Exhibit 10.31
XXXXX & WESSON
WHOLESALE SPORTING GOODS
DISTRIBUTOR AGREEMENT
THIS AGREEMENT is effective as of January 1, 2002 between XXXXX & WESSON
CORP., a Delaware corporation (Xxxxx & Wesson) with offices at 0000 Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 and <> (Distributor).
1. APPOINTMENT. Xxxxx & Wesson hereby appoints Distributor a non-exclusive
sporting goods wholesale distributor for Xxxxx & Wesson sporting goods equipment
(the Products) in accordance with the terms and conditions of this Agreement.
2. COMPLIANCE WITH FIREARMS LAWS. Distributor acknowledges that the
distribution and sale of Xxxxx & Wesson firearms are governed by
responsibilities and obligations delineated by law and by virtue of this
agreement with Xxxxx & Wesson. Distributor represents that it is presently in
full compliance with all federal, state and local laws, statutes, ordinances and
regulations relating to the distribution and sale of firearms. Distributor
further represents and acknowledges that the name and reputation of Xxxxx &
Wesson and its products constitute a valuable asset, and Distributor shall
conduct its operations and the distribution and sale of the Products ethically
and strictly in accordance with the letter and spirit of all applicable laws so
that the name and reputation of Xxxxx & Wesson and its Products shall not be
adversely affected. Distributor acknowledges this is a material condition and
term to this Agreement. Failure to comply with this Provision affords Xxxxx &
Wesson the right to terminate this Agreement without further obligation or
liability on the part of Xxxxx & Wesson.
3. DISTRIBUTOR'S DUTIES. The Distributor shall:
(a) Comply with all federal, state and local laws, statutes, ordinances
and regulations relating to the sale and distribution of firearms during the
term of this agreement.
(b) Employ sufficient adequately trained and competent personnel who will
follow all federal, state and local laws, statutes, ordinances and regulations
relating to the sale and distribution of firearms during the term of this
agreement.
(c) Restrict the sale of firearms to those persons or dealers lawfully
authorized to purchase or own firearms.
(d) Not knowingly sell Xxxxx & Wesson products to any person or entity who
is not complying with the laws and regulations relating to the sale or
distribution of firearms.
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(e) Maintain all required books and records relating to the sale or
distribution of firearms and cooperate with all appropriate law enforcement
inquiries relating to those books and records.
(f) Limit the sale of Xxxxx & Wesson firearms to other Xxxxx & Wesson
distributors or to retail dealers who have a federal firearms license and a
regular place of business where products are displayed to the retail public.
(g) Equip all new Xxxxx & Wesson firearms sold or distributed with a
locking device provided by Xxxxx & Wesson. Distributor further agrees that it
will provide all applicable Xxxxx & Wesson safety and instruction manuals with
new Xxxxx & Wesson products.
(h) Adhere to the sales policies of Xxxxx & Wesson which may be expressed
or modified by Xxxxx & Wesson as it deems necessary from time to time.
(i) Assist Xxxxx & Wesson in processing warranty claims and otherwise
fulfilling its obligations as provided in such warranties.
(j) Maintain the financial and competitive capabilities necessary to
achieve and support effective distribution of the Products.
(k) Pay all Xxxxx & Wesson invoices promptly when due.
(1) 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.
(m) Purchase and maintain a sufficient inventory of Products to
effectively support retail dealers' product needs and maintain, at its own
expense, suitable storage and warehouse facilities for this purpose.
(n) Report the unit and dollar sales of new Xxxxx & Wesson handguns broken
into the following categories: Revolvers, Centerfire Pistols, and .22 Pistols,
by state, on a monthly basis no later than 15 days from the end of the calendar
month. This information will be supplied on forms supplied by Xxxxx & Wesson
unless another format is specifically approved by Xxxxx & Wesson's Vice
President of Sales and Marketing.
