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Exhibit 10.19
DISTRIBUTION AGREEMENT
This AGREEMENT dated and executed ______________________, 199_ between
Gliatech Inc., a corporation organized and existing under the laws of the State
of Delaware of the United States of America, with offices at 00000 Xxxxxxxx Xxxx
Xxxx, Xxxxxxxxx, XX, XXX 00000 (hereinafter "Gliatech") and ________________, a
company organized and existing under the laws of _________, with offices at
____________________ (hereinafter "Distributor").
WHEREBY IT IS AGREED AS FOLLOWS:
1. APPOINTMENT: Gliatech hereby appoints Distributor as its
exclusive distributor throughout _______ (hereinafter "Territory"),
and Distributor hereby accepts the appointment for the product(s)
listed on Appendix I.A. attached hereto, as the same may be amended
from time to time in Gliatech's sole discretion (hereinafter
"Products"), subject to the following terms and conditions.
2. PURCHASES AND SALES:
(a) Distributor agrees that it will purchase from Gliatech and sell
the minimum amount of Products throughout the Territory as set forth
on Appendix I.B., as the same may be amended based on the mutual
agreement of the parties to the terms and conditions of a yearly
marketing plan (the "Plan"), which Plan will be established from year
to year pursuant to Section 2(c) below.
(b) In order to maintain the rights granted by Gliatech under this
Agreement, pursuant to its appointment hereunder, Distributor agrees
to purchase and take delivery of the aggregate quantities of the
Products as set forth in the applicable Plan for the current year.
Each such Plan shall be substantially in the form of Appendix II, as
such may be amended from time to time in Gliatech's sole discretion.
(c) The parties agree that such Plan shall be renegotiated on an
annual basis and that the parties shall mutually agree as to the terms
and conditions of such yearly Plan on or before November 1st of each
year.
(d) Distributor agrees to devote its utmost time and effort to
distribute, market, sell, promote and maintain substantial sales of
the Products throughout the Territory and will cooperate with Gliatech
in all reasonable marketing plans which are mutually agreed to by the
parties hereto.
(e) Distributor shall maintain documentation indicating the quantity
and lot numbers of all Products sold to each customer such that, in
the event that it might be required, it would be possible to contact
all purchasers of individual lots of Products sold.
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3. ORDERS AND PRICES:
(a) Unless otherwise notified, all orders for the Products shall be in
writing and subject to approval and written, facsimile or telex
acceptance by Gliatech. Gliatech shall use its reasonable commercial
efforts to promptly fill (by full or partial shipment) Distributor's
orders which are accepted by Gliatech.
(b) Gliatech shall sell the Products to Distributor at its
current prices as set forth on Appendix I.B. attached hereto,
as the same may be amended from time to time in Gliatech's
sole discretion. All orders for the Products shall be made
and sold to Distributor on a C.I.F. customs cleared,
Distributor's warehouse basis.
(c) Distributor and Gliatech agree to work together to prepare,
present and file whatever documentation is required to obtain optimal
reimbursement by relevant third-party government and private payers
for the use of the Products within the Territory. All out-of-pocket
direct expenses incurred by a party in connection with such activities
shall be paid by such party.
4. PAYMENT:
(a) Payment for all orders shall be made in U.S. dollars by
wire transfer to a bank account to be designated by Gliatech.
(b) Terms for payments will be net 30 days from the invoice date,
unless Gliatech at any time determines that Distributor's credit is
unsatisfactory, in which case payment will be required c.o.d. No
credit for returns and allowances shall be allowed to Distributor
against outstanding invoices or otherwise without the prior written
approval of Gliatech.
(c) If for any reason payment of any invoices due to Gliatech should
not be made or are delayed beyond their due dates, then Distributor
shall be required to pay interest on the amount of any such invoices
at an annual rate equal to one percent (1%) above the prime rate in
effect at the time as charged by the National City Bank, Cleveland,
Ohio, USA from the due date of payment until the date (inclusive) on
which actual payment is received or collected by Gliatech.
