1
EXHIBIT 10.7
▇▇▇▇▇ & WESSON
SALES REPRESENTATIVE AGREEMENT
THIS SALES REPRESENTATIVE AGREEMENT is effective as of October 23,
1999, between ▇▇▇▇▇ & WESSON CORP., a Delaware corporation with offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and BONANZA INTERNATIONAL,
INC. with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Representative").
1. Appointment.
▇▇▇▇▇ & Wesson hereby appoints Representative as a non-exclusive sales
representative to solicit and obtain orders for products of ▇▇▇▇▇ & Wesson
identified in Schedule A hereto ("the Products"), and Representative hereby
accepts such nonexclusive appointment in accordance with this Agreement.
Representative acknowledges that the name and reputation of ▇▇▇▇▇ & Wesson and
its Products constitute a valuable asset, and Representative shall conduct its
activities ethically and strictly in accordance with the letter and spirit of
applicable laws so that the name and reputation of ▇▇▇▇▇ & Wesson and its
Products shall not be adversely affected. Representative is not an agent,
employee or franchisee of ▇▇▇▇▇ & Wesson and may not assign or license any of
its rights or obligations under this Agreement.
2. Area of Responsibility.
Representative shall be responsible for developing, soliciting and
obtaining sales of Products solely within the geographic area described in
Schedule B hereto ("Area of Responsibility"). ▇▇▇▇▇ & Wesson shall have the
right, in its sole and absolute discretion and at any time, to appoint
additional sales representatives, to make direct sales to any person or entity,
and to enlarge or reduce Representative's Area of Responsibility, with respect
either to geographic territory or with respect to the inclusion or exclusion of
any customers (either specifically by name or by type) included therein, by
giving Representative ten (10) days' advance written notice of such change.
3. Prices and Terms of Orders.
(a) Representative shall solicit orders for the purchase of the
Products from ▇▇▇▇▇ & Wesson. All such orders shall be placed with ▇▇▇▇▇ &
Wesson, either by the customer, directly, or through the Representative. Such
orders shall be at the prices and on the other terms and conditions specified by
▇▇▇▇▇ & Wesson, including but not limited to, conditions of delivery, warranty,
discount and payment.
(b) All orders solicited and forwarded by Representative shall be in
accordance with ▇▇▇▇▇ & Wesson's sales policies and published procedures and
shall require ▇▇▇▇▇ & Wesson's express written acceptance and shall not be
binding in any
2
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 2
respect upon ▇▇▇▇▇ & Wesson without its acceptance. Decisions regarding a
customer's credit and all matters relating to shipments and ▇▇▇▇▇▇▇▇ shall be
made only by ▇▇▇▇▇ & Wesson. Nothing contained in this Agreement shall in any
manner be deemed to limit or affect the right of ▇▇▇▇▇ & Wesson to change or
modify its business operations or practices or to cease, in whole or in part,
the production or sale of any Product(s), and ▇▇▇▇▇ & Wesson shall incur no
liability to Representative as a result of any such change, modification or
cessation.
4. Representative's Duties.
Representative shall:
(a) Use its best and principal efforts to diligently promote the sale
and use of the Products and to solicit, secure, obtain and forward orders for
the Products to ▇▇▇▇▇ & Wesson; maintain a place of business within its Area of
Responsibility reasonably adequate for the performance of its obligations under
this Agreement; and, devote such time and attention to the performance of its
obligations under this Agreement as may be required to perform such obligations
satisfactorily.
(b) Sell and promote only complementary, not competitive products.
(c) Comply with all applicable laws, statutes and regulations governing
the sale of the Products and adhere to the sales policies of ▇▇▇▇▇ & Wesson as
they may be established from time to time.
(d) Forward immediately to ▇▇▇▇▇ & Wesson any and all orders and any
and all monies or remittances in any form which it may collect or receive from
customers or accounts; and, make no allowances or adjustments in accounts or
authorize the return of any Products unless given specific advance written
authorization, in individual cases, by ▇▇▇▇▇ & Wesson.
(e) Carry liability insurance with an insurer and in such amounts as
may be approved by ▇▇▇▇▇ & Wesson in connection with all matters relating to any
persons or business entities, vehicles and equipment, and any premises utilized
by Representative in the performance of its obligations hereunder.
Representative shall maintain such insurance in force and effect during the
entire period of this Agreement, and provide ▇▇▇▇▇ & Wesson with evidence of
such insurance and its maintenance.
