1
Exhibit 10.9
(LOGO) (HAYWARD POOL PRODUCTS, INC. LETTERHEAD)
January 10, 2000
Super Vision International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Dear Sir:
Reference is hereby made to: (i) the Distributorship Agreement dated
as of September 25, 1996 (the "Distributorship Agreement") between Super Vision
International, Inc. (the "Corporation") and Hayward Pool Products, Inc. (the
"Distributor"); and (ii) the Warrant Certificate dated as of September 25, 1996
(the "Warrant") issued by the Corporation to Hayward Industries, Inc. with
respect to the right, in accordance with the terms set forth therein, to
purchase up to 249,480 shares of the class A common stock, $.001 par value, of
the Corporation. Capitalized terms used herein, and not otherwise defined
herein shall have the meanings ascribed to them in the Distributorship
Agreement and the Warrant, respectively. This letter shall confirm our
agreement that:
(i) all obligations of the Distributor under the Distributorship
Agreement with respect to the Minimum Purchase Commitment for the period of
December 27, 1998 through December 25, 1999 are hereby waived by the
Corporation and, in addition, deemed satisfied by the Corporation for all
purposes under Section 3.3 of the Distributorship Agreement;
(ii) any and all claims of the Corporation with respect to the
amount of Products purchased by the Distributor during the period of December
27, 1998 through December 25, 1999 are hereby released;
(iii) the Distributorship Agreement shall be amended as follows:
(A) The following sub-paragraph (c) shall be added to
Section 3.3 of the Distributorship Agreement after sub-paragraph (b)
thereof:
(c) It is hereby understood and agreed that the
Distributor shall be entitled to a credit (the "Credit")
towards satisfaction of each Minimum Purchase Commitment in an
amount equal to the product obtained by multiplying: (a) the
number of units of any of the Lighting
A HAYWARD INDUSTRIES COMPANY
2
Strips (as hereinafter defined) directly sold by the
Corporation to and users in the Exclusive Market during the
relevant period by (b) the purchase price therefor that the
Distributor would have been entitled to purchase such Lighting
Strips from the Corporation calculated in accordance with
Section 3.2(a) hereof so as to provide to the Distributor a
gross margin of 25% (determined in accordance with generally
accepted accounting principles) based upon competitive selling
prices to the Distributor's customers reasonably calculated.
Within fifteen days of the end of each of the Distributor's
fiscal year periods during the term of this Agreement, the
Corporation shall provide to the Distributor a written
itemization of the number of units of such Lighting Strips
directly sold to and users in the Exclusive Market by the
Corporation during the relevant period and a detailed
calculation of the amount of the Credit which the Distributor
is entitled to with respect to the preceding fiscal year of the
Distributor. Such itemization and calculation shall be subject
to the verification and confirmation of the Distributor which
shall not be unreasonably withheld.
(B) The following shall be added to Section 3.12 of the
Distributorship Agreement:
Notwithstanding any provisions contained in this
Agreement or this Section 3.12 to the contrary, the parties understand
and agree that: (i) the Corporation shall be permitted to directly
market, sell and distribute, to end users in the Exclusive Market, its
sheet flow waterfall products, the rights of which were acquired by
the corporation in connection with its acquisition of Oasis Falls
International, Inc. on October 19, 1999 (collectively, the "Waterfall
Products"), as well as fiber optic lighting strips (in lengths not
greater than are necessary to illuminate the relevant Waterfall
Product) which are utilized solely to illuminate any of such Waterfall
Products (collectively, the "Lighting Strips"); and (ii) such direct
marketing, selling and distribution shall not be considered a breach
of the terms of this Agreement or this Section 3.12. It is further
understood and agreed that such Waterfall Products (and the
accompanying Lighting Strips) shall initially not be considered
covered by this Agreement as one of the Products provided, however,
upon thirty (30) days prior written notice delivered from the
Distributor to the Corporation any time during the term of this
Agreement, the Distributor shall have the right to have any or all of
the Waterfall Products or the accompanying Lighting Strips covered by
this Agreement as one of the Products. It is understood and agreed
that in the event the Distributor elects to have any or all of the
Waterfall Products or the accompanying Lighting Strips covered by the
Distributorship Agreement as one of the
2
3
Products: (a) the purchase price to the Distributor therefor, f.o.b.
the Corporation's facility in Orlando, Florida, shall, in accordance
with Section 3.2(a) hereof, initially be determined by the parties in
good faith so as to provide to the Distributor a gross margin of 25%
(determined in accordance with generally accepted accounting
principles) based upon competitive selling prices to the Distributor's
customers reasonably calculated; and (b) all of the Distributor's
rights to have any or all of the Waterfall Products and the
accompanying Lighting Strips covered by this Agreement as one of the
Products shall be on an exclusive basis (subject to the Corporation's
rights under this Section 3.12 to directly market, sell and distribute
the Waterfall Products and the accompanying Lighting Strips to end
users in the Exclusive Market).