5. DELIVERY: Delivery of the Products shall occur when the
Products are placed in the custody and control of Distributor at
Distributor's warehouse.
6. TRADEMARKS:
(a) All Products promoted, marketed, distributed and sold by
Distributor under this Agreement shall bear such patent, copyright and
trademark notices consistent with the letter and spirit of the
authorized patent, copyright and trademark
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notices as Gliatech shall require or specify to affix on the Products,
as the same may be amended from time to time at the sole discretion of
Gliatech. Gliatech makes no representation or warranty, express or
implied, that the Products will not infringe the property rights of
third parties in the Territory. In the event of such an infringement,
Distributor shall have no recourse against Gliatech for, and
Distributor hereby forever and irrevocably releases Gliatech from any
losses, liabilities, damages, costs or expenses incurred by
Distributor at any time due to the use by Distributor of any patents,
copyrights, trademarks, logos, tradenames, service marks or other
property rights of Gliatech or its affiliates, arising in connection
with the promotion, marketing and sales of the Products.
(b) Any use by Distributor of any trademarks, patent and copyright
notices, service marks, trade names, designs, logos, labels, labeling,
packaging and the like of Gliatech used on or in connection with the
Products (hereinafter collectively referred to as "Intellectual
Property") in connection with the promotion, marketing, distribution
or sale of the Products shall inure to the exclusive benefit of and
shall be in the manner provided by Gliatech, and in strict conformity
with the laws and governmental rules and regulations within the
Territory respecting their use.
(c) Distributor shall not, without the prior written consent of
Gliatech, use any intellectual property during the term of this
Agreement that is confusingly similar to any Intellectual Property of
Gliatech, use any other intellectual property in respect of the
Products, or use Intellectual Property except as expressly provided
hereunder.
7. AUTHORITY AND RESPONSIBILITY OF DISTRIBUTOR: Distributor undertakes to carry
out this Agreement as an independent contractor using its own employees which in
no sense are to be deemed employees or agents of Gliatech and Gliatech shall not
be accountable to Distributor or its employees in any way except in accordance
with the written agreement of Gliatech. All relationships entered into by
Distributor shall be for its exclusive account and risk and it shall not have
any power to bind Gliatech.
8. TERRITORIAL RESTRICTION: Distributor covenants with Gliatech that, without
the prior written consent of Gliatech, Distributor shall not (i) seek customers
for the Products outside the Territory, (ii) distribute to, or appoint a
subdistributor for, the distribution or sales of the Products inside or outside
the Territory or itself establish any branch, warehouse or distribution presence
of the Products outside the Territory, or (iii) export the Products outside
Western Europe (including the European Economic area and the customs territory
of the European Community) to any country where Gliatech or any of its
affiliates is marketing or distributing the Products or has granted marketing or
distributing rights to a third party; PROVIDED, HOWEVER, that it being expressly
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understood and agreed by the parties that the export prohibition contained
herein shall not apply to exports to any country in which the European Community
has an association or other agreement providing for free trade for the Products.
9. COMPETITION: Distributor shall not manufacture, sell, distribute, represent
or deal in or with, whether directly or indirectly, any products similar to or
competitive with the Products in the Territory without first obtaining written
consent from Gliatech therefor. Distributor further agrees that it shall not
obtain the Products for resale from any party other than Gliatech or its
designee(s).
10. REPRESENTATION AND ADVERTISING:
(a) All detailing, advertising, sales promotion and professional
service activities for the Products within the Territory undertaken by
Distributor shall be consistent with the advertising and promotional
materials for the Products approved by Gliatech as the labeling for
the Products, as the same may be amended from time to time at
Gliatech's sole discretion. Distributor shall be solely responsible
for ensuring that all detailing, advertising, sales promotion and
professional service activities for the Products within the Territory
conform in all respects with the laws, rules, regulations, customs and
procedures (collectively, the "Regulations") of the Territory and
Distributor shall include on labels and packaging such information
necessary for compliance with such Regulations, provided that
Distributor obtains the prior approval of Gliatech.
