Manufacturing Supply And Distribution Agreement

EXHIBIT 10.33


MANUFACTURING SUPPLY AND DISTRIBUTION AGREEMENT BETWEEN SONOMED, INC. AND
OPHTHALMIC TECHNOLOGIES, INC. DATED AS OF MARCH 11, 2004


MANUFACTURING, SUPPLY AND DISTRIBUTION AGREEMENT


THIS AGREEMENT by and between SONOMED, INC., incorporated in the State of New York, in the Unites States of America ("SONOMED"), and Ophthalmic Technologies, Inc., a Canadian Corporation ("OTI").


WHEREAS, SONOMED desires to purchase, market and sell certain products manufactured by OTI and OTI is willing and able to manufacture and supply such products to SONOMED under the terms and conditions described in this Agreement;


NOW, THEREFORE, SONOMED and OTI agree as follows:


1. DEFINITIONS


The following terms shall have the meaning specified in this SECTION:


1.1 "ACCESSORIES" shall mean the individual PRODUCT components which may
be sold separately as replacement parts, accessories to the Product
as well as software upgrades to the system not included as standard
features to Combination Products.


1.2 "AFFILIATE" shall mean corporations, partnerships or other business
entities, which, directly or indirectly are controlled by, control,
or are under common control with a party to this Agreement.


1.3 "ANNUAL FORECAST" shall mean a non-binding production planning
forecast setting forth SONOMED's estimated requirements for
PRODUCTS, including both estimated quantities and delivery dates,
during a specified rolling twelve (12) month period.


1.4 "ANNUAL MINIMUM" shall mean the quantities of Products set forth in
SCHEDULE A for each YEAR.


1.5 "ANNUAL ORDERS" shall mean binding blanket purchase orders
specifying the minimum quantity, but not delivery dates, of PRODUCTS
to be purchased by SONOMED during a YEAR.


1.6 "BUSINESS DAY" shall mean every day with the exception of Saturday,
Sunday or national holidays in the United States or Canada.


1.7 "COMBINATION PRODUCTS" shall mean ultrasound devices, which have the
capability to obtain images of both the anterior and posterior
segments of the eye, or high frequency


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anterior segment device upgrades to posterior segment devices
previously sold to OTI ("Upgrades"). For greater certainty, an
Anterior Segment Device is one that utilizes a 35-50 mhz probe. A
posterior segment device is one that utilizes a 10-20 mhz probe.


1.8 "CONFIDENTIAL INFORMATION" means any proprietary information or
materials belonging to OTI or SONOMED, whether or not patentable,
including but not limited to: formulations, techniques, methodology,
equipment, data, reports, know-how, sources of supply, patent
positioning, consultants and business plans, which are communicated
to, learned of, developed or other wise acquired by the party
receiving such information or material during or in the course of
the agreement including information concerning the existence, scope
or activities of any research and development project of OTI or
SONOMED.


1.9 "DELIVERY ORDERS" shall mean irrevocable, written purchase orders
for PRODUCTS which specify the (i) product(s), by SKU, (ii) quantity
to be delivered, (iii) designated carrier and (iv) requested
delivery date. SONOMED shall purchase for delivery a minimum of 10
units of Product at any one time.


1.10 "EFFECTIVE DATE" shall mean March 1 1, 2004.


1.11 "FDA" shall mean the United States Food and Drug Administration.


1.12 "FIELD" AND OR "ANTERIOR SEGMENT DEVICE" shall mean medical devices
utilizing 35MHz to 50 MHz ultrasound to obtain images of the
anterior segment of the eye.


1.13 "MASTER ARTWORK TEXT" shall mean the specific text or graphics for
all items of labeling, including, but not limited to all special
packaging, labels, markings and graphical screen representations, if
any, to be included in the GUI. All of the same to be provided by
SONOMED at its cost and expense and utilized by OTI in connection
with the packaging and labeling of the PRODUCT.


1.14 "NON-CONFORMING PRODUCT" shall mean any PRODUCT, WHICH DOES NOT
CONFORM, to the SPECIFICATIONS, QSRS or other requirements of this
Agreement.


1.15 "PRODUCTS" or "PRODUCT" shall mean the 35 MHz and 50 MHz Anterior
Segment ultrasound device, along with associated software and
computer hardware, conforming to the SPECIFICATIONS and the QSRS.


1.16 "QUARTER" shall mean the three-month periods commencing on the
Effective Date of each Year of the Term.


1.17 "QSRS" shall mean the quality system regulations for manufacture of
medical devices promulgated under the United States Federal Food,
Drug and Cosmetic Act, as amended.


1.18 "SPECIFICATIONS" shall mean the descriptions, criteria, standards,
and other requirements set forth in the attached Schedule B. The
parties agree that the Products shall be provided with up to date
configurations similar to the basic features offered as standard to
the Anterior Segment systems on the OTI Combined Products, except
that the systems may differ in terms of computer platform, and
graphical user interface. The database will be removed from the
Products but will be reinstalled if requested by SONOMED. OTI may
make modifications to the design of or features to any of the


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Products or make improvements to them at any time but shall be under
no obligation to apply the same to any Products previously purchased
by SONOMED.