(f) Maintain in its possession accurate sales records and provide ▇▇▇▇▇
& Wesson with access to (and the right to copy) such records. Representative
will report in reasonable detail, from time to time as ▇▇▇▇▇ & Wesson may
reasonably request, upon its sales activities.
(g) Promptly submit to ▇▇▇▇▇ & Wesson any and all inquiries,
expressions of interest and potential orders. Representative shall promptly and
diligently follow up on
2
3
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 3
all inquiries received by ▇▇▇▇▇ & Wesson and forwarded to Representative for
potential orders in its Area of Responsibility.
5. Compensation.
(a) Representative shall be compensated by payment of a commission on
Completed Sales (as defined below) of Products to ▇▇▇▇▇ & Wesson customers who
are located within Representative's Area of Responsibility, and who are not
specifically excluded under Section 2 or under Section 5(c) of this Agreement.
No commission will be paid for sales to any customer who is specifically
excluded by ▇▇▇▇▇ & Wesson, regardless of geographic location. Only completed
sales made solely during the term of a Representative's appointment hereunder
qualify for a commission in accordance with the commission schedules and
commission policies from time to time issued by ▇▇▇▇▇ & Wesson. The current
commission schedule of the company is attached as Schedule C hereto.
Commissions shall be computed on the net sales price of the Products,
minus deductions for such as the following determined by ▇▇▇▇▇ & Wesson in its
sole discretion: cancellations, returns, billed freight, allowances, promotional
allowances, allowable cash discounts (whether or not taken), and taxes,
including federal excise tax. Commissions shall be paid only for Products sold
pursuant to orders which are (i) approved by ▇▇▇▇▇ & Wesson, and (ii) which are
sold to, accepted and paid for by, the customer (hereinafter referred to as a
"Completed Sale"). Commissions shall be paid each month for all Completed Sales
of Products during the preceding month which are sold to and paid for by ▇▇▇▇▇ &
Wesson's customers who are located in the Representative's Area of
Responsibility.
(b) ▇▇▇▇▇ & Wesson reserves the right in its sole and absolute
discretion to accept or reject orders and ▇▇▇▇▇ & Wesson shall not be liable to
Representative for commissions on any order or any part of any order which for
any reason ▇▇▇▇▇ & Wesson may reject or fail to ship.
(c) ▇▇▇▇▇ & Wesson reserves the right to sell direct to any account and
to appoint distributors for the Products. These distributors and direct accounts
may, in ▇▇▇▇▇ & Wesson's sole and absolute discretion, be treated as ▇▇▇▇▇ &
Wesson proprietary accounts ("House Accounts") and Representative shall not be
entitled to any commission for ▇▇▇▇▇ & Wesson sales to such House Accounts.
(d) All commissions shall be computed by ▇▇▇▇▇ & Wesson, and such
computations shall be deemed accepted as final unless ▇▇▇▇▇ & Wesson receives a
written objection from Representative within ten (10) days of the
Representative's receipt of the disputed commission report
3
4
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 4
6. Expenses.
Representative shall be responsible for all of its expenses (including,
without limitation: travel, entertainment, hotel, telephone, telex, telecopier,
secretarial or office expense). Representative shall purchase from ▇▇▇▇▇ &
Wesson, at special prices set by ▇▇▇▇▇ & Wesson, an adequate supply of
demonstration Products, to be updated periodically to reflect those Products
currently being offered for sale by ▇▇▇▇▇ & Wesson.
7. Representative's Employees.
(a) Representative shall be responsible for the hiring, compensation,
termination and all other matters relating to any persons or business entities
utilized or employed by Representative in the conduct of its business
activities. ▇▇▇▇▇ & Wesson shall have no responsibility for any of the foregoing
matters, and Representative shall indemnify and hold harmless ▇▇▇▇▇ & Wesson
from any liability, losses, damages, costs and expenses, including reasonable
attorneys' fees, incurred in defending any claims or proceedings brought against
it by reason of any such matters.
(b) Nothing contained in this Agreement shall be construed to imply
that Representative is an officer, partner, joint venturer, employee or agent of
▇▇▇▇▇ & Wesson. It is expressly agreed that Representative is an independent
contractor.