(o) Not ship the Products to other wholesale distributors who are not
Xxxxx & Wesson contract distributors.
(p) Provide sales, service and market reports as Xxxxx & Wesson may
reasonably request.
4. DISTRIBUTOR'S KEY PERSONNEL AND AFFILIATES. Distributor represents and
warrants that the persons or entities named in Exhibit A include (a) all of the
Distributor's key personnel, officers, and directors, and (b) the
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individuals or entities that control or are controlled by the Distributor.
Distributor shall give written notice to Xxxxx & Wesson of any change in Exhibit
A within thirty (30) days of such change.
5. PROHIBITIONS. Distributor shall not, directly or indirectly:
(a) Sell new Xxxxx & Wesson products at "gun shows".
(b) Possess or transfer any large capacity ammunition feeding devices
manufactured by Xxxxx & Wesson for sale to purchasers except for those sold to
law enforcement agencies or other purchasers specified by law in paragraph (b)
of Section 178.40(a) of the Code of Federal Regulations.
(c) Sell or market new Xxxxx & Wesson products through Shotgun News, Gun
List, or other similar magazines.
(d) Knowingly sell firearms to persons or dealers where false or
misleading statements have been made with respect to the information required to
purchase a firearm.
(e) Knowingly sell or deliver any firearm to any person or dealer if the
purchase or possession would be in violation of any federal, state or local law,
statute, ordinance or regulation applicable at the place of sale or delivery.
(f) Participate in direct bids or sell the Products directly to law
enforcement agencies, except that Distributor may honor handgun orders from
dealers for law enforcement agencies providing the order does not exceed 25
units.
(g) 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
written approval of Vice President of Sales and Marketing to the attached list
(Exhibit B) of specific countries which currently have appropriate distribution
or agents.
6. TERMS OF SALE. This Agreement, as well as Xxxxx & Wesson's invoice and
order acknowledgment, shall govern the purchase and sale of all Products to
Distributor. 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.
7. 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
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"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 Distributor.
8. 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.
9. WARRANTY. Xxxxx & Wesson may provide express written warranties on
Xxxxx & Wesson Products. SUCH WARRANTIES ARE IN LIEU OF, AND XXXXX & WESSON
HEREBY DISCLAIMS, 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. Any statements or warranties, written or
oral, made by distributor with respect to a product that exceeds, modifies or
deviates from the applicable warranty for such product provided by Xxxxx &
Wesson shall be the sole responsibility of distributor unless Xxxxx & Wesson has
given its written authorization for such modification or deviation.
10. 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 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.
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11. RETURNS. Distributor shall not, upon the expiration or termination of
this Agreement, return inventory or any unsold product to Xxxxx & Wesson (unless
agreed upon by Xxxxx & Wesson) or seek reimbursement or any other damages
relating to prospective profits on sales or anticipated sales of products.
12. 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.
13. LIMITATION OF LIABILITY. To the fullest extent permitted by law, the
parties waive and relinquish any Claims, demands, causes of action or recoveries
for punitive damages, exemplary damages, or statutory damages. Xxxxx & Wesson
shall not be liable for indirect, special, incidental or other damages arising
under this Agreement or otherwise with respect to the sale of the Products,
including, any lost revenues or profits, consequential and/or incidental
damages, business interruption or damage to business reputation, regardless of
the theory upon which any Claim may be based, including any statutory causes of
action or claims. Notwithstanding the term of any limited written warranty
provided to Distributor, or in the event said limited written warranty fails of
its essential purpose, in no event xxxx Xxxxx & Wesson's entire liability to
Distributor exceed the purchase price actually paid by Distributor for the
Products hereunder, or any defective portion thereof, whichever is the lesser
amount. Any written limited warranty is the sole and exclusive remedy of
Distributor.
No Claim of any kind may be brought against Xxxxx & Wesson by Distributor more
than one year after the Claim has arisen. In addition, Distributor may not make
any Claim for shortage or damage in any delivery to Distributor more than
fourteen 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.
