Exhibit 10.1
AGREEMENT AMONG
SELLERS
This AGREEMENT AMONG
SELLERS (this “ Agreement ”) is made as of
the 27th day of April, 2004, by and among LD Holdings Inc., a
Delaware corporation (“ LDH ”), Lazy Days’
R.V. Center, Inc., a Florida corporation and wholly owned
subsidiary of LDH (“ Lazy Days ” and together
with LDH, collectively, the “ Companies ”), the
Employee Stock Ownership Plan and Trust for the Employees of Lazy
Days (the “ ESOP ”), acting herein through James
L. Farnsworth as the directed trustee of the ESOP and not in his
individual capacity, pursuant to the direction of the ESOP
Fiduciary, those persons and entities listed on Exhibit A
attached hereto (each a “ Seller ” and
collectively, the “ Sellers ”) and Oakridge
Consulting, acting herein through Michael Salvati solely in his
capacity as agent for the Sellers and not in his individual
capacity (the “ Sellers’ Representative
”). Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Agreement
(as defined below).
RECITALS
WHEREAS , as of the date hereof, LDH, Lazy Days, the
ESOP, the Sellers, the Sellers’ Representative and R.V.
Acquisition Inc., a Delaware corporation (the “ Buyer
”) entered into that certain Stock Purchase Agreement (the
“ Purchase Agreement ”), pursuant to which the
Buyer has agreed to purchase from the ESOP and the Sellers all of
their respective shares of capital stock of LDH (other than the
Sellers Contributed Shares and the Wallace Contributed Shares) (the
“ Transaction ”); and
WHEREAS , the Sellers and the ESOP now desire to set
forth herein their agreement as to the allocation of the proceeds
to be received by the ESOP and the Sellers pursuant to the
Transaction, and other related matters; and
WHEREAS , one of the conditions to the Closing of the
Transaction is that the parties enter into this
Agreement.
NOW THEREFORE,
in consideration of the foregoing
and the mutual agreements set forth below, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
CONSENTS AND
WAIVER
1.1
ESOP Waiver
under Shareholders’ Agreement and the 2002 Escrow
Agreement . In exchange for the
ESOP Consideration, (a) pursuant to Section 11(i) of the
Shareholders’ Agreement, the ESOP hereby agrees to waive its
right to receive any distributions from the Transaction to which
the ESOP may be entitled under the Shareholders’ Agreement,
and (b) pursuant to Section 15(d) of the 2002 Escrow
Agreement, the ESOP hereby agrees to waive its right to receive any
proceeds to which it might otherwise have been entitled from the
Transaction pursuant to the terms of the 2002 Escrow
Agreement.
1.2
Alliance and
Wallace Waiver under the 2002 Escrow Agreement
. Pursuant
to Section 15(d) of the 2002 Escrow Agreement, Alliance and
Wallace hereby waive the obligation of the ESOP to pay to the 2002
Escrow Agent any ESOP Consideration.
1.3
ESOP
Consideration . The Sellers hereby
acknowledge and agree that (a) the ESOP Consideration shall not be
considered proceeds of a Sale Event under the Shareholders’
Agreement, and shall not be subject to distribution pursuant to the
terms of the Shareholders’ Agreement, (b) the ESOP
Consideration shall not be subject to distribution under the 2002
Escrow Agreement, and (c) the Sellers shall have no rights in or to
the ESOP Consideration, or any portion thereof, except pursuant to
each Seller’s right in his capacity as an ESOP
participant.
1.4
Further
Acknowledgements . The Sellers and the
ESOP hereby further acknowledge and agree that any distributions
from the Transaction (other than the ESOP Consideration) to which
the ESOP may otherwise be entitled under the Shareholders’
Agreement or the 2002 Escrow Agreement shall be allocated among the
Sellers as set forth herein.
