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 ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and Luther Needlesafe Products
(hereinafter "Supplier") a California company, with principal offices at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
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 rights of any third party.
8.3 Supplier warrants to Distributor that the Products will operate in
compliance with the applicable functional description of the Products as
contained in Supplier's marketing literature for the Products,
Section 9
INDEMNIFICATION
9.1 Supplier hereby indemnifies and agrees to hold Distributor harmless
from and against any and all claims, demands or actions and costs, liabilities,
damages, legal fees and legal costs or losses (1) arising out of any actual or
alleged infringement of any patent trademark, or copyright or violation of any
trade secret or other proprietary rights by any of the Products furnished
hereunder; (2) arising out of any actual or alleged death or injury to any
person or damage to any tangible property resulting or claimed to result wholly
from (a) any actual or alleged defect in the Products, or (b) any statement or
misstatement contained in the documentation and marketing materials provided by
Supplier; or (3) arising out of any breach of this Agreement by Supplier.
9.2 Distributor hereby indemnifies and agrees to hold Supplier harmless
from and against any and all claims, demands, or actions and any cost-
liabilities, or losses (1) arising out of any statements or representations
made by Distributor or Distributor's employees or agents with, respect to the
Products, except for statements that are direct quotations of any documentation
and marketing materials provided by Supplier to Distributor for use in
connection with the Products; or (2) arising out of any breach, of this
Agreement by Distributor.
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9.3 The foregoing indemnities are in addition to any right otherwise
under this Agreement but shall be expressly contingent on the party seeking
indemnity (1) notifying the indemnifying party in writing of any such claim,
demand, action, or liability; (2) cooperating in the defense or settlement
thereof.
Section 10
TERM AND TERMINATION
10.1 The terms of this Agreement shall begin on the date first written
above and shall end on October 31, 2008 unless extended by mutual consent.
10.2 The occurrence of any one of the following items shall constitute a
material default under this Agreement (1) a failure to provide Products by the
Supplier to Distributor pursuant to this Agreement (2) Supplier selling or
distributing Products to any third parry in violation of Distributor's exclusive
right to sell the Products; or (3) a failure of the Distributor to pay for
purchased Products as agreed herein. In the event either Supplier or
Distributor commits a material default of this Agreement, the non-defaulting
party shall, provide a 90 day written notice to cure. In the event that the
default is not cured within the aforementioned 90-day period, the non-defaulting
party may declare the other party in breach. In the event of a declaration of
breach, the non-breaching party may either (1) seek injunctive relief to enforce
the terms of this contract; or (2) may declare the contract terminated.
10.3 The Supplier may discontinue the manufacture or distribution of one,
some or all of the Products with the prior written consent of the Distributor,
which consent will not be unreasonably withheld, provided that the Distributor
shall have no obligation to provide its consent until all outstanding orders of
the Distributor are fulfilled and the Distributor is reimbursed for any and all
reasonable out-of-pocket expenses relating to marketing, advertising or
promoting the Supplier's Products.
10.4 If Distributor fails to purchase 80% of the contract minimum in
Exhibit "B" in any Contract Year or Calendar Year after the initial Contract
Year or Calendar Year, the Agreement becomes non-exclusive provided, however,
that said non-exclusivity shall only occur after Distributor is given a 90-day
period after written notice within which it may make the contract minimums.
Section 11
COMPLIANCE WITH LAWS
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Distributor agrees to comply with all applicable federal, state, regional
and local laws and regulations in performing its obligations under the terms and
conditions of this Agreement and it dealings with End-Users concerning Products.
Section 12
OBLIGATIONS OF DISTRIBUTOR
12.1 Distributor shall use its best efforts to maximize the sales and
distribution of Supplier's Products in Exhibit "A".
12.2 Distributor shall maintain a national "800" telephone number for
order entry and customer service.
12.3 Distributor shall show Supplier products at appropriate national
conventions (e.g., ONS).
12.4 Distributor's Chief Operating Officer will supervise sales activity
and work to maximize sales in the Territory and manage resellers needed to
achieve contract maximums.
12.5 Distributor shall use its best efforts to develop contracts with
national and regional purchasing groups and the different entities of the
Federal Government that contract for and purchase medical products.
12.6 Distributor shall train, develop and maintain customer service and
sales support, and order entry for Supplier's Products covered by this
Agreement.
12.7 Distributor shall develop, with Supplier's technical support, sales
training programs and an approved in-service method for End-Users.
12.8 Distributor shall have in effect all licenses, permits and
authorizations required and necessary for the performance of its obligations
covered by this Agreement.
Section 13
OBLIGATIONS OF SUPPLIER
13.1 Supplier shall use its best efforts to obtain the best available
shipping dates and to ship Products in accordance with Distributor's shipping
requests.
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13.2 Supplier shall refer all leads, inquiries or request for Products
covered by this Agreement to Distributor and not sell Products inside
Distributor's Territory. Failure to do so would be a material breach of the
contract.
13.3 Supplier shall have in effect all licenses permits and
authorizations from all government agencies within the Territory necessary to
the performance of its obligations and shall comply with all applicable Jaws,
rules and regulations affecting its activities including, but not limited to,
FDA and other regulatory requirements.
13.4 Upon notification from Distributor to Supplier regarding defective
Product, Supplier will respond directly to the Distributor customer within 72
hours of receipt of notification. Supplier will provide a written response to
Distributor's customer with a copy submitted to Distributor.
13.6 Supplier will have the manufacturing and shipping capability to make
enough units of Products covered by this Agreement for Distributor to reach its
sales obligations.
