Exhibit 10.32
XXXXX & WESSON
WHOLESALE LAW ENFORCEMENT
DISTRIBUTOR AGREEMENT
THIS AGREEMENT is effective as of January 1, 2002 and expires December 31, 2002
between XXXXX & WESSON CORP., a Delaware corporation (Xxxxx & Wesson) with
offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 and
<> located at <> in <>, <>
(Distributor).
I. APPOINTMENT. Xxxxx & Wesson hereby appoints Distributor a non-exclusive
law enforcement wholesale distributor for Xxxxx & Wesson law enforcement
equipment (the Products) in the primary area of responsibility described in
Exhibit A (the "Territory") in accordance with this Agreement. Distributor
acknowledges that the name and reputation of Xxxxx & Wesson and its products
constitute a valuable asset, and Distributor shall conduct its operation
ethically and strictly in accordance with the letter and spirit of applicable
laws so that the name and reputation of Xxxxx & Wesson and its Products shall
not be adversely affected. Xxxxx & Wesson reserves the right to appoint other
distributors and to make direct sales to any person or entity. The Distributor
is not an agent, employee or franchisee of Xxxxx & Wesson and may not assign or
license any of its rights or obligations under this Agreement.
II. DISTRIBUTOR'S DUTIES. The Distributor shall:
A. Maintain the financial and competitive capabilities necessary to
achieve and support effective distribution of the FET exempt
Products in the Territory and individual officer sales nationwide.
B. Pay all Xxxxx & Wesson invoices promptly when due.
C. Provide financial statements (including a balance sheet, profit and
loss statement and changes in cash flow) certified by independent
certified public accountants, within 60 days after the close of each
fiscal year.
D. Purchase and maintain a sufficient inventory of Products to
effectively support its customers' product needs, and maintain at
its own expense suitable storage and warehouse facilities for this
purpose.
E. Not ship the Products to other wholesale distributors who are not
Xxxxx & Wesson contract distributors.
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F. Adhere to the sales policies of Xxxxx & Wesson which may be
expressed by Xxxxx & Wesson as it deems necessary from time to time.
G. Assist Xxxxx & Wesson in processing warranty claims and otherwise
fulfilling its obligations as provided in such warranties.
H. Advertise for direct sale of the Products to law enforcement and
security agencies and their personnel.
I. Provide Xxxxx & Wesson access to periodically examine the BATF
"Bound Book" sales record to ensure that the sales policies of Xxxxx
& Wesson are being adhered to.
J. Use its best and principal efforts to solicit and make law
enforcement sales of the Products including, without limitation, the
following: employ sufficient adequately trained and competent
personnel, including full-time salesmen; make regular personal calls
to customers in all parts of the Territory; maintain Distributor's
name on all bid lists at the state and local levels; make
substantial efforts to have Xxxxx & Wesson specifications written
into every bid; bid Xxxxx & Wesson on all bids, even when a
competitive product is specified; provide sales, service, market and
call reports, as Xxxxx & Wesson may reasonably request; and, attend
law enforcement shows and conventions which are conducted in the
Territory.
K. Supply test and evaluation samples of the Products to Distributor's
customers as needed. All T&E evaluation units will come direct from
Xxxxx & Wesson, drop shipped to the requesting agency.
L. Sell and service all Xxxxx & Wesson products within assigned
territory to individual officers and agencies.
M. Sell and service Xxxxx & Wesson products to individual officers
nationwide.
N. NOT bid FET exempt handguns outside assigned territory, either
directly or through a third account.
O. Be permitted to honor handgun orders for up to 5 tax exempt handguns
from Law Enforcement agencies outside of assigned territory.
P. Provide up to 10 salesman samples for each full-time traveling
salesman employed by Distributor at the prices identified in
paragraph V.
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III. DISTRIBUTOR'S KEY PERSONNEL AND AFFILIATES. Distributor represents that
the persons or entities named in Exhibit B include (a) all of the
Distributor's key personnel, officers, and directors, and (b) the individuals
or entities that control or are controlled by the Distributor. Distributor
shall give written notice to Xxxxx & Wesson of any change in Exhibit B within
thirty (30) days of such change.
IV. PROHIBITIONS. Distributor shall not, directly or indirectly, (a) sell new
Products at "gun shows"; (b) own, manage, be employed by, consult for, or in
any other way participate in, the Xxxxx & Wesson sporting goods business at
wholesale or retail except pursuant to a separate Xxxxx & Wesson wholesale
sporting goods distributor agreement; (c) engage in sales other than to law
enforcement and security agencies and their official personnel, except that
Distributor may make unsolicited and incidental sales of the Products to
consumers; (d) be permitted to export any order in excess of five new Xxxxx &
Wesson standard catalog handguns and an additional $1,000.00 in non-handgun
product, without the prior approval of either the Vice President of
International Sales or the Vice President of Sales & Marketing to the
attached list (Exhibit C) of specific countries which currently have
appropriate distribution or agents; (e) advertise for direct sale of the
Products in general distribution media or to other than law enforcement and
security agencies and their personnel.
