EXHIBIT 10.45
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
OUTBOARD MARINE CORPORATION
PRIVATE LABEL\RETAIL STORE AGREEMENT
THIS AGREEMENT is made this ____ day of _________________, ________ by
and between Xxxxxx Boats and Motors, Inc., a Texas corporation with its
principal place of business in Austin, TX ("XXXXXX") and Outboard Marine
Corporation, a Delaware corporation with its principal place of business in
Waukegan, IL ("OMC").
WHEREAS, Xxxxxx purchases private label boats for resale under the
Xxxxxx Edition tradename through its owned retail stores;
WHEREAS, it is the parties' intention that during the term of this
Agreement, any gasoline outboard motor OMC manufactures, markets or distributes
in the United States, including Xxxxxxx(R) or Evinrude(R), will be subject to
the terms of this Agreement. In addition, it is OMC's intention undeR the
Agreement to maintain Xxxxxx' relative position in the marketplace with regard
to * discounts;
WHEREAS, Xxxxxx wishes to purchase remote steering and electric start
gasoline outboard motors manufactured, sold or distributed by OMC in the United
States, including Xxxxxxx and Evinrude outboard motors ("OUTBOARD MOTORS") for
resale as part of its Xxxxxx Edition or other new boat packages and for sale as
loose outboards through Xxxxxx retail stores, all within the United States;
WHEREAS, Xxxxxx wishes to purchase tiller steering outboard motors,
including Xxxxxxx and Evinrude tiller steering outboard motors, ("TILLER
OUTBOARDS") for sale through Xxxxxx retail stores in the United States; and
WHEREAS, OMC wishes to sell Outboard Motors and Tiller Outboards to
Xxxxxx.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. All purchases and sales of Outboard Motors and Tiller Outboards shall be
under the terms and conditions of this Agreement, which is non-exclusive.
2. The prices paid by Xxxxxx for Outboard Motors for use with new boat
packages shall be as follows:
U.S. Dealer Net Price: 100%
* Discount (see Paragraph 2(b): *
Contract Discount (see Paragraphs 1 and 14): *
* Indicates Confidential Treatment Requested. The redacted material has been
filed separately with the Commission.
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Contract Resolution Discount: *
Total Discount: *
Invoice Price: *
* Rebate (see Paragraph 2(c)): * (paid monthly)
Contract Resolution Rebate: * (paid quarterly)
Planning Rebate (see Paragraph 2(d)): * (paid quarterly)
Xxxxxx Edition Rebate: * (paid quarterly)
Package Rebate (see Paragraph 2(e)): * (paid quarterly)
Market Development Rebate
(available for sales to Xxxxxx retail stores
see Paragraph 2(f)): * (paid upon approved
claims)
Total Rebate: *
Net Cost: *
The discounts and rebates above are subject to the following conditions:
(a) In order to earn the rebates described in this Para- graph 2, *
i. Not later than fifteen (15) days after the execution of this
Agreement Xxxxxx shall obtain a statement in the form attached
hereto as Attachment A from each of its suppliers of boats
waiving such suppliers' eligibility for and right and claim to
any pre-rig or package fee from OMC for model year 1999. Xxxxxx
shall obtain a similar statement from each of its suppliers of
boats for each subsequent model year during the term of this
Agreement. Such statements shall be provided to OMC not later
than fifteen (15) days prior to the beginning of each subsequent
model year;
ii. On a monthly basis, Xxxxxx will provide OMC with a list showing
the Outboard Motors' serial number, corresponding hull
identification number and make of boat for each new boat package
shipped by Xxxxxx in the previous month; and
iii. On a monthly basis, Xxxxxx will provide OMC with a list of
Outboard Motors sold by Xxxxxx in the previous month as loose
outboards. OMC shall charge back Xxxxxx for all Outboard Motors
on which the * Rebate is paid and which are sold as loose
outboards.
(b) * For model years 1999 and 2000, Travis's * Discount shall be * and
its invoice price shall be * of dealer net price. For model year 2001,
the * Discount available to Xxxxxx shall be adjusted as necessary so
that the Xxxxxx Invoice Price remains equal to the net price available
to OMC dealers pursuant to the maximum discounts and rebates offered
to OMC dealers under the applicable OMC dealer
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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program. OMC shall use commercially reasonable efforts to keep its
dealer program competitive to those offered by other outboard
manufacturers.
(c) * REBATE. The * Rebate shall be * . For model year 1999, if Xxxxxx
fails to purchase a combined total of * units of Outboard Motors and
Tiller Outboards and attain an average of * for its purchases of
Outboards Motors and Tiller Outboards, the Horsepower/Volume Rebate
shall be reduced by * percentage points for the following model year
as OMC's sole remedy, except as provided in Paragraph 6(g) herein. For
each model year after 1999, if Xxxxxx fails to purchase a combined
total of * units of Outboard Motors and Tiller Outboards and attain an
average of * for its purchases of Outboard Motors and Tiller
Outboards, the * Rebate shall be reduced by * percentage points for
the following model year as OMC's sole remedy, except as provided in
Paragraph 6(g) herein. Average horsepower shall be calculated on the
following basis: the total horsepower of units units.
