MOTORCAR PARTS AMERICA INC (Form: 8-K, Received: 01/13/2010 17:19:37)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 8, 2010

Motorcar Parts of America, Inc.

(Exact name of registrant as specified in its charter)


New York	001-33861	11-2153962

(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation)


2929 California Street, Torrance CA		90503

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (310) 212-7910

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


Item 1.01. Entry into a Material Definitive Agreement
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-10.1
EX-10.2
EX-10.3
EX-99.1

Item 1.01. Entry into a Material Definitive Agreement.

On January 8, 2010, Motorcar Parts of America, Inc. (the “Registrant”) entered into a Master Vendor Agreement (the “Master Vendor Agreement”), effective as of April 1, 2009, with O’Reilly Automotive, Inc. (“O’Reilly”) pursuant to the terms of which the Registrant will continue to supply O’Reilly with alternators and starters. On January 6, 2010, the Registrant also entered into (i) a Letter Agreement (the “Letter Agreement”), effective as of April 1, 2009, with O’Reilly relating to, among other things, the relationship between the Master Vendor Agreement and prior agreements between the Registrant and O’Reilly and (ii) a Vendor Agreement Addendum, effective as of April 1, 2009, with O’Reilly relating to certain other matters (the “Addendum” and, together with the Master Vendor Agreement and the Letter Agreement, the “Agreements”).

On January 11, 2010, the Company issued a press release announcing its entry into the Agreements (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in the Press Release shall be deemed furnished to the Securities and Exchange Commission (“the Commission”) but not filed.

Copies of the Agreements are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


10.1		Master Vendor Agreement, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

10.2		Letter Agreement, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

10.3		Vendor Agreement Addendum, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

99.1		Press Release, dated January 11, 2010, issued by the Registrant.


*		Portions of this agreement have been omitted pursuant to a request for confidential treatment.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	MOTORCAR PARTS OF AMERICA, INC.
Date: January 13, 2010	/s/ Michael M. Umansky
	Michael M. Umansky
	Vice President and General Counsel

EXHIBIT INDEX


10.1		Master Vendor Agreement, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

10.2		Letter Agreement, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

10.3		Vendor Agreement Addendum, dated as of April 1, 2009, between Motorcar Parts of America, Inc. and O’Reilly Automotive, Inc.*

99.1		Press Release, dated January 11, 2010, issued by the Registrant.


*		Portions of this agreement have been omitted pursuant to a request for confidential treatment.

Exhibit 10.1

MOTORCAR PARTS OF AMERICA, INC.
2929 California Street
Torrance, CA 90503

As of April 1, 2009

[*]
O’Reilly Automotive, Inc.
233 South Patterson
Springfield, MO 65802

Dear [*]:

O’Reilly Automotive, Inc. (together with its subsidiary entities, including CSK Auto, Inc., a wholly owned indirect subsidiary, “O’Reilly”) is engaged in the business of selling automotive parts and accessories, and Motorcar Parts of America, Inc. (“MPA”) is engaged in the business of manufacturing and selling alternators and starters for the automotive aftermarket. Representatives of O’Reilly and of MPA have had extensive discussions concerning O’Reilly’s needs with respect to MPA’s alternator and starter products and O’Reilly and MPA have reached an understanding effective as of the date of this letter (the “Effective Date”) with respect to their business, the terms of which are set forth in this letter Agreement (this “Agreement.”).

Other Agreements and Certain Arrangements:

O’Reilly and MPA are parties to a Vendor Agreement dated as of April 1, 2009 (together with any subsequent vendor agreements and amendments, the “Vendor Agreement.”). In the event of any inconsistency between this Agreement and the Vendor Agreement or any other agreement between O’Reilly and MPA, this Agreement, as it may be modified from time-to-time by a document making reference to this Agreement, shall control; provided however, that this Agreement does not supersede the rights O’Reilly may and the obligations MPA may have under the Vendor Agreement concerning product liability, defense and indemnification, and insurance protection. The parties agree that paragraphs 5, 9 and 10 of the Terms and Conditions applicable to the CSK Master Vendor Agreement dated December 14, 1998, as set forth on Schedule C to this Agreement, survive paragraph 1(B) of this Agreement with respect to all product heretofore sold by MPA to CSK Auto, Inc.

This Agreement supersedes all agreements between CSK and MPA and between O’Reilly and MPA, except as specifically set forth herein in paragraph 1(A). As a successor to CSK, O’Reilly is currently in possession of [*] with an agreed value of $[*] (the [*]).

MPA has credited the [*] payments due January and February 2009, in the amount of $[*].


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Slotting fee agreements shall continue as currently exist with O’Reilly. Current agreements are listed below:


Program	Start Month	End Month	Total Due O’Reilly
Original [*]	October 2003	October 2011	$[*]
2006 growth	April 2006	March 2014	$[*]
2007 growth	April 2007	March 2015	$[*]
2008 growth	April 2008	March 2016	$[*]
2009 growth	April 2009	March 2017	$[*]

All amounts to be credited on a monthly basis. Remaining CSK [*] of $[*] is included in the 2009 growth figure of $[*].