1.5
Exercise of
Fiduciary Duty . Notwithstanding any
provision hereof to the contrary, this Agreement shall not be
binding upon the ESOP unless the ESOP Fiduciary shall receive an
opinion of the ESOP Advisor, dated as of the Closing Date, that as
of such date (a) the consideration to be paid to the ESOP on the
Closing Date for the ESOP Common Shares pursuant to the terms of
the Purchase Agreement is not less than “adequate
consideration” as determined under ERISA, (b) the terms
and conditions of the transactions contemplated by the Purchase
Agreement are fair to the ESOP from a financial point of view, and
(c) the consideration to be paid to the ESOP for the ESOP Common
Shares pursuant to the terms of the Purchase Agreement is not less
than the consideration that the ESOP would have received under the
terms of the Purchase Agreement had this Agreement not been entered
into. The ESOP Fiduciary, as the independent Fiduciary under the
terms of the ESOP, shall have (i) determined, in the sole exercise
of its fiduciary discretion under ERISA, that the consummation by
the ESOP of the transactions contemplated by the Purchase Agreement
and this Agreement (including, without limitation, the LDRV
Agreement) is prudent, is for the exclusive purpose of providing
benefits to participants and beneficiaries of the ESOP, and does
not constitute a prohibited transaction or otherwise violate ERISA,
(ii) determined that the consummation by the ESOP of the
transactions contemplated by the Purchase Agreement and this
Agreement (including, without limitation, the LDRV Agreement) in no
other respects violates the ESOP Fiduciary’s fiduciary
obligations, and (iii) directed the Trustee to consummate the
transactions contemplated by the Purchase Agreement and this
Agreement (including, without limitation, the LDRV
Agreement).
ARTICLE II
ALLOCATION OF TOTAL NON-ESOP
SELLERS’ PROCEEDS
2.1
Total Non-ESOP
Sellers’ Proceeds . The Net Purchase
Price (after any adjustment under Section 2.3 and
Section 2.4 of the Purchase Agreement) less the ESOP
Consideration plus any adjustment for repayment of the ESOP
Loan per Section 2.2(c) of the Purchase Agreement shall
hereinafter be referred to as the “ Non-ESOP Sellers’ Net Purchase
Price ,” and the Non-ESOP
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Sellers’ Net Purchase
Price plus the Sellers Contribution Shares (valued at their
Liquidation Value (as defined below)) plus the Wallace
Contribution Shares (valued at $5,000,000) plus the Wallace
Share Notes (as such term is defined in the Wallace Note Agreement)
(valued at $7,000,000) shall hereinafter be referred to as the
“ Total Non-ESOP
Sellers’ Proceeds .” The parties to
this Agreement acknowledge that Wallace intends to use a portion of
his proceeds under the Purchase Agreement to purchase Notes (as
such term is defined in the Wallace Note Agreement).
2.2
Allocation of
Total Non-ESOP Sellers’ Proceeds Each of the Sellers
hereby acknowledges and agrees that the Total Non-ESOP
Sellers’ Proceeds shall be allocated and distributed among
the Sellers in accordance with the Shareholders’ Agreement
and the 2002 Escrow Agreement, (a) as modified by the provisions
of Article I
above, (b) as if
the Closing occurs on the thirtieth (30th) day immediately prior to
the Closing Date, (c) the ESOP Adjustment is given effect, and (d)
as if the holders of Class A Preferred Stock have elected to
convert their respective shares of Common Stock (as defined in the
Shareholders Agreement), at a conversion price of $3.674864 per
share, and as if the holders of Class B Preferred Stock have
elected to convert their respective shares into shares of Common
Stock, at a conversion price of $7.0267751 per share, in connection
with the Transaction; provided, however , that (i)
the Wallace Contribution Shares shall be (A) valued at five million
dollars ($5,000,000), (B) treated as if received as cash solely for
the purpose of determining the allocation hereunder, and (C)
allocated solely to Wallace in lieu of five million dollars
($5,000,000) of cash otherwise allocated to Wallace hereunder, and
(ii) that the Wallace Share Notes shall be (A) valued at seven
million dollars ($7,000,000), (B) treated as if received as cash
solely for the purpose of determining the allocation hereunder, and
(C) allocated solely to Wallace in lieu of seven million dollars
($7,000,000) of cash otherwise allocated to Wallace
hereunder.
2.3
Flow of
Funds . Each of the Sellers
hereby acknowledge and agree that the Flow of Funds spreadsheet
attached hereto as Exhibit
B is
illustrative of an allocation of the Total Non-ESOP Sellers’
Proceeds in accordance with Section 2.2 above.
2.4
Allocation
Confirmation . At least four (4)
business days prior to the Closing, the Companies shall, based upon
their determination of the Non-ESOP Sellers’ Net Purchase
Price, (a) determine the allocation of the Total Non-ESOP
Sellers’ Proceeds in accordance with Section 2.2 above, (b) determine each
Seller’s pro rata portion (expressed as a percentage carried
out to the fourth decimal place) of the Total Non-ESOP
Sellers’ Proceeds allocated to each Seller on such date in
accordance with Section 2.2 above (the “
Proceeds Percentages
”), and (c)
confirm the foregoing (including a detailed explanation of the
basis of their determination) to the Buyer and each of the Sellers
(the “ Allocation
Confirmation ”). The Sellers will
promptly acknowledge agreement with the Allocation Confirmation as
determined by the Companies pursuant to the foregoing terms.