(b) All detailing, advertising, sales promotion and professional
services activities for the Products within the Territory shall be
undertaken by Distributor at its own expense. Copies of any
promotional, detailing, advertising or other materials relating to
Gliatech or the Products which Gliatech may in its discretion provide
to Distributor shall be provided at reasonable charge to Distributor.
(c) Any promotional, detailing, advertising or other materials
relating to Gliatech or the Products which are prepared by Distributor
shall be submitted for Gliatech's review and approval prior to use by
Distributor.
11. ALTERATIONS: Distributor shall not sell or offer for sale any
Products which may be expired, damaged, spoiled or altered from the
condition or appearance in which they were delivered to
Distributor.
12. AUTHORIZATIONS:
(a) Gliatech shall obtain and maintain at its expense all government
approvals, health or product registrations, licenses, visas or other
permits howsoever called (hereinafter referred to as "Authorizations")
required to import, export,
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sell, distribute, promote and handle the Products in the Territory
and/or to fulfill all its obligations under this Agreement. If any
Authorizations should be required by law to be held in Distributor's
name, Distributor agrees that such Authorizations shall be held by
Distributor, for the benefit of and in trust for Gliatech.
(b) Upon termination of this Agreement for any reason, Distributor
shall cooperate fully with Gliatech and take all steps to transfer and
assign, immediately and without any charge, any Authorizations which
may be held in its name to Gliatech or its designee(s) to the extent
permitted by law.
(c) Distributor's Quality System and the Essential Requirements as set
forth on Appendix III, as have been reviewed by, are acceptable to,
Gliatech. Distributor shall permit regular audits of such Quality
System and the Essential Requirements. Distributor warrants that any
corrective actions related to Gliatech's Products that are identified
in the audits will be performed in a timely manner.
13. CONFIDENTIALITY: If Gliatech should provide, disclose or deliver any
technical, marketing or other information to Distributor pertaining in any way
to the Products or Gliatech's business, Distributor shall keep such information
secret and confidential at all times and shall not use such information except
pursuant to this Agreement. Further, Distributor shall not disclose or deliver
such information to any person or party, except to Distributor's responsible
supervisory personnel who are required to have such information for purposes of
this Agreement and government agencies or officials, if necessary, for obtaining
the Authorizations.
14. REPORTS:
(a) Distributor shall provide Gliatech with immediate notice of any
and all adverse reactions (incidents or near incidents) and complaints
associated with the use of the Products that are reported by users to
its agents, representatives or employees. Adverse events shall be
reported using an adverse event reporting form, mutually agreeable to
the parties, as the same may be amended from time to time. Moreover,
Distributor shall provide Gliatech with immediate notice if it is
contacted by a Competent Authority or Notified Body regarding such
adverse reactions (incidents or near incidents). Distributor shall
promptly provide copies of all correspondence of regulatory action
involving Gliatech's products to Gliatech.
(b) Distributor shall furnish Gliatech on a monthly basis with such
reports, in substantially the form of Appendix II attached hereto, as
the same may be amended from time to time in Gliatech's sole
discretion, as Gliatech may reasonably request regarding sales effort,
sales, inventories of the Products on hand and other matters relevant
to this Agreement.
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15. TERM:
(a) This Agreement shall be effective upon signature by both parties
hereto. Unless otherwise sooner terminated under the provisions of
this Agreement, this Agreement shall be for a term of five (5) years.
Thereafter, this Agreement shall continue for two additional terms of
two (2) years. In the event that this Agreement continues for two
additional terms, any subsequent extension shall be for a term of one
(1) year and shall be subject to the mutual agreement of the parties.
This Agreement shall automatically continue for the next applicable
term unless either party sends a written termination notice to the
other party not less than six (6) months prior to the expiration of
the then existing term.