Violation of Policy will incur the following actions:
First Violation - A warning will be issued that they are operating in violation
of our Agreement.
Second Violation - Cancellation of distribution Agreement.
V. TERMS OF SALE. This Agreement, Xxxxx & Wesson's invoice and order
acknowledgment shall govern the purchase and sale of all Products. To the
extent there is any inconsistency between the documents, this Agreement shall
govern. Xxxxx & Wesson reserves the right to change Products, prices, terms
of sale and sales policies by giving written notice of any such change to
Distributor.
Xxxxx & Wesson shall xxxx Distributor at Xxxxx & Wesson's Domestic
Distributor Confidential List price(s), except that:
A. Test and evaluation handguns will be invoiced at Distributor price less
20% with 60 day net terms;
B. Salesmen sample guns will be invoiced at Distributor price less 20%
with 180 day net terms;
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C. Purchases for resale within the Territory documented as exempt from FET
will be billed at the Domestic Distributor Confidential Price List
level (Distributor w/o FET) less 5%. All purchases for inventory will
be billed at the distributor price, including FET.
VI. INDEMNIFICATION. Distributor shall indemnify, defend, hold harmless, and
reimburse Xxxxx & Wesson from any and all claims, causes of action, losses,
damages, wrongful death claims, personal injury claims, property damage
claims, expenses and costs as they are incurred (including reasonable
attorney's fees, expenses and costs of litigation) or liability of any kind
arising directly or indirectly (hereinafter "Claims") in tort, contract or
otherwise, out of either (a) Distributor's alleged or actual violation or
breach of this agreement; (b) the handling, possession or use of the Products
by Distributor or any of its employees or agents (excluding, however,
liability arising solely out of the manufacture of the Products by Xxxxx &
Wesson); and/or (c) any Claims asserted by any third party against Xxxxx &
Wesson which were caused (or alleged to be), in whole or part, by the
negligence, misconduct, action or omissions of the Distributor.
VII. INSPECTION AND REPAIR OF RESALE PRODUCTS. Xxxxx & Wesson may, from time to
time, take used Products in trade-in from law enforcement agencies as a
credit toward the purchase of new Products, and Xxxxx & Wesson may sell such
used Products to the Distributor for resale by the Distributor to its
customers. If mutually agreed upon by Xxxxx & Wesson and Distributor, Xxxxx &
Wesson may direct law enforcement agencies to deliver such used Products
directly to Distributor. Upon receipt of the used Products, the Distributor
is required to follow the inspection and repair procedure described below.
Upon receipt of any used Products intended for resale, Distributor shall
perform an inspection of each used product and, if necessary, make all
necessary repairs to ensure that the Products are in good working order, and
that all safety devices and other features are functioning properly. Only
used Products which are functioning properly and safely may be sold by the
Distributor to its customers.
VIII. WARRANTY. Xxxxx & Wesson may provide warranties on Xxxxx & Wesson
Products. SUCH WARRANTIES ARE IN LIEU OF ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. Distributor shall not make any
representations or warranties concerning the Products except those contained
in Xxxxx & Wesson prepared materials accompanying the Product. Distributor is
not authorized to extend or otherwise modify (or permit any vendee to extend
or otherwise modify) Xxxxx & Wesson's warranty with respect to any Product.
IX. CREDIT. Xxxxx & Wesson may, in its sole discretion, extend credit to
Distributor, and ship Products to Distributor on open account. If Xxxxx &
Wesson is not
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satisfied with the credit standing of Distributor, Xxxxx & Wesson may
immediately discontinue extending credit to Distributor and Distributor will
immediately make payment of all outstanding amounts. In the event Distributor
fails to pay Xxxxx & Wesson any amount when due, Xxxxx & Wesson shall assess
Distributor a late charge equal to the greater of 2% per month or the highest
rate permissible under applicable law on the outstanding balance which is due
and owing.
X. TRADE NAMES AND TRADEMARKS. Xxxxx & Wesson grants to Distributor a
nontransferable, nonexclusive license to use Xxxxx & Wesson trade names and
trademarks provided that Distributor shall not use such trade names or
trademarks as any part of its title or the name of its business. Distributor
shall also not use such trade names or trademarks in any manner in connection
with an effort to sell the goods of others, whether or not such goods are
competitive with the Products. Upon termination of this Agreement,
Distributor shall immediately discontinue any use of Xxxxx & Wesson's
trademarks, trade names, and any other identification with Xxxxx & Wesson.
