, 2014 from $150.9 million for the fiscal year ended September 30, 2013. Gross profit as a percentage of revenue increased to 25.9% for the fiscal year ended September 30, 2014 from 25.8% for the fiscal year ended September 30, 2013. The increase in gross profit was primarily attributable to the increase in comparable-store sales and incrementally increased margins on new and used boat sales due to improving industry inventory and industry-wide conditions. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $13.9 million, or 10.5%, to $146.4 for the fiscal year ended September 30, 2014 from $132.5 million for the fiscal year ended September 30, 2013. The fiscal year ended September 30, 2013 and 2014 included a recovery recognized of approximately $11.7 million and $555,000, net of taxes and other expenses, from the Deepwater Horizon Settlement Program for damages suffered as a result of the Deepwater Horizon Oil Spill. The fiscal year ended September 30, 2014 include a gain of approximately $1.0 million, net of store closing costs, for the sale of our Walker, Minnesota retail location. Excluding these items and making both years comparable, selling, general, and administrative expenses increased $3.8 million, or 2.6%, to $148.0 million and as a percentage of revenue decreased to 23.7% for the fiscal year ended September 30, 2014 from 24.7% for the fiscal year ended September 30, 2013. The overall increase in selling, general, and administrative expenses was primarily attributable to increased commissions resulting from increased boat sales. Interest Expense. Interest expense decreased $194,000, or 4.6%, to $4.0 million for the fiscal year ended September 30, 2014 from $4.2 million for the fiscal year ended September 30, 2013. Interest expense as a percentage of revenue decreased to 0.6% for the fiscal year ended September 30, 2014 from 0.7% for the fiscal year ended September 30, 2013. The decrease was primarily a result of lower interest rates under our credit facility. Income Taxes . We had income tax expense of $91,000 for the fiscal year ended September 30, 2014 compared with an income tax benefit of $894,000 for the fiscal year ended September 30, 2013. In fiscal 2013, the tax benefit was 49 Table of Contents primarily attributable to a favorable tax settlement with a state in which we operate. In fiscal 2014, the income tax expense is primarily related to Federal alternative minimum tax and state tax expenses. In fiscal 2014 and 2013, the income tax expenses, excluding the favorable tax settlement in 2013, resulted in a low tax rate due to the utilization of the net operating loss carryforwards for tax purposes which had a full valuation allowance. We will continue to evaluate the need for a valuation allowance. If the full valuation allowance is reversed we will start recording a tax provision. Fiscal Year Ended September 30, 2013 Compared with Fiscal Year Ended September 30, 2012 Revenue. Revenue increased $60.0 million, or 11.5%, to $584.5 million for the fiscal year ended September 30, 2013 from $524.5 million for the fiscal year ended September 30, 2012. Of this increase, $57.7 million was attributable to an 11% increase in comparable-store sales. The increase in our comparable-store sales was due to incremental increases in new boat sales, partly attributable to new brands we have expanded with, and incremental increases in used boat sales, brokerage sales, F&I products, service, parts and accessories. Improving industry conditions resulting from improved economic conditions contributed to our comparable-store sales growth. Gross Profit. Gross profit increased $17.6 million, or 13.2%, to $150.9 million for the fiscal year ended September 30, 2013 from $133.3 million for the fiscal year ended September 30, 2012. Gross profit as a percentage of revenue increased to 25.8% for the fiscal year ended September 30, 2013 from 25.4% for the fiscal year ended September 30, 2012. The increase in gross profit was primarily attributable to the increase in comparable-store sales and incrementally increased margins on new and used boat sales due to improving industry inventory and industry-wide conditions. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $4.6 million, or 3.6%, to $132.5 for the fiscal year ended September 30, 2013 from $127.9 million for the fiscal year ended September 30, 2012. The fiscal year ended September 30, 2013 included a recovery recognized of approximately $11.7 million, net of taxes and other expenses, from the Deepwater Horizon Settlement Program for damages suffered as a result of the Deepwater Horizon Oil Spill. Excluding this item and making both years comparable, selling, general, and administrative expenses increased $16.4 million, or 12.7%, to $144.3 million and as a percentage of revenue increased to 24.7% for the fiscal year ended September 30, 2013 from 24.4% for the fiscal year ended September 30, 2012. The overall increase in selling, general, and administrative expenses was primarily attributable to increased commissions resulting from increased boat sales and restructured commission plans; increased insurance costs related to property, casualty, liability and healthcare; increased payroll associated with improved performance and modest personnel growth; and increased promotional spending in an effort to counteract the inclement weather conditions. Interest Expense. Interest expense decreased $229,000, or 5.2%, to $4.2 million for the fiscal year ended September 30, 2013 from $4.4 million for the fiscal year ended September 30, 2012. Interest expense as a percentage of revenue decreased to 0.7% for the fiscal year ended September 30, 2013 from 0.9% for the fiscal year ended September 30, 2012. The decrease was primarily a result of lower interest rates under our credit facility. Income Tax Benefit . We had an income tax benefit of $894,000 for the fiscal year ended September 30, 2013 compared with an income tax benefit of $176,000 for the fiscal year ended September 30, 2012. Our effective income tax rate was low for both the fiscal year ended September 30, 2013 and 2012. In fiscal 2013, the tax benefit was primarily attributable to a favorable tax settlement with a state in which we operate. In fiscal 2012, we generated a loss for tax purposes and we could not record the benefit for the net operating loss carryforward due to the required valuation allowance. For fiscal 2013 and 2012, the income tax expense ordinarily associated with our pre-tax income was offset by a net operating loss carryforward, which had a full valuation allowance. Quarterly Data and Seasonality 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 typically 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 if we acquire dealers that operate in colder regions of the United States or close retail locations in warm climates. 50 Table of Contents Our business is also subject to weather patterns, which may adversely affect our results of operations. For example, prolonged winter conditions, drought conditions (or merely reduced rainfall levels) or excessive rain, may limit access to area boating locations or render boating dangerous or inconvenient, thereby curtailing customer demand for our products and services. 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 affected 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. 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. Acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies when more robust economic conditions return. However, we cannot predict the length or severity of these unfavorable economic or financial conditions. 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 business levels 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 our ability to utilize the credit facility to fund operations. As of September 30, 2014, we were in compliance with all covenants under our credit facility. 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. As 100% owner of each of our dealerships, we determine the amounts of such distributions, and currently, no agreements exist that restrict this flow of funds from our dealerships. For the fiscal years ended September 30, 2014, 2013, and 2012, cash provided by operating activities approximated $10.8 million, $7.8 million, and $8.7 million, respectively. For the fiscal year ended September 30, 2014, cash provided by operating activities was primarily related to net income and a decrease in accounts receivable partially offset by an increase in inventory driven by the expansion of current and new brands and decreases in accrued expenses. For the fiscal year ended September 30, 2013, cash provided by operating activities was primarily related to net income partially offset by an increase in inventory driven by the timing of orders and increased trade-ins on new boat sales and decreases in accrued expenses and long-term liabilities. For the fiscal year ended September 30, 2012, cash provided by operating activities was primarily related to a decrease of inventory driven by inventory order reductions and partially offset by an increase in accounts receivable as a result of our strong September close and a decrease in accrued expenses and long-term liabilities. For the fiscal years ended September 30, 2014, 2013, and 2012, cash used in investing activities was approximately $12.8 million, $12.6 million, and $7.6 million, respectively. For the fiscal year ended September 30, 2014, cash used in investing activities was primarily used to improve existing retail facilities and purchase a note receivable in conjunction with the planned acquisition of a retail facility, partially offset by proceeds received from the sale of our Walker, Minnesota retail facility and insurance proceeds received as a result of Hurricane Sandy. For the fiscal year ended September 30, 2013, cash used in investing activities was primarily used to purchase inventory associated with a business acquisition and to purchase property and equipment associated with improving existing retail facilities and making capital improvements as a result of Hurricane Sandy and partially offset by insurance proceeds received as a result of Hurricane Sandy. For the fiscal year ended September 30, 2012, cash used in investing activities was primarily used to purchase property and equipment associated with improving existing retail facilities as well as inventory purchases associated with a business acquisition. For the fiscal years ended September 30, 2014, 2013 and 2012, cash provided by financing activities was approximately $6.1 million, $4.9 million, and $3.2 million, respectively. For the fiscal year ended September 30, 2014, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased 51 Table of Contents inventory levels and proceeds from the issuance of common stock from our stock based compensation plans. For the fiscal year ended September 30, 2013, cash provided by financing activities was primarily attributable to net short-term borrowings as a result of increased inventory levels and proceeds from the issuance of common stock from our stock based compensation plans. For the fiscal year ended September 30, 2012, cash provided by financing activities was primarily attributable to net short-term borrowings associated with capital expenditures and proceeds from the issuance of common stock from our stock based compensation plans. In August 2014, we entered into an amendment to our Inventory Financing Agreement (the “Amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with GE Commercial Distribution Finance Corporation. The August 2014 amendment extended the maturity date of the Credit Facility to August 2017, subject to additional extension for two one-year periods, with lender approval. The August 2014 amendment, among other things, modified the amount of borrowing availability and maturity date of the Credit Facility. The Amended Credit Facility provides a floor plan financing commitment of up to $235.0 million, an increase from the previous limit of $205.0 million, subject to borrowing base availability resulting from the amount and aging of our inventory. The Amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the Amended Credit Facility is 345 basis points above the one-month London Inter-Bank Offering Rate (“LIBOR”). There is an unused line fee of ten basis points on the unused portion of the Amended Credit Facility. Advances under the Amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral for the Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Amended Credit Facility. As of September 30, 2013 and 2014, our indebtedness associated with financing our inventory and working capital needs totaled approximately $122.5 million and $124.4 million, respectively. As of September 30, 2013 and 2014, the interest rate on the outstanding short- term borrowings was approximately 3.7% and 3.6%. As of September 30, 2014, our additional available borrowings under our Amended Credit Facility were approximately $38.2 million based upon the outstanding borrowing base availability. The aging of our inventory limits our borrowing capacity as defined curtailments reduce the allowable advance rate as our inventory ages. Except as specified in this “Management’s Discussion and Analysis of Financial Condition, and Results of Operations” and in our 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. Contractual Commitments and Commercial Commitments The following table sets forth a summary of our material contractual obligations and commercial commitments as of September 30, 2014: Year Ending September 30, 2015 2016 2017 2018 2019 Thereafter Total Short-Term Borrowings (1) Long-Term Liabilities (2) Leases (3) Total Operating $ $ 124,424 — — — — — 124,424 $ (Amounts in thousands) — 550 — — — — 550 $ 5,286 4,469 3,648 3,035 2,363 13,405 $ 32,206 $ $ 129,710 5,019 3,648 3,035 2,363 13,405 $ 157,180 (1) Estimates of future interest payments for short-term borrowings have been excluded in the tabular presentation. Amounts due are contingent upon the outstanding balances and the variable interest rates. As of September 30, 2014, the interest rate on our short-term borrowings was approximately 3.6%. 52 Table of Contents (2) The amounts included in long-term liabilities consist primarily of gross unrecognized tax benefits and our estimated liability for claims on certain workers’ compensation insurance policies. While we estimate the amount to be paid in excess of 12 months, the ultimate timing of the payments is subject to certain variability. Accordingly, we have classified all amounts as due in the following year for the purposes of this table. (3) Amounts for operating lease commitments do not include certain operating expenses such as maintenance, insurance, and real estate taxes. These amounts are not a material component of operating expenses. Off-Balance Sheet Arrangements We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to affect our financial condition, liquidity, or capital resources. We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support; we do not engage in hedging, or research and development services; and we do not have other relationships that expose us to liability that is not reflected in the financial statements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk As of September 30, 2014, 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 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 $1.2 million in annual pre-tax interest expense. This estimated increase is based upon the outstanding balance of our short-term debt as of September 30, 2014 and assumes no mitigating changes by us to reduce the outstanding balances and no additional interest assistance that could be received from vendors due to the interest rate increase. Products purchased from European-based and Chinese-based manufacturers are subject to fluctuations in the 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 other currencies compared with the U.S. dollar may impact the price points at which we can profitably sell such foreign 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 such foreign 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 European-based and Chinese-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 8. Financial Statements and Supplementary Data Reference is made to the financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this report, which financial statements, notes, and report are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 53 Table of Contents Item 9A. 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 at the reasonable assurance level. Changes in Internal Controls During the quarter ended September 30, 2014, 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 Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and internal controls over financial reporting 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. Although our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives 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 Chief Executive Officer and Chief Financial Officer, 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. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2014 as required by the Securities Exchange Act of 1934 Rule 13a-15(c). In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework (1992). Based on its evaluation, our management concluded that its internal control over financial reporting was effective as of September 30, 2014. Our internal control over financial reporting as of September 30, 2014 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears herein. 54 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders MarineMax, Inc.: We have audited MarineMax, Inc.’s internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). MarineMax, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, MarineMax, Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of MarineMax, Inc. and subsidiaries as of September 30, 2013 and 2014, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and our report dated December 11, 2014 expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP Tampa, Florida December 11, 2014 Certified Public Accountants 55 Table of Contents Item 9B. Other Information Appointment of Director On December 9, 2014, the Company’s Board of Directors appointed Clint Moore to the Board of Directors. In addition, the Board of Directors appointed Mr. Moore to the Audit Committee and the Compensation Committee. The compensation of Mr. Moore will be consistent with that provided to all non-employee directors, as described in our most recent proxy statement filed with the Securities and Exchange Commission on January 10, 2014. There is no arrangement or understanding pursuant to which Mr. Moore was selected as a director. There are no related party transactions between the Company and Mr. Moore that are reportable under Item 404(a) of Regulation S-K. Sales and Service Agreement with Boston Whaler On December 5, 2014, we and Boston Whaler, Inc. have entered into three-year Sales and Service Agreements relating to Boston Whaler products effective September 1, 2014 and extending through August 31, 2017 with automatic annual one-year extensions at each twelve-month anniversary of the agreement, provided that we are not in breach of a material term of the agreement, following written notice and expiration of applicable cure periods without cure (certain termination provisions are summarized below). The agreements appoint certain of our operating subsidiaries as a dealer for the retail sale, display, and servicing of all Boston Whaler products, parts, and accessories currently or in the future sold by Boston Whaler. The agreement designates a designated geographical territory and dealer location for the dealer, which is exclusive to the dealer. The agreement also specifies retail locations, which the dealer may not close, change, or add to without the prior written consent of Boston Whaler, provided that Boston Whaler may not unreasonably withhold its consent. Boston Whaler reserves the right to modify the territory or appoint other dealers to sell, display, and service product from dealer locations within the territory at any time if we close a dealer location without prior written notice to Boston Whaler and prior written approval by Boston Whaler, which will not be unreasonably withheld. Additionally, Boston Whaler shall have the right to appoint other dealers in the territory in the event that a dealer location fails to meet performance standards while carrying competitive product, following written notice and a period of 60 days to cure or 6 months for matters for which a cure cannot be completed in 60 days. The agreement also restricts the dealer from selling, advertising (other than in recognized and established marine publications), soliciting for sale, or offering for resale any Boston Whaler products outside its territory except as otherwise provided by Boston Whalers’ advertising policy or other applicable policy as long as similar restrictions also apply to all domestic Boston Whaler dealers selling comparable Boston Whaler products. In addition, the agreement provides for the lowest product prices charged by Boston Whaler from time to time to other domestic Boston Whaler dealers, subject to the dealer meeting all the requirements and conditions of Boston Whalers’ applicable programs and the right of Boston Whaler in good faith to charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and non-ordinary business circumstances, or for limited duration promotional programs. Among other things, the dealer agreement requires each dealer to achieve performance standards including inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to Boston Whalers’ current buying program, unit retail sales, customer satisfaction and marketing support. The sales performance will be in accordance with fair and reasonable standards and sales levels established by Boston Whaler in collaboration with the dealer based on factors such as population, sales potential, market share percentage of Boston Whaler products sold in the territory compared with competitive products sold in the territory, product availability, local economic conditions, competition, past sales history, historical product mix and stocking practices, existing product inventory, number of retail locations, and other special circumstances that may affect the sale of Boston Whaler products or the dealer, in each case established in a manner similar to those applied to domestic Boston Whaler dealers selling comparable products. The dealer is also required to maintain at each retail location, or at another acceptable location, a service department that is properly staffed and equipped to service Boston Whaler products promptly and professionally and to maintain parts and supplies to service Boston Whaler products properly on a timely basis, to provide or arrange for warranty and service work for Boston Whaler products. 56 Table of Contents Boston Whaler has agreed to indemnify us against any losses to third parties resulting from Boston Whaler’s negligent acts or omissions involving the design or manufacture of any of its products or any breach by it of the agreement. We have agreed to indemnify Boston Whaler against any losses to third parties resulting from our negligent acts or omissions involving the dealer’s application, use, or repair of Boston Whaler products, statements or representation not specifically authorized by Boston Whaler, the installation of any after-market components or any other modification or alteration of Boston Whaler products, and any breach by us of the agreement. The agreement may be terminated: • • • • • • • by Boston Whaler, upon 60 days’ prior written notice, if we do not have an ability to purchase products via flooring or self-financing or fail to meet our financial obligations as they become due to Boston Whaler or to our lenders; as to any dealer location if we are failing to meet performance standards and begin selling, displaying or advertising products that are competitive with the products being sold under the agreement (other than products of another Brunswick brand or new products currently carried), if we do not cure our failure within 90 days after written notice, or if we are meeting the performance standards and then starts failing to meet performance standards after beginning selling, displaying or advertising products that are competitive with products sold under the agreement (other than products of another Brunswick brand or new products currently carried) and do not cure our failure within 6 months after written notice or for dealer’s locations in New York, in the event such dealer location fails to meet performance standards and does not cure such failure within 6 months after written notice; by either party upon prior written notice to the other given within 60 days after the 4th anniversary of the agreement, with termination effective at the end of the 5th year, or which the agreement will renew for a 2 year term beginning on the 5th anniversary; following the 5th anniversary of the agreement, upon 12 months’ notice in the event of a material breach or default of any of the material obligations, performance standards, covenants, representations, warranties or duties imposed in the agreement or in Boston Whaler’s policies or programs applicable to domestic Boston Whaler dealers which breach is not cured during the notice period and through the parties working in good faith to resolve any issue; by Boston Whaler or us upon 60 days’ written notice if the other makes a fraudulent misrepresentation that is material to the agreement or in the event of the insolvency, bankruptcy, or receivership of the other; by Boston Whaler in the event of the assignment of the agreement by the dealer without the prior written consent of Boston Whaler; by Boston Whaler upon at least 60 days’ prior written notice in the event of the commission by dealer of an act of fraud upon Boston Whaler or the commission by us or one of our officers of a felony or act of fraud which is material detrimental to Boston Whaler’s reputation or business or which materially impairs our ability to perform our duties under the agreement or we fail to pay any lender financing products under the agreement after the sale of products by us. • upon the mutual consent of Boston Whaler and us. Either party may elect to not extend the term at the expiration of each applicable 12 month period in the event of a material breach or default by the other of any of the material obligations, performance standards, covenants, representations, warranties, or duties imposed by the agreement or the Boston Whaler manual that is not remedied or cured following notice thereof. In the event of a remedy or cure, the additional 12 month period shall be added to the term. The description of the Sales and Service Agreement with Boston Whaler is qualified in its entirety by reference to the complete terms and conditions of the agreements, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending December 31, 2014. 57 Table of Contents Item 10. Directors, Executive Officers and Corporate Governance PART III The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Corporate Governance”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2015 Annual Meeting of Stockholders. The information required by this Item relating to our executive officers is included in “Business — Executive Officers.” We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, and other senior accounting personnel. The “Code of Ethics for the CEO and Senior Financial Officers” is located on our website at www.MarineMax.com in the Investor Relations section under Corporate Governance. We intend to satisfy the disclosure requirement under Item 5.05(c) of Form 8-K regarding any amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above. Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Executive Compensation”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2015 Annual Meeting of Stockholders. Item 12 . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Security Ownership of Principal Stockholders, Directors, and Officers”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2015 Annual Meeting of Stockholders. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Certain Relationships and Related Transactions”) to be filed pursuant to Regulation 14A of the Exchange Act for our 2015 Annual Meeting of Stockholders. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to the definitive Proxy Statement (particularly under the caption “Ratification of Appointment of Independent Auditor”) to be filled pursuant to Regulation 14A of the Exchange Act for our 2015 Annual Meeting of Stockholders. Item 15. Exhibits, Financial Statement Schedules (a) Financial Statements and Financial Statement Schedules PART IV (1) Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this report. 58 Table of Contents (2) No financial statement schedules are included because such schedules are not applicable, are not required, or because required information is included in the consolidated financial statements or notes thereto. (b) Exhibits Exhibit Number 3.1 3.1(a) 3.2 3.3 4.1 10.3(h)* 10.3(i)* 10.4* 10.5* 10.20 10.20(a) 10.20(b) 10.20(c)† 10.20(d)† 10.20(e)† 10.21(f)† 10.21(g)† 10.21(h)† 10.21(i)† 10.21(j)† 10.21(k)† 10.21(l) 10.21(m) † 10.21(n) † Restated Certificate of Incorporation of the Registrant, including all amendments to date (1) Certificate of Amendment of Restricted Certificate of Incorporation of the Registrant (2) Exhibit Third Amended and Restated Bylaws of the Registrant (3) Certificate of Designation of Series A Junior Participating Preferred Stock (1) Specimen of Common Stock Certificate (1) Employment Agreement between Registrant and William H. McGill Jr. (4) Employment Agreement between Registrant and Michael H. McLamb (4) 1998 Incentive Stock Plan, as amended through February 27, 2001 (5) 1998 Employee Stock Purchase Plan (6) Agreement Relating to Acquisitions between Registrant and Brunswick Corporation, dated December 7, 2005 (7) Amendment, executed October 17, 2014, to Agreement Relating to Acquisitions between Registrant and Brunswick Corporation, dated December 7, 2005. Sea Ray Sales and Service Agreement (7) Sea Ray Sales and Service Agreement, executed October 17, 2014, by and between MarineMax East, Inc. and Sea Ray, a Division of Brunswick Corporation. Sea Ray Sales and Service Agreement, executed October 17, 2014, by and between MarineMax Northeast, LLC, and Sea Ray, a Division of Brunswick Corporation. Sea Ray Sales and Service Agreement, executed October 17, 2014, by and between MarineMax, Inc. and Sea Ray, a Division of Brunswick Corporation. Inventory Financing Agreement executed on June 24, 2010, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (8) Program Terms Letter executed on June 24, 2010, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (8) Amendment Number One to Inventory Financing Agreement, executed on December 17, 2010, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (9) Amendment Number One to Program Terms Letter, executed on December 17, 2010, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (9) Amendment Number Two to Inventory Financing Agreement, executed on June 1, 2011, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (10) Amendment Number Two to Program Terms Letter, executed on June 1, 2011, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (10) Amendment Number Three to Inventory Financing Agreement, executed on July 27, 2012, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (11) Amended and Restated Inventory Financing Agreement, executed on June 28, 2013, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (12) Amended and Restated Program Terms Letter, executed on June 28, 2013, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. (12) 59 Table of Contents Exhibit Number 10.21(o) † 10.21(p) † 10.22* 10.23* 10.24* 10.25 10.26† 10.26(a) 10.26(b) 10.27† 10.28 Amendment Number Four to the Amended and Restated Inventory Financing Agreement, executed on August 29, 2014, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. Second Amended and Restated Program Terms Letter, executed on August 29, 2014, among MarineMax, Inc. and its subsidiaries, as Borrowers, and GE Commercial Distribution Finance Corporation, as Lender. Exhibit MarineMax, Inc. 2007 Incentive Compensation Plan (13) Form Stock Option Agreement for 2007 Incentive Compensation Plan (13) Form Restricted Stock Unit Award Agreement for 2007 Incentive Compensation Plan (13) Director Fee Share Purchase Program (14) Floor Plan Loan Agreement executed on October 7, 2010, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and CGI Finance, Inc., as Lender. (15) Notice of Extension to Floor Plan Loan Agreement executed on September 15, 2011, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and CGI Finance, Inc., as Lender. (16) Notice of Extension to Floor Plan Loan Agreement executed on July 5, 2012, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and CGI Finance, Inc., as Lender. (11) Floor Plan Credit Loan Note executed on October 7, 2010, by MarineMax, Inc. and its subsidiaries, as Borrowers, payable to CGI Finance, Inc., as Lender. (15) Pledge and Security Agreement executed on October 7, 2010, by and among MarineMax, Inc. and its subsidiaries, as Borrowers, and CGI Finance, Inc., as Lender. (15) 10.29(a)* MarineMax, Inc. 2011 Stock-Based Compensation Plan (17) 10.29(b)* Form Stock Option Agreement for 2011 Stock-Based Compensation Plan (17) 10.29(c)* Form Restricted Stock Unit Award Agreement for 2011 Stock-Based Compensation Plan (17) 10.30* 10.31* 10.32† 10.32(a) 10.32(b) 10.32(c) 10.33† 10.33(a) 10.33(b) 10.33(c) 10.33(d) 10.34* 16.1 Consulting Agreement, dated June 7, 2012, by and between the Company and John B. Furman (18) Severance Policy for Key Executives (19) Dealership Agreement dated September 1, 2008 by and between MarineMax Northeast, LLC and Azimut Benetti S.P.A. (20) First Amendment dated June 22, 2010 to Dealership Agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and Azimut Benetti S.P.A. (20) Second Amendment dated February 29, 2012 to Dealership Agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and Azimut Benetti S.P.A. (20) Third Amendment dated July 21, 2012 to Dealership Agreement dated September 1, 2008, by and between MarineMax Northeast, LLC and Azimut Benetti S.P.A. (20) Dealership Agreement dated September 1, 2008 by and between MarineMax East, LLC and Azimut Benetti S.P.A. (20) First Amendment dated June 22, 2010 to Dealership Agreement dated September 1, 2008, by and between MarineMax East, Inc. and Azimut Benetti S.P.A. (20) Second Amendment dated February 29, 2012 to Dealership Agreement dated September 1, 2008, by and between MarineMax East, Inc. and Azimut Benetti S.P.A. (20) Third Amendment dated July 21, 2012 to Dealership Agreement dated September 1, 2008, by and between MarineMax East, Inc. and Azimut Benetti S.P.A. (20) Fourth Amendment dated August 21, 2013 to Dealership Agreement dated September 1, 2008, by and between MarineMax East, Inc. and Azimut Benetti S.P.A. (20) Consulting Agreement, dated November 19, 2013, by and between the Company and Kurt M. Frahn (21) Letter from Ernst & Young LLP to the Securities and Exchange Commission, dated March 28, 2013 (22) 60 Table of Contents Exhibit Number 21 23.1 23.2 31.1 31.2 32.1 32.2 List of Subsidiaries Consent of KPMG LLP Consent of Ernst & Young LLP Exhibit 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. 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. Certification pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document † Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Incorporated by reference to Registration Statement on Form 10-K for the year ended September 30, 2001, as filed on December 20, 2001. Incorporated by reference to Registrant’s Form 8-K as filed February 19, 2010. Incorporated by reference to Registrant’s Form 8-K as filed on June 16, 2011. Incorporated by reference to Registrant’s Form 8-K as filed on June 13, 2006. Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2001, as filed on February 14, 2002. Incorporated by reference to Amendment No. 1 to Registration Statement on Form S-1 (Registration 333-47873) as filed on May 4, 1998. Incorporated by reference to Registrant’s Form 8-K as filed on December 9, 2005. Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2010, as filed on August 9, 2010. Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended December 31, 2010, as filed on February 8, 2011. * Management contract or compensatory plan or arrangement. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2011, as filed on August 5, 2011. (11) Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2012, as filed on August 3, 2012. (12) Incorporated by reference to Registrant’s Form 10-Q for the quarterly period ended June 30, 2013, as filed on August 6, 2013. (13) Incorporated by reference to Registrant’s Form 8-K as filed on March 6, 2007. (14) Incorporated by reference to Registrant’s Form S-8 (File No. 333-141657) as filed March 29, 2007. (15) Incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 2010, as filed on December 2, 2010. (16) Incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 2011, as filed on December 8, 2011. (17) Incorporated by reference to Registrant’s Form 8-K as filed on January 25, 2011. (18) Incorporated by reference to Registrant’s Form 8-K as filed on June 11, 2012. (19) Incorporated by reference to Registrant’s Form 8-K as filed on November 27, 2012. (20) Incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 2013, as filed on December 6, 2013. (21) Incorporated by reference to Registrant’s Form 8-K as filed on November 21, 2013. (22) Incorporated by reference to Registrant’s Form 8-K as filed on April 2, 2013. (c) Financial Statements Schedules (1) See Item 15(a) above. 