Upon receipt of the Sellers’ acknowledgement of the
Allocation Confirmation, but in any event at least two (2) business
days prior to the Closing, the Companies shall prepare and deliver
to the Buyer Exhibit C
to the Purchase
Agreement, setting forth the name, address and Proceeds Percentage
of each of the Sellers.
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ARTICLE III
WALLACE SHORTFALL
3.1
Determination
of Wallace Shortfall . Notwithstanding anything to
the contrary in Article II above, to the extent that the
amount received by Wallace under the allocation of the Total
Non-ESOP Sellers’ Proceeds pursuant to Article II is less than $28,147,532 (the
“ Wallace
Shortfall ”), then all of the
Sellers holding Class A Preferred Stock immediately prior to the
Closing (the “ Class A
Holders ”), on a pro rata
basis, shall reallocate to Wallace, shares of the Sellers
Contribution Shares that the Class A Holders would have had the
right to receive pursuant to Article II above, having a total value
equal to the lesser of (a) the Wallace Shortfall or (b) all of the
Sellers Contribution Shares that the Class A Holders would have had
the right to receive pursuant to Article II above. For purposes of
determining the existence of a Wallace Shortfall, (a) shares of the
Sellers Contribution Shares received by Wallace pursuant to the
Allocation Confirmation shall be valued at one hundred percent
(100%) of the liquidation value per share of the Sellers
Contribution Shares pursuant to the Certificate of Incorporation of
the Buyer (the “ Liquidation Value ”), subject to
adjustment to reflect the effect of any stock split, reverse split,
exchange or readjustment of shares, stock dividend,
reclassification, reorganization, recapitalization or other like
change with respect to the Sellers Contribution Shares occurring
after the date of this Agreement, and (b) any amounts received by
Wallace (i) as an employee of the Companies, (ii) as an ESOP
participant, (iii) as a participant in any phantom stock plan of
Lazy Days, and/or (iv) pursuant to the Ground Lease, shall be
excluded.
3.2
Valuing the
Wallace Shortfall . For purposes of
determining the number of shares of the Sellers Contribution Shares
required to pay the Wallace Shortfall, the Sellers Contribution
Shares shall be valued at sixty percent (60%) of its Liquidation
Value, subject to adjustment to reflect the effect of any stock
split, reverse split, exchange or readjustment of shares, stock
dividend, reclassification, reorganization, recapitalization or
other like change with respect to the Sellers Contribution Shares
occurring after the date of this Agreement.
3.3
Procedure for
Acknowledgement of the Wallace Shortfall . At least four (4)
business days prior to the Closing, the Companies shall, based upon
their determination of the Allocation Confirmation as set forth
in Section 2.4
above, deliver a
notice of the Wallace Shortfall, including each Class A
Holder’s pro rata portion thereof, to the Escrow Agent, the
Buyer, the Sellers’ Representative and each of the Sellers.
The Sellers will promptly acknowledge agreement with the Wallace
Shortfall as determined by the Companies pursuant to the foregoing
terms.
3.4
Effect of
Additional Proceeds on Class A Amount . In the event that,
following the Closing, additional cash amounts which effectively
increase the Non-ESOP Sellers’ Net Purchase Price are
received by Wallace as a result of any post-Closing payments made
pursuant to the Purchase Agreement, and provided that any Wallace
Shortfall has been satisfied as set forth above, Wallace shall
transfer such additional cash amounts to the Class A Holders, in
accordance with their respective Proceeds Percentage, until the
Class A Holders receive from Wallace an amount equal to (a) the
amount of the Wallace Shortfall, plus (b) the amount of the
30 Day Adjustment.
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3.5
Effect on
Indemnification Obligations . The Sellers hereby
acknowledge and agree that their respective Proceeds Percentage as
determined under Article II above shall determine their
respective indemnification obligations under
Section 11.3 of the Purchase Agreement
(collectively the “ Indemnification Obligations ”). The Sellers
hereby further acknowledge and agree that any action taken pursuant
to this Article III shall not change any
Seller’s Proceeds Percentage as originally determined
pursuant to Article II above, and therefore each
Seller shall continue to bear the Indemnification Obligations in
accordance with its original Proceeds Percentage until each time
(each, a “ Reallocation
Date ”), if ever, that (a)
all of the Escrow Cash (as defined in the Escrow Agreement) has
been distributed under the Escrow Agreement and (b) any Seller has
no Sellers Contribution Shares remaining as a result of
Article III or Article IV hereof or the payment of
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