Policy Notice

American Drug Screen Corporation (“A.D.S. Corp”) is a Distributor of W.H.P.M. Inc. through distribution of W.H.P.M. Inc. Drug of Abuse screening devices

Section 1: Appointment

1.1
American Drug Screen Corporation (“A.D.S. Corp.”) hereby appoints ____________ Company (“Distributor”) as a non-exclusive, non-proprietary Distributor of A.D.S. Corp. products (the “Products) subject to the terms and conditions of this Distributor Agreement (the Agreement).

1.2
This Agreement is effective until replaced or cancelled by either party. This Agreement constitutes the final and entire Agreement of the parties and supersedes all prior oral or written Agreements, policies, understandings, representations, warranties and negotiations on the subject matter hereof.

1.3
The Distributor is an independent organization, not an agent or employee of A.D.S. Corp. The Distributor is not authorized to assume or create any obligation or responsibility, including but not limited to obligations based upon warranties or guarantees or other contractual obligations, on behalf or in the name of A.D.S. Corp. The Distributor will not misrepresent its status or authority.

1.4
Subject to the terms hereof, the Distributor is authorized to sell the Products purchased from A.D.S. Corp. hereunder to such parties, in such manner, at such prices and upon such terms as the Distributor shall determine.

1.5
The Distributor shall not use A.D.S. Corp.’s trade name, trade dress or trade marks, including without limitation any trade names, trade dress or trademarks associated with any of the Products, without A.D.S. Corp.’s written approval. The Distributor may identify itself as a Distributor of the Products and may, on a non-exclusive basis, and in format(s) acceptable to A.D.S. Corp., use A.D.S. Corp. trademarks to identify the Products when marketing A.D.S. Corp. Products. The Distributor will not use A.D.S. Corp.’s trade name, trade dress or any of its trademarks as part of the Distributor’s trade or business name or in any manner that A.D.S. Corp. considers misleading or objectionable.

1.6
Distributors must participate on a regular basis in technical and sales training as a condition of this Agreement to maintain Distributor’s discount level. A.D.S. Corp. has sole discretion in defining expectations for technical and sales training at the expense of the Distributor. These expectations will be reasonable and customary to prior practice.

Section 2: Customer Service, Technical Support, and Shipping:

2.1
A.D.S. Corp. will provide customer service and technical support to the Distributor. This will include communication of delivery information, timely response to special requests and complaints, and use of A.D.S. Corp.’s Distributor and e-commerce websites and all information contained within. A.D.S. Corp. will also provide technical and commercial assistance including product brochures and other sales aids reasonably necessary to enable Distributor to promote and solicit orders for A.D.S. Corp. product under the terms of this Agreement.

2.2
Distributor acknowledges it is their responsibility to provide end user service and product support to the extent of their knowledge and capability. If A.D.S. Corp. provides support or service by request of Distributor or end user, A.D.S. Corp. reserves the right to charge Distributor for that service or reduce Distributor discount levels. Distributor also need promptly forward all the complaints related to the Products to A.D.S. Corp. Distributor also need have tracing records for all the Products purchased from A.D.S. Corp.

2.3
Distributor agrees to separately pay all expenses incurred by A.D.S. Corp. in the shipment and delivery of ordered products, including without limitation freight charges, import duties and insurance premiums. Shipments will be made as designated by Distributor in advance of each shipment. Shipments will be shipped via UPS ground unless otherwise specified by Distributor. In the event Distributor requests express delivery or shipment by air instead of UPS ground, Distributor agrees to pay all additional expenses associated with such request. A.D.S. Corp. will use commercially reasonable efforts to meet Distributor’s requested delivery schedules of the Product.

2.4
All shipments shall be accompanied by a packing slip for each box of Product shipped by A.D.S. Corp. unless Distributor requests otherwise, all products ordered by Distributor shall be packed for shipment and storage. It is Distributor’s obligation to notify A.D.S. Corp. of any special packaging requirements (which shall be at Distributor’s expense).

Section 3: Prices, Fees, and Orders

3.1
Prices of Products and discounts offered to the Distributor will be determined in accordance with A.D.S. Corp. policies in effect as of the date of this Agreement and will be detailed in Schedule A attached hereto.

3.2
Discounting policies will be communicated in writing at least 60 days prior to effective date. Price concessions made to secure a competitive contract will not be extended to other existing pricing for the same product. Pricing amendments must be in writing and submitted as an amendment to Schedule A. All pricing and written pricing agreements are to be held in strict confidence by both parties. Any violation of said policy may result in damages. For promotional purposes, A.D.S. Corp. reserves the right to offer discounted product.