14. FORCE MAJEURE. Xxxxx & Wesson shall have no liability or obligation to
Distributor of any kind, including, but not limited to, any obligation to
deliver Products or provide maintenance, warranty, repair or other services,
arising from any delay or failure or failure to perform all or any part of this
Agreement as a result of causes, conduct or occurrence beyond Xxxxx & Wesson's
reasonable control, including, but not limited to, commercial impracticability,
fire, flood, act of war, civil disorder or disobedience, act of public enemies,
problems associated with manufacture or transportation (including car or truck
shortages), acts or failure to act of any state, federal or foreign governmental
or regulatory authorities, labor disputes, strikes or failures of suppliers to
make timely deliveries of materials, goods or services to Xxxxx & Wesson.
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15. DEFAULT. The failure of Distributor to perform any obligations
hereunder, including without limitation, the breach of this Agreement, the
payment of the purchase price for Products and/or all other amounts due
hereunder, the failure to materially perform other agreements between
Distributor and Xxxxx & Wesson, or Distributor's bankruptcy, insolvency, or
inability to pay its debts when they become due, shall constitute a default
under this Agreement and shall, in addition to any other remedies in law, equity
or under this Agreement, afford Xxxxx & Wesson all the remedies of a secured
party under the Uniform Commercial Code. In the event of default, Xxxxx & Wesson
may, in addition to canceling this Agreement without liability to Distributor,
refuse to provide warranty, repair and/or maintenance services and/or refuse to
deliver Products under this or any other service, purchase or maintenance
agreement relating to the Products, and may also cancel this Agreement and any
pending orders or agreements without liability to Distributor. Notwithstanding
the foregoing, it is understood that Xxxxx & Wesson's remedies hereunder are
cumulative and nonexclusive.
16. BREACH OF CONTRACT. A violation or breach of any item of this
agreement, which may be determined in the sole and unfettered discretion of
Xxxxx & Wesson, may in its discretion also issue a warning that a distributor is
operating in violation of the agreement, suspend shipments, or take such other
steps as it deems appropriate under the circumstances. No acts or omissions by
Xxxxx & Wesson shall be deemed a waiver of any rights under this agreement.
17. 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 prior 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 occur:
(a) a breach, violation or failure to perform any term of this
Agreement by Distributor;
(b) Failure to pay the purchase price to Xxxxx & Wesson when
due;
(c) 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 A, the filing of any lien against
Distributor or attachment of any assets, the entry of a judgment against
Distributor in an amount in excess of $25,000, the filing of any petition in
bankruptcy by or against Distributor, Distributor's insolvency, reorganization
or inability to pay its debts when due; or
(d) Distributor has failed to provide any financial statements
as required by Section 3(e).
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Xxxxx & Wesson may suspend or terminate all Distributor rights, with or without
notice, if a claim is brought by any governmental or law enforcement agency in
which the business or distribution practices of Distributor are called into
question.
18. SEVERABILITY. If any term, covenant, warranty or condition of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be held or deemed invalid or unenforceable, the remainder of this
Agreement or the application of such term, covenant or provision, to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each remaining term, covenant, or provision
of this Agreement shall be deemed valid and shall be enforced to the fullest
extent permitted by law.
19. NON-EXCLUSIVE NATURE. Xxxxx & Wesson reserves the right to appoint
other distributors and to make direct sales to any other person or entity. It is
expressly agreed that Distributor's rights are non-exclusive. 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.
