Exhibit 10.1

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

 
 

In re Akorn, Inc. Data Integrity Securities Litigation
 
 
 
STIPULATION AND AGREEMENT
OF SETTLEMENT
 
Civil No. 1:18-cv-01713
 
Hon. Matthew F. Kennelly
 
 

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TABLE OF CONTENTS

       
I.
Definitions
7
       
II.
Preliminary Approval of Settlement
26
       
III.
Release of Claims
27
       
IV.
The Settlement Consideration
28
 
A.
Cash Settlement Amount
29
 
B.
Settlement Shares
31
 
C.
Settlement CVRs
38
 
D.
Administration of the Settlement Consideration
43
       
V.
Use of Settlement Fund
44
 
A.
Attorneys’ Fees & Litigation Expenses
44
 
B.
Administration Expenses
46
 
C.
Use & Tax Treatment
47
       
VI.
Notice And Settlement Administration
49
 
A.
Claims Administrator & Defendants’ Obligations
49
 
B.
Notice, Submission of Proof of Claim Forms & the Plan of Allocation
49
 
C.
Determination of Authorized Claimants
50
 
D.
Distribution of the Settlement Fund
54
 
E.
Request For Exclusion From the Settlement Class
56
       
VII.
Final Approval of Settlement
57
       
VIII.
Effective Date of Settlement
57
       
IX.
Termination
58
       
X.
Miscellaneous Provisions
63
 
A.
Entire Agreement
63
 
B.
Final & Complete Resolution
63
 
C.
Publicity
64
 
D.
Contributions
65
 
E.
Preservation of Documents
65
 
F.
No Admission of Wrongdoing
65
 
G.
Amendment, Modification & Waiver
67
 
H.
Headings
67
 
I.
Jurisdiction of the Court
67
 
J.
Choice of Law
68
 
K.
Venue & Multi District Litigation
68
 
L.
Execution
68
 
M.
Notice
69
 
N.
Authority of Counsel
70
       

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STIPULATION AND AGREEMENT OF SETTLEMENT
This Stipulation and Agreement of Settlement, dated as of August 9, 2019, is
entered into between (a) Lead Plaintiffs Gabelli & Co. Investment Advisors, Inc.
and Gabelli Funds, LLC, individually and on behalf of the Settlement Class; and
(b) Defendants Akorn, Inc., Rajat Rai (“Rai”), Duane Portwood (“Portwood”), Alan
Weinstein (“Weinstein”), Brian Tambi (“Tambi”) and Ronald Johnson (“Johnson”),
and embodies the terms and conditions of the Settling Parties’ settlement of the
claims against the Defendants in the Action.1  Subject to the approval of the
Court and the terms and conditions expressly provided herein, this Stipulation
is intended to fully, finally and forever compromise, settle, release, resolve
and dismiss with prejudice all claims asserted in the Action against the
Defendants.
WHEREAS,
A.            The Action was commenced in the Court on March 8, 2018, by
plaintiff Joshi Living Trust through the filing of a class action complaint
alleging violations by Akorn, Rai, Portwood and Randall Pollard of
Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated
thereunder, captioned Joshi Living Trust v. Akorn, Inc., et al., No.
1:18-cv-01713-MFK (N.D. Ill.);
B.            By order dated May 31, 2018, the Court appointed Gabelli Funds as
lead plaintiffs in this Action, Entwistle & Cappucci LLP as lead counsel for the
proposed class and Bernstein Litowitz Berger & Grossmann LLP as local liaison
counsel for the proposed class;

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1 All words or terms used herein that are capitalized and not otherwise defined
shall have the meanings ascribed to those words or terms as set forth in
Section I hereof, entitled “Definitions”.

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C.          On September 5, 2018, Lead Plaintiffs filed an amended consolidated
complaint, naming as defendants the Defendants, Mark Silverberg (“Silverberg”),
John Kapoor (“Kapoor”), Kenneth Abramowitz (“Abramowitz”), Adrienne Graves
(“Graves”), Steven Meyer (“Meyer”) and Terry Rappuhn (“Rappuhn”), and asserting
(i) on behalf of persons who purchased or otherwise acquired the common stock of
Akorn during the period from November 3, 2016, through April 20, 2018,
inclusive, claims against Defendants and Silverberg under Sections 10(b)
and 20(a) of the Exchange Act, and (ii) on behalf of Akorn shareholders of
record as of June 9, 2017, claims against Akorn, Rai, Kapoor, Weinstein,
Abramowitz, Graves, Johnson, Meyer, Rappuhn and Tambi, under Sections 14(a)
and 20(a) of the Exchange Act (the “Proxy Claims”);
D.             On October 29, 2018, the parties filed a stipulation and joint
motion providing for the dismissal of certain claims and defendants;
E.            On October 30, 2018, the Court granted the parties’ motion,
dismissing all of the Proxy Claims without prejudice, dismissing defendants
Kapoor, Abramowitz, Graves, Meyer and Rappuhn without prejudice and dismissing
defendant Silverberg with prejudice;
F.              On December 19, 2018, the Defendants filed an answer to the
amended consolidated complaint;
G.           On February 21, 2019, plaintiff Johnny Wickstrom filed a class
action complaint in the United States District Court for the Northern District
of Illinois (the “Northern District of Illinois”), alleging violations of
Sections 10(b) and 20(a) of the Exchange Act during a class period from
August 1, 2018 through January 8, 2019, inclusive, and naming as defendants
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Akorn, Rai and Portwood.  The case was captioned Wickstrom v. Akorn, Inc., et
al., No. 1:19-cv-01299 (the “Wickstrom Action”);
H.            On March 27, 2019, the Court made a finding that the Wickstrom
Action was related to this Action and ordered the Wickstrom Action to be
transferred to the Court pursuant to Local Rule 40.4 of the Local Rules of the
Northern District of Illinois (each a “Local Rule”);
I.            On April 22, 2019, plaintiff Vicente Juan filed a class action
complaint in the Northern District of Illinois, alleging violations of
Sections 10(b) and 20(a) of the Exchange Act during a class period from
May 2, 2018 through January 8, 2019, inclusive, and naming as defendants Akorn,
Rai and Portwood.  The case was captioned Juan v. Akorn, Inc., et al., No.
1:19-cv-02720 (the “Juan Action”);
J.            On April 22, 2019, Lead Plaintiffs, by and through their
attorneys, filed the Second Amended Complaint, alleging claims on behalf of
persons or entities who purchased or otherwise acquired the common stock of
Akorn during the Class Period against Defendants pursuant to Sections 10(b) and
20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder;
K.           Also on April 22, 2019, Gabelli Funds and plaintiff Vicente Juan
filed motions in the Wickstrom Action to be appointed as lead plaintiffs in that
action;
L.            On April 23, 2019, the Court found that the Juan Action was
related to this Action and ordered the Juan Action to be transferred to the
Court pursuant to Local Rule 40.4;
M.           On April 29, 2019, plaintiff Vicente Juan filed a notice of
withdrawal of his motion for lead plaintiff status in the Wickstrom Action;
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N.            On May 3, 2019, the Litigation Parties and their counsel commenced
mediation before former United States District Judge Layn R. Phillips (“Judge
Phillips”);
O.            On May 9, 2019, the Court consolidated both the Wickstrom Action
and the Juan Action into this Action for all purposes;
P.          On May 31, 2019, plaintiffs Twin Master Fund, Ltd., Twin
Opportunities Fund, LP and Twin Securities, Inc. filed a complaint against
Defendants in the Northern District of Illinois, alleging violations of
Sections 10(b), 18 and 20(a) of the Exchange Act and Rule 10b-5 promulgated
thereunder, as well as one count of common law fraud (the “Twin Funds Action”);
Q.            On June 11, 2019, the Court found that the Twin Funds Action was
related to this Action and ordered the Twin Funds Action to be transferred to
the Court pursuant to Local Rule 40.4;
R.            On July 5, 2019, Lead Plaintiffs filed a motion in this Action
seeking certification of a proposed class of all persons or entities that
purchased or otherwise acquired Akorn’s common stock during the Class Period and
were damaged thereby;
S.            On July 11, 2019, plaintiffs Manikay Master Fund, LP and Manikay
Merger Fund, LP filed a complaint against Defendants in the Northern District of
Illinois, alleging violations of Sections 10(b), 18 and 20(a) of the Exchange
Act and Rule 10b-5 promulgated thereunder, as well as one count of common law
fraud (the “Manikay Funds Action”);
T.            On July 25, 2019, after extensive arm’s-length negotiations
facilitated by Judge Phillips, acting as mediator, the Litigation Parties
reached an agreement in principle as to
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the economic elements of a settlement and agreed to settle this Action and all
issues in dispute therein on the terms set forth in this Stipulation;
U.            On July 30, 2019, in connection with the agreement in principle
reached between them, the Litigation Parties jointly moved the Court to enter
the Stay Order;
V.            Also on July 30, 2019, the Court found that the Manikay Funds
Action was related to this Action and ordered the Manikay Funds Action to be
transferred to the Court pursuant to Local Rule 40.4;
W.            Also on July 30, 2019, the Court entered the Stay Order through at
least August 26, 2019;
X.            Based upon their investigation and prosecution of this case and
review of materials and presentations regarding Akorn’s financial condition and
ability to pay, Lead Plaintiffs and Lead Counsel have concluded that the terms
and conditions of this Stipulation are fair, reasonable and adequate to
Plaintiffs and in their best interests.  Based upon Lead Plaintiffs’ direct
oversight of the prosecution of this matter and with the advice of their
counsel, Lead Plaintiffs, individually and on behalf of the Settlement Class,
have agreed to settle and release all claims raised in the Action against
Defendants pursuant to the terms and provisions of this Stipulation, after
considering, among other things:  (a) the substantial financial benefit that
Plaintiffs will receive under the proposed Settlement; (b) Akorn’s ability to
pay and financial condition—including risks attendant to the renegotiation of
Akorn’s outstanding debt and other ongoing litigation; and (c) the significant
risks and costs of continued litigation and trial against Defendants;
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Y.            Defendants have denied and continue to deny all allegations of
wrongdoing, fault, liability or damage to Plaintiffs; deny that they are or have
engaged in any wrongdoing or violation of law; deny that they improperly or
misleadingly disclosed (or improperly failed to disclose) the status of Akorn’s
compliance with FDA rules and regulations concerning cGMP; and maintain that
they acted properly at all times, including complying with all legal duties and
public disclosure obligations.  Defendants believe that further conduct of this
Action could be protracted and expensive, and that it is desirable that this
Action be fully and finally settled in the manner and upon the terms and
conditions set forth in this Stipulation to limit further expense, inconvenience
and distraction, to dispose of the burden of protracted litigation, and to
permit the operation of Akorn’s business without further distraction and
diversion of Akorn’s executives and other personnel with respect to the matters
at issue in this Action.  Defendants have also taken into account the
uncertainty and risks inherent in any litigation.  Defendants state that they
are entering into this Settlement solely in order to eliminate the burden,
expense, uncertainty and risk of further litigation, and to avoid the business
disruptions associated therewith;
Z.            This Stipulation, whether or not consummated, together with any
proceedings related to any settlement, or any terms of any settlement, whether
or not consummated, shall in no event be construed as or deemed to be evidence
supporting, or an admission or concession on the part of any Defendant with
respect to any claim or of any fault or liability or wrongdoing or damage
whatsoever, or any infirmity in any of the defenses that Defendants have or
could have asserted;
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AA.            Each of the Litigation Parties recognizes and acknowledges,
however, that the Action has been prosecuted by Lead Plaintiffs in good faith
and defended by Defendants in good faith, and that the Action is being
voluntarily settled by the Litigation Parties with the advice of counsel; and
BB.            This Stipulation (together with the exhibits hereto) reflects the
final and binding agreement between the Settling Parties, subject to approval by
the Court, and constitutes a compromise of all Settled Claims between the
Settling Parties.
NOW, THEREFORE, it is hereby STIPULATED AND AGREED, by and among Lead Plaintiffs
(individually and on behalf of the Settlement Class) and Defendants, by and
through their respective undersigned attorneys and subject to the approval of
the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, that,
in consideration of the benefits flowing to the Settling Parties hereto from the
Settlement, that all Settled Claims as against all Released Persons shall be
compromised, settled, released and dismissed fully, finally and with prejudice,
upon and subject to the terms and conditions set forth below:

