EXHIBIT 10.19
SERVICES AND SUPPLY AGREEMENT
Services and Supply Agreement (the "Agreement"), dated as of January 15,
1998 by and between Cutanix Corporation, a corporation organized and existing
under the laws of the State of Delaware, with offices at 000 Xxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000 ("Cutanix"), and Centaur Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the State of Delaware, with
offices at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 ("Centaur").
WITNESSETH
WHEREAS, Centaur and Cutanix are parties to a certain License of even date
herewith Agreement (the "License Agreement");
WHEREAS, Cutanix requires a supply of certain Nitrone Related Therapeutic
(NRT/TM/) compounds (the "Compounds") in connection with its activities
permitted under the License Agreement;
WHEREAS, Cutanix wishes to purchase from Centaur and Centaur wishes to
manufacture and supply Cutanix with the Compounds; and
WHEREAS, Cutanix wishes to receive services from Centaur for the support of
its business and Centaur is willing to provide such services on the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties agree as follows:
1. Services to be Provided.
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(a) Subject to the terms and conditions hereof, Centaur will provide
Cutanix with the following services to the extent requested by Cutanix (the
"Services"):
(i) Management. Management services necessary to enable
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Cutanix to manage its overall operations, including, without limitation,
manufacturing, sales and marketing, research and development, and accounting
and financial activities;
(ii) Accounting. Accounting services necessary to the
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operation of the Company, including maintaining books of record, cash
management and financial reporting;
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[*] - Confidential treatment is being sought with respect to this portion of
this agreement. This portion has been omitted from this filing and has
been filed separately with the Securities and Exchange Commission.
(iii) MIS Support. MIS support, including, without limitation,
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services for financial systems, inventory control and other administrative
functions;
(iv) Facilities. Use of designated office and laboratory
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space;
(v) Purchasing and Receiving. Purchasing and receiving of
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items such as raw materials, equipment, components, and the like;
(vi) Human Resources. Personnel and related services as
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necessary, including payroll activities and access to employee benefit plans
and other corporate programs, to the extent the same can legally and
contractually be made available to Cutanix and its employees;
(vii) Scientific and Management Consultation. Consultation
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with Centaur's scientific and management personnel, as required;
(viii) Patent and Regulatory Advice. Consultation with Centaur
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personnel on patent and regulatory matters;
(ix) Process Development. Development or transfer to a third
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party of commercial scale manufacturing methods; and
(x) Other Services. Such other services as may be requested
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by Cutanix and agreed to by Centaur.
(b) Exceptions. Notwithstanding anything to the contrary set forth
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in this Agreement, Centaur is not required to provide Services to Cutanix
which exceed Centaur's capabilities and/or resources, as reasonably determined
by Centaur. If Cutanix requires Services which exceed Centaur's capabilities
and resources, Centaur will consider expanding and/or increasing its
capabilities and resources at Cutanix' expense. Prior to undertaking any such
expansion or increase, Centaur will present a good faith, reasonable, non-
binding estimate of the expenses of such undertaking and will not take any
action in that regard unless Cutanix delivers written confirmation of its
approval of the cost estimate and its consent for Centaur to proceed with the
work required. In addition, Centaur may withhold providing requested Services
if Cutanix is delinquent in the payment of any invoice delivered under this
Agreement.
2. Advances and Other Payments. Subject to the limitations set forth in
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Section 3 hereof and in Section 9 of the Stock Purchase Agreement between
Cutanix and Centaur of even date herewith (the "Stock Purchase Agreement"),
Centaur will, at Cutanix' request, advance monies to Cutanix and/or make
payments on behalf of Cutanix to third parties, including, but not limited to,
payments owed by Cutanix related to its formation ("Advances"). It is
understood and agreed by the parties that (i) payments made by Centaur to third
parties on behalf of Cutanix from June 1, 1997 through the date of this
Agreement and (ii) all other Services provided by Centaur to Cutanix from
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December 1, 1997 through the date of this Agreement, have not yet been invoiced
by Centaur, but will be considered to be Services provided under this Agreement
and, accordingly, will be subject to all of the terms hereof.