3.3
A.D.S. Corp. reserves the right to charge Distributor for Technical Phone Support, On-Site Service and Maintenance, Extended Warranties, Advanced Training and Professional Services. Cost for these services will be billed at rates defined in Schedule A in addition to materials and expenses used in performing said service.

3.4
A.D.S. Corp. does not offer drop shipments of products as a normal course of business for its Distributors. A.D.S. Corp. however realizes that situations may arise requiring drop shipments may be necessary. All drop shipments must be $500.00 or greater per order. If the drop shipment is less than $500.00, a 15% handling fee will be charged.

3.5
Should orders for Products exceed A.D.S. Corp.’s available inventory, A.D.S. Corp. will allocate its available inventory and make deliveries on such basis as A.D.S. Corp. deems equitable, as agreed to by both parties. Unless otherwise specified in Distributor’s order, A.D.S. Corp. shall be authorized to make deliveries in installments.

3.6
Distributor’s terms are Net 30, with approved credit. Payments made by credit card, VISA, MasterCard and Discover, will incur a 3% service fee.

Section 4: Promotional Support

4.1
A.D.S. Corp. shall supply marketing and promotional materials concerning the Products and marketing programs. Prices of these materials shall be determined on an individual basis in accordance with the A.D.S. Corp. Distributor support materials discount structure, which shall be provided to the Distributor at A.D.S. Corp.’s sole discretion.

4.2
A.D.S. Corp. shall make available to the Distributor an Advertising Co-op program on terms to be established by A.D.S. Corp. at A.D.S. Corp.’s sole discretion.

4.3
The policy of A.D.S. Corp. is to provide samples for the introduction of new products and for evaluation purposes. The Distributor can redeem the samples when they are available. Product Introduction samples must be drawn from existing inventory at the El Monte A.D.S. Corp. location. No additional sample products will be provided and all other samples will require purchases made by the Distributor.

Section 5: Inventory

5.1
Distributor shall purchase inventory for stocking purposes. Distributor shall stock product and not rely upon drop shipments. For non inventory items, delivery time is approximately six weeks and minimum 500 units per order. Distributor must allow +10% shipment for production. For in house stock orders, delivery time is approximately two weeks.

Section 6: Return Goods Policy

6.1
Distributor shall examine the Products and inform A.D.S. Corp. Customer Service Department about any shortages or transport damages immediately following receipt, at the latest 5 business days following receipt. In the case of transport damage, A.D.S. Corp shall not be held liable and Distributor shall file claim with shipping carrier for damages. In the case of shortages, A.D.S. Corp. shall take the necessary steps to correct such shortage. Damaged product must be returned to A.D.S. Corp. Please follow Return Goods Policy shown below. Otherwise, A.D.S. Corp. cannot accept responsibility for the damage or loss.

6.2
Distributor shall make any claims for shortage or damage of products with the common carrier promptly upon receipt of the order and provide A.D.S. Corp. with written notice of such a claim. Except in the case of negligence on the part of A.D.S. Corp. or A.D.S. Corp.’s failure to package Products as set forth below, Distributor will not have responsibility for Products damaged in shipment and Distributor must handle all claims for damage with the carrier. As between A.D.S. Corp. and Distributor, Products shall be deemed accepted by Distributor unless rejected within (90) days of delivery of the Products. It is Distributor’s responsibility to properly store and handle the Products pending inspection and/or return. If rejection was timely effected and A.D.S. Corp. determines the products to be defective, A.D.S. Corp. agrees to repair or replace the products or cancel an unpaid invoice or refund the amounts paid with respect to such defective product which is returned to A.D.S. Corp., at A.D.S. Corp.’s option.

6.3
Shipping errors must be brought to the attention of A.D.S. Corp. Customer Service Department within 5 business days of receipt of a shipment. A Return Merchandise Authorization (“RMA”) number will be issued by Customer Service. The return must be shipped to A.D.S. Corp. freight prepaid, and A.D.S. Corp. will issue a credit for the freight when the credit for the returned merchandise is issued.

6.4
Returns must be approved in advance by A.D.S. Corp. Customer Service Department and an RMA must have been issued. The RMA number must show on the outside of each carton returned. Cartons returned without an RMA number will be refused. To request an RMA number, please call customer service at (626) 443-8480 between the hours of 8:30am to 5:30pm Pacific Standard Time. Be sure to provide the invoice or PO number of the original shipment, the item to be returned, quantity, lot number, expiration date, and the reason for the return request.