1.19 "SUPPLY FAILURE" shall mean failure by OTI for any reason to supply
at least seventy-five percent (75%) of the Product quantities
specified in SONOMED's DELIVERY ORDERS in any two consecutive
QUARTERS, excluding any NON-CONFORMING PRODUCTS supplied by OTI,
provided such DELIVERY ORDERS are consistent with the ANNUAL ORDER
for such period.


1.20 "TERM" shall mean the period beginning on the EFFECTIVE DATE and
ending on the last day of YEAR 3.


1.21 "TERRITORY" shall mean the United States of America.


1.22 "YEAR" SHall mean consecutive twelve (12) month periods, with Year 1
beginning on the EFFECTIVE DATE.


2. APPOINTMENT AS EXCLUSIVE DISTRIBUTOR


2.1 Exclusive Rights. Subject to OTI's retained rights as provided in
SECTION 2.2, OTI hereby appoints SONOMED as OTI's exclusive vendor
to market, sell and distribute the Products throughout the Territory
during the Term. Products may not be resold outside the Territory.


2.2 OTI Retained Rights. OTI shall retain the right to sell Combined
Products in the Territory.


2.3 Branding. The Products will be branded and identified as SONOMED
Product. SONOMED to Provide OTI with all Master Artwork Text.


3. SONOMED OBLIGATIONS TO MARKET


3.1 Purchase of Products; Sales Efforts. SONOMED shall purchase Products
from OTI on the terms and conditions set forth in this Agreement,
and shall use commercially reasonable efforts to maximize sales of
the Products in the Territory.


3.2 General Duties. SONOMED shall, at its expense, be responsible for:


(i) All marketing decisions regarding the Products including, but
not limited to, pricing, provided that SONOMED shall make
reasonable efforts to maintain an average resale price of less
than Forty Thousand US Dollars ($40,000) in the United States.


(ii) Customer order processing, billing and collection for Products
sold by SONOMED in the Territory.


(iii) Preparing all promotional materials and conducting all
promotional activities relating to the Products sold by
SONOMED in compliance with all applicable laws and regulations
of the regulatory authorities in each country in the
Territory;


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(iv) Establishing and maintaining a system of record keeping, with
the support and assistance of OTI, including a register of lot
numbers and individual Product numbers and customer names and
addresses for all Product sold by SONOMED in order to assist
OTI with traceability in the event of a Product recall and
require any customer that is not the end user of Products, to
maintain a similar register, including names and addresses of
its end users.


3.3 Conference Presence. SONOMED shall display the Product at its booth
at the AAO and ASCRS and other conferences and trades shows in the
United States at which it attends. An OTI product specialist will
assist SONOMED at its booth at the yearly AAO and ASCRS.


3.4 Training Courses. IF requested by SONOMED, OTI will attend up to
three times per year at its cost, a sales training session for
SONOMED sales staff, distributors and agents.


3.5 Advertising. SONOMED will advertise the Product on its web site and
other product promotions and advertisements.


3.6 Product Manager. SONOMED will assign a product manager responsible
for the Product.


3.7 Employee Training. SONOMED will send selected sales, marketing, and
development personnel for training by OTI at OTI's offices in
Toronto, Canada at such times as shall be mutually agreed by the
parties. Each party shall bear its own expenses associated with such
training.


4. MANUFACTURE AND SUPPLY; RIGHTS TO PURCHASE


4.1 Requirements. During the Term, SONOMED shall have the obligation to
purchase the quantity of Products set out in Schedule A and shall
have the right to purchase and OTI shall manufacture and supply
SONOMED's requirements for the Products at such times and in such
quantities as specified by SONOMED in its Annual Forecasts and
Delivery Orders as provided herein. OTI shall be responsible for
maintaining an adequate inventory of Products and shall exercise its
best efforts to ensure that a sufficient quantity of Product will be
available to satisfy SONOMED's Annual Orders.


4.2 Accessories. SONOMED shall have the right to purchase Accessories on
an as needed basis.


4.3 Service. SONOMED to provide service after the expiration of the
warranty period.


4.4 Documentation. OTI shall provide SONOMED with a current operating
and service manual text in English and all current photographs in
electronic format.


5. ANNUAL ORDERS; INITIAL PAYMENT; DEMONSTRATION UNITS


5.1 Initial Annual Order. Within ten (10) Business Days following the
Effective Date, SONOMED shall agree to purchase and shall submit to
OTI the Annual Order for the


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Year 1 Annual Minimum or such greater number it may desire (less the
5 demonstration units referred it in 5.4).


5.2 Subsequent Annual Orders. SONOMED agrees to purchase and submit an
Annual Order for no less than the applicable Annual Minimum at least
sixty (60) days prior to the beginning of each Year.


5.3 Initial Deposit. SONOMED shall pay to OTI the sum of seventy
thousand dollars $70,000 (US) which sum shall be applied as a credit
against SONOMED's order of demonstration units.