3. Payment to Centaur. Costs for the Services provided hereunder by
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Centaur will be paid by Cutanix to Centaur within forty-five (45) days after
receipt by Cutanix of an invoice from Centaur. In the alternative, Cutanix may,
within such forty five (45) day period, elect, by delivery of written notice to
Centaur, to add all or a portion of the amount stated in an invoice to the
Advances, provided that such election does not cause the then outstanding
aggregate amount of Advances to exceed the maximum permitted Advances set forth
in Section 9 of the Stock Purchase Agreement. All invoices (or parts thereof)
which are properly added to the Advances will not be considered to be
delinquent. Centaur's invoice will contain sufficient detail to enable Cutanix
to clearly understand how the amount due was calculated and how to break the
amounts down into Cutanix' cost codes. Costs for the Services shall be
determined in accordance with United States generally accepted accounting
principles, and will be divided into two components, those being actual costs
and overhead. Costs will consist of the following:
(a) Actual Costs. Actual costs will consist of [*]
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(b) Overhead. Overhead will be determined by multiplying the costs
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of direct labor as calculated pursuant to Section 4(a)(i), above, by [*]. The
intent of the parties is that the payment of overhead will cover the portion of
Centaur's administrative costs, facilities costs and other corporate overhead
costs which reasonably support Cutanix.
4. Supply and Purchase of Compounds.
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(a) Supply. Centaur undertakes to manufacture and supply Cutanix'
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requirements of the Compounds for use in connection with activities authorized
by the License Agreement. Centaur shall be Cutanix' exclusive supplier of the
Compounds during the period beginning as of the date hereof and ending upon the
earlier of:
(i) Centaur's delivery of notice to Cutanix that it wishes to
terminate the exclusivity for any reason, or
(ii) Cutanix' delivery of notice to Centaur that it wishes to
terminate Centaur's exclusivity due to Centaur's inability or unwillingness to
fulfill its supply obligations under this Agreement,
such period being referred to herein as the "Exclusive Period".
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For twelve (12) months following termination of the Exclusive Period, Centaur
shall be obligated to supply Cutanix in the same manner as during the Exclusive
Period, subject to Cutanix' delivery of forecasts and orders as provided below.
Upon termination of the Exclusive Period, Centaur will provide (i) at no cost to
Cutanix, all documents related to the manufacturing of Compounds that are
reasonably required to enable another supplier to manufacture such Compounds,
(ii) an unrestricted royalty-free license to any intellectual property or know-
how used by Centaur in manufacturing the Compounds (without the right to grant
sublicenses, except to a third party supplier for the limited purpose of
manufacturing Compounds for Cutanix), and (iii) subject to Cutanix' compliance
with the cost reimbursement provisions of Section 3 hereof, technical and
operating advice to facilitate the manufacturing of the Compounds by Cutanix or
another supplier, subject in all cases to the agreement by any third party
supplier not to use or disclose information provided by Centaur for any purpose,
other than the manufacture of Compounds for Cutanix.
(b) Forecast. Cutanix will, before each January 1, April 1, July 1
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and October 1, present to Centaur a written forecast estimating the quantities
of the Compounds to be delivered during each of the next fifteen (15) months.
Cutanix will promptly notify Centaur of any significant change to its fifteen
(15) month requirements forecast.
(c) Acceptance of Forecast; Capacity Additions. Within thirty (30)
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days of receipt of Cutanix' forecast, Centaur will notify Cutanix whether it
accepts such forecast. Centaur shall accept such forecast unless (i) deliveries
forecasted in any consecutive three (3) month period exceed deliveries in every
consecutive three (3) month period in the forecast prior thereto which had most
recently been accepted by Centaur and (ii) Centaur does not expect to have
capacity available in its manufacturing facilities which can produce the
forecasted requirements in a commercially reasonable manner. If Centaur does
not accept Cutanix' forecast, Centaur will provide Cutanix with its assessment
of its lowest cost alternatives to add sufficient capacity to meet Cutanix'
forecasted delivery requirements and the amounts of production that would be
required in order for Centaur to recover through depreciation charges the
capital costs of such alternative investments under Section 4(f)(i)(e) hereof.