I.
DEFINITIONS

1.            As used in this Stipulation and any exhibits attached hereto and
made a part hereof, the following capitalized terms shall have the following
meanings:
1.1.        “Action” means the consolidated securities class action filed in the
Northern District of Illinois, Eastern Division, captioned In re Akorn, Inc.
Data Integrity Securities Litigation, No. 1:18-cv-01713-MFK, and includes all
actions consolidated therein,
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including, but not limited to, Wickstrom v. Akorn, Inc. et al., No. 19-cv-01299
(N.D. Ill.), and Juan v. Akorn, Inc. et al., No. 19-cv-02720 (N.D. Ill.).
1.2.            “Additional Derivative Actions” means any action brought after
the date hereof by an Akorn shareholder asserting derivatively on behalf of
Akorn any claims arising out of, relating to or in connection with the
allegations, facts, matters, events, transactions, acts, occurrences,
statements, representations, misrepresentations or omissions or failures to act
that were alleged or could have been alleged in the Derivative Actions.
1.3.            “Additional Securities Actions” means any action brought after
the date hereof by a purchaser of Akorn’s common stock asserting either
individually or on behalf of a class of purchasers any claims arising out of,
relating to or in connection with (i) the allegations, facts, matters, events,
transactions, acts, occurrences, statements, representations,
misrepresentations, or omissions or failures to act that were alleged or could
have been alleged in the Action; or (ii) any disclosures, non-disclosures or
public statements made in connection with any of the foregoing.
1.4.            “Akorn” means Akorn, Inc. and, where applicable, any successor
entity.
1.5.            “Akorn Compensation Plan” means any plan implemented and
maintained by Akorn for the compensation of its employees, management or
directors, including, but not limited to, the Akorn, Inc. 2014 Stock Option Plan
and the Akorn, Inc. 2017 Omnibus Incentive Compensation Plan.
1.6.            “Applicable Insurance Policies” means the following insurance
policies of
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Akorn:  US00075683DO17A, issued by XL Specialty Insurance Company; 0307-5817,
issued by Allied World National Assurance Company; and DOX10007587102, issued by
Endurance American Insurance Company.
1.7.            “Applicable Procedures” means, with respect to any transfer or
exchange of or for the beneficial interest(s) in any Settlement Shares or
Settlement CVRs, the rules and procedures of the DTC, the Escrow Agent, the
Transfer Agent or the Trustee and/or other applicable rules and procedures
(including the rules and procedures of the Escrow Agent, the Transfer Agent and
the Trustee with respect to certificated or book-entry securities) that apply to
such transfer or exchange.
1.8.            “Authorized Claimant” means a Settlement Class Member who timely
submits a valid Proof of Claim Form to the Claims Administrator.
1.9.            “Available Settlement Shares” means such Settlement Shares that
are available to be issued and delivered in full compliance with applicable laws
and in accordance with paragraphs 12 through 15 herein, which shall be, in all
cases, (i) duly and validly issued, fully paid, non-assessable and free from all
liens and encumbrances; (ii) exempt from the registration requirements of the
Securities Act pursuant to Section 3(a)(10); (iii) registered on a Form 8-A or
other Exchange Act registration statement that has been filed with the
Commission and has become effective in accordance with the provisions of the
Exchange Act; (iv) free from and not underlying or otherwise encumbered by any
unexpired options or other equity-based awards previously granted pursuant to
any Akorn Compensation Plan or reserved for issuance thereunder; and
(v) approved for listing on The NASDAQ Global Select Market (or any such other
stock
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exchange or market on which the shares of Akorn’s common stock shall then be
authorized for listing) such that the Available Settlement Shares shall
constitute “covered securities” within the meaning of Section 18(b) of the
Securities Act.
1.10.            “Cash Settlement Amount” means the D&O Coverage Amount
remaining as of the date hereof, less any erosion (not to exceed the
Reimbursement Cap) due to Reimbursable Defense Costs.
1.11.            “Cash Escrow Fund” means the Initial Cash Escrow Amount,
together with the excess, if any, of the Reimbursement Cap over the Reimbursable
Defense Costs deposited into the Escrow Account pursuant to paragraph 10 herein
following the date on which the Order and Final Judgment becomes Final.
1.12.            “Change in Control” means the acquisition of ownership,
directly or indirectly, beneficially or of record, by any person or entity (or
group of persons or entities) of equity interests representing more than fifty
percent (50%) of the aggregate ordinary voting power represented by the issued
and outstanding equity interest of Akorn.
1.13.            “Claimant” means a person or entity that submits a Proof of
Claim Form to the Claims Administrator seeking to share in the proceeds of the
Settlement of this Action.
1.14.            “Claims” means any and all manner of claims, debts, demands,
controversies, obligations, losses, costs, interest, penalties, fees, expenses,
rights, duties, judgments, sums of money, suits, contracts, agreements,
promises, damages, actions, causes of action and liabilities, of every nature
and description in law or equity (including, but not limited to, any claims for
damages, whether compensatory, special, incidental,
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consequential, punitive, exemplary or otherwise, injunctive relief, declaratory
relief, rescission or rescissionary damages, interest, attorneys’ fees, expert
or consulting fees, costs, or expenses), accrued or unaccrued, known or unknown,
arising under federal, state, common, administrative, or foreign law, or any
other law, rule, or regulation.
1.15.            “Claims Administrator” means the entity or firm, to be retained
by Lead Counsel, subject to Court approval, which shall send the Notice to the
Settlement Class Members, arrange for publication of the Publication Notice,
process Proof of Claim Forms received by Claimants, administer the disbursements
from and the distribution of the Net Settlement Fund to Authorized Claimants,
and perform such other administrative functions required under this Stipulation.
1.16.            “Class Distribution Order” means an order of the Court
approving the Claims Administrator’s administrative determinations concerning
the acceptance and rejection of the Claims submitted herein and approving any
Notice and Administration Expenses not previously applied for, including the
fees and expenses of the Claims Administrator, and, if the Effective Date has
occurred, directing distribution of the Net Settlement Fund to Authorized
Claimants.
1.17.            “Class Period” means, for the purposes of this Settlement only,
the period from November 3, 2016 through January 8, 2019, inclusive.
1.18.            “Class Settlement Shares” means the Settlement Shares, less any
Settlement Shares awarded to Plaintiffs’ Counsel pursuant to paragraphs 20
through 25 herein, as attorneys’ fees or to pay for Litigation Expenses.
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1.19.            “Commission” means the United States Securities and Exchange
Commission.
1.20.            “Court” means the United States District Court for the Northern
District of Illinois, Eastern Division, the Honorable Matthew F. Kennelly
presiding.
1.21.            “CVR Agreement” means the Contingent Value Rights Agreement
that shall be executed by Akorn and the Trustee on the date on which the Order
and Final Judgment becomes Final in or substantially in the form attached hereto
as Exhibit C with such modifications as may be necessary to reflect the
operational and administrative agency requirements and other reasonable requests
of the Trustee, in consideration of the release and final disposition of the
Settled Claims by the Releasing Persons.
1.22.            “D&O Coverage Amount” means the total coverage amount available
pursuant to the Applicable Insurance Policies, which amount is equal to Thirty
Million Dollars ($30,000,000.00).
1.23.          “D&O Insurers” means XL Specialty Insurance Company, Allied World
National Assurance Company and Endurance American Insurance Company, the
insurance companies that issued or are otherwise responsible for the insurance
policies that comprise the Applicable Insurance Policies.
1.24.            “Defendants” means Akorn, Rai, Portwood, Weinstein, Johnson and
Tambi.
1.25.            “Defendants’ Counsel” means the law firms of
Cravath, Swaine & Moore LLP and Figliulo & Silverman, P.C.
1.26.            “Derivative Actions” means the actions captioned Kogut v.
Akorn, Inc. et
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al., No. 646,174 (La. 19th Dist. Ct.) and In re Akorn, Inc. S’holder Deriv.
Litig., No. 18-cv-7374 (N.D. Ill.).
1.27.            “DTC” means the Depository Trust Company, a New York
corporation.
1.28.            “Effective Date” means the first date by which all the events
and conditions specified in paragraph 47 herein have been met and have occurred.
1.29.            “Escrow Account” means the escrow account, to be established by
Lead Counsel at a federally-insured banking institution approved by Defendants
and to be administered by the Escrow Agent, into which the Settlement
Consideration shall be deposited and held in escrow in accordance with the terms
hereof.  The Cash Escrow Fund held in the Escrow Account shall be held in an
interest-bearing account.  With the sole exception of depositing the Settlement
Consideration into the Escrow Account as provided for in paragraphs 9 through 17
herein, Defendants shall have no responsibility or liability relating to the
Escrow Account or the Settlement Fund maintained in the Escrow Account
including, without limitation, responsibility or liability related to any
interest (of any kind and at any time), fees, Taxes and Tax Expenses, investment
decisions, maintenance, supervision and distributions of any portions of the
Settlement Consideration.  Lead Counsel’s failure to establish the Escrow
Account shall not impair the enforceability of the Settlement.
1.30.            “Escrow Agent” means such party as may be chosen by Akorn, in
consultation with Lead Counsel, to act as escrow agent hereunder.
1.31.            “Escrow Agreement” means the escrow agreement between (i)
Akorn;
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(ii) Lead Counsel, on behalf of Lead Plaintiffs and the Settlement Class, and
(iii) the Escrow Agent.  The Escrow Agreement shall provide that the delivery of
the Settlement Consideration into the Escrow Account shall satisfy all of
Defendant’s payment and delivery obligations hereunder and thereunder, and that
Defendants and Defendants’ Counsel shall have neither authority over nor
responsibility or liability of any kind for the Escrow Account or the treatment
or disposition of the Settlement Fund therein.
1.32.            “Exchange Act” means the Securities Exchange Act of 1934, as
amended, codified at 15 U.S.C. § 78a et seq.
1.33.            “Final,” with respect to the Order and Final Judgment,
means:  (i) if no appeal is filed, the expiration of the time for filing or
noticing any appeal from the Court’s entry of the Order and Final Judgment in or
substantially in the form of Exhibit B to this Stipulation, i.e., thirty (30)
days after entry of the Order and Final Judgment; or (ii) if there is an appeal,
the date of final dismissal of any appeal from the Order and Final Judgment, or
the final dismissal of any proceeding on certiorari to review the Order and
Final Judgment; or (iii) the date of final affirmance on an appeal, if any, of
the Order and Final Judgment, the expiration of the time to file a petition for
a writ of certiorari, or the denial of a writ of certiorari to review the Order
and Final Judgment, or, if certiorari is granted, the date of final affirmance
of the Order and Final Judgment following review pursuant to such grant.  Any
proceeding or order, or any appeal or petition for a writ of certiorari
pertaining solely to any plan of allocation and/or application for attorneys’
fees, costs or expenses, shall not in any way delay or preclude the Order and
Final Judgment from
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becoming Final.
1.34.            “Individual Defendants” means Rai, Portwood, Weinstein, Johnson
and Tambi.
1.35.            “Initial Cash Escrow Amount” means the D&O Coverage Amount
remaining as of the date hereof, less the Reimbursement Cap.  Defendants
estimate the Initial Cash Escrow Amount to be approximately Twenty-Eight Million
Dollars ($28,000,000.00) as of the date hereof.  In the event that the Court
declines to extend the Stay Order for the duration of the proceedings related to
this Settlement, the Initial Cash Escrow Amount will be approximately
Twenty-Seven Million, Five Hundred Thousand Dollars ($27,500,00.00).
1.36.            “Lead Counsel” means the law firm of Entwistle & Cappucci LLP.
1.37.            “Lead Plaintiffs” or “Gabelli Funds” mean Gabelli & Co.
Investment Advisors, Inc. and Gabelli Funds, LLC.
1.38.            “Liaison Counsel” means the law firm of Bernstein Litowitz
Berger & Grossmann LLP acting as local counsel.
1.39.            “Litigation Expenses” means reasonable and documented
out-of-pocket costs and expenses incurred by Lead Plaintiffs and Lead Counsel in
connection with commencing, prosecuting and settling the Action (which may
include the costs and expenses of Lead Plaintiffs directly related to their
representation of the Settlement Class), for which Lead Counsel intends to apply
to the Court for reimbursement to be paid from (and out of) the Settlement
Fund.  Litigation Expenses does not include attorneys’ fees
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incurred in connection with commencing, prosecuting and settling the Action.
1.40.            “Litigation Parties” means Defendants and Lead Plaintiffs,
individually and on behalf of the Settlement Class.
1.41.            “Net Settlement Fund” means the Settlement Fund less (i)
Court-awarded attorneys’ fees and Litigation Expenses; (ii) Notice and
Administration Expenses; (iii) any required payments of Taxes or Tax Expenses;
and (iv) any other fees or expenses approved by the Court.
1.42.            “Notice” means the Notice of:  (I) Pendency of Class Action and
Proposed Settlement; (II) Settlement Fairness Hearing; and (III) Motion for and
Award of Attorneys’ Fees and Reimbursement of Litigation Expenses, which is to
be sent to Settlement Class Members in, or substantially in, the form attached
hereto as Exhibit A-1 to Exhibit A (the Preliminary Approval Order).
1.43.            “Notice and Administration Expenses” means all expenses
incurred by either the Claims Administrator or Lead Counsel in connection with
the preparation, printing and mailing of the Notice to the Settlement Class,
publication of the Publication Notice, and all expenses of settlement
administration.
1.44.            “Order and Final Judgment” means the Order and Final Judgment
Approving Class Action Settlement to be entered by the Court, in or
substantially in the form attached hereto as Exhibit B.
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1.45.            “Opt-Outs” means putative Settlement Class Members who validly
exclude themselves from the Settlement Class by timely filing a request for
exclusion in accordance with the requirements set forth in the Notice, as
contemplated by paragraph 44 herein.
1.46.            “Plaintiffs” means Lead Plaintiffs and the Settlement Class.
1.47.            “Plaintiffs’ Counsel” means Lead Counsel and all other legal
counsel who, at the direction and under the supervision of Lead Counsel, have
performed services on behalf of Lead Plaintiffs and/or the Settlement Class in
connection with the Action.
1.48.            “Plan of Allocation” means the plan and procedures for
allocating the Net Settlement Fund to be distributed to Authorized Claimants
following approval of the same by the Court.
1.49.            “Preliminary Approval Order” means the Order Preliminarily
Approving Settlement, Approving Form of Class Notice, and Setting Hearing Date
for Final Approval of Settlement, to be entered by the Court, in or
substantially in the form attached as Exhibit A to this Stipulation.
1.50.            “Proof of Claim Form” or “Proof of Claim Forms” mean the proof
of claim and release form in or substantially in the form attached as
Exhibit A-2 to Exhibit A, which each Claimant must complete and submit should
that Claimant seek to share in a distribution of the Net Settlement Fund.
1.51.            “Publication Notice” means the Summary Notice of (I) Pendency
of Class Action and Proposed Settlement; (II) Settlement Fairness Hearing; and
(III) Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation
Expenses, in or substantially
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in the form attached as Exhibit A-3 to Exhibit A.
1.52.            “Reimbursable Defense Costs” means the defense fees and costs
incurred by Defendants, up to and not exceeding the Reimbursement Cap, for which
they may seek reimbursement under the Applicable Insurance Policies during the
pendency of the Stay Order and proceedings related to this Settlement.  Such
fees and costs include any defense fees and costs arising from or related to
(i) the Action, including fees and costs arising from or related to this
Stipulation or the Settlement; (ii) the Twin Funds Action; (iii) the Manikay
Funds Action; (iv) the Derivative Actions; (v) any Additional Derivative
Actions; and/or (vi) any Additional Securities Actions.  Such fees and costs do
not include any defense fees and costs that are covered by insurance policies of
Akorn or the Individual Defendants other than the Applicable Insurance Policies.
1.53.            “Reimbursement Cap” means (i) Two Million Dollars
($2,000,000.00) while the Stay Order is in effect; and (ii) Two Million, Five
Hundred Thousand Dollars ($2,500,00.00) if either the Stay Order is lifted while
proceedings relating to this Settlement are ongoing or if any Additional
Securities Action is filed that is not stayed.
1.54.            “Released Persons” refers jointly and severally, individually
and collectively to all current or former Defendants in the Action and their
current and former directors, officers, shareholders, employees, servants,
partners, agents, affiliates, subsidiaries, parents, joint ventures, successors
or assigns, and any representatives, trustees, executors, heirs, assigns or
transferees, attorneys, accountants, investment bankers, commercial bankers,
advisors or insurers of any of the foregoing, as well as all
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counsel representing such persons or entities in connection with the Action or
any transaction from which the Action arises.  As used in this paragraph,
“affiliates” means entities controlling, controlled by or under common control
with any of the Released Persons. All Released Persons are express third-party
beneficiaries of this Stipulation.
1.55.            “Releasing Persons” means Lead Plaintiffs, Settlement Class
Members and, to the extent acting as such, Lead Plaintiffs’ or any Settlement
Class Members’ current and former directors, officers, shareholders, employees,
servants, partners, agents, affiliates, subsidiaries, parents, joint ventures,
successors or assigns, and any representatives, trustees, executors, heirs,
assigns or transferees, attorneys, accountants, investment bankers, commercial
bankers, advisors or insurers of any of the foregoing, jointly and severally,
individually and collectively, whether in an individual, class, representative,
legal, equitable or any other type or in any other capacity.  As used in this
paragraph, “affiliates” means entities controlling, controlled by or under
common control with any Releasing Person.
1.56.            “Second Amended Complaint” means the Second Consolidated
Amended Class Action Complaint for Violations of the Federal Securities Laws,
filed by Lead Plaintiffs in this Action on April 22, 2019.
1.57.            “Section 3(a)(10)” means Section 3(a)(10) of the Securities
Act, codified at 15 U.S.C. § 77c(a)(10).
1.58.            “Securities Act” means the Securities Act of 1933, as amended,
codified at 15 U.S.C. § 77a et seq.
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1.59.            “Settled Claims” means any and all Claims (including any Claim
that this Stipulation was fraudulently induced), demands, rights, actions or
causes of action, whether the Claims are known or Unknown Claims, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed, hidden or
concealed, matured or unmatured, accrued or unaccrued, that have been, could
have been, or in the future can or might be asserted in the Action or in any
court, tribunal or proceeding, including, but not limited to, any claims arising
under federal or state statutory or common law or relating to alleged fraud,
misrepresentation (negligent, reckless, intentional or otherwise, and including
misrepresentations through omission(s)), breach of any duty, negligence,
violations of federal or state securities laws or any other claim under any
theory by or on behalf of the Lead Plaintiffs and/or any and all Settlement
Class Members that any of the Releasing Persons ever had, now has, or hereafter
can, shall or may have against the Released Persons by reason of, arising out
of, relating to or in connection with (i) the allegations, facts, matters,
events, transactions, acts, occurrences, statements, representations,
misrepresentations, or omissions or failures to act that were alleged or could
have been alleged in the Action; (ii) any disclosures, non-disclosures or public
statements made in connection with any of the foregoing; and (iii) the
Stipulation and the Settlement. For the avoidance of doubt, the Settled Claims
do not include (x) any claim by or on behalf of any Defendant against any
insurance carrier; (y) any claim to enforce the Settlement, if approved by the
Court, or the Stipulation; or (z) any claim of or against any Opt-Outs.
1.60.            “Settlement” means the settlement contemplated by this
Stipulation.
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1.61.            “Settlement Consideration” means the sum of:  (i) the Cash
Settlement Amount; (ii) the Settlement Shares; and (iii) the Settlement CVRs,
which aggregate amount shall include all attorneys’ fees and Litigation
Expenses, and all costs related to Notice and Administration Expenses.
1.62.            “Settlement Class”, “Settlement Class Member” and “Settlement
Class Members” mean, for the purposes of this Settlement only, all persons or
entities that purchased or otherwise acquired shares of Akorn’s common stock
during the Class Period and were damaged thereby, including any and all of their
respective successors in interest, predecessors, representatives, trustees,
executors, administrators, heirs, assigns or transferees, immediate and remote,
and any person or entity acting for or on behalf of, or claiming under, any of
them.  Excluded from the Settlement Class are (i) Defendants; (ii) any person
who was an officer, director or managing agent of Akorn or any of its
subsidiaries or affiliates at any point during the Class Period; (iii) members
of the immediate family of any of the foregoing individuals (including all
trusts and other entities related to, owned or controlled by such individuals);
(iv) any affiliate of Akorn; (v) any entity in which any Defendant has or had a
controlling interest; (vi) any Opt-Outs; and (vii) the legal representatives,
heirs, predecessors, successors or assigns of any of the foregoing.
1.63.            “Settlement CVRs” means the contingent value rights to be
issued and delivered by Akorn pursuant to the terms of this Stipulation and the
CVR Agreement.  Such contingent value rights shall be, in all cases, (i) valid
and binding obligations of Akorn;
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(ii) exempt from the registration requirements of the Securities Act pursuant to
Section 3(a)(10); and (iii) registered on a Form 8-A or other Exchange Act
registration statement that has been filed with the Commission and has become
effective in accordance with the provisions of the Exchange Act.
1.64.            “Settlement Hearing” means the hearing held to determine
whether the proposed Settlement embodied by this Stipulation is fair, reasonable
and adequate to the Settlement Class, and whether the Court should enter the
Order and Final Judgment approving the Settlement.
1.65.            “Settlement Fund” means the Cash Escrow Fund, together with the
Settlement Shares and Settlement CVRs, maintained in the Escrow Account.
1.66.            “Settlement Shares” means the shares of Akorn common stock, no
par value per share, that either (i) are available, authorized, unissued and
uncommitted as of the date hereof (which number is approximately 6,486,375, in
total, as of the date hereof) or (ii) are released during the calendar years of
2019 through 2024, inclusive, by the expiration of unexercised out-of-the-money
options granted prior to the date hereof pursuant to an Akorn Compensation Plan
(which number is approximately 2,249,330, in total, as of the date hereof), in
each case to be issued and delivered by Akorn pursuant to the terms of this
Stipulation at such time as such Settlement Shares become Available Settlement
Shares in accordance with paragraphs 12 through 15 herein in consideration of
the release and final disposition of the Settled Claims by the Releasing
Persons.  The total number of Settlement Shares to be issued pursuant to this
Stipulation shall not exceed the available, authorized,
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unissued and uncommitted shares as of the date hereof and the shares that are
released by the expiration of unexercised out-of-the-money options outstanding
as of the date hereof.  For the avoidance of doubt, Settlement Shares shall not
include shares of Akorn’s common stock that are released by any expiration of
unexercised out-of-the-money options in connection with a Change in Control.
1.67.            “Settling Parties” means Releasing Persons and Released
Persons.
1.68.            “Stay Order” means any order or orders that, individually or in
the aggregate, have the effect of:  (i) staying all proceedings in the Action
and any action as to which the Court has entered a finding of relatedness
pursuant to Local Rule 40.4, including, but not limited to, the Wickstrom
Action, the Juan Action, the Twin Funds Action, the Manikay Funds Action and any
other action; and (ii) transfering to the Court’s docket as a related case
pursuant to Local Rule 40.4 any Additional Securities Action commenced in or
transferred to the Northern District of Illinois, and staying such action.
1.69.            “Stipulation” means this Stipulation and Agreement of
Settlement, dated as of August 9, 2019, entered into between (a) Lead
Plaintiffs, individually and on behalf of the Settlement Class; and (b)
Defendants.
1.70.            “Taxes” means any taxes (including any estimated taxes,
interest or penalties) arising with respect to any income earned by the
Settlement Fund, including any taxes or tax detriments to which Defendants may
possibly be subject (as computed on a “first-dollar” basis) with respect to (i)
any income earned by the Settlement Fund for any period during which the
Settlement Fund is not treated, or does not qualify, as a “qualified
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settlement fund” for federal or state income tax purposes; and (ii) the payment
or reimbursement by the Settlement Fund of any taxes or tax detriments described
in clause (i) of this paragraph.
1.71.            “Tax Expenses” means expenses and costs incurred in connection
with the operation and implementation of paragraph 27 herein (including expenses
of tax attorneys and/or accountants and mailing and distribution costs and
expenses relating to filing, or failing to file, the returns described in
paragraph 27 herein).
1.72.            “Termination Notice” means a written notice delivered by either
Defendants or Lead Plaintiffs indicating their intent to terminate the
Settlement and this Stipulation pursuant to the terms set forth in paragraphs 48
through 52 herein.
1.73.            “Transfer Agent” means Akorn’s transfer agent, Computershare
Trust Company, N.A., or such other party as is Akorn’s transfer agent from time
to time.
1.74.            “Trustee” means such party as may be chosen by Akorn, in
consultation with Lead Counsel, to act as trustee with respect to the Settlement
CVRs.
1.75.            “Unknown Claims” means any and all Claims that Defendants, Lead
Plaintiffs, for themselves, the Settlement Class, and any or all other persons
and entities whose claims are being released, do not know or suspect to exist,
which, if known by him, her or it, might affect his, her or its agreement to
release the Settling Parties or the Settled Claims, or might affect his, her or
its decision to object to or not object to the Settlement.  With respect to any
and all Settled Claims, the Litigation Parties stipulate and agree that upon the
Effective Date, the Plaintiffs and Defendants shall expressly waive, and each
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Released Person and Releasing Person shall be deemed to have waived, and by
operation of the Order and Final Judgment shall have expressly waived, any and
all provisions, rights and benefits of or conferred by any law of any state or
territory of the United States or by any law of any other country, or principle
of common law, which is or is similar, comparable, or equivalent to Cal. Civ.
Code § 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Plaintiffs or Defendants may hereafter discover facts in addition to or
different from those which he, she or it now knows or believes to be true with
respect to the subject matter of the Settled Claims, but hereby stipulates and
agrees that Lead Plaintiffs and each other Releasing Person shall be deemed to
settle and release, and upon the Effective Date and by operation of the Order
and Final Judgment shall have settled and released, fully, finally, and forever,
all Settled Claims against Released Persons, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden,
which now exist, or which heretofore existed upon any theory of law or equity
now existing or coming into existence in the future, including, but not limited
to, conduct that is negligent or intentional and with or without malice, or a
breach of any duty, law, or rule, without regard to the subsequent discovery or
existence of such different or additional facts.
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II.
PRELIMINARY APPROVAL OF SETTLEMENT

2.            Promptly after this Stipulation has been fully executed, Lead
Counsel and Defendants’ Counsel shall jointly apply to the Court for entry of a
Preliminary Approval Order, substantially in the form attached hereto as
Exhibit A (with annexes).  During the period from execution of this Stipulation
to the Effective Date, which shall include the period following entry of the
Preliminary Approval Order, each of the Settling Parties, and their respective
heirs, executors, administrators, successors and assigns and all persons acting
in concert with any such person or entity, agree not to institute, maintain or
prosecute any or all Settled Claims against any or all of the Settling Parties.
3.            Solely for purposes of this Settlement and for no other purpose,
the Lead Plaintiffs and Defendants agree to the certification of the Action as a
class action.  Solely for purposes of this Settlement and for no other purpose,
the Defendants agree not to contest:  (a) certification of the Action as a class
action pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil
Procedure on behalf of the Settlement Class; (b) certification of Lead
Plaintiffs as class representatives for the Settlement Class; and
(c) appointment of Lead Counsel as class counsel for the Settlement Class
pursuant to Rule 23(g) of the Federal Rules of Civil Procedure.  In the event
that this Settlement is terminated pursuant to the terms of this Stipulation,
the certification of the Settlement Class in connection with this Settlement
shall become null and void.  In such case, the Defendants shall have the right
to continue to oppose the certification of a class.
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III.
RELEASE OF CLAIMS

4.            The obligations incurred pursuant to this Stipulation are in
consideration of:  (i) the agreement by Akorn to use its best efforts to make
available to the Settlement Class the Cash Settlement Amount; (ii) the delivery
of the Settlement Shares and Settlement CVRs by Akorn for the benefit of the
Settlement Class; (iii) the full and final disposition of the Action as against
all Defendants; and (iv) the releases provided for herein, including the release
and final disposition of any and all Settled Claims.
5.            (a)  By operation of the Order and Final Judgment, upon the
Effective Date, each and all of the Releasing Persons, on behalf of themselves
and their respective heirs, executors, administrators, successors and assigns
and all persons acting in concert with any such person shall, with respect to
each and every Settled Claim, waive, release, forever discharge and dismiss,
with prejudice, and agree not to institute, maintain or prosecute any or all
Settled Claims against any or all of the Released Persons, and shall be
permanently and finally enjoined without the necessity of posting a bond from
commencing or prosecuting any actions or other proceedings asserting any of the
Settled Claims either directly, indirectly, representatively, derivatively or in
any other capacity against any of the Released Persons.  This injunction
expressly extends to all claims covered by this Stipulation and all Releasing
Persons defined herein.
(b)  By operation of the Order and Final Judgment, upon the Effective Date, each
of the Released Persons, on behalf of themselves and their respective heirs,
executors, administrators, successors and assigns and all persons acting in
concert with any such person, shall have, fully, finally, and forever released,
relinquished, and discharged Lead Plaintiffs, Plaintiffs’ Counsel and the
Settlement Class (except any Opt-Outs) from all Claims (including Unknown
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Claims) arising out of, relating to, or in connection with, the institution,
prosecution, assertion, Settlement, or resolution of the Action or the Settled
Claims except to enforce the releases and other terms and conditions contained
in this Stipulation or any Court order (including, but not limited to, the Order
and Final Judgment) entered pursuant thereto.