61 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. /s/ William H. McGill Jr. William H. McGill Jr. Chairman of the Board and Chief Executive Officer Date: December 11, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature /s/ William H. McGill Jr. William H. McGill Jr. /s/ Michael H. McLamb Michael H. McLamb /s/ Frances L. Allen Frances L. Allen /s/ Hilliard M. Eure III Hilliard M. Eure III /s/ Charles R. Oglesby Charles R. Oglesby /s/ Joseph A. Watters Joseph A. Watters /s/ Dean S. Woodman Dean S. Woodman Capacity Chairman of the Board, President, and Chief Executive Officer (Principal Executive Officer) Date December 11, 2014 Executive Vice President, Chief Financial Officer, Secretary, and Director (Principal Accounting and Financial Officer) December 11, 2014 Director Director Director Director Director 62 December 11, 2014 December 11, 2014 December 11, 2014 December 11, 2014 December 11, 2014 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Page F-2 F-4 F-5 F-6 F-7 F-8 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders MarineMax, Inc.: We have audited the accompanying consolidated balance sheets of MarineMax, Inc. and subsidiaries as of September 30, 2013 and 2014, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of MarineMax, Inc. and subsidiaries as of September 30, 2013 and 2014, and the results of their operations and their cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), MarineMax Inc. internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated December 11, 2014, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. /s/ KPMG LLP Tampa, Florida December 11, 2014 Certified Public Accountants F-2 Table of Contents Report of Independent Registered Certified Public Accounting Firm The Board of Directors and Stockholders MarineMax, Inc. and Subsidiaries We have audited the accompanying consolidated statements of operations, stockholders’ equity and cash flows of MarineMax, Inc. and subsidiaries for the year ended September 30, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flows of MarineMax, Inc. and subsidiaries for the year ended September 30, 2012, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Tampa, Florida December 7, 2012 F-3 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands except share and per share data) ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Inventories, net Prepaid expenses and other current assets Total current assets Property and equipment, net Other long-term assets, net Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable Customer deposits Accrued expenses Short-term borrowings Total current liabilities Long-term liabilities Total liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY: September 30, September 30, 2013 2014 $ 23,756 19,410 228,041 4,849 276,056 $ 27,839 12,547 244,151 4,415 288,952 100,339 5,507 $ 381,902 101,878 11,851 $ 402,681 $ 7,474 9,342 20,331 122,470 159,617 473 160,090 $ 7,823 10,979 19,600 124,424 162,826 560 163,386 Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued or outstanding as of September 30, 2013 and 2014 Common stock, $.001 par value; 40,000,000 shares authorized, 24,336,495 and 25,002,807 shares issued and 23,545,595 and 24,211,907 shares outstanding as of September 30, 2013 and 2014, respectively Additional paid-in capital Retained earnings Treasury stock, at cost, 790,900 shares held as of September 30, 2013 and 2014 Total stockholders’ equity Total liabilities and stockholders’ equity — — 24 221,729 15,869 (15,810 ) 221,812 $ 381,902 25 227,939 27,141 (15,810 ) 239,295 $ 402,681 See accompanying notes to consolidated financial statements. F-4 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands except share and per share data) Revenue Cost of sales Gross profit Selling, general, and administrative expenses Income from operations Interest expense Income before income taxes Income tax benefit (provision) Net income Basic net income per common share Diluted net income per common share Weighted average number of common shares used in computing net income per common share: Basic Diluted For the Year Ended September 30, 2013 584,497 433,644 150,853 2012 524,456 391,173 133,283 $ 2014 $ 624,692 462,872 161,820 127,913 5,370 132,505 18,348 146,433 15,387 4,447 923 176 1,099 0.05 0.05 $ $ $ 4,218 14,130 894 15,024 0.65 0.63 $ $ $ 4,024 11,363 (91 ) 11,272 0.47 0.46 $ $ $ $ 22,740,986 23,335,918 23,253,992 24,003,728 23,916,238 24,655,262 See accompanying notes to consolidated financial statements. F-5 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Amounts in thousands except share data) Common Stock Additional Paid-in Amount Capital Shares Retained Earnings Total (Accumulated Treasury Stockholders’ Stock Deficit) Equity BALANCE, September 30, 2011 Net income Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of tax withholding Shares issued upon exercise of stock options Stock-based compensation BALANCE, September 30, 2012 Net income Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of tax withholding Shares issued upon exercise of stock options Stock-based compensation BALANCE, September 30, 2013 Net income Shares issued pursuant to employee stock purchase plan Shares issued upon vesting of equity awards, net of tax withholding Shares issued upon exercise of stock options Stock-based compensation BALANCE, September 30, 2014 23,303,100 $ 23 $ 211,041 $ — — — 561 101,982 — (254 ) $ (15,810 ) $ 195,000 1,099 1,099 561 — — — 230,380 45,084 — 1 20,504 — (85 ) 903 3,465 23,701,050 $ 24 $ 215,885 $ — — — 574 81,715 — 32,666 — 504,400 — 16,664 — (157 ) 2,692 2,735 24,336,495 $ 24 $ 221,729 $ — — — 574 55,333 — 512,147 88,729 — 1 10,103 — (541 ) 3,591 2,586 25,002,807 $ 25 $ 227,939 $ — — — (85 ) — 904 — 3,465 — 845 $ (15,810 ) $ 200,944 15,024 574 — — 15,024 — — — — — — — (157 ) 2,692 2,735 15,869 $ (15,810 ) $ 221,812 11,272 11,272 574 — — — — — — (541 ) 3,592 2,586 27,141 $ (15,810 ) $ 239,295 — — — See accompanying notes to consolidated financial statements. F-6 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss (gain) on sale of property and equipment Loss (gain) on insurance settlements Stock-based compensation expense, net (Increase) Decrease in — Accounts receivable, net Inventories, net Prepaid expenses and other assets (Decrease) Increase in — Accounts payable Customer deposits Accrued expenses and long-term liabilities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment Purchase of note receivable Net cash used in acquisition of businesses, primarily inventory Proceeds from insurance settlements Proceeds from sale of property and equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on short-term borrowings Net proceeds from issuance of common stock under incentive compensation and employee purchase plans Net cash provided by financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS: CASH AND CASH EQUIVALENTS, beginning of period CASH AND CASH EQUIVALENTS, end of period Supplemental Disclosures of Cash Flow Information: Cash paid for: Interest Income taxes See accompanying notes to consolidated financial statements. F-7 For the Year Ended September 30, 2014 2013 2012 $ 1,099 $ 15,024 $ 11,272 6,479 225 — 3,465 6,777 136 154 2,735 7,281 (821 ) (235 ) 2,586 (4,657 ) 8,313 (479 ) 319 (8,853 ) (820 ) 6,005 (16,110 ) (307 ) (185 ) (590 ) (4,996 ) 8,674 (2,645 ) 832 (5,848 ) 7,811 612 1,637 (1,111 ) 10,809 (5,732 ) — (4,393 ) — 2,483 (7,642 ) (9,822 ) — (4,638 ) 1,743 113 (12,604 ) (9,194 ) (6,020 ) — 756 1,612 (12,846 ) 1,819 1,823 1,954 1,380 3,199 4,231 19,386 4,166 6,120 4,083 23,756 $ 23,617 $ 23,756 $ 27,839 3,109 4,932 139 23,617 4,322 10 4,380 330 3,932 58 Table of Contents MARINEMAX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. COMPANY BACKGROUND AND BASIS OF PRESENTATION: 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. We recently implemented programs to increase sales of boats, boating parts, and accessories, as well as the offer of finance and insurance, or F&I, products at various offsite locations; and the charter of power and sailing yachts in the British Virgin Islands. None of these recently implemented programs have had a material effect on our consolidated financial statements. As of September 30, 2014, we operated through 54 retail locations in 17 states, consisting of Alabama, Arizona, California, Connecticut, Florida, Georgia, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas. Our MarineMax Vacations operations maintain a facility in Tortola, British Virgin Islands. We are the nation’s largest retailer of Sea Ray, Boston Whaler, and Meridian recreational boats and yachts, all of which are manufactured by Brunswick Corporation (“Brunswick”). Sales of new Brunswick boats accounted for approximately 40% of our revenue in fiscal 2014. Sales of new Sea Ray and Boston Whaler boats, both divisions of Brunswick, accounted for approximately 26% and 10%, respectively, of our revenue in fiscal 2014. Brunswick is the world’s largest manufacturer of marine products and marine engines. We believe we represented approximately 43% of Brunswick’s Sea Ray boat sales, during our fiscal 2014. We have dealership agreements with Sea Ray, Boston Whaler, Meridian, and Mercury Marine, all subsidiaries or divisions of Brunswick. We also have dealer agreements with Italy-based Azimut-Benetti Group’s product line for Azimut Yachts. 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 have multi-year dealer agreements with Brunswick covering Sea Ray products that appoints us as the exclusive dealer of Sea Ray boats in our geographic markets. We are the exclusive dealer for Boston Whaler through multi-year dealer agreements for many of our geographic markets. In addition, we are the exclusive dealer for Azimut Yachts for the entire United States through a multi-year dealer agreement. Sales of new Azimut boats accounted for approximately 14% of our revenue in fiscal 2014. We believe 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, Boston Whaler, Meridian, 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 Sea Ray and Azimut 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 approximately 49%, 51%, and 52% of our revenue during fiscal 2012, 2013, and 2014, respectively, can have a major impact on our operations. Local influences, such as corporate downsizing, military base closings, inclement weather such as Hurricane Sandy, environmental conditions, and specific events, such as the BP oil spill in the Gulf of Mexico, also could adversely affect, and in certain instances have adversely affected, our operations in certain markets. F-8 Table of Contents 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. As a result, an economic downturn could impact us more than certain of our competitors due to our strategic focus on a higher end of our market. 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 may adversely affect our business, financial condition, and results of operations. 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 and depressed economic conditions had a substantial negative effect on our business in each subsequent fiscal year. These conditions have caused us to substantially reduce our acquisition program, delay new store openings, reduce our inventory purchases, engage in inventory reduction efforts, close a number of our retail locations, reduce our headcount, and amend and replace our credit facility. Acquisitions and new store openings remain important strategies to our company, and we plan to accelerate our growth through these strategies when more normal economic conditions return. However, we cannot predict the length or severity of these unfavorable economic or financial conditions or the extent to which they will continue to 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. In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported consolidated financial statements to conform to the consolidated financial statement presentation of the current period. The 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. 2. SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Vendor Consideration Received We account for consideration received from our vendors in accordance with FASB Accounting Standards Codification 605-50, “Revenue Recognition - Customer Payments and Incentives” (“ASC 605-50”). ASC 605-50 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 ASC 605-50, 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 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 and used boat, motor, and trailer inventories 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 an average cost 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 a lower of cost or market valuation allowance. As of September 30, 2013 and 2014, our lower of cost or market valuation allowance for new and used boat, motor, and trailer inventories was $1.8 million and $2.2 million, respectively. 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. F-9 Table of Contents Property and Equipment We record property and equipment at cost, net of accumulated depreciation, and depreciate property and equipment over their estimated useful lives using the straight-line method. We capitalize and amortize leasehold improvements over the lesser of the life of the lease or the estimated useful life of the asset. Useful lives for purposes of computing depreciation are as follows: Buildings and improvements Machinery and equipment Furniture and fixtures Vehicles Years 5-40 3-10 5-10 3-5 We remove the cost of property and equipment sold or retired and the related accumulated depreciation from the accounts at the time of disposition and include any resulting gain or loss in the consolidated statements of operations. We charge maintenance, repairs, and minor replacements to operations as incurred, and we capitalize and amortize major replacements and improvements over their useful lives. Goodwill We account for goodwill in accordance with FASB Accounting Standards Codification 350, “Intangibles - Goodwill and Other” (“ASC 350”), which provides that the excess of cost over net assets of businesses acquired is recorded as goodwill. The acquisitions of Bassett Marine, LLC and Parker Boat Company resulted in goodwill of $802,000. In accordance with ASC 350, we review goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment test is performed during the fourth fiscal quarter. If the carrying amount of goodwill exceeds its fair value we would recognize an impairment loss in accordance with ASC 350. As of September 30, 2014, and based upon our most recent analysis, we determined through our qualitative assessment that it is not “more likely than not” that the fair values of our reporting units are less than their carrying values. As a result, we were not required to perform the two-step goodwill impairment test. Impairment of Long-Lived Assets FASB Accounting Standards Codification 360-10-40, “Property, Plant, and Equipment - Impairment or Disposal of Long-Lived Assets” (“ASC 360-10-40”), 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 ASC 360-10-40 is permanent and may not be restored. Based upon our most recent analysis, we believe no impairment of long-lived assets existed as of September 30, 2014. Customer Deposits Customer deposits primarily include amounts received from customers toward the purchase of boats. We recognize these deposits as revenue at the time of delivery or acceptance by the customers. F-10 Table of Contents Insurance We retain varying levels of risk relating to the insurance policies we maintain, most significantly workers’ compensation insurance and employee medical benefits. We are responsible for the claims and losses incurred under these programs, limited by per occurrence deductibles and paid claims or losses up to pre-determined maximum exposure limits. Our third-party insurance carriers pay any losses above the pre- determined exposure limits. We estimate our liability for incurred but not reported losses using our historical loss experience, our judgment, and industry information. 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 the service is completed. We recognize deferred revenue from service operations and slip and storage services on a straight-line basis over the term of the contract or when service is completed. We recognize commissions earned from a brokerage sale at the time the related brokerage transaction closes. 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 recognize marketing fees earned on credit life, accident, disability, gap, 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. Pursuant to negotiated agreements with financial and insurance institutions, we are charged back for a portion of these fees should the customer terminate or default on the related finance or insurance contract before it is outstanding for a stipulated minimum period of time. We base the chargeback allowance, which was not material to the consolidated financial statements taken as a whole as of September 30, 2014, on our experience with repayments or defaults on the related finance or insurance contracts. 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. We are charged back for a portion of these commissions should the customer terminate or default on the service contract prior to its scheduled maturity. We determine the chargeback allowance, which was not material to the consolidated financial statements taken as a whole as of September 30, 2014, based upon our experience with terminations or defaults on the service contracts. The following table sets forth percentages of our revenue generated by certain products and services, for each of last three fiscal years. New boat sales Used boat sales Maintenance, repair, storage, and charter services Finance and insurance products Parts and accessories Brokerage sales Total revenue 2012 62.7 % 17.8 % 8.3 % 2.8 % 6.0 % 2.4 % 100.0 % 2013 61.9 % 19.4 % 8.0 % 2.8 % 5.5 % 2.4 % 100.0 % 2014 65.2 % 16.8 % 7.8 % 2.6 % 5.1 % 2.5 % 100.0 % Stock-Based Compensation We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”). In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our Employee Stock Purchase Plan. 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. For restricted stock units with market conditions, we utilize a Monte Carlo simulation embedded in a lattice model to determine the fair value. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. F-11 Table of Contents Advertising and Promotional Costs We expense advertising and promotional costs as incurred and include them in selling, general, and administrative expenses in the accompanying consolidated statements of operations. Pursuant to ASC 605-50, we net amounts received by us under our co-op assistance programs from our manufacturers against the related advertising expenses. Total advertising and promotional expenses approximated $9.5 million, $9.8 million, and $9.5 million, net of related co-op assistance of approximately $390,000, $419,000, and $473,000, for the fiscal years ended September 30, 2012, 2013, and 2014, respectively. Income Taxes We account for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740, 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. Concentrations of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable. Concentrations of credit risk with respect to our cash and cash equivalents are limited primarily to amounts held with financial institutions. Concentrations of credit risk arising from our receivables are limited primarily to amounts due from manufacturers and financial institutions. Fair Value of Financial Instruments The carrying amount of our financial instruments approximates fair value resulting from either length to maturity or existence of interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements. Use of Estimates and Assumptions The preparation of 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by us in the accompanying consolidated financial statements relate to valuation allowances, valuation of goodwill and intangible assets, valuation of long-lived assets, and valuation of accruals. Actual results could differ materially from those estimates. 3. NEW ACCOUNTING PRONOUNCEMENTS: In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-9), a converged standard on revenue recognition. The new pronouncement requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. ASU 2014-9 is effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Early adoption is not permitted. We currently do not believe the adoption of this standard will have a material impact on our consolidated financial statements. F-12 Table of Contents 4. ACCOUNTS RECEIVABLE: Trade receivables consist primarily of receivables from financial institutions, which provide funding for customer boat financing and amounts due from financial institutions earned from arranging financing with our customers. We normally collect these receivables within 30 days of the sale. Trade receivables also include amounts due from customers on the sale of boats, parts, service, and storage. Amounts due from manufacturers represent receivables for various manufacturer programs and parts and service work performed pursuant to the manufacturers’ warranties. The allowance for uncollectible receivables, which was not material to the consolidated financial statements as of September 30, 2013 or 2014, was based on our consideration of customer payment practices, past transaction history with customers, and economic conditions. When an account becomes uncollectable, we expense it as a bad debt and we credit payments subsequently received to the bad debt expense account. We review the allowance for uncollectible receivables when an event or other change in circumstances results in a change in the estimate of the ultimate collectability of a specific account. Accounts receivable, net consisted of the following as of September 30, Trade receivables Amounts due from manufacturers Other receivables 5. INVENTORIES: Inventories, net, consisted of the following as of September 30, New boats, motors, and trailers Used boats, motors, and trailers Parts, accessories, and other 6. PROPERTY AND EQUIPMENT: Property and equipment consisted of the following as of September 30, Land Buildings and improvements Machinery and equipment Furniture and fixtures Vehicles Accumulated depreciation and amortization F-13 2013 2014 (Amounts in thousands) $ 14,982 $ 7,175 4,974 398 $ 12,547 4,060 368 $ 19,410 2014 2013 (Amounts in thousands) $ 189,618 $ 200,318 37,191 6,642 $ 244,151 31,701 6,722 $ 228,041 2013 2014 (Amounts in thousands) $ 40,939 81,212 26,334 4,656 4,945 158,086 (57,747 ) $ 100,339 $ 40,970 84,726 23,405 3,787 5,543 158,431 (56,553 ) $ 101,878 Table of Contents Depreciation and amortization expense on property and equipment totaled approximately $6.4 million, $6.8 million, and $7.3 million for the fiscal years ended September 30, 2012, 2013, and 2014, respectively. 7. OTHER LONG-TERM ASSETS: During February 2006, we became party to a joint venture with Brunswick that acquired certain real estate and assets of Great American Marina for an aggregate purchase price of approximately $11.0 million, of which we contributed approximately $4.0 million and Brunswick contributed approximately $7.0 million. The terms of the agreement specify that we operate and maintain the service business and that Brunswick operate and maintain the marina business. Simultaneously with the closing, the acquired entity became Gulfport Marina, LLC (“Gulfport”). We account for our investment in Gulfport in accordance with FASB Accounting Standards Codification 323, “Investment – Equity Method and Joint Venture”. Accordingly, we adjust the carrying amount of our investment in Gulfport to recognize our share of earnings or losses, based on the service business we operate. The carrying amount of our investment is included in other long-term assets on the consolidated balance sheets, and our share of the earnings or losses based on the service business that we operate are included in selling, general and administrative expenses on the consolidated statements of operations. During September 2014, we acquired a note receivable for approximately $6.0 million to facilitate the acquisition of certain real estate assets. The carrying amount of the note receivable is included in other long-term assets on the consolidated balance sheet as of September 30, 2014. 8. SHORT-TERM BORROWINGS: In August 2014, we entered into an amendment to our Inventory Financing Agreement (the “Amended Credit Facility”), originally entered into in June 2010, as subsequently amended, with GE Commercial Distribution Finance Corporation. The August 2014 amendment extended the maturity date of the Credit Facility to August 2017, subject to additional extension for two one-year periods, with lender approval. The August 2014 amendment, among other things, modified the amount of borrowing availability and maturity date of the Credit Facility. The Amended Credit Facility provides a floor plan financing commitment of up to $235.0 million, an increase from the previous limit of $205.0 million, subject to borrowing base availability resulting from the amount and aging of our inventory. The Amended Credit Facility has certain financial covenants as specified in the agreement. The covenants include provisions that our leverage ratio must not exceed 2.75 to 1.0 and that our current ratio must be greater than 1.2 to 1.0. The interest rate for amounts outstanding under the Amended Credit Facility is 345 basis points above the one-month London Inter-Bank Offering Rate (“LIBOR”). There is an unused line fee of ten basis points on the unused portion of the Amended Credit Facility. Advances under the Amended Credit Facility are initiated by the acquisition of eligible new and used inventory or are re-advances against eligible new and used inventory that have been partially paid-off. Advances on new inventory will generally mature 1,080 days from the original invoice date. Advances on used inventory will mature 361 days from the date we acquire the used inventory. Each advance is subject to a curtailment schedule, which requires that we pay down the balance of each advance on a periodic basis starting after six months. The curtailment schedule varies based on the type and value of the inventory. The collateral for the Amended Credit Facility is all of our personal property with certain limited exceptions. None of our real estate has been pledged for collateral for the Amended Credit Facility. As of September 30, 2013 and 2014, our indebtedness associated with financing our inventory and working capital needs totaled approximately $122.5 million and $124.4 million, respectively. As of September 30, 2013 and 2014, the interest rate on the outstanding short- term borrowings was approximately 3.7% and 3.6%. As of September 30, 2014, our additional available borrowings under our Amended Credit Facility were approximately $38.2 million based upon the outstanding borrowing base availability. F-14 Table of Contents As is common in our industry, we receive interest assistance directly from boat manufacturers, including Brunswick. The interest assistance programs vary by manufacturer, but 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 September 30, 2014, we had no long-term debt. However, we rely on our Amended Credit Facility to purchase our inventory of boats. 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 Amended Credit Facility also depends upon the ability of our lenders 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. Unfavorable economic conditions, weak consumer spending, turmoil in the credit markets, and lender difficulties, among other potential reasons, could interfere with our ability to utilize our Amended Credit Facility to fund our operations. Any inability to utilize our Amended Credit Facility could require us to seek other sources of funding to repay amounts outstanding under the credit agreements or replace or supplement our credit agreements, which may not be possible at all or under commercially reasonable terms. Similarly, 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 2009, 2010, and 2011 adversely affected the ability of customers to finance boat purchases, which had a negative effect on our operating results. 9. INCOME TAXES: The components of our benefit (provision) from income taxes consisted of the following for the fiscal years ended September 30, Current benefit (provision): Federal State Total current benefit (provision) Deferred benefit (provision): Federal State Total deferred benefit (provision) Total income tax benefit (provision) 2012 2013 2014 (Amounts in thousands) $ 116 60 $ 176 $ (101 ) 995 $ 894 — — — $ 176 — — — $ 894 $ (46 ) (45 ) $ (91 ) — — — $ (91 ) Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended September 30, Federal tax benefit (provision) State taxes, net of federal effect Stock based compensation Valuation allowance Federal NOL carryback Foreign rate differential Other Effective tax rate 2012 (35.0 )% 16.8 % (7.5 )% 50.2 % 12.6 % (15.4 )% (2.7 )% 19.0 % 2013 (35.0 )% 0.7 % (0.6 )% 45.0 % 0.0 % (2.9 )% (0.9 )% 6.3 % 2014 (35.0 )% (4.4 )% (0.2 )% 42.5 % 0.0 % (3.0 )% (0.7 )% (0.8 )% F-15 Table of Contents Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of these temporary differences representing the components of deferred tax assets (liabilities) as of September 30, Current deferred tax assets: Inventories Accrued expenses Current deferred tax assets Valuation allowance Net current deferred tax assets Long-term deferred tax assets: Depreciation and amortization Stock based compensation Tax loss carryforwards Other Long-term deferred tax assets Valuation allowance Net long-term deferred tax assets 2013 2014 (Amounts in thousands) $ 1,494 1,269 2,763 (2,763 ) $ — $ 8,275 4,216 26,726 364 39,581 (39,581 ) $ — $ 1,712 1,110 2,822 (2,822 ) $ — $ 6,008 3,902 24,418 374 34,702 (34,702 ) $ — Pursuant to ASC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. ASC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. As of September 30, 2014, we have no available taxable income in prior carryback years, reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. Although as of September 30, 2014, we were no longer in a three year cumulative loss position for financial reporting purposes in our significant jurisdictions, we believe there is sufficient negative evidence concerning our projected future taxable income and, therefore, the realization of our deferred tax assets. Our future taxable income is inherently difficult to project and subject to uncertainty due to many factors including the impact of general economic conditions and the cyclical nature of our operations which historically has resulted in losses in the first half of our fiscal year. Additionally, historically it has been difficult to project our industry’s trends and therefore our results. Based on our analysis of the available evidence we determined that our deferred tax assets needed a full valuation allowance as of September 30, 2013 and September 30, 2014. The total valuation allowance as of September 30, 2013 and 2014 was $42.3 million and $37.5 million, respectively. We will continue to evaluate the need for a full valuation allowance. If the full valuation allowance is reversed we will start recording a tax provision. Under ASC 740, the impact of uncertain tax positions taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As of September 30, 2013 and 2014, we had approximately $224,000 and $234,000, respectively, of gross unrecognized tax benefits, of which approximately $154,000 and $154,000, respectively, if recognized, would impact the effective tax rate before considering a change in valuation allowance. F-16 Table of Contents The reconciliation of the total amount recorded for unrecognized tax benefits at the beginning and end of the fiscal years ended September 30, 2013 and 2014 is as follows: Unrecognized tax benefits at the beginning of the year Increases in tax positions for prior years Decreases in tax positions for prior years Unrecognized tax benefits as of September 30, 2013 (Amounts in thousands) 2014 $ $ 1,498 34 (1,308 ) 224 $ 224 10 — $ 234 Consistent with our prior practices, we recognize interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2013 and 2014, interest and penalties represented approximately $100,000 and $110,000, respectively, of the gross unrecognized tax benefits. We are subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire, we are subject to income tax audits in the jurisdictions in which we operate. We are no longer subject to U.S. federal tax examinations for fiscal years prior to 2011, and we are not subject to audits prior to the 2010 fiscal year for the majority of the state jurisdictions. We do not expect a change to the total amount of unrecognized tax benefits in the next 12 months based on examinations by tax authorities, the expiration of statutes of limitations, or potential settlements of outstanding positions. 10. STOCKHOLDERS’ EQUITY: In November 2005, our Board of Directors approved a share repurchase plan allowing our company to repurchase up to 1,000,000 shares of our common stock. Under the plan, we may buy back common stock from time to time in the open market or in privately negotiated blocks, dependent upon various factors, including price and availability of the shares, and general market conditions. Through September 30, 2014, we had purchased an aggregate of 790,900 shares of common stock under the plan for an aggregate purchase price of approximately $15.8 million. 11. STOCK-BASED COMPENSATION: We account for our stock-based compensation plans following the provisions of FASB Accounting Standards Codification 718, “Compensation — Stock Compensation” (“ASC 718”). In accordance with ASC 718, we use the Black-Scholes valuation model for valuing all stock-based compensation and shares purchased under our Employee Stock Purchase Plan. 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. For restricted stock units with market conditions, we utilize a Monte Carlo simulation embedded in a lattice model to determine the fair value. We recognize compensation cost for all awards in operations, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. Cash received from option exercises under all share-based compensation arrangements for the fiscal years ended September 30, 2012, 2013, and 2014 was approximately $1.5 million, $3.3 million, and $4.2 million, respectively. There were no tax benefits realized for tax deductions from option exercises for the fiscal years ended September 30, 2012, 2013, and 2014. We currently expect to satisfy share-based awards with registered shares available to be issued. 12. THE INCENTIVE STOCK PLANS: During February 2013, our stockholders approved a proposal to amend the 2011 Stock-Based Compensation Plan (“2011 Plan”) to increase the 1,200,456 share threshold by 1,000,000 shares to 2,200,456 shares. During January 2011, our stockholders approved a proposal to authorize our 2011 Plan, which replaced our 2007 F-17 Table of Contents Incentive Compensation Plan (“2007 Plan”). Our 2011 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 2011 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. Subsequent to the February 2013 amendment described above, the total number of shares of our common stock that may be subject to awards under the 2011 Plan is equal to 2,000,000 shares, plus (i) any shares available for issuance and not subject to an award under the 2007 Plan, which was 200,456 shares at the time of approval of the 2011 Plan; (ii) the number of shares with respect to which awards granted under the 2011 Plan and the 2007 Plan terminate without the issuance of the shares or where the shares are forfeited or repurchased; (iii) with respect to awards granted under the 2011 Plan and the 2007 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 2011 Plan or the 2007 Plan. The 2011 Plan terminates in January 2021, and awards may be granted at any time during the life of the 2011 Plan. The date on which awards vest are determined by the Board of Directors or the Plan Administrator. The Board of Directors has appointed the Compensation Committee as 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 2011 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, 2013 through September 30, 2014: Balance as of September 30, 2013 Options authorized Options granted Options cancelled/forfeited/expired Restricted stock awards forfeited Options exercised Balance as of September 30, 2014 Exercisable as of September 30, 2014 Shares Available for Grant 1,787,537 — (571,000 ) 134,172 — — 1,350,709 Options Outstanding 2,301,638 $ — 571,000 (134,172 ) — (512,147 ) 2,226,319 $ 1,529,976 $ Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price 10,419 $ 10.13 — $ 15.81 $ 20.15 — $ 7.01 15,980 $ 11.70 13,144 $ 10.92 Weighted Average Remaining Contractual Life 6.5 6.6 5.6 The weighted-average grant date fair value of options granted during the fiscal years ended September 30, 2012, 2013, and 2014 was $4.30, $4.49, and $6.23, respectively. The total intrinsic value of options exercised during the fiscal years ended September 30, 2012, 2013, and 2014 was approximately $1.4 million, $3.3 million, and $4.5 million, respectively. As of September 30, 2013 and 2014, there were approximately $980,000 and $2.2 million, respectively, of unrecognized compensation costs related to non-vested options that are expected to be recognized over a weighted average period of 2.0 years. The total fair value of options vested during the fiscal years ended September 30, 2012, 2013, and 2014 was approximately $3.1 million, $2.5 million, and $1.9 million, respectively. We used the Black-Scholes model to estimate the fair value of options granted. 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. F-18 Table of Contents The following are the weighted-average assumptions used for the fiscal years ended September 30, Dividend yield Risk-free interest rate Volatility Expected life 2012 2013 2014 0.0 % 0.8 % 89.9 % 4.5 years 0.0 % 0.6 % 80.1 % 4.3 years 0.0 % 0.7 % 55.7 % 3.2 years 13. EMPLOYEE STOCK PURCHASE PLAN: During February 2012, our stockholders approved a proposal to amend our 2008 Employee Stock Purchase Plan (“Stock Purchase Plan”) to increase the number of shares available under that plan by 500,000 shares. The Stock Purchase Plan as amended provides for up to 1,000,000 shares of common stock to be available for purchase by our regular employees who have completed at least one year of continuous service. In addition, there were 52,837 shares of common stock available under our 1998 Employee Stock Purchase Plan, which have been made available for issuance under our Stock Purchase Plan. 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 used 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 the fiscal years ended September 30, Dividend yield Risk-free interest rate Volatility Expected life 2012 2013 2014 0.0 % 0.1 % 51.8 % Six months 0.0 % 0.1 % 54.8 % Six months 0.0 % 0.1 % 39.6 % Six months As of September 30, 2014, we had issued 647,115 shares of common stock under our Stock Purchase Plan. 14. RESTRICTED STOCK AWARDS: We have granted non-vested (restricted) stock awards (“restricted stock”) and restricted stock units (“RSUs”) to certain key employees pursuant to the 2011 Plan and 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. Certain restricted stock awards granted in fiscal 2008 required certain levels of performance by us by September 2011 before they were earned: these metrics were not met, and the awards were forfeited. Certain RSUs granted in fiscal 2010, 2011, and 2012 require a minimum level of performance of our stock price compared with an index over designated time periods from the grant date before they are earned, or the awards will be forfeited. The stock underlying the RSUs will be delivered upon vesting. The performance metrics for the RSUs granted in fiscal 2010 were not met by the September 2012 measurement date, and the awards were forfeited. The performance metrics for the RSUs granted in fiscal 2011 and 2012 were met by the September 2013 and 2014 measurement dates, and the awards were earned. F-19 Table of Contents We accounted for the restricted stock awards granted using the measurement and recognition provisions of ASC 718. 