In the event OMC is unable to timely ship forecasted reasonable orders
of Xxxxxx, then the units not shipped will be counted toward the
horsepower and volume requirements of this Agreement.
* Rebates will be paid on a monthly basis.
* Rebate payments will be made within 30 days of the end of each
month.
(d) For model year 1999, Xxxxxx will earn the Planning Rebate by adhering
to its own forecast and placing orders in a pattern consistent with
its past order pattern with OMC. To qualify for the Planning Rebate in
subsequent model years, Xxxxxx must forecast, by model, at least * of
the total unit volume sold in the four most recently completed
quarters. Forecasts must be submitted at least 30 days prior to the
start of each quarter. Forecasts are subject to acceptance by OMC in
its sole discretion. Acceptance of forecasts will not be unreasonably
withheld provided Xxxxxx' forecasts are consistent with its past order
pattern with OMC. The rebate will be paid based upon the accuracy of
the forecast according to the following schedule:
% of Forecast Shipped
Each Quarter Rebate
------------ ------
* *
* *
* *
* *
Accepted orders not shipped shall count toward determining the
Planning Rebate. Planning Rebates shall be paid quarterly within 30
days after each quarter.
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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(e) PACKAGE REBATE. The Package Rebate shall be paid quarterly on Outboard
Motors sold as part of a new boat package, documented in accordance
with Paragraph 2(a).
(f) MARKET DEVELOPMENT REBATE. The Market Development Rebate shall be paid
to Xxxxxx upon submission to OMC of such documents as may be required
under OMC's then current Market Development Program. This is the only
Market Development Rebate available to Xxxxxx retail stores under the
1999 OMC Xxxxxxx and Evinrude Dealer Sales Programs. The Market
Development Rebate shall be paid upon approval of claims. The * Market
Development Rebate will apply only to new boat package sales by Xxxxxx
retail stores. The Market Development Rebate shall be calculated on
the dealer net price of Outboard Motors purchased by Xxxxxx under this
Agreement.
The Market Development Funds shall be used for the purpose of
promoting Outboard Motors in accordance with OMC's Market Development
Program which may be in effect from time to time.
3. Xxxxxx agrees that its purchases of Outboard Motors from OMC under the
terms described in Paragraph 2 above are for the exclusive purpose of sale
by Xxxxxx retail stores in the United States, which are authorized OMC
dealers, as part of a complete new boat package and for no other purpose.
Xxxxxx agrees not to offer or sell boat packages with Outboard Motors or
Tiller Outboards in excess of the boat's rated horsepower capacity.
4. LOOSE OUTBOARD MOTORS AND TILLER OUTBOARDS DISCOUNTS AND REBATES. The
discounts, rebates and procedures described in Paragraphs 2 and 3 of this
Agreement apply only to Outboard Motors sold as a part of a complete boat
package. For model year 1999, loose Outboard Motors and Tiller Outboards
will be priced as follows provided a minimum of * combined total units of
loose Outboard Motors and Tiller Outboards are purchased:
U.S. DEALER NET PRICE: 100%
Loose Outboard Motors and
Tiller Outboards Discount: *
Invoice Price: *
Net Cost: *
Terms and financing for model year 1999 are as provided for in the 1999
Xxxxxxx and Evinrude Dealer Sales Programs.
OMC reserves the right to change its dealer programs with regard to
loose Outboard Motors and Tiller Outboards for future model years,
However, for model year 2000 Xxxxxx' discount for loose Outboard Motors
and Tiller Outboards will remain at 22% provided it complies with the
minimum purchase requirement of such programs. For model year 2001,
Xxxxxx will
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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receive the maximum discount and rebate offered to dealers under OMC's
published dealer programs provided it complies with the minimum purchase
volume requirements of such programs.
5. During the term of this Agreement, terms of purchase (including freight and
financing from finance companies) on Outboard Motors and Tiller Outboards
purchased by Xxxxxx from OMC shall be subject to, but no less favorable
than, for each year of the Agreement, those offered by OMC to its
authorized dealers during that model year.
OMC intends for its dealer programs for Outboard Motors and Tiller
Outboards to remain competitive with the terms and conditions of those
programs offered by the other outboard manufacturers.
Xxxxxx agrees not to publish or disclose to third parties in any way the
prices and discounts contained in this Agreement, except as required by its
accounting or legal advisors or as required by law, including without
limitation applicable regulations of the United States Securities Exchange
Commission or stock exchange requirements.