Notwithstanding Section (A) above, the understandings between the parties with respect to the following (whether or not embodied in the form of a formal agreement) shall remain in effect:


Program	Start Month	End Month	Total Due O’Reilly
[*]	June 2006	May 2011	$[*]
[*]	January 2007	Oct 2011	$[*]
[*]	August 2008	July 2009	$[*]
[*]	January 2009	Dec 2013	$[*]
[*]	April 2009	Mar 2019	$[*]
[*]	June 2009	May 2014	$[*]


1		Domestic

*		All amounts to be credited on a monthly basis except [*] is credited on a quarterly basis.

	2.		Certain Definitions:

			As used herein, unless the context otherwise requires, the following terms shall have the meanings indicated:

“CSK” shall refer to CSK both before and after its acquisition by O’Reilly.

“Eligible Core Returns” are those cores in the then current MPA program that meet the standards for core returns currently existing between the parties and generally accepted in the industry and are returned in original MPA Ultima or Autolite boxes and Bosch and Beck/Arnley relabeled boxes, are rebuildable, have all component parts, part numbers and are not broken.

“Factoring Program” shall mean the factoring program with respect to O’Reilly accounts payable which had been in effect with Branch Banking & Trust Company through Spring 2008, or any program providing similar rights and obligations to the parties.


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

“Import” alternators and starters are alternators and starters used as original equipment on any vehicle, other than the following:


[*]		[*]
[*]		[*]
[*]		[*]
[*]		[*]
[*]		[*]
[*]		[*]
[*]		[*]
[*]		[*]

“Term of this Agreement” shall mean the period commencing April 1, 2009 and ending March 31, 2019.

“Unit Prices” shall mean the price for each alternator or starter (unit plus core) determined pursuant to this Agreement.

“Net Sale” shall mean sales net of core charges, warranty and other returns, net of stock adjustments and net of the allowance set forth in Paragraph 4 of this Agreement.

“Anticipated DC” or “Anticipated DC’s” shall mean one or more of [*].

	3.		*[] Requirements:**

			During the Term of this Agreement, MPA shall be the []. In addition, domestic alternators and starters []. MPA must maintain [] standards, perform in compliance with [] standards and [] for all units covered by this Agreement []. If MPA fails to maintain these standards, O’Reilly may, [] [] written notice of such failure. MPA will have [] to cure to O’Reilly’s satisfaction. If MPA is not able to cure within the [], O’Reilly, at its sole option and discretion, may terminate this Agreement by giving written notice thereof to MPA.

	4.		Pricing:

			MPA shall sell, on the terms described in Section 5 hereof, all alternators and starters at the current Unit Prices (unit plus core charges) which prices effective April 1, 2009 are set forth in Schedule A-1.


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

			After the initial [] period immediately following the Effective Date of this Agreement, and upon the giving of [] advance notice to O’Reilly, MPA may from time to time [*]. Nothing in this paragraph shall be read to diminish O’Reilly’s rights under paragraph 3 above.

			MPA shall contribute the following percentage amount and for the purposes indicated below, [*]:

			[] - [] Allowance;

			[] - [] Allowance;

			[] - [] Allowance includes setup, labor and inventory with the exception of the [] stores. MPA shall supply setup and labor for [] domestic and import product in new stores serviced from [*];

			[] - [] Fund;

			No less often than annually, O’Reilly shall furnish to MPA a list with such detail as MPA may reasonably request of all stores opened, acquired, relocated and closed by O’Reilly. In addition to those distribution centers described in paragraph 3 above, this Agreement also applies to new distribution centers opened during the term of this Agreement. With respect these new distribution centers, MPA shall grant O’Reilly with respect to each such new distribution center []. [] shall be based upon the anticipated starter and alternator inventory at capacity of each such distribution center and shall be [] beginning on the last day of the first month in which the distribution center is opened; [] consistent with the terms set forth in Section 5 of this Agreement. New distribution center is defined as facilities opened after the agreement Effective Date not including Anticipated DC’s and not being a relocation of an existing facility.

	5.		Certain Sales and Credit Terms; Factoring:

			All sales shall be net payable to MPA, and credits due O’Reilly, [] from O’Reilly receipt of shipment. All debits and credits shall be given in accordance with the usual practices of the parties, and shall be taken [] from the date granted. MPA shall grant a further [] [] from net invoice to O’Reilly for payment within terms. All credits and allowances shall be taken as set forth in this Agreement, which supersedes the Vendor Agreement with respect to all matters contained herein, subject to paragraph 1(A) (D) & (E) above.

			O’Reilly agrees to use commercially reasonable efforts to again participate in a Factoring Program with respect to all of its payables related to this Agreement. MPA agrees to [*] day payment terms when the Factoring Program is reinstated at a mutually agreed


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

			discount rate. In the event the Factoring Program is reinstated, [] would no longer apply. Additionally if a factoring program is utilized, [].

	6.		*[]**

			In partial consideration of this Agreement, MPA shall []. So long as this Agreement shall remain in effect and so long as MPA remains [] commencing April 1, 2009 and continuing on the same day of each month thereafter until the amount is paid in full, March 1, 2016. This [] includes []. Notwithstanding the foregoing, the [] shall be earned ratably over a 120-month term of this Agreement. If this Agreement is terminated by O’Reilly [].