(b) Distributor and Gliatech hereby acknowledge and agree that any
such continuations or extensions of this Agreement between the
parties, regardless of any modification or renegotiation of the
Agreement, shall not deem this Agreement to be one of "indefinite
duration," regardless of any contrary interpretation by otherwise
applicable law.
(c) Notwithstanding any other provisions hereof, this Agreement may be
terminated by Gliatech upon the occurrence of any one of the following
events, any one of which shall constitute just cause for termination:
(i) Upon thirty (30) days written notice to Distributor, upon
cessation of production by Gliatech of the Products for any
reason whatsoever;
(ii) Upon thirty (30) days written notice to Distributor upon
institution of proceedings in receivership, bankruptcy or
insolvency by or against Distributor, or an assignment for the
benefit of creditors or dissolution or liquidation of
Distributor's business whether voluntarily or by a third
party;
(iii) Upon notice in writing to Distributor, upon the
closing of Distributor's offices in the Territory for any
reason whatsoever;
(iv) Upon notice in writing to Distributor, upon loss by
either Gliatech or Distributor of any license, permit or
authorization from any governmental agency within the
Territory necessary for the performance of the obligations
hereunder;
(v) Upon the failure of Distributor to sell the minimum
quantity of Products set forth on Appendix I.B., as such is
amended from year to year as provided herein;
(vi) Upon failure by the parties to mutually agree by
November 30th of each year to the terms and conditions of
the Plan;
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(vii) Upon notice in writing to Distributor, upon breach of
this Agreement by Distributor, which breach has not been cured
within thirty (30) days of receipt of notice from Gliatech of
such breach;
(viii) Upon a material change in the existing ownership
or control of Distributor's equity, business or assets;
or
(ix) Upon any major deviation by Distributor from the Quality
System and the Essential Requirements as set forth on Appendix
III or upon the failure of Distributor to timely correct such
deviation after receipt from Gliatech of notice of such
deviation.
(d) Notwithstanding any other provision hereof, this Agreement may be
terminated by Distributor upon the occurrence of any one of the
following events, any one of which shall constitute just cause for
termination;
(i) Upon thirty (30) days written notice to Gliatech, upon
institution of proceedings in receivership, bankruptcy or
insolvency by or against Gliatech, or an assignment for the
benefit of creditors or dissolution or liquidation of
Gliatech's business whether voluntarily or by a third party;
or
(ii) Upon notice in writing to Gliatech, upon breach of this
Agreement by Gliatech, which breach has not been cured within
thirty (30) days of receipt of notice from Distributor of such
breach.
(e) Upon termination of this Agreement for any reason, Distributor and
Gliatech hereby expressly acknowledge to and agree that the notice
periods preceding any such termination set forth herein are adequate
and sufficient under all the circumstances, and that no indemnity of
any nature whatsoever shall be owing or payable by Gliatech to
Distributor, including, but not limited to, indemnity for loss of
profit, goodwill, creation of clientele for the Products,
demonstration costs and termination costs or the performance of any
other activities in connection with the promotion and sale of the
Products except as may be due and owing according to the express
provisions of this Agreement.
16. RIGHTS UPON TERMINATION:
(a) Notwithstanding the termination of the Agreement for any reason
whatsoever, Distributor and Gliatech shall remain responsible to each
other for the performance of any and all obligations, including, but
not limited to, the discharge of all debts, incurred prior to, and
which obligations shall survive, the effective date of termination.
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(b) Within ten (10) days of the effective date of termination of this
Agreement, Distributor shall deliver to Gliatech, in accordance with
its written instructions, any and all marketing communications
materials then on hand relating to the Products, any materials
relating to pending applications for any intellectual property rights
with respect to the Products and any appropriate repayment for
marketing communications materials shall be made by Gliatech within
thirty (30) days following delivery subject to the rights of set-off
by Gliatech, as set forth in Section 17 herein below.
(c) Distributor agrees that, upon any such termination, Distributor
shall have no right to pass through Distributor's costs of terminating
its own employees, and that any such right is hereby expressly
disclaimed by Gliatech and expressly waived by Distributor.
