EXHIBIT 10.12(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT made and entered into this 10th day of November, 2003
("Effective Date"), by and between, Coronado Industries, Inc. having its
headquarters at 00000 X. Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxx
00000 (hereinafter referred to as "CI"), and Izasa, S.A. having offices at
Aragoneses 00 - 00000 Xxxxxxxxxx - Xxxxxx (Xxxxx) (hereinafter referred to as
"IZASA").
WITNESSETH
WHEREAS, CI is engaged in the distribution and sale of a patented Pneumatic
Trabeculoplasty (PNT) device as described on Schedule A (hereinafter called the
"Products") and desires to appoint IZASA, on the terms and conditions
hereinafter set forth, as exclusive distributor for the sale of the Products
within Spain.
NOW THEREFORE in consideration of the mutual covenants herein contained,
and other good and valuable consideration, it is mutually agreed as follows:
1. APPOINTMENT AND ACCEPTANCE
1.1 CI hereby appoints IZASA as CI's exclusive distributor of the Products
in the country of Spain (hereinafter called "the Territory").
1.2 IZASA accepts such appointment and agrees to use its best efforts to
promote, develop and increase sales of the Products within the
Territory. Without limiting the generality of the foregoing, IZASA
shall:
(a) distribute to the best advantage such literature and other
advertising material as may be agreed to by CI and will not use
or release any advertising or promotional materials (including,
without limitation, labels, packages, circulars, and
advertisements) without the express prior written approval of CI;
(b) solicit prospective purchasers who may specify or utilize the
Products;
(c) not promote or sell any product or product line which is directly
or indirectly competitive with the Products;
(d) take no action which might impair the goodwill or reputation of
CI or any of its affiliated companies or of the Products;
(e) refrain from making quotations or writing letters under the name
of CI. The name of CI shall not appear on stationery used by
IZASA, except as a marginal note showing "Distributor for
Coronado Industries";
(f) have complete control over, and shall pay, all the costs and
expenses of its business;
(g) build and maintain a sales organization commensurate with the
sales potential of the Products in the Territory and employ sales
Page 1 Izasa Spanish Distribution Agreement - Final November 6, 2003
personnel trained with sufficient product knowledge to sell the
Products adequately within the Territory;
(h) interface with customers and potential customers on behalf of CI
for inquiries with respect to the Products and use of the
Products;
(i) not make claims with respect to indications for the Products that
are not approved by the appropriate Health Authority or other
appropriate regulatory body;
(j) purchase sufficient quantities of the Products from CI so as to
be able to maintain an adequate supply for resale of the
Products;
(k) comply with all applicable Spanish and European laws and
regulations, including any reporting requirements in regards to
complaints or incidents;
(l) promptly report to CI, or its European representative which is
currently
Medical Device Safety Services
Xxxxxxxxxxxxxxxx 0
X-00000 Xxxxxxxx Xxxxxxx
x00 000 00 00 0000
all complaints, incidents or problems it receives relating to the
Products;
(m) follow all CI sales policies communicated by CI from time to time
in the promotion and sale of Products;
(n) handle and store all Products in accordance with Spanish and
European laws and the labeling and instructions of CI.
2. PRICE, RETURNS, PURCHASE OBLIGATIONS, PRODUCT SUPPLY
2.1 The supply price of the Products, except for samples, to IZASA shall
be as outlined below;
(a) PNT controllers at [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION] per controller.
(b) PNT rings at [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION] per single ring packaged in a
sterile sachet. Rings will be provided to IZASA in units of 100
sterile sachets/carton.
(c) CI will arrange for shipment of product from their manufacturing
facility to IZASA's warehouse. The cost of shipping the product
from CI's distribution facility to IZASA's central receiving
facility in Spain will be the responsibility of CI
(d) The above supply prices will be fixed until December 2005.
Beginning in January 2006 CI can adjust the supply price based on
a reported U.S. manufacturing inflation index, with such
adjustment using 2003 as the base year.
Page 2 Izasa Spanish Distribution Agreement - Final November 6, 2003
(e) The above pricing reflects the current controller and ring design
and manufacturing processes. In the event the United States Food
and Drug Administration (USFDA) or any other governmental heath
authority (HA) requires modifications to the PNT controller
and/or ring in order to allow continuing sale within the
Territory which would lead to an increase in the manufacturing
costs to CI of more than 10%, the Parties agree to negotiate a
new supply price.