Subject to Cutanix making a commitment to purchase the full amount of production
referred to in the preceding sentence (a "Minimum Purchase Commitment"), Centaur
shall promptly take whatever steps are reasonably necessary to add such capacity
and shall accept Cutanix' forecast as presented, or as revised by mutual
agreement. Any capacity added in reliance upon a Cutanix Minimum Purchase
Commitment shall be made available preferentially, though not exclusively, to
Cutanix. Any product manufactured utilizing such capacity, whether for Cutanix
or otherwise, will be credited against Cutanix' Minimum Purchase Commitment with
respect to such capacity. If Centaur fails to provide Cutanix within sixty (60)
days of receipt of Cutanix' forecast with commercially reasonable alternatives
for adding sufficient capacity to meet such forecast, Cutanix may terminate the
Exclusive Period. The test for commercial reasonableness shall include
consideration of the magnitude of the commitments required by either party in
light of their respective
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financial resources. In the event that Centaur provides a commercially
reasonable alternative for adding sufficient capacity to meet Cutanix'
forecast but Cutanix fails to undertake the requisite Minimum Purchase
Commitment, the new accepted forecast shall be deemed to be the one with the
greatest equal monthly deliveries which does not violate the condition set
forth in clause (i) of this Section 4(c), above. If Centaur adds capacity for
Cutanix in reliance on a Minimum Purchase Commitment and Cutanix fails to meet
such Minimum Purchase Commitment (other than through the failure of Centaur to
supply the amounts set forth in the Minimum Purchase Commitment for any
reason) and Centaur cannot find a commercially reasonable alternative use for
such capacity after reasonable effort, Cutanix shall pay to Centaur the
unrecovered portion of the capital cost of such capacity. In the event that
Cutanix wishes for Centaur to add more cost effective capacity for
manufacturing the Compounds at any time, Centaur shall make reasonable efforts
to do so provided (i) Cutanix undertakes a Minimum Purchase Commitment
appropriate for such capacity addition and (ii) any unfulfilled portion of the
Minimum Purchase Commitment for previously added capacity is treated as set
forth above in this Section 4(c).
(d) Firm Orders. Cutanix will place firm, non-cancellable orders for
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delivery, with lead time to be mutually agreed upon once a product is known and
the logistics are defined, but not less than ninety (90) days prior to the
required shipment date, and Centaur will be obliged to deliver all ordered
Compounds by the delivery date stated in the order, except to the extent that
such supply would exceed the latest accepted forecast given by more than twenty
percent (20%) for the month in question. No order may be less that one
production batch, which will be defined and mutually agreed upon by the parties
once specific products and production processes are known. In addition, a
reasonable minimum annual purchase requirement shall be agreed upon by the
parties acting in good faith, with such minimum annual purchase requirement to
commence with the third full year after Cutanix' initial product is first
commercially marketed.
(e) Delivery Terms. The terms and conditions of sale attached hereto as
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Exhibit A shall be applicable to all sales of the Compounds hereunder. If there
is any inconsistency between the terms and conditions of sale and this
Agreement, this Agreement shall prevail.
(f) Pricing.
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(i) Cutanix will purchase the Compounds from Centaur at the Standard
Manufacturing Price ("SMP"). The SMP shall equal [*] of Standard Costs, which
include costs of production, quality control, quality assurance, handling,
shipping and warehousing. Standard Costs shall equal the sum of (a) through (e)
below:
(a) Active and inactive raw materials and compounds at the
purchase price;
(b) Finishing and packaging supplies at the purchase price;
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(c) Full direct labor cost including benefits costs paid by
Centaur;
(d) Variable overheads (variable overheads include, but are
not limited to, the expenses generated within a production, warehousing or
shipping department such as wages and benefits of indirect labor, indirect
operating supplies, etc.); and
(e) Fixed overheads (fixed overheads include those expenses
necessary to run a particular manufacturing site (e.g. plant administration,
taxes, insurance, depreciation, repairs and maintenance) and are allocated to
product based on its total direct labor hours, machine hours, cycle time
and/or volume of end product);
provided, however, that in calculating Standard Costs, the sum of items (d) and
(e) above shall not exceed [*] of the sum of items (a), (b) and (c) above.
(ii) If Centaur sources the Compounds from a third party, the price
charged to Cutanix for such Compounds will be as if the Compounds were
manufactured by Centaur, i.e., the SMP using Centaur's average Standard Costs
for the last three deliveries of the Compounds of Centaur origin to Cutanix.
(iii) If Centaur sources the Compounds from a third party without
having manufactured the Compounds in quantities sufficient to fill three
delivery orders of normal volume during the twelve (12) months preceding the
date of relevant delivery to Cutanix hereunder, the price charged to Cutanix
for such Compounds will be the actual price charged to Centaur by the third
party supplier for the Compounds in question plus [*], always provided that
the price so charged by the third party supplier does not exceed the price
otherwise charged to Centaur by the same supplier for other similar supplies
as per Centaur's written evidence should Cutanix so request.
(g) Manufacturing Methods. During the Exclusive Period, Centaur will
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utilize the lowest cost manufacturing methods reasonably available in its
facilities to produce the Compounds in the quantities ordered. If lower cost
production can reasonably be achieved using available capacity other than
capacity built for Cutanix, Centaur will utilize such capacity to lower the
price charged to Cutanix, and such production shall continue to be credited
against any outstanding Minimum Purchase Commitments.