IV.
THE SETTLEMENT CONSIDERATION

6.            In consideration of the agreements of Defendants contained herein,
Lead Plaintiffs shall cooperate and use their reasonable best efforts to bring
about the settlement or dismissal with prejudice of the Derivative Actions as
promptly as practicable.
7.            In consideration of the settlement of the Settled Claims against
the Released Persons and Lead Plaintiffs’ obligations as described in
paragraph 6 herein, Akorn shall (i) use its best efforts to make available to
the Settlement Class the Cash Settlement Amount as set forth in paragraphs 9
through 11 herein, and (ii) deliver the Settlement Shares and the Settlement
CVRs for the benefit of the Settlement Class as set forth in paragraphs 12
through 15 and 16 through 17, respectively.
8.            Any sums required to be held in escrow hereunder shall be held by
the Escrow Agent for the benefit of the Plaintiffs and the Settlement Class
until the Effective Date.   The Escrow Agent shall not disburse or distribute
the Settlement Fund, or any portion thereof, except as provided in this
Stipulation, upon order of the Court or with the prior written agreement of
Defendants’ Counsel and Lead Counsel.  Subject to further order and/or direction
as may be made by the Court or at the direction of Lead Counsel, the Escrow
Agent is authorized to execute such transactions on behalf of the Settlement
Class as are consistent with the terms of this
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Stipulation.  All funds held by the Escrow Agent shall be deemed to be in the
custody of the Court, and shall remain subject to the jurisdiction of the Court,
until such time as such funds shall be distributed to Authorized Claimants
pursuant to this Stipulation and/or further order of the Court, or returned to
the entity or entities that deposited the Settlement Consideration into the
Escrow Account on Defendants’ behalf in the event that this Stipulation is not
consummated or is terminated pursuant to Section IX herein.
A.      CASH SETTLEMENT AMOUNT
9.            Akorn shall use its best efforts to cause the D&O Insurers to pay,
via check or wire transfer, the Initial Cash Escrow Amount into the Escrow
Account as soon as practicable after the later of (i) entry by the Court of the
Preliminary Approval Order and (ii) delivery by Lead Counsel to Defendants’
Counsel of an IRS Form W-9 and complete wiring instructions for the Escrow
Account.  The Escrow Agent shall hold the Initial Cash Escrow Amount as
fiduciary for the benefit of the Settlement Class.
10.            Akorn shall use its best efforts to cause the D&O Insurers to
pay, via check or wire transfer, into the Escrow Account, not later than ten
(10) business days after the date on which the Order and Final Judgment becomes
Final:  (i) the Initial Cash Escrow Amount, to the extent that the D&O Insurers
have not already deposited the Initial Cash Escrow Amount as set forth in
paragraph 9 herein; and (ii) the excess, if any, of the Reimbursement Cap over
Reimbursable Defense Costs as of such date (inclusive of any Reimbursable
Defense Costs incurred, but for which Defendants have not yet received an
invoice).
11.            The payment of the Cash Settlement Amount shall be subject to the
following terms and conditions:
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(a)  Akorn shall use its best efforts to enable pursuit of insurance proceeds by
the Settlement Class in the event of non-payment of the Cash Settlement Amount
by any D&O Insurer, including, if necessary, assigning to Lead Plaintiffs, on
behalf of the Settlement Class, Akorn’s rights pursuant to the Applicable
Insurance Policies; provided, however, such assignment will not be made if, in
Lead Counsel’s judgment, it will impair coverage under the Applicable Insurance
Policies or applicable law.
(b)  Defendants agree to use their reasonable best efforts to avoid any
unnecessary depletion of the D&O Coverage Amount while (i) the Stay Order is in
effect and (ii) proceedings relating to this Settlement are ongoing.
(c)  Defendants agree not to seek reimbursement from the Applicable Insurance
Policies for an amount in excess of the Reimbursement Cap while proceedings
relating to this Settlement are ongoing.  For the avoidance of doubt, other than
payment of Reimbursable Defense Costs up to the Reimbursement Cap, Defendants
agree not to use the proceeds of the Applicable Insurance Policies for any
purpose other than the payment of the Cash Settlement Amount.
(d)  The Cash Settlement Amount shall be distributed to Authorized Claimants
according to the terms set forth in paragraphs 38 through 40 herein.
(e)  For the avoidance of doubt, the Cash Settlement Amount shall be funded
solely from the proceeds of the Applicable Insurance Policies.
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B.                  SETTLEMENT SHARES
12.            As soon as practicable after the entry by the Court of the
Preliminary Approval Order, Akorn shall use its best efforts to issue and
deliver to the Escrow Agent pursuant to Section 3(a)(10), as fiduciary for the
benefit of the Settlement Class, all shares constituting Available Settlement
Shares as of the date of entry of the Preliminary Approval Order, which shares
shall be held by the Escrow Agent as fiduciary for the benefit of the Settlement
Class.  Notwithstanding the foregoing, it is understood and agreed between the
Litigation Parties that the Settlement Shares are to be issued pursuant to the
registration exemption set forth in Section 3(a)(10), and nothing herein shall
require Akorn to undertake any steps toward issuance of Available Settlement
Shares other than seeking entry of the Order and Final Judgment prior to
satisfaction of the requirements of Section 3(a)(10).
13.            No later than ten (10) business days after the date on which the
Order and Final Judgment becomes Final, Akorn shall issue and deliver to the
Escrow Agent pursuant to Section 3(a)(10), as fiduciary for the benefit of the
Settlement Class, all shares constituting Available Settlement Shares as of the
date on which the Order and Final Judgment becomes Final that were not already
issued and delivered to the Escrow Agent pursuant to paragraph 12 herein.
14.            No later than ninety (90) days after the date on which any
Settlement Shares not yet issued and delivered pursuant to paragraphs 12 and 13
herein shall become Available Settlement Shares through the expiration of
unexercised out-of-the-money options outstanding as of the date hereof, Akorn
will issue and deliver to the Escrow Agent pursuant to Section 3(a)(10), as
fiduciary for the benefit of the Settlement Class, any such Available Settlement
Shares; provided, however, that, for the avoidance of doubt and consistent with
the definition of
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“Settlement Shares”, Akorn shall be under no obligation to issue any shares
under this Stipulation on account of options that expire on or after January 1,
2025.
15.            The issuance and delivery of the Settlement Shares shall be
subject to the following terms and conditions:
(a)  In order to qualify the Settlement Shares for the exemption from the
registration requirements of the Securities Act provided by Section 3(a)(10),
the Litigation Parties and their counsel will cooperate so that each of the
following conditions will be satisfied:  (i) Settlement Class Members shall be
given adequate notice of the Settlement Hearing; (ii) the Settlement Hearing
shall be open to all Settlement Class Members; (iii) there shall be no improper
impediments to the appearance of any Settlement Class Member at the Settlement
Hearing; (iv) the Court shall be advised before the Settlement Hearing that
Akorn will rely on the Section 3(a)(10) registration exemption based on the
Court’s approval of the issuance of the Settlement Shares as part of the
consideration provided in exchange for the settlement and release of the Settled
Claims; (v) the Settlement Hearing shall include consideration of the fairness
of the terms and conditions of the issuance of the Settlement Shares in exchange
for the settlement and release of the Settled Claims; (vi) the Order and Final
Judgment shall approve the fairness of the terms and conditions of the issuance
of the Settlement Shares in exchange for the settlement and release of the
Settled Claims; (vii) the Order and Final Judgment shall state that the
Settlement Shares are freely tradable, and exempt from registration under
Section 3(a)(10) and any analogous provisions of applicable state securities
laws, and that Akorn may choose to distribute the Settlement Shares without
registration and compliance with the prospectus delivery requirements of the
U.S. securities laws or any analogous state securities laws based on the Court’s
findings; and (viii) Lead
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Counsel will not request (and Plaintiffs’ Counsel will not accept) more than 25%
of the Settlement Shares in connection with an award of attorneys’ fees, as set
forth in paragraph 21 herein.
(b)  All Settlement Shares, including any Settlement Shares awarded to
Plaintiffs’ Counsel as attorneys’ fees, may only be issued when such Settlement
Shares have become Available Settlement Shares, subject to notice of issuance
(which such notice Akorn will provide promptly after issuance).  The Settlement
Shares shall be issued by Akorn only in certificate-less (book entry) form. 
Akorn shall not issue or otherwise provide any physical certificates for the
Settlement Shares or any portion thereof.
(c)  Upon delivery of the Settlement Shares to the Escrow Agent, the Escrow
Agent shall hold the Settlement Shares as fiduciary for the benefit of the
Settlement Class and, as applicable, as Court awarded attorneys’ fees and/or
Litigation Expenses in accordance with paragraphs 20 through 25 herein.  None of
the Settlement Class Members nor any of Defendants shall have any claim against
Lead Plaintiffs, Plaintiffs’ Counsel, or any of their agents, relating to
distributions of the Settlement Shares made in accordance with this Stipulation
and the plan of allocation approved by the Court.  The Releasing Persons hereby
release any and all Claims against the Released Persons that arise out of,
relate to, or are based on the issuance or transfer of the Settlement Shares
made in accordance with this Stipulation or distributions of the Settlement
Shares by Lead Plaintiffs, Lead Counsel, the Escrow Agent, or any of their
agents, and shall forever be barred and enjoined from prosecuting any and all
such claims against any of the Released Persons, provided, however, that the
foregoing shall not alter Akorn’s obligations under this Stipulation with
respect to the issuance or delivery of the Settlement Shares or the payment of
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costs associated therewith to the extent required by paragraph 15(e) herein.
(d)  After the Effective Date, Lead Counsel may direct the Escrow Agent to sell
any amount of Class Settlement Shares for the benefit of the Settlement Class. 
The Escrow Agent shall deposit the proceeds from such sale(s) into the Escrow
Account.  Such proceeds shall be distributed to Authorized Claimants in the same
manner as the Cash Settlement Amount, according to the terms set forth in
paragraphs 38 through 40 herein and Lead Counsel shall have no liability to the
Settlement Class for any decisions made with respect to the sale or transfer of
the Class Settlement Shares in accordance with the terms of this Stipulation.
(e)  With respect to any Class Settlement Shares that are not sold by the Escrow
Agent, Lead Counsel (through its broker) shall direct the Escrow Agent to
transfer such Settlement Shares in accordance with the Applicable Procedures, to
the accounts of Authorized Claimants, all in accordance with the written
instructions to be provided by Lead Counsel or the Claims Administrator at the
time of this transfer in accordance with paragraph 15(h) herein.  Akorn shall be
responsible for the payment of all costs associated with the issuance and
delivery of the Settlement Shares, including without limitation, (i) all costs
related to the transfer of the Settlement Shares to the Escrow Account and (ii)
all costs associated with listing the Settlement Shares on The NASDAQ Global
Select Market (or any other stock exchange or market on which Akorn’s common
stock is then listed or quoted).  However, all costs associated with
distributing the Settlement Shares to Authorized Claimants (including any costs
incurred by the Transfer Agent) will be paid from the Escrow Account and will
constitute Notice and Administration Expenses.  The Escrow Agent shall maintain
a cash reserve sufficient to cover the anticipated Notice and
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Administration Expenses associated with distributions of Settlement Shares.
(f)  Class Settlement Shares shall not be distributed by the Escrow Agent until
Akorn’s General Counsel receives instructions from Lead Counsel as to the
distribution of such Settlement Shares. Such instructions will include, but are
not limited to, transferring the Settlement Shares in accordance with the
Applicable Procedures, to the accounts of Authorized Claimants in the amounts
directed by the Claims Administrator.  Akorn shall authorize the Escrow Agent to
distribute the Settlement Shares in accordance with such instructions.
(g)  Akorn shall direct the Transfer Agent to provide Lead Counsel with
instructions as to all information the Transfer Agent requires, as well as all
formatting requirements, to enable the transfer of the Settlement Shares
electronically in accordance with the Applicable Procedures, to the accounts of
Authorized Claimants.  Such instructions shall include, but are not limited to,
any requirements necessary to satisfy the guidelines of the Securities Transfer
Association, Inc. so that the Proof of Claim Forms to be sent to potential
Settlement Class Members capture all such information in the appropriate format,
as well as the physical or electronic medium for the delivery of such
information that the Transfer Agent requires.  Akorn shall direct the Transfer
Agent to provide such instructions and review and provide comments, if any, on
the Proof of Claim Form within five (5) calendar days of the filing of the
motion for entry of the Preliminary Approval Order.  Any changes made to the
Proof of Claim Form at the request of the Transfer Agent shall not be deemed
material changes to the Proof of Claim Form.
(h)  Lead Counsel shall have sole responsibility, on behalf of the Settlement
Class, for directing Akorn to instruct the Escrow Agent to transfer in
accordance with the Applicable
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Procedures, to the accounts of Authorized Claimants the Settlement Shares
allocable to those claimants.  Any such directions (the “Settlement Shares
Instructions”) given to Akorn or the Escrow Agent by Lead Counsel shall be set
forth in a writing signed by Lead Counsel and accompanied by such information,
and in such physical or electronic medium as specified by the Transfer Agent as
set forth in paragraph 15(g) herein, to permit the Settlement Shares to be
immediately transferred electronically in accordance with the Applicable
Procedures, to the accounts of Authorized Claimants, in such amounts as are
appropriate.  Lead Counsel, Akorn, the Escrow Agent, the Claims Administrator,
and all entities under the direction of Lead Counsel shall cooperate with the
Transfer Agent to provide such information as is required for the Settlement
Shares Instructions.  Each of Lead Counsel and the Claims Administrator has the
right to rely on the instructions provided by the Transfer Agent as to the
information it requires, as well as the formatting requirements to enable the
transfer of the Settlement Shares electronically in accordance with the
Applicable Procedures, to the accounts of Authorized Claimants.  The Transfer
Agent, in its sole discretion, may request additional information or
reformatting in order to effect the transfer of the Settlement Shares in
accordance with the Applicable Procedures, to the accounts of the Authorized
Claimants.  Each of Akorn, the Escrow Agent and the Transfer Agent has the right
to rely on the accuracy and completeness of the information provided by Lead
Counsel or Authorized Claimants with respect to the issuance and distribution of
the Settlement Shares.  None of the Defendants, the Escrow Agent or the Transfer
Agent shall have any responsibility or liability regarding the accuracy or
completeness of any information provided by Lead Counsel or any Authorized
Claimant in respect to the issuance or distribution of the Settlement Shares, or
any losses incurred in connection therewith; however, as discussed in this
paragraph and in
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paragraph 15(g) herein, Akorn and the Transfer Agent are responsible for
providing complete and accurate instructions to Lead Counsel and the Claims
Administrator with respect to the information and formatting required in respect
to the issuance or distribution of the Settlement Shares.  Lead Counsel shall
provide Defendants’ Counsel with notice of the Settlement Shares Instructions at
the same time such Settlement Shares Instructions are delivered to Akorn.  Lead
Counsel shall not issue the Settlement Shares Instructions to Akorn with respect
to the Settlement Shares allocable to Authorized Claimants prior to the entry of
the Class Distribution Order authorizing the distribution of the Settlement
Shares, in whole or part, to Authorized Claimants.
(i)  As of the date the Settlement Shares are issued to the Escrow Agent, as
fiduciary for the Settlement Class, the Lead Plaintiffs and the Settlement Class
Members shall retain the benefit of any increase in the value of Akorn’s common
stock and assume the risk of any decrease in the value of Akorn’s common stock.
(j)  During the period between the initial issuance of the Settlement Shares and
the distribution of Class Settlement Shares to Authorized Claimants, on any
matter or at any meeting at which shareholders of Akorn are entitled to vote,
any such Settlement Shares not yet sold or distributed to Authorized Claimants
shall be deemed voted (and Lead Counsel shall and shall cause the voting of the
Settlement Shares) in the same manner in which the majority of the outstanding
shares of Akorn’s common stock (exclusive of the Settlement Shares) are actually
voted.
(k)  Akorn shall not:  (i) from the date hereof through December 31, 2024,
inclusive, reset the strike price of any options outstanding as of the date
hereof that are out-of-the-money as of the date hereof and issued heretofore
pursuant to any Akorn Compensation Plan; or
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(ii) issue, sell, grant or otherwise dispose of any of the Settlement Shares
other than as set forth in this Stipulation, including, but not limited to, as
set forth in paragraphs 12 through 15 herein.
C.   SETTLEMENT CVRs
16.            No later than ten (10) business days after the date on which the
Order and Final Judgment becomes Final, Akorn shall issue and deliver to the
Escrow Agent pursuant to Section 3(a)(10), as fiduciary for the benefit of the
Settlement Class, the Settlement CVRs.
17.            The issuance and delivery of the Settlement CVRs shall be subject
to the following terms and conditions:
(a)  In order to qualify the Settlement CVRs for the exemption from the
registration requirements of the Securities Act provided by Section 3(a)(10),
the Litigation Parties and their counsel will cooperate so that each of the
following conditions will be satisfied:  (i) Settlement Class Members shall be
given adequate notice of the Settlement Hearing; (ii) the Settlement Hearing
shall be open to all Settlement Class Members; (iii) there shall be no improper
impediments to the appearance of any Settlement Class Member at the Settlement
Hearing; (iv) the Court shall be advised before the Settlement Hearing that
Akorn will rely on the Section 3(a)(10) registration exemption based on the
Court’s approval of the issuance of the Settlement CVRs as part of the
consideration provided in exchange for the settlement and release of the Settled
Claims; (v) the Settlement Hearing shall include consideration of the fairness
of the terms and conditions of the issuance of the Settlement CVRs in exchange
for the settlement and release of
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the Settled Claims; (vi) the Order and Final Judgment shall approve the fairness
of the terms and conditions of the issuance of the Settlement CVRs in exchange
for the settlement and release of the Settled Claims; (vii) the Order and Final
Judgment shall state that the Settlement CVRs are freely tradable, and exempt
from registration under Section 3(a)(10) and any analogous provisions of
applicable state securities laws, and that Akorn may choose to distribute the
Settlement CVRs without registration and compliance with the prospectus delivery
requirements of the U.S. securities laws or any analogous state securities laws
based on the Court’s findings; and (viii) Lead Counsel will not request (and
Plaintiffs’ Counsel will not accept) more than 25% of the Settlement CVRs in
connection with an award of attorneys’ fees, as set forth in paragraph 21
herein.
(b)  The Settlement CVRs shall be issued in or substantially in the form set
forth in the CVR Agreement.  The Settlement CVRs shall be issued by Akorn only
in certificate-less (book entry) form.  Akorn shall not issue or otherwise
provide any physical certificates for the Settlement CVRs or any portion
thereof, except as provided by the CVR Agreement.
(c)  All Settlement CVRs, including any Settlement CVRs awarded to Plaintiffs’
Counsel as attorneys’ fees, shall be:  (i) valid and binding obligations of
Akorn; and (ii) exempt from the registration requirements of the Securities Act
pursuant to Section 3(a)(10).
(d)  Upon delivery of the Settlement CVRs to the Escrow Agent, the Escrow Agent
shall hold the Settlement CVRs as fiduciary for the benefit of the Settlement
Class and, as applicable, as Court awarded attorneys’ fees and/or Litigation
Expenses in accordance with paragraphs 20 through 25 herein.  None of the
Settlement Class Members nor any of Defendants shall have any claim against Lead
Plaintiffs, Plaintiffs’ Counsel, or any of their agents, relating to the
distributions of the Settlement CVRs made in accordance with this Stipulation
and the Plan of Allocation approved by the Court.  The Releasing Persons hereby
release any and all Claims
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against the Released Persons that arise out of, relate to, or are based on the
issuance or transfer of the Settlement CVRs made in accordance with this
Stipulation and the CVR Agreement or distributions of the Settlement CVRs by
Lead Plaintiffs, Lead Counsel, the Escrow Agent, or any of their agents, and
shall forever be barred and enjoined from prosecuting any and all such claims
against any of the Released Persons, provided, however, that the foregoing shall
not alter Akorn’s obligations under this Stipulation with respect to the
issuance or delivery of the Settlement CVRs or the payment of costs associated
therewith to the extent required by paragraph 17(e) herein.
(e)  Akorn shall be responsible for the payment of all costs associated with the
issuance and delivery of the Settlement CVRs, including without limitation, (i)
all costs related to the transfer of the Settlement CVRs to the Escrow Account
and (ii) all costs associated with listing the Settlement CVRs on The NASDAQ
Global Market (or any other such national securities exchange); provided,
however, that Lead Counsel and Lead Plaintiffs shall cooperate reasonably and in
good faith with Akorn as to any listing of such Settlement CVRs for trading on
The NASDAQ Global Market (or any other such national securities exchange). 
However, all costs associated with distributing the Settlement CVRs to
Authorized Claimants (including any costs incurred by the Trustee) will be paid
from the Escrow Account and will constitute Notice and Administration Expenses.
(f)  After the Effective Date, Lead Counsel may direct the Escrow Agent to sell
any amount of Settlement CVRs for the benefit of the Settlement Class.  The
Escrow Agent shall deposit the proceeds from such sale(s) into the Escrow
Account.  Such proceeds shall be distributed to Authorized Claimants in the same
manner as the Cash Settlement Amount, according to the
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terms set forth in paragraphs 38 through 40 herein.  Lead Counsel shall have no
liability to the Settlement Class for any actions taken with respect to the
transfer or sale of the Settlement CVRs in accordance with the terms of this
Stipulation.
(g)  Settlement CVRs shall not be distributed by the Escrow Agent until Akorn’s
General Counsel receives instructions from Lead Counsel as to the distribution
of such Settlement CVRs. Such instructions will include, but are not limited to,
transferring the Settlement CVRs in accordance with the CVR Agreement and the
Applicable Procedures, to the accounts of Authorized Claimants in the amounts
directed by the Claims Administrator.  Akorn shall authorize the Escrow Agent to
distribute the Settlement CVRs in accordance with such instructions.
(h)  Akorn shall direct the Trustee to provide Lead Counsel with instructions as
to all information the Trustee requires, as well as all formatting requirements,
to enable the transfer of the Settlement CVRs electronically in accordance with
the CVR Agreement and the Applicable Procedures, to the accounts of Authorized
Claimants.  Such instructions shall include, but are not limited to, any
requirements necessary to satisfy the guidelines of the Securities Transfer
Association, Inc. so that the Proof of Claim Forms to be sent to potential
Settlement Class Members capture all such information in the appropriate format,
as well as the physical or electronic medium for the delivery of such
information that the Trustee requires.  Akorn shall direct the Trustee to
provide such instructions and review and provide comments, if any, on the Proof
of Claim Form within five (5) calendar days of the filing of the motion for
entry of the Preliminary Approval Order. Any changes made to the Proof of Claim
Form at the request of the Trustee shall not be deemed material changes to the
Proof of Claim Form.
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(i)  Lead Counsel shall have sole responsibility, on behalf of the Settlement
Class, for directing Akorn to instruct the Escrow Agent to transfer in
accordance with the CVR Agreement and the Applicable Procedures, to the accounts
of Authorized Claimants the Settlement CVRs allocable to those claimants.  Any
such directions (the “Settlement CVRs Instructions”) given to Akorn or the
Escrow Agent by Lead Counsel shall be set forth in a writing signed by Lead
Counsel and accompanied by such information, and in such physical or electronic
medium as specified by the Trustee as set forth in paragraph 17(g) herein, to
permit the Settlement CVRs to be immediately transferred electronically in
accordance with the CVR Agreement and the Applicable Procedures, to the accounts
of Authorized Claimants, in such amounts as are appropriate.  Lead Counsel,
Akorn, the Escrow Agent, the Claims Administrator, and all entities under the
direction of Lead Counsel shall cooperate with the Trustee to provide such
information as is required for the Settlement CVRs Instructions.  Each of Lead
Counsel and the Claims Administrator has the right to rely on the instructions
provided by the Trustee as to the information it requires, as well as the
formatting requirements to enable the transfer of the Settlement CVRs
electronically in accordance with the CVR Agreement and the Applicable
Procedures, to the accounts of Authorized Claimants.  The Trustee, in its sole
discretion, may request additional information or reformatting in order to
effect the transfer of the Settlement CVRs in accordance with the CVR Agreement
and the Applicable Procedures, to the accounts of the Authorized Claimants. 
Each of Akorn, the Escrow Agent and the Trustee has the right to rely on the
accuracy and completeness of the information provided by Lead Counsel or
Authorized Claimants with respect to the issuance and distribution of the
Settlement CVRs.  None of the Defendants, the Escrow Agent or the Trustee shall
have any responsibility or liability regarding the accuracy or
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completeness of any information provided by Lead Counsel or any Authorized
Claimant in respect to the issuance or distribution of the Settlement CVRs, or
any losses incurred in connection therewith; however, as discussed in this
paragraph and in paragraph 17(g) herein, Akorn and the Trustee are responsible
for providing complete and accurate instructions to Lead Counsel and the Claims
Administrator with respect to the information and formatting required in respect
to the issuance or distribution of the Settlement CVRs.  Lead Counsel shall
provide Defendants’ Counsel with notice of the Settlement CVRs Instructions at
the same time such Settlement CVRs Instructions are delivered to Akorn.  Lead
Counsel shall not issue the Settlement CVRs Instructions to Akorn with respect
to the Settlement CVRs allocable to Authorized Claimants prior to the entry of
the Class Distribution Order authorizing the distribution of the Settlement
CVRs, in whole or part, to Authorized Claimants.
D.      ADMINISTRATION OF THE SETTLEMENT CONSIDERATION
18.            In no event shall Defendants have any responsibility, financial
obligation, or liability whatsoever with respect to the operation, management or
disbursement of the Settlement Fund as may be held in the Escrow Account, once
established.  Defendants shall likewise have no responsibility whatsoever for
the allocation or distribution of the Settlement Fund and shall not be
responsible or otherwise liable, including to or with Lead Plaintiffs, Lead
Counsel, any Settling Parties, the Escrow Agent or the Claims Administrator for
any disputes relating to the amount, allocation, or distribution of any fees,
costs, or awards of any kind.  After the delivery of the Settlement Shares and
Settlement CVRs in accordance with paragraphs 12 through 17 herein, Defendants
shall not be liable for any additional payments of any kind to any Settling
Parties or to
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any other person or entity with respect to this Settlement or Stipulation. 
However, for the avoidance of doubt, nothing in this paragraph shall relieve
Akorn from its obligations pursuant to paragraphs 9 through 11.
19.            Akorn shall be solely responsible for the delivery of the
Settlement Shares and the Settlement CVRs, and the D&O Insurers shall be solely
responsible for the payment of the Cash Settlement Amount.  In no event shall
the Individual Defendants be liable for the payment or delivery of any element
of the Settlement Consideration.  In no event shall Defendants or their insurers
(including, but not limited to, the D&O Insurers) be liable for or required to
pay any amounts of any kind to Plaintiffs or Plaintiffs’ Counsel except as
expressly set forth herein.  For the avoidance of doubt, neither Defendants nor
their insurers (including, but not limited to, the D&O Insurers) shall be liable
for or required to pay any interest on the Settlement Consideration of any kind
and relating to any time period (including prior to the transfer of the
Settlement Consideration into the Escrow Account) or any amount to Lead
Plaintiffs’ or Plaintiffs’ Counsel on account of attorneys’ fees, Litigation
Expenses or reimbursement of any other fees or expenses.