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, 2013 through September 30, 2014: Non-vested balance as of September 30, 2013 Changes during the period Awards vested Non-vested balance as of September 30, 2014 Weighted Average Grant Date Fair Value 6.04 $ 5.98 $ 6.10 $ Shares/ Units 64,670 (61,330 ) 3,340 As of September 30, 2014, we had approximately $1,000 of total unrecognized compensation cost related to non-vested restricted stock awards. We expect to recognize that cost over a weighted-average period of 0.1 years. 15. NET INCOME PER SHARE: The following is a reconciliation of the shares used in the denominator for calculating basic and diluted net income per share for the fiscal years ended September 30, Weighted average common shares outstanding used in calculating basic income per share Effect of dilutive options and non-vested restricted stock awards Weighted average common and common equivalent shares used in 2012 2013 2014 22,740,986 594,932 23,253,992 749,736 23,916,238 739,024 calculating diluted income per share 23,335,918 24,003,728 24,655,262 During the fiscal years ended September 30, 2012, 2013, and 2014 there were 1,546,207, 1,728,042, and 1,144,600 weighted average shares of options outstanding, respectively, that were not included in the computation of diluted income 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. 16. COMMITMENTS AND CONTINGENCIES: Lease Commitments We lease certain land, buildings, machinery, equipment, and vehicles related to our dealerships under non-cancelable third-party operating leases. Certain of our leases include options for renewal periods and provisions for escalation. Rental expenses, including month-to-month rentals, were approximately $5.1 million, $5.4 million, and $5.8 million for the fiscal years ended September 30, 2012, 2013, and 2014, respectively. F-20 Table of Contents Future minimum lease payments under non-cancelable operating leases as of September 30, 2014, were as follows: (Amounts in thousands) 2015 2016 2017 2018 2019 Thereafter Total 5,286 4,469 3,648 3,035 2,363 13,405 $ 32,206 Other Commitments and Contingencies We are party to various legal actions arising in the ordinary course of business. We believe that these matters should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. In fiscal 2013 and 2014 we recognized a recovery of approximately $11.7 million and $555,000, net of taxes and other expenses, respectively, from the Deepwater Horizon Settlement Program for damages suffered as a result of the Deepwater Horizon Oil Spill. The recovery was recorded as a reduction in selling, general, and administrative expenses on our consolidated statements of operations. While additional claims are outstanding, we cannot be certain of the amount of any further recovery. During fiscal 2012, 2013, and 2014, we incurred costs associated with store closings and lease terminations of approximately $350,000, $162,000, and $217,000, respectively. These costs primarily related to the future minimum operating lease payments of the closed locations. The store closings were a key component in our effort to better match our fixed costs with the decline in retail business caused by the soft economic conditions. The store closing costs have been included in selling, general, and administrative expenses in the consolidated statements of operations during fiscal 2012, 2013, and 2014. In connection with certain of our workers’ compensation insurance policies, we maintain standby letters of credit for our insurance carriers in the amount of $1.3 million relating primarily to retained risk on our workers compensation claims. We are subject to federal and state environmental regulations, including rules relating to air and water pollution and the storage and disposal of gasoline, oil, other chemicals and waste. We believe that we are in compliance with such regulations. 17. EMPLOYEE 401(k) PROFIT SHARING PLANS: Employees are eligible to participate in our 401(k) Profit Sharing Plan (the “Plan”) following their 90-day introductory period starting either April 1 or October 1, provided that they are 21 years of age. Under the Plan, we match 25% of participants’ contributions, up to a maximum of 5% of each participant’s compensation. We contributed, under the Plan, or pursuant to previous similar plans, approximately $298,000, $440,000, and $463,000 for the fiscal years ended September 30, 2012, 2013, and 2014, respectively. 18. QUARTERLY FINANCIAL DATA (UNAUDITED): The following table sets forth certain unaudited quarterly financial data for each of our last eight quarters. The information has been derived from unaudited financial statements that we believe reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of such quarterly financial information. F-21 Table of Contents Revenue Cost of sales Gross profit Selling, general, and administrative expenses (Loss) income from December 31, 2012 March 31, 2013 September 30, March 31, June 30, 2013 2014 (Amounts in thousands except share and per share data) December 31, 2013 2013 September 30, June 30, 2014 2014 $ 99,051 $ 72,773 26,278 160,008 $ 175,756 $ 128,949 122,358 46,807 37,650 149,682 $ 109,564 40,118 109,592 $ 79,682 29,910 136,615 $ 101,829 34,786 214,401 $ 164,084 121,168 160,195 42,916 54,206 29,443 36,100 33,047 33,915 32,282 35,687 41,652 36,823 operations Interest expense (Loss) income before income tax benefit (provision) Income tax benefit (provision) Net (loss) income Net (loss) income per share: $ (3,165 ) 997 1,550 1,166 13,760 1,193 6,203 862 (2,372 ) 997 (901 ) 1,078 12,554 1,051 6,093 885 (4,162 ) 384 12,567 5,341 (3,369 ) (1,979 ) 11,503 5,208 — (4,162 ) $ (40 ) 344 $ 1,070 13,637 $ (136 ) 5,205 $ — (3,369 ) $ — (1,979 ) $ — 11,503 $ (91 ) 5,117 Diluted $ (0.18 ) $ 0.01 $ 0.56 $ 0.21 $ (0.14 ) $ (0.08 ) $ 0.47 $ 0.21 Weighted average number of shares: Diluted 22,955,715 24,019,409 24,177,020 24,267,879 23,715,945 23,845,302 24,719,369 24,813,777 F-22 Exhibit 10.20(a) AMENDMENT TO THE AGREEMENT RELATING TO ACQUISTIONS THIS AMENDMENT TO THE AGREEMENT RELATING TO ACQUISITIONS (this “Amendment”) is made and entered into effective as of the 1st day of September, 2014, by and between the Sea Ray Division of Brunswick Corporation (the “Company”), and MarineMax, Inc. (“MarineMax”). WHEREAS, MarineMax and the Company have previously entered into the Agreement Relating to Acquisitions dated December 6, 2005 (the “Agreement”) and they now desire to amend and modify the Agreement as set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and as provided in Section 12 of the Agreement, the parties agree to amend the Agreement as follows: 1. Dealer Agreement . The reference to the Dealer Agreement in the recitals of the Agreement shall be modified to refer to the Sales and Service Agreements entered into by and between the Sea Ray Division of Brunswick Corporation and MarineMax, Inc. (and its affiliates) dated September 1, 2014. 2. Section 11 . The first sentence of Section 11 of the Agreement is hereby deleted in its entirety. 3. Notices . The addresses in Section 14 of the Agreement are hereby deleted in their entirety and are replaced with the addresses for notice in the Dealer Agreement. 4. Ratification . Except as specifically amended and modified by this Amendment, all of the terms and provisions of the Agreement are hereby ratified, confirmed and approved by the parties hereto and such terms and provisions shall remain in full force and effect. 5. Miscellaneous. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of any conflicts of law principles. This Amendment shall be binding upon and inure to the benefit of the parties hereto, and their successors and permitted assigns. This Amendment may not be modified, amended or supplemented except by written agreement of both parties. This Amendment may be executed in counterparts. If executed in counterparts, each counterpart shall be deemed an original, but both of which taken together shall constitute one and the same agreement. Any signature delivered by facsimile or other electronic transmission shall be deemed to be an original signature. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written. Sea Ray Division of Brunswick Corporation /s/ Tim Schiek By: Title: President Recreational Boat Group MarineMax, Inc. By: /s/ Michael H. McLamb Title: Executive Vice President 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. Exhibit 10.20(c) SALES AND SERVICE AGREEMENT This Sales and Service Agreement (“ Agreement ”) is entered into as of September 1, 2014 by Sea Ray, a Division of Brunswick Corporation (“Sea Ray” or “Company”) MarineMax, Inc. (“MarineMax”), and MarineMax East, Inc. (“Dealer”), in consideration of the mutual covenants contained in this Agreement, and subject to and incorporating herein the Sales and Service Agreement Terms and Conditions attached hereto. Pursuant to this Agreement, Company hereby appoints Dealer through its Dealer Locations identified in Exhibit A as its dealer for the sale of Products in the Dealer Regions identified in such Exhibit. Dealer represents and warrants to Company that MarineMax, Inc. is the sole and exclusive parent of Dealer. In this Agreement, the following words and expressions that are not defined elsewhere in this Agreement shall have the following meaning, except where the context requires otherwise: DEFINED TERMS Dealer and Dealer’s Principal Address: MarineMax East, Inc., 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759 Dealer Location: Each Dealer facility as listed on Exhibit A attached hereto. Dealer Regions: The Dealer Locations sharing a Territory and comprising a Dealer Region are listed on attached Exhibit A. If a Dealer Location is added to this Agreement (through acquisition or otherwise), the parties will work together to determine the realignment of applicable Dealer Regions related to the addition of such location and/or the appropriate Dealer Region for such new location. Territory: Identified for each Dealer Region in attached Attachment 1 to Exhibit A Product(s): Full line of Sea Ray Sport Boats, Sport Cruisers, Sport Yachts and Yachts (Including related parts and accessories) Performance Standards: See attached Exhibit B. Term: The Term of this Agreement shall be September 1, 2014 to August 31, 2017, provided however that, except as otherwise provided below or in Section 16 of this Agreement, at the end of each twelve (12) month period of the Term, the Term of this Agreement shall be extended by another twelve (12) month period so that the Term of this Agreement remains three (3) years. Notwithstanding the above, (i) either party may provide written notice to the other no less than one hundred and twenty (120) days before the end of any twelve (12) month period that it will not agree to an additional extension due to the failure by such other party to remedy a material breach of this Agreement following written notice thereof and the expiration of the applicable cure 1 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. period without cure or failure to reach agreement through good faith efforts to do so by the parties and (ii) on or within sixty (60) days after the sixth (6 th ) anniversary of this Agreement, either party may provide written notice to the other party to terminate this Agreement effective at the end of the then current contract year (i.e., August 31, 2021). If neither party provides notice to terminate this Agreement on or within sixty (60) days after the sixth (6 th ) anniversary as described above, this Agreement will automatically renew for three (3) year terms beginning on the seventh (7 th ) anniversary, unless otherwise terminated pursuant to this Agreement; provided that on or within sixty (60) days after the second (2 nd ) year of any such three (3) year renewal term, either party may provide written notice to the other party to terminate this Agreement effective as of August 31 of the then current contract year. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement in accordance with the terms of Section 16D. 2 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. IN WITNESS WHEREOF, Company, MarineMax and Dealer have executed this Agreement and the parties and the individual(s) signing for each party respectively below represent and warrant that the individual(s) signing this Agreement is(are) duly authorized to do so. Sea Ray Division of Brunswick Corporation MarineMax, Inc. By: Title: Date: MarineMax East, Inc. By: Title: Date: By: Title: Date: 3 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. SALES AND SERVICE AGREEMENT TERMS AND CONDITIONS 1. Appointment of Dealer : Sea Ray hereby appoints Dealer as a dealer for the retail sale, display, and servicing of all Sea Ray product(s), parts and accessories (hereinafter “Product” or “Products”) as identified in the Defined Terms and subject to Sea Ray’s then current policies and programs applicable to all domestic Sea Ray dealers selling comparable Products, from the authorized Dealer Location(s) identified in the attached Exhibit A for each Dealer Region, which Products shall be purchased only from Sea Ray or an authorized Sea Ray dealer located in the country in which Dealer is located. Dealer Regions and Dealer Locations are set forth in the Defined Terms and Exhibit A. During the Term of this Agreement, Sea Ray shall not appoint other dealers to sell Products from a dealer location within the Territory set forth in the Defined Terms; provided, however, that Sea Ray reserves the right to modify the Territory or appoint other dealers to sell, display and service Product from dealer locations within the Territory at any time if Dealer closes a Dealer Location without prior written notice to Sea Ray and prior written approval thereof by Sea Ray, which approval shall not be unreasonably withheld upon a review by Sea Ray of Dealer’s abilities to perform the Agreement obligations and as further provided in Paragraph 2. Provided that similar restrictions apply to all domestic Sea Ray dealers selling comparable Products, Dealer shall not sell, advertise, solicit for sale or offer for resale Products outside of the Territory except as otherwise provided by Sea Ray’s Advertising Policy or other applicable policy. Dealer may advertise in recognized and established marine publications with cross-territorial distribution provided that when Dealer does so, it specifically identifies its authorized locations as defined in this Agreement and complies with Sea Ray’s Advertising Policy. Sea Ray reserves the right in its sole discretion to monitor or otherwise enforce its policies and procedures applicable to all domestic Sea Ray dealers and will do so on a fair and equitable basis. There are no third party beneficiary rights to such policies and procedures or this Agreement or other dealer agreements. Sea Ray reserves the right to make sales or provide service in the Territory based upon legitimate business purposes and to appoint other dealers or service providers to sell, display, and/or service products, from any other location outside the Territory. Sea Ray may also display Products within the Territory for general display and promotional purposes. Sea Ray shall have the right to adopt and modify policies and programs related to the Products from time to time in its sole discretion and in accordance with its own reasonable business judgment and it will enforce such policies and programs on a fair and equitable basis. Dealer agrees to comply with such policies and programs following receipt of notice thereof from Sea Ray, including without limitation, through inclusion in Sea Ray’s Dealer Manual and/or Programs. 2. Location : Dealer shall sell at retail, display, and service Products only at and from the authorized Dealer Location(s) referenced in Exhibit A, as may be amended from time to time as provided herein. Dealer Location(s) are both sales and service unless otherwise specified in writing. Dealer shall concentrate its sales, display and service efforts within the designated Territory. 4 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. Dealer shall not delete, change, or add to the above Dealer Location(s) without the prior written consent of Sea Ray, which consent shall not be unreasonably withheld, and Sea Ray may consider any relevant factors and consequences as part of the approval process, including but not limited to the Dealer’s qualifications and abilities to perform the Agreement obligations from the proposed Dealer Location, the effect such a grant would have on the resulting Territory configuration and adjacent Sea Ray dealer sales, the Dealer’s financial capabilities to successfully operate the business from the Dealer Location, and whether the Dealer will have adequate personnel to manage the business at the Dealer Location. Dealer shall not, directly or indirectly, sell Products for use by or to a purchaser located outside of the country in which the Dealer is located, and shall not sell Products to a third party who Dealer knows or should know will resell the Products outside of the country in which the Dealer is located. Dealer shall not sell to others for the purpose of resale without the prior written consent of Sea Ray. Dealer shall not utilize the services of a broker or similar agent to sell Product unless such broker is an affiliated third party of Dealer that is located within the Territory, consummates the sale of any Product in concert with Dealer and pursuant to Dealer’s standard practices, and otherwise complies with the requirements of this Agreement. Dealer agrees to provide appropriate facilities and to assume full and complete managerial authority and responsibility for the service of the Products at and from those Dealer Location(s) specified in this Agreement and for the display and retail sale of the Products at and from each Dealer Location. Additionally, Dealer may engage in temporary off-site display and sales activity within the Territory. 3. Responsibilities of the Parties : 3.1 Dealer’s Responsibilities : Dealer agrees to: A. Devote its best efforts to aggressively promote, display, advertise and sell Products at each Dealer Location and in the Territory and Dealer Region in accordance with the terms of this Agreement and all applicable federal, state and local laws. Dealer shall display and utilize at each Dealer Location signs, graphics and image elements with Sea Ray’s Identification as defined herein, subject to approval by Sea Ray, that will positively reflect the Sea Ray image and promote the retail sale of the Products. B. Achieve the performance standards set forth as follows and in the related Exhibit B (collectively, “Performance Standards”) for each Dealer Region. Sea Ray, in collaboration with Dealer , will establish fair and reasonable Performance Standards for each of the Dealer Regions under this Agreement which Performance Standards shall be established in a manner similar to those applied to domestic Sea Ray dealers. Performance Standards shall include minimum requirements relating to inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to the terms of Sea Ray’s then current buying program, unit retail sales based on Product registrations for Products in each Dealer Region, customer satisfaction (e.g., Net Promoter Scores) and Product marketing support. 5 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. Sea Ray, in collaboration with Dealer, will establish the Performance Standards taking into consideration factors such as population, sales potential, market share percentage of the Products sold in the Territory as compared to competitive products sold in the Territory, product availability, economic conditions in the Dealer Region(s) and Territory, competition from other marine dealerships in the area, past sales history, historical Product mix and stocking practices, existing Product Inventory, adequacy and ability of the Products to meet customer demand in the Territory, number of locations, and any special circumstances that may affect the sale of Products or the Dealer. The Performance Standards for the first Product Model Year of this Agreement are agreed to and identified in Exhibit B. Sea Ray, in collaboration with Dealer, will, in subsequent years, substitute the updated and amended Performance Standards for the current Exhibit B. The Performance Standards on Exhibit B will continue to apply until replaced with updated and amended Performance Standards. C. Maintain at each Dealer Location (unless a sales location only, and then service shall be provided at another Dealer Location) a service department that Dealer agrees to staff, train, and equip to promptly and professionally service Products; and to maintain at each Dealer Location parts and supplies to properly service Products on a timely basis. D. Perform any and all necessary Product rigging, installation, and inspection services prior to delivery to the purchaser as required by Sea Ray’s current written policy applicable to domestic Sea Ray dealers and perform post-sale service of all Products originally sold by Dealer and brought to Dealer for service. Dealer will be required to provide or arrange for warranty and service work for Product regardless of the selling dealer of the Product or condition of sale. Sea Ray will exercise reasonable efforts as to this Paragraph 3.1D. to address circumstances in which another dealer has made a sale to an original retail purchaser who permanently resides within Dealer’s Territory where such sale is contrary to the terms of the selling dealer’s Sales and Service Agreement. Dealer will provide appropriate instructions to purchasers on how to obtain warranty and service work from the Dealer. Dealer will secure all Product inventory against weathering and other damage, and maintain inventory in a like new and unused condition. E. Furnish each Product purchaser with Sea Ray’s limited warranty on new Products and with information and training as to the safe and proper operation and maintenance of the Product. F. Complete and submit Sea Ray’s Product registration card (or applicable electronic form) and In-Service Checklist promptly upon delivery of the Products to the purchaser and assist Sea Ray in performing Product defect and recall campaigns. In the event Dealer fails to return the card or submit the other documentation to Sea Ray as required, Dealer shall indemnify Sea Ray against any liability, loss, or damage which Sea Ray may sustain directly as a result of such failure. G. Maintain complete Product sales, warranty and service records, and report to Sea Ray upon request the name and address of each Product purchaser to the extent required by applicable law. Dealer further agrees to provide Sea Ray with access to its applicable books and records at reasonable times and upon reasonable prior notice to verify the accuracy of information submitted for participation and eligibility in promotions and other programs. 6 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. H. [Intentionally omitted.] I. Submit to Sea Ray upon request any additional information or clarifying information regarding Dealer’s financial statements and allow full and open disclosure of financial information concerning Dealer between Sea Ray and any financial institution or company which may finance or propose to finance all or part of Dealer’s Product inventory. J. Conduct business in a manner that preserves and enhances the reputation and goodwill of both Sea Ray and Dealer for providing quality products and services, and refrain from using any false, misleading or deceptive advertising. Submit truthful and accurate statements, reports and information to Sea Ray and any financial institution financing or proposing to finance Dealer’s Product inventory or any purchaser. K. Maintain an ability to purchase Product inventory for each Dealer Location via flooring and/or self-financing that is customary to carry on hand and display Sea Ray’s current Product models as indicated in the Defined Terms and the performance standards set forth herein. L. [Intentionally omitted.] M. Use its best efforts to maintain and improve scores or other customer satisfaction rating (e.g., Net Promoter Scores) in compliance with the Performance Standards for such applicable ratings. N. Comply with those Dealer obligations that may be imposed or established by Sea Ray applicable to all domestic Sea Ray Dealers including but not limited to those included in Sea Ray’s policies and programs and Sea Ray’s Advertising Policy. O. Maintain a financial condition which is adequate to satisfy and perform its obligations under this Agreement. P. Provide prior written notice to Sea Ray if Dealer desires to make any material change in Dealer’s financing of its Product inventory or business and give Sea Ray sufficient time to discuss and review with Dealer the effect of the proposed change. Q. Notify Sea Ray of the addition or deletion of any Dealer Location(s) which notification Dealer agrees shall not be deemed a consent by Sea Ray to such a proposed change. R. Provide Sea Ray with prior notice of any proposed appointment of sub-dealers. All appointments of authorized sub-dealers are subject to prior written approval by Sea Ray (“Authorized Sub-dealers”). Dealer will set its own resale price to Authorized Sub-dealers and assume all risk of non-payment by the Authorized Sub-dealers. The Authorized Sub-dealers are not parties to any agreement between Sea Ray and Dealer and Dealer will ensure that the Authorized Sub-dealers do not take any actions that violate any policies and programs of Sea Ray or are inconsistent with the terms of this Agreement. Dealer is responsible for any losses incurred by Sea Ray as a result of Authorized 7 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. Sub-dealer’s performance including, but without limitation, Authorized Sub-dealer’s failure to pay Sea Ray for any Product or to pay any financial institution that finances Products purchased by the Authorized Sub-dealers. Dealer will not enter into any agreement with Authorized Sub-dealers that is inconsistent with the terms and conditions of this Agreement. S. Notify Sea Ray in writing of the applicable brand and boat type at least thirty (30) days before Dealer begins to sell, display or advertise a new boat brand. 3.2 Company Responsibilities : Company Agrees to: A. Sell Products to Dealer in accordance with Company’s then-current terms and conditions of sale applicable to domestic Sea Ray dealers, limited warranties, and the price list published from time to time by Company, less any applicable discounts allowed by Company’s programs applicable to Dealer and consistent with the provisions of Section 5 hereof. Company shall have the right to modify its terms and conditions of sale, limited warranties, price lists and programs from time to time in its sole discretion and in compliance with the terms of this Agreement; provided, however, that Company will provide reasonable prior written notice to Dealer after the beginning of the Model Year of such modifications and that changes in the limited warranty and pricing will apply only to future retail purchases. Company will make available its current policies and programs in electronic format or in a manual or other format Company deems appropriate. Dealer should contact Company for a copy of the policies and programs if it does not have access to or did not receive a copy. promotional material to assist Dealer in the sale of Products as Company deems appropriate. B. Provide to Dealer reasonable quantities of catalogs, specification sheets, and other advertising, merchandising or order forms or procedures, maintenance and service manuals and other materials of a technical nature as Company deems appropriate. C. Make available to Dealer in electronic format or otherwise reasonable quantities of parts books, warranty claim forms, designations of Company that correspond to the Products as Company deems appropriate. D. Furnish Dealer with written instructions and/or policies for the use of trademarks, trade names, logos and other trade E. Furnish a Limited Warranty for the Products and provide warranty support and process warranty claims in accordance with Company’s warranty policy, which may be modified from time to time by Company in its sole discretion. Company shall notify Dealer of changes to Company’s warranty policy and make available current versions of its warranty policy to Dealer. appropriate. F. Promote sales of the Products via the Internet and other marine related publications or by other means as Company deems 8 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. G. Ship parts related to the Products in accordance with Company’s policy on shipping parts. H. Accept payment for Product and credit Dealer’s account within a reasonable time. account status upon request, and administer credit policies in a non-discriminatory manner. I. Furnish detailed invoices upon shipment and periodic statements thereafter, provide prompt communication regarding Company reserves the right to create, update and modify such a website locator from time to time in its sole discretion. J. Identify Dealer’s name and address in listing of authorized dealers on Company’s website dealer locator (if available). Products. K. Provide reasonable technical assistance and procedures for handling of technical questions of Dealer related to the L. Maintain communication channels in order to receive Dealer feedback from time to time. deems appropriate. M. Provide reasonable consultative assistance to Dealer for operational, sales and customer service support as Company N. Provide reasonable supportive informational materials for new models of Products as Company deems appropriate. Company. O. Provide owner’s manual for Products and similar materials for other components or accessories that are made available to Performance Standards set forth in Section 3.1.B. P. Supply Dealer with proper quantities of Product consistent with Sea Ray’s quality standards to allow Dealer to meet the at least annually, conduct a portfolio product review with appropriate Dealer managers. Q. Provide Dealer with two (2) seats on Sea Ray’s concept review teams to consult with Sea Ray regarding the Products and, 4. Orders : Dealer agrees to submit orders to Sea Ray in a manner and format prescribed by Sea Ray, applicable to all domestic Sea Ray dealers which orders shall be subject to Sea Ray’s then current terms and conditions of sale which may be modified by Sea Ray at any time for all domestic dealers as deemed reasonably necessary. Any order which does not comply with Sea Ray’s terms and conditions need not be filled by Sea Ray provided, however, that Sea Ray shall promptly notify Dealer of such noncompliance. Any additional or different terms submitted by Dealer will be deemed rejected and will also be void and of no effect. Dealer cancellation of orders will be subject to Sea Ray’s then current cancellation policy applicable to all domestic Sea Ray dealers. All orders submitted by Dealer are subject to acceptance by Sea Ray. 9 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. 5. Prices : The Products sold to the Dealer by Sea Ray shall be on the basis of price lists published by Sea Ray from time to time for its domestic dealers, less any applicable discounts allowed by Sea Ray’s programs. Sea Ray shall have the right to revise the price lists or applicable discounts or programs applicable to all of its domestic dealers at any time and agrees to promptly notify Dealer of any such change. The Product prices charged to Dealer will be the lowest price then charged to other domestic dealers subject to Dealer meeting all the requirements and conditions of Sea Ray’s applicable programs, and provided that Sea Ray may in good faith, charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and limited duration non-ordinary business circumstances, or for limited duration promotional programs. Sea Ray shall have no obligation to reimburse Dealer for any loss which Dealer may sustain by reason of any change in price, program, or discount for which notice was provided in accordance herewith. Terms of payment will be as specified from time to time by Sea Ray. Dealer will pay Sea Ray the lesser of 1.5% late charges per month or the maximum permitted by applicable law on any past due invoice except as to any specific amount of an invoice that is disputed in good faith by the Dealer. Sea Ray may refuse shipment for any credit reason, including Dealer’s failure to pay for a prior shipment or to pay any financial institution who finances Dealer’s purchases, or for Dealer’s failure to maintain its Product inventory in accordance with the terms of this Agreement. Sea Ray shall immediately notify Dealer if Sea Ray refuses shipment to Dealer so that Dealer has a reasonable opportunity to cure any issue. Dealer will reimburse Sea Ray for all reasonable and necessary costs in collecting past due accounts, including attorney fees and court costs. Dealer hereby grants to Sea Ray and Sea Ray hereby retains a security interest in all Products sold to Dealer and all proceeds arising out of the sale of the Products until such Products are paid for in full. Dealer agrees to sign, file, authenticate, and authorize the signing, filing and authenticating by Sea Ray of such financing statements and other documents and do such other acts, as Sea Ray may request to establish and maintain a valid and protected security interest in the Products. 6. Shipments : All shipments of Products shall be made FOB the Sea Ray factory designated by Sea Ray, and title shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Dealer shall pay all applicable shipping, transportation, delivery, and handling charges for Products ordered. If Dealer fails to accept delivery of any Products ordered, other than material non-conforming Products that must be returned to Sea Ray for repair, Dealer shall reimburse Sea Ray for any costs incurred, including returning such Products to Sea Ray. If Sea Ray ships Products not ordered by Dealer, Dealer shall have the right to refuse delivery, in which event Sea Ray shall pay all costs incurred in returning same to Sea Ray. Shipments shall be subject to Sea Ray’s production schedule and availability of materials or transportation equipment. No liability shall be sustained by Sea Ray by reason of its not filling any order due to circumstances beyond its reasonable control such as, but not limited to, labor disputes, natural disasters, accidents to machinery, acts of God, acts of or threatened acts of war or terrorism, material shortages, regulations, demands for goods exceeding Sea Ray’s available supply or any other cause beyond Sea Ray’s control. In the event of any delay in delivery, failure to fill orders or other default or damage caused by any of the foregoing, Sea Ray may, at its option and without liability, cancel all or any portion of the applicable orders to the extent affected by the event of force majeure and/or extend any date upon which performance is due hereinunder. 10 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. 7. Risk of Loss : Risk of loss for Products ordered by Dealer shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Sea Ray has instructions to insure Products on behalf of Dealer from the shipping point to the final delivery point unless otherwise agreed by the parties in writing. Dealer will be the loss payee on any claim. Sea Ray will assist Dealer in the processing and collection of any claims against the carrier contracted by Sea Ray. Notwithstanding the above, if Dealer or Dealer’s representative takes possession of Products at the Sea Ray factory, Dealer assumes responsibility to insure the Products upon tender of the Products to Dealer or Dealer’s representative at the Sea Ray factory. 8. Payment - Claims : All sales of Products to Dealer shall be paid for in advance by Dealer, unless otherwise agreed between Sea Ray and Dealer in writing. All claims for shortage or damages or unacceptable Product shall be made pursuant to Sea Ray’s then current policy on shipment damage and claims procedures applicable to all Sea Ray domestic dealers. The failure of Dealer to give such notification as set forth in Sea Ray’s then current shipment damage and claims procedures policy shall constitute a waiver of any such claim. Dealer shall cause to be paid or shall make reimbursement to Sea Ray in full for any and all taxes, duties, or other charges imposed by federal, state, municipal, or other governmental authority upon Dealer’s purchase under this Agreement. 9. Product Modification : Sea Ray shall have the right to discontinue the sale of Products or to modify the design, specifications and components of Products at any time provided, however, that Sea Ray shall notify Dealer, prior to shipment, of any major changes with respect to Products previously ordered by Dealer but not yet delivered, in which event Dealer shall have the right to terminate such order within five (5) business days after such notification by providing written notice to Sea Ray. The failure to provide such timely written notification shall be deemed acceptance by Dealer of such changes. 10. Warranties and Limitation of Warranties and Liability : 10.1 Warranties : Dealer agrees to: A. Sell Products only on the basis of Sea Ray’s published applicable limited warranty and make no other warranty or representations concerning the limited warranty, express or implied, either verbally or in writing. B. Display at each Dealer Location that Product warranty information required by applicable law and furnish and make known to the first-use purchaser at the time of delivery the appropriate operations and maintenance manual provided by Sea Ray, instructional information for the use and operation of the Product consistent with the operations and maintenance manual, the Product installation instructions, if any, together with Sea Ray’s written limited warranty, including all disclaimers and limitations thereto. 