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EXHIBIT 10.03
PROCESSING AGREEMENT
THIS PROCESSING AGREEMENT (the "Agreement") is made and entered into
this 20th day of December, 2001, between Akorn, Inc., a Louisiana Corporation
("Akorn") and NeoPharm, Inc., a Delaware Corporation ("NeoPharm").
WHEREAS, NeoPharm is a pharmaceutical company which has developed
certain chemotherapeutic agents (the "Products");
WHEREAS, Akorn owns and operates a lyophilization facility located at
1222 West Grand Avenue, Decatur, Illinois (the "Facility") and has the ability
and capacity to process and finish pharmaceutical products; and
WHEREAS, NeoPharm desires to contract with Akorn to process and finish
the Products at the Facility, and Akorn desires to provide such services, on the
terms and conditions set forth herein
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, the parties agree as follows:
ARTICLE I
PROCESSING ESTIMATE/DELIVERY OF PRODUCTS
Section 1.1. PROCESSING ESTIMATE. At least thirty (30) days prior to
the Effective Date (as defined herein), and at least thirty (30) days prior to
the commencement of each twelve (12) month period thereafter, NeoPharm shall
deliver to Akorn its good faith estimate (the "Estimate") of the quantity of
Products to be Processed (as defined herein) by Akorn hereunder for the upcoming
twelve (12) month period. Such estimate shall be non-binding, and NeoPharm shall
update the Estimate quarterly based upon its expected Processing needs. Akorn
agrees to allocate to the Processing of NeoPharm's Products no less than fifteen
percent (15%) of the Facility's Processing capacity during every twelve (12)
month period during the Term of this Agreement; the actual allocation of the
Facility's capacity to NeoPharm for such period shall be agreed upon by the
parties and is referred to herein as the "Processing Maximum". Processing
Capacity shall be measured in terms of hours usage of the Facility. NeoPharm
shall have the right to audit Akorn's books and records to ascertain compliance
with this Section 1.1.
Section 1.2. PURCHASE ORDERS. From time to time, NeoPharm shall provide
Akorn with a purchase order (the "Purchase Order") which shall set forth the
Product to be Processed and the quantity of Bulk Product to be Processed by
Akorn (the "Batch"). Akorn shall provide NeoPharm with written acceptance of the
Purchase Order, which acceptance shall set forth the date the Processing Run (as
defined herein) for the Batch covered by such Purchase Order shall commence (the
"Processing Run Commencement Date"). Akorn agrees that the Pocessing Run
Commencement Date shall be no later than fourteen (14) days after Akorn's
receipt of the
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Purchase Order. Akorn shall use its best efforts to accommodate NeoPharm's
request to amend a Purchase order to modify the size of a Batch to be Processed.
Section 1.3. ESTIMATED YIELD. Upon Akorn's acceptance of a Purchase
Order, Akorn shall calculate the estimated Final Product to be manufactured
(the "Estimated Yield") from the Batch that is the subject of the Purchase
Order. The Estimated Yield factor to be applied to each Purchase Order shall
be based upon the optimum yield determined from the first (3) Processing Runs
of a particular Product. Such determination and each such Processing Run
shall be performed and conducted in the presence of a NeoPharm
representative. In the event NeoPharm disagrees with Akorn's Estimated Yield,
the Parties shall in good faith agree upon a third party to review the data
Akorn utilized to calculate the Estimated Yield. The findings of such third
party shall be binding on both parties. In the event that the actual yield of
any Batch is less than ninety-five percent (95%) of the Estimated Yield,
NeoPharm shall be entitled to an investigation of the reason(s) for the
reduced yield of the Batch, and NeoPharm shall be entitled to an equitable
reduction (the "Yield Credit") in the Processing Fee (as defined herein).
Section 1.4. DELIVERY OF BULK PRODUCTS. At least fifteen (15)
business days prior to each Processing Run Commencement Date, NeoPharm shall
deliver to Akorn sufficient amounts of Bulk Product for such Processing Run
along with any applicable vial labeling materials. For purposes of this
Agreement, Bulk Product shall mean formulated solutions of the Products.
NeoPharm warrants that all Bulk Product provided hereunder shall meet all
applicable specifications and shall have been produced in compliance with
applicable federal, state and local laws and regulations, including, without
limitation, the Good Manufacturing Practices Regulations ("GMPs") of the
United States Food and Drug Administration ("FDA"), 21 C.F.R. part 211, in
effect at the time of Processing. In connection with the delivery of Bulk
Product, NeoPharm shall provide Akorn with written certification of the
sterility of Bulk Product.