2.2 (i) IZASA will have the following annual minimum purchase requirements
('Annual Minimum')
Calendar Year Annual Minimum
-----------------------------------------------------------------
January 2004 to December 2004 *
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January 2005 to December 2005 *
-----------------------------------------------------------------
January 2006 to December 2006 *
-----------------------------------------------------------------
January 2007 to December 2007 *
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January 2008 to December 2008 *
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* [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION]
(ii) IZASA and CI will agree to a delivery schedule for the calendar
year 2004 minimum quantities by December 15th, 2003. For the
remaining years of this agreement Izasa and CI will agree to a
delivery schedule for each year's 'Annual Minimum' by September
15th of the prior year.
(iii) The agreed upon delivery schedule for the 'Annual Minimums' will
involve no more than 5 shipments per year from CI to IZASA
(iv) Quantities in excess of the 'Annual Minimum" requirements cannot
be applied to the next year's Annual Minimum
2.3 Terms of payment shall be as follows:
i) Net 30 days upon receipt of goods for orders placed under the
Annual Minimums
ii) Net 60 days upon receipt of goods for all other orders
2.4 IZASA shall make the payments described herein by bank wire transfer
per instructions to be provided by CI. Time shall be of the essence
with respect to the payment monies by IZASA pursuant to this
Agreement.
2.5 CI will provide to IZASA, free of charge, up to [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION] PNT
controllers, along with [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION] rings per controller (the starter
packs) in order to accelerate the introduction and adoption of PNT
within the Territory. Delivery of the controllers and rings described
under this subsection will be agreed to by the Parties. The intent is
to provide devices to key opinion leaders within the Territory. IZASA
will not sell materials which are provided to them free of charge.
Page 3 Izasa Spanish Distribution Agreement - Final November 6, 2003
2.6 IZASA may return goods, including vacuum units which may require
service, to CI only in accordance with CI's published returned goods
policy. Used rings cannot be returned to CI
2.7 CI will be responsible for the production, including sourcing of raw
materials, for all commercial and clinical supplies. All Products
shipped to IZASA will be in compliance with relevant regulatory and
governmental requirements, including compliance with the requirements
of an EU 2a device classification and will have sufficient expiry
dating to allow for distribution through normal distribution channels.
This manufacturing obligation will expire upon termination of this
Agreement.
3. RELATIONSHIP OF THE PARTIES
IZASA shall be an independent contractor of CI. This Agreement does not
create any employer-employee, agency, joint venture or partnership relationship
between CI and IZASA. IZASA is not authorized or empowered to act as agent for
CI for any purpose and shall not on behalf of CI either enter into any contract,
undertaking, or agreement of any kind whatever, or make any promise, warranty,
or representation with respect to the Products other than those published by CI
in the advertising and sales promotional material provided to IZASA.
4. NOTICES
Any notices will be sent via facsimile and by a recognized express mail
carrier:
If to IZASA: IZASA S.A.
Facsimile:
If to CI: Coronado Industries
00000 X. Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxx 00000
XXX
Attention: CEO
CC: Director of Operations
Facsimile x0 000 000 0000
or to such other address as either party may hereafter designate by notice to
the other party. The date of giving of any such notice shall be on the date
received from an express mail carrier.
5. FORCE MAJEURE
Neither party hereto will be liable to the other for its failure to perform
hereunder due to act of God, accident, fire, flood, storm, riot, sabotage,
explosion, strike, labor disturbance, national defense requirement, governmental
law, ordinance, rule or regulation, whether valid or invalid, defense
requirement, governmental law, ordinance, rule or regulation, whether valid or
invalid, inability to obtain electricity or other type of energy, raw materials,
Page 4 Izasa Spanish Distribution Agreement - Final November 6, 2003
labor, equipment or transportation, or any other contingency beyond its
reasonable control which would make performance commercially impracticable. In
the event of a shortage of Products, CI reserves the right to allocate its
inventory of Products as it may determine in its sole discretion.
6. TRADEMARKS AND PROPRIETARY INFORMATION
6.1 CI will be responsible for registering and maintaining all Patents and
Trademark(s) relating to the Products in the Territory at CI's costs.
6.2 By virtue of the Agreement and IZASA's performance hereunder, IZASA
shall acquire no interest in CI trademarks or corporate names, label
designs or other identifying marks used to distinguish CI's Products.
Except for undertaking such activities as are directly related to
promoting the sale of the Product under this Agreement, IZASA shall
not make use of the name CI, or make use of any trademark or trade
name which in the judgment of CI is confusingly similar thereto
without the written consent of CI.