11 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. C. Subject to the terms of the applicable limited warranty, expressly inform the purchaser in writing that no Sea Ray warranty applies if the Product is “used” unless Sea Ray expressly authorizes such warranty in writing or the existing balance of the warranty is transferable and is transferred. No Product warranty shall apply if the design or material of the Product is substantially modified without the express authorization of Sea Ray in writing. D. Provide timely warranty service on all Product presented to Dealer by purchasers in accordance with Sea Ray’s then current warranty service program applicable to all domestic Sea Ray dealers selling comparable Products. Dealer agrees to make all claims for reimbursement under Sea Ray’s warranty service program in the manner reasonably prescribed by Sea Ray. Sea Ray may revise its warranty service program from time to time, providing Dealer with written notification of all revisions, and those revisions will supersede all previous programs. E. To verify the accuracy of the warranty claims submitted to Sea Ray by Dealer and the service provided by Dealer with regard to such warranty claims, provide Sea Ray with access to its applicable books and records, and provide such additional documentation which Sea Ray may reasonably request. In the event Sea Ray finds errors in the aggregate greater than 5% of reviewed claims submitted by Dealer Location and paid by Sea Ray, Sea Ray may calculate the percentage rate of error; and using that percentage rate of error, extrapolate the amount owed to Sea Ray for up to three (3) prior years of all paid claims made by Sea Ray to Dealer at that Dealer Location. Within thirty (30) days of such notice of such amount, Dealer shall either pay the extrapolated amount to Sea Ray or pay the cost of a full audit by Sea Ray or Sea Ray’s designee or at Dealer’s option and expense, a third party auditor reasonably acceptable to Sea Ray and Dealer and pay to Sea Ray that amount, if any, found to be owing to Sea Ray as a result of such audit. Sea Ray agrees to honor all legitimate warranty claims on Products when made by purchaser through Dealer in the manner reasonably prescribed by Sea Ray. Sea Ray shall respond to all proper and legitimate warranty claims submitted by Dealer within the time period described in the then current warranty policy applicable to domestic Sea Ray dealers. Sea Ray agrees to pay or credit all accepted and undisputed claims within thirty (30) days after receipt of all required documentation. 10.2 Limitation of Warranties and Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SEA RAY’S PUBLISHED APPLICABLE LIMITED WARRANTY, SEA RAY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR, NOR SHALL THE MEASURE OF DAMAGES INCLUDE, ANY AMOUNTS FOR LOST PROFITS, LOST SALES, OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR ANY REASON OR UPON ANY CAUSE OF ACTION, WHETHER SOUNDING IN TORT, CONTRACT OR ANY OTHER LEGAL THEORY. 12 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. 11. Indemnification . A. In order to obtain preferred boat show space at discounted rates for Dealers, Sea Ray may contract with and agree to indemnify boat show sponsors and other related parties. Accordingly, Dealer shall defend, indemnify and hold harmless Sea Ray, and any boat show sponsor which Sea Ray has agreed to indemnify, from any and all claims, causes of action, and suits, including claims of negligence arising either directly or indirectly out of Dealer’s use of boat show space originally obtained by Sea Ray. B. Sea Ray agrees to indemnify and hold harmless Dealer for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Sea Ray’s negligent acts or omissions involving the original design or manufacture of any Product at the time it left Sea Ray’s possession or control, or the repair of any Product performed by Sea Ray, or (2) any breach of this Agreement by Sea Ray. Sea Ray, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Dealer agrees to cooperate at its own expense and provide Sea Ray with any available information as may be reasonably necessary to such defense. In the event Sea Ray elects not to defend any litigation that may arise out of any claims covered hereby, Sea Ray will be responsible for Dealer’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. C. Dealer agrees to indemnify and hold harmless Sea Ray for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Dealer’s negligent acts or omissions involving Dealer’s improper application, use or repair of the Products, (2) statements or representations not specifically authorized by Sea Ray, including warranties inconsistent with Sea Ray’s standard limited warranty, and the installation of any after market components or any other modification or alteration to the Product, or (3) any breach of this Agreement by Dealer. Dealer, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Sea Ray agrees to cooperate at its own expense and provide Dealer with any available information as may be reasonably necessary to such defense. In the event Dealer elects not to defend any litigation that may arise out of any claims covered hereby, Dealer will be responsible for Sea Ray’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. D. The provisions in this Paragraph 11 regarding indemnification do not apply to claims by third parties in which there has been a judicial determination that the indemnifying party does not have liability to the third party. The provisions in this Paragraph 11 shall survive the expiration or termination of this Agreement. 12. Repossession or Repurchase of Product by Sea Ray : Dealer shall be liable to and reimburse Sea Ray for any and all losses or deficiencies on the sale or disposition of any Product purchased by Dealer pursuant to this Agreement which is repossessed or repurchased by Sea Ray for any reason whatsoever, except as contemplated in Paragraph 16G. Dealer shall also be liable for any and all discounts, volume rebates, or other sales incentives paid to Dealer on Product repurchased, and all reasonable attorney’s fees, court costs, and expenses incurred in connection with such repossession or repurchase. Dealer agrees to provide Sea Ray, upon request, guarantees or other adequate security to cover any repurchase or financial obligations that Sea Ray may assume in connection with Dealer’s flooring or financing. 13 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. 13. Trademarks and Service Marks : Dealer acknowledges that Sea Ray or its affiliated companies are the exclusive owners of various trademarks, service marks, trade designations, logos and trade dress (collectively “Identification”) which Sea Ray uses in connection with Products and its business. Dealer is authorized to use Identification only in the manner prescribed by Sea Ray, only in connection with the promotion and sale of Products, and only until the expiration or termination of this Agreement. Dealer shall not register or assist any other party to register any domain name that contains or closely resembles any Company Identification without first obtaining the prior written consent of Company. Dealer shall not use Identification in any unauthorized manner or in any manner that adversely reflects upon the reputation of Sea Ray or in relation to any other matter that is a breach of this Agreement. Dealer shall not use Identification or advertise outside of the Territory to the extent prohibited by the terms of this Agreement, without Sea Ray’s express written consent and shall comply with Sea Ray’s Advertising Policy. Authorization shall not be interpreted as a license for use of Identification. Dealer acquires no proprietary rights with respect to Identification, and this authorization shall terminate simultaneously with the termination or expiration of this Agreement. In the event of expiration or termination of this Agreement, Dealer shall immediately discontinue use of Identification in any way whatsoever and shall thereafter not use, either directly or indirectly, any Identification or any confusingly similar Identification in a manner likely to confuse, mislead, or deceive the public. Dealer may continue to use Identification for a reasonable period of time in the event Sea Ray does not repurchase Dealer Product inventory as long as such Identification use remains subject to the terms of this Agreement, Sea Ray’s Advertising Policy or any other written instructions provided by Sea Ray to Dealer. Dealer agrees that any unauthorized use or continued use of Identification after the period of time allowed by this Paragraph 13 shall constitute irreparable harm entitling Sea Ray to seek equitable relief, including injunction and specific performance, without the necessity of posting bond or proving actual damages, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for such a breach by Dealer but shall be in addition to all other remedies available at law or equity to Sea Ray. 14. [Intentionally omitted.] 15. No Agency Created : It is understood and agreed that Dealer is not, nor shall it at any time represent itself to be, the agent, employee, representative, partner, or franchisee of Sea Ray for any purpose. Neither party shall enter into any contract or commitment in the name of or on behalf of the other party. Sea Ray has no fiduciary duty to Dealer pursuant to this Agreement or the relationship between the parties. Dealer is not required to pay, and shall not pay, to Sea Ray any fee for the right to purchase the Products or otherwise do business with Sea Ray. 16. Term of Agreement - Termination : A. The term of this Agreement shall be as set forth in the Defined Terms (the “ Term”) subject however to the provisions set forth in this Paragraph 16 and in Paragraph 18. 14 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. B. Subject to the provisions of Section 16F below, Sea Ray may terminate this Agreement upon the giving of at least sixty (60) days prior written notice to Dealer if: (1) Dealer does not have an ability to purchase Products via flooring or self-financing; or (2) Dealer fails to meet its financial obligations as they become due to either Sea Ray or lender(s) financing Products. Sea Ray shall work in good faith with Dealer to try to resolve any differences between them prior to giving such 60-day notice of termination. C. This Agreement may be terminated at any time by the mutual consent of the parties. D. Subject to the provisions of Section 16F below, either party may elect to not extend the Term of this Agreement for another twelve (12) month period following expiration of the current twelve (12) month period of the Term as described in the Defined Terms in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party. In such event, the non-breaching party will provide written notice to the breaching party and an opportunity to cure or remedy such breach. The parties shall work together in good faith to resolve any issues but the additional twelve (12) month extension shall not be added until such time that the breach is remedied to the reasonable good faith satisfaction of the parties. At such time as the parties agree that the concerns have been remedied, the additional twelve (12) month extension shall be added to the end of the existing Term. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement upon the giving of at least twenty four (24) months prior written notice to the other party in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party, which breach is not cured during such notice period; provided, however, that if such a breach or default by Dealer only pertains to one Dealer Region, Sea Ray shall only have the right pursuant to this provision to terminate this Agreement as to that particular Dealer Region. The parties shall work together in good faith to resolve any issues. Notwithstanding the above, so long as Dealer’s failure to meet the Performance Standards is not caused by Sea Ray failing to have Product available for purchase by Dealer, Sea Ray shall have the right to terminate this Agreement as to the applicable Dealer Region(s) (i) if Dealer is failing to meet the Performance Standards in a Dealer Region and begins selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within ninety (90) days after written notice of the same from Sea Ray, or (ii) if Dealer is meeting the Performance Standards in a Dealer Region, but then starts failing to meet the Performance Standards after beginning selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within six (6) months after written notice of the same from Sea Ray. 15 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. E. Notwithstanding subparagraph D above or anything in this Agreement to the contrary, this Agreement may be terminated by a party upon sixty (60) days prior written notice to the other party if any of the following occur with regard to the other party: (1) the other party ceases to exist; (2) the other party becomes insolvent or takes or fails to take any action which constitutes an admission of inability to pay debts as they mature; (3) the other party makes a general assignment for the benefit of creditors to an agent authorized to liquidate any substantial amount of assets; (4) the other party becomes a subject of an “order for relief” within the meaning of the United States Bankruptcy Code; (5) the other party becomes the subject of a receivership, reorganization, liquidation or any similar proceeding; or (6) the other party makes a fraudulent misrepresentation that is material to this Agreement. This Agreement may be terminated upon sixty (60) days prior written notice by Sea Ray upon the occurrence of: (1a) a prohibited assignment, transfer, delegation or subcontracting without consent as described in Paragraph 18A; (2b) the commission by Dealer of an act of fraud upon Sea Ray; (3c) the commission by Dealer (or any of its officers) of a felony or other act of fraud which is materially detrimental to Sea Ray’s reputation or business or which materially impairs the Dealer’s ability to perform the duties under this Agreement; or (4d) Dealer fails to pay any lender financing Products after the sale of Products by Dealer (out of trust). F. For the purpose of the first paragraph of Section 16D, if a breach or default by Dealer pertains only to one Dealer Region, Sea Ray shall have the right to deny the additional extension period for that particular Dealer Region only until remedied as described in Section D. For the purpose of Section 16B or E, if Dealer breaches or defaults as described in such provisions, Sea Ray may, in its own discretion, elect either to terminate the entire Agreement (as to all Dealer Regions) or terminate only as to particular Dealer Region subject to the Agreement. Notwithstanding the foregoing, in the event of any possible termination pursuant to Section 16B or E, a party seeking to terminate shall first provide written notice to the other party stating the potential grounds therefore and both parties shall work together in good faith for a period of no less than sixty (60) days to resolve any concerns between the parties. G. [****] H. In the event of termination of this Agreement prior to its expiration date, provided the termination is not for fraud, bad faith, or insolvency of Dealer, Sea Ray will nevertheless continue to sell to Dealer warranty parts and accessories for Products on a cash on delivery basis for a period not to exceed twelve (12) months in order that Dealer may continue to provide warranty service on Products which have outstanding warranties subject to Dealer’s compliance with the terms and conditions of Sea Ray’s warranty and parts program applicable to all domestic Sea Ray dealers. The performance of any warranty work after termination or expiration of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. I. Any period of time described in the Agreement shall be modified to include such different period of time that may be required by applicable law. 16 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. J. In the event of expiration or the termination of this Agreement by either party, Sea Ray is relieved from any obligation to make any further Product shipments under this Agreement, and may cancel all of Dealer’s unshipped orders for Products, irrespective of previous acceptance by Sea Ray, except those which are proved to Sea Ray’s reasonable satisfaction to have been the subject of a binding customer order to Dealer prior to the receipt of any notice of termination or expiration. The acceptance of orders from Dealer for the continuous sale of Products to Dealer or any other act after expiration or termination of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. Upon the expiration or termination of this Agreement, all obligations owed by Dealer to Sea Ray shall become immediately due and payable on the effective date of the expiration or termination, whether otherwise then due or not (without presentment, demand, protest or notice of any kind, all of which are waived by Dealer); and Sea Ray may offset or deduct from any and all sums owed to Dealer any and all sums owed by Dealer to Sea Ray, or any parent, affiliate or subsidiary of Sea Ray, returning to Dealer the excess, if any. 17. Governing Law : This Agreement shall be governed, interpreted and construed according to the laws of the State of Tennessee, U.S.A., without regard to applicable conflicts of law. 18. Assignability : A. This appointment and Agreement is made and entered into with the distinct understanding that it is personal with Dealer, and is not, whether by operation of law, change in control or otherwise, assignable or in any part delegable or transferable unless the express written consent of Sea Ray is obtained; provided, however, that Dealer may assign the appointment and this Agreement to a subsidiary or affiliate without consent. An assignment by Dealer to any subsidiary or affiliate shall not relieve Dealer from any obligation or responsibility provided for under the terms of this Agreement. Unless first approved by Sea Ray in writing, any purported assignment, transfer, delegation or subcontracting of Dealer’s rights and obligations under this Agreement by it (other than to a subsidiary or affiliate) may immediately render this Agreement terminated in Sea Ray’s sole discretion. B. Sea Ray may not assign this Agreement without the prior written consent of Dealer, except that no such consent is necessary with respect to assignment of this Agreement to any Sea Ray owned subsidiary or affiliate. An assignment by Sea Ray to any owned subsidiary or affiliate shall not relieve Sea Ray from any obligation or responsibility provided for under the terms of this Agreement. Upon any sale of the business or the assets of Sea Ray to a nonaffiliated third party, and where Dealer does not agree to the assignment, this Agreement shall be terminated and Sea Ray shall be released from any further obligations and liabilities to supply Products to Dealer under this Agreement provided however that the provisions of Sections 11 and 16 and all other provisions that are intended to survive termination either expressly or impliedly shall do so in accordance with their terms. 19. Notices, Communications : A. Any written notice given pursuant to this Agreement shall be either hand delivered (by courier or otherwise), or mailed, postage prepaid, by Registered or Certified Mail, return 17 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. receipt requested, to the party identified below at the respective address listed below. Notice may also be given by fax, e-mail or other electronic method; however, if notice is provided pursuant to Paragraph 16, a copy must also be mailed in the manner described herein. Such notice shall be deemed to be given upon first receipt. A change of address may be given by such notice. To Sea Ray: Sea Ray Boats Attention: President 800 South Gay Street, Suite 1200 Knoxville, TN 37929 With a copy to: Brunswick Corporation Law Department Attention: General Counsel 1 N. Field Court Lake Forest, Ill Tel: (847)735-4700 Fax: (847) 735-4433 To Dealer: William H. McGill, Jr. President MarineMax, Inc. 2600 McCormick Drive Suite 200 Clearwater, Florida 33759 With a copy to: MarineMax, Inc. Attention: General Counsel Suite 200 2600 McCormick Drive Clearwater, FL 33759 Tel: (727) 531 1700 Fax: (727) 450-1162 B. Dealer hereby grants permission and consent to Sea Ray and to those entities who are authorized by Sea Ray to send or transmit communications (including but not limited to facsimiles, wireless communications, and e-mails) to Dealer and Dealer’s officers, directors, employees, subsidiaries and affiliates, and their permitted successors and assigns. Such communications are not limited in content and may include advertisements, and Dealer understands that by providing such consent it may incur costs that are related to the receipt of such communications. Dealer further agrees that such communications may be sent to any telephone number or electronic media address supplied by Dealer for each Dealer Location. 20. Entire Agreement - Non-Waiver : This Agreement, including any attached addenda, contains the entire agreement between the parties with respect to the matters set forth herein and may not be amended or modified except by a written instrument signed by Sea Ray and Dealer that expressly states that the writing constitutes an amendment or modification to this Agreement, provided that, subject to the provisions of this Agreement, Sea Ray may in its sole discretion and from time to time make changes in accordance with its own reasonable business judgment to the policies and programs applicable to all domestic Sea Ray dealers upon the giving of notice to Dealer as described herein. This Agreement terminates and replaces all prior agreements made between the parties regarding the subject matter of this Agreement and there are no other agreements regarding the matters herein provided that 18 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. each party shall remain obligated to the other for any monies owed under such prior agreements between the parties; and except for payments to be made to Dealer in the ordinary course of business or claims of third parties, there are no other monies, claims, or actions which may give rise to or result in any compensation or monies being owed to Dealer by Sea Ray. Failure on the part of Sea Ray or Dealer to enforce any term of this Agreement shall not constitute a waiver thereof. 21. Severability – Existing Claims : Whenever possible, each paragraph of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any portion of this Agreement is deemed invalid or unenforceable, the remaining sections shall still be enforceable unless removal of that portion so materially alters the risks and benefits to either party that enforcement would be substantially unfair. In such a case, the parties agree to immediately negotiate a substitute clause to restore each party as closely as possible to the risks and benefits originally assumed. Dealer represents to Sea Ray that it is not aware of any claims, causes of action, or disputes that it has or may assert against Sea Ray that arise out of or have accrued prior to the effective date of this Agreement. Dealer further represents to Sea Ray that it has not breached or otherwise violated any term or condition of any previous agreement with Sea Ray. 22. Disputes : All disputes, controversies or claims connected with, arising out of, or relating to this Agreement, or any modification, extension or renewal thereof, or to any causes of action that result from such relationship, shall be subject exclusively to the remedy of arbitration described herein, including but not limited to sums due under this Agreement, the interpretation, performance or nonperformance of this Agreement, and claim for damages or rescission, a breach or default of this Agreement, the creation, termination or nonrenewal of this Agreement (such as a dispute regarding the causes, validity or circumstances of the termination, nonextension, or nonrenewal), and trade regulations or antitrust claims, whether such controversies or claims are in law or equity or include claims based upon contract, statute, tort or otherwise. All controversies shall be conducted in accordance with the American Arbitration Association Commercial Arbitration Rules. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1-16, as amended, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of the arbitration shall be at Chicago, Illinois. Dealer consents to personal jurisdiction of the federal and state courts located in the State of Illinois for the purpose of enforcing this provision or confirming any arbitration award. No party shall be entitled to receive an award of damages in excess of actual damages and in no event shall the parties receive an award of punitive, special or consequential damages, or prejudgment interest. Except for claims based on sums owing to Sea Ray for Products purchased by Dealer, or sums owing to Dealer for the reimbursement of funds it paid for Products that were previously returned to Sea Ray or claims based on Paragraph 11 hereof, all arbitration claims and proceedings must be instituted within one (1) year after the dispute arises, and the failure to institute arbitration proceedings within such period shall constitute an absolute ban to the institution of any proceedings and a waiver and relinquishment of all such claims. This paragraph shall survive the expiration or termination of the Agreement. 19 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. 23. [intentionally omitted] 24. Reservation of Rights : Sea Ray grants to Dealer only those rights expressly stated in this Agreement. Except to the extent otherwise expressly provided in this Agreement, Sea Ray retains all rights. This Agreement does not concern any other brands or products, except the Sea Ray Products identified in the Defined Terms. Sea Ray and/or its affiliates reserve the right for Sea Ray’s affiliates to own, acquire, manage, sell, display or service other products and other brands in any area (including the Territory) including those that may compete with Products. Sea Ray reserves the right to receive incentives, rebates or other payments from third-party suppliers, including without limitation related to purchases by or through Dealer from such third party suppliers. 25. Confidentiality . Each party shall maintain as confidential all proprietary business information, trade secrets and all materials containing confidential business information provided to such party by the other party, including but not limited to customers, vendors, price lists, wholesale prices, programs, rebates, discounts, inventions, concepts, designs, structures, formulas, processes, financial information, employees, strategic plans, acquisition plans or other business affairs of the disclosing party. Dealer acknowledges that Sea Ray is an affiliate of Brunswick Corporation, and accordingly subsidiaries, affiliates and other divisions of Brunswick Corporation may be given access or have access to confidential business information received in connection with this Agreement, and such disclosure does not constitute a breach of this paragraph. Each party, on behalf of its directors, officers, employees and agents to whom such information and materials are disclosed, agree that it shall keep such information and materials confidential both during and after the Term of this Agreement for a period of three (3) years provided that if any such information or material is a trade secret, then the obligations under this Paragraph shall survive the termination of this Agreement for the longer of five (5) years or the length of time such information remains a trade secret. These obligations of confidentiality do not apply to any information which (1) was known to the receiving party prior to receipt from the disclosing party; (2) is independently developed by the receiving party, provided that the burden of proof of such independent development shall be on the receiving party; (3) is or becomes publicly known without the fault of the receiving party; (4) is or becomes rightfully available to the receiving party without confidential restriction from a source not bound by a confidentiality obligation to the disclosing party; (5) is required by law, rule or regulation to be disclosed; (6) is required to be disclosed pursuant to court or government action; provided, the disclosing party is given reasonable prior notice of such disclosure; or (6) is disclosed pursuant to written agreement of the parties. The terms of this paragraph are in addition to, and in no way a limitation of, the terms of any confidentiality or non-disclosure agreement (or any confidentiality provision in any other agreement) between or involving Sea Ray (or its affiliates) and Dealer. 26. Miscellaneous : In case of any dispute relating to the rights and duties imposed by this Agreement, both parties will openly discuss and make reasonable efforts at amicable resolution. Except as expressly described to the contrary in this Agreement, the rights and remedies of each party are not 20 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. exclusive. Unless otherwise provided, where either party has a right to make a determination or pursue or not pursue a particular course of action under the terms of this Agreement, such as, for example granting consent or approval, such determinations and decisions shall be made by such party in its sole discretion. As defined herein, a domestic Sea Ray dealer shall be an authorized Sea Ray dealer whose territory is located solely within the continental Unites States. 27. Counterparts and Signatures : This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute on and the same Agreement. Any signature delivered by fax or other electronic transmission shall be deemed to be an original signature. 28. Guarantee : As a condition for Sea Ray’s entering into this Agreement, MarineMax has signed this Agreement as evidence of its irrevocable guarantee of the Dealer’s performance of all of the duties and obligations provided for in this Agreement. 21 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. Exhibit A [****] 22 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. EXHIBIT B [****] 23 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. Exhibit B Table [****] 24 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. Exhibit X [****] 25 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. Exhibit Y [****] 26 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. SALES AND SERVICE AGREEMENT This Sales and Service Agreement (“ Agreement ”) is entered into as of September 1, 2014 by Sea Ray, a Division of Brunswick Corporation (“Sea Ray” or “Company”) MarineMax, Inc. (“MarineMax”), and MarineMax Northeast, LLC (“Dealer”), in consideration of the mutual covenants contained in this Agreement, and subject to and incorporating herein the Sales and Service Agreement Terms and Conditions attached hereto. Pursuant to this Agreement, Company hereby appoints Dealer through its Dealer Locations identified in Exhibit A as its dealer for the sale of Products in the Dealer Regions identified in such Exhibit. Dealer represents and warrants to Company that MarineMax East, Inc. is the direct parent of Dealer and MarineMax, Inc. is the sole and exclusive parent of MarineMax East, Inc. Exhibit 10.20(d) DEFINED TERMS In this Agreement, the following words and expressions that are not defined elsewhere in this Agreement shall have the following meaning, except where the context requires otherwise: Dealer and Dealer’s Principal Address: MarineMax Northeast, LLC, 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759 Dealer Location: Each Dealer facility as listed on Exhibit A attached hereto. Dealer Regions: The Dealer Locations sharing a Territory and comprising a Dealer Region are listed on attached Exhibit A. If a Dealer Location is added to this Agreement (through acquisition or otherwise), the parties will work together to determine the realignment of applicable Dealer Regions related to the addition of such location and/or the appropriate Dealer Region for such new location. Territory: Identified for each Dealer Region in attached Attachment 1 to Exhibit A Product(s): Full line of Sea Ray Sport Boats, Sport Cruisers, Sport Yachts and Yachts (Including related parts and accessories) Performance Standards: See attached Exhibit B. Term: The Term of this Agreement shall be September 1, 2014 to August 31, 2017, provided however that, except as otherwise provided below or in Section 16 of this Agreement, at the end of each twelve (12) month period of the Term, the Term of this Agreement shall be extended by another twelve (12) month period so that the Term of this Agreement remains three (3) years. Notwithstanding the above, (i) either party may provide written notice to the other no less than one hundred and twenty (120) days before the end of any twelve (12) month period that it will not agree to an additional extension due to the failure by such other party to remedy a material breach of this Agreement following written notice thereof and the expiration of the applicable cure 1 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. period without cure or failure to reach agreement through good faith efforts to do so by the parties and (ii) on or within sixty (60) days after the sixth (6 th ) anniversary of this Agreement, either party may provide written notice to the other party to terminate this Agreement effective at the end of the then current contract year (i.e., August 31, 2021). If neither party provides notice to terminate this Agreement on or within sixty (60) days after the sixth (6 th ) anniversary as described above, this Agreement will automatically renew for three (3) year terms beginning on the seventh (7 th ) anniversary, unless otherwise terminated pursuant to this Agreement; provided that on or within sixty (60) days after the second (2 nd ) year of any such three (3) year renewal term, either party may provide written notice to the other party to terminate this Agreement effective as of August 31 of the then current contract year. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement in accordance with the terms of Section 16D. 2 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. IN WITNESS WHEREOF, Company, MarineMax and Dealer have executed this Agreement and the parties and the individual(s) signing for each party respectively below represent and warrant that the individual(s) signing this Agreement is(are) duly authorized to do so. Sea Ray Division of Brunswick Corporation MarineMax, Inc. By: Title: Date: MarineMax Northeast, LLC By: Title: Date: MarineMax East, Inc. By: Title: Date: By: Title: Date: 3 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. SALES AND SERVICE AGREEMENT TERMS AND CONDITIONS 1. Appointment of Dealer : Sea Ray hereby appoints Dealer as a dealer for the retail sale, display, and servicing of all Sea Ray product(s), parts and accessories (hereinafter “Product” or “Products”) as identified in the Defined Terms and subject to Sea Ray’s then current policies and programs applicable to all domestic Sea Ray dealers selling comparable Products, from the authorized Dealer Location(s) identified in the attached Exhibit A for each Dealer Region, which Products shall be purchased only from Sea Ray or an authorized Sea Ray dealer located in the country in which Dealer is located. Dealer Regions and Dealer Locations are set forth in the Defined Terms and Exhibit A. During the Term of this Agreement, Sea Ray shall not appoint other dealers to sell Products from a dealer location within the Territory set forth in the Defined Terms; provided, however, that Sea Ray reserves the right to modify the Territory or appoint other dealers to sell, display and service Product from dealer locations within the Territory at any time if Dealer closes a Dealer Location without prior written notice to Sea Ray and prior written approval thereof by Sea Ray, which approval shall not be unreasonably withheld upon a review by Sea Ray of Dealer’s abilities to perform the Agreement obligations and as further provided in Paragraph 2. Provided that similar restrictions apply to all domestic Sea Ray dealers selling comparable Products, Dealer shall not sell, advertise, solicit for sale or offer for resale Products outside of the Territory except as otherwise provided by Sea Ray’s Advertising Policy or other applicable policy. Dealer may advertise in recognized and established marine publications with cross-territorial distribution provided that when Dealer does so, it specifically identifies its authorized locations as defined in this Agreement and complies with Sea Ray’s Advertising Policy. Sea Ray reserves the right in its sole discretion to monitor or otherwise enforce its policies and procedures applicable to all domestic Sea Ray dealers and will do so on a fair and equitable basis. There are no third party beneficiary rights to such policies and procedures or this Agreement or other dealer agreements. Sea Ray reserves the right to make sales or provide service in the Territory based upon legitimate business purposes and to appoint other dealers or service providers to sell, display, and/or service products, from any other location outside the Territory. Sea Ray may also display Products within the Territory for general display and promotional purposes. Sea Ray shall have the right to adopt and modify policies and programs related to the Products from time to time in its sole discretion and in accordance with its own reasonable business judgment and it will enforce such policies and programs on a fair and equitable basis. Dealer agrees to comply with such policies and programs following receipt of notice thereof from Sea Ray, including without limitation, through inclusion in Sea Ray’s Dealer Manual and/or Programs. 2. Location : Dealer shall sell at retail, display, and service Products only at and from the authorized Dealer Location(s) referenced in Exhibit A, as may be amended from time to time as provided herein. Dealer Location(s) are both sales and service unless otherwise specified in writing. Dealer shall concentrate its sales, display and service efforts within the designated Territory. 