Exhibit 10.5
STRIDES CAPITAL CONTRIBUTION
AGREEMENT
For
value received, STRIDES ARCOLAB LIMITED, a company organized under
the laws of India (“ Strides ”), promises to pay
to the order of AKORN-STRIDES, LLC, a Delaware limited liability
company (“ A-S ”), at 2500 Millbrook Drive,
Buffalo Grove, Illinois 60089-4694, or at such other place as the
holder of this Agreement (“ Holder ”) may from
time to time designate in writing, in lawful money of the United
States, the principal sum of One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00), or so much thereof as may be advanced,
with interest and due and payable all as set forth
below.
This Strides
Capital Contribution Agreement (the “ Agreement
”) is made pursuant to that certain “Limited Liability
Company Agreement for Akorn-Strides, LLC, a Delaware Limited
Liability Company,” dated September 22, 2004 (the
“ LLC Agreement ”), and is one of the two
“Strides Capital Contribution Agreements” referred to
therein. Terms used with capital letters in this Agreement and not
otherwise defined herein shall have the meanings set forth in the
LLC Agreement. This Agreement evidences Strides’ obligation
to repay advances to be made by A-S to Strides as provided in
Section 3.1(B)(ii) of the LLC Agreement.
ARTICLE 1. INTEREST AND PAYMENTS
1.1 Interest . This Agreement shall bear no
interest.
1.2 Payments . Until this Agreement paid in full:
1.2.1
Immediately on the date of Strides’ acceptance of a Purchase
Order, as defined under that certain “OEM Agreement”
dated September 22, 2004 (the “ OEM Agreement
”), an amount equal to thirty five percent (35%) of the
invoice amount for such Purchase Order (“ Agreement
Repayment Amount ”) shall become due and payable under
this Agreement. Strides shall immediately, in each case, (i) apply
thirty five percent (35%) of the amount due by A-S under such
invoice under the OEM Agreement in satisfaction of the Agreement
Repayment Amount; and (ii) credit the applicable invoice by an
amount equal to the Agreement Repayment Amount.
1.2.2
Immediately upon each occurrence of Strides becoming entitled to
any amount as a return of Capital Contribution, an equal amount
shall become due and payable under this Agreement.
1.3 Prepayments. Strides may prepay all or any part of the
principal balance at any time without charge or premium.
1
ARTICLE 2. ADDITIONAL TERMS AND
CONDITIONS
2.1 Application of Payments . All payments received,
irrespective of how they may be designated by Strides, shall be
applied in this order: first, to amounts other than interest and
principal, if any, owing under this Agreement, second, to
principal; except that, after the occurrence and during the
continuation of any Event of Default, all amounts received shall be
applied in such order as Holder, in its sole discretion, may elect.
Strides waives the application of any statute or rule of law that
would otherwise direct, or permit Strides to direct, the order of
application of payments made by Strides or amounts otherwise
received by Holder.
2.2 No Waiver By Acceptance of Overdue or Partial Payments .
If Holder accepts payment of any overdue amount, or partial payment
of an amount due and the remainder of such amount is unpaid, such
acceptance shall in no event: (a) constitute a cure or waiver of
Strides’ default with respect to such overdue or unpaid
amount; (b) prevent Holder from exercising any of its rights
and remedies with respect to Strides’ default; or
(c) constitute a waiver of Holder’s right to require
full and timely payment of amounts becoming due thereafter or to
exercise any of Holder’s rights and remedies for any failure
to so pay.
2.3 Default . Each of the following events (“
Events of Default ”) constitutes a default under this
Agreement:
2.3.1
a default in the payment when due of any amount
hereunder;
2.3.2
Strides (a) voluntarily suspends the transaction of business;
(b) becomes insolvent or unable to pay its debts as they mature;
(c) makes an assignment for the benefit of creditors;
(d) becomes the subject of a bankruptcy, reorganization or
similar debtor-relief proceeding unless, in the case of an
involuntar