XI. LIMITATION OF LIABILITY. Xxxxx & Wesson's liability for any losses or
damages to Distributor resulting from the condition of the Products or from
any other cause shall be limited to the purchase price, or at Xxxxx &
Wesson's option, to the repair or replacement of the Products. Under no
circumstances shall Xxxxx & Wesson be liable to Distributor for incidental,
consequential or special damages. No claim of any kind may be brought by
Distributor more than two years after the claim has arisen. In addition,
Distributor may not make any claim for shortage or damage in any delivery to
Distributor more than three business days after Distributor's receipt of the
delivery; and, all other claims, including claims for allegedly defective
goods, must be made within fifteen days after Distributor learns of the facts
on which such claim is based, but in no event later than one year after
Distributor's receipt of the goods.
XII. TERM. This Agreement shall remain in effect until December 31, 2002, when
it will automatically terminate provided, however, that either party may
terminate this Agreement without cause by giving thirty (30) days written
notice to the other party and, provided further, that Xxxxx & Wesson may
terminate this Agreement immediately by giving written notice of termination
if any of the following happen:
A. a breach of this Agreement by Distributor;
B. a change in the business, operation, control, financial condition or
business affairs of Distributor including, without limitation, a
change in the parties listed in Exhibit B, the filing of any lien
against Distributor or attachments of any assets, the entry of a
judgment against Distributor in an amount in excess of $25,000, or
the filing of any petition in bankruptcy by or against Distributor;
or
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C. Distributor has failed to provide any financial statements as
required by Section II (c).
Distributor shall not, upon the expiration or termination of this Agreement,
return inventory to Xxxxx & Wesson or seek reimbursement, or any other
damages relating to prospective profits on sales or anticipated sales.
XIII. MISCELLANEOUS. This Agreement constitutes the entire agreement between the
parties and supersedes any prior negotiations, representations or
agreements. The delay or failure of either party to assert or exercise any
of its rights shall not operate as a waiver of such right.
Except for the right of either party to apply to a court of competent
jurisdiction for any equitable relief to preserve the status quo or prevent
irreparable harm, any controversy or claim relating to this agreement shall be
settled by arbitration in the City of Springfield, Massachusetts, in accordance
with the rules then obtaining of the American Arbitration Association.
Distributor shall be liable for all collection costs and expenses, including
collection agency and reasonable attorney's fees, incurred by Xxxxx & Wesson to
collect amounts owed to Xxxxx & Wesson by Distributor.
DISTRIBUTOR XXXXX & WESSON
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By: __________________________ By: _____________________________
Signature Signature
__________________________ _____________________________
Print Name and Title Print Name and Title
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EXHIBIT A
XXXXX & WESSON LAW ENFORCEMENT DISTRIBUTORSHIP AGREEMENT
NAME OF DISTRIBUTOR: <>,<>,<>
GEOGRAPHIC AREA OF RESPONSIBILITY FOR ALL XXXXX & WESSON LAW ENFORCEMENT
PRODUCTS:
STATES:
<>
COMMENTS:
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EXHIBIT B
XXXXX & WESSON LAW ENFORCEMENT DISTRIBUTORSHIP AGREEMENT
NAME OF DISTRIBUTOR: ,Company-LVL1,,
Pursuant to Paragraph 3 of the Law Enforcement Distributorship Agreement,
Distributor identifies the following Affiliates:
Key personnel, officers and directors of Distributor are:
Individual Job Function
__________________________________ ____________________________________
__________________________________ ____________________________________
__________________________________ ____________________________________
__________________________________ ____________________________________
__________________________________ ____________________________________
INDIVIDUAL OR ENTITY NATURE OF RELATIONSHIP WITH DISTRIBUTOR
__________________________________ ____________________________________
__________________________________ ____________________________________
__________________________________ ____________________________________
__________________________________ ____________________________________
DISTRIBUTOR
____________________________________
INSERT FIRM'S NAME
BY:_________________________________
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PRINT NAME AND TITLE DATED:
DATED:_________________
EXHIBIT C
XXXXX & WESSON LAW ENFORCEMENT DISTRIBUTORSHIP AGREEMENT
RESTRICTED COUNTRIES
---------------------
ARGENTINA
AUSTRALIA
AUSTRIA
BELGIUM
BOLIVIA
BULGARIA
CANADA
CZECH REPUBLIC
CHILE
DENMARK
DOMINICAN REPUBLIC
ECUADOR
EL SALVADOR
ESTONIA
FRANCE
FINLAND
GERMANY
GREECE
GUATEMALA
HONDURAS
HUNGARY
ICELAND
INDONESIA
ISRAEL
ITALY
JAPAN
KENYA
KOREA
LATVIA
LEBANON
LUXEMBURG
MALAYSIA
MEXICO
MACEDONIA
0
XXXXX
XXX XXXXXXXXXXX
XXX XXXXXXX
XXXXXX
XXXXXX
XXXXXXXX
XXXX
PHILIPPINES
POLAND
PORTUGAL
REPUBLIC OF SOUTH AFRICA
SINGAPORE
SLOVAKIA
SPAIN
SURINAM
SWEDEN
SWITZERLAND
THAILAND
TOBAGO
TRINIDAD
TURKEY
UNITED KINGDOM
URUGUAY
VENEZUELA
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