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Exhibit 10.71
December 12, 1996
VIA FACSIMILE AND U.S. MAIL
Xxxxxx X. Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
RE: RIDE, INC./STRAIGHT LINE WATER SPORTS, INC.
Dear Xxxxx:
This Amendment sets forth the terms of the understanding resolving the open
issues in connection with that certain Exclusive OEM Agreement ("Agreement"),
dated as of July 26, 1995, by and between Ride Snowboard Company ("Ride") and
Straight Liner Water Sports, Inc. ("Straight Line"), as amended by the Letter
Agreement, dated December 6, 1996, by and between Straight Line and Ride.
Unless otherwise defined herein, capitalized terms shall be as defined in the
Letter Agreement
1. Purchase Order.
a. Upon execution of this Amendment, Ride shall issue a
Purchase Order for a total of 2,500 compact Boards ("Compacts") and
the 180 B Grade Boards currently warehoused by Straight Line ("Grade
B's"), provided that Ride shall be under no obligation to purchase,
and the total number of 6,000 Boards shall be reduced by, those Grade
B's that do not meet insert specifications ("Defects").
b. On or before December 20, 1996, Ride shall issue a
Purchase Order for 3,320 Boards ("SPG Boards"); provided that Ride may
deliver the top sheet graphics for such SPG Boards no later than
January 15, 1997.
2. Delivery. The delivery schedule for the Boards shall be as
follows:
a. All Grade B's, less the Defects, may be delivered
immediately;
b. 750 Compacts may be delivered immediately upon completion;
c. 750 Compacts on March 15, 1997;
d. 1000 Compacts on April 15, 1997;
e. 3,320 SPG Boards on or before May 15, 1997.
All other terms of delivery shall be as provided in the Agreement.
3. Payment. Ride shall make payment as follows:
a. The current account receivable balance of $180,079.07,
without warranty holdback, on or before December 13, 1996. No
interest shall be due on this sum provided payment is timely made as
described herein;
b. Payment for the Grade B's and Compacts delivered as
provided in paragraphs 2.a.-c. hereof net 15 days from receipt of
invoice;
c. Payment for all other Boards shall be net 15 days from the
date of delivery and invoice or May 30, 1997, whichever is later.
All other payment terms shall be as described in the Agreement.
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4. Warranty. Warranty shall be as described in the Letter Agreement with the
following modifications:
a. The term of the warranty shall be from the date of this
Amendment through and including December 31, 1998, after which date
all warranty obligations, express and implied, including the implied
warranties of merchantability and fitness for a particular purpose,
shall expire;
b. The warranty shall be secured by a joint escrow ("Escrow")
in the principal amount of $96,600 to be established and funded by
Ride from payment due Straight Line under paragraph 3.c. above no
later than May 30, 1996. The escrow shall require the joint
instructions of Ride and Straight Line, and may terminate on or after
January 1, 1999 at Straight Line's election. Interest, if any,
generated by the escrowed funds shall be for the benefit of Straight
Line.
c. The technical representatives pursuant to paragraph 4 of
the Letter Agreement shall be Xxxx Xxxxx for Straight Line, and Xxxx
X'Xxxxxx for Ride, or their respective successor as may be determined
in the respective parties' sole discretion should such representative
be unavailable for any reason. In the event the technical reps cannot
agree on the applicability of a warranty claim, they shall flip a coin
and the decision of the winner thereof shall control and bind the
parties.
d. The Boards shall be warranted against the following
defects:
- Delaminations, including bubbles
- Bending and breaking
- Major top failure (not to include scratches or
normal cap chipping)
- Insert pull outs or spinning and cracking around
inserts.
5. Grading. Grading of the Boards shall be as described on the
Quality Specifications for 96 Production memorandum, dated January 24, 1996,
attached hereto as Exhibit A.
6. Pricing. Pricing for the Boards shall be as provided in the
Agreement.
7. Molds. Straight Line shall transfer the molds as provided in
paragraph 6 of the Letter Agreement, including the tooling therefor, upon
payment by Ride in the amount of $4,300.
8. Integration. Except as modified herein, the terms of the Letter
Agreement and the Agreement shall remain in full force and effect.
Please indicate your acceptance of the foregoing by signing the subjoined
Acknowledgment. Thank you.
Yours very truly,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
General Counsel
DHD/ss
enclosure
cc: Xxxxx Xxxxx
Xxxxx Kaznits
Xxxx X'Xxxxxx
ACKNOWLEDGED, UNDERSTOOD AND AGREED TO:
STRAIGHT LINE WATER SPORTS, INC. RIDE SNOWBOARD COMPANY
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By /s/ Xxxxxxx X. Gai By /s/ Xxxxx Xxxxx
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Its CEO Xxxxx Xxxxx, Xx. Vice President
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Date 12/12/96 Date 12/12/96
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