			Should [], the parties agree to [].

	7.		Cores:

Except for the [*] as set forth in paragraph 1(B) of this Agreement, O’Reilly owns all [*] in its inventory on the Effective Date and, as set forth in this Agreement, O’Reilly shall own all [*] constituting part of the units delivered to O’Reilly hereunder after the Effective Date.

Each March 31 during the term of this Agreement (including March 31, 2009), [*] will [*]. The dollar amount by which the [*] exceeds [*]. If the [*] is less than [*]


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[*]. Schedule B contains [*].

From the time of receipt by O’Reilly to the time of shipment to MPA upon return, all risk of loss to [*] subject to this Agreement shall be with O’Reilly.

[*] shall remain the property of MPA and [*] shall be payable by O’Reilly to MPA only as set forth below. If MPA [*], O’Reilly shall [*]. After [*], MPA shall have no interest whatsoever in any [*] in O’Reilly’s inventory.

	8.		Confidentiality:

			O’Reilly and MPA shall not disclose the terms of this Agreement to any third parties other than (i) agents, accountants, attorneys or other representatives of either O’Reilly or MPA, as the case may be, on a “need to know” basis, or (ii) as required by law.

	9.		Notices:

			All notices, demands and other communications required, desired, or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given immediately if personally delivered; twenty-four hours after being delivered to overnight delivery couriers or sent to telecopy, e-mail, or other electronic transmitting device, provided that the device records the date and time of successful transmission thereof; or five days after mailing by registered or certified mail, postage prepaid, return receipt requested, addressed in accordance with the addresses set forth below, or to such other addresses of which notice is given pursuant to this Section.


		If to O’Reilly:		O’Reilly Automotive, Inc.
				233 South Patterson
				Springfield, MO 65802
				Attn: [*]
				[*]
				Telephone: [*]
				Facsimile: [*]
				Email: [*]

		With copies to:		O’Reilly Automotive, Inc.
				233 South Patterson
				Springfield, MO 65802
				Attn: [*]
				[*]
				Telephone: [*]


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


				Fax: [*]
				Email: [*]

				-and-

				O’Reilly Automotive, Inc.
				233 South Patterson
				Springfield, MO 65802
				Attn: [*]
				[*]
				Telephone: [*]
				Fax: [*]
				Email: [*]

		If to MPA:		Motorcar Parts of America, Inc.
				2929 California Street
				Torrance, CA 90503
				Attn: Selwyn Joffe,
				Chairman, President & CEO
				Telephone: (310) 972-4005
				Facsimile: (310) 224-5128
				Email: sjoffe@motorcarparts.com

		With a copy to:		Motorcar Parts of America, Inc.
				2929 California Street
				Torrance, CA 90503
				Attn: Michael M. Umansky
				Vice President and General Counsel
				Telephone: (310) 972-4015
				Facsimile: (310) 943-1630
				Email: mumansky@motorcarparts.com

	10.		Entire Agreement:

			This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and, unless otherwise noted herein, supersedes any prior agreements, arrangements, understandings, representations, warranties and covenants between the parties hereto. All other subject matters will continue to be governed by the O’Reilly vendor agreement.

	11.		Severability:

			If any portion of this Agreement is for any reason declared invalid or unenforceable by reason of any applicable law, the validity of the remaining portions shall not be affected thereby and such remaining portions shall remain in full force and effect as if this Agreement had been executed with the invalid portion eliminated.


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

	12.		Governing Law:

			This Agreement shall be governed by and construed in accordance with the internal laws of the State of Missouri in effect from time to time. Any litigation arising hereunder shall be brought in any court of competent subject matter jurisdiction located within the geographic boundary of Greene County, Missouri.

	13.		Attorneys’ Fees:

			In any litigation, to enforce or to interpret any part of this Agreement, the prevailing party shall be entitled to recover as an element of its costs of the action, all attorneys’ fees reasonably incurred in bringing such action and in enforcing any judgment or award granted therein, all of which shall be deemed to have accrued upon the commencement of such action.

	14.		Amendment:

			No supplement, amendment, or modification hereof shall be valid unless it shall be in writing and signed by all parties hereto.

	15.		Successors and Assigns:

			Except as otherwise specifically provided herein, all of the terms, provisions, and obligations of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns.

	16.		Further Assurances:

			Each party shall execute and deliver all such further instruments, documents or similar materials, and shall perform any and all acts necessary, to give full force and effect to all of the terms and provisions of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates set forth opposite their names below.


O’REILLY AUTOMOTIVE, INC.

By:		[*]

ITS:		[*]

Signature:		[*]

Date:		12/21/09


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


MOTORCAR PARTS OF AMERICA, INC.

By:		/s/ Selwyn Joffe

ITS:		CEO

Signature:		/s/ Selwyn Joffe

Date:		1/6/10

Schedule A-1
[*]


[*] =		CONFIDENTIAL TREATMENT REQUESTED. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.