6. This Agreement may be terminated by either OMC or Xxxxxx in the event of
any breach of the terms of this Agreement by the other, including, but not
limited to:
(a) Failure of Xxxxxx to pay for Outboard Motors or Tiller Outboards in
accordance with the terms of this Agreement;
(b) failure of OMC to pay rebates as required by this Agreement;
(c) Bankruptcy or insolvency of the other party;
(d) Material or intentional fraud or misrepresentation;
(e) Disclosure to third parties of Outboard Motor or Tiller Outboard
prices charged to Xxxxxx by OMC, except as required by its accounting
or legal advisors or as required by law, including without limitation
applicable regulations of the United States Securities Exchange
Commission or stock exchange requirements.
(f) * ;
(g) Travis's failure to order at least a combined total of * units of
Outboard Motors and Tiller Outboards in any model year during the term
of this Agreement;
(h) OMC's failure to supply at least 80% of Xxxxxx' accepted orders in any
two consecutive quarters; and
(i) The failure of either party to act in good faith in any material
respect as relating to this Agreement.
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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Provided, however, termination shall be subject to the following cure
provisions:
The party suffering the breach shall provide the breaching party a written
notice of such breach. The breaching party shall have a period of * days
from the date of receipt of such notification of such breach to cure the
breach of the Agreement, except in the instance of the breaches set forth
in (c), (d) and (e) above for which there shall be no cure period. All
notifications shall be sent by certified or other forms of registered mail.
7. Xxxxxx retail stores shall not be eligible for any discounts, rebates, or
any other OMC dealer programs except, to the extent they may exist in any
model year during the term of this Agreement, the following:
(a) Dealer Sales to Government Agencies
(b) Resort Rental Plan
(c) Professional Guide Program
(d) Promotional Engine Program
8. Xxxxxx agrees to increase its OMC Genuine Parts & Accessories ("P&A")
business by * per model year starting with a goal of * (exclusive of
electric trolling motor purchases) in P&A purchases in model year 1999.
Xxxxxx will be allowed to participate in all P&A programs and will receive
a * volume rebate per year during the term of this Agreement provided the
abovereferenced annual P&A purchase goals are met. OMC will accept in each
model year of this Agreement, * , return of up to * of the total P&A
purchased by Xxxxxx.
9. OMC agrees to sell to Xxxxxx rigging items at * for the pre-rigging of
Xxxxxx Edition boats. These rigging items are not eligible for the * P&A
volume rebate. These rigging items will, however, count toward Xxxxxx'
annual P&A purchase goals.
10. This Agreement supersedes any and all prior agreements between the parties
relating to prices and discounts for Outboard Motors, Tiller Outboards and
P&A. The discounts and rebates contained in this Agreement are the only
ones applicable to purchases of Outboard Motors, Tiller Outboards and P&A
by Xxxxxx. In the event of a conflict between this Agreement and any other
agreement concerning any provisions of this Agreement, the terms of this
Agreement shall prevail.
11. The Agreement dated October 3, 1997 by and between Xxxxxx Boats & Motors,
Inc. and OMC (the "1997 AGREEMENT") is hereby terminated effective June 30,
1998.
12. OMC and Xxxxxx retail stores may enter into Dealer Agreements. Such Dealer
Agreements will govern all aspects of the parties' relationship except
those relating to the purchase of
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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Outboard Motors and Tiller Outboards as contained in this Agreement. OMC
will not terminate or fail to renew such Dealer Agreements during the term
of this Agreement except for cause as defined in such Dealer Agreement. For
purposes of this Agreement, the definition of cause will not change
materially from that definition contained in the 1999 OMC Dealer Agreement.
OMC has the sole discretion in approving Xxxxxx retail stores as OMC
dealers, but such approval shall not be unreasonably withheld.
13. OMC reserves the right to modify, change or alter its dealer programs and
discounts at any time during the term of this Agreement and shall provide
Xxxxxx with reasonable notice of such modifications, changes or
alterations. * . OMC reserves the right to conduct an audit of Xxxxxx'
books and records upon reasonable notice for the purpose of verifying any
discount or rebate claimed by Xxxxxx pursuant to this Agreement.
14. This Agreement shall be effective as of July 1, 1998 and shall expire on
June 30, 2001.
15. Each party hereby covenants and agrees that such party will not pursue
against any other party hereto any claims that such party has, had or may
have had against such other party pursuant to the 1997 Agreement; provided,
however, that the foregoing covenant and agreement shall be of no further
force and effect if this Agreement is terminated prior to June 30, 2001,
unless such termination is by OMC pursuant to Paragraphs 6(a), (e) or (g)
above.
16. The provisions hereof shall inure to the benefit of, and be binding upon,
the permitted assignees, successors, heirs, executors and administrators of
the parties hereto. This Agreement may not be assigned without the written
consent of all other parties.
XXXXXX BOATS & MOTORS, INC. OUTBOARD MARINE CORPORATION
BY: /S/ XXXX XXXXXX BY: ILLEGIBLE
-------------------------- -----------------------------
ITS: PRESIDENT ITS: VICE PRESIDENT, GENERAL
COUNSEL & SECRETARY
DATE: NOVEMBER 13, 1998 DATE: NOVEMBER 12, 1998
* INDICATES CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
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