6.3 The Parties will use their best efforts to discover any infringement
of any Patent, Trademark or corporate name of Coronado Industries and
will promptly notify each other of any such infringement or wrongful
use. Any Proprietary Information provided shall be and remain the
property of CI, and CI will impose any conditions with respect thereto
which it deems reasonably necessary to preserve the confidential
nature thereof. IZASA will retain all Proprietary Information in
strict confidence as trade secrets of CI and will not disclose, or
permit any employee or agent of IZASA to disclose, any Proprietary
Information to anyone without the prior written approval of CI,
provided, however, that such disclosure may be made to any employee of
IZASA who has a reasonable need for access thereto. For the purpose of
this Agreement, the term "Proprietary Information" shall mean all
formulae, processes, and other information relating to the
distribution, sale, and use of any Product which has been or may
hereafter be furnished to IZASA and which would not be available to
the general public otherwise than through violation of this Agreement.
6.4 Upon the expiration or prior termination of this Agreement, IZASA will
exercise all necessary precautions to safeguard the secrecy of
Proprietary Information and to prevent the unauthorized disclosure
thereof, IZASA will consult CI as to the procedures established by it
for this purpose and will from time to time, if requested by CI,
advise CI of the procedures which it then has in effect.
7. REGISTRATIONS AND HEALTH AUTHORITY INTERACTIONS
7.1 CI will be responsible for all interactions with the relevant Health
Authorities (HA's) and will bear the costs associated with the
registration(s) in the Territory.
7.2 IZASA, as reasonably requested by CI, will assist and provide
expertise as required in dealing with the relevant HA's in the
Territory.
7.3 CI and IZASA agree that a Type 2a device classification is required to
allow the sale of the Products in the Territory. CI agrees to supply
IZASA with Products meeting this classification.
Page 5 Izasa Spanish Distribution Agreement - Final November 6, 2003
8. TERM AND TERMINATON
8.1 The term of this Agreement shall be for a period of five (5) years
from the date first above written. Izasa may extend the term for an
additional two (2) years by agreeing to a minimum purchase of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION] in year six (6) and seven (7). Following the initial 7
year term outlined above, this Agreement will be automatically
renewable on an annual basis, unless either Party notifies the other 6
months prior to expiration of the initial term, or each annual
extension, of their intention not to renew,
8.2 CI shall have the option to terminate, upon ninety (90) days' written
notice, if ownership or control of IZASA is transferred to a third
party or if either Party is adjudged bankrupt, files or has filed
against it any petition under any bankruptcy or insolvency law, has a
receiver appointed for its business or property, or makes a general
assignment for the benefit of its creditors.
8.3 IZASA cannot assign, transfer, or hypothecate this Agreement without
the prior approval of CI.
8.4 IZASA hereby accords CI upon termination or expiration of this
Agreement an option to repurchase from IZASA all or any part of
IZASA's inventory of Products at the price paid therefore by IZASA
(the "Repurchase Price"), pursuant to the following procedures:
8.4.1 Within five (5) days after the effective date of termination,
IZASA shall submit to CI a written schedule reflecting all Products
then owned by or in IZASA's possession. Said schedule shall identify
each Product and shall indicate the quantity thereof on hand.
8.4.2 Within ten (10) days after the receipt of such schedule by CI,
CI shall have the right to inspect the inventory reflected on such
schedule.
8.4.3 Within ten (10) days after completion of CI's inspection of said
inventory, CI shall give written notice of its election to repurchase
all or any part of the inventory.
8.4.4 Upon receipt of said notice of repurchase, IZASA shall forthwith
deliver such Products as may be specified therein to a carrier
designated by CI. Payment of the Repurchase Price as hereinabove
provided shall be made by CI to IZASA either by (1) the issuance to
IZASA of a credit corresponding to the Repurchase Price to be applied
in the reduction of any indebtedness of IZASA to CI or by (2) payment
of the excess of the Repurchase Price over any such indebtedness of
IZASA within ten (10) days after the delivery of said Products to CI.
8.5 Upon termination or expiration of this Agreement, IZASA shall
immediately cease to represent itself as an authorized distributor of
CI with respect to the Products; provided, however, that IZASA shall
have the right to sell, only in accordance with the provisions of this
Agreement notwithstanding the termination or expiration of this
Agreement, those Products which are in its inventory on the date of
such termination and which CI has not repurchased pursuant to the
provisions of Subsection 9.3 hereof.
