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Exhibit 10.21
LUTHER/ALLIANCE
EXCLUSIVE MASTER SALES & DISTRIBUTION AGREEMENT
THIS
MASTER SALES AND DISTRIBUTION AGREEMENT (hereinafter the
"Agreement")
made effective as of the 1st day of
November,2003 by and between New Alliance of
Independent Medical Distributors, Inc., a
Texas corporation d/b/a Alliance
Medical (hereinafter "Distributor or
Alliance") with principal offices at 3429
Executive Center Drive, Austin, Texas
78731, and Luther Needlesafe Products
(hereinafter "Supplier") a California
company, with principal offices at 3199
Airport Loop Dr., Unit E, Costa Mesa,
California 92626-3414.
BACKGROUND
Supplier
develops, manufactures and sells certain medical products.
Supplier is willing to provide quantities
of certain products to Distributor for
marketing, sales and distribution under the
terms and conditions of this
Agreement. Distributor is willing to accept
and pay for certain quantities of
such medical products under the terms and
conditions of this Agreement
NOW,
THEREFORE, the parties agree as follows:
Section 1
DEFINITIONS
As used
herein, the following words and phrases shall have the
following
meanings:
1.1
"Contract Year."
Each 12-month period during the term of this
Agreement beginning on November 1 and
ending on the last day of October 12
months thereafter.
1.2
"End-Users."
Customers of Alliance who have acquired products for
their own use and not for redistribution or
resale.
1.3
Alliance will
act as master distributor and maximize sales through
Alliance distribution resources. In markets
not covered by Alliance, Alliance
will contract; sell and manage other
resellers or subcontractors to reach sales
goals.
1.4
"Territory." The
United States of America and Canada.
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1.5
"Resellers."
Companies that would buy product from Alliance for sale
into markets not covered by Alliance; e.g.
Doctor's offices and Long Term Care
facilities.
1.6
"Products." The
products covered by this Agreement or described, on
the "Product Price List" attached to
Exhibit "A" and any other products added to
Exhibit "A" from time to time in writing,
signed by both parties, All improved
product would be covered under original
contract and new products that serve the
same market
1.7
"Contract Term"
Means a five-year period beginning November 1, 2003
and ends on October 31, 2008, unless
extended by mutual agreement of the
parties.
Section 2
Master Distributor Appointment
2.1
Supplier grants
Distributor the exclusive right and license to
market distribute, sub-contract and sell
the Products provided to Distributor
under this Agreement in unopened and
unaltered form, to End-Users or resellers
located in the Territory.
2.2
Pursuant to this
Agreement, Distributor agrees to phase out sales of
any competitive product as soon as
contractually possible, and without incurring
additional expenses or cost expenditures or
penalties, and to exclusively
market, sell, and distribute Supplier's
Products in the Territory set forth
above.
2.3
As master
distributor, Distributor will manage sales and contracting
of Supplier's Products covered in this
Agreement to all national and regional
group accounts.
Section 3
PRODUCT ORDERS AND SHIPMENT
3.1
Distributor
shall from time to time prepare and submit to Supplier
product orders stating the number and type
of Products that Distributor desires
to receive, with shipment by Supplier
expected for approximately 7 days
thereafter. Distributor's product orders
shall be in writing and shall
constitute binding commitments to accept
the number and type of Products stated
therein, in accordance with the terms and
conditions of this Agreement
Distributor may
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cancel a product order only with the prior
written approval of an authorized
representative of Supplier.
3.2
Within 3 days
after receiving a product order from Distributor
submitted in accordance with the terms
hereof, Supplier shall acknowledge in
writing its acceptance of such product
order. Supplier's acceptance shall
constitute a binding commitment to ship to
Distributor the number and type of
Products stated in such product order, in
accordance with the terms and
conditions thereof.
3.3
Supplier shall
use all reasonable efforts to ship quantities of
Products ordered within 5 days of receipt
and acceptance of product orders.