8. Limitations Upon Representative's Authority.
In addition to any other limitations contained in this Agreement,
Representative shall not have, nor shall it represent itself as having, any
authority, to:
(a) make contracts in the name of or binding on ▇▇▇▇▇ & Wesson or
pledge ▇▇▇▇▇ & Wesson's credit or extend credit in ▇▇▇▇▇ & Wesson's name;
(b) vary, alter, enlarge or limit orders or contracts for the sale of
the Products;
(c) except for those representations specifically authorized by ▇▇▇▇▇ &
Wesson, make any representations with respect to the Products or ▇▇▇▇▇ & Wesson,
or incur or assume for ▇▇▇▇▇ & Wesson any liability or obligation other than
those expressly authorized in writing by ▇▇▇▇▇ & Wesson;
(d) execute any receipt or acknowledgment of payment or satisfaction of
any debt or obligation owed to ▇▇▇▇▇ & Wesson or endorse or negotiate any
instrument, draft, check or commercial paper in the name of ▇▇▇▇▇ & Wesson, or
(e) engage, employ, delegate, subcontract or enter into any arrangement
or understanding for the purpose or having the effect of so engaging, employing,
delegating, subcontracting, directly or indirectly, any third party to perform
the duties or enjoy the rights of the Representative hereunder unless it shall
have received the prior written consent of ▇▇▇▇▇ & Wesson (which consent may be
withheld by ▇▇▇▇▇ & Wesson in its
4
5
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 5
sole and absolute discretion). In the event that ▇▇▇▇▇ & Wesson consents to
Representative's utilization of a third party to perform such duties,
Representative assumes all responsibility for making sure that the third party
is aware of, and complies with, the terms of this Agreement.
9. Covenants.
(a) Neither during the term of Representative's appointment under this
Agreement nor at any time thereafter will Representative, directly or
indirectly, make use of other than for the benefit of ▇▇▇▇▇ & Wesson - or
divulge to any person, firm, association or corporation - any of ▇▇▇▇▇ &
Wesson's supplier lists, customer lists, price lists, record books, trade
secrets, confidential information or other information of any kind, nature or
description concerning any matters affecting or relating to ▇▇▇▇▇ & Wesson's
business, except when expressly authorized to do so in writing by ▇▇▇▇▇ &
Wesson. Representative shall obtain a binding written agreement from each of its
employees, representatives, agents and officers that he is aware of, and will
comply with, the terms of this paragraph.
(b) During the term of Representative's appointment under this
Agreement Representative shall not handle, offer, act as sales representative or
agent for, or sell other lines of products which are competitive with the
Products, directly or indirectly, whether as representative, agent,
warehouseman, distributor, wholesaler, dealer or otherwise, without ▇▇▇▇▇ &
Wesson's prior written consent. ▇▇▇▇▇ & Wesson shall be the sole judge of which
products are competitive. Representative shall deliver to ▇▇▇▇▇ & Wesson upon
the signing of this Agreement a list containing the names and addresses of each
non ▇▇▇▇▇ & Wesson manufacturer's product line which Representative seeks also
to represent; and Representative shall update this list and seek ▇▇▇▇▇ &
Wesson's written consent before taking on any additional product lines for those
manufacturers or any new manufacturer.
(c) Representative acknowledges and agrees that all ▇▇▇▇▇ & Wesson
trade names and trademarks are the sole and exclusive property of ▇▇▇▇▇ &
Wesson. Representative shall not use such trade names or trademarks as part of
its title or the name of its business. Representative also shall 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, Representative shall immediately discontinue
any use of ▇▇▇▇▇ & Wesson's trademarks, trade names, and any other
identification with ▇▇▇▇▇ & Wesson.
10. Remedies.
Representative acknowledges and admits that there would be no adequate
remedy at law for its failure to comply with its obligations under this
Agreement, and agrees that, in the event of any such failure, ▇▇▇▇▇ & Wesson
shall be entitled to equitable relief by way of temporary restraining order,
preliminary injunction and permanent injunction and such other and further
relief as any court with jurisdiction may deem just and proper,
5
6
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 6
without the necessity of posting any bond or proving any actual damages. ▇▇▇▇▇ &
Wesson will be entitled, if it so elects, to maintain proceedings in any court
of competent jurisdiction, either at law or in equity, to obtain damages for any
breach of this Agreement by Representative, to enforce the specific performance
of this Agreement, to restrain or enjoin Representative from violating this
Agreement or to obtain any combination of such remedies or other remedies as may
be available to ▇▇▇▇▇ & Wesson at the time of any such breach.