4 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. Dealer shall not delete, change, or add to the above Dealer Location(s) without the prior written consent of Sea Ray, which consent shall not be unreasonably withheld, and Sea Ray may consider any relevant factors and consequences as part of the approval process, including but not limited to the Dealer’s qualifications and abilities to perform the Agreement obligations from the proposed Dealer Location, the effect such a grant would have on the resulting Territory configuration and adjacent Sea Ray dealer sales, the Dealer’s financial capabilities to successfully operate the business from the Dealer Location, and whether the Dealer will have adequate personnel to manage the business at the Dealer Location. Dealer shall not, directly or indirectly, sell Products for use by or to a purchaser located outside of the country in which the Dealer is located, and shall not sell Products to a third party who Dealer knows or should know will resell the Products outside of the country in which the Dealer is located. Dealer shall not sell to others for the purpose of resale without the prior written consent of Sea Ray. Dealer shall not utilize the services of a broker or similar agent to sell Product unless such broker is an affiliated third party of Dealer that is located within the Territory, consummates the sale of any Product in concert with Dealer and pursuant to Dealer’s standard practices, and otherwise complies with the requirements of this Agreement. Dealer agrees to provide appropriate facilities and to assume full and complete managerial authority and responsibility for the service of the Products at and from those Dealer Location(s) specified in this Agreement and for the display and retail sale of the Products at and from each Dealer Location. Additionally, Dealer may engage in temporary off-site display and sales activity within the Territory. 3. Responsibilities of the Parties : 3.1 Dealer’s Responsibilities : Dealer agrees to: A. Devote its best efforts to aggressively promote, display, advertise and sell Products at each Dealer Location and in the Territory and Dealer Region in accordance with the terms of this Agreement and all applicable federal, state and local laws. Dealer shall display and utilize at each Dealer Location signs, graphics and image elements with Sea Ray’s Identification as defined herein, subject to approval by Sea Ray, that will positively reflect the Sea Ray image and promote the retail sale of the Products. B. Achieve the performance standards set forth as follows and in the related Exhibit B (collectively, “Performance Standards”) for each Dealer Region. Sea Ray, in collaboration with Dealer , will establish fair and reasonable Performance Standards for each of the Dealer Regions under this Agreement which Performance Standards shall be established in a manner similar to those applied to domestic Sea Ray dealers. Performance Standards shall include minimum requirements relating to inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to the terms of Sea Ray’s then current buying program, unit retail sales based on Product registrations for Products in each Dealer Region, customer satisfaction (e.g., Net Promoter Scores) and Product marketing support. 5 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. Sea Ray, in collaboration with Dealer, will establish the Performance Standards taking into consideration factors such as population, sales potential, market share percentage of the Products sold in the Territory as compared to competitive products sold in the Territory, product availability, economic conditions in the Dealer Region(s) and Territory, competition from other marine dealerships in the area, past sales history, historical Product mix and stocking practices, existing Product Inventory, adequacy and ability of the Products to meet customer demand in the Territory, number of locations, and any special circumstances that may affect the sale of Products or the Dealer. The Performance Standards for the first Product Model Year of this Agreement are agreed to and identified in Exhibit B. Sea Ray, in collaboration with Dealer, will, in subsequent years, substitute the updated and amended Performance Standards for the current Exhibit B. The Performance Standards on Exhibit B will continue to apply until replaced with updated and amended Performance Standards. C. Maintain at each Dealer Location (unless a sales location only, and then service shall be provided at another Dealer Location) a service department that Dealer agrees to staff, train, and equip to promptly and professionally service Products; and to maintain at each Dealer Location parts and supplies to properly service Products on a timely basis. D. Perform any and all necessary Product rigging, installation, and inspection services prior to delivery to the purchaser as required by Sea Ray’s current written policy applicable to domestic Sea Ray dealers and perform post-sale service of all Products originally sold by Dealer and brought to Dealer for service. Dealer will be required to provide or arrange for warranty and service work for Product regardless of the selling dealer of the Product or condition of sale. Sea Ray will exercise reasonable efforts as to this Paragraph 3.1D. to address circumstances in which another dealer has made a sale to an original retail purchaser who permanently resides within Dealer’s Territory where such sale is contrary to the terms of the selling dealer’s Sales and Service Agreement. Dealer will provide appropriate instructions to purchasers on how to obtain warranty and service work from the Dealer. Dealer will secure all Product inventory against weathering and other damage, and maintain inventory in a like new and unused condition. E. Furnish each Product purchaser with Sea Ray’s limited warranty on new Products and with information and training as to the safe and proper operation and maintenance of the Product. F. Complete and submit Sea Ray’s Product registration card (or applicable electronic form) and In-Service Checklist promptly upon delivery of the Products to the purchaser and assist Sea Ray in performing Product defect and recall campaigns. In the event Dealer fails to return the card or submit the other documentation to Sea Ray as required, Dealer shall indemnify Sea Ray against any liability, loss, or damage which Sea Ray may sustain directly as a result of such failure. G. Maintain complete Product sales, warranty and service records, and report to Sea Ray upon request the name and address of each Product purchaser to the extent required by applicable law. Dealer further agrees to provide Sea Ray with access to its applicable books and records at reasonable times and upon reasonable prior notice to verify the accuracy of information submitted for participation and eligibility in promotions and other programs. 6 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. H. [Intentionally omitted.] I. Submit to Sea Ray upon request any additional information or clarifying information regarding Dealer’s financial statements and allow full and open disclosure of financial information concerning Dealer between Sea Ray and any financial institution or company which may finance or propose to finance all or part of Dealer’s Product inventory. J. Conduct business in a manner that preserves and enhances the reputation and goodwill of both Sea Ray and Dealer for providing quality products and services, and refrain from using any false, misleading or deceptive advertising. Submit truthful and accurate statements, reports and information to Sea Ray and any financial institution financing or proposing to finance Dealer’s Product inventory or any purchaser. K. Maintain an ability to purchase Product inventory for each Dealer Location via flooring and/or self-financing that is customary to carry on hand and display Sea Ray’s current Product models as indicated in the Defined Terms and the performance standards set forth herein. L. [Intentionally omitted.] M. Use its best efforts to maintain and improve scores or other customer satisfaction rating (e.g., Net Promoter Scores) in compliance with the Performance Standards for such applicable ratings. N. Comply with those Dealer obligations that may be imposed or established by Sea Ray applicable to all domestic Sea Ray Dealers including but not limited to those included in Sea Ray’s policies and programs and Sea Ray’s Advertising Policy. O. Maintain a financial condition which is adequate to satisfy and perform its obligations under this Agreement. P. Provide prior written notice to Sea Ray if Dealer desires to make any material change in Dealer’s financing of its Product inventory or business and give Sea Ray sufficient time to discuss and review with Dealer the effect of the proposed change. Q. Notify Sea Ray of the addition or deletion of any Dealer Location(s) which notification Dealer agrees shall not be deemed a consent by Sea Ray to such a proposed change. R. Provide Sea Ray with prior notice of any proposed appointment of sub-dealers. All appointments of authorized sub-dealers are subject to prior written approval by Sea Ray (“Authorized Sub-dealers”). Dealer will set its own resale price to Authorized Sub-dealers and assume all risk of non-payment by the Authorized Sub-dealers. The Authorized Sub-dealers are not parties to any agreement between Sea Ray and Dealer and Dealer will ensure that the Authorized Sub-dealers do not take any actions that violate any policies and programs of Sea Ray or are inconsistent with the terms of this Agreement. Dealer is responsible for any losses incurred by Sea Ray as a result of Authorized 7 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. Sub-dealer’s performance including, but without limitation, Authorized Sub-dealer’s failure to pay Sea Ray for any Product or to pay any financial institution that finances Products purchased by the Authorized Sub-dealers. Dealer will not enter into any agreement with Authorized Sub-dealers that is inconsistent with the terms and conditions of this Agreement. S. Notify Sea Ray in writing of the applicable brand and boat type at least thirty (30) days before Dealer begins to sell, display or advertise a new boat brand. 3.2 Company Responsibilities : Company Agrees to: A. Sell Products to Dealer in accordance with Company’s then-current terms and conditions of sale applicable to domestic Sea Ray dealers, limited warranties, and the price list published from time to time by Company, less any applicable discounts allowed by Company’s programs applicable to Dealer and consistent with the provisions of Section 5 hereof. Company shall have the right to modify its terms and conditions of sale, limited warranties, price lists and programs from time to time in its sole discretion and in compliance with the terms of this Agreement; provided, however, that Company will provide reasonable prior written notice to Dealer after the beginning of the Model Year of such modifications and that changes in the limited warranty and pricing will apply only to future retail purchases. Company will make available its current policies and programs in electronic format or in a manual or other format Company deems appropriate. Dealer should contact Company for a copy of the policies and programs if it does not have access to or did not receive a copy. promotional material to assist Dealer in the sale of Products as Company deems appropriate. B. Provide to Dealer reasonable quantities of catalogs, specification sheets, and other advertising, merchandising or order forms or procedures, maintenance and service manuals and other materials of a technical nature as Company deems appropriate. C. Make available to Dealer in electronic format or otherwise reasonable quantities of parts books, warranty claim forms, designations of Company that correspond to the Products as Company deems appropriate. D. Furnish Dealer with written instructions and/or policies for the use of trademarks, trade names, logos and other trade E. Furnish a Limited Warranty for the Products and provide warranty support and process warranty claims in accordance with Company’s warranty policy, which may be modified from time to time by Company in its sole discretion. Company shall notify Dealer of changes to Company’s warranty policy and make available current versions of its warranty policy to Dealer. appropriate. F. Promote sales of the Products via the Internet and other marine related publications or by other means as Company deems 8 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. G. Ship parts related to the Products in accordance with Company’s policy on shipping parts. H. Accept payment for Product and credit Dealer’s account within a reasonable time. account status upon request, and administer credit policies in a non-discriminatory manner. I. Furnish detailed invoices upon shipment and periodic statements thereafter, provide prompt communication regarding Company reserves the right to create, update and modify such a website locator from time to time in its sole discretion. J. Identify Dealer’s name and address in listing of authorized dealers on Company’s website dealer locator (if available). Products. K. Provide reasonable technical assistance and procedures for handling of technical questions of Dealer related to the L. Maintain communication channels in order to receive Dealer feedback from time to time. deems appropriate. M. Provide reasonable consultative assistance to Dealer for operational, sales and customer service support as Company N. Provide reasonable supportive informational materials for new models of Products as Company deems appropriate. Company. O. Provide owner’s manual for Products and similar materials for other components or accessories that are made available to Performance Standards set forth in Section 3.1.B. P. Supply Dealer with proper quantities of Product consistent with Sea Ray’s quality standards to allow Dealer to meet the at least annually, conduct a portfolio product review with appropriate Dealer managers. Q. Provide Dealer with two (2) seats on Sea Ray’s concept review teams to consult with Sea Ray regarding the Products and, 4. Orders : Dealer agrees to submit orders to Sea Ray in a manner and format prescribed by Sea Ray, applicable to all domestic Sea Ray dealers which orders shall be subject to Sea Ray’s then current terms and conditions of sale which may be modified by Sea Ray at any time for all domestic dealers as deemed reasonably necessary. Any order which does not comply with Sea Ray’s terms and conditions need not be filled by Sea Ray provided, however, that Sea Ray shall promptly notify Dealer of such noncompliance. Any additional or different terms submitted by Dealer will be deemed rejected and will also be void and of no effect. Dealer cancellation of orders will be subject to Sea Ray’s then current cancellation policy applicable to all domestic Sea Ray dealers. All orders submitted by Dealer are subject to acceptance by Sea Ray. 9 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. 5. Prices : The Products sold to the Dealer by Sea Ray shall be on the basis of price lists published by Sea Ray from time to time for its domestic dealers, less any applicable discounts allowed by Sea Ray’s programs. Sea Ray shall have the right to revise the price lists or applicable discounts or programs applicable to all of its domestic dealers at any time and agrees to promptly notify Dealer of any such change. The Product prices charged to Dealer will be the lowest price then charged to other domestic dealers subject to Dealer meeting all the requirements and conditions of Sea Ray’s applicable programs, and provided that Sea Ray may in good faith, charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and limited duration non-ordinary business circumstances, or for limited duration promotional programs. Sea Ray shall have no obligation to reimburse Dealer for any loss which Dealer may sustain by reason of any change in price, program, or discount for which notice was provided in accordance herewith. Terms of payment will be as specified from time to time by Sea Ray. Dealer will pay Sea Ray the lesser of 1.5% late charges per month or the maximum permitted by applicable law on any past due invoice except as to any specific amount of an invoice that is disputed in good faith by the Dealer. Sea Ray may refuse shipment for any credit reason, including Dealer’s failure to pay for a prior shipment or to pay any financial institution who finances Dealer’s purchases, or for Dealer’s failure to maintain its Product inventory in accordance with the terms of this Agreement. Sea Ray shall immediately notify Dealer if Sea Ray refuses shipment to Dealer so that Dealer has a reasonable opportunity to cure any issue. Dealer will reimburse Sea Ray for all reasonable and necessary costs in collecting past due accounts, including attorney fees and court costs. Dealer hereby grants to Sea Ray and Sea Ray hereby retains a security interest in all Products sold to Dealer and all proceeds arising out of the sale of the Products until such Products are paid for in full. Dealer agrees to sign, file, authenticate, and authorize the signing, filing and authenticating by Sea Ray of such financing statements and other documents and do such other acts, as Sea Ray may request to establish and maintain a valid and protected security interest in the Products. 6. Shipments : All shipments of Products shall be made FOB the Sea Ray factory designated by Sea Ray, and title shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Dealer shall pay all applicable shipping, transportation, delivery, and handling charges for Products ordered. If Dealer fails to accept delivery of any Products ordered, other than material non-conforming Products that must be returned to Sea Ray for repair, Dealer shall reimburse Sea Ray for any costs incurred, including returning such Products to Sea Ray. If Sea Ray ships Products not ordered by Dealer, Dealer shall have the right to refuse delivery, in which event Sea Ray shall pay all costs incurred in returning same to Sea Ray. Shipments shall be subject to Sea Ray’s production schedule and availability of materials or transportation equipment. No liability shall be sustained by Sea Ray by reason of its not filling any order due to circumstances beyond its reasonable control such as, but not limited to, labor disputes, natural disasters, accidents to machinery, acts of God, acts of or threatened acts of war or terrorism, material shortages, regulations, demands for goods exceeding Sea Ray’s available supply or any other cause beyond Sea Ray’s control. In the event of any delay in delivery, failure to fill orders or other default or damage caused by any of the foregoing, Sea Ray may, at its option and without liability, cancel all or any portion of the applicable orders to the extent affected by the event of force majeure and/or extend any date upon which performance is due hereinunder. 10 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. 7. Risk of Loss : Risk of loss for Products ordered by Dealer shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Sea Ray has instructions to insure Products on behalf of Dealer from the shipping point to the final delivery point unless otherwise agreed by the parties in writing. Dealer will be the loss payee on any claim. Sea Ray will assist Dealer in the processing and collection of any claims against the carrier contracted by Sea Ray. Notwithstanding the above, if Dealer or Dealer’s representative takes possession of Products at the Sea Ray factory, Dealer assumes responsibility to insure the Products upon tender of the Products to Dealer or Dealer’s representative at the Sea Ray factory. 8. Payment - Claims : All sales of Products to Dealer shall be paid for in advance by Dealer, unless otherwise agreed between Sea Ray and Dealer in writing. All claims for shortage or damages or unacceptable Product shall be made pursuant to Sea Ray’s then current policy on shipment damage and claims procedures applicable to all Sea Ray domestic dealers. The failure of Dealer to give such notification as set forth in Sea Ray’s then current shipment damage and claims procedures policy shall constitute a waiver of any such claim. Dealer shall cause to be paid or shall make reimbursement to Sea Ray in full for any and all taxes, duties, or other charges imposed by federal, state, municipal, or other governmental authority upon Dealer’s purchase under this Agreement. 9. Product Modification : Sea Ray shall have the right to discontinue the sale of Products or to modify the design, specifications and components of Products at any time provided, however, that Sea Ray shall notify Dealer, prior to shipment, of any major changes with respect to Products previously ordered by Dealer but not yet delivered, in which event Dealer shall have the right to terminate such order within five (5) business days after such notification by providing written notice to Sea Ray. The failure to provide such timely written notification shall be deemed acceptance by Dealer of such changes. 10. Warranties and Limitation of Warranties and Liability : 10.1 Warranties : Dealer agrees to: A. Sell Products only on the basis of Sea Ray’s published applicable limited warranty and make no other warranty or representations concerning the limited warranty, express or implied, either verbally or in writing. B. Display at each Dealer Location that Product warranty information required by applicable law and furnish and make known to the first-use purchaser at the time of delivery the appropriate operations and maintenance manual provided by Sea Ray, instructional information for the use and operation of the Product consistent with the operations and maintenance manual, the Product installation instructions, if any, together with Sea Ray’s written limited warranty, including all disclaimers and limitations thereto. 11 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. C. Subject to the terms of the applicable limited warranty, expressly inform the purchaser in writing that no Sea Ray warranty applies if the Product is “used” unless Sea Ray expressly authorizes such warranty in writing or the existing balance of the warranty is transferable and is transferred. No Product warranty shall apply if the design or material of the Product is substantially modified without the express authorization of Sea Ray in writing. D. Provide timely warranty service on all Product presented to Dealer by purchasers in accordance with Sea Ray’s then current warranty service program applicable to all domestic Sea Ray dealers selling comparable Products. Dealer agrees to make all claims for reimbursement under Sea Ray’s warranty service program in the manner reasonably prescribed by Sea Ray. Sea Ray may revise its warranty service program from time to time, providing Dealer with written notification of all revisions, and those revisions will supersede all previous programs. E. To verify the accuracy of the warranty claims submitted to Sea Ray by Dealer and the service provided by Dealer with regard to such warranty claims, provide Sea Ray with access to its applicable books and records, and provide such additional documentation which Sea Ray may reasonably request. In the event Sea Ray finds errors in the aggregate greater than 5% of reviewed claims submitted by Dealer Location and paid by Sea Ray, Sea Ray may calculate the percentage rate of error; and using that percentage rate of error, extrapolate the amount owed to Sea Ray for up to three (3) prior years of all paid claims made by Sea Ray to Dealer at that Dealer Location. Within thirty (30) days of such notice of such amount, Dealer shall either pay the extrapolated amount to Sea Ray or pay the cost of a full audit by Sea Ray or Sea Ray’s designee or at Dealer’s option and expense, a third party auditor reasonably acceptable to Sea Ray and Dealer and pay to Sea Ray that amount, if any, found to be owing to Sea Ray as a result of such audit. Sea Ray agrees to honor all legitimate warranty claims on Products when made by purchaser through Dealer in the manner reasonably prescribed by Sea Ray. Sea Ray shall respond to all proper and legitimate warranty claims submitted by Dealer within the time period described in the then current warranty policy applicable to domestic Sea Ray dealers. Sea Ray agrees to pay or credit all accepted and undisputed claims within thirty (30) days after receipt of all required documentation. 10.2 Limitation of Warranties and Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SEA RAY’S PUBLISHED APPLICABLE LIMITED WARRANTY, SEA RAY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR, NOR SHALL THE MEASURE OF DAMAGES INCLUDE, ANY AMOUNTS FOR LOST PROFITS, LOST SALES, OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR ANY REASON OR UPON ANY CAUSE OF ACTION, WHETHER SOUNDING IN TORT, CONTRACT OR ANY OTHER LEGAL THEORY. 12 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. 11. Indemnification . A. In order to obtain preferred boat show space at discounted rates for Dealers, Sea Ray may contract with and agree to indemnify boat show sponsors and other related parties. Accordingly, Dealer shall defend, indemnify and hold harmless Sea Ray, and any boat show sponsor which Sea Ray has agreed to indemnify, from any and all claims, causes of action, and suits, including claims of negligence arising either directly or indirectly out of Dealer’s use of boat show space originally obtained by Sea Ray. B. Sea Ray agrees to indemnify and hold harmless Dealer for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Sea Ray’s negligent acts or omissions involving the original design or manufacture of any Product at the time it left Sea Ray’s possession or control, or the repair of any Product performed by Sea Ray, or (2) any breach of this Agreement by Sea Ray. Sea Ray, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Dealer agrees to cooperate at its own expense and provide Sea Ray with any available information as may be reasonably necessary to such defense. In the event Sea Ray elects not to defend any litigation that may arise out of any claims covered hereby, Sea Ray will be responsible for Dealer’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. C. Dealer agrees to indemnify and hold harmless Sea Ray for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Dealer’s negligent acts or omissions involving Dealer’s improper application, use or repair of the Products, (2) statements or representations not specifically authorized by Sea Ray, including warranties inconsistent with Sea Ray’s standard limited warranty, and the installation of any after market components or any other modification or alteration to the Product, or (3) any breach of this Agreement by Dealer. Dealer, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Sea Ray agrees to cooperate at its own expense and provide Dealer with any available information as may be reasonably necessary to such defense. In the event Dealer elects not to defend any litigation that may arise out of any claims covered hereby, Dealer will be responsible for Sea Ray’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. D. The provisions in this Paragraph 11 regarding indemnification do not apply to claims by third parties in which there has been a judicial determination that the indemnifying party does not have liability to the third party. The provisions in this Paragraph 11 shall survive the expiration or termination of this Agreement. 12. Repossession or Repurchase of Product by Sea Ray : Dealer shall be liable to and reimburse Sea Ray for any and all losses or deficiencies on the sale or disposition of any Product purchased by Dealer pursuant to this Agreement which is repossessed or repurchased by Sea Ray for any reason whatsoever, except as contemplated in Paragraph 16G. Dealer shall also be liable for any and all discounts, volume rebates, or other sales incentives paid to Dealer on Product repurchased, and all reasonable attorney’s fees, court costs, and expenses incurred in connection with such repossession or repurchase. Dealer agrees to provide Sea Ray, upon request, guarantees or other adequate security to cover any repurchase or financial obligations that Sea Ray may assume in connection with Dealer’s flooring or financing. 13 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. 13. Trademarks and Service Marks : Dealer acknowledges that Sea Ray or its affiliated companies are the exclusive owners of various trademarks, service marks, trade designations, logos and trade dress (collectively “Identification”) which Sea Ray uses in connection with Products and its business. Dealer is authorized to use Identification only in the manner prescribed by Sea Ray, only in connection with the promotion and sale of Products, and only until the expiration or termination of this Agreement. Dealer shall not register or assist any other party to register any domain name that contains or closely resembles any Company Identification without first obtaining the prior written consent of Company. Dealer shall not use Identification in any unauthorized manner or in any manner that adversely reflects upon the reputation of Sea Ray or in relation to any other matter that is a breach of this Agreement. Dealer shall not use Identification or advertise outside of the Territory to the extent prohibited by the terms of this Agreement, without Sea Ray’s express written consent and shall comply with Sea Ray’s Advertising Policy. Authorization shall not be interpreted as a license for use of Identification. Dealer acquires no proprietary rights with respect to Identification, and this authorization shall terminate simultaneously with the termination or expiration of this Agreement. In the event of expiration or termination of this Agreement, Dealer shall immediately discontinue use of Identification in any way whatsoever and shall thereafter not use, either directly or indirectly, any Identification or any confusingly similar Identification in a manner likely to confuse, mislead, or deceive the public. Dealer may continue to use Identification for a reasonable period of time in the event Sea Ray does not repurchase Dealer Product inventory as long as such Identification use remains subject to the terms of this Agreement, Sea Ray’s Advertising Policy or any other written instructions provided by Sea Ray to Dealer. Dealer agrees that any unauthorized use or continued use of Identification after the period of time allowed by this Paragraph 13 shall constitute irreparable harm entitling Sea Ray to seek equitable relief, including injunction and specific performance, without the necessity of posting bond or proving actual damages, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for such a breach by Dealer but shall be in addition to all other remedies available at law or equity to Sea Ray. 14. [Intentionally omitted.] 15. No Agency Created : It is understood and agreed that Dealer is not, nor shall it at any time represent itself to be, the agent, employee, representative, partner, or franchisee of Sea Ray for any purpose. Neither party shall enter into any contract or commitment in the name of or on behalf of the other party. Sea Ray has no fiduciary duty to Dealer pursuant to this Agreement or the relationship between the parties. Dealer is not required to pay, and shall not pay, to Sea Ray any fee for the right to purchase the Products or otherwise do business with Sea Ray. 16. Term of Agreement - Termination : A. The term of this Agreement shall be as set forth in the Defined Terms (the “ Term”) subject however to the provisions set forth in this Paragraph 16 and in Paragraph 18. 14 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. B. Subject to the provisions of Section 16F below, Sea Ray may terminate this Agreement upon the giving of at least sixty (60) days prior written notice to Dealer if: (1) Dealer does not have an ability to purchase Products via flooring or self-financing; or (2) Dealer fails to meet its financial obligations as they become due to either Sea Ray or lender(s) financing Products. Sea Ray shall work in good faith with Dealer to try to resolve any differences between them prior to giving such 60-day notice of termination. C. This Agreement may be terminated at any time by the mutual consent of the parties. D. Subject to the provisions of Section 16F below, either party may elect to not extend the Term of this Agreement for another twelve (12) month period following expiration of the current twelve (12) month period of the Term as described in the Defined Terms in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party. In such event, the non-breaching party will provide written notice to the breaching party and an opportunity to cure or remedy such breach. The parties shall work together in good faith to resolve any issues but the additional twelve (12) month extension shall not be added until such time that the breach is remedied to the reasonable good faith satisfaction of the parties. At such time as the parties agree that the concerns have been remedied, the additional twelve (12) month extension shall be added to the end of the existing Term. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement upon the giving of at least twenty four (24) months prior written notice to the other party in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party, which breach is not cured during such notice period; provided, however, that if such a breach or default by Dealer only pertains to one Dealer Region, Sea Ray shall only have the right pursuant to this provision to terminate this Agreement as to that particular Dealer Region. The parties shall work together in good faith to resolve any issues. Notwithstanding the above, so long as Dealer’s failure to meet the Performance Standards is not caused by Sea Ray failing to have Product available for purchase by Dealer, Sea Ray shall have the right to terminate this Agreement as to the applicable Dealer Region(s) (i) if Dealer is failing to meet the Performance Standards in a Dealer Region and begins selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within ninety (90) days after written notice of the same from Sea Ray, or (ii) if Dealer is meeting the Performance Standards in a Dealer Region, but then starts failing to meet the Performance Standards after beginning selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within six (6) months after written notice of the same from Sea Ray. 15 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. E. Notwithstanding subparagraph D above or anything in this Agreement to the contrary, this Agreement may be terminated by a party upon sixty (60) days prior written notice to the other party if any of the following occur with regard to the other party: (1) the other party ceases to exist; (2) the other party becomes insolvent or takes or fails to take any action which constitutes an admission of inability to pay debts as they mature; (3) the other party makes a general assignment for the benefit of creditors to an agent authorized to liquidate any substantial amount of assets; (4) the other party becomes a subject of an “order for relief” within the meaning of the United States Bankruptcy Code; (5) the other party becomes the subject of a receivership, reorganization, liquidation or any similar proceeding; or (6) the other party makes a fraudulent misrepresentation that is material to this Agreement. This Agreement may be terminated upon sixty (60) days prior written notice by Sea Ray upon the occurrence of: (1a) a prohibited assignment, transfer, delegation or subcontracting without consent as described in Paragraph 18A; (2b) the commission by Dealer of an act of fraud upon Sea Ray; (3c) the commission by Dealer (or any of its officers) of a felony or other act of fraud which is materially detrimental to Sea Ray’s reputation or business or which materially impairs the Dealer’s ability to perform the duties under this Agreement; or (4d) Dealer fails to pay any lender financing Products after the sale of Products by Dealer (out of trust). F. For the purpose of the first paragraph of Section 16D, if a breach or default by Dealer pertains only to one Dealer Region, Sea Ray shall have the right to deny the additional extension period for that particular Dealer Region only until remedied as described in Section D. For the purpose of Section 16B or E, if Dealer breaches or defaults as described in such provisions, Sea Ray may, in its own discretion, elect either to terminate the entire Agreement (as to all Dealer Regions) or terminate only as to particular Dealer Region subject to the Agreement. Notwithstanding the foregoing, in the event of any possible termination pursuant to Section 16B or E, a party seeking to terminate shall first provide written notice to the other party stating the potential grounds therefore and both parties shall work together in good faith for a period of no less than sixty (60) days to resolve any concerns between the parties. G. [****] H. In the event of termination of this Agreement prior to its expiration date, provided the termination is not for fraud, bad faith, or insolvency of Dealer, Sea Ray will nevertheless continue to sell to Dealer warranty parts and accessories for Products on a cash on delivery basis for a period not to exceed twelve (12) months in order that Dealer may continue to provide warranty service on Products which have outstanding warranties subject to Dealer’s compliance with the terms and conditions of Sea Ray’s warranty and parts program applicable to all domestic Sea Ray dealers. The performance of any warranty work after termination or expiration of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. I. Any period of time described in the Agreement shall be modified to include such different period of time that may be required by applicable law. 16 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. J. In the event of expiration or the termination of this Agreement by either party, Sea Ray is relieved from any obligation to make any further Product shipments under this Agreement, and may cancel all of Dealer’s unshipped orders for Products, irrespective of previous acceptance by Sea Ray, except those which are proved to Sea Ray’s reasonable satisfaction to have been the subject of a binding customer order to Dealer prior to the receipt of any notice of termination or expiration. The acceptance of orders from Dealer for the continuous sale of Products to Dealer or any other act after expiration or termination of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. Upon the expiration or termination of this Agreement, all obligations owed by Dealer to Sea Ray shall become immediately due and payable on the effective date of the expiration or termination, whether otherwise then due or not (without presentment, demand, protest or notice of any kind, all of which are waived by Dealer); and Sea Ray may offset or deduct from any and all sums owed to Dealer any and all sums owed by Dealer to Sea Ray, or any parent, affiliate or subsidiary of Sea Ray, returning to Dealer the excess, if any. 17. Governing Law : This Agreement shall be governed, interpreted and construed according to the laws of the State of Tennessee, U.S.A., without regard to applicable conflicts of law. 18. Assignability : A. This appointment and Agreement is made and entered into with the distinct understanding that it is personal with Dealer, and is not, whether by operation of law, change in control or otherwise, assignable or in any part delegable or transferable unless the express written consent of Sea Ray is obtained; provided, however, that Dealer may assign the appointment and this Agreement to a subsidiary or affiliate without consent. An assignment by Dealer to any subsidiary or affiliate shall not relieve Dealer from any obligation or responsibility provided for under the terms of this Agreement. Unless first approved by Sea Ray in writing, any purported assignment, transfer, delegation or subcontracting of Dealer’s rights and obligations under this Agreement by it (other than to a subsidiary or affiliate) may immediately render this Agreement terminated in Sea Ray’s sole discretion. B. Sea Ray may not assign this Agreement without the prior written consent of Dealer, except that no such consent is necessary with respect to assignment of this Agreement to any Sea Ray owned subsidiary or affiliate. An assignment by Sea Ray to any owned subsidiary or affiliate shall not relieve Sea Ray from any obligation or responsibility provided for under the terms of this Agreement. Upon any sale of the business or the assets of Sea Ray to a nonaffiliated third party, and where Dealer does not agree to the assignment, this Agreement shall be terminated and Sea Ray shall be released from any further obligations and liabilities to supply Products to Dealer under this Agreement provided however that the provisions of Sections 11 and 16 and all other provisions that are intended to survive termination either expressly or impliedly shall do so in accordance with their terms. 