Section 1.5. OWNERSHIP/RISK OF LOSS. NeoPharm shall own all Bulk
Product delivered by NeoPharm and all Finished Product (as defined herein)
Processed by Akorn and, except in a case giving rise to Akorn's
indemnification responsibilities hereunder, NeoPharm shall bear the risk of
loss with respect to such materials.
ARTICLE II
PROCESSING OF BULK PRODUCTS
Section 2.1. PROCESSING OBLIGATIONS. Commencing with each Processing
Run Commencement Date, Akorn shall Process the Bulk Product corresponding to
the applicable Purchase Order in accordance with the terms of this Article II
(each a "Processing Run"). For purposes of this Agreement, "Processing" shall
mean filling into vials, lyophilizing, inspecting and packaging the Bulk
Product in order to produce finished pharmaceutical dosage forms of the
Products (the "Finished Product"). The parameters (the "Processing
Parameters") under which Akorn shall Process the Bulk Product shall be
mutually agreed upon by the Parties at least thirty (30) days prior to the
Effective Date and shall be attached hereto as Schedule 2.1. Any amendments
and/or additions to the Processing Parameters or the equipment, test methods,
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specifications or any other requirement of this Agreement or with respect to the
operation of the Facility, must be mutually agreed to by the parties in writing
and shall be attached to Schedule 2.1. Notwithstanding the foregoing and in
addition to any supplemental parameters agreed to by the parties with respect to
a particular Processing Run, Akorn's Processing at a minimum shall consist of
the following components:
(a) Preparation and retention of the master production
and control records required by the FDA for each
Product pursuant to 21 CFR 600.12 (the "Batch
Records") as approved by Akorn and NeoPharm.
(b) Compliance with the applicable standards from the
USP-NF guidelines.
(c) Furnishing vials, stoppers and seals for the Products
and conducting the appropriate inspection, testing
and release thereof.
(d) Preparation and sterilization of vials and stoppers
in accordance with Akorn's Standard Procedures;
(e) Aseptically filling vials within tolerance limits set
by NeoPharm and holding filled vials under specified
conditions which shall be provided by NeoPharm until
loaded in lyophilizer;
(f) Aseptically stopping and sealing lyophilized product
vials.
(g) Performance of Quality Control Testing of finished
dosage forms in accordance with NeoPharm's
specifications.
(h) Inspection of the finished dosage form.
(i) Storage of quarantined vials at mutually agreed upon
temperatures until instructed by NeoPharm to ship the
Finished Product.
(j) Shipping of the Finished Product in accordance with
NeoPharm's specifications.
Section 2.2. ADDITION OF OTHER PRODUCTS TO THE AGREEMENT. NeoPharm may
add additional pharmaceutical products to be Processed by Akorn. The parties
shall mutually agree upon any Processing Parameters and the Processing Fee for
such additional products.
Section 2.3. REPRESENTATIONS AND WARRANTIES OF AKORN. Akorn agrees that
in performing the Processing services hereunder, it shall comply with applicable
GMPs and that it shall use its best efforts to maintain the Facility in such a
fashion as to be in compliance with all applicable federal, state and local
rules and regulations. Akorn agrees that it shall maintain all licenses and
permits required by any applicable federal, state or local agency, including but
not limited to the FDA, in order to operate the Facility and provide the
Processing services required hereunder. Without limiting the generality of the
foregoing, Akorn agrees that it will cause its
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employees and agents to follow all procedures developed and implemented in
connection with the removal of the warning letter sanctions pursuant to Form 483
or current GMP regulations issued or imposed by the FDA with regard to the
Facility. Akorn also agrees to store all manufacturing and laboratory records on
the site where the Processing is performed and to keep such records readily
available. Further, Akorn represents and warrants that it shall use its best
efforts to insure that all filtration, filling and lyophilization of the Product
by Akorn shall be done in an aseptic processing environment and in accordance
with the Processing Parameters.
Section 2.4. FACILITIES INSPECTION. During the Term of this
Agreement, NeoPharm shall have the right, at its expense, to audit the
Facility for Akorn's compliance with GMPs and any other applicable laws.