(h) Notification of Events Concerning Supply. Centaur will promptly
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notify Cutanix of any circumstances that may be of importance as to Centaur's
ability to supply Cutanix with the Compounds.
(i) Guaranty of Quality. Centaur covenants and warrants that the quality
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of the Compounds to be supplied by Centaur hereunder shall meet mutually agreed
specifications ("Specifications") and will be manufactured in accordance with
U.S. Food and Drug Administration regulations as outlined in applicable
sections of CFR 21.
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(j) Cutanix Inspection. Within sixty (60) days following receipt of
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each shipment and before the Compounds are put into further production,
whichever is first to occur, Cutanix shall carry out customary tests and
inspections as separately agreed between the parties. Should any quantity of
the Compounds be found not to conform with the Specifications, Centaur shall,
at its sole cost, replace the defective quantity in accordance with Section 4
of the terms and conditions attached hereto as Schedule A, provided that
Cutanix has notified Centaur of such non-conformity within ninety (90) days
following receipt of the defective quantity of Compounds.
5. Cutanix Covenant. Cutanix covenants and agrees that the services and
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Compounds provided hereunder will not be used, nor will Cutanix act, to the
detriment or disadvantage of Centaur.
6. Term and Termination.
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(a) Term. The term of this Agreement (the "Term") shall commence as
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of the date hereof. Unless sooner terminated pursuant to this Agreement, the
Term shall expire at such time as the License Agreement expires.
(b) Default. Failure by either party to comply with any of its
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material obligations contained in this Agreement following notice and
opportunity to cure, as hereinafter provided (a "Default") shall entitle the
other party to terminate this Agreement. The non-defaulting party shall give
the other party notice specifying the nature of the breach of this Agreement
and requiring it to cure. If such breach is not cured within ninety (90) days
after the receipt of such notice (or one hundred twenty (120) days in event
such breach cannot be reasonably expected to be cured within ninety (90) days,
and the defaulting party gives notice to the other party of its inability to
cure such breach within a 90-day period and the defaulting party thereafter
uses reasonable efforts to cure such breach as soon as practicable, but in no
event longer than one hundred twenty (120) days, the notifying party shall be
entitled, without prejudice to any of its other rights under this Agreement,
and in addition to any other remedies available to it by law or in equity, to
terminate this Agreement by giving notice to that effect to the defaulting
party. The right of either party to terminate this Agreement, as hereinabove
provided, shall not be affected in any way by its waiver or failure to take
action with respect to any previous Default.
(c) Insolvency or Bankruptcy. Either party may, in addition to any
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other remedies available to it by law or in equity, terminate this Agreement by
written notice to the other party in the event (i) the other party shall have
become insolvent or bankrupt, or shall have made an assignment for the benefit
of its creditors, or (ii) there shall have been appointed a trustee or receiver
of the other party or for all or a substantial part of its property, or (iii)
any case or proceeding shall have been commenced or some other action taken by
or against the other party in bankruptcy or seeking reorganization, liquidation,
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dissolution, winding-up, arrangement, composition or readjustment of its debts
or any other relief under any bankruptcy, insolvency, reorganization or other
similar act or law of any jurisdiction now or hereafter in effect or there shall
have been issued a warrant of attachment, execution, distraint or similar
process against any substantial part of the property of the other party, and any
such event or action (except where a party voluntarily takes such actions (e.g.,
where a party makes a bankruptcy filing)) shall have continued for ninety (90)
days undismissed, unbounded and undischarged (alternatively a "Bankruptcy");
provided, however, that no such right to terminate shall pertain solely by
virtue of a voluntary reorganization for the purpose of solvent amalgamation or
reconstruction.
(d) Effect of Termination of Agreement. Upon termination of this
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Agreement for any reason, nothing herein shall be construed to release either
party from any obligation that matured prior to the effective date of such
termination.
7. Audits. Centaur shall keep accurate records in sufficient detail to
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enable the amounts due to Centaur hereunder to be determined. Upon Cutanix'
request, Centaur shall permit an independent, certified public accountant
selected by Cutanix, except one to whom Centaur has reasonable objection, to
have access during ordinary business hours to Centaur's records necessary to
determine the correctness of and obtain information as to the amount payable to
Centaur for any such period. Such examination shall be at Cutanix' expense and
shall not take place more than once each year. These rights with respect to any
year shall terminate three (3) years after the end of any such year.