V.
USE OF SETTLEMENT FUND

A.     ATTORNEYS’ FEES & LITIGATION EXPENSES
20.            Lead Counsel will apply to the Court for a collective award of
attorneys’ fees to Plaintiffs’ Counsel to be paid from (and out of) the
Settlement Fund.  Lead Counsel will also apply to the Court for reimbursement of
Litigation Expenses.  Lead Counsel’s application for an award of attorneys’ fees
and Litigation Expenses is not the subject of any agreement between the
Litigation Parties other than what is set forth in this Stipulation, and
Defendants take no position with respect to Lead Counsel’s request for such fees
and expenses.  Defendants shall have
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no responsibility for or liability whatsoever for any notice sent to Settlement
Class Members concerning Lead Counsel’s application for an award of attorneys’
fees and Litigation Expenses.
21.            Lead Counsel shall not request (and Plaintiffs’ Counsel shall not
accept) as an award of attorneys’ fees more than 25% of each of the Cash
Settlement Amount, Settlement Shares (upfront and as they become available), and
Settlement CVRs.
22.            Any attorneys’ fees and/or Litigation Expenses awarded by the
Court shall be paid to Plaintiffs’ Counsel from any amounts available in the
Settlement Fund within fifteen (15) business days of the date on which the Order
and Final Judgment is entered, subject to Plaintiffs’ Counsel’s joint and
several obligation to make appropriate refunds or repayments to the Settlement
Fund of the awarded attorneys’ fees and/or Litigation Expenses, plus accrued
interest at the same net rate as is earned by the Cash Escrow Fund, if, as a
result of any further proceedings, successful collateral attack, or otherwise
modified by court order, the award of attorneys’ fees and/or Litigation Expenses
is reduced or reversed; provided, however, that no Settlement Shares or
Settlement CVRs may be sold or distributed by the Escrow Agent prior to the
Effective Date.  In such case, Plaintiffs’ Counsel shall make the appropriate
refund or repayment in full to the Settlement Fund within ten (10) business days
after any order reducing or reversing the award of attorneys’ fees and/or
Litigation Expenses that has become Final.
23.            Neither Plaintiffs nor Plaintiffs’ Counsel may cancel or
terminate the Settlement or this Stipulation based on the Court’s or any
appellate court’s ruling with respect to attorneys’ fees and/or Litigation
Expenses.
24.            In no event will any Defendant or any of Defendants’ insurers
(including, but not limited to, the D&O Insurers beyond their obligations under
the Applicable Insurance
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Policies) be requested or required to pay, or be liable in any way for, any
Plaintiffs’ attorneys’ fees, Litigation Expenses or any other costs, fees or
expenses of any kind.
25.            Lead Counsel shall allocate the attorneys’ fees awarded by the
Court among Plaintiffs’ Counsel in a manner that it, in good faith, believes
reflects the contribution of such counsel to the institution, prosecution and
settlement of the Action against the Defendants.  Defendants shall have no
responsibility for or liability whatsoever with respect to the allocation or
award of attorneys’ fees or Litigation Expenses.  The attorneys’ fees and
Litigation Expenses that are awarded to Plaintiffs’ Counsel shall be payable
solely from the Settlement Fund.
B.           ADMINISTRATION EXPENSES
26.            All reasonable Notice and Administration Expenses shall be paid
from the Settlement Fund when incurred, except that prior to the Effective Date,
the Claims Administrator and/or Lead Counsel, as applicable, may only draw on
the Settlement Fund in an amount not exceeding $250,000.00 to pay Notice and
Administration Expenses incurred.  In addition, Taxes, Tax Expenses and fees
related to the administration and maintenance of the Escrow Account and
investment of the Settlement Fund may be paid from the Settlement Fund as
incurred, without further approval of the Defendants, their insurers (including,
but not limited to, the D&O Insurers) or further order of the Court.  Should
there be insufficient Settlement Funds in the Escrow Account to cover Notice and
Administration Expenses, Taxes, Tax Expenses or fees related to the
administration of the Escrow Account, Lead Counsel shall pay any such expenses. 
Lead Counsel may subsequently seek reimbursement of any such expenses as
Litigation Expenses hereunder.  After the Effective Date, without approval of
the Defendants, their insurers (including, but not
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limited to, the D&O Insurers) or further order of the Court, Notice and
Administration Expenses may be paid from the Settlement Fund as incurred.
C.           USE & TAX TREATMENT
27.            (a)    The Litigation Parties agree that the Settlement Fund is
intended to be, and shall be treated as being, a “qualified settlement fund”
within the meaning of Treasury Regulation § 1.468B-1.  Lead Counsel shall
administer the Settlement Fund and shall be the administrator within the meaning
of Treasury Regulation § 1.468B-2(k)(3) (the “Administrator”).
(b)  Lead Counsel as Administrator shall be solely responsible for filing or
causing to be filed all information and other tax returns as may be necessary or
appropriate (including, without limitation, the returns described in Treasury
Regulation § 1.468B-2(k)) for the Settlement Fund.  Lead Counsel as
Administrator shall also be responsible for causing payment to be made from the
Settlement Fund of any Taxes owed with respect to the Settlement Fund.  The
Released Persons shall not have any liability or responsibility for any such
Taxes.  Upon written request, the Defendants will work with Lead Counsel to
produce a combined statement described in Treasury Regulation § 1.468B-3(e).
(c)  Lead Counsel as Administrator shall timely make such elections as are
necessary or advisable to carry out this paragraph, including, as necessary,
making a “relation back election”, as described in Treasury Regulation
§ 1.468B-1, to cause the qualified settlement fund to come into existence at the
earliest allowable date, and shall take or cause to be taken all actions as may
be necessary or appropriate in connection therewith.
(d)  All Taxes shall be paid out of the Settlement Fund, and shall be timely
paid, by
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the Escrow Agent pursuant to the distribution instructions to be set forth in
the Escrow Agreement, and without further order of the Court.  Any tax returns
prepared for the Settlement Fund (as well as the election set forth therein)
shall be consistent with this paragraph and in all events shall reflect that all
Taxes on the income earned by the Settlement Fund shall be paid out of the
Settlement Fund as provided herein.
(e)  The Released Persons shall have no responsibility for or liability for the
acts or omissions of Lead Counsel or their agents or the Escrow Agent with
respect to the payment of Taxes as described herein.
(f)  It is the sole responsibility of the Releasing Persons to pay Taxes or any
other taxes, plus any penalties and interest, on any Settlement Consideration
received pursuant to the Settlement and disbursement of the Settlement Fund that
are construed to be income, and the Settlement Fund, Lead Plaintiffs,
Plaintiffs’ Counsel, Defendants, their insurers, and Defendants’ Counsel shall
have no liability for such taxes, penalties or interest.
28.            This is not a claims-made settlement.  Upon the occurrence of the
Effective Date, Defendants and/or such other persons or entities funding the
Settlement Fund on the Defendants’ behalf, shall not have any right to the
return of the Settlement Fund or any portion thereof for any reason.
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VI.
NOTICE AND SETTLEMENT ADMINISTRATION

A.     CLAIMS ADMINISTRATOR & DEFENDANTS’ OBLIGATIONS
29.            As part of the Preliminary Approval Order, Lead Counsel shall
seek appointment of the Claims Administrator.  The Claims Administrator shall
administer the Settlement, including, but not limited to, the process of
receiving, reviewing and approving or denying Claims, under Lead Counsel’s
supervision and subject to the jurisdiction of the Court.
30.            Other than Akorn’s obligations pursuant to paragraphs 9
through 17 and 31 herein, none of the Defendants, nor any other Released Person,
shall have any involvement in, or any responsibility, authority or liability
whatsoever for, and will not be requested to or required to pay any costs, fees
or expenses in connection with:  (i) the administration of the Settlement,
including the selection of the Claims Administrator; (ii) providing notice to
the Settling Parties; (iii) the Plan of Allocation; (iv) the Class Distribution
Order; (v) reviewing, challenging or otherwise making determinations concerning
Proof of Claim Forms; or (vi) the allocation, disbursement and payment of the
Settlement proceeds out of (and from) the Net Settlement Fund.  Defendants and
all other Released Persons shall have no liability whatsoever to any person or
entity, including, but not limited to, Lead Plaintiffs, any other Settlement
Class Members or Plaintiffs’ Counsel, in connection with the foregoing.
B.      NOTICE, SUBMISSION OF PROOF OF CLAIM FORMS & THE PLAN OF ALLOCATION
31.            In accordance with the terms of the Preliminary Approval Order,
Lead Counsel shall cause the Claims Administrator to mail the Notice and Proof
of Claim Form to those Settlement Class Members as may be identified through
reasonable effort.  Lead Counsel shall also cause the Claims Administrator to
have the Publication Notice published in accordance with
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the terms of the Preliminary Approval Order.  For the purposes of identifying
and providing notice to the Settlement Class, Akorn shall cooperate to the
extent reasonably necessary, including requesting that the Transfer Agent
provide (at no cost to the Settlement Fund, Lead Counsel or the Claims
Administrator) information in electronic searchable format from Akorn’s transfer
records concerning the identity of the Settlement Class Members and their
transactions in Akorn’s common stock during the Class Period.
32.            The Claims Administrator shall receive Proof of Claim Forms and
determine:  (i) whether the Claim is a valid Claim, in whole or in part, and
(ii) each Authorized Claimant’s pro rata share of the Net Settlement Fund based
upon the Plan of Allocation as approved by the Court.  No Defendant, nor any
other Released Person, shall have any involvement with or liability, obligation
or responsibility for the application of the Court-approved Plan of Allocation.
33.            The Plan of Allocation to be proposed by Lead Counsel is not a
necessary term of the Settlement or of this Stipulation and it is not a
condition of the Settlement or of this Stipulation that any particular Plan of
Allocation be approved by the Court.  Any decision by the Court concerning the
Plan of Allocation shall not affect the validity of or finality of this
Stipulation or Settlement.  Defendants and the other Released Persons shall not
object in any way to the Plan of Allocation or any other plan of allocation in
this Action.
C.      DETERMINATION OF AUTHORIZED CLAIMANTS
34.            For purposes of determining the extent, if any, to which a
Settlement Class Member shall be entitled to be treated as an Authorized
Claimant, the following conditions shall apply:
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(a)  Each Settlement Class Member shall be required to timely submit a Proof of
Claim Form, signed under penalty of perjury and supported by such documents as
are designated therein, including proof of the Claimant’s loss, or such other
documents or proof as the Claims Administrator or Lead Counsel, in their
discretion, may deem acceptable;
(b)  All Proof of Claim Forms must be submitted by the date set by the Court in
the Preliminary Approval Order and specified in the Notice unless such period is
extended by order of the Court.  Any Settlement Class Member who fails to submit
a valid Proof of Claim Form by such date shall be forever barred from receiving
any payment pursuant to this Stipulation and the Settlement (unless, by order of
the Court, a later submitted Proof of Claim Form by such Settlement Class Member
is approved), but shall in all other respects be bound by all of the terms of
this Stipulation and the Settlement, including the terms of the Order and Final
Judgment to be entered in the Action and the releases provided for herein and
therein, and will be permanently barred and enjoined from bringing any action,
claim or other proceeding of any kind against the Defendants or any other
Released Persons concerning the Settled Claims.  Provided that it is received
before preparation of the distribution of the Net Settlement Fund, a Proof of
Claim Form shall be deemed to have been submitted when mailed, if received with
a postmark indicated on the envelope and if mailed first-class postage prepaid
and addressed in accordance with the instructions thereon.  In all other cases,
the Proof of Claim Form shall be deemed to have been submitted when actually
received by the Claims Administrator;
(c)  Each Proof of Claim Form shall be submitted to and reviewed by the Claims
Administrator, under the supervision of Lead Counsel, who shall determine in
accordance with
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this Stipulation and the Court approved plan of allocation, the extent to which,
if any, each Claim shall be allowed, subject to review by the Court pursuant to
paragraphs 34(d) and 34(e) herein as necessary;
(d)  Proof of Claim Forms that do not meet the submission requirements may be
rejected.  Prior to rejection of a Proof of Claim Form, the Claims Administrator
shall communicate with the Claimant in writing in order to afford the Claimant
the opportunity to remedy curable deficiencies in the Proof of Claim Form
submitted.  The Claims Administrator, under the supervision of Lead Counsel,
shall notify, in a timely fashion and in writing, all Claimants whose Claim it
proposes to reject in whole or in part, setting forth the reasons therefore, and
shall indicate in such notice that the Claimant whose Claim is to be rejected
has the right to a review by the Court if the Claimant so desires and complies
with the requirements of paragraph 34(e) herein; and
(e)  If any Claimant whose Claim has been rejected in whole or in part desires
to contest such rejection, the Claimant must, within twenty (20) calendar days
after the date of mailing of the notice required in paragraph 34(d) herein,
serve upon the Claims Administrator a notice and statement of reasons indicating
the Claimant’s grounds for contesting the rejection, along with any supporting
documentation, and requesting a review thereof by the Court.  If a dispute
concerning a Claim cannot be otherwise resolved, Lead Counsel shall thereafter
present the request for review to the Court.
35.            Each Claimant shall be deemed to have submitted to the
jurisdiction of the Court with respect to the Claimant’s Claim, and the Claim
will be subject to investigation and
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discovery under the Federal Rules of Civil Procedure, provided that such
investigation and discovery shall be limited to that Claimant’s status as a
Settlement Class Member and the validity and amount of the Claimant’s Claim.  No
discovery shall be allowed on the merits of the Action or the Settlement,
including from any Defendant, for any reason.
36.            All proceedings with respect to the administration, processing
and determination of Claims and the determination of all controversies relating
thereto, including disputed questions of law and fact with respect to the
validity of any Claims, shall be subject to the jurisdiction of the Court.  All
Settling Parties expressly waive trial by jury (to the extent any such right may
exist) and any right of appeal or review with respect to such determinations.
37.            All Authorized Claimants shall, as part of the Proof of Claim
Form, execute an individual release of the Released Persons upon the same terms
as set forth herein, as a condition precedent to receipt of any part of any
disbursement from the Settlement Fund, but the failure of any Authorized
Claimant to execute such a release shall not in any way affect the validity of
the releases provided by Releasing Persons in favor of Released Persons herein,
and the Releasing Persons shall nonetheless be bound by the terms of those
releases.  Further, the failure of any Releasing Person to make a claim on the
Settlement Fund shall not affect the validity and effectiveness of the release
provided herein in favor of Released Persons, as to that Releasing Person.  Lead
Counsel and/or the Claims Administrator shall retain copies of the individual
releases executed by Authorized Claimants referred to in this paragraph for at
least three (3) years after the distribution of the Net Settlement Fund by the
Claims Administrator and shall provide copies of individual releases to
Defendants’ Counsel at no expense if requested to do so.
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D.   DISTRIBUTION OF THE SETTLEMENT FUND
38.            Lead Counsel will apply to the Court, on notice to Defendants’
Counsel, for a Class Distribution Order:  (i) approving the Claims
Administrator’s administrative determinations concerning the acceptance and
rejection of the Claims submitted; (ii) approving payment of any administration
fees and expenses associated with the administration and disbursement of the
Settlement Fund from the Escrow Account; and (iii) if the events listed in
paragraph 39 herein have occurred, directing payment of the Net Settlement Fund
to Authorized Claimants.
39.            The Net Settlement Fund shall be distributed to Authorized
Claimants by the Claims Administrator and the Transfer Agent, as appropriate,
only after the Effective Date and after:  (i) all Proof of Claim Forms have been
processed, and all Claimants whose Claims have been rejected or disallowed, in
whole or in part, have been notified and provided the opportunity to be heard
concerning such rejection or disallowance; (ii) all objections with respect to
all rejected or disallowed Claims have been resolved by the Court, and all
appeals therefrom have been resolved or the time therefore has expired;
(iii) all matters with respect to attorneys’ fees, Litigation Expenses, costs,
and disbursements have been resolved by the Court, all appeals therefrom have
been resolved or the time therefore has expired; and (iv) all Notice and
Administration Expenses, Taxes and Tax Expenses have been paid from the
Settlement Fund.
40.            Lead Counsel shall be solely responsible for supervising the
administration of the Settlement and distribution of the Net Settlement Fund by
the Claims Administrator, the Transfer Agent and the Trustee, as appropriate,
subject to Court approval.  Lead Counsel shall
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have the right, but not the obligation, to waive what they deem to be formal or
technical defects in any Proof of Claim Forms submitted in the interests of
achieving substantial justice.
41.            Payment from the Settlement Fund pursuant to this Stipulation
shall be deemed final and conclusive against all Settlement Class Members.  All
Settlement Class Members whose Claims are not approved for payment shall be
barred from participating in distributions from the Net Settlement Fund, but
otherwise shall be bound by all of the terms of this Stipulation and the
Settlement, including the terms of the Order and Final Judgment to be entered in
the Action and the releases provided for herein and therein, and will be
permanently barred and enjoined from bringing any action against the Released
Persons with respect to any and all of the Settled Claims.
42.            No person or entity shall have any claim against Lead Plaintiffs,
Lead Counsel, the Claims Administrator or any other agent designated by Lead
Counsel, or the Releasing Persons and/or their respective counsel, arising from
distributions made from the Settlement Fund substantially in accordance with
this Stipulation, the Court approved plan of allocation, the Class Distribution
Order, or any other order of the Court.  Lead Plaintiffs and Defendants, and
their respective counsel and all other Settling Parties, shall have no liability
whatsoever for the sale or transfer of the Settlement Shares or Settlement CVRs,
investment or distribution of the Settlement Fund or the Net Settlement Fund,
the Plan of Allocation, or the determination, administration, calculation, or
payment of any Claim by or non-performance of the Claims Administrator, the
payment or withholding of Taxes and Tax Expenses (including interests and
penalties) owed by the Settlement Fund, or any losses incurred therewith.
43.            If the funds remaining in the Settlement Fund following pro rata
distribution(s) to all Authorized Claimants are an amount that is not cost
effective or efficient to
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redistribute to Authorized Claimants, then such remaining funds, after payment
of any further Notice and Administration Expenses, Taxes and Tax Expenses, shall
be contributed to a non-sectarian, not-for profit organization recognized as
tax-exempt under Internal Revenue Code § 501(c)(3) to be designated by the
Court.
E.   REQUEST FOR EXCLUSION FROM THE SETTLEMENT CLASS
44.            Any Settlement Class Member wishing to become an Opt-Out must
timely mail a signed, written request for exclusion from the Settling Parties to
the Claims Administrator, within the time and in accordance with the criteria
and containing the information set forth in the Preliminary Approval Order and
in the Notice.  Unless amended by the Court, the Preliminary Approval Order,
attached as Exhibit A hereto, shall provide that requests for exclusion shall be
received no later than twenty-one (21) calendar days prior to the Settlement
Hearing.  Opt-Outs shall not be bound by this Settlement and the releases
described herein, shall have no entitlement to or claim upon all or any part of
the Settlement Fund, and shall not receive any payment pursuant to the
Settlement.
45.            Lead Counsel, subject to review by the Court, shall be
responsible for determining whether a request for exclusion is timely and valid,
in accordance with the criteria specified in the Court’s Preliminary Approval
Order and in the Notice.  To be valid, a request for exclusion must comply fully
with the criteria specified in the Preliminary Approval Order and in the Notice,
and contain all of the information specified in the Preliminary Approval Order
and in the Notice.  If a request for exclusion is untimely, or is invalid
because it does not otherwise comply with the criteria or contain all of the
information specified in the Court’s Preliminary Approval Order and in the
Notice, then it shall be void and of no effect, and that Settlement Class Member
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shall remain part of the Settling Parties in this Action and shall be bound by
all of the terms of this Stipulation and Settlement, including the terms of the
Order and Final Judgment to be entered in the Action and the releases provided
for herein, and will be barred and enjoined from bringing any action against the
Released Persons concerning the Settled Claims.  Any disputes regarding whether
or not a request for exclusion is timely and valid, and thus effective, shall be
resolved by the Court.

VII.
FINAL APPROVAL OF SETTLEMENT

46.            At the Settlement Hearing, Lead Counsel and Defendants’ Counsel
shall request that the Court enter an Order and Final Judgment in or
substantially in the form attached hereto as Exhibit B (with annexes, if any)
finding, pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, the
Settlement to be fair, reasonable and adequate to the class, and, with regard to
the Settlement Shares and Settlement CVRs being issued as part of the Settlement
Fund that:  (i) the terms and conditions of the proposed issuances are fair to
all those who will receive such securities in the proposed exchange; and
(ii) the terms and conditions of, and the procedures for, the proposed issuances
are fair.  Pursuant to Section 3(a)(10), the Court’s judgment of the fairness of
the Settlement shall serve as a substitute for the registration requirements of
the Securities Act with regard to any Settlement Shares or Settlement CVRs.

VIII.
EFFECTIVE DATE OF SETTLEMENT

47.            The Effective Date of this Settlement shall be the earliest date
upon which all of the following shall have occurred:
(a)  the Preliminary Approval Order has been entered by the Court;
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(b)  the Settlement Consideration (other than any Settlement Shares that are not
Available Settlement Shares as of the date the Order and Final Judgment has
become Final) has been transferred into the Escrow Account;
(c)  the Court has approved the Settlement, following Notice to the Settlement
Class and the Settlement Hearing, as prescribed by Rule 23 of the Federal Rules
of Civil Procedure; and
(d)  the Order and Final Judgment has been entered by the Court and has become
Final.

IX.
TERMINATION

48.            Defendants or Lead Plaintiffs shall have the right to terminate
the Settlement and this Stipulation by providing a Termination Notice to counsel
for all other signatories hereto, within five (5) calendar days of:  (i) the
Court’s refusal to certify the Settlement Class as agreed by the Litigation
Parties in paragraph 3 herein, or any amendment by the Court of the scope of the
Settlement Class; (ii) the Court’s refusal to enter the Preliminary Approval
Order in any material respect; (iii) Defendants’ failure to comply with their
obligations concerning payment of the Settlement Consideration pursuant to
paragraphs 9 through 17 herein; (iv) the Court’s refusal to approve this
Stipulation or any material part of it; (v) the Court’s refusal to enter an
Order and Final Judgment in or substantially in the form attached hereto as
Exhibit B; or (vi) any material modification, vacatur or reversal of the Order
and Final Judgment by a United States Court of Appeals or the United States
Supreme Court.  For the avoidance of doubt, no decision or proceeding, whether
in this Court or any appellate court, with respect to an application for
attorneys’ fees or reimbursement of Litigation Expenses or with respect to any
plan of
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allocation:  (i) shall be considered material to the Settlement, (ii) shall
affect the finality of any Order and Final Judgment, if applicable, or (iii)
shall be grounds for termination of the Settlement.
49.            In addition to the grounds set forth in paragraph 48 herein,
Defendants shall have the unilateral right to terminate the Settlement and this
Stipulation, and render them null and void and of no further effect, in the
event that Settlement Class Members who purchased or acquired, in aggregate, in
excess of a certain number of shares of Akorn common stock during the Class
Period (such number as agreed upon by the Litigation Parties) (the “Termination
Threshold”), timely and validly request exclusion from the Settlement Class in
accordance with the provisions of paragraphs 44 and 45 herein, within the time
and in accordance with the criteria set forth in the Preliminary Approval Order
and in the Notice.
(a)  The Litigation Parties agree to maintain the confidentiality of the
Termination Threshold, which is set forth in the Supplemental Agreement
Regarding Requests for Exclusion (the “Supplemental Agreement”) that is
simultaneously herewith being executed by Defendants’ Counsel and Lead Counsel. 
The Supplemental Agreement shall not be filed with the Court and its terms shall
not be disclosed in any other manner (other than the statements herein and in
the Notice, to the extent necessary, or as otherwise provided in the
Supplemental Agreement) unless and until the Court otherwise directs or a
dispute arises between Lead Plaintiffs and the Defendants concerning the
interpretation or application of the Supplemental Agreement, in which event the
Litigation Parties shall submit the Supplemental Agreement to the Court in
camera and request that the Court afford it confidential treatment.
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(b)  With respect to this paragraph, no later than twenty-one (21) calendar days
prior to the Settlement Hearing, the Claims Administrator shall provide
Defendants’ Counsel with (i) copies of any and all requests for exclusion from
the Settlement Class herein received by the Claims Administrator, (ii) a list of
all persons or entities requesting exclusion, (iii) a list of shares of Akorn
common stock purchased or acquired during the Class Period by each of those
persons or entities (to the extent provided to the Claims Administrator), (iv)
an accounting of the aggregate losses claimed to have been suffered by all
persons or entities requesting exclusion, and (v) a report by Lead Counsel
identifying which requests for exclusion Lead Counsel has determined to be
timely and valid under the criteria specified in the Preliminary Approval Order
and the Notice, and therefore which putative Settlement Class Members are deemed
to be Opt-Outs.  With respect to this paragraph, no later than fourteen (14)
calendar days prior to the Settlement Hearing, the Claims Administrator shall
provide Defendants’ Counsel with a representation that all requests for
exclusion received have been copied and provided to Defendants’ Counsel.
(c)  Defendants shall be entitled to exercise the right referenced in this
paragraph to terminate the Settlement and this Stipulation only if Defendants’
provide Lead Counsel with a Termination Notice and file that notice with the
Court no later than 5:00 p.m. Eastern time on the third (3rd) business day prior
to the Settlement Hearing.
(d)  Lead Counsel may attempt to cause the retraction of any request for
exclusion made by any Opt-Out prior to the Settlement Hearing.  If Lead Counsel
succeeds in causing the retraction of sufficient requests for exclusion such
that the remaining Opt-Outs do not satisfy the requirements of the Termination
Threshold, then Defendants’ Termination Notice automatically
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shall be deemed a nullity.  To retract a request for exclusion, an Opt-Out must,
prior to the Settlement Hearing, file a written notice with the Court stating
his, her, or its desire to retract the request for exclusion from the Settlement
Class and to be bound by the Settlement, this Stipulation, and any Order and
Final Judgment entered herein, provided, however, that the filing of such
written notice of retraction may be effected by Lead Counsel.
(e)  Any dispute among the Settling Parties concerning the interpretation or
application of this paragraph and the Supplemental Agreement shall be presented
to the Court for resolution upon the application of any party hereto.
50.            If a right to terminate this Stipulation and Settlement arises
under either of paragraphs 48 or 49 herein:  (i) neither the Defendants nor Lead
Plaintiffs (as the case may be) will be required for any reason or under any
circumstance to exercise that right; and (ii) any exercise of that right shall
be made in good faith, but in the sole and unfettered discretion of the
Defendants or Lead Plaintiffs, as applicable.
51.            In the event that the Settlement is terminated or any of the
requirements of the Effective Date specified in paragraph 47 herein are, for any
reason, not satisfied, this Stipulation and Settlement shall be null and void,
without prejudice, and none of its terms, including, but not limited to, the
certification of the Settlement Class, the appointment of class representatives,
and the appointment of class counsel, shall be effective or enforceable, except
that paragraphs 51, 52 and 61 herein shall survive such termination; the
Settling Parties shall be deemed to have reverted to their respective litigation
positions in the Action immediately prior to the date of this Stipulation; the
Settling Parties shall proceed in all respects as if this Stipulation
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and any related orders had not been entered; neither Lead Plaintiffs nor any
other putative Claimant may use the fact of execution of this Stipulation
consenting to certification of a class solely for settlement purposes as a basis
to argue that Defendants have in any way circumscribed, limited or waived their
ability to oppose, for any reason, certification of a class other than for
settlement purposes; and the fact and terms of the Settlement, this Stipulation
and all settlement discussions shall not be admissible in any trial of this
Action or any other proceeding, including, but not limited to, for the purposes
of obtaining certification of a class other than for settlement purposes, and
shall not be used by Lead Plaintiffs against or to the prejudice of the
Defendants or by the Defendants against or to the prejudice of Lead Plaintiffs
in any court filings, depositions, at trial, or otherwise.
52.            In the event the Settlement is terminated or any of the
requirements of the Effective Date specified in paragraph 47 herein are, for any
reason, not satisfied, then the Settlement Consideration previously paid on
behalf of or by the Defendants, together with any interest and earnings thereon
and including repayment of any attorneys’ fees or Litigation Expenses disbursed
pursuant to paragraphs 20 through 25 herein (together with interest thereon),
less any Taxes and/or Tax Expenses paid or due, and less any Notice and
Administration Expenses actually incurred and paid or payable from the
Settlement Fund pursuant to paragraphs 26 and 27 herein, shall be returned to
the entity or entities that deposited the Settlement Consideration into the
Escrow Account on Defendants’ behalf, within ten (10) business days after
written notification of such event.  For the avoidance of doubt, in the event
that the Settlement is terminated, any Settlement Shares previously issued shall
be returned to Akorn and such Settlement Shares shall become unissued shares. 
At the request of Defendants, the Escrow Agent shall apply for any tax
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refund owed on the amounts in the Escrow Account and pay the proceeds, after any
deduction of any fees or expenses incurred in connection with such
application(s), for refund to the applicable funder or as otherwise directed.

