April 28, 1997
Brunswick Corporation
0 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated April 1, 1997
(the "Asset Purchase Agreement"), among Brunswick Corporation ("Purchaser"),
American Recreation Company, Inc. ("Seller") and Bell Sports Corp. ("Parent")
pursuant to which Purchaser is acquiring from Seller, among other things, the
Advent brand of bicycle helmets and racks (the "Advent Products") described in
the Asset Purchase Agreement. As an inducement to Purchaser to consummate the
transactions contemplated by the Asset Purchase Agreement, Seller and Parent
hereby agree as follows:
1. For a period commencing on the Closing Date (as defined in
the Asset Purchase Agreement) and ending on the first anniversary of
the Closing Date, Seller shall manufacture and sell to Purchaser Advent
Products in such quantities as Purchaser shall reasonably request from
time to time pursuant to customary purchase orders.
2. Any Advent Products sold by Seller to Purchaser pursuant to
this letter agreement shall be at Seller's standard cost of manufacture
of such Advent Products plus 10%. All Advent Products so sold to
Purchaser shall be shipped F.O.B. Seller's Rantoul, Illinois facility,
at Purchaser's expense. Seller shall provide Purchaser, upon reasonable
request, with substantiation of Seller's standard cost of manufacture.
Seller's standard cost can be adjusted once during the term of this
letter agreement on or after July 1, 1997, subject to 90 days' prior
notice to Purchaser. No price adjustment shall apply to any purchase
order submitted to Seller prior to the date of adjustment. Credit terms
shall be 1%, 10, net 30.
3. Any Advent Products sold by Seller to Purchaser in
accordance with this letter agreement shall be on such other terms and
conditions, and shall be subject to Seller's warranty that all Advent
Products are free of defects in design and manufacture and such other
warranties, as Seller shall provide its customers generally with
respect to comparable products manufactured and sold by Seller. Seller
shall be responsible for all product liability claims for Advent
Products sold to Purchaser hereunder; provided, however, that Seller
shall not be responsible for any product liability claim arising out of
modifications made by Purchaser to finished Advent Products or arising
out of any failure to warn by Purchaser or advertising by Purchaser.
4. Purchaser may terminate this letter agreement at any time
upon not less than 90 days' prior written notice; provided, however,
that no such termination shall affect Purchaser's obligation to pay for
any Advent Products ordered prior to such termination.
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If the foregoing accurately sets forth our mutual understanding with
respect to the matters described herein, please execute a copy of this letter
agreement in the space provided below and return a copy to the undersigned.
Very truly yours,
AMERICAN RECREATION COMPANY, INC.
By: Xxxxxx Xxxxxx
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BELL SPORTS CORP.
By: Xxxxxx Xxxxxx
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ACKNOWLEDGED AND AGREED:
this 28th day of April, 1997
BRUNSWICK CORPORATION
By: Xxxxxx X. XxXxxxx
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