Information supplied to Cutanix by such independent, certified public
accountants shall not include any proprietary information not required to be
disclosed under other sections of this Agreement. In the event that any such
audit reveals that Cutanix has been overcharged by the greater of (i) $5,000 or
(ii) five percent (5%) of the total charges in issue which are the subject of
the audit, Centaur shall reimburse Cutanix for the cost of the audit. Centaur
shall promptly reimburse the full amount of any overpayment to Cutanix.
8. Miscellaneous.
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8.1 No Partnership. Nothing in this Agreement is intended or shall be
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deemed to constitute a partnership, agency, employer, employee or joint venture
relationship between the parties. Neither party shall incur any debts or make
any commitments for the other.
8.2 Assignments. Except as otherwise provided herein, neither this
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Agreement nor any interest hereunder shall be assignable by either party by
operation of law or otherwise without the prior written consent of the other;
provided, however, that either party may assign this Agreement to any wholly-
owned subsidiary or to any successor by merger or sale of substantially all of
its assets to which this Agreement relates in a
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manner such that the assignor shall remain liable and responsible for the
performance and observance of all its duties and obligations hereunder, or if
the assignor disappears because of such transaction, the assignee must agree to
abide by the terms and conditions of this Agreement.
8.3 Force Majeure. Neither party shall be liable to the other for loss or
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damages or shall have any right to terminate this Agreement for any default or
delay (including, without limitation, an inability to supply Compounds)
attributable to any act of God, earthquake, flood, fire, explosion, strike,
lockout, labor dispute, casualty or accident, war, revolution, civil commotion,
act of public enemies, blockage or embargo, injunction, law, order,
proclamation, regulation, ordinance, demand or requirement of any government or
subdivision, authority (including, without limitation, drug regulatory
authorities) or representative of any such government, or any other cause beyond
the reasonable control of such party, if the party affected shall give prompt
notice of any such cause to the other party. The party given such notice shall
thereupon be excused from such of its obligations hereunder as it is so disabled
and for thirty (30) days thereafter. Notwithstanding the foregoing, the
inability of a party to perform due to its failure to comply with any applicable
law, rule, regulation, ordinance, license or permit or order of a court or other
tribunal in effect on the date hereof shall not be deemed to be a force majeure
event.
8.4 Public Announcements. Copies of press releases or similar written
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communications containing a party's name shall be provided to that party prior
to release. Cutanix may not use Centaur's name or disclose any information
regarding Centaur or its technology or know-how without Centaur's prior written
approval, except as described in the License Agreement.
8.5 Entire Agreement of the Parties; Amendment. This Agreement, the Stock
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Purchase Agreement, and the License Agreement constitute and contain the entire
understanding and agreement of the parties, and cancel and supersede all prior
agreements, whether oral or written, between the parties respecting the subject
matter hereof. No waiver, modification or amendment of any provision of this
Agreement shall be valid or effective unless made in writing and signed by a
duly authorized officer of each of the parties.
8.6 Severability. In the event any one or more of the provisions of this
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Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement or either of the parties to be invalid, illegal
or unenforceable, such provision or provisions shall be validly reformed by
addition or deletion of wording as appropriate to avoid such result and as
nearly as possible approximate the intent of the parties and, if unreformable,
shall be divisible and deleted in such jurisdiction to the extent necessary to
comply with such holding, and in all other jurisdictions, this Agreement shall
not be affected; provided, however, that no such reformation shall be made if
the effect of such reformation would be such as to fundamentally alter the terms
of this Agreement beyond the intent of the parties.
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8.7 Captions. The captions to this Agreement are for convenience only,
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and are to be of no force or effect in construing or interpreting any of the
provisions of this Agreement.
8.8 Notice and Delivery. Any notice, requests, delivery, approval or
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consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered in
person, delivered by recognized courier, or sent by certified mail, return
receipt requested to the party (which notice shall be considered effective three
(3) days after it is sent) to whom it is directed, or by facsimile transmission
for which evidence of transmission is provided, at its address shown below or
such other address as such party shall have last given by notice to the other
party.
If to Centaur, addressed to:
President and Chief Executive Officer
Centaur Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx XX 00000, XXX
Fax: 000-000-0000
If to Cutanix, addressed to:
President and Chief Executive Officer
Cutanix Corporation
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx XX 00000, XXX
Fax: 000-000-0000
8.9 Limitation of Liability. Neither party shall be liable to the other
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for indirect, incidental or consequential damages arising out of any of the
terms or conditions of this Agreement or with respect to its performance or lack
thereof.