NeoPharm agrees to provide Akorn with reasonable prior notice of the date of
such audit. In addition to the foregoing, NeoPharm shall have the right to
designate an individual to be at the Facility to monitor each Processing Run.
NeoPharm agrees that its employees or agents who inspect the Facility or who
are on site at the Facility during a Processing Run will comply with Akorn's
rules, regulations and GMPs.
Section 2.5. AKORN OBLIGATION TO MEET REQUIREMENTS. Akorn agrees to
fulfill, in each twelve (12) month period during the Term of this Agreement
(as defined herein), all Purchase Orders placed by NeoPharm up to one hundred
percent (100%) of NeoPharm's most recently updated Estimate. Akorn shall use
reasonable efforts to supply any quantity ordered by NeoPharm of Product in
excess of the Estimate subject to Akorn's production scheduling capabilities
and commitments to other customers.
Section 2.6. SUBCONTRACTING. Akorn shall not pass to a third party
any work entrusted to it under this Agreement without first obtaining
NeoPharm's written approval of such arrangements, which approval shall not be
unreasonably withheld.
Section 2.7. QUALITY ASSURANCE DEPARTMENT. Akorn agrees that at all
times during the term of this Agreement, it shall maintain a quality
assurance department (the "Quality Assurance Department") for purposes of
monitoring the quality of Akorn's Processing hereunder and for purposes of
approving each Batch Processed hereunder. Akorn agrees that upon NeoPharm's
request, it shall provide NeoPharm with copies of the policies, procedures
and findings of the Quality Assurance Department.
ARTICLE III
SHIPMENT AND STORAGE
Section 3.1. STORAGE. Akorn shall store and handle the Bulk Product
and Finished Product as required by the Processing Parameters. Akorn shall
take such actions as are reasonably necessary to protect the Bulk Product and
Finished Product from damage and deterioration. Vials of Finished Product
will be stored at the recommended controlled temperature until shipped as
instructed by NeoPharm.
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Section 3.2. RELEASE OF FINISHED PRODUCT. Upon Akorn's Quality
Assurance Department's written release of a Batch of Finished Product, Akorn
shall promptly ship the Finished Product to NeoPharm or, at NeoPharm's
discretion, warehouse Finished Product, in accordance with FDA and GMP
warehousing procedures, for a maximum of thirty (30) days at no cost, and
thereafter at charges to be mutually agreed upon, to the extent warehousing
space is available. Akorn shall provide NeoPharm with properly completed Batch
Records, prepared in conformance with the Processing Parameters, within five (5)
days following Akorn's written release of such Batch but, in no event more than
four (4) weeks from the date the Processing Run is completed (i.e., the date the
filling or lyophilization is completed).
Section 3.3. TRANSFER OF FINISHED PRODUCT TO NEOPHARM. Finished Product
shall be shipped to NeoPharm in accordance with NeoPharm's written instructions.
Unless otherwise agreed to in writing by the Parties, there shall be only one
shipment per Batch of Finished Product. NeoPharm shall be responsible for all
costs associated with the shipment of Finished Product
Section 3.4. REJECTION. NeoPharm may reject any Batch of Finished
Product failing to meet any of the Processing Parameters by providing Akorn with
written notice of such rejection (the "Rejection") within sixty (60) days
following NeoPharm's receipt of the applicable Batch Records and written notice
from Akorn stating that Akorn's Quality Assurance Department has approved the
Batch. Any rejection by NeoPharm pursuant to this Section 3.4 shall be
accompanied by a report of analysis, including a product sample from the Batch
analyzed. NeoPharm's failure to reject a Batch of Finished Product in the manner
set forth above shall constitute acceptance thereof except to the extent that
any defect in the Batch was not discovered by NeoPharm after exercising due
diligence and using customary testing procedures accepted in the industry and
provided that NeoPharm notifies Akorn of any such defect within a reasonable
time after NeoPharm discovers or should have discovered the defect and before
any substantial change in the condition of the Batch which is not caused by such
defect. In the event Akorn accepts NeoPharm's Rejection, NeoPharm shall be
entitled to a credit against the Processing Fee (the "Rejection Credit") equal
to the Processing Fee for such Batch and the cost, not to exceed $25,000, of
NeoPharm's Bulk Product. In the event the Parties can not agree upon whether the
Rejection was justified, the Parties shall mutually agree upon a third party to
test samples of such Batch and to review records and test data and other
relevant information developed by both parties relating thereto to ascertain
whether the Batch was manufactured in accordance with the Processing Parameters.