X.
MISCELLANEOUS PROVISIONS

A.   ENTIRE AGREEMENT
53.            All of the exhibits attached hereto are hereby incorporated by
reference as though fully set forth herein.  Notwithstanding the foregoing, in
the event that there exists a conflict or inconsistency between the terms of
this Stipulation and the terms of any exhibit attached hereto, the terms of the
Stipulation shall prevail.
54.            This Stipulation and its exhibits constitute the entire agreement
among the Settling Parties concerning the Settlement of the Action, and no
representation, warranties, or inducements have been made by any party hereto
concerning this Stipulation and its exhibits other than those contained and
memorialized in such documents.
B.   FINAL & COMPLETE RESOLUTION
55.            The Litigation Parties intend this Stipulation and the Settlement
to be a final and complete resolution of all Settled Claims between the Settling
Parties.  Accordingly, Plaintiffs and Plaintiffs’ Counsel and Defendants and
Defendants’ Counsel agree not to assert in any forum that this Action was
brought by, prosecuted in, or defended in bad faith or without a reasonable
basis.  No Settling Party shall assert any claims of or make any application for
sanctions for violation of Rule 11 of the Federal Rules of Civil Procedure or
other court rule or statute with respect to any claims or defenses asserted in
this action.
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56.            The Stipulation shall be binding upon, and inure to the benefit
of, the successors and assigns of the Settling Parties.
C.   PUBLICITY
57.            In no event shall Lead Plaintiffs, Plaintiffs’ Counsel,
Defendants, or Defendants’ Counsel make any public statement that disparages the
business or reputation of any of the other Settling Parties, their counsel, or
Released Persons (including, without limitation, Akorn and its officers,
directors, management and employees).  Nothing in this provision prevents
Plaintiffs’ Counsel from (a) describing their role in this Action in
conversations with Settlement Class Members in the course of giving legal advice
regarding the terms of the Settlement, or (b) making statements about Defendants
in proceedings before the Court or any court considering this Action.
58.            Although Defendants retain their right to deny that the Claims
asserted in the Action were meritorious, Defendants and Defendants’ Counsel will
not assert to any media representative (whether or not for attribution) that the
Action was commenced or prosecuted in bad faith, nor will they deny that the
Action was commenced and prosecuted in good faith and is being settled
voluntarily after consultation with competent legal counsel.  In all events,
Plaintiffs and Plaintiffs’ Counsel and Defendants and Defendants’ Counsel shall
not make any accusations of wrongful or actionable conduct by any Litigation
Party concerning the prosecution, defense and resolution of the Action, and
shall not otherwise suggest that the Settlement constitutes an admission of any
Claim or defense alleged.
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D.   CONTRIBUTIONS
59.            This Stipulation shall not be construed more strictly against one
party than another merely by virtue of the fact that it, or any part of it, may
have been prepared initially by counsel for one of the Litigation Parties, it
being recognized that it is the result of arm’s-length negotiations between the
Litigation Parties and that all Litigation Parties have contributed
substantially and materially to the preparation of this Stipulation.
E.   PRESERVATION OF DOCUMENTS
60.            Defendants will take reasonable steps to retain and preserve any
documents, information (including electronically stored information) and other
evidence potentially relevant to continuing litigation, if any, against the D&O
Insurers.  For the avoidance of doubt, no Defendant shall have any obligation to
provide any documents, information or other evidence:  (a) protected by the
attorney-client privilege, joint defense privilege or other work product
doctrine; or (b) reflecting legal advice provided to Defendants by Defendants’
Counsel concerning the allegations in the Action.
F.   NO ADMISSION OF WRONGDOING
61.            This Stipulation, whether or not consummated, and any proceedings
taken pursuant to it:
(a)  shall not be offered or received against any Defendant or Released Person
as evidence of, or construed as or deemed to be evidence of, any presumption,
concession, or admission by any Defendant or Released Person with respect to the
truth of any fact alleged by any of the Plaintiffs or the validity of any
Settled Claim that has been or could have been asserted
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in the Action or in any litigation, or the deficiency of any defense that has
been or could have been asserted in the Action or in any litigation, or of any
liability, negligence, fault or wrongdoing of any Defendant or Released Person;
(b)  shall not be offered or received against any Defendant or Released Person
as evidence of a presumption, concession or admission of any fault,
misrepresentation or omission with respect to any statement or written document
approved or made by any Defendant or Released Person;
(c)  shall not be offered or received against any Defendant or Released Person
as evidence of a presumption, concession or admission with respect to any
liability, negligence, fault or wrongdoing, or in any way referred to for any
other reason as against any Defendant or Released Person, in any other civil,
criminal or administrative action or proceeding, other than such proceedings as
may be necessary to effectuate the provisions of this Stipulation; provided,
however, that if this Stipulation is approved by the Court, the Settling Parties
may refer to it to effectuate the liability protection granted them hereunder;
(d)  shall not be construed against any Defendant or Released Person as an
admission or concession that the consideration to be given hereunder represents
the amount which could or would have been recovered after trial; and
(e)  shall not be construed as or received in evidence as an admission,
concession or presumption against Lead Plaintiffs or any of the Releasing
Persons that any of their claims are without merit, or that any defenses
asserted by any Defendants have any merit, or that damages recoverable under the
Second Amended Complaint would not have exceeded the Settlement
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Consideration or the Settlement Fund.
G.   AMENDMENT, MODIFICATION & WAIVER
62.            The terms of this Stipulation, as reflected in this Stipulation,
may not be modified or amended, nor may any of its provisions be waived, except
by a writing signed by both Lead Plaintiffs and each Defendant (or their
successors-in-interest).
63.            The waiver by any one signatory to this Stipulation of any breach
of this Stipulation by any other party shall not be deemed a waiver of any other
prior or subsequent breach of this Stipulation.  Any such waiver shall be made
on behalf of the party waiving the breach, and will not constitute a waiver by
any other party.
H.   HEADINGS
64.            The headings herein (including any and all subheadings) are used
for the purpose of convenience only and are not meant to have legal effect.
I.    JURISDICTION OF THE COURT
65.            The administration and consummation of the Settlement as embodied
in this Stipulation shall be under the authority of the Court, and the Court
shall retain jurisdiction for the purpose of entering orders providing for
awards of attorneys’ fees and Litigation Expenses to Plaintiffs’ Counsel and
enforcing the terms of this Stipulation, including the Plan of Allocation (or
such other plan of allocation as may be approved by the Court) and the
distribution of the Net Settlement Fund to Settlement Class Members, except that
the CVR Agreement and all suits, actions, proceedings, claims and causes of
action (whether in contract or tort) based upon, arising
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out of or relating to the CVR Agreement shall be subject to the exclusive
jurisdiction of the court as stated therein.
J.      CHOICE OF LAW
66.            The construction, interpretation, operation, effect and validity
of this Stipulation and all documents necessary to effectuate it, shall be
governed by the internal laws of the State of New York without regard to
conflicts of laws, except to the extent that federal law requires that federal
law governs.
K.     VENUE & MULTI DISTRICT LITIGATION
67.            In the event that any Additional Securities Action shall be
commenced in a court other than the Northern District of Illinois, Defendants
shall promptly move pursuant to 28 U.S.C. § 1404 and/or § 1407 to transfer such
Additional Securities Action to the Northern District of Illinois.
68.            Upon transfer of such Additional Securities Action to the
Northern District of Illinois, the Litigation Parties shall jointly request and
take all steps necessary to effect the reassignment of such action to the
Court’s docket pursuant to Local Rule 40.4 and the stay of such action pursuant
to the Stay Order.
L.     EXECUTION
69.            This Stipulation may be executed in one or more counterparts,
including by signature transmitted by facsimile or email.  All executed
counterparts and each of them shall be deemed to be one and the same instrument.
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M.     NOTICE
70.            If any Settling Party is required to give notice to another
Settling Party under this Stipulation, such notice shall be in writing and shall
be deemed to have been duly given upon receipt of hand delivery or facsimile or
email transmission, with confirmation of receipt.  Notice shall be provided as
follows:

If to Lead Plaintiffs or Plaintiffs’ Counsel:   
Entwistle & Cappucci LLP
Attn:  Andrew J. Entwistle, Esq.
500 W. 2nd Street, Suite 1900-16
Austin, TX  78701
Tel.:  (512) 710-5960
aentwistle@entwistle-law.com

If to Defendants or Defendants’ Counsel:   
Cravath, Swaine & Moore LLP
Attn:  Robert H. Baron, Esq.
Worldwide Plaza
825 Eighth Avenue
New York, NY  10019
Tel.:  (212) 474-1000
rbaron@cravath.com

           -and-

Figliulo & Silverman, P.C.
Attn:  James R. Figliulo
10 S. LaSalle Street, Suite 3600
Chicago, IL 60603
Tel.:  (312) 251-4600
jfigliulo@fslegal.com

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N.     AUTHORITY OF COUNSEL
71.            All counsel and any other person executing this Stipulation and
any of the exhibits hereto, or any related settlement documents, warrant and
represent that they have the full authority to do so and that they have the
authority to take appropriate action required or permitted to be taken pursuant
to this Stipulation to effectuate its terms.

Dated:   August 9, 2019
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Dated:  August 9, 2019.
CRAVATH, SWAINE & MOORE LLP

/s/ Robert H. Baron                        
                                                    
Robert H. Baron (admitted pro hac vice)
Worldwide Plaza
825 Eighth Avenue
New York, NY  10019
Tel.:  (212) 474-1000
rbaron@cravath.com

FIGLIULO & SILVERMAN, P.C.
James R. Figliulo
10 S. LaSalle Street, Suite 3600
Chicago, IL 60603
Tel.:  (312) 251-4600
jfigliulo@fslegal.com

Attorneys for Defendants

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Dated:  August 9, 2019.
ENTWISTLE & CAPPUCCI LLP

/s/ Andrew J.
Entwistle                                                                     
Andrew J. Entwistle
500 W. 2nd Street, Suite 1900-16
Austin, TX  78701
Tel.:  (512) 710-5960
aentwistle@entwistle-law.com

Joshua K. Porter (admitted pro hac vice)
Brendan Brodeur (admitted pro hac vice)
Andrew M. Sher (admitted pro hac vice)
299 Park Avenue, 20th Floor
New York, NY  10017
Tel.:  (212) 894-7200
jporter@entwistle-law.com
bbrodeur@entwistle-law.com
asher@entwistle-law.com

Attorneys for Lead Plaintiffs

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Exhibit A

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Exhibit A

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

IN RE AKORN, INC. DATA INTEGRITY SECURITIES LITIGATION

    

    Civ. A. No. 1:18-cv-01713

Hon. Matthew F. Kennelly

[PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT, APPROVING
FORM OF CLASS NOTICE, AND SETTING HEARING DATE FOR FINAL
APPROVAL OF SETTLEMENT
WHEREAS, a consolidated class action is pending before this Court entitled In re
Akorn, Inc. Data Integrity Securities Litigation, Civ. A. No. 1:18-cv-01713 (the
“Action”);
WHEREAS, the parties to the Action consist of (a) lead plaintiffs Gabelli & Co.
Investment Advisors, Inc. and Gabelli Funds, LLC (the “Lead Plaintiffs”), on
behalf of themselves and the Settlement Class; and (b) defendants Akorn, Inc., 
(“Akorn”) and individual defendants Ronald M. Johnson, Duane A. Portwood, Rajat
Rai, Brian Tambi and Alan Weinstein (collectively, the “Defendants” and,
together with Lead Plaintiffs, the “Litigation Parties”), have determined to
settle all claims asserted against Defendants in this Action with prejudice (the
“Settlement”) on the terms and conditions set forth in the Stipulation and
Agreement of Settlement filed with the Court on August 9, 2019 (the
“Stipulation”),1 subject to approval of this Court;
WHEREAS, On May 31, 2019, plaintiffs Twin Master Fund, Ltd., Twin Opportunities
Fund, LP and Twin Securities, Inc. filed a complaint against Defendants in the
Northern District

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1 All capitalized words or terms not otherwise defined in this Order shall have
the meanings ascribed to those words or terms in the Stipulation.
 

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of Illinois, alleging violations of Sections 10(b), 18 and 20(a) of the Exchange
Act and Rule 10b-5 promulgated thereunder, as well as one count of common law
fraud (the “Twin Funds Action”);
WHEREAS, On July 11, 2019, plaintiffs Manikay Master Fund, LP and Manikay Merger
Fund, LP filed a complaint against Defendants in the Northern District of
Illinois, alleging violations of Sections 10(b), 18 and 20(a) of the Exchange
Act and Rule 10b-5 promulgated thereunder, as well as one count of common law
fraud (the “Manikay Funds Action”);
WHEREAS, both the Twin Funds Action and Manikay Funds Action have been found
related to the Action and reassigned to the Hon. Matthew F. Kennelly;
WHEREAS, Lead Plaintiffs have made an application, pursuant to Rule 23 of the
Federal Rules of Civil Procedure, for an order preliminarily approving the
Settlement in accordance with the Stipulation, certifying the Settlement Class
for purpose of the Settlement only, and authorizing notice to Settlement Class
Members as more fully described herein; and
WHEREAS, the Court has read and considered: (a) Lead Plaintiffs’ Motion for
Preliminary Approval of Settlement, Approval of Form of Class Notice, and a
Hearing Date for Final Approval of Settlement and the Memorandum of Law in
support thereof; and (b) the Stipulation and the exhibits attached thereto;
NOW THEREFORE, IT IS HEREBY ORDERED:
1.            Class Certification for Settlement Purposes – Pursuant to Rule 23
of the Federal Rules of Civil Procedure, the Court certifies, solely for
purposes of effectuating the proposed Settlement, a class consisting of all
persons and entities that purchased or otherwise acquired shares of Akorn’s
common stock during the period from November 3, 2016 through January 8, 2019,
inclusive (the “Class Period”), and were damaged thereby, including any and all
of their respective successors in interest, predecessors, representatives,
trustees, executors, administrators,
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heirs, assigns or transferees, immediate and remote, and any person or entity
acting for or on behalf of, or claiming under, any of them (the “Settlement
Class” and its members the “Settlement Class Members”).  Excluded from the
Settlement Class are: (i) Defendants; (ii) any person who was an officer,
director or managing agent of Akorn or any of its subsidiaries or affiliates at
any point during the Class Period; (iii) members of the immediate family of any
of the foregoing individuals; (iv) any affiliate of Akorn; (v) any entity in
which any Defendant has or had a controlling interest; and (vi) the legal
representatives, heirs, predecessors, successors or assigns of any of the
foregoing.  Also excluded from the Settlement Class are any persons and entities
who validly exclude themselves from the Settlement Class by timely filing a
request for exclusion in accordance with the requirements set forth in paragraph
14 herein and the Notice.
2.            Class Findings – Pursuant to Rule 23(e)(1)(B)(ii) of the Federal
Rules of Civil Procedure, the Court finds that, for purposes of the proposed
Settlement only, it will likely be able to certify the Settlement Class. 
Specifically, the Court finds that each element required for certification of
the Settlement Class pursuant to Rule 23 of the Federal Rules of Civil Procedure
has been met or will likely be met for purposes of the proposed Settlement
only:  (a) the members of the Settlement Class are so numerous that their
joinder in the Action would be impracticable; (b) there are questions of law and
fact common to the Settlement Class which predominate over any individual
questions; (c) the claims of Lead Plaintiffs in the Action are typical of the
claims of the Settlement Class; (d) Lead Plaintiffs and Lead Counsel have and
will fairly and adequately represent and protect the interests of the Settlement
Class; and (e) a class action is superior to other available methods for the
fair and efficient adjudication of the Action.
3.            The Court hereby finds and concludes that pursuant to Rule 23 of
the Federal Rules of Civil Procedure, and for the purposes of the Settlement
only, Lead Plaintiffs Gabelli & Co.
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Investment Advisors, Inc. and Gabelli Funds, LLC are adequate class
representatives and certifies them as class representatives for the Settlement
Class.  The Court also appoints Lead Counsel Entwistle & Cappucci LLP as class
counsel for the Settlement Class, pursuant to Rule 23(g) of the Federal Rules of
Civil Procedure.
4.            Preliminary Approval of the Settlement – The Court hereby
preliminarily approves the Settlement, as embodied in the Stipulation, and
finds, pursuant to Rule 23(e)(1)(B)(i) of the Federal Rules of Civil Procedure,
that it will likely be able to finally approve the Settlement under Rule
23(e)(2) as being fair, reasonable, and adequate to the Settlement Class,
subject to further consideration at the Settlement Hearing to be conducted as
described below.
5.            Settlement Hearing – The Court will hold a settlement hearing (the
“Settlement Hearing”) on ________, 2019 at ____ a.m. in Courtroom 2103, 219
South Dearborn Street, Chicago, Illinois, for the following purposes:
(a)            to determine whether the proposed Settlement on the terms and
conditions provided for in the Stipulation is fair, reasonable, and adequate to
the Settlement Class, and should be granted final approval by the Court;
(b)            to determine, for purposes of the Settlement only, whether: (i)
the Settlement Class should be finally certified; (ii) Lead Plaintiffs should be
finally certified as the Class Representatives for the Settlement Class; (iii)
the law firm of Entwistle & Cappucci LLP should be finally appointed as Class
Counsel for the Settlement Class;.
(c)            to determine whether an Order and Final Judgment substantially in
the form attached as Exhibit B to the Stipulation should be entered providing
for the form of release set forth therein and dismissing the Action with
prejudice;
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(d)            to determine whether the terms and conditions of the issuance of
the Settlement Shares pursuant to an exemption from registration requirements
under Section 3(a)(10) of the Securities Act are fair to all persons and
entities to whom the shares will be issued;
(e)            to determine whether the proposed Plan of Allocation should be
approved as fair and reasonable;
(f)            to determine whether Lead Counsel’s anticipated application for
an award of attorneys’ fees and reimbursement of expenses should be approved;
and
(g)            to consider any other matters that may properly be brought before
the Court in connection with the Settlement.  Notice of the Settlement and the
Settlement Hearing shall be given to Settlement Class Members as set forth in
paragraph 8 of this Order.
6.            The Court may adjourn the Settlement Hearing without further
notice to the Settlement Class and may approve the proposed Settlement with such
modifications as the Litigation Parties may agree to, if appropriate, without
further notice to the Settlement Class.
7.            CAFA Notice – At least seven (7) calendar days before the
Settlement Hearing, Defendants shall cause to be served on Lead Counsel and
filed with the Court proof, by affidavit or declaration, of compliance with 28
U.S.C. § 1715(b), requiring Defendants to serve within ten (10) calendar days
following the filing of the Stipulation with the Court notice of the proposed
Settlement on the appropriate State official of each state in which a class
member resides and the appropriate federal official (“CAFA Notice”).  The
Defendants shall be solely responsible for the costs and administration of the
CAFA Notice.
8.            Retention of Claims Administrator and Manner of Giving Notice –
Lead Counsel is hereby authorized to retain JND Legal Administration as claims
administrator to supervise and administer the notice procedure in connection
with the proposed Settlement as well
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as the processing of Claims for the proceeds of the Settlement, as more fully
set forth below.  Notice of the Settlement and the Settlement Hearing shall be
given by Lead Counsel as follows:
(a)            within ten (10) business days of the date of entry of this Order,
Akorn shall use its reasonable best efforts to provide or cause to be provided
to the Claims Administrator in electronic format (at no cost to the Settlement
Fund, Lead Counsel or the Claims Administrator) its security list (consisting of
last known names and addresses) of the holders of Akorn common stock during the
Class Period maintained by the Transfer Agent;
(b)            not later than twenty (20) business days after the date of entry
of this Order (the “Notice Date”), the Claims Administrator shall cause a copy
of the Notice and the Proof of Claim Form, substantially in the forms attached
hereto as Exhibits 1 and 2, respectively (the “Notice Packet”), to be mailed by
first-class mail to all potential Settlement Class Members who could be
identified through reasonable effort;
(c)            contemporaneously with the mailing of the Notice Packet, the
Claims Administrator shall cause copies of the Notice and Proof of Claim Form to
be posted on a website to be developed for the Settlement, from which copies of
the Notice and Proof of Claim Form can be downloaded;
(d)            not later than ten (10) business days after the Notice Date, the
Claims Administrator shall cause the Publication Notice, substantially in the
form attached hereto as Exhibit 3, to be published once in Investor’s Business
Daily and to be transmitted once over the PR Newswire; and
(e)            not later than seven (7) calendar days prior to the Settlement
Hearing, Lead Counsel shall serve on Defendants’ Counsel and file with the Court
proof, by affidavit or declaration, of such mailing and publication.
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9.            Approval of Form and Content of Notice – The Court: (a) approves,
as to form and content, the Notice, Proof of Claim Form, and Publication Notice,
attached hereto as Exhibits 1, 2, and 3, respectively; and (b) finds that the
mailing and distribution of the Notice and Proof of Claim Form and the
publication of the Publication Notice in the manner and form set forth in
paragraph 8 of this Order (i) is the best notice practicable under the
circumstances; (ii) constitutes notice that is reasonably calculated, under the
circumstances, to apprise Settlement Class Members of the pendency of the
Action, of the effect of the proposed Settlement (including the Releases to be
provided thereunder), of their right to object to the Settlement, of their right
to exclude themselves from the Settlement Class, and of their right to appear at
the Settlement Hearing; (iii) constitutes due, adequate, and sufficient notice
to all persons and entities entitled to receive notice of the proposed
Settlement; and (iv) satisfies the notice requirements of Rule 23 of the Federal
Rules of Civil Procedure, the United States Constitution (including the Due
Process Clause), the Private Securities Litigation Reform Act of 1995, 15 U.S.C.
§ 78u-4, as amended, Section 3(a)(10) of the Securities Act, and all other
applicable law and rules.  The date and time of the Settlement Hearing shall be
included in the Notice and Publication Notice before they are mailed and
published, respectively.
10.            Nominee Procedures – Brokers and other nominees who purchased or
otherwise acquired Akorn common stock during the Class Period for the benefit of
another person or entity shall: (a) within seven (7) business days of receipt of
the Notice, request from the Claims Administrator sufficient copies of the
Notice Packet to forward to all such beneficial owners and within seven (7)
business days of receipt of those Notice Packets forward them to all such
beneficial owners; or (b) within seven (7) business days of receipt of the
Notice, send a list of the names and addresses of all such beneficial owners to
the Claims Administrator in which
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event the Claims Administrator shall promptly mail the Notice Packet to such
individuals or entities.  Upon full compliance with this Order, such nominees
may seek reimbursement of their reasonable expenses actually incurred in
complying with this Order by providing the Claims Administrator with proper
documentation supporting the expenses for which reimbursement is sought.  Such
properly documented expenses incurred by nominees in compliance with the terms
of this Order shall be paid from the Settlement Fund, with any disputes as to
the reasonableness or documentation of expenses incurred subject to review by
the Court.
11.            Participation in the Settlement – Settlement Class Members who
wish to participate in the Settlement and to be eligible to receive a
distribution from the Net Settlement Fund must complete and submit a Proof of
Claim Form in accordance with the instructions contained therein.  Unless the
Court orders otherwise, all Proof of Claim Forms must be postmarked no later
than one hundred twenty (120) calendar days after the Notice Date. 
Notwithstanding the foregoing, Lead Counsel may, at its discretion, accept for
processing late Claims provided such acceptance does not delay the distribution
of the Net Settlement Fund to the Settlement Class.  By submitting a Proof of
Claim Form, a person or entity shall be deemed to have submitted to the
jurisdiction of the Court with respect to his, her or its Claim and the subject
matter of the Settlement.
12.            Each Proof of Claim Form submitted must satisfy the following
conditions: (a) it must be properly completed, signed and submitted in a timely
manner in accordance with the provisions of the preceding paragraph; (b) it must
be accompanied by adequate supporting documentation for the transactions and
holdings reported therein, in the form of broker confirmation slips, broker
account statements, an authorized statement from the broker containing the
transactional and holding information found in a broker confirmation slip or
account statement,
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or such other documentation as is deemed adequate by Lead Counsel or the Claims
Administrator; (c) if the person executing the Proof of Claim Form is acting in
a representative capacity, a certification of his, her or its current authority
to act on behalf of the Claimant must be included in the Proof of Claim Form to
the satisfaction of Lead Counsel or the Claims Administrator; and (d) the Proof
of Claim Form must be complete and contain no material deletions or
modifications of any of the printed matter contained therein and must be signed
under penalty of perjury.
13.            Any Settlement Class Member that does not timely and validly
submit a Proof of Claim Form:  (a) shall be deemed to have waived his, her, or
its right to share in the Net Settlement Fund; (b) shall be forever barred from
participating in any distributions therefrom; (c) shall be bound by the
provisions of the Stipulation and the Settlement and all proceedings,
determinations, orders, and judgments in the Action relating thereto, including,
without limitation, the Order and Final Judgment, and the releases provided for
therein, whether favorable or unfavorable to the Settlement Class; and (d) will
be barred from commencing, maintaining, or prosecuting any of the Settled Claims
against each and all of the Released Persons, as more fully described in the
Stipulation and Notice.  Notwithstanding the foregoing, late Proof of Claim
Forms may be accepted for processing as set forth in paragraph 11 above.
14.            Exclusion From the Settlement Class – Any Settlement Class Member
who wishes to exclude himself, herself, or itself from the Settlement Class must
request exclusion in writing within the time and in the manner set forth in the
Notice, which shall provide that:
(a)            any such request for exclusion from the Settlement Class must be
mailed or delivered such that it is received no later than twenty-one (21)
calendar days prior to the Settlement Hearing, to:  Claims Administrator at In
re Akorn, Inc. Data Integrity Securities Litigation c/o JND Legal
Administration, PO Box 91207, Seattle, WA  98111-9307; and
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(b)            each request for exclusion must:  (i) state the name, address,
and telephone number of the person or entity requesting exclusion, and, in the
case of entities, the name and telephone number of the appropriate contact
person; (ii) state that such person or entity “requests exclusion from the
Settlement Class in In re Akorn, Inc. Data Integrity Securities Litigation, Civ.
A. No. 1:18-cv-01713”; (iii) state the number of Akorn common shares
purchased/acquired and/or sold during the Class Period, as well as the dates,
number of shares, and prices paid or proceeds received for each such
purchase/acquisition and sale; and (iv) be signed by the person or entity
requesting exclusion or an authorized representative.  A request for exclusion
shall not be effective unless it provides all the required information and is
received within the time stated above.
15.            Any person or entity who or which timely and validly requests
exclusion in compliance with the terms stated in this Order and is excluded from
the Settlement Class shall not be a Settlement Class Member, shall not be bound
by the terms of the Settlement or any orders or judgments in the Action relating
to the Settlement, and shall not receive any payment out of the Settlement Fund.
16.            Any Settlement Class Member that does not timely and validly
request exclusion from the Settlement Class in the manner stated in this Order: 
(a) shall be deemed to have waived his, her, or its right to be excluded from
the Settlement Class; (b) shall be forever barred from requesting exclusion from
the Settlement Class in this or any other proceeding; (c) shall be bound by the
provisions of the Stipulation, the Settlement, and all proceedings,
determinations, orders, and judgments in the Action relating to the Settlement,
including, but not limited to, the Order and Final Judgment, and the releases
provided for therein whether favorable or unfavorable to the Settlement Class;
and (d) shall be barred from commencing, maintaining, or prosecuting any of
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the Settled Claims against any of the Released Persons, as more fully described
in the Stipulation and Notice.
17.            Appearance and Objections at Settlement Hearing – Any Settlement
Class Member who does not request exclusion from the Settlement Class may enter
an appearance in the Action, at his, her, or its own expense, individually or
through counsel of his, her, or its own choice, by filing with the Clerk of
Court and delivering a notice of appearance to both Lead Counsel and Defendants’
Counsel, at the addresses set forth in ¶ 18 below, such that it is received no
later than twenty-one (21) calendar days prior to the Settlement Hearing, or as
the Court may otherwise direct.  Any Settlement Class Member who does not enter
an appearance will be represented by Lead Counsel.
18.            Any Settlement Class Member who does not request exclusion from
the Settlement Class may file a written objection to the proposed Settlement,
the proposed Plan of Allocation, and/or Lead Counsel’s motion for an award of
attorneys’ fees and reimbursement of Litigation Expenses and show cause, if he,
she, or it has any cause, why the proposed Settlement, the proposed Plan of
Allocation, and/or Lead Counsel’s motion for an award of attorneys’ fees and
reimbursement of Litigation Expenses should not be approved; provided, however,
that no Settlement Class Member shall be heard or entitled to contest the
approval of the terms and conditions of the proposed Settlement, the proposed
Plan of Allocation, and/or Lead Counsel’s motion for an award of attorneys’ fees
and reimbursement of Litigation Expenses unless that person or entity has filed
a written objection with the Court and served copies of such objection on Lead
Counsel and Defendants’ Counsel at the addresses set forth below such that they
are received no later than twenty-one (21) calendar days prior to the Settlement
Hearing.
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Lead Counsel
 