6.5
If it is determined that the return is due to an error or problem on the part of A.D.S. Corp., shipping charges will be credited to Distributor’s account at the time of the credit for the returned Product. Requests for Product returns for reasons other than defects in manufacturing or errors of A.D.S. Corp. are subject to a 25% restocking fee, and the freight charges will not be credited. Product must be returned in unopened cartons and in saleable form, unless damage occurred to Product or its cartons during transit, in which case Distributor shall return Product as it was delivered to them. Product returns for other than manufacturing errors must have been purchased within 45 days prior to the return request.

Section 7: Warranties, Indemnification, and Limitation of Remedies

7.1
A.D.S. CORP. WARRANTS THE PRODUCTS TO THE ORIGINAL ENDUSER PURCHASER IN ACCORDANCE WITH A.D.S.’S LIMITED PRODUCT WARRANTY (“LIMITED WARRANTY”). DISTRIBUTOR SHALL PROVIDE EACH OF ITS ENDUSER CUSTOMERS WITH A COPY OF THE LIMITED WARRANTY. SUCH LIMITED WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER EXPRESS OR IMPLIED WARRANTIES.

7.2
A.D.S. Corp.’s Limited Warranty is limited to Products that have not in any way been altered or damaged and that are used in conformance with A.D.S. Corp.’s Limited Warranty does not extend to entire systems of which Products are merely components. The Distributor is not authorized to extend, and shall not extend, and warranty with respect to the Products to any of its customers, except for the A.D.S. Corp. Limited Warranty to be provided to end-user customers. Any warranty made or given by Distributor with respect to Products that have been altered or damaged, and any warranty that otherwise departs from A.D.S. Corp.’s Limited Warranty shall not be enforceable against A.D.S. Corp. The Distributor shall be solely responsible for any warranties, representations or statements with respect to the Products or their performance or use which were not specifically authorized by A.D.S. Corp. Distributor shall indemnify and hold A.D.S. Corp. harmless from and against any and all claims, costs, expenses (including but not limited to reasonable attorney fees), damages and liabilities resulting from any such warranties, representations or statements.

7.3
IN NO EVENT SHALL A.D.S. CORP. BE LIABLE TO DISTRIBUTOR OR TO ANY OF DISTRIBUTOR’S CUSTOMERS FOR ANY CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR INDIRECT DAMAGES OR ANY KIND, AND A.D.S. CORP. EXPRESSLY DISCLAIMS ALL SUCH DAMAGES.

Section 8: Term and Termination

8.1
Unless terminated pursuant to this Section 8, this Distributor Agreement shall remain in effect until further notice. A.D.S. Corp. may modify this Agreement with a thirty-(30) day written notice at its sole discretion.

8.2
This Agreement may be terminated by either party without cause upon thirty-calendar days’ written notice to the other party. Expiration or termination shall not affect Distributor’s obligation to pay for Products purchased hereunder prior to the expiration or termination date.

8.3
The Distributor shall not be entitled to any compensation or reimbursement for inability to recoup any investment made in connection with performance under this Agreement, loss of prospective profits or revenues or anticipated sales, or any other losses whatsoever occasioned by termination or expiration hereof.

8.4
Upon termination of this Agreement, the Distributor shall immediately cease any use of A.D.S. Corp.’s trademarks, trade dress and trade names, any use or publication of demonstration copies of Products, and any marketing, selling or sublicensing of Products. All products, technical and promotional materials, will be returned to A.D.S. Corp., upon their request, in a method prescribed by A.D.S. Corp., at A.D.S. Corp.’s expense within 30 days of termination.

Section 9: Intellectual and proprietary Property

9.1
The Distributor will not give, copy, loan, exhibit, sell, lease, transfer or otherwise disclose to any person or entity any specifications, drawings, photographs, designs, price or customer lists, ideas or any other business or confidential information furnished to Distributor by A.D.S. Corp., and will not use any such information except in furtherance of Distributor’s obligations hereunder during the term hereof. All such information remains the exclusive property of A.D.S. Corp.

9.2
In the event of termination of this Agreement, the Distributor and A.D.S. Corp are not relieved of their obligations to adhere to the provisions of section 9.1.

Section 10: Miscellaneous

10.1
This Agreement shall be governed by and construed by in accordance with the laws of the state of California.

10.2
In the event that any provision or requirement of this Agreement is held to violate any law, the validity of any other provision or requirements shall remain in full force ad effect.

10.3
A.D.S. Corp. and Distributor agree that any dispute concerning the construction validity or performance of this Agreement shall be resolved through binding arbitration conducted according to the rules of the American Arbitration Association and any arbitration proceeding shall be held in county of the main headquarters of A.D.S. Corp.