19. Notices, Communications : A. Any written notice given pursuant to this Agreement shall be either hand delivered (by courier or otherwise), or mailed, postage prepaid, by Registered or Certified Mail, return 17 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. receipt requested, to the party identified below at the respective address listed below. Notice may also be given by fax, e-mail or other electronic method; however, if notice is provided pursuant to Paragraph 16, a copy must also be mailed in the manner described herein. Such notice shall be deemed to be given upon first receipt. A change of address may be given by such notice. To Sea Ray: Sea Ray Boats Attention: President 800 South Gay Street, Suite 1200 Knoxville, TN 37929 With a copy to: Brunswick Corporation Law Department Attention: General Counsel 1 N. Field Court Lake Forest, Ill Tel: (847)735-4700 Fax: (847) 735-4433 To Dealer: William H. McGill, Jr. President MarineMax, Inc. 2600 McCormick Drive Suite 200 Clearwater, Florida 33759 With a copy to: MarineMax, Inc. Attention: General Counsel Suite 200 2600 McCormick Drive Clearwater, FL 33759 Tel: (727) 531 1700 Fax: (727) 450-1162 B. Dealer hereby grants permission and consent to Sea Ray and to those entities who are authorized by Sea Ray to send or transmit communications (including but not limited to facsimiles, wireless communications, and e-mails) to Dealer and Dealer’s officers, directors, employees, subsidiaries and affiliates, and their permitted successors and assigns. Such communications are not limited in content and may include advertisements, and Dealer understands that by providing such consent it may incur costs that are related to the receipt of such communications. Dealer further agrees that such communications may be sent to any telephone number or electronic media address supplied by Dealer for each Dealer Location. 20. Entire Agreement - Non-Waiver : This Agreement, including any attached addenda, contains the entire agreement between the parties with respect to the matters set forth herein and may not be amended or modified except by a written instrument signed by Sea Ray and Dealer that expressly states that the writing constitutes an amendment or modification to this Agreement, provided that, subject to the provisions of this Agreement, Sea Ray may in its sole discretion and from time to time make changes in accordance with its own reasonable business judgment to the policies and programs applicable to all domestic Sea Ray dealers upon the giving of notice to Dealer as described herein. This Agreement terminates and replaces all prior agreements made between the parties regarding the subject matter of this Agreement and there are no other agreements regarding the matters herein provided that 18 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. each party shall remain obligated to the other for any monies owed under such prior agreements between the parties; and except for payments to be made to Dealer in the ordinary course of business or claims of third parties, there are no other monies, claims, or actions which may give rise to or result in any compensation or monies being owed to Dealer by Sea Ray. Failure on the part of Sea Ray or Dealer to enforce any term of this Agreement shall not constitute a waiver thereof. 21. Severability – Existing Claims : Whenever possible, each paragraph of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any portion of this Agreement is deemed invalid or unenforceable, the remaining sections shall still be enforceable unless removal of that portion so materially alters the risks and benefits to either party that enforcement would be substantially unfair. In such a case, the parties agree to immediately negotiate a substitute clause to restore each party as closely as possible to the risks and benefits originally assumed. Dealer represents to Sea Ray that it is not aware of any claims, causes of action, or disputes that it has or may assert against Sea Ray that arise out of or have accrued prior to the effective date of this Agreement. Dealer further represents to Sea Ray that it has not breached or otherwise violated any term or condition of any previous agreement with Sea Ray. 22. Disputes : All disputes, controversies or claims connected with, arising out of, or relating to this Agreement, or any modification, extension or renewal thereof, or to any causes of action that result from such relationship, shall be subject exclusively to the remedy of arbitration described herein, including but not limited to sums due under this Agreement, the interpretation, performance or nonperformance of this Agreement, and claim for damages or rescission, a breach or default of this Agreement, the creation, termination or nonrenewal of this Agreement (such as a dispute regarding the causes, validity or circumstances of the termination, nonextension, or nonrenewal), and trade regulations or antitrust claims, whether such controversies or claims are in law or equity or include claims based upon contract, statute, tort or otherwise. All controversies shall be conducted in accordance with the American Arbitration Association Commercial Arbitration Rules. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1-16, as amended, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of the arbitration shall be at Chicago, Illinois. Dealer consents to personal jurisdiction of the federal and state courts located in the State of Illinois for the purpose of enforcing this provision or confirming any arbitration award. No party shall be entitled to receive an award of damages in excess of actual damages and in no event shall the parties receive an award of punitive, special or consequential damages, or prejudgment interest. Except for claims based on sums owing to Sea Ray for Products purchased by Dealer, or sums owing to Dealer for the reimbursement of funds it paid for Products that were previously returned to Sea Ray or claims based on Paragraph 11 hereof, all arbitration claims and proceedings must be instituted within one (1) year after the dispute arises, and the failure to institute arbitration proceedings within such period shall constitute an absolute ban to the institution of any proceedings and a waiver and relinquishment of all such claims. This paragraph shall survive the expiration or termination of the Agreement. 19 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. 23. [intentionally omitted] 24. Reservation of Rights : Sea Ray grants to Dealer only those rights expressly stated in this Agreement. Except to the extent otherwise expressly provided in this Agreement, Sea Ray retains all rights. This Agreement does not concern any other brands or products, except the Sea Ray Products identified in the Defined Terms. Sea Ray and/or its affiliates reserve the right for Sea Ray’s affiliates to own, acquire, manage, sell, display or service other products and other brands in any area (including the Territory) including those that may compete with Products. Sea Ray reserves the right to receive incentives, rebates or other payments from third-party suppliers, including without limitation related to purchases by or through Dealer from such third party suppliers. 25. Confidentiality . Each party shall maintain as confidential all proprietary business information, trade secrets and all materials containing confidential business information provided to such party by the other party, including but not limited to customers, vendors, price lists, wholesale prices, programs, rebates, discounts, inventions, concepts, designs, structures, formulas, processes, financial information, employees, strategic plans, acquisition plans or other business affairs of the disclosing party. Dealer acknowledges that Sea Ray is an affiliate of Brunswick Corporation, and accordingly subsidiaries, affiliates and other divisions of Brunswick Corporation may be given access or have access to confidential business information received in connection with this Agreement, and such disclosure does not constitute a breach of this paragraph. Each party, on behalf of its directors, officers, employees and agents to whom such information and materials are disclosed, agree that it shall keep such information and materials confidential both during and after the Term of this Agreement for a period of three (3) years provided that if any such information or material is a trade secret, then the obligations under this Paragraph shall survive the termination of this Agreement for the longer of five (5) years or the length of time such information remains a trade secret. These obligations of confidentiality do not apply to any information which (1) was known to the receiving party prior to receipt from the disclosing party; (2) is independently developed by the receiving party, provided that the burden of proof of such independent development shall be on the receiving party; (3) is or becomes publicly known without the fault of the receiving party; (4) is or becomes rightfully available to the receiving party without confidential restriction from a source not bound by a confidentiality obligation to the disclosing party; (5) is required by law, rule or regulation to be disclosed; (6) is required to be disclosed pursuant to court or government action; provided, the disclosing party is given reasonable prior notice of such disclosure; or (6) is disclosed pursuant to written agreement of the parties. The terms of this paragraph are in addition to, and in no way a limitation of, the terms of any confidentiality or non-disclosure agreement (or any confidentiality provision in any other agreement) between or involving Sea Ray (or its affiliates) and Dealer. 26. Miscellaneous : In case of any dispute relating to the rights and duties imposed by this Agreement, both parties will openly discuss and make reasonable efforts at amicable resolution. Except as expressly described to the contrary in this Agreement, the rights and remedies of each party are not 20 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. exclusive. Unless otherwise provided, where either party has a right to make a determination or pursue or not pursue a particular course of action under the terms of this Agreement, such as, for example granting consent or approval, such determinations and decisions shall be made by such party in its sole discretion. As defined herein, a domestic Sea Ray dealer shall be an authorized Sea Ray dealer whose territory is located solely within the continental Unites States. 27. Counterparts and Signatures : This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute on and the same Agreement. Any signature delivered by fax or other electronic transmission shall be deemed to be an original signature. 28. Guarantee : As a condition for Sea Ray’s entering into this Agreement, MarineMax has signed this Agreement as evidence of its irrevocable guarantee of the Dealer’s performance of all of the duties and obligations provided for in this Agreement. 21 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. Exhibit A [****] 22 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. EXHIBIT B Performance Standards [****] 23 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. Exhibit B Table [****] 24 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. Exhibit X [****] 25 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. Exhibit Y [****] 26 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. SALES AND SERVICE AGREEMENT This Sales and Service Agreement (“ Agreement ”) is entered into as of September 1, 2014 by Sea Ray, a Division of Brunswick Corporation (“Sea Ray” or “Company”) and MarineMax, Inc. (“MarineMax” or “Dealer”), in consideration of the mutual covenants contained in this Agreement, and subject to and incorporating herein the Sales and Service Agreement Terms and Conditions attached hereto. Pursuant to this Agreement, Company hereby appoints Dealer through its Dealer Locations identified in Exhibit A as its dealer for the sale of Products in the Dealer Regions identified in such Exhibit. Exhibit 10.20(e) In this Agreement, the following words and expressions that are not defined elsewhere in this Agreement shall have the following meaning, except where the context requires otherwise: DEFINED TERMS Dealer and Dealer’s Principal Address: MarineMax, Inc., 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759 Dealer Location: Each Dealer facility as listed on Exhibit A attached hereto. Dealer Regions: The Dealer Locations sharing a Territory and comprising a Dealer Region are listed on attached Exhibit A. If a Dealer Location is added to this Agreement (through acquisition or otherwise), the parties will work together to determine the realignment of applicable Dealer Regions related to the addition of such location and/or the appropriate Dealer Region for such new location. Territory: Identified for each Dealer Region in attached Attachment 1 to Exhibit A Product(s): Full line of Sea Ray Sport Boats, Sport Cruisers, Sport Yachts and Yachts (Including related parts and accessories) Performance Standards: See attached Exhibit B. Term: The Term of this Agreement shall be September 1, 2014 to August 31, 2017, provided however that, except as otherwise provided below or in Section 16 of this Agreement, at the end of each twelve (12) month period of the Term, the Term of this Agreement shall be extended by another twelve (12) month period so that the Term of this Agreement remains three (3) years. Notwithstanding the above, (i) either party may provide written notice to the other no less than one hundred and twenty (120) days before the end of any twelve (12) month period that it will not agree to an additional extension due to the failure by such other party to remedy a material breach of this Agreement following written notice thereof and the expiration of the applicable cure period without cure or failure to reach agreement through good faith efforts to do so by the parties and (ii) on or within sixty (60) days after the sixth (6 th ) anniversary of this Agreement, 1 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. either party may provide written notice to the other party to terminate this Agreement effective at the end of the then current contract year (i.e., August 31, 2021). If neither party provides notice to terminate this Agreement on or within sixty (60) days after the sixth (6 th ) anniversary as described above, this Agreement will automatically renew for three (3) year terms beginning on the seventh (7 th ) anniversary, unless otherwise terminated pursuant to this Agreement; provided that on or within sixty (60) days after the second (2 nd ) year of any such three (3) year renewal term, either party may provide written notice to the other party to terminate this Agreement effective as of August 31 of the then current contract year. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement in accordance with the terms of Section 16D. 2 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. IN WITNESS WHEREOF, Company and MarineMax have executed this Agreement and the parties and the individual(s) signing for each party respectively below represent and warrant that the individual(s) signing this Agreement is(are) duly authorized to do so. Sea Ray Division of Brunswick Corporation MarineMax, Inc. By: Title: Date: By: Title: Date: 3 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. SALES AND SERVICE AGREEMENT TERMS AND CONDITIONS 1. Appointment of Dealer : Sea Ray hereby appoints Dealer as a dealer for the retail sale, display, and servicing of all Sea Ray product(s), parts and accessories (hereinafter “Product” or “Products”) as identified in the Defined Terms and subject to Sea Ray’s then current policies and programs applicable to all domestic Sea Ray dealers selling comparable Products, from the authorized Dealer Location(s) identified in the attached Exhibit A for each Dealer Region, which Products shall be purchased only from Sea Ray or an authorized Sea Ray dealer located in the country in which Dealer is located. Dealer Regions and Dealer Locations are set forth in the Defined Terms and Exhibit A. During the Term of this Agreement, Sea Ray shall not appoint other dealers to sell Products from a dealer location within the Territory set forth in the Defined Terms; provided, however, that Sea Ray reserves the right to modify the Territory or appoint other dealers to sell, display and service Product from dealer locations within the Territory at any time if Dealer closes a Dealer Location without prior written notice to Sea Ray and prior written approval thereof by Sea Ray, which approval shall not be unreasonably withheld upon a review by Sea Ray of Dealer’s abilities to perform the Agreement obligations and as further provided in Paragraph 2. Provided that similar restrictions apply to all domestic Sea Ray dealers selling comparable Products, Dealer shall not sell, advertise, solicit for sale or offer for resale Products outside of the Territory except as otherwise provided by Sea Ray’s Advertising Policy or other applicable policy. Dealer may advertise in recognized and established marine publications with cross-territorial distribution provided that when Dealer does so, it specifically identifies its authorized locations as defined in this Agreement and complies with Sea Ray’s Advertising Policy. Sea Ray reserves the right in its sole discretion to monitor or otherwise enforce its policies and procedures applicable to all domestic Sea Ray dealers and will do so on a fair and equitable basis. There are no third party beneficiary rights to such policies and procedures or this Agreement or other dealer agreements. Sea Ray reserves the right to make sales or provide service in the Territory based upon legitimate business purposes and to appoint other dealers or service providers to sell, display, and/or service products, from any other location outside the Territory. Sea Ray may also display Products within the Territory for general display and promotional purposes. Sea Ray shall have the right to adopt and modify policies and programs related to the Products from time to time in its sole discretion and in accordance with its own reasonable business judgment and it will enforce such policies and programs on a fair and equitable basis. Dealer agrees to comply with such policies and programs following receipt of notice thereof from Sea Ray, including without limitation, through inclusion in Sea Ray’s Dealer Manual and/or Programs. 2. Location : Dealer shall sell at retail, display, and service Products only at and from the authorized Dealer Location(s) referenced in Exhibit A, as may be amended from time to time as provided herein. Dealer Location(s) are both sales and service unless otherwise specified in writing. Dealer shall concentrate its sales, display and service efforts within the designated Territory. 4 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. Dealer shall not delete, change, or add to the above Dealer Location(s) without the prior written consent of Sea Ray, which consent shall not be unreasonably withheld, and Sea Ray may consider any relevant factors and consequences as part of the approval process, including but not limited to the Dealer’s qualifications and abilities to perform the Agreement obligations from the proposed Dealer Location, the effect such a grant would have on the resulting Territory configuration and adjacent Sea Ray dealer sales, the Dealer’s financial capabilities to successfully operate the business from the Dealer Location, and whether the Dealer will have adequate personnel to manage the business at the Dealer Location. Dealer shall not, directly or indirectly, sell Products for use by or to a purchaser located outside of the country in which the Dealer is located, and shall not sell Products to a third party who Dealer knows or should know will resell the Products outside of the country in which the Dealer is located. Dealer shall not sell to others for the purpose of resale without the prior written consent of Sea Ray. Dealer shall not utilize the services of a broker or similar agent to sell Product unless such broker is an affiliated third party of Dealer that is located within the Territory, consummates the sale of any Product in concert with Dealer and pursuant to Dealer’s standard practices, and otherwise complies with the requirements of this Agreement. Dealer agrees to provide appropriate facilities and to assume full and complete managerial authority and responsibility for the service of the Products at and from those Dealer Location(s) specified in this Agreement and for the display and retail sale of the Products at and from each Dealer Location. Additionally, Dealer may engage in temporary off-site display and sales activity within the Territory. 3. Responsibilities of the Parties : 3.1 Dealer’s Responsibilities : Dealer agrees to: A. Devote its best efforts to aggressively promote, display, advertise and sell Products at each Dealer Location and in the Territory and Dealer Region in accordance with the terms of this Agreement and all applicable federal, state and local laws. Dealer shall display and utilize at each Dealer Location signs, graphics and image elements with Sea Ray’s Identification as defined herein, subject to approval by Sea Ray, that will positively reflect the Sea Ray image and promote the retail sale of the Products. B. Achieve the performance standards set forth as follows and in the related Exhibit B (collectively, “Performance Standards”) for each Dealer Region. Sea Ray, in collaboration with Dealer , will establish fair and reasonable Performance Standards for each of the Dealer Regions under this Agreement which Performance Standards shall be established in a manner similar to those applied to domestic Sea Ray dealers. Performance Standards shall include minimum requirements relating to inventory stocking levels, provision of annual sales forecasts, submission of orders pursuant to the terms of Sea Ray’s then current buying program, unit retail sales based on Product registrations for Products in each Dealer Region, customer satisfaction (e.g., Net Promoter Scores) and Product marketing support. 5 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. Sea Ray, in collaboration with Dealer, will establish the Performance Standards taking into consideration factors such as population, sales potential, market share percentage of the Products sold in the Territory as compared to competitive products sold in the Territory, product availability, economic conditions in the Dealer Region(s) and Territory, competition from other marine dealerships in the area, past sales history, historical Product mix and stocking practices, existing Product Inventory, adequacy and ability of the Products to meet customer demand in the Territory, number of locations, and any special circumstances that may affect the sale of Products or the Dealer. The Performance Standards for the first Product Model Year of this Agreement are agreed to and identified in Exhibit B. Sea Ray, in collaboration with Dealer, will, in subsequent years, substitute the updated and amended Performance Standards for the current Exhibit B. The Performance Standards on Exhibit B will continue to apply until replaced with updated and amended Performance Standards. C. Maintain at each Dealer Location (unless a sales location only, and then service shall be provided at another Dealer Location) a service department that Dealer agrees to staff, train, and equip to promptly and professionally service Products; and to maintain at each Dealer Location parts and supplies to properly service Products on a timely basis. D. Perform any and all necessary Product rigging, installation, and inspection services prior to delivery to the purchaser as required by Sea Ray’s current written policy applicable to domestic Sea Ray dealers and perform post-sale service of all Products originally sold by Dealer and brought to Dealer for service. Dealer will be required to provide or arrange for warranty and service work for Product regardless of the selling dealer of the Product or condition of sale. Sea Ray will exercise reasonable efforts as to this Paragraph 3.1D. to address circumstances in which another dealer has made a sale to an original retail purchaser who permanently resides within Dealer’s Territory where such sale is contrary to the terms of the selling dealer’s Sales and Service Agreement. Dealer will provide appropriate instructions to purchasers on how to obtain warranty and service work from the Dealer. Dealer will secure all Product inventory against weathering and other damage, and maintain inventory in a like new and unused condition. E. Furnish each Product purchaser with Sea Ray’s limited warranty on new Products and with information and training as to the safe and proper operation and maintenance of the Product. F. Complete and submit Sea Ray’s Product registration card (or applicable electronic form) and In-Service Checklist promptly upon delivery of the Products to the purchaser and assist Sea Ray in performing Product defect and recall campaigns. In the event Dealer fails to return the card or submit the other documentation to Sea Ray as required, Dealer shall indemnify Sea Ray against any liability, loss, or damage which Sea Ray may sustain directly as a result of such failure. G. Maintain complete Product sales, warranty and service records, and report to Sea Ray upon request the name and address of each Product purchaser to the extent required by applicable law. Dealer further agrees to provide Sea Ray with access to its applicable books and records at reasonable times and upon reasonable prior notice to verify the accuracy of information submitted for participation and eligibility in promotions and other programs. 6 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. H. [Intentionally omitted.] I. Submit to Sea Ray upon request any additional information or clarifying information regarding Dealer’s financial statements and allow full and open disclosure of financial information concerning Dealer between Sea Ray and any financial institution or company which may finance or propose to finance all or part of Dealer’s Product inventory. J. Conduct business in a manner that preserves and enhances the reputation and goodwill of both Sea Ray and Dealer for providing quality products and services, and refrain from using any false, misleading or deceptive advertising. Submit truthful and accurate statements, reports and information to Sea Ray and any financial institution financing or proposing to finance Dealer’s Product inventory or any purchaser. K. Maintain an ability to purchase Product inventory for each Dealer Location via flooring and/or self-financing that is customary to carry on hand and display Sea Ray’s current Product models as indicated in the Defined Terms and the performance standards set forth herein. L. [Intentionally omitted.] M. Use its best efforts to maintain and improve scores or other customer satisfaction rating (e.g., Net Promoter Scores) in compliance with the Performance Standards for such applicable ratings. N. Comply with those Dealer obligations that may be imposed or established by Sea Ray applicable to all domestic Sea Ray Dealers including but not limited to those included in Sea Ray’s policies and programs and Sea Ray’s Advertising Policy. O. Maintain a financial condition which is adequate to satisfy and perform its obligations under this Agreement. P. Provide prior written notice to Sea Ray if Dealer desires to make any material change in Dealer’s financing of its Product inventory or business and give Sea Ray sufficient time to discuss and review with Dealer the effect of the proposed change. Q. Notify Sea Ray of the addition or deletion of any Dealer Location(s) which notification Dealer agrees shall not be deemed a consent by Sea Ray to such a proposed change. R. Provide Sea Ray with prior notice of any proposed appointment of sub-dealers. All appointments of authorized sub-dealers are subject to prior written approval by Sea Ray (“Authorized Sub-dealers”). Dealer will set its own resale price to Authorized Sub-dealers and assume all risk of non-payment by the Authorized Sub-dealers. The Authorized Sub-dealers are not parties to any agreement between Sea Ray and Dealer and Dealer will ensure that the Authorized Sub-dealers do not take any actions that violate any policies and programs of Sea Ray or are inconsistent with the terms of this Agreement. Dealer is responsible for any losses incurred by Sea Ray as a result of Authorized 7 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. Sub-dealer’s performance including, but without limitation, Authorized Sub-dealer’s failure to pay Sea Ray for any Product or to pay any financial institution that finances Products purchased by the Authorized Sub-dealers. Dealer will not enter into any agreement with Authorized Sub-dealers that is inconsistent with the terms and conditions of this Agreement. S. Notify Sea Ray in writing of the applicable brand and boat type at least thirty (30) days before Dealer begins to sell, display or advertise a new boat brand. 3.2 Company Responsibilities : Company Agrees to: A. Sell Products to Dealer in accordance with Company’s then-current terms and conditions of sale applicable to domestic Sea Ray dealers, limited warranties, and the price list published from time to time by Company, less any applicable discounts allowed by Company’s programs applicable to Dealer and consistent with the provisions of Section 5 hereof. Company shall have the right to modify its terms and conditions of sale, limited warranties, price lists and programs from time to time in its sole discretion and in compliance with the terms of this Agreement; provided, however, that Company will provide reasonable prior written notice to Dealer after the beginning of the Model Year of such modifications and that changes in the limited warranty and pricing will apply only to future retail purchases. Company will make available its current policies and programs in electronic format or in a manual or other format Company deems appropriate. Dealer should contact Company for a copy of the policies and programs if it does not have access to or did not receive a copy. promotional material to assist Dealer in the sale of Products as Company deems appropriate. B. Provide to Dealer reasonable quantities of catalogs, specification sheets, and other advertising, merchandising or order forms or procedures, maintenance and service manuals and other materials of a technical nature as Company deems appropriate. C. Make available to Dealer in electronic format or otherwise reasonable quantities of parts books, warranty claim forms, designations of Company that correspond to the Products as Company deems appropriate. D. Furnish Dealer with written instructions and/or policies for the use of trademarks, trade names, logos and other trade E. Furnish a Limited Warranty for the Products and provide warranty support and process warranty claims in accordance with Company’s warranty policy, which may be modified from time to time by Company in its sole discretion. Company shall notify Dealer of changes to Company’s warranty policy and make available current versions of its warranty policy to Dealer. appropriate. F. Promote sales of the Products via the Internet and other marine related publications or by other means as Company deems 8 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. G. Ship parts related to the Products in accordance with Company’s policy on shipping parts. H. Accept payment for Product and credit Dealer’s account within a reasonable time. account status upon request, and administer credit policies in a non-discriminatory manner. I. Furnish detailed invoices upon shipment and periodic statements thereafter, provide prompt communication regarding Company reserves the right to create, update and modify such a website locator from time to time in its sole discretion. J. Identify Dealer’s name and address in listing of authorized dealers on Company’s website dealer locator (if available). Products. K. Provide reasonable technical assistance and procedures for handling of technical questions of Dealer related to the L. Maintain communication channels in order to receive Dealer feedback from time to time. deems appropriate. M. Provide reasonable consultative assistance to Dealer for operational, sales and customer service support as Company N. Provide reasonable supportive informational materials for new models of Products as Company deems appropriate. Company. O. Provide owner’s manual for Products and similar materials for other components or accessories that are made available to Performance Standards set forth in Section 3.1.B. P. Supply Dealer with proper quantities of Product consistent with Sea Ray’s quality standards to allow Dealer to meet the at least annually, conduct a portfolio product review with appropriate Dealer managers. Q. Provide Dealer with two (2) seats on Sea Ray’s concept review teams to consult with Sea Ray regarding the Products and, 4. Orders : Dealer agrees to submit orders to Sea Ray in a manner and format prescribed by Sea Ray, applicable to all domestic Sea Ray dealers which orders shall be subject to Sea Ray’s then current terms and conditions of sale which may be modified by Sea Ray at any time for all domestic dealers as deemed reasonably necessary. Any order which does not comply with Sea Ray’s terms and conditions need not be filled by Sea Ray provided, however, that Sea Ray shall promptly notify Dealer of such noncompliance. Any additional or different terms submitted by Dealer will be deemed rejected and will also be void and of no effect. Dealer cancellation of orders will be subject to Sea Ray’s then current cancellation policy applicable to all domestic Sea Ray dealers. All orders submitted by Dealer are subject to acceptance by Sea Ray. 9 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. 5. Prices : The Products sold to the Dealer by Sea Ray shall be on the basis of price lists published by Sea Ray from time to time for its domestic dealers, less any applicable discounts allowed by Sea Ray’s programs. Sea Ray shall have the right to revise the price lists or applicable discounts or programs applicable to all of its domestic dealers at any time and agrees to promptly notify Dealer of any such change. The Product prices charged to Dealer will be the lowest price then charged to other domestic dealers subject to Dealer meeting all the requirements and conditions of Sea Ray’s applicable programs, and provided that Sea Ray may in good faith, charge lesser prices to other dealers to meet existing competitive circumstances, for unusual and limited duration non-ordinary business circumstances, or for limited duration promotional programs. Sea Ray shall have no obligation to reimburse Dealer for any loss which Dealer may sustain by reason of any change in price, program, or discount for which notice was provided in accordance herewith. Terms of payment will be as specified from time to time by Sea Ray. Dealer will pay Sea Ray the lesser of 1.5% late charges per month or the maximum permitted by applicable law on any past due invoice except as to any specific amount of an invoice that is disputed in good faith by the Dealer. Sea Ray may refuse shipment for any credit reason, including Dealer’s failure to pay for a prior shipment or to pay any financial institution who finances Dealer’s purchases, or for Dealer’s failure to maintain its Product inventory in accordance with the terms of this Agreement. Sea Ray shall immediately notify Dealer if Sea Ray refuses shipment to Dealer so that Dealer has a reasonable opportunity to cure any issue. Dealer will reimburse Sea Ray for all reasonable and necessary costs in collecting past due accounts, including attorney fees and court costs. Dealer hereby grants to Sea Ray and Sea Ray hereby retains a security interest in all Products sold to Dealer and all proceeds arising out of the sale of the Products until such Products are paid for in full. Dealer agrees to sign, file, authenticate, and authorize the signing, filing and authenticating by Sea Ray of such financing statements and other documents and do such other acts, as Sea Ray may request to establish and maintain a valid and protected security interest in the Products. 