 
Defendants’ Counsel

Entwistle & Cappucci LLP
Andrew J. Entwistle, Esq.
500 W. 2nd Street, Suite 1900-16
Austin, Texas 78701
 
Entwistle & Cappucci LLP
Joshua K. Porter, Esq.
299 Park Avenue, 20th Floor
New York, New York 10171

Cravath, Swaine & Moore LLP
Robert H. Baron, Esq.
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
 

19.            Any objections, filings, and other submissions by the objecting
Settlement Class Member:  (a) must state the name, address, and telephone number
of the person or entity objecting and must be signed by the objector; (b) must
contain a statement of the Settlement Class Member’s objection or objections,
and the specific reasons for each objection, including any legal and evidentiary
support the Settlement Class Member wishes to bring to the Court’s attention and
whether the objection applies only to the objector, to a specific subset of the
Settlement Class, or to the entire Settlement Class; and (c) must include
documents sufficient to prove membership in the Settlement Class, including the
number of shares of Akorn common stock that the objecting Settlement Class
Member purchased/acquired and/or sold during the Class Period, as well as the
dates, number of shares, and prices of each such purchase/acquisition and sale. 
Objectors who enter an appearance and desire to present evidence at the
Settlement Hearing in support of their objection must include in their written
objection or notice of appearance the identity of any witnesses they may call to
testify and any exhibits they intend to introduce into evidence at the hearing.
20.            Any Settlement Class Member who or which does not make his, her,
or its objection in the manner provided herein shall be deemed to have waived
his, her, or its right to object to any
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aspect of the proposed Settlement, the proposed Plan of Allocation, and Lead
Counsel’s motion for an award of attorneys’ fees and reimbursement of Litigation
Expenses, and shall be forever barred and foreclosed from objecting to the
fairness, reasonableness, or adequacy of the Settlement, the Plan of Allocation,
or the requested attorneys’ fees and Litigation Expenses, or from otherwise
being heard concerning the Settlement, the Plan of Allocation, or the requested
attorneys’ fees and Litigation Expenses in this or any other proceeding.
21.            Stay and Temporary Injunction – Until otherwise ordered by the
Court, the Court stays all proceedings in the Action, the Twin Funds Action and
the Manikay Funds Action, and any action subsequently filed in or reassigned to
this Court that is based upon the same of substantially similar facts and
circumstances as in the Action, other than proceedings necessary to carry out or
enforce the terms and conditions of the Stipulation.  Pending final
determination of whether the Settlement should be granted final approval, the
Court bars and enjoins Lead Plaintiffs, plaintiffs in the Twin Funds Action,
plaintiffs in the Manikay Funds Action, and all members of the Settlement Class,
from commencing or prosecuting any and all of the Settled Claims against each
and all of the Released Persons.
22.            Settlement Administration Fees and Expenses – All reasonable
costs incurred in identifying Settlement Class Members and notifying them of the
Settlement as well as in administering the Settlement shall be paid as set forth
in the Stipulation without further order of the Court.
23.            Settlement Fund – The contents of the Settlement Fund held by the
Escrow Agent shall be deemed and considered to be in custodia legis of the
Court, and shall remain subject to the jurisdiction of the Court, until such
time as they shall be distributed pursuant to the Stipulation and/or further
order(s) of the Court.  No person who is not a Settlement Class Member or Lead
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Counsel shall have any right to any portion of, or to any distribution of, the
Net Settlement Fund unless ordered by the Court or otherwise provided in the
Stipulation.
24.            Neither Defendants, their counsel, nor any Released Person shall
have any liability or responsibility for the Plan of Allocation or any
application for attorneys’ fees or Litigation Expenses submitted by Lead Counsel
or Lead Plaintiff, and such matters shall be considered separately from the
fairness, reasonableness and adequacy of the Settlement.
25.            Taxes – Lead Counsel is authorized and directed to prepare any
tax returns and any other tax reporting form for or in respect to the Settlement
Fund, to pay from the Settlement Fund any Taxes or Tax Expenses owed with
respect to the Settlement Fund, and to otherwise perform all obligations with
respect to Taxes and Tax Expenses and any reporting or filings in respect
thereof without further order of the Court in a manner consistent with the
provisions of the Stipulation.
26.            Termination of Settlement – If the Settlement is terminated as
provided in the Stipulation, the Settlement is not approved, or the Effective
Date of the Settlement otherwise fails to occur, this Order (including the
certification of the Settlement Class) shall be vacated, rendered null and void,
and be of no further force and effect, except as otherwise provided by the
Stipulation, and this Order shall be without prejudice to the rights of Lead
Plaintiffs, the other Settlement Class Members, or Defendants, and the Settling
Parties shall revert to their respective positions in the Action as of
immediately prior to the execution of the Stipulation on August 9, 2019, as
provided in the Stipulation.
27.            Use of this Order – Except as necessary to effectuate the
protections from liability granted thereunder or otherwise to enforce the terms
of the Settlement, neither this Order, the Stipulation (whether or not
consummated), including the exhibits thereto, the Plan of Allocation
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contained therein (or any other plan of allocation that may be approved by the
Court), the negotiations leading to the execution of the Stipulation, nor any
proceedings taken pursuant to or in connection with the Stipulation and/or
approval of the Settlement (including any arguments proffered in connection
therewith):
(a)            shall be offered or received against any Defendant or Released
Person as evidence of, or construed as or deemed to be evidence of, any
presumption, concession, or admission by any Defendant or Released Person with
respect to the truth of any fact alleged by any of the Plaintiffs or the
validity of any Settled Claim that has been or could have been asserted in the
Action or in any litigation, or the deficiency of any defense that has been or
could have been asserted in the Action or in any litigation, or of any
liability, negligence, fault or wrongdoing of any Defendant or Released Person;
(b)            shall be offered or received against any Defendant or Released
Person as evidence of a presumption, concession or admission of any fault,
misrepresentation or omission with respect to any statement or written document
approved or made by any Defendant or Released Person;
(c)            shall be offered or received against any Defendant or Released
Person as evidence of a presumption, concession or admission with respect to any
liability, negligence, fault or wrongdoing, or in any way referred to for any
other reason as against any Defendant or Released Person, in any other civil,
criminal or administrative action or proceeding, other than such proceedings as
may be necessary to effectuate the provisions of this Stipulation;
(d)            shall be construed against any Defendant or Released Person as an
admission or concession that the consideration to be given hereunder represents
the amount which could or would have been recovered after trial; or
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(e)            shall be construed as or received in evidence as an admission,
concession or presumption against Lead Plaintiffs or any of the Releasing
Persons that any of their claims are without merit, or that any defenses
asserted by any Defendants have any merit, or that damages recoverable under the
Second Amended Complaint would not have exceeded the Settlement Consideration or
the Settlement Fund.
28.            Supporting Papers – Lead Counsel shall file and serve the opening
papers in support of the proposed Settlement, the proposed Plan of Allocation
and Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of
Litigation Expenses no later than thirty-five (35) calendar days prior to the
Settlement Hearing; and reply papers, if any, shall be filed and served no later
than seven (7) calendar days prior to the Settlement Hearing.
29.            The Court retains jurisdiction to consider all further
applications arising out of or connected with the proposed Settlement.
SO ORDERED this _______________ day of ___________________, 2019.

 
 

 
 
The Honorable Matthew F. Kennelly

 
 
United States District Judge

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Exhibit A-1
[Notice of (I) Pendency of Class Action and Proposed Settlement; (II) Settlement
Fairness Hearing; and (III) Motion for and Award of Attorneys’ Fees and
Reimbursement of Litigation Expenses is Excluded from this Filing]

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Exhibit A-2
[Proof of Claim and Release Form is Excluded from this Filing]

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Exhibit A-3
[Summary Notice of (I) Pendency of Class Action and Proposed Settlement; (II)
Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees
and Reimbursement of Litigation Expenses is Excluded from this Filing]

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Exhibit B

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Exhibit B

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

IN RE AKORN, INC. DATA INTEGRITY SECURITIES LITIGATION

     Civ. A. No. 1:18-cv-01713

Hon. Matthew F. Kennelly

[PROPOSED] ORDER AND FINAL JUDGMENT APPROVING
CLASS ACTION SETTLEMENT

WHEREAS, on August 9, 2019, Lead Plaintiffs Gabelli & Co. Investment Advisors,
Inc. and Gabelli Funds, LLC, individually and on behalf of the Settlement
Class,1  on the one hand, and Defendants Akorn, Inc., Rajat Rai, Duane Portwood,
Alan Weinstein, Brian Tambi and Ronald Johnson, on the other hand, entered into
the Stipulation to settle the above-captioned litigation;
WHEREAS, on August 26, 2019, the Court held a preliminary approval hearing
pursuant to Rule 23(e)(1) of the Federal Rules of Civil Procedure (the
“Preliminary Approval Hearing”);
WHEREAS, following the Preliminary Approval Hearing, on August 26, 2019, the
Court entered the Preliminary Approval Order;
WHEREAS, pursuant to the Preliminary Approval Order, the Court scheduled the
Settlement Hearing for _________, 2019, at _________, for the purpose of, among
other things, determining whether:  (i) the terms and conditions of the
Settlement are fair, reasonable and

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1 All capitalized words or terms not otherwise defined in this Order and Final
Judgment shall have the meanings ascribed to those words or terms in the
Stipulation and Agreement of Settlement (the “Stipulation”) filed with the Court
on August 9, 2019.

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adequate to the Settlement Class, and should therefore be approved; (ii) a
judgment as provided for in the Stipulation should be entered; and (iii) the
terms and conditions of the issuance of the Settlement Shares and Settlement
CVRs pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 3(a)(10) are fair to all persons and entities
to whom the shares will be issued;
WHEREAS, pursuant to the Preliminary Approval Order, the Court ordered that the
Notice and a Proof of Claim Form, substantially in the forms attached to the
Preliminary Approval Order as Exhibits A-1 and A-2, respectively, be mailed by
first-class mail, postage prepaid, on or before twenty (20) business days after
the date of entry of the Preliminary Approval Order (“Notice Date”) to all
potential Settlement Class Members who could be identified through reasonable
effort, and that the Publication Notice, substantially in the form attached to
the Preliminary Approval Order as Exhibit A-3, be published in Investor’s
Business Daily and transmitted over PR Newswire within ten (10) calendar days of
the Notice Date;
WHEREAS, the Notice and the Publication Notice advised potential Settlement
Class Members of the date, time, place, and purpose of the Settlement Hearing. 
The Notice further advised that any objections to the Settlement were required
to be filed with the Court and served on counsel for the Litigation Parties such
that they were received by _________, 2019;
WHEREAS, the provisions of the Preliminary Approval Order as to notice were duly
complied with;
WHEREAS, on _________, 2019, Lead Plaintiff moved for final approval of the
Settlement, as set forth in the Preliminary Approval Order.  The Settlement
Hearing was duly held before this Court on ___________, 2019, at which time all
interested persons and entities were afforded the opportunity to be heard;
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[WHEREAS, no objections to the Settlement were received;] and
WHEREAS, this Court has duly considered Lead Plaintiff’s motion, the affidavits,
declarations, memoranda of law submitted in support thereof, the Stipulation,
and all of the submissions and arguments presented with respect to the proposed
Settlement;
NOW, THEREFORE, after due deliberation, IT IS HEREBY ORDERED, ADJUDGED AND
DECREED:
Incorporation of Settlement Documents
1.          This Order and Final Judgment incorporates and makes a part hereof
as though set forth fully herein: (i) the Stipulation filed with the Court
August 9, 2019; and (ii) the Notice, which was filed with the Court on August 9,
2019.
Jurisdiction
2.          This Court has jurisdiction over the subject matter of the Action
and over all parties to the Action, including the Litigation Parties and all
Settlement Class Members (collectively, the “Parties”).
Class Certification for Settlement Purposes
3.          The Court hereby affirms its determinations in the Preliminary
Approval Order and finally certifies, for purposes of the Settlement only,
pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, the
Settlement Class of:  all persons or entities that purchased or otherwise
acquired shares of Akorn common stock between November 3, 2016 and January 8,
2019, inclusive, and were damaged thereby.  Excluded from the Settlement Class
are:  (i) Defendants; (ii) any person who was an officer, director or managing
agent of Akorn or any of its subsidiaries or affiliates at any point during the
Class Period; (iii) members of the immediate family of any of the foregoing
individuals; (iv) any affiliate of Akorn; (v) any entity in which any
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Defendant has or had a controlling interest; (vi) any Opt-Outs that are listed
on the annexed Exhibit A as having submitted an exclusion request allowed by the
Court (the “Authorized Opt-Outs”); and (vii) the legal representatives, heirs,
predecessors, successors or assigns of any of the foregoing.
Adequacy of Representation
4.          Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for
purposes of the Settlement only, the Court hereby reaffirms its determinations
in the Preliminary Approval Order and finally certifies the Gabelli Funds as the
Class Representatives for the Settlement Class; and finally appoints the law
firm of Entwistle & Cappucci LLP as Class Counsel for the Settlement Class.  The
law firm of Bernstein Litowitz Berger & Grossmann LLP will continue to act as
Plaintiffs’ local Liaison Counsel.
Notice
5.          The Court finds that the mailing and publication of the Notice,
Publication Notice, and Proof of Claim Form, as appropriate:
(a)  complied with the Preliminary Approval Order;
(b)  constituted the best notice practicable under the circumstances;
(c)  constituted notice that was reasonably calculated to apprise Settlement
Class Members of (i) the effect of the Settlement, (ii) the proposed Plan of
Allocation, (iii) Lead Counsel’s request for an award of attorneys’ fees and
payment of Litigation Expenses incurred in connection with the prosecution of
the Action, (iv) their right to object or seek exclusion from the Settlement
Class, and (v) their right to appear at the Settlement Hearing;
(d)  constituted due, adequate, and sufficient notice to all persons or entities
entitled to receive notice of the proposed Settlement;
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(e)  satisfied the notice requirements of Rule 23 of the Federal Rules of Civil
Procedure, the United States Constitution (including the Due Process Clause),
and Section 21D(a)(7) of the Exchange Act, 15 U.S.C. § 78u-4(a)(7), as amended
by the Private Securities Litigation Reform Act of 1995 (the “PSLRA”); and
(f)  constituted adequate notice pursuant to the requirements of
Section 3(a)(10) of the Securities Act.
Objections
6.          [There have been no objections to the Settlement.] [The Court has
considered all timely objections to the Settlement and granted each such
objector an opportunity to be heard.]
Final Settlement Approval and Dismissal of Claims
7.          The Court hereby fully and finally approves the Settlement as set
forth in the Stipulation in all respects, and finds that the Settlement is, in
all respects, fair, reasonable and adequate, and in the best interests of Lead
Plaintiffs and the Settlement Class.  In reaching this decision, the Court
considered, among other thing:  (i) the benefits to the Settlement Class;
(ii) the complexity, expense and possible duration of further litigation against
Defendants; (iii) the strength of Plaintiffs’ case, including the risks of
establishing liability and damages; (iv) the costs of continued litigation; (v)
[the lack of any objections to the Settlement] [all timely objections to the
Settlement] and (vi) the stage of proceedings and discovery completed as of the
date hereof, including the fact that Defendants have already produced millions
of documents, as well as extensive deposition and trial testimony from other
court proceedings that relate to allegations in the Action, to Lead Counsel. 
This Court further finds the Settlement set forth in the Stipulation is the
result of arm’s-length negotiations between experienced counsel representing the
interests of
5