The findings of such third party shall be binding on both parties. If the third
party determines that the Batch was manufactured in accordance with the
Processing Parameters, NeoPharm shall be deemed to have accepted the affected
Batch. If the third party determines that the Batch was not manufactured in
accordance with the Processing Parameters, NeoPharm shall be entitled to the
Rejection Credit. The Parties shall share the costs of any such third party
testing. In the event a Batch was properly Rejected, Akorn agrees that NeoPharm
shall be entitled to a replacement Processing Run, regardless of whether such
replacement Processing Run will cause NeoPharm to exceed the Processing Maximum.
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ARTICLE IV
PRICE OF MANUFACTURE
Section 4.1. PRICE. In consideration of the Processing provided by
Akorn hereunder, NeoPharm agrees to pay Akorn a processing fee (the "Processing
Fee"), as modified by the Yield Credit or the Rejection Credit, if applicable.
The Processing Fee shall be mutually agreed upon by the Parties at least thirty
(30) days prior to the Effective Date based upon the Processing Parameters for
each Product, after a trial run if necessary, and shall be attached hereto as
Schedule 4.1.
Section 4.2. MOST FAVORED PRICING. Akorn agrees that the Processing Fee
charged to NeoPharm hereunder shall be no higher than the lowest fee charged by
Akorn to any customers with similar processing requirements for Processing at
the Facility, regardless of any discounts afforded to such other customers.
NeoPharm shall have the right to audit Akorn's books and records to ascertain
compliance with this Section 4.2.
ARTICLE V
TERM AND TERMINATION
Section 5.1. TERM. This Agreement shall have an initial term (the
"Initial Term") commencing on the date the warning letter sanctions imposed
by the FDA pursuant to Form 483 or current GMP regulations on Akorn and/or
the Facility have been removed (the "Effective Date") and ending on THE LATER
OF (i) the fifth (5th) anniversary of the Effective Date, or (ii) two (2)
years after the date on which Akorn pays all amounts of principal and accrued
interest under that certain Promissory Note (the "Note"), dated December 20,
2001, issued by Akorn to NeoPharm in exchange for a loan in principal amount
of Three Million Two Hundred Fifty Thousand Dollars ($3,250,000) plus
interest. This Agreement will automatically extend for two additional,
five-year terms (each, an "Additional Term") beyond the Initial Term,
provided, however, that either NeoPharm or Akorn may terminate this Agreement
at the end of the Initial Term or an Additional Term, as the case may be, by
sending a termination notice ninety (90) days prior to the end of such
Initial Term or Additional Term. Notwithstanding the foregoing, in the event
the warning letter sanctions pursuant to Form 483 or current GMP regulations
have not been removed by June 30, 2003 or in the event the Akorn has not
received validation from the FDA with respect to Processing NeoPharm's
Products by such date, NeoPharm may terminate this Agreement upon written
notice to Akorn.
Section 5.2. VOLUNTARY TERMINATION. NeoPharm or Akorn may terminate
this Agreement for any reason, provided that the terminating party first serves
written notice of such termination on the other party no later than one hundred
eighty (180) days prior to the date of such termination. Notwithstanding the
foregoing, Akorn shall not have the right to voluntarily terminate this
Agreement until the Note has been paid in full and for two (2) years thereafter.
Section 5.3. TERMINATION FOR MATERIAL BREACH. Either party may
terminate this Agreement in the event of a material breach by the other,
provided that the party asserting such
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breach first serves written notice of the alleged breach on the offending party
and such alleged breach is not cured within thirty (30) days of the offending
party's receipt of such notice.
Section 5.4. TERMINATION FOR REJECTED FINISHED PRODUCTS. NeoPharm may
terminate this Agreement upon written notice to Akorn in the event NeoPharm
property rejects three (3) consecutive Batches of Finished Product or six (6)
Batches of Finished Product within a two (2) month period.
