EXHIBIT 10.9(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT made and entered into this 9th day of September, 2003
("Effective Date"), by and between, Coronado Industries, Inc. having its
headquarters at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (hereinafter referred to as "CI"), and EuPharmed s.r.l. having offices at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇/▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ (hereinafter referred to as "EuP").
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 EuP, on the terms and conditions hereinafter
set forth, as exclusive distributor for the sale of the Products within Italy.
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 EuP as CI's exclusive distributor of the Products
in the country of Italy (hereinafter called "the Territory").
1.2 EuP 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, EuP
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 EuP,
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
personnel trained with sufficient product knowledge to sell the
Products adequately within the Territory;
Page 1 EuPharmed Distribution Agreement 9 September 2003
(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 Italian 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
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▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇
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 Italian 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 EuP 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 EuP in units of 100
sterile sachets/carton.
(c) CI will arrange for shipment of product from their manufacturing
facility to EuP's warehouse. The cost of shipping the product
from CI's distribution facility to EuP's central receiving
facility in Italy will be the responsibility of CI.
(d) The above supply prices will be fixed until December 2007.
Beginning in January 2008 CI can adjust the supply price based on
a reported U.S. manufacturing inflation index, with such
adjustment using 2003 as the base year.
(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
Page 2 EuPharmed Distribution Agreement 9 September 2003
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 EuP will have the following minimum purchase requirements
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March 2004 to December 2005 * per month
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January 2006 to December 2006 * per month
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January 2007 to December 2007 * per month
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* [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION]
2.3 Terms of payment shall be AS FOLLOWS:
2.3.1 Minimum Purchase Obligations - Payment due upon receipt of
merchandise by EuP. Anticipated delivery to commence on March 1, 2004.
2.3.2 Additional Controllers Purchased in Excess of the Monthly
Minimum - Payment net 30 days upon receipt of merchandise by EuP.
2.3.3 PNT Rings - Payment for quantities above any minimum purchase
obligations net 60 days upon receipt by EuP.
2.4 EuP 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 EuP pursuant to this Agreement.
2.5 CI will provide to EuP, 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, who
are not involved in the EuP Clinical Trial (see Section 8 below), so
as to allow them to gain experience with PNT. EuP will not sell
materials which are provided to them free of charge.
2.6 EuP 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 EuP 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.
Page 3 EuPharmed Distribution Agreement 9 September 2003
3. RELATIONSHIP OF THE PARTIES
EuP shall be an independent contractor of CI. This Agreement does not
create any employer-employee, agency, joint venture or partnership relationship
between CI and EuP. EuP 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 EuP.
4. NOTICES
Any notices will be sent via facsimile and by a recognized express mail
carrier:
If to EuP: EuPharmed s.r.l.
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▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile # ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
If to CI: Coronado Industries
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: CEO
CC: Director of Operations
Facsimile ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
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,
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 EuP's performance hereunder, EuP 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, EuP shall not make use
of the name CI, or make use of any trademark or trade name which in
Page 4 EuPharmed Distribution Agreement 9 September 2003
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. EuP will retain all Proprietary Information in strict
confidence as trade secrets of CI and will not disclose, or permit any
employee or agent of EuP 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 EuP 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 EuP 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, EuP will
exercise all necessary precautions to safeguard the secrecy of
Proprietary Information and to prevent the unauthorized disclosure
thereof, EuP 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 EuP, 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 EuP agree that a Type 2a device classification is required to
allow the sale of the Products in the Territory. CI agrees to supply
EuP with Products meeting this classification.
8. EUPHARMED CLINICAL TRIAL ("ECT")
8.1 EuP will conduct a one (1) year, prospective, randomized trial of PNT,
involving five (5) to seven (7) centers in Italy and a minimum of
one-hundred and twenty (120) patients, with the intent being to
further demonstrate the long-term efficacy and safety of PNT in the
agreed upon glaucoma population (the "ECT").
8.2 As partial consideration for being granted an exclusive
distributorship within the Territory, EuP will be responsible for all
costs, except the costs of the controllers and PNT rings, associated
with conducting the ECT in the Territory.