Distributor agrees to indemnify, defend and hold Gliatech free and
harmless against all claims, actions, suits, losses, damages, expenses
and other liabilities of every kind and nature asserted or sustained
by employees, officers, directors, agents, joint venturers,
representatives of Distributor or the third parties by reason of any
termination of this Agreement.
(d) After notice of termination has been given as herein provided (and
following the expiration of the notice period) or upon termination of
this Agreement if effected without advance notice, the right of
Distributor to place orders for the Products shall cease and Gliatech
will have the right to appoint, accept orders from and deliver the
Products to a new Distributor for the Territory who may begin
deliveries to customers in the Territory immediately after the
effective date of termination.
17. REPURCHASE OPTION:
(a) Within thirty (30) days after a notice of termination is given or
after the effective date of termination (if effected without advance
notice), Distributor shall furnish Gliatech with a statement certified
by management showing in detail the current inventory of Products.
(b) Within fifteen (15) days following receipt of Distributor's
certified statement of inventory or, if such statement is not
provided, within forty-five (45) days after termination, Gliatech may,
in its sole discretion, elect, in whole or in part, to repurchase the
inventory of Products at prices equal to their original cost to
Distributor, less any commissions, discounts, allowances or returns
and other deductions by way of set-off for all unpaid amounts then
owed by Distributor to Gliatech, by notifying Distributor in writing.
Distributor shall allow Gliatech's representatives free access to view
and inspect such inventory during all normal business hours. Delivery
of the Products specified in the notice by which Gliatech exercises
its option shall be made by Distributor in accordance with Gliatech's
notice.
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Payment shall be made within thirty (30) days of delivery of such
inventory to Gliatech.
18. WARRANTY AND REPRESENTATIONS:
(a) Gliatech hereby expressly warrants and represents to Distributor
that all Products purchased by Distributor pursuant to this Agreement
have been approved for sale and use in the Territory and shall be free
from defects in materials and workmanship. Gliatech agrees to
indemnify, defend and hold Distributor harmless against all claims,
actions, suits, losses, damages and expenses in respect of claims made
by third parties alleging personal injury or death resulting from use
of the Product; PROVIDED, HOWEVER, that Gliatech shall not be liable
to Distributor for any claim by Distributor for loss of profits, or
for special, incidental or consequential damages owing to any defect
in the Products, whether caused by Gliatech's negligence or otherwise.
Notwithstanding anything to the contrary herein, Gliatech shall not
indemnify or defend Distributor or hold Distributor harmless against
any claim, action, suit, loss, damages or expenses in respect of
claims arising out of any wrongful act, by Distributor, including any
breach of this Agreement.
(b) As between Gliatech and Distributor, the liability of Gliatech to
Distributor, otherwise than in respect of third party claims, shall be
limited at Gliatech's option to replace those Products which are shown
to be defective either in materials or workmanship or to issue a
credit note for the full invoice value of such defective Products.
(c) Any claim or defect in materials or workmanship shall be allowed
only when submitted to Gliatech in writing within seven (7) days after
discovery of the defect, and in no event later than thirty (30) days
after the delivery of the Products to Distributor, together with the
alleged defective Products if requested by Gliatech. No claim shall be
allowed in respect of any Products which have been altered, neglected,
damaged, handled or stored in any manner which adversely affects them.
(d) Except for the warranties and representations stated above,
Gliatech makes no warranties or representations of any kind
whatsoever, express or implied, and all other warranties and
representations of whatever kind, including warranties of
merchantability and fitness for a particular purpose, are hereby
disclaimed by Gliatech and waived by Distributor. The preceding
subclauses (a) through (c) of this Article 19 set forth exclusively
all of Gliatech's liability in contract, tort or otherwise in the
event of defective Products and/or for breach of any warranties or
representations.
(e) Distributor agrees to indemnify, defend and hold Gliatech free and
harmless against all claims, actions, suits, losses, damages, expenses
and other liabilities of every kind and
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nature asserted or sustained by third parties by reason of any act of
neglect or breach committed by Distributor or any of its employees,
agents or representatives.