Section 14
MISCELLANEOUS
14.1 Each of the parties is an independent contractor under this
Agreement, and nothing herein shall be construed to create a partnership, joint
venture, or agency relationship between the parties hereto. Without the prior
written authorization of the other party, no parry shall have any authority to
enter into agreements of any kind on behalf of the other party nor shall a party
have any power or authority to bind or obligate the other party in any manner to
any third party.
14.2 Each party represents and warrants that it has full power and
authority to undertake the obligations set forth in this Agreement and that it
has not entered into any other agreement nor will it enter into any other
agreements that would render it incapable of satisfactorily performing its
obligations hereunder.
14.3 If any provision of this Agreement shall be declared to be invalid
or unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
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14.4 All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be delivered by hand,
overnight courier, facsimile, electronic mail, or U.S. mail. Notice shall be
considered given when such notice is actually received by the other party at its
then principal place of business.
14.5 All questions concerning the validity, operation, interpretation,
and construction of this Agreement will be governed by and determined in
accordance with the laws of the State of California, without application of its
principles of conflicts of law. Exclusive venue for any action arising under
this Agreement shall be solely in the County of Orange in California.
14.6 Neither party shall by mere lapse of time, without giving notice or
taking other action hereunder, be deemed to have waived any breach by the other
party of any of the provisions of this Agreement. Further, the waiver by either
party of a particular breach of this Agreement by the other shall not be
construed as or constitute a continuing waiver of such breach or of other
breaches of the same or other provisions of this Agreement.
14.7 Except for obligations of Distributor respecting (1) protection of
Supplier's proprietary rights in the Products and (2) payment of invoices for
Products, neither party shall be in default if any delay or failure to perform
any obligation hereunder is caused solely by events beyond such party's control.
Any party claiming the benefit of such excuse shall be entitled to do so only to
the extent that such party has diligently acted to cure the cause and
consequence of such event.
14.8 The parties hereto acknowledge that this Agreement is the complete
and exclusive statement of agreement respecting the subject matter hereto and
supersedes all proposals (oral or written), understandings, representations,
conditions, and other communications between the parties relating hereto. This
Agreement may be amended only by a subsequent writing that specifically refers
to this Agreement and is signed by both parties, and no other act document,
purchase order, usage, or custom shall be deemed to amend this Agreement.
14.9 Should any litigation be commenced between the parties hereto
concerning any provision of this Agreement the party prevailing in such
litigation shall be entitled, in addition to such other relief as may be granted
by a court of competent jurisdiction, to reasonable attorneys' fees and costs in
such litigation.
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14.10 Disputes/Cure/Arbitration. In the event a party breaches any of its
obligations hereunder and fails to cure the same within any applicable cure
period, or in the event of any other dispute or controversy between the parties
hereto arising out of or relating to this Agreement, such dispute or controversy
shall be submitted to the American Arbitration Association in Orange County,
California. The arbitrator(s) shall decide any such matter in accordance with
then applicable Commercial Rules of the American Arbitration Association or any
successor organization. The determinations of the arbitrator(s) shall be final
and shall not be subject to judicial review; provided, however, that any award
or determination rendered by the arbitrators may be entered in any court of
competent jurisdiction. The expenses of arbitration, the reasonable fees and
costs of legal counsel, experts, and evidence shall be awarded to the prevailing
party as provided in such rules.
14.11 Agreement Continuance and Continuity. In the event of a merger,
acquisition or sale of Supplier to or by another company this agreement and its
provisions will be binding on that succeeding company.
WHEREBY, the parties have caused this Agreement to be executed by their duly
authorized officers.
Luther Needlesafe Products, a California
Corporation
By:_____________________________________
Name and Title
New Alliance of Independent
Medical Distributors, Inc., a Texas
Corporation
By:_____________________________________
Name and Title
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EXHIBIT "A"
Product: At all times in the:
LUTHER/ALLIANCE
EXCLUSIVE MASTER SALES & DISTRIBUTION AGREEMENT
The product being referred to is the Luther safety ▇▇▇▇▇ needle device.
Pricing: For each sterile safety ▇▇▇▇▇ needle device ordered by Distributor from
Supplier, Distributor will be invoiced two dollars and fifty-five cents, ($2.55)
U.S. without a y-site and ($3-06) with a y-site.
Minimum order: One overshipper containing four, (4) cases. Each case contains
twenty-five, (25) safety ▇▇▇▇▇ needle devices for a total of one hundred, (100)
safety ▇▇▇▇▇ needle devices contained in each case.
Supplier will maintain inventories of the full product line, including 19, 20,22
gauge needles with lengths from 1/2" to 1 1/2" as required to fulfill customer's
needs.
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EXHIBIT "B"
Quantities: Distributor has agreed to a quota of 1,000,000 units of the Luther
safely ▇▇▇▇▇ needle device from Supplier in the first Ml calendar year beginning
November 1, 2003 through December 31, 2004, and 1,300,000 units from January 1,
2005 through December 31,2005.
For Distributor to maintain their exclusivity under the terms of the:
LUTHER/ALLIANCE
EXCLUSIVE MA5TEK SALES & DISTRIBUTION AGREEMENT
Distributor must purchase a minimum of eighty, (80%) percent of the above stated
amounts.
In accordance with this agreement ninety, (90) days prior to the end of each
calendar year the required quantities to be purchased by Distributor will be
reassessed and restated as part of this agreement
The aforementioned quota is not a guaranteed purchase by Alliance.
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