PHONE (208) 461-1213     FAX (208) 442-7121

DEALER APPLICATION & AGREEMENT

Dealer Agreement

NEMO Arms, Inc.
THIS AGREEMENT is mutually agreed by NEMO Arms, Inc. (hereafter referred to as “Company”) and the Dealer (hereafter referred to as “Dealer”) signed and approved by Company in the attached Dealer Application Form. By submitting the Dealer Application Form, in consideration of the promises made herein and intending to be legally bound, Dealer agrees to terms of this agreement as follows, and agrees to the sales revenue quota commitment in the attached Dealer Application Form.

1. APPOINTMENT OF DEALER
1.1 Dealer of all levels must be formally appointed by Company, must fulfill the required sales revenue quota stated in the attached Dealer Application Form. The Dealership status is subject to annual/semiannual performance evaluation.
1.2 Dealers of all levels have different set of privileges and responsibilities as detailed in detailed terms of this agreement.
1.3 This Agreement is non-transferable. In the event of any changes to the entity of the Dealership, the new entity must re-sign this Agreement with Company.
1.4 This agreement, together with its amendments as well as the set of purchasing terms and price levels, are subject to change from time to time when Company deems as necessary. Company shall notify Dealer, although not mandatory, of such changes at least 30 days in advance.
1.5 Company shall have the right at any time to introduce new products, discontinue the manufacture or sales of any existing products without incurring any obligation or liability whatsoever. Company shall notify Dealer, although not mandatory, of such changes at least 30 days in advance.

2. PRIVILEGE AND RESPONSIBILITIES OF DEALER
2.1 Dealer shall allocate its resources to maintain a market share and sales volume, satisfactory to Company as per listed in Dealer Application Form.
2.2 Dealer shall maintain a certain level of product inventory, satisfactory to Company, in keeping with the sales potential in the territory.
2.3 Dealers of all levels shall aggressively promote the sale of Company products through, but not limited to, advertising, open houses, shows, field demonstrations and other applicable gatherings using Company’s advertising and/or sales promotion materials as provided by Company, and by participation in early order and other sales related programs offered by Company.
2.4 Dealers of all levels shall extend to its customers the Company’s applicable standard printed product warranty which is in effect at the time of retail sale. Dealer understands that no other warranty is expressed or implied. Dealer shall advise customers to promptly forward the completed warranty registration to Company, and shall service the customers warranty claims on behalf of Company when customer chooses to make the warranty claim with Dealer.
2.5 Dealer shall properly staff and train sales and service personnel with respect to Company products. Dealer shall be responsible for tier-1 customer supports and inquiries and shall only direct tier-2 customer support issues beyond Dealer’s service ability to Company.
2.6 Dealer shall carefully store and care for all products for which Dealer is indebted to Company and protect them from damage or loss from any cause. Dealer shall be responsible for maintaining insurance on such said products until the total product purchasing sum is fully paid to Company or the products are returned to the warehouse of Company.
2.7 Dealer shall encourage subsequent retailers and customers to use Company’s original equipment parts in the repair and replacement of Company products. Dealer shall not represent, nor resale, non-Company parts or competitor parts of similar kind.
2.8 Dealer shall cooperative with Company’s annual or semi-annual performance evaluation and any other programs or matters pertaining to the administration of the agreement.
2.9 RESALE: Dealer is purchasing for resale (at no less than MAP pricing) purposes only. If Dealer is found to be advertising below MAP pricing, the dealer may be removed as an approved NEMO Arms, Inc. dealer. Dealer agrees to obtain and maintain a state resale tax number and certificate in the state in which the Dealer conducts its business.
2.10 Notification: Dealer agrees to promptly notify NEMO Arms Inc. of any changes in ownership or control of its business in the form of its business entity (e.g. partnership, corporation, sole proprietor).
2.11 Free Shipping Policy for Gold Level Dealers - Dealers will receive free shipping, if the following occurs: The dealer places a 50-rifle purchase order for six months and all of the rifles are shipped within six months. The dealer will pay for shipping on the first fifty rifles and, once the fifty rifles are shipped in a six-month period, shipping will be free for the remainder of the 12-month period and the dealer will receive a credit for the previous fifty rifles shipping, that can be used towards future purchases.
2.12 Dealers becoming Distributors – When a distributor places a purchase order for 100 rifles and receives them within a three-month period-of-time, they will receive distributor pricing on these rifles. Free shipping does not apply at the distributor price level.