Page 6 Izasa Spanish Distribution Agreement - Final November 6, 2003
8.6 The termination or expiration of this Agreement shall not release
IZASA from the obligation to pay any sum that may be owning to CI or
operate to discharge any liability that had been incurred by either
Party prior to any such termination.
8.7 Failure by a Party to comply with any of its material obligations
contained in this Agreement, including minimum purchase and payment
term obligations, shall entitle the non-defaulting Party to give to
the defaulting Party written notice specifying the nature of the
default and requiring the defaulting Party to make good such default.
If such default is not cured within sixty (60) days after the receipt
of such notice (or, if such default is not capable of being cured
within such sixty (60) day period, within such amount of time as may
be reasonably necessary to cure such breach, as long as the Defaulting
Party is making diligent efforts to do so, except in the case of
payment default, as to which the defaulting Party shall have only a
sixty (60) day cure period), the non-defaulting Party shall be
entitled immediately to terminate this agreement by giving written
notice to the defaulting Party. The right of a Party to terminate this
Agreement, as hereinafter provided, shall not be affected in any way
by its waiver or failure to take action with respect to any previous
default.
8.8 The Parties may agree in writing, signed by both Parties, to terminate
this agreement in its entirety. In such an event, the Parties shall
agree to the effects of such termination at that time
9. ASSIGNMENT
This Agreement shall be binding upon the successors and assignees of CI and
IZASA. This Agreement shall not be assignable by IZASA without the prior written
consent of CI. CI may at any time assign this Agreement to any of its affiliated
companies or to an unrelated third party.
10. INDEMNIFICATION
10.1 So long as IZASA is not negligent in storing and otherwise maintaining
the Products and relabels and repackages the Products in compliance
with procedures agreed to in writing by CI, and complies with
applicable laws and its obligations under this Agreement with respect
to promotion of the Products, CI will indemnify IZASA from any and all
liability, loss, or damage IZASA may suffer as a result of claims,
demands, costs, or judgment against it arising from the sale of said
Products supplied by CI . The limits of insurance will be a minimum of
USD $1.0 million per incidence and $1.0 million in total which will
also be the limits of this indemnification. This indemnification shall
commence from the execution of this Agreement and shall continue in
full force and effect so long as there may be any claims, demands,
costs or judgments arising against IZASA from IZASA's sale of Products
supplied by CI.
10.2 IZASA will indemnify CI from any and all liability, loss or damage CI
may suffer as a result of claims, demands, costs or judgments against
it arising from IZASA's negligence in storing, maintaining or handling
the Products or from not relabeling or repackaging the Products in
compliance with the agreed to written procedure or otherwise failing
to comply with applicable laws and regulations and the terms of this
Page 7 Izasa Spanish Distribution Agreement - Final November 6, 2003
Agreement. The limits of insurance will be a minimum USD $1.0 million
per incidence and $1 million in total which will also be the limits of
this indemnification. Said indemnification shall commence from the
execution hereof and shall continue in full force and effect so long
as there may be any claims, demands, costs or judgments arising
against CI as a result of IZASA's conduct as aforesaid.
10.3 Each Party will maintain, at each Party's own expense, insurance
coverage from a reputable insurance carrier, so as to adequately cover
the dollar amounts outlined in the above referenced indemnifications.
11. MISCELLANEOUS
11.1 The provisions of this Agreement shall be construed and the
performance thereof governed in accordance with the laws of the State
of Arizona.
11.2 The article headings in this Agreement are inserted for convenience
only and shall not be deemed to be part of this Agreement or
considered in construing this Agreement.
11.3 This Agreement constitutes the entire understanding between the
Parties and supersedes any previous written or oral agreements or
understandings between the Parties.
11.4 No modification to or waiver of the terms or conditions hereof shall
be binding upon either Party unless approved in writing by an
authorized representative and no modification can be made by the
acknowledgment of acceptance or by the use of purchase order forms
containing other or different terms or conditions.
11.5 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
CORONADO INDUSTRIES, INC. IZASA S.A.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx Xxxxx
-------------------------- ---------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx Xxxxx
Title: President Title: Managing Director S.E.
Page 8 Izasa Spanish Distribution Agreement - Final November 6, 2003
SCHEDULE A
(1) PNT Vacuum Controller - Model 1000
(2) PNT Sterilized/Single Use/Disposable Ring - pre-sterilized polypropylene
3-port PNT ring. One (1) sterilized ring per sealed Tyvek(R)pouch. 100
rings per carton