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Lead Plaintiffs, the Settlement Class, and Defendants. The Settlement shall be
consummated in accordance with the terms and provisions of the Stipulation.
8.          The Second Amended Complaint filed on April 22, 2019, is dismissed
in its entirety, with prejudice, and without costs to any party, except as
otherwise provided in the Stipulation.
9.          The Parties are hereby directed to consummate the Stipulation and to
perform its terms.
Section 3(a)(10) Exemption
10.        The Court, after holding the Settlement Hearing, hereby finds that: 
(i) the Settlement Shares and Settlement CVRs are to be issued solely in
exchange for bona fide outstanding claims; (ii) all person and entities to whom
the Settlement Shares and Settlement CVRs will be issued had the right to appear
at the Settlement Hearing; (iii) the Settlement Hearing was open to all persons
and entities to whom the Settlement Shares and Settlement CVRs will be issued;
(iv) adequate notice has been given to all persons and entities to whom the
Settlement Shares and Settlement CVRs will be issued, and there have been no
improper impediments to the appearance of such persons and entities at the
Settlement Hearing; and (v) the terms and conditions of the issuance of the
Settlement Shares and Settlement CVRs pursuant to the terms of the Stipulation
are fair to all persons and entities to whom the Settlement Shares and
Settlement CVRs will be issued.  The Court hereby acknowledges that it was
advised prior to the Settlement Hearing that, following Court approval of the
Settlement, Akorn intends to rely on the Section 3(a)(10) registration exemption
when distributing the Settlement Shares and Settlement CVRs to the Settlement
Class (and to Plaintiffs’ Counsel, as may be awarded by the Court, except that
such award will not include more than 25% of either the (a) the total Settlement
Shares or (b) the total
6

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Settlement CVRs) pursuant to the terms of the Stipulation.  The Court hereby
approves the terms and conditions of the issuance of the Settlement Shares and
Settlement CVRs in exchange for the settlement and release of the Settled Claims
by the Releasing Persons as fair both procedurally and substantively to all
person and entities to whom the Settlement Shares and Settlement CVRs will be
issued, and finds that the Settlement Shares and Settlement CVRs are freely
tradable and exempt from the registration requirements of the Securities Act
(or, where applicable, any analogous provisions of applicable state securities
laws) pursuant to Section 3(a)(10).  Based upon the Court’s findings that the
terms and conditions of the Settlement are fair both procedurally and
substantively, Akorn may distribute the Settlement Shares and Settlement CVRs
without registration or compliance with the prospectus delivery requirements of
the U.S. securities laws (or, where applicable, any analogous state securities
laws).
11.        At any time after the Effective Date, Lead Counsel may, in accordance
with the terms of the Stipulation, direct the Escrow Agent to sell all or any
portion of the Class Settlement Shares or Settlement CVRs on behalf of the
Settlement Class, pursuant to the exemption from registration requirements of
the Securities Act provided by Section 3(a)(10), which exemption shall also
remain applicable to and not otherwise limit or invalidate the initial issuance
of and delivery of the Settlement Shares or Settlement CVRs to the Escrow Agent.
To the extent that any sale of the Class Settlement Shares or Settlement CVRs
occurs, the cash proceeds of such sale(s) shall be deposited in the Escrow
Account and held in escrow under the control of the Escrow Agent as fiduciary
for the benefit of the Settlement Class pending disbursement or distribution in
accordance with the terms of the Stipulation.
7

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Releases
12.        Upon the Effective Date, each and all of the Releasing Persons, on
behalf of themselves and each of their respective heirs, executors, trustees,
administrators, predecessors, successors, assigns, and any other person or
entity claiming (now or in the future) through or on behalf of them, regardless
of whether any such person or entity ever seeks or obtains by any means,
including, without limitation, by submitting a Proof of Claim Form, any
distribution from the Settlement Fund, shall be deemed to have fully, finally,
and forever waived, released, discharged, and dismissed each and every one of
the Settled Claims against each and every one of the Released Persons and shall
be deemed to have covenanted not to sue the Released Persons in respect to any
such Settled Claims and shall forever be barred and enjoined from asserting,
commencing, instituting, prosecuting, maintaining or in any way participating in
the commencement or prosecution of any action or other proceeding, in any forum,
asserting any or all of the Settled Claims against any or all of the Released
Persons.
13.         Upon the Effective Date, each of the Defendants and Released
Persons, on behalf of themselves and their respective heirs, executors,
administrators, successors and assigns and all persons acting in concert with
any such person or entity, shall have, fully, finally, and forever released,
relinquished, and discharged Lead Plaintiffs, Plaintiffs’ Counsel and the
Settlement Class (except, for the avoidance of doubt, any Authorized Opt-Outs)
from all Claims (including Unknown Claims) arising out of, relating to, or in
connection with, the institution, prosecution, assertion, Settlement, or
resolution of the Action or the Settled Claims except to enforce the releases
and other terms and conditions contained in the Stipulation or any Court order
(including, but not limited to, this Order and Final Judgment) entered pursuant
thereto.
8

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14.         Pursuant to the PSLRA, 15 U.S.C. § 78u-4(f)(7), upon the Effective
Date, the Defendants are discharged from all claims for contribution that have
been or may hereafter be brought by or on behalf of any person or entity, based
upon, relating to, or arising out of the Action. Upon the Effective Date, any
and all persons or entities are permanently BARRED, ENJOINED and RESTRAINED from
commencing, prosecuting or asserting any and all claims for contribution based
upon, relating to, or arising out of the Action, whether arising under state,
federal or common law, as claims, cross-claims, counterclaims, or third-party
claims, in this Action or as a separate action, in this Court, in any federal or
state court, or in any other court, arbitration proceeding, administrative
proceeding, or other forum (collectively, the “Barred Contribution Claims”)
against the Defendants; and the Defendants are permanently BARRED, ENJOINED and
RESTRAINED from commencing, prosecuting or asserting any and all Barred
Contribution Claims against any person or entity, other than a person or entity
whose liability to the Settlement Class has been extinguished pursuant to the
Settlement and this Order and Final Judgment.
15.         Pursuant to the PSLRA, 15 U.S.C. § 78u-4(f)(7), any final verdict or
judgment obtained by or on behalf of Lead Plaintiff, the Settlement Class or any
Settlement Class Member shall be reduced as provided therein.
Binding Effect
16.       Each Settlement Class Member (except for the Authorized Opt‑Outs),
whether or not such Settlement Class Member executes and delivers a Proof of
Claim Form, as well as the respective successors and assigns of each Settlement
Class Member, is forever bound by this Order and Final Judgment, including,
without limitation, the release of claims as set forth in the Stipulation.
9

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No Admissions
17.        This Order and Final Judgment and the Stipulation, whether or not
consummated, and any discussions, negotiations, proceedings or agreements
relating to the Stipulation, the Settlement, and any matters arising in
connection with settlement discussions or negotiations, proceedings, or
agreements, shall not be offered or received against or to the prejudice of the
Parties or their respective counsel or advisors, for any purpose other than in
an action to enforce the terms hereof, and in particular:
(a)  do not constitute, and shall not be offered or received against or to the
prejudice of Defendants as evidence of, or construed as, or deemed to be
evidence of any presumption, concession, or admission by Defendants with respect
to the truth of any allegation by Plaintiffs, or the validity of any claim that
has been or could have been asserted in the Action or in any litigation,
including but not limited to the Settled Claims, or of any liability, damages,
negligence, fault or wrongdoing of Defendants or any person or entity
whatsoever;
(b)  do not constitute, and shall not be offered or received against or to the
prejudice of Defendants as evidence of a presumption, concession, or admission
of any fault, misrepresentation, or omission with respect to any statement or
written document approved or made by Defendants, or against or to the prejudice
of Lead Plaintiffs or the Settlement Class as evidence of any infirmity in the
claims alleged by Lead Plaintiffs;
(c)  do not constitute, and shall not be offered or received against or to the
prejudice of Defendants, Plaintiffs or their respective counsel or advisors, as
evidence of a presumption, concession, or admission with respect to any
liability, damages, negligence, fault, infirmity, or wrongdoing, or in any way
referred to for any other reason against or to the prejudice of any of the
Defendants, Plaintiffs, or their respective counsel or advisors, in any other
civil, criminal, or
10

--------------------------------------------------------------------------------

administrative action or proceeding in this Court, in any federal or state
court, or in any other court, arbitration proceeding, administrative proceeding,
or other forum, other than such proceedings as may be necessary to effectuate
the provisions of the Stipulation;
(d)  do not constitute, and shall not be construed against Defendants or
Plaintiffs as an admission or concession that the consideration to be given
hereunder represents the amount that could be or would have been recovered after
trial; and
(e)  do not constitute, and shall not be construed as or received in evidence as
an admission, concession, or presumption against Plaintiffs that any of their
claims are without merit or infirm or that damages recoverable under the Second
Amended Complaint would not have exceeded the Settlement Consideration.
Rule 11 Findings
18.         The Court finds that during the course of the Action, the Litigation
Parties and their respective counsel at all times complied with the requirements
of Rule 11 of the Federal Rules of Civil Procedure.
Modification of the Agreement of Settlement
19.        Without further approval from the Court, Lead Plaintiffs and
Defendants are hereby authorized to agree to and adopt such amendments to or
modifications of the Stipulation or any exhibits attached thereto to effectuate
the Settlement that:  (i) are not materially inconsistent with this Order and
Final Judgment; and (ii) do not materially limit the rights of the Settlement
Class Members in connection with the Settlement.  Without further order of the
Court, the Litigation Parties may agree to reasonable extensions of time to
carry out any of the provisions of the Stipulation.
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Retention of Jurisdiction
20.        Without affecting the finality of this Order and Final Judgment in
any way, this Court hereby retains continuing jurisdiction over:
(i) administration of and implementation of the Settlement; (ii) the allowance,
disallowance or adjustment of any Settlement Class Member’s claim on legal or
equitable grounds and any award or distribution of the Settlement Fund; (iii)
disposition of the Settlement Fund; (iv) any applications for attorneys’ fees,
costs, interest and payment of expenses in the Action; (v) all Parties for the
purpose of construing, enforcing and administering the Settlement and this Order
and Final Judgment; and (vi) other matters related or ancillary to the
foregoing.
Termination of the Settlement
21.         In the event that the Settlement does not become effective in
accordance with the terms of the Stipulation, then this Order and Final Judgment
shall be rendered null and void to the extent provided by and in accordance with
the Stipulation and shall be vacated, and in such event, all orders entered and
releases delivered in connection herewith shall be null and void to the extent
provided by and in accordance with the Stipulation.
Entry of Order and Final Judgment
22.         There is no just reason for delay in the entry of this Order and
Final Judgment.  Accordingly, the Clerk of Court is expressly directed to
immediately enter this Order and Final Judgment.
[Expiration of CAFA Notice Period
23.         This Order and Final Judgment is effective on ______, 2019, the
expiration date for the 90-day notice period provided in 28 U.S.C. § 1715(d).]
12

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DATED this ___ day of ___________, 2019

 
BY THE COURT:
 
 
 
 
Honorable Matthew F. Kennelly
UNITED STATES DISTRICT JUDGE

13

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Exhibit C

--------------------------------------------------------------------------------

CONTINGENT VALUE RIGHTS AGREEMENT

by and between

AKORN, INC.

and

[          ]

Dated as of [          ], 2019

--------------------------------------------------------------------------------

TABLE OF CONTENTS
 
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
   
Section 1.1. Definitions
1
Section 1.2. Certificates and Opinions
7
Section 1.3. Form of Documents Delivered to Trustee
7
Section 1.4. Acts of Holders
8
Section 1.5. Notices, etc., to Trustee and Company
8
Section 1.6. Notice to Holders; Waiver
9
Section 1.7. Conflict with Trust Indenture Act
9
Section 1.8. Effect of Headings and Table of Contents
9
Section 1.9. Benefits of Agreement
9
Section 1.10. Governing Law; Waiver of Jury Trial
9
Section 1.11. Legal Holidays
10
Section 1.12. Separability Clause
10
Section 1.13. No Recourse Against Others
10
Section 1.14. Counterparts
10
Section 1.15. Acceptance of Trust
10
Section 1.16. Termination
11
Section 1.17. Certain Purchases and Sales
11
   
ARTICLE 2
SECURITY FORMS
   
Section 2.1. Forms Generally
11
   
ARTICLE 3
THE SECURITIES
   
Section 3.1. Title and Terms
11
Section 3.2. Registrable Form
13
Section 3.3. Execution, Authentication, Delivery and Dating
13
Section 3.4. Registration, Registration of Transfer and Exchange
13
Section 3.5. Mutilated, Destroyed, Lost and Stolen Securities
15
Section 3.6. Payments with respect to CVRs
16
Section 3.7. Persons Deemed Owners
16
Section 3.8. Cancellation
16
Section 3.9. CUSIP Numbers
16
   
ARTICLE 4
THE TRUSTEE
   
Section 4.1. Certain Duties and Responsibilities
16
Section 4.2. Certain Rights of Trustee
17
Section 4.3. Notice of Default
18
Section 4.4. Not Responsible for Recitals or Issuance of Securities
18
Section 4.5. May Hold Securities
18
Section 4.6. Money Held in Trust
18
Section 4.7. Compensation and Reimbursement
18
Section 4.8. Disqualification; Conflicting Interests
19
Section 4.9. Corporate Trustee Required; Eligibility
19
Section 4.10. Resignation and Removal; Appointment of Successor
19
Section 4.11. Acceptance of Appointment of Successor
20
Section 4.12. Merger, Conversion, Consolidation or Succession to Business
20

i

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Section 4.13. Preferential Collection of Claims Against Company
21
   
ARTICLE 5
HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE AND COMPANY
   
Section 5.1. Company to Furnish Trustee Names and Addresses of Holders
21
Section 5.2. Preservation of Information; Communications to Holders
21
Section 5.3. Reports by Trustee
21
Section 5.4. Reports by Company
21
   
ARTICLE 6
AMENDMENTS
   
Section 6.1. Amendments Without Consent of Holders
22
Section 6.2. Amendments with Consent of Holders
22
Section 6.3. Execution of Amendments
23
Section 6.4. Effect of Amendments
23
Section 6.5. Conformity with Trust Indenture Act
23
Section 6.6. Reference in Securities to Amendments
23
   
ARTICLE 7
COVENANTS
   
Section 7.1. Payment of Amounts, if any, to Holders
23
Section 7.2. Maintenance of Office or Agency
23
Section 7.3. Money for Security Payments to Be Held in Trust
24
Section 7.4. Listing of CVRs
24
Section 7.5. Non-Use of Name
24
   
ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
   
Section 8.1. Event of Default Defined; Waiver of Default
25
Section 8.2. Collection by the Trustee; the Trustee May Prove Payment
Obligations
25
Section 8.3. Application of Proceeds
26
Section 8.4. Suits for Enforcement
27
Section 8.5. Restoration of Rights on Abandonment of Proceedings
27
Section 8.6. Limitations on Suits by Holders
27
Section 8.7. Unconditional Right of Holders to Institute Certain Suits
27
Section 8.8. Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default
27
Section 8.9. Control by Holders
28
Section 8.10. Waiver of Past Defaults
28
Section 8.11. The Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances
28
Section 8.12. Right of Court to Require Filing of Undertaking to Pay Costs
29
   
ARTICLE 9
CONSOLIDATION OR MERGER
   
Section 9.1. Company May Consolidate or Merge on Certain Terms
29
Section 9.2. Successor Person Substituted
29
Section 9.3. Officer’s Certificate to the Trustee
29
Section 9.4. Successors and Assigns
29

ii

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ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate
30
Section 10.2. Liquidation; Dissolution; Bankruptcy
30
Section 10.3. Default on Senior Obligations
30
Section 10.4. When Distribution Must Be Paid Over
30
Section 10.5. Notice by Company
31
Section 10.6. Subordination Effective Notwithstanding Deficiencies with Respect
to Senior Obligations; Waiver of Right to Contest Senior Obligation;
Reinstatement of Subordination Provisions
31
Section 10.7. Relative Rights
31
Section 10.8. Subordination May Not Be Impaired by Company
32
Section 10.9. Distribution or Notice to Representative
32
Section 10.10. Rights of the Trustee
32
Section 10.11. Authorization to Effect Subordination
32

Annex A          Example Calculations of EBITDA, Excess EBITDA and Annual
Payment
Annex B          Form of Global Security
Note:  This table of contents shall not, for any purpose, be deemed to be a part
of this CVR Agreement.

iii

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Reconciliation and tie between Trust Indenture Act of 1939 and
Contingent Value Rights Agreement, dated as of [          ], 2019
 
Trust Indenture Act Section
Agreement Section
Section 310
(a)(1)
4.9
 
(a)(2)
4.9
 
(a)(3)
Not Applicable
 
(a)(4)
Not Applicable
 
(a)(5)
4.9
 
(b)
4.8, 4.10
 
(c)
Not Applicable
Section 311
(a)
4.13
 
(b)
4.13
 
(c)
Not Applicable
Section 312
(a)
5.1, 5.2(a)
 
(b)
5.2(b)
 
(c)
5.2(c)
Section 313
(a)
5.3(a)
 
(b)
5.3(a)
 
(c)
5.3(a), 8.11
 
(d)
5.3(b)
Section 314
(a)
5.4
 
(b)
Not Applicable
 
(c)(1)
1.2(a)
 
(c)(2)
1.2(a)
 
(c)(3)
Not Applicable
 
(d)
Not Applicable
 
(e)
1.2(b)
 
(f)
Not Applicable
Section 315
(a)
4.1(a), 4.1(b)
 
(b)
8.11
 
(c)
4.1(a)
 
(d)
4.1(c)
 
(d)(1)
4.1(a), 4.1(b)
 
(d)(2)
4.1(c)(ii)
 
(d)(3)
4.1(c)(iii)
 
(e)
8.12
Section 316
(a)(last sentence)
1.1 (Definition of “Outstanding”)
 
(a)(1)(A)
8.9
 
(a)(1)(B)
8.10
 
(a)(2)
Not Applicable
 
(b)
8.7
 
(c)
1.4(a)
Section 317
(a)(1)
8.2
 
(a)(2)
8.2
 
(b)
7.3
Section 318
(a)
1.7

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this CVR Agreement.
iv

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THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [          ], 2019 (this
“CVR Agreement”), by and between Akorn, Inc., a Louisiana corporation (the
“Company”), and [          ], a [            ], as trustee (the “Trustee”), in
favor of each person who from time to time holds one or more Contingent Value
Rights (the “Securities” or “CVRs”) to receive cash payments in the amounts and
subject to the terms and conditions set forth herein.

WITNESSETH:

WHEREAS, this CVR Agreement is entered into in accordance with to the
Stipulation and Agreement of Settlement, dated as of August 9, 2019 (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, the “Settlement Stipulation”), by and among the Company, Gabelli
& Co. Investment Advisors, Inc. and Gabelli Funds, LLC (together, the “Lead
Plaintiffs”), on behalf of the Settlement Class (together with the Lead
Plaintiffs, the “Plaintiffs”), and the Individual Defendants in the matter In re
Akorn, Inc. Data Integrity Securities Litigation, C.A. No. 18-cv-173 (N.D. Ill.)
(the “Securities Litigation”);

WHEREAS, as part of the consideration for the Settlement and the release of the
Settled Claims, the Company has agreed to issue to the Plaintiffs the CVRs,
which shall be issued pursuant to the terms of this CVR Agreement and in
accordance with the Settlement Stipulation; and

WHEREAS, the CVRs shall be issued pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
provided by Section 3(a)(10) of the Securities Act, which exemption was
perfected in the Order and Final Judgment entered by the Court on [], 2019 in
the Securities Litigation.

NOW, THEREFORE, in consideration of the foregoing premises and the final
resolution of the Settled Claims contemplated by the Settlement Stipulation, it
is covenanted and agreed, for the equal and proportionate benefit of all Holders
(as defined below) of the Securities, as follows:

ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1.  Definitions.  For all purposes of this CVR Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

(a)  the terms defined in this Article 1 have the meanings assigned to them in
this Article 1, and include the plural as well as the singular;

(b)  all accounting terms used herein and not expressly defined herein shall,
except as otherwise noted, have the meanings assigned to such terms in
accordance with applicable Accounting Standards, where “Accounting Standards”
means (A) GAAP (as defined below); or (B) to the extent that the Company adopts
International Financial Reporting Standards (IFRS), then “Accounting Standards”
means International Financial Reporting Standards (IFRS), in either case
consistently applied;

(c)  all capitalized terms used in this CVR Agreement without definition shall
have the respective meanings ascribed to them in the Settlement Stipulation;

(d)  all other terms used herein which are defined in the Trust Indenture Act
(as defined herein), either directly or by reference therein, have the
respective meanings assigned to them therein;

(e)  the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this CVR Agreement as a whole and not to any particular Article,
Section or other subdivision;

(f)  whenever the words “include”, “includes” or “including” are used in this
CVR Agreement, they shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words of
like import;

--------------------------------------------------------------------------------

(g)  references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, rule or regulation, in each
case as amended or otherwise modified from time to time; and

(h)  all references to “$” or “dollar” refer to United States dollars.

“Act” shall have the meaning set forth in Section 1.4(a).

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purpose of this definition,
“control” when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Annual Payment” means, with respect to any Excess EBITDA Measuring Period for
any CVR that is Outstanding as of the applicable Annual Payment Record Date, an
amount equal to the lesser of (a) (i) thirty-three and one third percent (33.3%)
of the Excess EBITDA for such Excess EBITDA Measuring Period divided by (ii) the
Initial Settlement CVR Amount, and (b) the Annual Payment Cap; provided that if
the making of such Annual Payment would cause the cumulative amount of Annual
Payments commencing from the date of this CVR Agreement (inclusive of such
Annual Payment) with respect to such Outstanding CVR to exceed the Total Payment
Cap with respect to such Outstanding CVR, then such Annual Payment will be
reduced by an amount equal to such excess amount.  Example calculations of
Annual Payments are set forth on Annex A.

“Annual Payment Cap” means, with respect to each CVR that is Outstanding as of
the applicable Annual Payment Record Date, an amount equal to (a) twelve million
dollars ($12,000,000) divided by (b) the Initial Settlement CVR Amount.

“Annual Payment Date” means, with respect to any Annual Payment, the date that
is selected by the Company, which date shall be no later than  sixty (60) days
following the date on which the Company files its annual report on Form 10-K
setting forth the line items comprising EBITDA for the applicable Excess EBITDA
Measuring Period.

“Annual Payment Record Date” shall have the meaning set forth in Section
3.1(c)(i).

“Applicable Procedures” means, with respect to any transfer or exchange of or
for beneficial interests in any Global Security, the rules and procedures of the
Depositary that apply to such transfer or exchange.

“Bankruptcy Claim” means, with respect to each CVR that is Outstanding as of the
Bankruptcy Claim Date, a general unsecured claim on behalf of the Holder of such
Outstanding CVR in an amount equal to (a) thirty million dollars ($30,000,000)
divided by (b) the Initial Settlement CVR Amount, in any case commenced under
the Bankruptcy Code (i) by the Company or (ii) involuntarily against the Company
in which an order for relief has been entered by the bankruptcy court against
the Company, which claim shall be expressly subordinated in such case to the
claims of holders of Senior Obligations in accordance with Article 10 hereof.

“Bankruptcy Claim Date” shall mean (a) in the case of a case commenced by the
Company under the Bankruptcy Code, the date of the filing by the Company of a
petition in respect thereof, and (b) in the case of a case commenced
involuntarily against the Company, the date on which an order for relief has
been entered in such case by the bankruptcy court against the Company.

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. 101 et
seq.).