11. Indemnification.
Representative shall indemnify and hold harmless ▇▇▇▇▇ & Wesson, its
shareholders, officers, directors, agents, servants and employees against all
loss, liability, damage, cost and expense, including reasonable attorneys' fees
and expenses, arising out of or resulting from the assertion against ▇▇▇▇▇ &
Wesson of any claims or obligations by reason of either (a) Representative's
breach of this Agreement, including any unauthorized representations, or (b) the
handling, possession or use of the Products by Representative or any of its
employees or agents (excluding, however, liability arising solely out of the
design or manufacture of the Products by ▇▇▇▇▇ & Wesson).
12. Term and Termination of Agreement.
(a) The term of Representative's appointment under this Agreement shall
remain in effect until December 31, 2001, 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 ▇▇▇▇▇ & Wesson may terminate this Agreement immediately by giving
written notice of termination if any of the following happen:
(i) a breach of this Agreement by Representative;
(ii) any assignment by Representative for benefit of its
creditors;
(iii) the death, incapacity, or insolvency of Representative
(if it is an individual) or any partner or officer of Representative;
(iv) any substantial change in the management or control of
Representative; and
(v) the institution by or against Representative of voluntary
or involuntary proceedings in bankruptcy, or under any other insolvency
law, or for receivership or dissolution of Representative.
(b) All property of ▇▇▇▇▇ & Wesson, and any copies thereof or any other
form of reproduction, extract, abstract or description thereof, including
summaries and records, shall be turned over to ▇▇▇▇▇ & Wesson by Representative,
or its representative, within
6
7
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 7
30 days after termination or expiration of such appointment of Representative
under this Agreement
(c) Representative shall not, upon the expiration or termination of
this Agreement, return Products or inventory to ▇▇▇▇▇ & Wesson or seek
reimbursement, or seek any damages relating to prospective profits on sales or
anticipated sales.
13. Miscellaneous.
(a) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any of the other
provisions, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provisions were omitted.
(b) This Agreement supersedes any prior agreement between ▇▇▇▇▇ &
Wesson and Representative and constitutes the entire agreement between the
parties. Except as otherwise set forth herein, this Agreement may not be
modified or supplemented except by a writing signed by both parties. This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
(c) This Agreement constitutes a personal contract on the part of the
Representative which may not be transferred or assigned, in whole or in part, by
Representative without ▇▇▇▇▇ & Wesson's prior written consent. For the purposes
of this Agreement; a sale or transfer, directly or indirectly, of control over
Representative or of more than a majority of any class of capital stock or other
equity interest in Representative shall constitute a transfer or assignment
prohibited by this paragraph. This Agreement may be assigned by ▇▇▇▇▇ & Wesson
and shall be binding upon and inure to the benefit of ▇▇▇▇▇ & Wesson, its
successors and assigns, and Representative, its heirs, representatives and
approved assigns.
(d) Any notices sent pursuant to this Agreement will be deemed given
when delivered or, if sent by certified mail, postage prepaid, on the third
business day following the date of mailing, addressed as follows:
Company: ▇▇▇▇▇ & Wesson Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Representative: Bonanza International, Inc.
▇▇ ▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Either party may change its address by written notice to the other in accordance
with the provisions of this paragraph.
7
8
Representative Agreement-Bonanza International, Inc.
October 23, 1999
page: 8
(e) The waiver by ▇▇▇▇▇ & Wesson of any breach hereof committed by
Representative shall not constitute a waiver of any other or subsequent breach.
A party breaching this Agreement agrees to pay all costs, expenses and
reasonable attorneys' fees incurred by the other party resulting from the breach
of the terms or conditions of this Agreement.
▇▇▇▇▇ & WESSON CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice-President & CFO
REPRESENTATIVE:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
President
8
9
SCHEDULE A
NAME: BONANZA INTERNATIONAL, INC.
▇▇▇▇▇ & WESSON
SALES REPRESENTATIVE AGREEMENT
PRODUCTS
--------
Handguns
Supplies, parts and accessories for above items
Handcuffs
▇▇▇▇▇ & Wesson apparel/promotional items
10
SCHEDULE B
NAME: BONANZA INTERNATIONAL, INC.
▇▇▇▇▇ & WESSON
SALES REPRESENTATIVE AGREEMENT
AREA OF RESPONSIBILITY
----------------------
The following indicates the primary area of responsibility for which the
Representative has been appointed:
Latin America (South & Central America)
Caribbean Islands
11
SCHEDULE C
NAME: BONANZA INTERNATIONAL, INC.
▇▇▇▇▇ & WESSON
SALES REPRESENTATIVE AGREEMENT
COMPENSATION
------------
Commission rate will be 3% on products as referred to on Schedule A, or as
negotiated.