Section 5.5. TERMINATION FOR INSOLVENCY. In the event that either party
shall admit in writing that it can not pay its debts, or shall suspend its
business, or shall file a voluntary petition or any answer admitting the
jurisdiction of the court and the material allegations of, or shall consent to,
an involuntary petition pursuant to or purporting to be pursuant to any
reorganization or insolvency law of any jurisdiction, or shall make an
assignment for the benefit of creditors, or shall apply for or consent to the
appointment of a receiver or trustee of all or a substantial part of its
property (such party, upon the occurrence of any such event, a "Bankrupt
Party"), then, to the extent permitted by the law, the other party hereto may
thereafter immediately terminate this Agreement by giving notice of termination
to the Bankrupt Party.
Section 5.6. EFFECT OF EXPIRATION OR TERMINATION. Upon termination or
expiration of this Agreement, neither party shall have any further obligations
to the other party except for those obligations which accrued prior to the date
of termination or those obligations which are intended to survive the
termination or expiration of this Agreement.
Section 5.7. AKORN OBLIGATIONS UPON EXPIRATION OR TERMINATION. Upon the
expiration of this Agreement or its earlier termination, Akorn shall, at the
request of NeoPharm and at NeoPharm's expense, return or dispose of all Bulk
Product or Finished Product to NeoPharm or to a third party pursuant to the
instructions of NeoPharm.
ARTICLE VI
INDEMNIFICATION
Section 6.1. AKORN INDEMNITY. Akorn agrees to indemnify, protect and
defend NeoPharm and hold NeoPharm harmless from and against any claims, damages,
liability, harm, loss, costs, penalties, lawsuits, threats of lawsuit, recalls
or other governmental action, including reasonable attorneys' fees, brought or
claimed by any third party which (i) arise as the result of Akorn's breach of
this Agreement or of any warranty or representation made to NeoPharm under this
Agreement; or (ii) which result from any claim made against NeoPharm in
connection with Akorn's manufacture of defective Finished Product for NeoPharm.
Upon the filing of any such legal claim or lawsuit against NeoPharm, NeoPharm
shall promptly notify Akorn, in writing, of any such claim and Akorn shall, at
its expense, with attorneys reasonably acceptable to NeoPharm, handle, defend
and control such claim or lawsuit. Failure to notify Akorn promptly of the
commencement of any such action, if prejudicial to the ability to defend such
action, shall
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relieve Akorn of any liability to NeoPharm under this Section 6.1. NeoPharm
shall have the right to participate in the defense of such action at its expense
with counsel of its choosing.
Section 6.2. NEOPHARM INDEMNITY. NeoPharm agrees to indemnify, protect
and defend Akorn and hold Akorn harmless from and against any claims, damages,
liabilities, harm, loss, costs, penalties, lawsuits, threats of lawsuit, recalls
or other governmental action, including reasonable attorneys' fees, brought or
claimed by any third party, which (i) arise out of NeoPharm's breach of this
Agreement or of any warranty or representation to Akorn under this Agreement; or
(ii) result from the negligent acts or willful malfeasance on the part of
NeoPharm or employees or agents, in connection with NeoPharm's sale, marketing
or distribution of Product manufactured by Akorn or other activities or actions
in connection with the Finished Product. Upon the filing of any such legal claim
or lawsuit against Akorn, Akorn shall promptly notify NeoPharm, in writing, of
any such claim and NeoPharm shall, at its expense, with attorneys reasonably
acceptable to Akorn, handle, defend and control such claim or lawsuit. Failure
to notify NeoPharm promptly of the commencement of any such action, if
prejudicial to the ability to defend such action, shall relieve NeoPharm of any
liability to Akorn under this Section 6.2. Akorn shall have the right to
participate in the defense of such action at its expense with counsel of its
choosing.
ARTICLE VII
RIGHT OF FIRST REFUSAL
Section 7.1. GRANT OF RIGHTS. Akorn agrees that in the event it
receives a bona fide third party offer (an "Offer") to acquire the Facility from
an unrelated third party (exclusive of an offer to acquire a controlling
interest in the outstanding shares of stock or substantially all of the assets
of Akorn), it shall provide NeoPharm with written notice of the terms and
conditions of such Offer.
Section 7.2. RIGHT OF FIRST REFUSAL. Upon its receipt of the notice
contemplated by Section 7.1, NeoPharm shall have the right to acquire the
Facility on the same terms and conditions as are set forth in the Offer (or
their cash equivalent in the event the Offer contains consideration other than
cash). In order to exercise the foregoing right, NeoPharm must provide Akorn
written notice of its exercise within thirty (30) days of its receipt of the
written notice from Akorn.