Packaging and means of shipment of Products
shall be determined by Supplier,
unless otherwise agreed. Product shall be
shipped F.O.B. Destination. If
scheduling of shipment by Supplier is
delayed, to occur more than 30 days from
the date of receipt of a product order,
Supplier shall so notify Distributor.
3.4
Products damaged
in transit shall be returned to Supplier within 30
days after receipt, accompanied by such
documentation as may reasonably be
required, including but not limited to a
returned goods authorization obtained
by Distributor from Supplier, to assert any
claims that may lie against the
carrier causing such, damage.
3.5
Within the first
15 days of each quarter, Distributor shall prepare
its tentative projections of the number and
type of Products that Distributor
reasonably expects to order and accept for
distribution during the following
quarter in order to satisfy its continuing
requirements, and shall submit such
projection to Supplier.
3.6
Within 30 days
of the end of each calendar quarter, during the term
of this Agreement Distributor shall provide
a sales report to Supplier showing
End-User and resellers sales during
preceding quarter.
Section 4
PRICES AND
PAYMENT
4.1
Prices for
Products shall be as indicated on Exhibit "A." Prices
quoted, are exclusive of taxes, shipping
and insurance charges.
4.2
The Product
prices set forth in Exhibit "A" are firm, for the first
Contract Year. Supplier may change the
prices for Products for any subsequent
Contract Year (no greater than 1% above the
CPI (Consumer Price Index) for the
prior calendar year in any Contract Year)
by providing written notice 90 days
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prior to the end of any Contract Year. Such
new price will apply to all product
orders received after the beginning of the
subsequent Contract Year.
4.3
Supplier shall
invoice Distributor at time of shipment of each
order. Payment shall be due within 30 days
of date of receipt of shipment or
date of invoice, whichever is later.
4.4
Within 30 days
after the end of each calendar quarter during the
term of this Agreement, Supplier shall pay
to Distributor an administration fee
equal to 2% of the net dollar amount
actually paid from Distributor to Supplier
for purchases of Product under this
Agreement during such calendar quarter.
Section 5
INSPECTION BY DISTRIBUTOR
During the
30 days following Distributor's receipt of each shipment of
Products ordered hereunder, Distributor
shall have the right to inspect the
Products to ascertain whether they conform
in number and type to Distributor's
product order, or whether there are obvious
defects present. If the Products so
inspected are found not to conform,
Distributor shall notify Supplier in writing
within such 30-day period, unless defects
become apparent after use by an End
User.
Section 6
TRADEMARKS; MARKING OF PRODUCTS
Distributor may use and display the business name or trademarks
of
Supplier to identify and market the
Products only (1) on business cards and
Stationery of Distributor indicating it is
an authorized distributor for
Supplier, and (2) on marketing materials
prepared by Supplier and delivered to
Distributor relating to the Products set
forth on Exhibit "A". In each, case,
Distributor shall comply with Supplier's
guidance regarding the use of its
business names and trademarks. No other use
of Supplier's business name or
trademarks is authorized.
Section 7
COMPETITIVE PRODUCTS AND EXCLUSIVITY COMMITMENT
So long as
this Agreement remains in effect, Distributor shall not add
additional products to its current line to
distribute, or add additional
products to its current line to act as an
agent or representative of any
developer or manufacturer of, medical
products that compete directly or
indirectly with the Products. Distributor
will use its best efforts to convert
existing End-Users of
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any currently-provided competitive products
to the Supplier's Products provided
in no event shall such conversion be deemed
a condition, to or breach of this
Agreement
Section 8
WARRANTIES AND LIMITATIONS OF LIABILITY
8.1
Supplier
warrants to Distributor that Supplier owns or has rights to
the Products, including any intellectual
property rights associated therewith,
adequate to enable Supplier to perform its
obligations, to authorize the
distribution of the Products by
Distributor, and to authorize the use of the
Products by End-Users.
8.2
Supplier
warrants to Distributor that the Products and the
distribution thereof do not infringe the
trademarks, patents, copyrights, or
other proprietary ri