8.10 Remedies Cumulative. The remedies provided hereunder are cumulative
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and not exclusive.
8.11 Governing Law. This Supply Agreement shall be governed by and
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construed in accordance with the laws of the State of California without regard
to the conflict of laws provisions thereof.
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IN WITNESS WHEREOF, the parties have caused this Supply Agreement to be
executed by their respective duly authorized officers as of the day and year set
forth below, each copy of which shall for all purposes be deemed to be an
original.
CENTAUR PHARMACEUTICALS, INC. CUTANIX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
President and President and
Chief Executive Officer Chief Executive Officer
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SCHEDULE A
TERMS AND CONDITIONS OF SALE
1. Payment Terms. All payments shall be made in U.S. dollars. Payment in
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full is due forty-five (45) days after the date of the invoice. Interest at the
rate of one and one-half percent (1-1/2%) per month will be charged on all
overdue accounts unless a lower rate is required by law. In case of default of
any payment by Cutanix, Cutanix shall be responsible for all costs of collection
including without limitation attorney's fees and other litigation or settlement
costs.
2. Shipment. All Compounds are sold and all prices are F.O.B.
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manufacturing plant. Cutanix may, at its option, (a) physically pick up
Compounds at Centaur's factory loading dock upon reasonable notice to Centaur,
(b) arrange for pick up via common carrier at Centaur's factory loading dock
upon reasonable notice or (c) request that Centaur act as Cutanix' agent to
arrange delivery of Compounds.
If Centaur agrees to act as Cutanix' agent to arrange delivery of
Compounds, (a) Cutanix will provide full address to which Compounds are to be
delivered, (b) all expenses of shipment are for the Cutanix' account, (c) all
shipments will be insured at Cutanix' expense and made at Cutanix' risk and (d)
Cutanix will indemnify, defend and hold harmless Centaur from and against all
claims, losses, liabilities and expenses (including attorneys' fees and other
litigation or settlement costs) arising out of any acts of Centaur while so
acting as Cutanix' agent, except to the extent such claims, losses, liabilities
and expenses are caused by the gross negligence of Centaur.
3. Limited Warranty. Centaur warrants that Compounds delivered under this
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Agreement will be free from any defects for a period of one year after delivery
provided that Cutanix notifies Centaur of any defect within ninety (90) days
after delivery of the goods in question, or if the defect is one which cannot
reasonably be discovered upon delivery, within thirty (30) days after said
defect should reasonably have been discovered but in no event later than one
year after delivery. Cutanix' failure to timely give the required notice shall
render the warranty ineffective. This warranty does not extend to any Compounds
which have been subject to misuse, accident or improper handling or storage.
THIS WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Centaur
shall have no liability for special, indirect, liquidated or consequential
damages (including but not limited to damages for lost profits, or injury to
persons or property). Centaur's liability under this warranty shall be limited
to replacing the Compounds that are proved to be other than as herein warranted.
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4. Returned Material. Compounds may be returned only if defective.
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Cutanix must contact Centaur prior to return and must request a return
authorization number. Centaur will pay transportation charges for return of
defective Compounds and delivery of any requested replacement Compounds.
Centaur will use its commercially reasonable efforts to ship replacement
Compounds promptly in accordance with the customary lead time for ordering of
Compounds. In lieu of shipping requested replacement compounds, Cutanix may
request that Centaur issue a credit memo to Cutanix for the invoiced cost of the
returned goods plus shipping costs.
5. Claims, Indemnification. The liability of Centaur with respect to a
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claim of any kind, whether as to quality or amount of Compounds delivered or for
non-delivery of Compounds, shall not exceed the invoice price of the quantities
of Compounds as to which the claim is made. Cutanix shall be responsible for
inspecting and testing all Compounds delivered to it hereunder within sixty (60)
days of receipt and before use by Cutanix. Cutanix assumes all responsibility
and liability for injury or damages resulting from its handling, possession, use
or sale of Compounds supplied hereunder including, but not limited to any injury
or damage resulting from the use of Compounds in Cutanix' manufacturing
operations or in combination with other substances or products, and agrees to
defend and indemnify Centaur from and against all claims, losses, liabilities
and expenses (including attorneys' fees and other litigation or settlement
costs) arising out of such handling, possession, use or sale, except to the
extent such claims, losses, liabilities and expenses are caused by the gross
negligence of Centaur.
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