20. ACCEPTANCE, MERGER AND INTEGRATION. XXXXX & WESSON WILL BE
DEEMED TO HAVE ACCEPTED THIS AGREEMENT WHEN XXXXX & WESSON RETURNS AN
ACKNOWLEDGED COPY OF THIS AGREEMENT TO DISTRIBUTOR, OR AT XXXXX & WESSON'S
OPTION, WHEN XXXXX & WESSON BEGINS SUBSTANTIAL PERFORMANCE UNDER THIS
AGREEMENT. DISTRIBUTOR ACCEPTS THIS AGREEMENT BY ACKNOWLEDGING OR SIGNING
A COPY OF THIS AGREEMENT OR BY ACCEPTANCE OF DELIVERY OF THE PRODUCTS OR
SERVICES HEREUNDER. NOTWITHSTANDING THE MANNER IN WHICH DISTRIBUTOR
ACCEPTS, DISTRIBUTOR'S ACCEPTANCE IS LIMITED EXCLUSIVELY TO THE ACCEPTANCE
OF XXXXX & WESSON'S TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT ONLY.
XXXXX & WESSON HEREBY OBJECTS TO AND REJECTS ANY PROPOSAL BY DISTRIBUTOR
FOR ADDITIONAL OR DIFFERENT TERMS IN CONNECTION WITH THE PRODUCTS OR
SERVICES PROVIDED. ANY CONTRARY TERMS PROVIDED BY DISTRIBUTOR ARE AGREED
TO BE SUPERFLUOUS AND WITHOUT ANY FORCE AND EFFECT. THIS AGREEMENT, WHICH
INCLUDES ALL THE TERMS AND CONDITIONS SET FORTH HEREIN AND ALL RIDERS OR
LIMITED WRITTEN WARRANTIES, IF ANY, PROVIDED BY XXXXX & WESSON, IS
INTENDED TO BE THE EXCLUSIVE AND FINAL STATEMENT OF THE TERMS AND
UNDERSTANDINGS RELATIVE TO THE SUBJECT MATTER HEREOF, MERGING HEREIN, AND
SUPERSEDING ALL NEGOTIATIONS AND PRIOR WRITTEN OR ORAL AGREEMENTS BETWEEN
THE PARTIES AS TO THE SUBJECT MATTER OF THE PURCHASE OF THE PRODUCTS OR
SERVICES HEREUNDER. THERE ARE NO PROMISES, REPRESENTATIONS OR
UNDERSTANDINGS MADE IN CONNECTION WITH THIS AGREEMENT OR CONTEMPORANEOUS
WITH THE EXECUTION HEREOF, EXCEPT AS SET FORTH IN THIS AGREEMENT.
21. ARBITRATION. Except for the right of either party to apply to a court
of competent jurisdiction located within the Commonwealth of Massachusetts for
equitable relief to preserve the status quo or prevent irreparable harm, any
controversy or
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claim relating to this Agreement shall be settled by arbitration in the City of
Springfield, Massachusetts, in accordance with the rules of the American
Arbitration Association or some other similar organization mutually agreeable to
the parties. The arbitrator shall not be empowered to grant exemplary or
punitive damages or any damages in excess of those damages permitted or limited
under the express terms of this Agreement. Distributor shall be liable for all
collection costs and expenses, including collection agency and reasonable
attorney's fees and costs, incurred by Xxxxx & Wesson to collect amounts owed to
Xxxxx & Wesson by Distributor.
22. ATTORNEY'S FEES. In the event it becomes necessary for Xxxxx & Wesson
to enforce the terms and conditions of this Agreement by litigation or
otherwise, or to defend itself in any Controversy (as defined herein),
litigation, Claim, demand, dispute, or cause of action arising out of or as a
result of this Agreement or the Products or services provided hereunder, and if
Xxxxx & Wesson is the substantially prevailing party in said Controversy,
litigation, Claim, demand, dispute, or cause of action, then Xxxxx & Wesson
shall be entitled to recover, in addition to any other relief granted or damages
assessed, its attorney's fees, expert witness fees, costs, and all expenses of
litigation.
23. 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.
<> XXXXX & WESSON
BY: __________________________ BY: ______________________________
__________________________ ______________________________
PRINT NAME AND TITLE PRINT NAME AND TITLE
Date: Date:
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