; and
(C) The following Section 3.14 shall be added to the
Distributorship Agreement after Section 3.13:
3.14 Right of First Refusal
Subject to the terms and conditions of this Section 3.14,
the Corporation hereby grants to the Distributor and the Distributor
hereby accepts from the Corporation, the right of first refusal to
purchase the Corporation's rights in and to the Waterfall Products and
the accompanying Lighting Strips, or any of them, in the circumstances
and pursuant to the procedures hereafter described in this Section
3.14. If the Corporation desires to sell any or all of its interest in
the Waterfall Products and the accompanying Lighting Strips, or any of
them, pursuant to a bona-fide offer therefor, the Corporation shall
give the Distributor written notice thereof, which notice shall set
forth in reasonable detail the terms of such bona-fide offer. In the
event the Distributor shall desire to purchase any or all of the
Corporation's interest in the Waterfall Products and the accompanying
Lighting Strips, or any of them, upon the terms and subject to the
conditions contained in such notice, the Distributor shall, within
fifteen (15) days from its receipt of the notice from the Corporation,
confirm in writing to the Corporation its acceptance of such terms,
whereupon the parties shall expeditiously as possible proceed with
such transaction. In the event that the Distributor shall fail to
confirm such acceptance to the Corporation within such 15 day period,
the Corporation shall be free to sell any or all of its interest in
the Waterfall Products and the accompanying Lighting Strips, or any of
them, free of the restrictions of this Section 3.14;
3
4
(iv) sub-paragraphs (c), (d) and (e) of the first Paragraph of the
Warrant are hereby in their entirety and the following inserted in lieu thereof:
(c) shall not be entitled to exercise in excess of 40% of the
Warrants originally evidenced hereby prior to the satisfaction by the
Distributor of the third Minimum Purchase Commitment (in the manner
set forth under Section 3.3 of the Distributorship Agreement but with
reference to "December 29, 2001" in lieu of "December 25, 1999") or
satisfaction of any deficiency with respect thereto in the manner
thereunder provided (provided, however, that, in addition to all other
Warrants otherwise exercisable after giving effect to sub-paragraphs
(a) and (b) immediately preceding, the registered holder hereof shall
be entitled, at any time prior to the tenth anniversary of the
Issuance Date, to exercise a number of Warrants in each case
calculated as the product obtained by multiplying: (x) 20% of the
Warrants originally evidenced hereby by (y) the portion (expressed as
a fraction) of any deficiency by the Distributor in satisfying the
third Minimum Purchase Commitment existing as of December 25, 1999 and
satisfied at the time of such calculation but in no event later than
December 31, 2001), and
(d) shall not be entitled to exercise in excess of 60% of
the Warrants originally evidenced hereby prior to the later of the
fourth anniversary hereof and the satisfaction by the Distributor of
the fourth Minimum Purchase Commitment (in the manner set forth under
Section 3.3 of the Distributorship Agreement) or satisfaction of any
deficiency with respect thereto in the manner thereunder provided, and
(e) shall not be entitled to exercise in excess of 80% of
the Warrants originally evidenced hereby prior to the later of the
fifth anniversary hereof and the satisfaction by the Distributor of
the fifth Minimum Purchase Commitment (in the manner set forth under
Section 3.3 of the Distributorship Agreement) or satisfaction of any
deficiency with respect thereto in the manner thereunder provided.
; and
(v) Except as amended in this letter, the terms and provisions of
the Distributorship Agreement and the Warrant shall remain in full force and
effect.
4
5
If the foregoing accurately reflects our agreement, please so indicate
by executing the enclosed counterpart of this letter in the space below
provided and returning such executed counterpart to us.
Very truly yours,
HAYWARD POOL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President - Marketing
and Sales
HAYWARD INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
AGREED TO AND ACCEPTED this
______ day of January, 2000
SUPER VISION INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
5