*Confidential Treatment Requested
Under
17 C.F.R. §§ 200.80(b)(4), 200.83 and
240.24b-2
DEVELOPMENT FUNDING
AGREEMENT
This Development
Funding Agreement (this “Agreement”) is entered into on
November 7, 2006 (“Effective Date”) between AKORN,
INC., a Louisiana corporation having a principal place of business
at 2500 Millbrook Drive, Buffalo Grove, Illinois 60089-4694, United
States of America (“AKORN”) and SERUM INSTITUTE of
INDIA, LTD., a Company incorporated under the laws of India laws,
having its principal place of business at S. No. 212/2, Off
Soli Poonawalla Road, Hadapsar, Pune — 411 028, Maharashtra,
INDIA, (“SII”) (each a “Party” and
collectively, the “Parties”).
A. The
Parties have entered into a Development and Exclusive Distribution
Agreement of even date (“Distribution Agreement”) that
provides for the grant to AKORN of exclusive marketing and
distribution rights in North, Central and South America for the
rabies monoclonal antibody (“Product”); and
B. In
connection with the Distribution Agreement, the Parties desire to
set forth their agreement with respect to development funding
payments to be paid to SII in respect of Product development,
pursuant to the term and conditions set forth below.
NOW, THEREFORE, in
consideration of the mutual promises herein, and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by the Parties, the Parties agree as
follows:
1.1 All
capitalized terms used herein shall have the same meanings set
forth in the Distribution Agreement, unless otherwise defined in
this Amendment.
1.2
Distribution Agreement . The term “Distribution
Agreement” has the meaning ascribed to it in the Recitals
above.
1.3
Payments . The term “Payments” means the
payments set forth on the Payment Schedule, that are due and
payable to SII as provided herein.
1.4 Payment
Schedule . The term “Payment Schedule” means the
payment schedule, set forth in Exhibit A, attached hereto and
fully incorporated herein.
1.5 Triggering
Event . The term “Triggering Events” means the
objectives and deliverables described and set forth in the Payment
Schedule.
ARTICLE 2
MILESTONE PAYMENTS
2.1
Payments . AKORN shall pay to SII the corresponding Payment
within ten (10) calendar days the Parties’ reasonable
verification that a specific Triggering Event has
occurred.
* CONFIDENTIAL
TREATMENT REQUESTED — This language has been omitted and
filed separately with the Securities and Exchange
Commission.
*Confidential Treatment Requested
Under
17 C.F.R. §§ 200.80(b)(4), 200.83 and
240.24b-2
2.2 U.S.
Dollars . All payments to be made pursuant to this Agreement
shall be in United States Dollars.
2.3 Late
Payments . Any late payments hereunder shall be subject to
annual interest at the rate of ten percent (10%) compounded on a
monthly basis, until paid in full.
3.1
Representations and Warranties . Each of AKORN and SII
represents, warrants and covenants that it has the full power,
right and authority to execute and deliver this Agreement and
perform its obligations hereunder.
3.2 Limitation
of Liability . NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, WHETHER
FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS
AGREEMENT.
4.1 Term .
This Agreement shall commence on the Effective Date and shall
continue for so long as the Distribution Agreement remains in full
force and effect, unless earlier terminated under
Section 4.2.
4.2
Termination . This Agreement will terminate:
4.2.1
on the thirtieth (30th) calendar day after SII gives written notice
to AKORN of a material breach by AKORN of any term or condition of
this Agreement, unless the breach is cured before the thirtieth
(30th) calendar day; or
4.2.2
automatically and immediately upon any termination of the
Distribution Agreement.
4.3 Effect of
Termination .
4.3.1
In the event of termination all Parties shall remain liable for
each of their respective obligations hereunder that accrued prior
to the date of termination.
4.3.2
All rights and remedies conferred herein shall be cumulative and in
addition to all of the rights and remedies available to each Party
at law, equity or otherwise.
4.3.3
Upon any termination of the Distribution Agreement solely as a
result of [...***...] ’s material breach of the
Collaboration Agreement, then SII shall promptly repay to AKORN,
without interest, fifty percent (50%) of all Payments paid by AKORN
to SII other than
* CONFIDENTIAL
TREATMENT REQUESTED — This language has been omitted and
filed separately with the Securities and Exchange
Commission.
Page 2
*Confidential Treatment Requested
Under
17 C.F.R. §§ 200.80(b)(4), 200.83 and
240.24b-2
the
nonrefundable amount indicated on Exhibit A. Upon any
termination of the Distribution Agreement prior to CBER approval
for Product sales solely as a result of SII’s material breach
of the Distribution Agreement or the Collaboration Agreement or in
the event SII permanently stops developing Product under the
Collaboration Agreement, then SII shall promptly repay to AKORN,
without interest, fifty percent (50%) of all Payments paid by AKORN
to SII other than the nonrefundable amount indicated on
Exhibit A. This Section 4.3.3 shall be of no force or
effect in the event of the termination of the Distribution
Agreement or this Agreement due to a material breach by AKORN. Upon
any such termination of the Distribution Agreement or this
Agreement due to a material breach by AKORN, SII shall have no
liability to repay to AKORN any of the Payments, in whole or in
par
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