(f) Gliatech represents that so long as Distributor uses reasonable
commercial efforts to control its inventories and rotates its stock of
Products, Gliatech shall use its reasonable commercial efforts to
promptly replace any expired Products which it accepts for return.
Returned Products will be accepted by Gliatech if: (1) the Products
are received by Gliatech's Director of Manufacturing in Cleveland,
Ohio, USA, after the date of expiration marked on the package, (2) the
Products are in saleable condition and the original packaging is
inspected by Gliatech and found to be intact and (3) an acceptance
notice has been issued by Gliatech. Accepted returns will be replaced
by Gliatech free of any purchase, shipping or duties to Distributor.
19. MISCELLANEOUS:
(a) NOTICES: Any notices, approvals, reports, statements or other
communications given under this Agreement ("notices") shall be sent in
English and in writing and delivered either personally or by
registered mail (return receipt requested), to a party at the
addresses first stated herein or such other address designated by the
party hereafter for such purpose. Any period of time provided or
measured by such notice shall commence on and include the date of
mailing or of personal delivery, as the case may be, and shall be
calculated on the basis of calendar days.
(b) INTERPRETATION AND ENFORCEMENT OF AGREEMENT: All matters,
questions or disputes relating to the interpretation, form, validity,
performance and the parties' rights and obligations under this
Agreement shall be governed by and decided in accordance with the laws
of the Territory. Any disputes or questions which the parties cannot
resolve after negotiations shall be settled by arbitration instituted
at the option of either party. The arbitration will be conducted under
the regulations of American Arbitration Association. Each party hereby
accepts and submits itself unconditionally to the exclusive
jurisdiction of the arbitrator.
(c) PRIOR AGREEMENTS: This Agreement and the Appendices attached
hereto and made a part hereof, constitute the entire Agreement between
the parties with respect to the within subject matter, and to that
extent, terminate and supersede all previous agreements,
understandings, letters or other instruments whatsoever, if any,
whether written or oral, relating to the same subject matter.
(d) FORCE MAJEURE: Neither party shall be liable for delay
or failure to perform hereunder due to any contingency beyond
its control, including, but not limited to, acts of God,
fires, floods, wars, civil wars, sabotage, strikes,
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governmental laws, ordinances, rules or regulations or failure of
third party delivery. The party invoking any event constituting Force
Majeure shall be excused from its inability to perform its obligations
hereunder only to the extent and for the duration of the event of
Force Majeure so invoked and shall be bound to resume such performance
immediately after the cessation of such event.
(e) SEVERABILITY: Any provisions of this Agreement which may be held
to be illegal, invalid or unenforceable in any jurisdiction shall be
ineffective in such jurisdiction to the extent of such illegality,
invalidity or unenforceability, without affecting, impairing or
invalidating the remaining provisions of this Agreement in any
jurisdiction, which remaining provisions shall remain in full force
and effect.
(f) ASSIGNMENT AND AMENDMENT: This Agreement and all rights and
obligations provided herein shall not be assigned, transferred or
delegated by Distributor without Gliatech's prior written consent. No
amendment, alteration or other modification of this Agreement shall be
valid and binding upon the parties unless made in writing,
specifically referring to this Agreement and duly executed by the
parties hereto.
(g) COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which may be deemed an original but all of which
shall constitute the same Agreement.
(h) SURVIVAL: The covenants, agreements and undertakings set forth
herein Sections 6(c), 12(b), 13 and 17 shall survive beyond the
termination of this Agreement for any reason whatsoever.
(i) WAIVER: The failure or delay of a party to protest or enforce its
rights and remedies with respect to any breach or failure relating to
performance of this Agreement shall not prejudice or be deemed to
constitute a waiver or surrender of such party's rights and remedies,
whether under this Agreement or at law, in equity or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
ATTEST: Gliatech Inc.
By:
Name:
Title:
ATTEST: ---------------------------
By:
Name:
Title:
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