8.3 EuP will consult with CI on the design of the ECT.
Page 5 EuPharmed Distribution Agreement 9 September 2003
8.4 EuP will own the clinical trial data generated as a result of
performing the ECT, but will allow CI to utilize the data to assist in
registrations both within and outside the Territory and for
discussions with other potential distributors. The clinical trial data
generated by the ECT will be provided to CI, in compliance with
Italian and European clinical trial regulations, on a quarterly basis.
All reports will comply with all applicable European and Italian laws
concerning Privacy
8.5 CI will supply to EuP, free of charge, a sufficient quantity of PNT
controllers and rings to perform the ECT.
8.6 EuP agrees to use best efforts to initiate the ECT, including
recruitment of investigators, protocol preparation and patient
enrollment. The current planning envisions an ECT Investigators
Meeting during the second half of September, 2003, which will then be
immediately followed by submission of the ECT protocol to the relevant
Ethics Committees and/or Institutional Review Boards for approval to
allow initiation of the ECT.
8.7 In the event the results of the ECT demonstrate a reduction in the
intraocular pressure of less than 2 mm of Hg, the Parties will agree
to negotiate in good faith and revise this Agreement accordingly.
8.8 Coronado will make available, if necessary, either ▇▇. ▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇ LiVeccia or another physician with suitable experience in
performing the PNT treatment to train the study physicians.
9. TERM AND TERMINATON
9.1 The term of this Agreement shall be for a period of five (5) years
from the date first above written. EuPharmed 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,
9.2 This Agreement shall immediately terminate upon ninety (90) days'
notice if EuP assigns, transfers, or hypothecates this Agreement or if
ownership or control of EuP 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.
9.3 EuP hereby accords CI upon termination or expiration of this Agreement
an option to repurchase from EuP all or any part of EuP's inventory of
Products at the price paid therefore by EuP (the "Repurchase Price"),
pursuant to the following procedures:
9.3.1 Within five (5) days after the effective date of termination,
EuP shall submit to CI a written schedule reflecting all Products then
owned by or in EuP's possession. Said schedule shall identify each
Product and shall indicate the quantity thereof on hand.
Page 6 EuPharmed Distribution Agreement 9 September 2003
9.3.2 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.
9.3.3 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.
9.3.4 Upon receipt of said notice of repurchase, EuP 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 EuP either by (1) the issuance to EuP
of a credit corresponding to the Repurchase Price to be applied in the
reduction of any indebtedness of EuP to CI or by (2) payment of the
excess of the Repurchase Price over any such indebtedness of EuP
within ten (10) days after the delivery of said Products to CI.
9.4 Upon termination or expiration of this Agreement, EuP shall
immediately cease to represent itself as an authorized distributor of
CI with respect to the Products; provided, however, that EuP 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.
9.5 The termination or expiration of this Agreement shall not release EuP
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.
9.6 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.
9.7 The Parties may agree in a 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
Page 7 EuPharmed Distribution Agreement 9 September 2003
10. ASSIGNMENT
This Agreement shall be binding upon the successors and assignees of CI and
EuP. This Agreement shall not be assignable by EuP 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.
11. INDEMNIFICATION
11.1 So long as EuP 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 EuP from any and all
liability, loss, or damage EuP 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 EuP from EuP's sale of Products
supplied by CI.
11.2 EuP 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 EuP'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
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 EuP's conduct as aforesaid.
11.3 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.
12. MISCELLANEOUS
12.1 The provisions of this Agreement shall be construed and the
performance thereof governed in accordance with the laws of the State
of Arizona.
12.2 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.
12.3 This Agreement constitutes the entire understanding between the
Parties and supersedes any previous written or oral agreements or
understandings between the Parties.
Page 8 EuPharmed Distribution Agreement 9 September 2003
12.4 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.
12.5 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 EuPharmed s.r.l.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President Title: Managing Director
Page 9 EuPharmed Distribution Agreement 9 September 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