3. PAYMENT TERMS
3.1 Dealer is assigned by Company a set of fixed and favorable purchasing prices. Prices are subject to change at Company’s sole discretion. Dealer understands that price changes are normal due to several factors including, but not limited to, inflation, exchange rate fluctuation, raw material market status, etc. Company, though not mandatory, shall notify Dealer of such changes at least 15 days in advance.
3.2 All prices are FOB Company’s warehouse, and do not include transportation cost, applicable federal, state or local taxes which shall be borne by Dealer. An amount equal to the appropriate taxes will be added to the invoice by Company where Company has the legal obligation to collect such taxes unless Dealer provides Company with a valid tax exemption certificate authorized by the appropriate taxing authority.
3.3 Dealer will agree to a certain payment method with Company for the products purchased. Payment term is net cash prepaid prior to shipment, except where satisfactory credit is established in which case payment term shall be Net 15 days from the date of delivery, where terms are based upon Company’s assertion with the approval of the Dealer Application. Company reserves the right to revoke any credit extended at Company’s sole discretion. Dealer agrees to pay such invoices when due regardless of other scheduled deliveries. Invoices not paid within 15 days of the invoice date will have 1.5% per month finance charge assessed against the unpaid balance from the date of invoice until the date of payment.
3.4 When credit is extended to Dealer, Dealer agrees that title to all Company products with right of repossession for default shall remain with Company until the purchase price is paid in full. Credit will be extended to Dealer after execution and filing of security agreements and related documents satisfactory to Company. Should Company deem itself insecure, Company may suspend or reduce Dealer’s credit limit, or take other steps necessary to protect Company’s interest.
3.5 For all payment rendered via credit card or debit card, payment must be approved by card issuing bank prior to shipment. There will be a 3% processing fee added to all invoices that are being paid in this manner. For all payments made by personal check or company check, payment must be cleared by the transaction banks before products are shipped. Any returned checks will be subject to a $45 service charge that will be
added to the Dealer’s balance. Any delinquent payments or returned checks may result in the account being changed to cash prepay.
3.6 Dealer understands and agrees that if credit is extended, all invoices are to be paid by the invoice due date. Dealer shall be liable for all costs incurred by NEMO Arms, Inc. in collection of any delinquent account,
including attorney fees.

4. ORDER PLACEMENT, DELIVERY, RETURNS, AND REPAIRS
4.1 Dealer can place orders any time via email to sales@nemoarms.com or via telephone during Company’s regular business hours. Dealer may also order via fax, although email is preferred. Regardless of the method of order placement, Dealer must obtain an order number from Company as evidence that the order has been properly placed. Company assumes no responsibility for orders not placed due to any reasons, including but not limited to email routing problems or distractions of junk mails or junk faxes.
4.3 At the time of order, Company may provide estimated shipping cost for reference purposes only. Company shall post the actual cost at the time of shipping as per shipping carrier’s actual charge amount. Company may use a different shipping carrier of the same delivery type without notice if Company deems economically beneficial for Dealer.
4.4 No returns will be accepted after 30 days. Any return of all products or services, and exchange of all products prior to that time, must be authorized in advance by Company and must be issued an RMA number. Company shall not be obligated to accept any returns without Company’s authorization, unless otherwise arranged by Company. Dealer is responsible for all freight expenses. All returned orders or orders that are refused at delivery will incur a restocking fee of 20% and any additional fees to cover wear-and-tear, damage to the product, packaging, or anything else at the time of return, per terms of Company return policy.
4.5 30-day cancellation notice, prior to shipment, will be required for all pre-orders that are scheduled.
4.6 When placing an order of 5 rifles or more in one shipment, a 25% deposit will be required at the time the order is placed. Full payment of this type of order will be due no later than 15 days after the order is shipped.
4.7 The Company will not accept any custom orders.
4.8 All repairs that are not directly due to manufacturing defects, will incur the cost of parts, labor, and shipping. The current billable hourly rate is $135, which is subject to change at any time. If a product is sent in for repair and it is deemed to not be a manufacturing defect, the customer will be give an estimate of cost for the repair and will be responsible for any charges for evaluation, regardless if the repair is done or not.
4.9 To receive additional discounts for Military, Law Enforcement, or any other promotional discount, identification and evidence of qualification must be provided.

5. TRADEMARKS AND PROPERTY RIGHTS
5.1 Dealer is licensed to use Company’s name and trademarks in the normal course of selling Company’s products and performing related services under this agreement. Dealer agrees not to use Company’s name and trademarks as part of Dealer’s name or in any manner including but not limited to internet domain registration, web page composition, etc., which would misrepresent the relationship between Dealer and Company. Dealer may represent itself as an “authorized dealer of Company, and, with prior approval of Company, may use Company’s name, logo, and trademarks on its websites, signs or other advertising or promotional materials. Dealer’s license to use Company’s name and trademarks is limited to the aid of the marketing and sales of Company’s products and is prohibited for any other use, and Dealer shall abide by restrictions and limitations imposed by Company from time to time. Upon termination of this agreement, Dealer shall immediately cease representing itself as a distributor or a dealer of Company, and shall cease use of all Company names and trademarks and any signs or other materials, of whatever nature.
5.2 Dealer’s license to use Company’s name and trademarks include but not limit to the terms of a) statement declaring the name and trademarks are property of Company, whenever applicable; b) whenever Company logo is used on web site or marketing materials, or whenever Dealer proclaim itself as a distributor or a dealer of Company on web site, a hyperlink must be clearly evident and functional so that a click on Company logo or Company name shall direct the web site to Company’s main web site (http://www.nemoarms.com) or the dealer directory page of Company’s web site, where the Company logo and Dealer’s proclaim can be easily verified by the public on the internet.
5.3 Dealer may also use product literatures, product images for normal marketing use, provided that Dealer acknowledges the copyright of Company and uses the literatures and images in its entirely with no modifications, retouches or alterations of any kind that may cause misunderstandings and misinterpretations.