ARTICLE VIII
CONFIDENTIALITY
Section 8.1. CONFIDENTIAL INFORMATION. Each party (the "Receiving
Party") shall maintain in confidence all information heretofore or hereafter
disclosed by the other party (the "Disclosing Party") which such party knows or
has reason to know is a trade secret, and other proprietary information owned by
or licensed to the other party, including, but not limited to,
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information relating to the Product (including without limitation, information
developed in preclinical and clinical studies) and licenses, patents, patent
applications, technology or processes and business plans of the other party,
including, without limitation, information designated as confidential in writing
from one party to the other (all of the foregoing hereinafter referred to as
"Confidential Information") and shall not use such Confidential Information
except as permitted by this Agreement or disclose the same to anyone other than
those of its officers, directors or employees as are necessary in connection
with such party's activities as contemplated by this Agreement. Each party shall
use the same efforts as such party would use to protect its own information and
to ensure that its officers, directors and employees do not disclose or make any
unauthorized use of such Confidential Information. Each party shall notify the
other promptly upon discovery of any unauthorized use or disclosure of the other
party's Confidential Information.
Section 8.2. LIMITATIONS ON CONFIDENTIALITY. The obligation of
confidentiality contained in this Article VIII shall not apply to the extent
that: i) the Receiving Party is required to disclose Confidential Information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction; ii) the Receiving Party can demonstrate that the
disclosed Confidential Information was, at the time of disclosure, already in
the public domain other than as a result of actions or failure to act of the
Receiving Party, its officers, directors or employees, in violation hereof; iii)
the disclosed Confidential Information was rightfully known by the Receiving
Party (as shown by its written records) prior to the date of disclosure to the
Receiving Party in connection with this Agreement; or iv) the disclosed
Confidential Information was received by the Receiving Party on an unrestricted
basis from a source which is not under a duty of confidentiality to the other
Party.
Section 8.3. DISCLOSURE REQUIRED BY LAW. In the event that the
Receiving Party shall be required to make disclosure pursuant to the provisions
of Section 8.2 (i) as a result of the issuance of a court order or other
government process, the Receiving Party shall promptly, but in no event more
than forty-eight (48) hours after learning of such court order or other
government process, notify, by personal delivery or facsimile, all pursuant to
Section 9.4 hereof, the Disclosing Party and, at the Disclosing Party's expense,
the Receiving Party shall: a) take all reasonably necessary steps requested by
the Disclosing Party to defend against the enforcement of such court order or
other government process, and b) permit the Disclosing Party to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
Section 8.4. EQUITABLE REMEDIES FOR BREACH OF CONFIDENTIALITY. The
parties acknowledge that their failure to comply with the provisions of Section
8.1 may cause irreparable harm and damage to the name and reputation of the
other party for which no adequate remedy may be available at law. Accordingly,
the parties agree that upon a breach by a party of such provisions, the
non-breaching party may, at its option, enforce the obligations of the breaching
party under those provisions by seeking equitable remedies in a court of
competent jurisdiction.
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ARTICLE IX
MISCELLANEOUS
Section 9.1. FORCE MAJEURE. Neither of the parties to this Agreement
shall be liable to the other party for any loss, injury, delay, damage or other
casualty suffered or incurred by such other party due to strikes, lockouts,
accidents, fire, delays in manufacture, transportation or delivery of material,
embargoes, inability to ship, explosions, floods, war, governmental action or
any other cause similar thereto which is beyond the reasonable control of such
other party and any failure or delay by a party in the performance of any of its
obligations under this Agreement shall not be considered a breach of this
Agreement due to, but only so long as there exists, one or more of the foregoing
causes; provided, however, that if Akorn cannot complete a Processing Run within
ninety (90) days of the stated completion date due to any such cause, NeoPharm
may cancel the order without liability to Akorn.
Section 9.2. STATUS OF THE PARTIES. This Agreement shall not be
construed to create between the parties hereto or their respective successors or
permitted assignees the relationship of principal and agent, joint venturers,
copartners or any other similar relationship, the existence of which is hereby
expressly denied by each party. Neither party shall be liable to any third party
in any way for engagement, obligation, contract, representation or transaction
or for any negligent act or omission to act of the other except as expressly
provided.
Section 9.3. GOVERNING LAW. The provisions of this Agreement shall be
governed in all respects by the laws of the State of Illinois.