6. Shipments : All shipments of Products shall be made FOB the Sea Ray factory designated by Sea Ray, and title shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Dealer shall pay all applicable shipping, transportation, delivery, and handling charges for Products ordered. If Dealer fails to accept delivery of any Products ordered, other than material non-conforming Products that must be returned to Sea Ray for repair, Dealer shall reimburse Sea Ray for any costs incurred, including returning such Products to Sea Ray. If Sea Ray ships Products not ordered by Dealer, Dealer shall have the right to refuse delivery, in which event Sea Ray shall pay all costs incurred in returning same to Sea Ray. Shipments shall be subject to Sea Ray’s production schedule and availability of materials or transportation equipment. No liability shall be sustained by Sea Ray by reason of its not filling any order due to circumstances beyond its reasonable control such as, but not limited to, labor disputes, natural disasters, accidents to machinery, acts of God, acts of or threatened acts of war or terrorism, material shortages, regulations, demands for goods exceeding Sea Ray’s available supply or any other cause beyond Sea Ray’s control. In the event of any delay in delivery, failure to fill orders or other default or damage caused by any of the foregoing, Sea Ray may, at its option and without liability, cancel all or any portion of the applicable orders to the extent affected by the event of force majeure and/or extend any date upon which performance is due hereinunder. 10 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. 7. Risk of Loss : Risk of loss for Products ordered by Dealer shall pass to Dealer at the time the Products or parts are tendered to the designated carrier or the Dealer or Dealer’s representative at the Sea Ray factory. Sea Ray has instructions to insure Products on behalf of Dealer from the shipping point to the final delivery point unless otherwise agreed by the parties in writing. Dealer will be the loss payee on any claim. Sea Ray will assist Dealer in the processing and collection of any claims against the carrier contracted by Sea Ray. Notwithstanding the above, if Dealer or Dealer’s representative takes possession of Products at the Sea Ray factory, Dealer assumes responsibility to insure the Products upon tender of the Products to Dealer or Dealer’s representative at the Sea Ray factory. 8. Payment - Claims : All sales of Products to Dealer shall be paid for in advance by Dealer, unless otherwise agreed between Sea Ray and Dealer in writing. All claims for shortage or damages or unacceptable Product shall be made pursuant to Sea Ray’s then current policy on shipment damage and claims procedures applicable to all Sea Ray domestic dealers. The failure of Dealer to give such notification as set forth in Sea Ray’s then current shipment damage and claims procedures policy shall constitute a waiver of any such claim. Dealer shall cause to be paid or shall make reimbursement to Sea Ray in full for any and all taxes, duties, or other charges imposed by federal, state, municipal, or other governmental authority upon Dealer’s purchase under this Agreement. 9. Product Modification : Sea Ray shall have the right to discontinue the sale of Products or to modify the design, specifications and components of Products at any time provided, however, that Sea Ray shall notify Dealer, prior to shipment, of any major changes with respect to Products previously ordered by Dealer but not yet delivered, in which event Dealer shall have the right to terminate such order within five (5) business days after such notification by providing written notice to Sea Ray. The failure to provide such timely written notification shall be deemed acceptance by Dealer of such changes. 10. Warranties and Limitation of Warranties and Liability : 10.1 Warranties : Dealer agrees to: A. Sell Products only on the basis of Sea Ray’s published applicable limited warranty and make no other warranty or representations concerning the limited warranty, express or implied, either verbally or in writing. B. Display at each Dealer Location that Product warranty information required by applicable law and furnish and make known to the first-use purchaser at the time of delivery the appropriate operations and maintenance manual provided by Sea Ray, instructional information for the use and operation of the Product consistent with the operations and maintenance manual, the Product installation instructions, if any, together with Sea Ray’s written limited warranty, including all disclaimers and limitations thereto. 11 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. C. Subject to the terms of the applicable limited warranty, expressly inform the purchaser in writing that no Sea Ray warranty applies if the Product is “used” unless Sea Ray expressly authorizes such warranty in writing or the existing balance of the warranty is transferable and is transferred. No Product warranty shall apply if the design or material of the Product is substantially modified without the express authorization of Sea Ray in writing. D. Provide timely warranty service on all Product presented to Dealer by purchasers in accordance with Sea Ray’s then current warranty service program applicable to all domestic Sea Ray dealers selling comparable Products. Dealer agrees to make all claims for reimbursement under Sea Ray’s warranty service program in the manner reasonably prescribed by Sea Ray. Sea Ray may revise its warranty service program from time to time, providing Dealer with written notification of all revisions, and those revisions will supersede all previous programs. E. To verify the accuracy of the warranty claims submitted to Sea Ray by Dealer and the service provided by Dealer with regard to such warranty claims, provide Sea Ray with access to its applicable books and records, and provide such additional documentation which Sea Ray may reasonably request. In the event Sea Ray finds errors in the aggregate greater than 5% of reviewed claims submitted by Dealer Location and paid by Sea Ray, Sea Ray may calculate the percentage rate of error; and using that percentage rate of error, extrapolate the amount owed to Sea Ray for up to three (3) prior years of all paid claims made by Sea Ray to Dealer at that Dealer Location. Within thirty (30) days of such notice of such amount, Dealer shall either pay the extrapolated amount to Sea Ray or pay the cost of a full audit by Sea Ray or Sea Ray’s designee or at Dealer’s option and expense, a third party auditor reasonably acceptable to Sea Ray and Dealer and pay to Sea Ray that amount, if any, found to be owing to Sea Ray as a result of such audit. Sea Ray agrees to honor all legitimate warranty claims on Products when made by purchaser through Dealer in the manner reasonably prescribed by Sea Ray. Sea Ray shall respond to all proper and legitimate warranty claims submitted by Dealer within the time period described in the then current warranty policy applicable to domestic Sea Ray dealers. Sea Ray agrees to pay or credit all accepted and undisputed claims within thirty (30) days after receipt of all required documentation. 10.2 Limitation of Warranties and Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SEA RAY’S PUBLISHED APPLICABLE LIMITED WARRANTY, SEA RAY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR, NOR SHALL THE MEASURE OF DAMAGES INCLUDE, ANY AMOUNTS FOR LOST PROFITS, LOST SALES, OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR ANY REASON OR UPON ANY CAUSE OF ACTION, WHETHER SOUNDING IN TORT, CONTRACT OR ANY OTHER LEGAL THEORY. 12 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. 11. Indemnification . A. In order to obtain preferred boat show space at discounted rates for Dealers, Sea Ray may contract with and agree to indemnify boat show sponsors and other related parties. Accordingly, Dealer shall defend, indemnify and hold harmless Sea Ray, and any boat show sponsor which Sea Ray has agreed to indemnify, from any and all claims, causes of action, and suits, including claims of negligence arising either directly or indirectly out of Dealer’s use of boat show space originally obtained by Sea Ray. B. Sea Ray agrees to indemnify and hold harmless Dealer for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Sea Ray’s negligent acts or omissions involving the original design or manufacture of any Product at the time it left Sea Ray’s possession or control, or the repair of any Product performed by Sea Ray, or (2) any breach of this Agreement by Sea Ray. Sea Ray, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Dealer agrees to cooperate at its own expense and provide Sea Ray with any available information as may be reasonably necessary to such defense. In the event Sea Ray elects not to defend any litigation that may arise out of any claims covered hereby, Sea Ray will be responsible for Dealer’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. C. Dealer agrees to indemnify and hold harmless Sea Ray for losses, cost and expense to the extent such losses, cost or expense result from any third party claim related to (1) Dealer’s negligent acts or omissions involving Dealer’s improper application, use or repair of the Products, (2) statements or representations not specifically authorized by Sea Ray, including warranties inconsistent with Sea Ray’s standard limited warranty, and the installation of any after market components or any other modification or alteration to the Product, or (3) any breach of this Agreement by Dealer. Dealer, at its expense and through counsel of its own choosing, may defend any litigation that may arise out of any claims covered hereby, and Sea Ray agrees to cooperate at its own expense and provide Dealer with any available information as may be reasonably necessary to such defense. In the event Dealer elects not to defend any litigation that may arise out of any claims covered hereby, Dealer will be responsible for Sea Ray’s reasonable attorney fees on a pro-rated basis to the extent such losses are subject to indemnification pursuant to this Agreement. D. The provisions in this Paragraph 11 regarding indemnification do not apply to claims by third parties in which there has been a judicial determination that the indemnifying party does not have liability to the third party. The provisions in this Paragraph 11 shall survive the expiration or termination of this Agreement. 12. Repossession or Repurchase of Product by Sea Ray : Dealer shall be liable to and reimburse Sea Ray for any and all losses or deficiencies on the sale or disposition of any Product purchased by Dealer pursuant to this Agreement which is repossessed or repurchased by Sea Ray for any reason whatsoever, except as contemplated in Paragraph 16G. Dealer shall also be liable for any and all discounts, volume rebates, or other sales incentives paid to Dealer on Product repurchased, and all reasonable attorney’s fees, court costs, and expenses incurred in connection with such repossession or repurchase. Dealer agrees to provide Sea Ray, upon request, guarantees or other adequate security to cover any repurchase or financial obligations that Sea Ray may assume in connection with Dealer’s flooring or financing. 13 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. 13. Trademarks and Service Marks : Dealer acknowledges that Sea Ray or its affiliated companies are the exclusive owners of various trademarks, service marks, trade designations, logos and trade dress (collectively “Identification”) which Sea Ray uses in connection with Products and its business. Dealer is authorized to use Identification only in the manner prescribed by Sea Ray, only in connection with the promotion and sale of Products, and only until the expiration or termination of this Agreement. Dealer shall not register or assist any other party to register any domain name that contains or closely resembles any Company Identification without first obtaining the prior written consent of Company. Dealer shall not use Identification in any unauthorized manner or in any manner that adversely reflects upon the reputation of Sea Ray or in relation to any other matter that is a breach of this Agreement. Dealer shall not use Identification or advertise outside of the Territory to the extent prohibited by the terms of this Agreement, without Sea Ray’s express written consent and shall comply with Sea Ray’s Advertising Policy. Authorization shall not be interpreted as a license for use of Identification. Dealer acquires no proprietary rights with respect to Identification, and this authorization shall terminate simultaneously with the termination or expiration of this Agreement. In the event of expiration or termination of this Agreement, Dealer shall immediately discontinue use of Identification in any way whatsoever and shall thereafter not use, either directly or indirectly, any Identification or any confusingly similar Identification in a manner likely to confuse, mislead, or deceive the public. Dealer may continue to use Identification for a reasonable period of time in the event Sea Ray does not repurchase Dealer Product inventory as long as such Identification use remains subject to the terms of this Agreement, Sea Ray’s Advertising Policy or any other written instructions provided by Sea Ray to Dealer. Dealer agrees that any unauthorized use or continued use of Identification after the period of time allowed by this Paragraph 13 shall constitute irreparable harm entitling Sea Ray to seek equitable relief, including injunction and specific performance, without the necessity of posting bond or proving actual damages, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for such a breach by Dealer but shall be in addition to all other remedies available at law or equity to Sea Ray. 14. [Intentionally omitted.] 15. No Agency Created : It is understood and agreed that Dealer is not, nor shall it at any time represent itself to be, the agent, employee, representative, partner, or franchisee of Sea Ray for any purpose. Neither party shall enter into any contract or commitment in the name of or on behalf of the other party. Sea Ray has no fiduciary duty to Dealer pursuant to this Agreement or the relationship between the parties. Dealer is not required to pay, and shall not pay, to Sea Ray any fee for the right to purchase the Products or otherwise do business with Sea Ray. 16. Term of Agreement - Termination : A. The term of this Agreement shall be as set forth in the Defined Terms (the “ Term”) subject however to the provisions set forth in this Paragraph 16 and in Paragraph 18. 14 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. B. Subject to the provisions of Section 16F below, Sea Ray may terminate this Agreement upon the giving of at least sixty (60) days prior written notice to Dealer if: (1) Dealer does not have an ability to purchase Products via flooring or self-financing; or (2) Dealer fails to meet its financial obligations as they become due to either Sea Ray or lender(s) financing Products. Sea Ray shall work in good faith with Dealer to try to resolve any differences between them prior to giving such 60-day notice of termination. C. This Agreement may be terminated at any time by the mutual consent of the parties. D. Subject to the provisions of Section 16F below, either party may elect to not extend the Term of this Agreement for another twelve (12) month period following expiration of the current twelve (12) month period of the Term as described in the Defined Terms in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party. In such event, the non-breaching party will provide written notice to the breaching party and an opportunity to cure or remedy such breach. The parties shall work together in good faith to resolve any issues but the additional twelve (12) month extension shall not be added until such time that the breach is remedied to the reasonable good faith satisfaction of the parties. At such time as the parties agree that the concerns have been remedied, the additional twelve (12) month extension shall be added to the end of the existing Term. In addition, after the seventh (7 th ) anniversary of this Agreement (i.e., during any three (3) year renewal Term), either party may elect to terminate this Agreement upon the giving of at least twenty four (24) months prior written notice to the other party in the event of the material breach or default of any of the material obligations, Performance Standards (as defined in Section 3.1B and Exhibit B), covenants, representations, warranties, or duties imposed herein or in Sea Ray’s policies or programs applicable to domestic Sea Ray dealers by either party, which breach is not cured during such notice period; provided, however, that if such a breach or default by Dealer only pertains to one Dealer Region, Sea Ray shall only have the right pursuant to this provision to terminate this Agreement as to that particular Dealer Region. The parties shall work together in good faith to resolve any issues. Notwithstanding the above, so long as Dealer’s failure to meet the Performance Standards is not caused by Sea Ray failing to have Product available for purchase by Dealer, Sea Ray shall have the right to terminate this Agreement as to the applicable Dealer Region(s) (i) if Dealer is failing to meet the Performance Standards in a Dealer Region and begins selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within ninety (90) days after written notice of the same from Sea Ray, or (ii) if Dealer is meeting the Performance Standards in a Dealer Region, but then starts failing to meet the Performance Standards after beginning selling, displaying, or advertising products that are competitive with the Products (other than products of another Brunswick Corporation brand or new products which MarineMax sells, displays or advertises for sale as of the date of this Agreement) and does not cure its failure to meet the Performance Standards within six (6) months after written notice of the same from Sea Ray. 15 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. E. Notwithstanding subparagraph D above or anything in this Agreement to the contrary, this Agreement may be terminated by a party upon sixty (60) days prior written notice to the other party if any of the following occur with regard to the other party: (1) the other party ceases to exist; (2) the other party becomes insolvent or takes or fails to take any action which constitutes an admission of inability to pay debts as they mature; (3) the other party makes a general assignment for the benefit of creditors to an agent authorized to liquidate any substantial amount of assets; (4) the other party becomes a subject of an “order for relief” within the meaning of the United States Bankruptcy Code; (5) the other party becomes the subject of a receivership, reorganization, liquidation or any similar proceeding; or (6) the other party makes a fraudulent misrepresentation that is material to this Agreement. This Agreement may be terminated upon sixty (60) days prior written notice by Sea Ray upon the occurrence of: (1a) a prohibited assignment, transfer, delegation or subcontracting without consent as described in Paragraph 18A; (2b) the commission by Dealer of an act of fraud upon Sea Ray; (3c) the commission by Dealer (or any of its officers) of a felony or other act of fraud which is materially detrimental to Sea Ray’s reputation or business or which materially impairs the Dealer’s ability to perform the duties under this Agreement; or (4d) Dealer fails to pay any lender financing Products after the sale of Products by Dealer (out of trust). F. For the purpose of the first paragraph of Section 16D, if a breach or default by Dealer pertains only to one Dealer Region, Sea Ray shall have the right to deny the additional extension period for that particular Dealer Region only until remedied as described in Section D. For the purpose of Section 16B or E, if Dealer breaches or defaults as described in such provisions, Sea Ray may, in its own discretion, elect either to terminate the entire Agreement (as to all Dealer Regions) or terminate only as to particular Dealer Region subject to the Agreement. Notwithstanding the foregoing, in the event of any possible termination pursuant to Section 16B or E, a party seeking to terminate shall first provide written notice to the other party stating the potential grounds therefore and both parties shall work together in good faith for a period of no less than sixty (60) days to resolve any concerns between the parties. G. [****] H. In the event of termination of this Agreement prior to its expiration date, provided the termination is not for fraud, bad faith, or insolvency of Dealer, Sea Ray will nevertheless continue to sell to Dealer warranty parts and accessories for Products on a cash on delivery basis for a period not to exceed twelve (12) months in order that Dealer may continue to provide warranty service on Products which have outstanding warranties subject to Dealer’s compliance with the terms and conditions of Sea Ray’s warranty and parts program applicable to all domestic Sea Ray dealers. The performance of any warranty work after termination or expiration of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. I. Any period of time described in the Agreement shall be modified to include such different period of time that may be required by applicable law. 16 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. J. In the event of expiration or the termination of this Agreement by either party, Sea Ray is relieved from any obligation to make any further Product shipments under this Agreement, and may cancel all of Dealer’s unshipped orders for Products, irrespective of previous acceptance by Sea Ray, except those which are proved to Sea Ray’s reasonable satisfaction to have been the subject of a binding customer order to Dealer prior to the receipt of any notice of termination or expiration. The acceptance of orders from Dealer for the continuous sale of Products to Dealer or any other act after expiration or termination of this Agreement shall not be construed as a continuation of this Agreement, the commencement of a new agreement, or a waiver of the termination. Upon the expiration or termination of this Agreement, all obligations owed by Dealer to Sea Ray shall become immediately due and payable on the effective date of the expiration or termination, whether otherwise then due or not (without presentment, demand, protest or notice of any kind, all of which are waived by Dealer); and Sea Ray may offset or deduct from any and all sums owed to Dealer any and all sums owed by Dealer to Sea Ray, or any parent, affiliate or subsidiary of Sea Ray, returning to Dealer the excess, if any. 17. Governing Law : This Agreement shall be governed, interpreted and construed according to the laws of the State of Tennessee, U.S.A., without regard to applicable conflicts of law. 18. Assignability : A. This appointment and Agreement is made and entered into with the distinct understanding that it is personal with Dealer, and is not, whether by operation of law, change in control or otherwise, assignable or in any part delegable or transferable unless the express written consent of Sea Ray is obtained; provided, however, that Dealer may assign the appointment and this Agreement to a subsidiary or affiliate without consent. An assignment by Dealer to any subsidiary or affiliate shall not relieve Dealer from any obligation or responsibility provided for under the terms of this Agreement. Unless first approved by Sea Ray in writing, any purported assignment, transfer, delegation or subcontracting of Dealer’s rights and obligations under this Agreement by it (other than to a subsidiary or affiliate) may immediately render this Agreement terminated in Sea Ray’s sole discretion. B. Sea Ray may not assign this Agreement without the prior written consent of Dealer, except that no such consent is necessary with respect to assignment of this Agreement to any Sea Ray owned subsidiary or affiliate. An assignment by Sea Ray to any owned subsidiary or affiliate shall not relieve Sea Ray from any obligation or responsibility provided for under the terms of this Agreement. Upon any sale of the business or the assets of Sea Ray to a nonaffiliated third party, and where Dealer does not agree to the assignment, this Agreement shall be terminated and Sea Ray shall be released from any further obligations and liabilities to supply Products to Dealer under this Agreement provided however that the provisions of Sections 11 and 16 and all other provisions that are intended to survive termination either expressly or impliedly shall do so in accordance with their terms. 19. Notices, Communications : A. Any written notice given pursuant to this Agreement shall be either hand delivered (by courier or otherwise), or mailed, postage prepaid, by Registered or Certified Mail, return 17 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. receipt requested, to the party identified below at the respective address listed below. Notice may also be given by fax, e-mail or other electronic method; however, if notice is provided pursuant to Paragraph 16, a copy must also be mailed in the manner described herein. Such notice shall be deemed to be given upon first receipt. A change of address may be given by such notice. To Sea Ray: Sea Ray Boats Attention: President 800 South Gay Street, Suite 1200 Knoxville, TN 37929 With a copy to: Brunswick Corporation Law Department Attention: General Counsel 1 N. Field Court Lake Forest, Ill Tel: (847)735-4700 Fax: (847) 735-4433 To Dealer: William H. McGill, Jr. President MarineMax, Inc. 2600 McCormick Drive Suite 200 Clearwater, Florida 33759 With a copy to: MarineMax, Inc. Attention: General Counsel Suite 200 2600 McCormick Drive Clearwater, FL 33759 Tel: (727) 531 1700 Fax: (727) 450-1162 B. Dealer hereby grants permission and consent to Sea Ray and to those entities who are authorized by Sea Ray to send or transmit communications (including but not limited to facsimiles, wireless communications, and e-mails) to Dealer and Dealer’s officers, directors, employees, subsidiaries and affiliates, and their permitted successors and assigns. Such communications are not limited in content and may include advertisements, and Dealer understands that by providing such consent it may incur costs that are related to the receipt of such communications. Dealer further agrees that such communications may be sent to any telephone number or electronic media address supplied by Dealer for each Dealer Location. 20. Entire Agreement - Non-Waiver : This Agreement, including any attached addenda, contains the entire agreement between the parties with respect to the matters set forth herein and may not be amended or modified except by a written instrument signed by Sea Ray and Dealer that expressly states that the writing constitutes an amendment or modification to this Agreement, provided that, subject to the provisions of this Agreement, Sea Ray may in its sole discretion and from time to time make changes in accordance with its own reasonable business judgment to the policies and programs applicable to all domestic Sea Ray dealers upon the giving of notice to Dealer as described herein. This Agreement terminates and replaces all prior agreements made between the parties regarding the subject matter of this Agreement and there are no other agreements regarding the matters herein provided that 18 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. each party shall remain obligated to the other for any monies owed under such prior agreements between the parties; and except for payments to be made to Dealer in the ordinary course of business or claims of third parties, there are no other monies, claims, or actions which may give rise to or result in any compensation or monies being owed to Dealer by Sea Ray. Failure on the part of Sea Ray or Dealer to enforce any term of this Agreement shall not constitute a waiver thereof. 21. Severability – Existing Claims : Whenever possible, each paragraph of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any portion of this Agreement is deemed invalid or unenforceable, the remaining sections shall still be enforceable unless removal of that portion so materially alters the risks and benefits to either party that enforcement would be substantially unfair. In such a case, the parties agree to immediately negotiate a substitute clause to restore each party as closely as possible to the risks and benefits originally assumed. Dealer represents to Sea Ray that it is not aware of any claims, causes of action, or disputes that it has or may assert against Sea Ray that arise out of or have accrued prior to the effective date of this Agreement. Dealer further represents to Sea Ray that it has not breached or otherwise violated any term or condition of any previous agreement with Sea Ray. 22. Disputes : All disputes, controversies or claims connected with, arising out of, or relating to this Agreement, or any modification, extension or renewal thereof, or to any causes of action that result from such relationship, shall be subject exclusively to the remedy of arbitration described herein, including but not limited to sums due under this Agreement, the interpretation, performance or nonperformance of this Agreement, and claim for damages or rescission, a breach or default of this Agreement, the creation, termination or nonrenewal of this Agreement (such as a dispute regarding the causes, validity or circumstances of the termination, nonextension, or nonrenewal), and trade regulations or antitrust claims, whether such controversies or claims are in law or equity or include claims based upon contract, statute, tort or otherwise. All controversies shall be conducted in accordance with the American Arbitration Association Commercial Arbitration Rules. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1-16, as amended, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of the arbitration shall be at Chicago, Illinois. Dealer consents to personal jurisdiction of the federal and state courts located in the State of Illinois for the purpose of enforcing this provision or confirming any arbitration award. No party shall be entitled to receive an award of damages in excess of actual damages and in no event shall the parties receive an award of punitive, special or consequential damages, or prejudgment interest. Except for claims based on sums owing to Sea Ray for Products purchased by Dealer, or sums owing to Dealer for the reimbursement of funds it paid for Products that were previously returned to Sea Ray or claims based on Paragraph 11 hereof, all arbitration claims and proceedings must be instituted within one (1) year after the dispute arises, and the failure to institute arbitration proceedings within such period shall constitute an absolute ban to the institution of any proceedings and a waiver and relinquishment of all such claims. This paragraph shall survive the expiration or termination of the Agreement. 19 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. 23. [intentionally omitted] 24. Reservation of Rights : Sea Ray grants to Dealer only those rights expressly stated in this Agreement. Except to the extent otherwise expressly provided in this Agreement, Sea Ray retains all rights. This Agreement does not concern any other brands or products, except the Sea Ray Products identified in the Defined Terms. Sea Ray and/or its affiliates reserve the right for Sea Ray’s affiliates to own, acquire, manage, sell, display or service other products and other brands in any area (including the Territory) including those that may compete with Products. Sea Ray reserves the right to receive incentives, rebates or other payments from third-party suppliers, including without limitation related to purchases by or through Dealer from such third party suppliers. 25. Confidentiality . Each party shall maintain as confidential all proprietary business information, trade secrets and all materials containing confidential business information provided to such party by the other party, including but not limited to customers, vendors, price lists, wholesale prices, programs, rebates, discounts, inventions, concepts, designs, structures, formulas, processes, financial information, employees, strategic plans, acquisition plans or other business affairs of the disclosing party. Dealer acknowledges that Sea Ray is an affiliate of Brunswick Corporation, and accordingly subsidiaries, affiliates and other divisions of Brunswick Corporation may be given access or have access to confidential business information received in connection with this Agreement, and such disclosure does not constitute a breach of this paragraph. Each party, on behalf of its directors, officers, employees and agents to whom such information and materials are disclosed, agree that it shall keep such information and materials confidential both during and after the Term of this Agreement for a period of three (3) years provided that if any such information or material is a trade secret, then the obligations under this Paragraph shall survive the termination of this Agreement for the longer of five (5) years or the length of time such information remains a trade secret. These obligations of confidentiality do not apply to any information which (1) was known to the receiving party prior to receipt from the disclosing party; (2) is independently developed by the receiving party, provided that the burden of proof of such independent development shall be on the receiving party; (3) is or becomes publicly known without the fault of the receiving party; (4) is or becomes rightfully available to the receiving party without confidential restriction from a source not bound by a confidentiality obligation to the disclosing party; (5) is required by law, rule or regulation to be disclosed; (6) is required to be disclosed pursuant to court or government action; provided, the disclosing party is given reasonable prior notice of such disclosure; or (6) is disclosed pursuant to written agreement of the parties. The terms of this paragraph are in addition to, and in no way a limitation of, the terms of any confidentiality or non-disclosure agreement (or any confidentiality provision in any other agreement) between or involving Sea Ray (or its affiliates) and Dealer. 26. Miscellaneous : In case of any dispute relating to the rights and duties imposed by this Agreement, both parties will openly discuss and make reasonable efforts at amicable resolution. Except as expressly described to the contrary in this Agreement, the rights and remedies of each party are not 20 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. exclusive. Unless otherwise provided, where either party has a right to make a determination or pursue or not pursue a particular course of action under the terms of this Agreement, such as, for example granting consent or approval, such determinations and decisions shall be made by such party in its sole discretion. As defined herein, a domestic Sea Ray dealer shall be an authorized Sea Ray dealer whose territory is located solely within the continental Unites States. 27. Counterparts and Signatures : This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute on and the same Agreement. Any signature delivered by fax or other electronic transmission shall be deemed to be an original signature. 28. Guarantee : As a condition for Sea Ray’s entering into this Agreement, MarineMax has signed this Agreement as evidence of its irrevocable guarantee of the Dealer’s performance of all of the duties and obligations provided for in this Agreement. 21 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. Exhibit A [****] 22 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. EXHIBIT B Performance Standards [****] 23 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. Exhibit B Table [****] 24 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. Exhibit X [****] 25 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. Exhibit Y [****] 26 Exhibit 10.21(o) 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 AMENDED AND RESTATED INVENTORY FINANCING AGREEMENT THIS FOURTH AMENDMENT (the “ Amendment ”) dated this 29 th day of August, 2014, is to that certain Amended and Restated Inventory Financing Agreement entered into by and among GE Commercial Distribution Finance Corporation (“ CDF ”) and the undersigned Dealers (each, individually, a “ Dealer ” and, collectively, “ Dealers ”) dated June 28, 2013 (as amended, supplemented or otherwise modified form time to time, the “ Financing Agreement ”). WHEREAS, the parties hereto desire to amend the Financing Agreement in certain respects; NOW THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as follows: 1. Exhibit A of the Financing Agreement is hereby amended and restated in its entirety in form and substance as set forth in Exhibit A hereto. 2. Section 1(b) of the Financing Agreement is hereby amended to replace “two hundred five million dollars ($205,000,000.00)” with “two hundred thirty-five million dollars ($235,000,000.00),” as the “Maximum Credit Amount” defined therein. 3. Section 1(c) of the Financing Agreement is hereby deleted in its entirety and replaced with the following: Pre-Owned Inventory Advances and Sublimits . Subject to the overall Maximum Credit Amount set forth above and the terms and conditions of this Agreement, on and after the date hereof (the “ Closing Date ”), CDF agrees to make cash advances to Dealers with respect to pre-owned units of inventory; provided that such cash advances shall not exceed the Pre-Owned Inventory Sublimit and must comply with the pre-owned inventory advance terms set forth herein. Regardless of the amount of credit available to Dealers under the Maximum Credit Amount hereunder, CDF shall not provide extensions of credit to Dealers in excess of forty-five million dollars ($45,000,000.00) with respect to used or pre-owned inventory (the “ Pre-Owned Inventory Sublimit ”). Within such Pre-Owned Inventory Sublimit, (A) any advances with respect to units with applicable valuations of five hundred thousand dollars ($500,000.00) or more shall require unit specific documentation (including an advance request form), (B) CDF will not advance Dealers more than thirty-five million dollars ($35,000,000.00) of such Pre-Owned Inventory Sublimit for used or pre-owned inventory with applicable valuations of less than five hundred thousand dollars ($500,000.00) (the “ Other Pre-Owned Sublimit ”), and (C) CDF will not advance Dealers more than twenty million dollars ($20,000,000.00) of such Pre-Owned KCP-4504921-5 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. Inventory Sublimit for used or pre-owned inventory with applicable valuations of five hundred thousand dollars ($500,000.00) or more (the “ Specific Pre-Owned Sublimit ”). 4. Section 5(b)(viii) of the Financing Agreement is hereby amended to replace “eight million dollars ($8,000,000.00)” with “nine million dollars ($9,000,000.00),” as used therein. 