5.4 Demonstration Units. SONOMED hereby agrees to purchase five (5)
demonstration units at a per unit purchase price of Fourteen
Thousand US Dollars ($14,000), for use by its salesman and for
display and use in its various courses, conferences and trades
shows. The Initial Deposit will be applied by OTI against this
order.


5.5 Delivery Order Commitment. In the event that as of the expiration of
any Year during the Term, SONOMED has failed to submit Delivery
Orders for the Annual Order for such Year, OTI shall have the right
to invoice SONOMED for such remaining units and SONOMED shall pay
for such units in full within thirty (30) calendar days following
receipt of invoice. Upon receipt of such payment, OTI shall deliver
the remaining units to SONOMED's designated carrier for shipment.
Failure to pay shall be considered a material breach of this
Agreement.


5.6 UPGRADE CREDIT. OTI SHALL WITHIN TWO WEEKS OF EACH QUARTER PROVIDE A
WRITTEN REPORT TO SONOMED AS TO THE NUMBER OF UPGRADES OTI HAS SOLD
IN SUCH QUARTER. THE ANNUAL MINIMUM FOR SUBSEQUENT ANNUAL ORDERS
REFERRED TO IN 5. 2 ABOVE MAY BE REDUCED BY SONOMED BY THE NUMBER OF
UPGRADES SOLD BY OTI IN THE PREVIOUS YEAR. THE ANNUAL MINIMUM IN ANY
GIVEN YEAR MAY NOT BE REDUCED BY GREATER THAN ONE THIRD OF THE
ANNUAL MINIMUM. IF SONOMED WISHES TO REDUCE THE ANNUAL MINIMUM IT
MUST GIVE NOTICE TO OTI OF SUCH DESIRE AND THE QUANTITY BY WHICH IT
DESIRES TO REDUCE THE ANNUAL MINIMUM AT THE TIME IT DELIVERS TO OTI
ITS ANNUAL ORDER IN ACCORDANCE WITH SECTION 5.2 ABOVE.


6. FORECASTS, ORDERS, SHIPMENTS


6.1 Annual Forecasts. SONOMED will provide OTI with an initial Annual
Forecast upon execution of this Agreement and shall update the
Annual Forecast on a rolling basis no later than thirty (30)
calendar days prior to the first day of each subsequent Quarter.


6.2 Delivery Orders. SONOMED will provide OTI with an initial Delivery
Order within ten (10) Business Days following the Effective Date and
will submit subsequent Delivery Orders to OTI at least ninety (90)
calendar days in advance of SONOMED's requested delivery date.
SONOMED agrees to submit with its Annual Order each Year Delivery
Orders for a minimum of twenty-five per cent (25%) of the Annual
Order for each applicable Year of the Term to be delivered during
the first Quarter of each such Year . SONOMED further agrees to
purchase and take delivery each Quarter of each Year twenty-five
percent of the Annual Order for each applicable Year.


6.3 Shipment. Title and risk of loss or damages to the Products shall
pass to SONOMED upon OTI's delivery to SONOMED's designated carrier
for shipment at OTI's warehouse facility in Toronto, Canada. SONOMED
shall bear any costs of shipment of


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the Products from the point of delivery to SONOMED's designated
carrier as well as the amount of any and all taxes (other than
income or franchise taxes of OTI), custom duties or other charges
which may be required to be paid or collected on the sale, delivery,
or transportation of the Products. OTI shall not be responsible for
delays, loss or damage in shipment. SONOMED assumes and agrees to
pay all costs and charges for transportation, handling and insurance
of the Products from the point of shipment.


6.4 Invoicing. OTI shall submit an invoice for payment to SONOMED as of
the date of fulfillment of any Delivery Order.


7. PRICE AND PAYMENT


7.1 Purchase Price. The per unit purchase price for all Products
purchased by SONOMED in Year 1 shall be Fourteen Thousand US Dollars
($14,000). OTI may upon three months' prior written notice, increase
the price of the Products after Year two and for each subsequent
year by an amount not to exceed five (5%) per annum. If SONOMED
disagrees with the price increase it may terminate the Agreement
within five business days of receipt of such price increase notice
in which event OTI will have five business days to retract such
price increase in which even this Agreement continues or to accept
such termination in which event section 18.4 will apply.


7.2 Payment Terms. Except for the initial payment under SECTION 5.3 and
as otherwise indicated in this agreement, SONOMED shall pay for the
applicable purchase price within thirty (30) calendar days from the
later of (i) receipt of invoice from OTI or (ii) date of delivery of
Products to SONOMED's designated carrier for shipment.


7.3 Accessories. SONOMED shall pay the purchase price for Accessories
within thirty (30) calendar days from the later of (i) receipt of
invoice from OTI or (ii) date of delivery of Products to SONOMED's
designated carrier for shipment.


7.4 Currency. All payments due hereunder shall be made in U.S. Dollars
to OTI at its headquarters in Toronto, Canada, or such other place
as OTI may designate.


8. INTELLECTUAL PROPERTY


8.1 Ownership. OTI shall retain all rights, title and interest in and to
all intellectual property rights relating to the Products held by
OTI prior the Effective Date or developed by OTI during the Term.
Neither pa ...