6. TERMINATION
6.1 Unless otherwise provided by applicable law, either party may terminate this agreement without cause and for any reason, upon a written notice given to the other party no less than 30 days in advance. Upon termination for any reason, all amounts owed to Company shall become immediately due and payable, and Dealer shall immediately cease to use all Company’s names and trademarks, and shall no long proclaim itself as a dealer of Company.
6.2 Dealer that fails to fulfill the sales revenue quota or fails to pass annual or semiannual
distributorship/dealership evaluation shall automatically result in change of its distributorship/dealership status or the termination of this agreement.

7. RIGHTS OF COMPANY
7.1 Company has the rights to modify and to interpret this agreement. Company has the rights to re-evaluate the performance and validity of Dealer’s dealership annually, semiannually or at any given time, and change the status of the Dealership accordingly.
7.2 Company has the rights to sell directly any of its products to any of the following:
(a) United States government or any of its agencies, bureaus, commissions, or departments; (b) Any foreign government or any of its agencies, bureaus, commissions, or departments; (c) Academic institutes, churches, charities, trade organizations or any other non-profit entities;
7.3 Company has the rights to change the design of any products or part thereof at any time without notice to Dealer.
7.4 Company has the rights to change the price of any of its products from those shown by its present price list. In the event of price change, Company shall, although not obligated to, inform Dealers of such changes at least 15 days in advance.

8. CLAIMS AND LEGAL DISCLAIMERS
8.1 If during the term of the Agreement, Dealer shall have reason to believe it has any claim against Company in any respect of any transaction growing out of this Agreement, Dealer shall notify Company in writing within 30 days after Dealer knows, or has reason to know, the basis of any such claim. Failure to give the claim notice shall relieve Company from all liability on any claim in respect to any transaction growing out of this Agreement.
8.2 This Agreement does not constitute Dealer the agent or legal representative of the Company for any purpose whatsoever. Dealer is not granted any right or authority to assume or to create any obligation or responsibility, express or implied, on behalf of or in the name of Company or to bind Company in any manner.
8.3 The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of Montana, Unites States of America, the state in which this Agreement is being executed. It is understood, however, that this is a general form of agreement, designed for use anywhere in the world wherever Company may desire to sell its products and that any provision herein which in any way contravenes the laws of any state or jurisdiction shall be deemed not to be part of this Agreement therein.
8.4 Jurisdiction and venue: By signing this Agreement, Staffer submits to the exclusive personal jurisdiction and venue with respect to any action, special proceeding, or other proceeding that may be brought arising out of, in connection with, or by reason of this agreement before the court of State of Montana, located in Flathead County or such other Montana court as NEMO Arms, Inc. may elect.
8.5 If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provision will nevertheless continue in full force without being impaired or invalidated in any way.
8.6 If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret to provision of this Agreement, the prevailing party will be entitled to reasonable attorney’s fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled.
8.7 This Agreement, together with the Dealer Application Form, may be signed in counterparts and may be transmitted by one party hereto to another party by means of facsimile or email transmission. Any such signature transmitted by facsimile or email shall be deemed to be the original for all purposes.
8.8 This Agreement is valid only when the signed and approved Dealer Application form is attached.

9. NON-DISCLOSURE
9.1 By signing this agreement, the Dealer agrees not to disclose any proprietary information belonging to NEMO Arms, Inc., such as the Dealer Price List that may be distributed to the Dealer in the course of business. Dealer agrees that if any of NEMO Arms, Inc.’s price lists were to be distributed to unauthorized persons, it would be detrimental to NEMO Arms, Inc. business and damages will be paid in the amount of $500,000 to NEMO Arms, Inc. by Dealer.

Dealers Outside of the United States of America:
Commodities sold by NEMO Arms, Inc are controlled under the Export Administration Regulations (EAR) and the ITAR Regulations and may not be exported to a foreign person, either in the US or abroad, without a license or exception from the US Department of Commerce.
Prior Authorization or license from the US State Department of Defense Trade Controls is required to export, re-export, transfer item(s) abroad, either in its original form or after being incorporated into other end items.
Pricing does not include Broker and Export Fees.
NEMO Arms Inc 2820 Brandt Ave, Nampa, ID 83687 Ph: 208-461-1213 Fax 208-442-7121

By signing and submitting this application, you authorize NEMO Arms Inc. to make inquiries into the banking and business/trade references that you have supplied.