5. Section 17 of the Financing Agreement is hereby amended to replace “June 28, 2016” with “August 29, 2017,” as used therein. 6. Each reference in the Financing Agreement, [****], the Program Terms Letter, and any other document, instrument or agreement related thereto or executed in connection therewith (collectively, the “ Documents ”) to the Financing Agreement shall be deemed to refer to the Financing Agreement as amended by this Amendment. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement. 7. Each Dealer hereby ratifies and confirms the Financing Agreement, as amended hereby, and each other Document executed by such Dealer in all respects. 8. This Amendment shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their participants, successors and assigns. 9. This Amendment may be executed in any number of counterparts, each of which counterparts, once they are executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement. This Amendment may be executed by any party to this Amendment by original signature, facsimile and/or electronic signature. KCP-4504921-5 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. IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written. MARINEMAX, INC. By: Name: Title: MARINEMAX EAST, INC. By: Name: Title: MARINEMAX SERVICES, INC. By: Name: Title: MARINEMAX NORTHEAST, LLC By: Name: Title: BOATING GEAR CENTER, LLC By: MARINEMAX EAST, INC., the sole member of Boating Gear Center, LLC KCP-4504921-5 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. By: Name: Title: US LIQUIDATORS, LLC By: Name: Title: NEWCOAST FINANCIAL SERVICES, LLC By: Name: Title: MY WEB SERVICES, LLC By: MARINEMAX, INC., the sole member of My Web Services, LLC By: Name: Title: MARINEMAX CHARTER SERVICES, LLC By: MARINEMAX EAST, INC., the sole member of MarineMax Charter Services, LLC By: Name: Title: GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION KCP-4504921-5 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. By: Name: Title: KCP-4504921-5 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. Vendors Tracker Marine, L.L.C. Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Contender Boats, Inc. Crest Marine, LLC Grady-White Boats, Inc. Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Tracker Marine, L.L.C. Malibu Boats, LLC Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Brunswick Corporation or affiliates thereof Seminole Marine, Inc. Scout Boats, Inc. Brunswick Corporation or affiliates thereof Correct Craft, Inc. Brunswick Corporation or affiliates thereof Zodiac of North America, Inc. Sea Hunt boat Manufacturing Company, Inc. Azimut Bennetti Group PBH Marine Group, LLC Hangzhou Sino Eagle Yacht Co., Ltd. Trailer Vendors: EZ Loader Boat Trailers, Inc. EZ Loader Custom Boat Trailers, Inc. Knight Bros., Inc. Karavan Trailers, Inc. Magic Tilt Trailers Inc. Mcclain Trailers, Inc. Northeast Marine Industries, Inc. Roadrunner Trailers of Texas, Inc. Lippert Components, Inc. BoatMate Trailers, LLC. Heritage Trailers, LLC Load Rite Trailers, LLC Marine Master Trailers, LLC Phoenix Trailers, LLC Ram-Lin Custom Trailers, Inc KCP-4504921-5 Restrictions Exhibit A Existing Vendors Brand BASS TRACKER BAYLINER BOSTON WHALER CABO YACHTS CONTENDER CREST GRADY-WHITE HARRIS FLOTEBOTE HATTERAS LAGUNA MAKO MALIBU AND AXIS MERCURY MERIDIAN PRINCECRAFT SAILFISH SCOUT SEA RAY SKI NAUTIQUE TROPHY SPORTFISHING ZODIAC SEA HUNT AZIMUT AND ATLANTIS SCARAB AQUILA EZ LOADER HERITAGE KARAVAN MAGIC TILT MCCLAIN NORTHEAST ROADRUNNER TRAILER ZIEMAN BOATMATE HERITAGE LOADRITE MARINE MASTER PHOENIX RAM-LIN 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. Exhibit 10.21(p) GE Capital Commercial Distribution Finance 500 W. Monroe Street Chicago, IL 60661 USA SECOND AMENDED AND RESTATED PROGRAM TERMS LETTER August 29, 2014 MarineMax, Inc. MarineMax East, Inc. MarineMax Services, Inc. MarineMax Northeast LLC Boating Gear Center, LLC US Liquidators, LLC Newcoast Financial Services, LLC My Web Services, LLC MarineMax Charter Services, LLC 18167 US Highway 19 North Suite 300 Clearwater, FL 33764 Attn: Mike McLamb RE: Wholesale Marine Products Finance Program Dear Mike: This Program Terms Letter outlines the terms of your marine financing program with GE Commercial Distribution Finance Corporation (“CDF”). This program will apply to all outstanding invoices financed by CDF pursuant to that certain Amended and Restated Program Terms Letter dated June 28, 2013 between CDF and you (as amended from time to time, the “Existing PTL”) and to all invoices financed on or after the date hereof. This Program Terms Letter amends and restates the Existing PTL in its entirety. This Program Terms Letter supplements that certain Amended and Restated Inventory Financing Agreement, dated as of June 28, 2013, among CDF and you (the “Inventory Financing Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Inventory Financing Agreement. 1 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. The following sets forth the terms of your financing program: A. Rates and Terms Effective Program Dates: Applies to all outstanding invoices financed by CDF pursuant to the Original PTL and all invoices financed by CDF on or after the date hereof. Subsidy Period: As determined by manufacturer program (if applicable). Eligible Products: New and pre-owned marine products, subject to a perfected first priority Lien in favor of CDF and free and clear of all other Liens not permitted by the Inventory Financing Agreement. Consigned products shall be excluded unless you comply with CDF’s documentation requirements with respect thereto and CDF otherwise agrees in writing. Dealer Rate: The effective dealer interest rate for any month (after the manufacturer subsidy period expires, if applicable) shall be the One month LIBOR rate plus 3.45%. Performance Rebate: Dealer Rate shall be the same for both new and pre-owned inventory. The Dealer Rate will be recalculated monthly based on changes in the One month LIBOR rate as outlined above. So long as Dealer remains in compliance with all the terms and conditions of the Inventory Financing Agreement, this Program Terms Letter and all other agreements or instruments by and between Dealer and CDF, beginning the date hereof through the calendar quarter ending September 30, 2014, and for each calendar quarter thereafter, CDF will pay you a rebate to be paid quarterly in an amount equal to .30% of (i) the average daily balance of outstanding Obligations owed to CDF for the prior quarter less (ii) the average daily balance of the [****] for the prior quarter (the “Performance Amount”). Such rebate will be subject to the following: 1. Such rebates will be paid within 30 days following the end of the applicable quarter. 2. The average daily balance of outstanding Obligations will be calculated as the sum of the daily balance of outstanding Obligations for each day in the applicable quarter divided by the number of days in the applicable quarter. 2 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. 3. The average daily balance of the [****] will be calculated as the sum of the daily balance of the [****] for each day in the applicable quarter divided by the number of days in the applicable quarter. Unused Line Fee: Dealer will be charged a monthly Unused Line Fee in an amount equal to 0.10% multiplied by the Unused Line, calculated based on the actual number of days in the calendar month in a year of 360 days. Unused Line is the Maximum Credit Amount, minus the average daily balance of outstanding Obligations owed to CDF, plus the average daily balance of the [****]. Billed monthly. Maturity Period: Invoices financed for new inventory by CDF are considered due in full at 1080 days from original invoice date, except that invoices financed by CDF related to all Azimut-Benetti S.p.A. are considered due in full at 1080 days from the original funding date. Invoices financed for pre-owned (trade in or used) inventory by CDF are considered due in full at 361 days from the date Dealer acquires such unit (“Acquisition Date”). Advance Request: Each advance with respect to pre-owned inventory or re-advance shall be made pursuant to a completed written advance request in the form attached hereto as Exhibit A (together with all attachments required thereby, an “Advance Request Form”) or such other form as CDF and Dealers may agree. In addition, each advance with respect to any advance request for Aquila brand inventory shall be accompanied by the following documentation for each item of Aquila brand inventory: • A copy of the original invoice from Sino Eagle Yacht Co., Ltd. • Either a Manufacturer’s Statement of Origin (MSO) or Builder’s Certificate • Evidence that each such item of Aquila brand inventory has cleared United States Customs • Evidence that MarineMax has paid Sino Eagle Yacht Co., Ltd. in full for each such item of Aquila brand inventory Floorplan Advance Rate: For new inventory (excluding Azimut brand new inventory and Aquila brand new inventory), 100% of invoice amount, including freight (if included on original invoice), subject to Availability. For Azimut brand new inventory: 85% of invoice amount for all inventory that is 70 feet or less and 75% of invoice amount for all 3 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. inventory that is greater than 70 feet, subject to Availability; provided that, until Azimut has executed and delivered a current program terms letter (“Azimut PTL”), the advance rates for Azimut brand new inventory shall be as follows: (a) if the aggregate outstanding amount of Obligations is < [****], 80% of invoice amount for all inventory that is 70 feet or less and 75% of invoice amount for all inventory that is greater than 70 feet, subject to Availability; and (b) if the aggregate outstanding amount of Obligations is > [****], 85% of invoice amount for all inventory that is 70 feet or less and 75% of invoice amount for all inventory that is greater than 70 feet, subject to Availability. For Aquila brand new inventory, 75% of invoice amount, subject to a maximum of [****] in the aggregate advanced at any one time. Upon CDF’s receipt of the Azimut PTL, the advance rate for Azimut Pre-Sold inventory shall be, 90% of the invoice amount, as verified by CDF, subject to Availability. As used herein, “Pre-Sold” means under contract to a retail customer pursuant to an Acceptable Contract. “Acceptable Contract” means a fully executed bona fide contract with a retail customer, on terms that are commercially reasonable, including a deposit. As used herein, “Availability” shall mean: (i) the lesser of: (a) the Maximum Credit Amount, minus the outstanding amount of Approvals, and (b) (I) at any time the aggregate outstanding amount of Obligations is less than [****], 100% of total eligible inventory shown on the most recent inventory certificate, or (II) at any time the aggregate outstanding amount of Obligations is equal to or greater than [****], 100% of total eligible inventory shown on the most recent inventory certificate, less the lesser of (x) $[****] and (y) 10% of total eligible inventory shown on such inventory certificate, (ii) minus, the aggregate outstanding amount of Obligations. If Availability is negative at any time, then immediate payment shall be required of amount sufficient to cause Availability to be equal to or greater than $0. Pre-owned (trade in or used) inventory advances will be as follows, subject to Availability, the Pre-owned Inventory Sublimit, the Specific Pre-Owned Sublimit, and the Other Pre-Owned Sublimit: 4 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. 75% MarineMax Pre-owned Inventory Cost Day 1 (“Day 1” as used herein shall mean Acquisition Date) through Day 180 (after Acquisition Date); 67% Day 181 (after Acquisition Date) through Day 360 (after Acquisition Date), which reflects the 10% curtailment as described in “Floorplan Curtailments” section below; 0% Day 361+ (after Acquisition Date). “MarineMax Pre-owned Inventory Cost” shall be Dealer’s internal valuation for pre-owned inventory (as set forth on the monthly inventory certificate and borrowing base). All models of pre-owned inventory are eligible, provided low wholesale values can be determined via NADA, Yachtworld.com, survey, or other source acceptable to CDF. Internal condition and valuation methodology required on all units > $500,000.00 (“Specific Pre-Owned Items”). If valuation of any Specific Pre-Owned Item exceeds [****], CDF advances in excess of [****] for such Specific Pre-Owned Item shall be in CDF’s discretion. Trade in units < $500,000.00 value will be financed on a “borrowing base” calculated as the aggregate of the pre-owned advance rates multiplied by the applicable MarineMax Pre-owned Inventory Cost of such pre-owned inventory. CDF may implement a Pre-Owned Inventory Reserve against the pre-owned inventory to reduce the availability of eligible pre- owned inventory. “Pre-Owned Inventory Reserve” is defined and calculated as the low wholesale value determined via NADA, Yachtworld.com, survey or other source acceptable to CDF minus the MarineMax Pre-owned Inventory Cost, divided by the low wholesale value determined via NADA, Yachtworld.com, survey or other source acceptable to CDF, as a percentage. Borrowing base certificate in the form attached hereto as Exhibit B required to be submitted on the date hereof and monthly by the 5 th day of the month based on preceding month end balances of pre-owned inventory. Month-end borrowing base certificate can be used to borrow up to 80% of eligible borrowing base for that calendar month, subject to Availability, the Pre-Owned Inventory Sublimit and the Other Pre-Owned Sublimit. Any request for advances > 80% of prior month-end borrowing base requires submission of an updated borrowing base and such advances shall be limited to 100% of updated borrowing base, subject to Availability, the Pre-Owned Inventory Sublimit and the Other Pre-Owned Sublimit. 5 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. Concentration Limits: If any unit (new or pre-owned) remains at a location other than a Permitted Location for more than 30 days, then immediate payment shall be required of the full principal amount of the Obligations owed with respect to such unit. If the aggregate value of units at locations other than Permitted Locations (excluding boat shows) exceeds $5,000,000.00 at any time, then immediate payment shall be required of the Obligations with respect to such units in an aggregate amount equal to such excess. In addition, if a material adverse change results in the reduction of the value of the Collateral in an aggregate amount exceeding $250,000.00, then immediate payment shall be required of the Obligations with respect to such Collateral in an amount equal to such excess; provided that, if such reduction of value is the subject of an insurance claim payable to CDF as loss payee, then immediate payment of such excess amount shall only be required to the extent it exceeds the claim amount (net of any deductible) and payment of the remainder of such excess shall not be required until the earlier of (i) receipt of such insurance proceeds, if any, or the rejection or denial of such claim or any portion thereof and (ii) 30 days (or such later date as CDF may agree in writing) after such loss or damage. If the number of units of inventory (new and pre-owned) financed by CDF which are not Pre-Sold and which have an Outstanding Amount > $150,000.00 exceeds [****] of total number of units of inventory financed by CDF, then immediate payment shall be required and applied to the oldest units of such inventory financed by CDF to the extent required to reduce the number of such units to [****] or less. “Outstanding Amount” means the outstanding amount financed by CDF for such unit, minus any portion of the Required Amount (as defined in the [****]) funded to the [****] with respect to curtailments for such unit. For purposes of determining the concentration limits, units of inventory financed by CDF shall include, without limitation, each unit of pre-owned inventory with a valuation < $500,000.00 identified on the current borrowing base certificate. If the units of inventory (new and pre-owned) financed by CDF which are not Pre-Sold and which have an Outstanding Amount > $750,000.00 exceed [****] in the aggregate (of which no more than [****] in the aggregate may be Azimut brand), then immediate payment shall be required and applied to the oldest units of such inventory financed by CDF to the extent required to reduce the Outstanding Amount to [****] or less for such inventory (or [****] or less for Azimut brand inventory). In no event shall CDF finance more than the greater of [****] units or [****] of such inventory that exceeds 70 ft., and which are not Pre-Sold. 6 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. Inventory Reporting: Floorplan Curtailments: A monthly inventory certificate in the form attached hereto as Exhibit C or in such other form as Dealers and CDF may agree, together with supporting documentation requested by CDF, shall be required to be provided by the 5 th day of each month (or the first business day following the 5 th day of each month if the 5 th day is not a business day) based on the balances as of the date of the certificate. All inventory to be included (new, pre-owned). To be provided on ad-hoc basis upon CDF request. Curtailment payments on invoices financed by CDF will be due pursuant to the following schedule: For all Azimut-Benetti S.p.A inventory, a curtailment payment of 10% of the initial amount financed is due and payable on each item of new inventory at each of the following points in time: 181, 361, 541, 721 and 900 days from the original funding date and the full remaining balance of the advance is due and payable on each item of Azimut-Benetti S.p.A inventory when it is aged 1080 days from the original funding date. For all other new and Pre-Sold inventory, a curtailment payment of 10% of the initial amount financed is due and payable on each item of new inventory at each of the following points in time: 181, 361, 541, 721 and 900 days from the date of the respective original invoice and the full remaining balance of the advance is due and payable on each item of inventory when it is aged 1080 days from the date of the original invoice. For pre-owned (trade in or used) inventory < $500,000.00 low NADA wholesale value, a curtailment payment of 10% of the amount financed is due and payable at day 181 after the Acquisition Date; for pre-owned (trade in or used) inventory > $500,000.00 low NADA wholesale value, a curtailment payment of 10% of the amount financed is due and payable at day 181 after the Acquisition Date; and the advances with respect to all such items of inventory will be due in full at day 361 after the Acquisition Date. All curtailment payments will be billed monthly and due in a single payment on the last day of such month. The failure to remit curtailment payments when due shall be considered a Default under the terms of the IFA and any such late curtailment payments shall be subject to interest at the Default Rate until paid in full. Curtailment payments will be offset by an amount equal to the lesser 7 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. of (i) the Required Amount set forth in the [****], (ii) the [****] balance set forth in the [****], and (iii) [****] (provided the [****] has a balance of at least [****]). Notwithstanding such offset, the entire amount of curtailment payments will be paid no later than 20 days following the due date thereof. [****] [****] can be funded for curtailments due (up to a maximum of [****]) and other amounts subject to cap on the amount of [****] equal to the lesser of (i) [****] of the then outstanding loan balance or (ii) [****]. 1. Maximum of [****] removal of funds per week (Dealer may not remove funds required to maintain the Required Amount) 2. Maximum of [****] contributions of funds per week (unless otherwise needed for minimum requirements) 3. Not intended for direct application for unit payoffs Inventory Re- Advance Capability: New inventory may be paid down to a minimum floorplan balance of $1,000.00 per unit; permitted to re-advance up to maximum allowable advance rate (original invoice amount less curtailments due) subject to: 1. Request must aggregate at least $100,000.00 (refinance amount) 2. Maximum ‘re-book’ advance is limited to 25% of Maximum Credit Amount within any 30 day period or, if [****] is terminated at CDF’s option, 50% of Maximum Credit Amount within any 30 day period (such limit, the “Re-Advance Sublimit”) 3. Limited to Brunswick and Azimut product 4. Delivery of an Advance Request Form and certification of applicable inventory values Landlord Lien Waivers: If any Eligible Inventory Collateral is held at a location leased by you and you have not delivered to CDF a landlord lien waiver or subordination in form acceptable to CDF, as an alternative, you will be required to fund a reserve equal to 3 months of base rent, which will be placed in the [****] pursuant to the terms of the [****], as a “required” minimum amount. B. General Terms Audit/Inspection Fees: Pre-closing and annual audit costs will be paid by Dealers. Actual floorcheck expenses for inventory inspections will be paid by CDF, provided that if results of the inspections are not satisfactory to CDF, in its reasonable discretion, then additional inspection expenses will be paid by Dealers. MSO’s/Titles: All Pre-owned titles and documentation must show all prior liens released. 8 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. Insurance Certificates: On or before the date hereof, Dealer shall deliver to CDF certificates of insurance satisfying the requirements set forth in Section 6 of the Inventory Financing Agreement. Audit/Inspection Frequency: 8 x per year All locations with an average outstanding Total Eligible Inventory (calculated semi-annually based on inventory reports provided to CDF by Dealers) > $1,000,000 will be inspected quarterly at a minimum All locations with an average outstanding Total Eligible Inventory (calculated semi-annually based on inventory reports provided to CDF by Dealers) < $1,000,000 will be inspected semi-annually at a minimum During each inspection, CDF will inspect multiple locations wherein at least 48% of Total Eligible Inventory is located. During each calendar quarter, CDF will inspect multiple locations wherein at least 98% of Total Eligible Inventory is located. MSO and Preowned Title audits to be conducted every 120 days and additional audits/inspections at any other time at CDF’s discretion COMS Non-Usage Fee: Dealers will be charged $1,000 in the aggregate per month for any month during which Dealers do not use the CDF COMS on-line payment system for Dealers’ primary method of payment to CDF. Servicing Fee: Dealers will pay to CDF a monthly servicing fee equal to 0.10% of the average daily balance of outstanding Obligations. Late Payment Fee: Under the terms of your financing agreement with CDF, you are to remit payment to CDF immediately upon the earlier of (i) your receipt of the proceeds of any sale or other disposition of any unit of CDF’s financed collateral, and (ii) 7 calendar days after such sale or other disposition. If it is discovered that a unit of collateral is sold or otherwise disposed of without payment remitted to CDF (Sold out of Trust “SOT”), whether as the result of an inventory collateral inspection or otherwise, CDF may, in its sole discretion, charge you the following late payment fee on a monthly basis for each SOT item: Day 1- 7 after the retail sale of the unit On the 8 th day after the retail sale of the unit $0.00 .25% of the outstanding invoice amount per unit per month 9 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. NSF Fee: You will be charged a fee of $25 for each check or other item that is returned unpaid. Please note that the fees and charges referred to above such as the Late Payment Fee and NSF Fee are not intended to be CDF’s sole remedies for those events, and if you fail to meet any of your obligations under your agreements with CDF, CDF specifically reserves all other rights and remedies legally available to it. Customer Online Management System (COMS): CDF encourages use of COMS, our Internet payment/floorplan system. CDF will assist you in the installation of the system and provide you with training, free of charge. Internet payments are processed via an ACH transaction and at no cost to you. You can view the system’s capabilities at www.gecdf.com/coms. Application of Terms: • The terms set forth in this Program Terms Letter shall apply only to loans with CDF, and will not apply to any other GE Commercial Distribution Finance platform or joint venture (i.e. RV, Yamaha, Suzuki, Polaris Acceptance, Brunswick Acceptance Company, LLC, etc.) or any loans with any CDF Affiliate. Confidentiality Agreement: The rates and terms set forth in this letter are for your benefit and shall be held in the strictest confidence by you; provided that you may disclose the terms hereof to the extent required by applicable laws or regulations if you provide CDF with prior written notice of such disclosure, work with CDF in good faith to redact any information herein requested by CDF, and provide CDF with an opportunity to seek a protective order with respect to such information. Subject to the foregoing, you will take all reasonable precautions to assure the confidentiality of this information is not released to any third party. PLEASE ACKNOWLEDGE YOUR ACCEPTANCE OF YOUR FINANCING TERMS AND RETURN TO [ ]. THANK YOU FOR THE OPPORTUNITY TO FINANCE YOUR INVENTORY NEEDS. GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION By: Name: Title: 10 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. ACCEPTED AS OF AUGUST , 2013: MARINEMAX, INC. By: Name: Title: MARINEMAX EAST, INC. By: Name: Title: MARINEMAX SERVICES, INC. By: Name: Title: MARINEMAX NORTHEAST, LLC By: Name: Title: BOATING GEAR CENTER, LLC By: MARINEMAX EAST, INC., the sole member of Boating Gear Center, LLC By: Name: Title: US LIQUIDATORS, LLC By: Name: Title: NEWCOAST FINANCIAL SERVICES, LLC By: Name: Title: 11 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. MY WEB SERVICES, LLC By: MARINEMAX, INC., the sole member of My Web Services, LLC By: Name: Title: MARINEMAX CHARTER SERVICES, LLC By: MARINEMAX EAST, INC., the sole member of MarineMax Charter Services, LLC By: Name: Title: 12 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. GE Commercial Distribution Finance Corporation 5595 Trillium Blvd. Hoffman Estates IL 60192 Exhibit A Advance Request Form Re: Second Amended and Restated Inventory Financing Agreement, dated August 29, 2014, among MarineMax, Inc. (“Agent”), the other Dealers party thereto (collectively, together with Agent, “Dealers”) and GE Commercial Distribution Finance Corporation (“CDF”), as amended, modified, restated or replaced from time to time (the “Agreement”) Ladies and Gentlemen: The undersigned is Agent for Dealers under the Agreement and as such is authorized to make and deliver this advance request (this “Request”) on behalf of Dealers pursuant to Section 1 of the Agreement. All capitalized terms used, but not defined, herein have the meanings provided in the Agreement. Dealers hereby request that CDF make an advance on , 20 of $ to Dealers under the terms of the Agreement with respect to the following (check one): pre-owned inventory units with applicable valuations of five hundred thousand dollars ($500,000.00) or more (“Specific Pre- Owned Items”), subject to the Pre-Owned Inventory Sublimit and Availability (as defined in the Program Terms Letter). pre-owned inventory units with applicable valuations of less than five hundred thousand dollars ($500,000.00) (“Other Pre-Owned Items”), subject to the Pre-Owned Inventory Sublimit and Availability. units of inventory (excluding used or pre-owned inventory) for which Dealers have previously made payments to CDF (“Re- Advance Items”), subject to the Re-Advance Sublimit and Availability. The undersigned hereby represents, warrants and certifies that, as of the date hereof, (a) each representation and warranty made to CDF by or on behalf of any Dealer is true and correct as of the date hereof, except to the extent that such representation or warranty expressly relates to an earlier date, in which event such representation or warranty was true and correct as of such earlier date; (b) neither a Default nor any event which with the giving of notice, the passage of time or both would result in a Default has occurred and is continuing or would reasonably be expected to result after giving effect to the advance requested hereby [except ]; Program Terms Letter – Exhibit A KCP-4504974-8 A - 1 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. (c) after giving effect to the advance requested hereby, the aggregate outstanding amount of the Obligations (i) will not exceed Availability, (ii) with respect to pre-owned inventory will not exceed the Pre-Owned Inventory Sublimit, (iii) with respect to Specific Pre- Owned Items will not exceed the Specific Pre-Owned Sublimit, (iv) with respect to Other Pre-Owned Items will not exceed the Other Pre- Owned Sublimit, and (v) with respect to Re-Advance Items, will not exceed the Re-Advance Sublimit; (d) if this Request relates to Specific Pre-Owned Items, Exhibit A hereto sets forth, for each Specific Pre-Owned Item, (i) the Dealer who owns such item, (ii) the location of such item, (iii) the year, make and model, serial number, engine model, horsepower and serial for such item, (iv) the NADA low wholesale value and the advance amount requested therefor, and (v) copies of the reports and documents listed on Exhibit A as “Required Documents”; (e) if this Request relates to Other Pre-Owned Items, Exhibit B hereto sets forth (i) the date of the most recent borrowing base certificate and the borrowing base amount shown thereon, (ii) borrowing base availability as of the date hereof, and (ii) borrowing base availability after the advance request hereby; (f) if this Request relates to Re-Advance Items, Exhibit C hereto sets forth (i) the specific Re-Advance Items supporting such advance, identified by manufacturer, original invoice number, and original invoice date and (ii) the original invoice amount, outstanding amount of Obligations with respect to such Re-Advance Item, and the re-advance amount requested therefor; (g) each Specific Pre-Owned Item, Other Pre-Owned Item and Re-Advance Item, as applicable, is owned by the Dealer identified on the Exhibits attached hereto, free and clear of all Liens, and CDF holds a first and prior Lien on such Collateral pursuant to the Agreement, and such Collateral is in good saleable condition (normal wear and tear excepted); and (h) Dealers will pay CDF for each item of Collateral financed pursuant to this Request under the terms and conditions of the Agreement. Executed this day of , . MarineMax, Inc. By: Its: Typed Name: Program Terms Letter – Exhibit A KCP-4504974-8 A - 2 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. Exhibit A to Advance Request Form Specific Pre-Owned Items RE: USED TRADE-IN ( CIRCLE ONE ) AGENT FOR DEALERS MARINE MAX NUMBER UNIT DEALER LOCATION YEAR MAKE/MODEL BOAT SERIAL NUMBER ENGINE MODEL, HORSEPOWER & SERIAL NADA (ABOS or BUC) LOW WHOLESALE VALUE FOR BOAT & ENGINE $ VALUE X % $ DOLLAR AMOUNT OF USED/TRADE REQUEST TO BE ADVANCED $ REQUIRED DOCUMENTS: *Attach copy of customer contract for trade-in units/bill of sale and proof of payment for used units. *Attach copy of completed Title Documents(front and rear) evidencing the boat is free and clear of all liens. *Attach copy of survey/internal condition report *Attach copy of internal valuation report *Attach copy of Coast Guard documentation, abstract of title, and bill of sale Specific Pre-Owned Sublimit $20,000,000 (1) Outstanding Amount with Respect to Specific Program Terms Letter – Exhibit A KCP-4504974-8 A - 3 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. Pre-Owned Items Amount of Advance Requested [not > $2,500,000.00] Outstanding Amount with Respect to Specific Pre-Owned After Requested Advance [(2) + (3)] Specific Pre-Owned Sublimit Availability After Requested Advance [(1) – (4)] Pre-Owned Inventory Sublimit Outstanding Amount with Respect to Other Pre-Owned Items Outstanding Amount with Respect to Specific Pre-Owned Items and Other Pre-Owned Items After Requested Advance [(5) + (7)] Pre-Owned Inventory Sublimit Availability After Requested Advance [(6) – (8)] Program Terms Letter – Exhibit A KCP-4504974-8 A - 4 (2) (3) (4) (5) $45,000,000 (6) (7) (8) (9) 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. Exhibit B to Advance Request Form Other Pre-Owned Items Borrowing Base Certificate Date Borrowing Base Amount Other Pre-Owned Sublimit Other Pre-Owned Line of Credit [Lesser of (1) or (2)] Outstanding Amount with Respect to Other Pre-Owned Borrowing Base Availability (Payment Required) [(3) - (4)] Amount of Advance Requested Outstanding Amount with Respect to Other Pre-Owned After Requested Advance [(4) + (6)] Percentage of Borrowing Base Amount [(7) / (1)] (must be £ 80% if certificate date not request date and £ 100% if certificate date is request date) Borrowing Base Availability After Requested Advance [(1) – (7)] (1) $35,000,000 (2) (3) (4) (5) (6) (7) % (8) (9) Pre-Owned Inventory Sublimit $45,000,000 (10) Outstanding Amount with Respect to Specific Pre-Owned Items Outstanding Amount with Respect to Specific Pre-Owned Items and Other Pre-Owned Items After Requested Advance [(7) + (11)] Pre-Owned Inventory Sublimit Availability [(10) – (12)] Program Terms Letter – Exhibit A KCP-4504974-8 A - 5 (11) (12) (13) 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. DEALER NAME DEALER Exhibit C Re-Advance Items NUMBER UNIT MANUFACTURER LOCATION BOAT SERIAL NUMBER BOAT MODEL& SERIAL ORIGINAL INVOICE NUMBER ORIGINAL INVOICE DATE ORIGINAL INVOICE AMOUNT OUTSTANDING AMOUNT WITH RESPECT TO RE-ADVANCE ITEM RE-ADVANCE AMOUNT REQUESTED Re-Advance Sublimit Re-Advance Amounts within prior 30 Days Amount of Advance Requested Re-Advance Amounts within prior 30 Days After Requested Advance [(2) + (3)] Re-Advance Sublimit Availability After Requested Advance [(1) – (4)] Program Terms Letter – Exhibit A KCP-4504974-8 A - 6 (1) (2) (3) (4) (5) 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. Exhibit B Borrowing Base Certificate Form Program Terms Letter – Exhibit B KCP-4504974-8 B - 1 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. Program Terms Letter – Exhibit C KCP-4504974-8 Exhibit C Monthly Inventory Certificate Form C - 1 Exhibit 21 LIST OF SUBSIDIARIES Name MarineMax East, Inc. (1) MarineMax Services, Inc. (2) MarineMax Northeast, LLC (2) Boating Gear Center, LLC (2) US Liquidators, LLC (1) Newcoast Financial Services, LLC (1) My Web Services, LLC (1) MarineMax Charter Services, LLC (2) MarineMax Vacations, LTD (2) State or Jurisdiction of Incorporation or Organization Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware British Virgin Islands (1) Wholly owned subsidiary of MarineMax, Inc. (2) Wholly owned subsidiary of MarineMax East, Inc. Consent of Independent Registered Public Accounting Firm Exhibit 23.1 The Board of Directors MarineMax, Inc.: We consent to the incorporation by reference in the registration statements on Form S-8 (Nos. 333-141657, 333-83332, 333-63307, 333-156358 and 333-177019) of MarineMax, Inc. and subsidiaries of our reports dated December 11, 2014, with respect to the consolidated balance sheets of MarineMax, Inc. and subsidiaries as of September 30, 2013 and 2014 and the related statements of operations, stockholders’ equity and cash flows for each of the years then ended, and the effectiveness of internal control over financial reporting as of September 30, 2014 which reports appear in the September 30, 2014 annual report on Form 10-K of MarineMax, Inc. /s/ KPMG LLP Tampa, Florida December 11, 2014 Certified Public Accountants Exhibit 23.2 We consent to the incorporation by reference in the following Registration Statements: Consent of Independent Registered Certified Public Accounting Firm 1) Registration Statement (Form S-8 No. 333-141657) pertaining to the 2007 Incentive Compensation Plan of MarineMax, Inc., 2) Registration Statement (Form S-8 No. 333-83332) pertaining to the 1998 Incentive Stock Plan of MarineMax, Inc., 3) Registration Statement (Form S-8 No. 333-63307) pertaining to the 1998 Incentive Stock Plan and the 1998 Employee Stock Purchase Plan of MarineMax, Inc., 4) Registration Statement (Form S-8 No. 333-156358) pertaining to the 2008 Employee Stock Purchase Plan of MarineMax, Inc.; and 5) Registration Statement (Form S-8 No. 333-177019) pertaining to the 2011 Stock-Based Compensation Plan of MarineMax, Inc.; of our report dated December 7, 2012, with respect to the consolidated financial statements of MarineMax, Inc. and subsidiaries included in this Annual Report (Form 10-K) of MarineMax Inc. and subsidiaries for the year ended September 30, 2014. /s/ Ernst & Young LLP Tampa, Florida December 11, 2014 Exhibit 31.1 I, William H. McGill Jr., certify that: 1. I have reviewed this report on Form 10-K of MarineMax, Inc.; CERTIFICATION 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 5. 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. Date: December 11, 2014 /s/ W ILLIAM H. M C G ILL , J R . William H. McGill Jr. Chief Executive Officer (Principal Executive Officer) Exhibit 31.2 I, Michael H. McLamb, certify that: 1. I have reviewed this report on Form 10-K of MarineMax, Inc.; CERTIFICATION 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 am 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 5. 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. Date: December 11, 2014 /s/ M ICHAEL H. M C L AMB Michael H. McLamb Chief Financial Officer (Principal Financial Officer) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 In connection with the Annual Report on Form 10-K of MarineMax, Inc. (the “Company”) for the year ended September 30, 2014, 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. § 1350, as adopted pursuant to § 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. Date: December 11, 2014 /s/ W ILLIAM H. M C G ILL J R . William H. McGill Jr. Chief Executive Officer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 In connection with the Annual Report on Form 10-K of MarineMax, Inc. (the “Company”) for the year ended September 30, 2014, 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. § 1350, as adopted pursuant to § 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. Date: December 11, 2014 /s/ M ICHAEL H. M C L AMB Michael H. McLamb Chief Financial Officer 

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