Section 9.4. NOTICE. All notices, proposals, submissions, offers,
approvals, agreements, elections, consents, acceptances, waivers, reports,
plans, requests, instructions and other communications required or permitted to
be made or given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing and shall be deemed to have
been duly made or given when: a) delivered personally with receipt acknowledged;
b) sent by registered or certified mail or equivalent, return receipt requested;
c) sent by facsimile, cable or telex (which shall promptly be confirmed by a
writing sent by registered or certified mail or equivalent, return receipt
requested); or d) sent by recognized overnight courier for delivery within
twenty-four (24) hours, in each case addressed or sent to the parties at the
following addresses and facsimile numbers or to such other or additional address
or facsimile as any party shall hereafter specify by Communication to the other
parties:
To Akorn: Akorn, Inc.
2500 Millbrook Drive
Buffalo Grove, Illinois 60089-4694
Facsimile No. (847) 279-6123
Attn: Antonio Pera
With a Copy to: Tressler, Soderstrom, Maloney & Priess
2100 Manchester Road, Suite 950
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Wheaton, Illinois 60187
Facsimile No.: (630) 668-3003
Attn: William A. Kindorf, III
To NeoPharm: Neopharm, Inc.
150 Field Drive, Illinois 60045
Facsimile No.: (847) 295-8854
Attn: James Hussey
With a Copy to: Ross & Hardies
150 North Michigan Avenue
Chicago, Illinois 60601-7567
Facsimile No.: (312) 750-8600
Attn: Scott Becker
Notice of change of address shall be deemed given when actually received, all
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received or on the date when delivered
personally; (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or overnight courier; or (iii)
four (4) business days after mailing (except that in the case of any
communication given to a person with an address outside the United States, then
ten (10) business days after mailing).
Section 9.5. LEGAL CONSTRUCTION. In case any one or more of the
provisions contained in this Agreement shall be invalid or unenforceable in any
respect, the validity and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable provision in light of
the tenor of this Agreement, and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.
Section 9.6. ENTIRE AGREEMENT, MODIFICATIONS, CONSENTS, WAIVERS. This
Agreement, together with the Schedules hereto, contains the entire agreement of
the parties with respect to the subject matter hereof. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Each party hereto may, by an instrument in writing, waive compliance by
the other party hereto with any term or provision of this Agreement to be
performed or complied with by such other party. The waiver by either party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach. Neither anything in this
Agreement nor the execution or performance hereof shall be deemed to prejudice
in any way, and each party hereto expressly reserves, any and all rights,
remedies and claims which each party may now or hereafter have against or with
respect to the other party or any of such other party's Affiliates, relating to
any matter which is not expressly covered by this Agreement.
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Section 9.7. SECTION HEADINGS; CONSTRUCTION. The section headings and
titles contained herein are each for reference only and shall not be deemed to
affect the meaning or interpretation of this agreement. The words "hereby",
"herein", "herein above", "hereinafter", "hereof" and "hereunder", when used
anywhere in this Agreement, refer to this Agreement as a whole and not merely to
a subdivision in which such words appear, unless the context otherwise requires.
The singular shall include the plural, the conjunctive shall include the
disjunctive and the masculine gender shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.
Section 9.8. EXECUTION COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each such duplicate counterpart shall constitute
an original, any one of which may be introduced in evidence or used for any
other purpose without the production of its duplicate counterpart. Moreover,
notwithstanding that any of the parties did not execute the same counterpart,
each counterpart shall be deemed for all purposes to be an original, and all
such counterparts shall constitute one and the same instrument, binding on all
of the parties hereto.
Section 9.9. BINDING EFFECT, ASSIGNMENT. Neither party may directly or
indirectly assign, delegate, encumber or in any other manner transfer any of its
rights, remedies, obligations, liabilities or interests in or arising under this
Agreement, without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed. Any attempted assignment, delegation,
encumbrance or other transfer in violation of this Agreement shall be void and
of no effect and shall be a material breach hereof. In the event Akorn sells the
Facility to a third party, Akorn agrees that it shall cause such third party to
agree in writing to assume Akorn's responsibilities hereunder.
* * * * * * * *
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
AKORN, INC. NEOPHARM, INC.
By:_______________________ By:___________________________
Its:______________________ Its:__________________________
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