“Board of Directors” means the board of directors of the Company or any other
body performing similar functions, or any duly authorized committee of that
board.

“Board Resolution” means a resolution duly adopted by the Board of Directors.

2

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“Business Day” means any day (other than a Saturday or a Sunday) on which
banking institutions in The City of New York, New York are not authorized or
obligated by Law or executive order to close and, if the CVRs are listed on a
national securities exchange, electronic trading network or other suitable
trading platform, such exchange, electronic network or other trading platform is
open for trading.

“Change in Control” means the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person of equity interests representing more
than fifty percent (50%) of the aggregate ordinary voting power represented by
the issued and outstanding equity interests of the Company, other than any
transaction, including any consolidation or merger, pursuant to which the voting
stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for voting stock of a transferee entity constituting
more than fifty percent (50%) of such voting stock of such surviving or
transferee entity (immediately after giving effect to such issuance).

“Change in Control Payment” means, with respect to each CVR that is Outstanding
as of the Change in Control Payment Record Date, an amount equal to (a) thirty
million dollars ($30,000,000) divided by (b) the Initial Settlement CVR Amount;
provided that the Company shall not make the Change in Control Payment with
respect to any Outstanding CVR unless, after giving effect to all Change in
Control Payments, the Senior Obligations and any other debt for borrowed money
of the Company and its Subsidiaries (and accrued interest in respect thereof)
shall have been satisfied in full in cash.

“Change in Control Payment Date” means, with respect to the Change in Control
Payment, the date that is selected by the Company or its successor in accordance
with Article 9 hereof that is no later than sixty (60) days following the date
of the consummation of the Change in Control.

“Change in Control Payment Record Date” shall have the meaning set forth in
Section 3.1(c)(ii).

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Commission” means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

“Company” means the Person named as the “Company” in the first paragraph of this
CVR Agreement and its permitted successors and assigns. To the extent necessary
to comply with the requirements of the provisions of Trust Indenture Act
Sections 310 through 317, inclusive, to the extent that they are applicable to
the Company, the term “Company” shall include any other obligor with respect to
the Securities for the purposes of complying with such provisions.

“Company Request” or “Company Order” means a written request or order signed in
the name of the Company by the chief executive officer, any president or vice
president, the secretary or any assistant secretary or any other individual duly
authorized to act on behalf of the Company for such purpose, and delivered to
the Trustee.

“Corporate Trust Office” means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this CVR Agreement is located at
[          ].

“CVRs” shall have the meaning set forth in the Preamble of this CVR Agreement.

“CVR Agreement” means this instrument as originally executed and as it may from
time to time be supplemented or amended pursuant to the applicable provisions
hereof.

“CVR Payment” means any Annual Payment and any Change in Control Payment.

“Depositary” shall have the meaning set forth in Section 3.2.

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“Direct Registration Securities” means Securities, the ownership of which is
recorded on the Direct Registration System. The terms
“deliver,” “execute,” “issue,” “register,” “surrender,” “transfer” or “cancel,”
when used with respect to Direct Registration Securities, shall refer to an
entry or entries or an electronic transfer or transfers in the Direct
Registration System.

“Direct Registration System” means the system for the uncertificated
registration of ownership of securities established by the Security Registrar
and utilized by the Security Registrar pursuant to which the Security Registrar
may record the ownership of CVRs without the issuance of a certificate, which
ownership shall be evidenced by periodic statements issued by the Security
Registrar to the Holders entitled thereto.

“EBITDA” means, with respect to any Excess EBITDA Measuring Period, the
Company’s consolidated net income (loss) (a) plus interest expense, net (or
minus interest income, net, to the extent applicable) (b) plus income tax
provision (or minus income tax benefit, to the extent applicable) (c) plus
depreciation expense (d) plus amortization expense, in each case as determined
with respect to such Excess EBITDA Measuring Period and reported in the
Company’s annual report on Form 10-K with respect to such Excess EBITDA
Measuring Period.  Example calculations of EBITDA are set forth on Annex A.

“Event of Default” shall have the meaning set forth in Section 8.1 of this CVR
Agreement.

“Excess EBITDA” means, with respect to any Excess EBITDA Measuring Period, an
amount equal to the excess, if any, of (a) EBITDA for such Excess EBITDA
Measuring Period over (b) (i) the sum of (x) Net Debt as of the last day of such
Excess EBITDA Measuring Period and (y) one hundred million dollars
($100,000,000) divided by (ii) 3.0.  Example calculations of Excess EBITDA are
set forth on Annex A.

“Excess EBITDA Measuring Period” means the twelve (12) month period beginning on
the first day of each fiscal year of the Company during the term of this CVR
Agreement and ending on the last day of each fiscal year of the Company during
the term of this CVR Agreement; provided that the first Excess EBITDA Measuring
Period shall begin on January 1, 2019 and end on December 31, 2019.

“Excess EBITDA Statement” means, with respect to each Excess EBITDA Measuring
Period, the written statement of the Company setting forth the Annual Payments,
if any, due with respect to each CVR that is Outstanding as of the applicable
Annual Payment Record Date, if any, in respect of the applicable Excess EBITDA
Measuring Period in accordance with this CVR Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time.

“Global Securities” means global securities in registered form, substantially in
the form set forth in Annex B.

“Governmental Entity” means the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

“Holder” means a Person in whose name a Security is registered in the Security
Register.

“Indirect Participant” means a Person who holds a beneficial interest in a
Global Security through a Participant.

“Initial Settlement CVR Amount” shall have the meaning set forth in Section
3.1(a).

“Junior Obligations” shall have the meaning set forth in Section 10.1.

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“Law” means any statute, law (including common law), treaty, rule, regulation,
code, ordinance, order, decree, writ, judgment, injunction or determination of
any arbitrator or court or other Governmental Entity.

“Majority Holders” means, at the time of determination, Holders of at least a
majority of the Outstanding CVRs.

“Net Debt” means, with respect to any Excess EBITDA Measuring Period, an amount
equal to (a) the Company’s total short-term and long-term debt plus (b) the
Company’s deferred financing costs minus (c) the Company’s unrestricted cash and
cash equivalents, in each case as of the last day of such Excess EBITDA
Measuring Period and reported in the Company’s annual report on Form 10-K with
respect to such Excess EBITDA Measuring Period.

“Officer’s Certificate”, when used with respect to the Company, means a
certificate signed by the chief executive officer, any president or vice
president, the secretary or any assistant secretary or any other individual
authorized to act on behalf of the Company delivered to the Trustee.

“Opinion of Counsel” means a written opinion of counsel, which may be counsel
for the Company.

“Outstanding”, when used with respect to the Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this CVR Agreement, except: (i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation and (ii) Securities in exchange for
or in lieu of which other Securities have been authenticated and delivered
pursuant to this CVR Agreement; provided, however, that in determining whether
the Holders of the requisite Outstanding Securities have given any request,
demand, direction, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company, whether held as treasury securities or
otherwise, shall be disregarded and deemed not to be Outstanding.

“Participant” means, with respect to the Depositary, a Person who has an account
with the Depositary.

“Party” shall mean the Trustee and the Company, as applicable.

“Paying Agent” means any Person authorized by the Company to pay the amount
determined pursuant to Section 3.1, if any, on any Securities on behalf of the
Company.

“Payment Date” means any Annual Payment Date and the Change in Control Payment
Date, if applicable.

“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or Governmental Entity, including, in each case,
such Person’s permitted successors and assigns.

“Responsible Officer”, when used with respect to the Trustee, means any officer
assigned to the Corporate Trust Office and also means, with respect to any
particular corporate trust matter, any other officer of the Trustee to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.

“Securities” shall have the meaning set forth in the Preamble of this CVR
Agreement.

“Securities Act” shall have the meaning set forth in the Recitals of this CVR
Agreement.

“Security Register” shall have the meaning set forth in Section 3.4(a).

“Security Registrar” shall have the meaning set forth in Section 3.4(a).

“Senior Obligations” means any existing or future obligations of the Company and
its Subsidiaries, including the principal of, premium (if any), interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable Law) on, and
all other amounts owing thereon, with respect to or as evidenced by (i) borrowed

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money, (ii) notes, debentures, bonds or other similar debt instruments, (iii)
the net obligations owed under interest rate swaps or similar agreements or
currency exchange transactions, (iv) reimbursement obligations in respect of
letters of credit and similar obligations, (v) the deferred purchase price of
property or services and conditional sale agreements, (vi) capital leases or
(vii) guarantees in respect of obligations referred to in clauses (i) through
(vi) above; unless, in any case, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly provides that such
obligations are pari passu to or subordinate in right of payment to the
Securities.

Notwithstanding the foregoing, “Senior Obligations” shall not include:

(A)
Junior Obligations;

(B)
trade debt incurred in the ordinary course of business;

(C)
any intercompany indebtedness between the Company and any of its Subsidiaries;

(D)
indebtedness or other obligations of the Company that by its terms ranks equal
or junior in right of payment to the Junior Obligations;

(E)
indebtedness of the Company that, by operation of Law, is subordinate to any
general unsecured obligations of the Company; or

(F)
indebtedness evidenced by any guarantee of indebtedness ranking equal or junior
in right of payment to the Junior Obligations.

For the avoidance of doubt, all “Secured Obligations” under (and as defined in)
that certain Loan Agreement, dated as of April 17, 2014, among the Company, the
other loan parties party thereto, the other lenders party thereto and the
administrative agent party thereto shall constitute “Senior Obligations” for the
purposes hereof.

“Series A Contingent Value Rights” shall have the meaning set forth in Section
3.1(b).

“Settlement Stipulation” shall have the meaning set forth in the Recitals of
this CVR Agreement.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, association, partnership or other business entity of which
more than fifty percent (50%) of the total voting power of shares of Voting
Securities is at the time owned or controlled, directly or indirectly, by: (i)
such Person; (ii) such Person and one or more Subsidiaries of such Person; or
(iii) one or more Subsidiaries of such Person.

“Tax” means any federal, state, local or foreign income, profits, gross
receipts, license, payroll, employment, severance, stamp, occupation, premium,
windfall profits, environmental, customs duty, capital stock, franchise, sales,
social security, unemployment, disability, use, property, withholding, excise,
transfer, registration, production, value added, alternative minimum, occupancy,
estimated or any other tax of any kind whatsoever, together with any interest,
penalty or addition thereto, imposed by any Governmental Entity responsible for
the imposition of any such tax, whether disputed or not.

“Tax Return” means any return, report, declaration, claim or other statement
(including attached schedules) relating to Taxes.

“Termination Date” shall have the meaning set forth in Section 1.16.

“Total Payment Cap” means, with respect to each CVR, an amount equal to (a)
sixty million dollars ($60,000,000) divided by (b) the Initial Settlement CVR
Amount. 

“Total Payment Cap Date” means the Payment Date on which the cumulative Annual
Payments (inclusive of any Annual Payments to be made on such Payment Date) that
the Company has paid, or caused to be paid or

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deposited with, the Trustee in accordance with Section 3.1 with respect to each
CVR Outstanding as of the applicable Annual Payment Record Date equals the Total
Payment Cap.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from
time to time.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this
CVR Agreement, until a successor Trustee shall have become such pursuant to the
applicable provisions of this CVR Agreement, and thereafter “Trustee” shall mean
such successor Trustee.

“Voting Securities” means securities or other interests having voting power or
the right to elect or appoint a majority of the directors, or any Persons
performing similar functions, irrespective of whether or not stock or other
interests of any other class or classes shall have or might have voting power or
any right by reason of the happening of any contingency.

Section 1.2.  Certificates and Opinions.

(a)  Upon any application or request by the Company to the Trustee to take any
action under any provision of this CVR Agreement, the Company shall furnish to
the Trustee an Officer’s Certificate stating that, in the opinion of the signor,
all conditions precedent, if any, provided for in this CVR Agreement relating to
the proposed action have been satisfied, and an Opinion of Counsel stating,
subject to customary exceptions, that in the opinion of such counsel, all such
conditions precedent, if any, have been satisfied, except that, in the case of
any such application or request as to which the furnishing of any one of such
documents is specifically required by any provision of this CVR Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.

(b)  Every certificate or opinion with respect to satisfaction of a condition or
compliance with a covenant provided for in this CVR Agreement shall include: (i)
a statement that each individual signing such certificate or opinion has read
such condition or covenant and the definitions herein relating thereto; (ii) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (iii) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such condition has been
satisfied or covenant has been complied with; and (iv) a statement as to
whether, in the opinion of each such individual, such condition or covenant has
been complied with.

Section 1.3.  Form of Documents Delivered to Trustee.

(a)  In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

(b)  Any Officer’s Certificate may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel. Any
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company.

(c)  Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company.

(d)  Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this CVR Agreement, they may, but need not, be consolidated
and form one instrument.

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Section 1.4.  Acts of Holders.

(a)  Any request, demand, authorization, direction, notice, consent (including
any consent obtained in connection with a tender offer or exchange for, or
purchase of, the CVRs), waiver or other action provided by this CVR Agreement to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
CVR Agreement and (subject to Section 4.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section 1.4. The Company
may set a record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
permitted under this CVR Agreement. If not previously set by the Company, (i)
the record date for determining the Holders entitled to vote at a meeting of the
Holders shall be the date preceding the date notice of such meeting is mailed or
otherwise delivered to the Holders, or if notice is not given, on the day next
preceding the day such meeting is held, and (ii) the record date for determining
the Holders entitled to consent to any action in writing without a meeting shall
be the first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the Company. If a record date is
fixed, those Persons who were Holders of the Securities at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
take such action by vote or consent or, except with respect to clause (d) below,
to revoke any vote or consent previously given, whether or not such Persons
continue to be Holders after such record date.

(b)  The fact and date of the execution by any Person of any such instrument or
writing may be proved in any reasonable manner that the Trustee deems
sufficient.

(c)  The ownership of Securities shall be proved by the Security Register.
Neither the Company nor the Trustee nor any agent of the Company or the Trustee
shall be affected by any notice to the contrary.

(d)  At any time prior to (but not after) the evidencing to the Trustee, as
provided in this Section 1.4, of the taking of any action by the Holders of the
Securities specified in this CVR Agreement in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to be
included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Section 1.4, revoke such
action so far as concerns such Security. Any request, demand, authorization,
direction, notice, consent (including any consent obtained in connection with a
tender offer or exchange for, or purchase of, the CVRs), waiver or other action
by the Holder of any Security shall bind every future Holder of the same
Security or the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done by the Trustee, any Paying Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Security.

Section 1.5.  Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this CVR Agreement to be made upon, given or
furnished to, or filed with:

(a)  the Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished, filed or otherwise delivered, in
writing, to or with the Trustee at its Corporate Trust Office; or

(b)  the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class postage prepaid to the
Company addressed to it at:

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Akorn, Inc.
 
1925 West Field Court, Suite 300
 
Lake Forest, Illinois 60045
 
Attn:
Joseph Bonaccorsi, General Counsel
 
Email:
joe.bonaccorsi@akorn.com
       
with copies to (which shall not constitute notice):
       
Cravath, Swaine & Moore LLP
 
Worldwide Plaza
 
825 Eighth Avenue
 
New York, New York 10019
 
Attn:
Paul H. Zumbro
   
Nicholas A. Dorsey
 
Email:
pzumbro@cravath.com
   
ndorsey@cravath.com

or at any other address previously furnished in writing to the Trustee by the
Company.

Section 1.6.  Notice to Holders; Waiver.

(a)  Except as otherwise expressly stated in this CVR Agreement, where this CVR
Agreement provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if sent by
electronic transmission in accordance with the Applicable Procedures or in
writing and mailed, first-class postage prepaid, or otherwise delivered to each
Holder affected by such event, at such Holder’s address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail or otherwise delivered, neither the failure
to mail or otherwise deliver such notice, nor any defect in any notice so mailed
or otherwise delivered, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this CVR Agreement provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

(b)  In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail or otherwise deliver notice
of any event as required by any provision of this CVR Agreement, then any method
of giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.

Section 1.7.  Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof which is required to be
included in this CVR Agreement by any of the provisions of the Trust Indenture
Act, such required provision shall control.

Section 1.8.  Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.

Section 1.9.  Benefits of Agreement. Nothing in this CVR Agreement or in the
Securities, express or implied, shall give to any Person (other than the Parties
hereto and their successors hereunder, any Paying Agent and the Holders) any
benefit or any legal or equitable right, remedy or claim under this CVR
Agreement or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the Parties hereto and
their successors, any Paying Agent and of the Holders.

Section 1.10.  Governing Law; Waiver of Jury. (A)  THIS CVR AGREEMENT AND ALL
SUITS, ACTIONS, PROCEEDINGS, CLAIMS AND CAUSES OF ACTION (WHETHER IN CONTRACT OR
TORT)

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BASED UPON, ARISING OUT OF OR RELATING TO THIS CVR AGREEMENT, THE NEGOTIATION,
EXECUTION OR PERFORMANCE OF THIS CVR AGREEMENT OR THE SECURITIES, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. EACH OF THE COMPANY,
THE TRUSTEE AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
HOLDERS, BY THEIR ACCEPTANCE OF THE SECURITIES, HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE (EXCEPT AS SET FORTH IN THE FINAL SENTENCE OF THIS SECTION 1.10)
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION, PROCEEDING, CLAIM OR CAUSE
OF ACTION (WHETHER IN CONTRACT OR TORT) BASED UPON, ARISING OUT OF OR RELATING
TO THIS CVR AGREEMENT, THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS CVR
AGREEMENT OR THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE COMPANY AND THE TRUSTEE AGREES THAT PROCESS MAY BE SERVED
UPON THEM IN ANY MANNER AUTHORIZED BY THE LAWS OF THE STATE OF NEW YORK FOR SUCH
PERSONS AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO SUCH SERVICE
OF PROCESS, THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  FOR THE
AVOIDANCE OF DOUBT, AS PROVIDED IN PARAGRAPH 65 OF THE SETTLEMENT STIPULATION,
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS SHALL
RETAIN EXCLUSIVE JURISDICTION OVER DISPUTES ARISING OUT OF THE INITIAL
DISTRIBUTION OF CVRS FROM THE NET SETTLEMENT FUND TO PLAINTIFFS AND ANY OTHER
DISPUTES ARISING OUT OF THE PLAN OF ALLOCATION.

(b)  EACH OF THE COMPANY, THE TRUSTEE AND, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE HOLDERS, BY THEIR ACCEPTANCE OF THE SECURITIES, HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BASED UPON, ARISING OUT OF OR
RELATING TO THIS CVR AGREEMENT, THE NEGOTIATION, EXECUTION OR PERFORMANCE OF
THIS CVR AGREEMENT OR THE SECURITIES.

Section 1.11.  Legal Holidays. If a Payment Date shall not be a Business Day,
then (notwithstanding any provision of this CVR Agreement or the Securities to
the contrary) payment on the Securities need not be made on such date, but may
be made, without the accrual of any interest thereon, on the next succeeding
Business Day with the same force and effect as if made on such Payment Date.

Section 1.12.  Separability Clause. If any provision in this CVR Agreement or in
the CVRs shall be invalid, illegal or unenforceable, then the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

Section 1.13.  No Recourse Against Others. A director, officer, employee, agent
or representative of the Company or any Affiliate of the Company or the Trustee
shall not have any liability for any obligations of the Company or the Trustee
under the Securities or this CVR Agreement or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Security
each Holder waives and releases all such liability and all such claims. The
waiver and release are part of the consideration for the issue of the
Securities.

Section 1.14.  Counterparts. This CVR Agreement shall be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this CVR Agreement.

Section 1.15.  Acceptance of Trust. [          ], the Trustee named herein,
hereby accepts the trusts in this CVR Agreement declared and provided, upon the
terms and conditions set forth herein.

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Section 1.16.  Termination. This CVR Agreement will, automatically and without
any further action of any Party, terminate and be of no force or effect and
shall be satisfied and discharged, and the Parties hereto shall have no
liability or obligations hereunder, at the earliest to occur of (a) the
consummation of a Change in Control; provided that, if a Change in Control
Payment is due and payable pursuant to the terms of this CVR Agreement, then
upon the making of such payment on the Change in Control Payment Date, (b) the
Bankruptcy Claim Date (upon the receipt of the Bankruptcy Claim), (c) the Total
Payment Cap Date and (d) the Annual Payment Date with respect to the Excess
EBITDA Measuring Period ending on December 31, 2023; provided that, in the case
of clause (d), if the cumulative Annual Payments that the Company has paid to,
or caused to be paid or deposited with, the Trustee in accordance with Section
3.1 as of such Annual Payment Date (after giving effect to any Annual Payment to
be made on such date) is less than the Total Payment Cap, then such date shall
be extended to the Annual Payment Date with respect to the Excess EBITDA
Measuring Period ending on December 31, 2025 (the earliest of such dates, the
“Termination Date”); provided, however, that Sections 1.5 through 1.10, 1.12,
1.13, this Section 1.16, 4.7, 7.2, 7.5, 8.2, Article 10 and Section 1.1 (to the
extent related to the foregoing) shall survive termination of this CVR Agreement
in accordance with their terms.

Section 1.17.  Certain Purchases and Sales. Nothing contained herein shall
prohibit the Company or any of its Subsidiaries or Affiliates from acquiring in
open market transactions, private transactions or otherwise, any Securities.

ARTICLE 2
SECURITY FORMS

Section 2.1.  Forms Generally.

(a)  (i)  The Global Securities and the Trustee’s certificate of authentication
shall be in substantially the forms set forth in Annex B, attached hereto and
incorporated herein by reference, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this CVR
Agreement and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may be required by Law or any
rule or regulation pursuant thereto, all as may be determined by the officers
executing such Global Securities, as evidenced by their execution of the Global
Securities. Any portion of the text of any Global Security may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Global Security. 

(ii)  The Global Securities shall be typewritten, printed, lithographed or
engraved on steel engraved borders or produced by any combination of these
methods or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Global Securities, as evidenced by their execution
of such Global Securities. 

(b)  The Direct Registration Securities shall be uncertificated and shall be
evidenced by the Direct Registration System maintained by the Security
Registrar.

ARTICLE 3
THE SECURITIES

Section 3.1.  Title and Terms.

(a)  The aggregate number of CVRs which may be authenticated, as applicable, and
delivered under this CVR Agreement is limited to a number equal to [●]1 (such
amount, the “Initial Settlement CVR Amount”), except for Securities
authenticated, as applicable, and delivered upon registration of transfer of,

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1 To equal the amount of CVRs determined in accordance with the Plan of
Allocation.

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or in exchange for, or in lieu of, other Securities pursuant to Section 3.4, 3.5
or 6.6.

(b)  The Securities shall be known and designated as the “Series A Contingent
Value Rights” of the Company.

(c)  Subject to the limitations set forth in Article 10:

(i)  on each Annual Payment Date, the Company shall pay to the Trustee, by wire
transfer to the account designated by the Trustee (so designated in writing at
least two (2) Business Days prior to the applicable Annual Payment Date), an
amount equal to the aggregate Annual Payment due, if any, in respect of the CVRs
that are Outstanding as of the close of business in New York City, three (3)
Business Days prior to such Annual Payment Date (the “Annual Payment Record
Date”) for the Excess EBITDA Measuring Period ended immediately preceding such
Annual Payment Date, and the Trustee shall pay to each Holder of record of the
CVRs as of the Annual Payment Record Date an amount equal to the Annual Payment
due, if any, in respect of such CVRs held by such Holder; provided that, the
Company’s obligations to make any Annual Payment shall terminate in its entirety
on the Termination Date;

(ii)  on the Change in Control Payment Date, if any, the Company shall pay to
the Trustee, by wire transfer to the account designated by the Trustee (so
designated in writing at least two (2) Business Days prior to the Change in
Control Payment Date), an amount equal to the aggregate Change in Control
Payment due in respect of the CVRs that are Outstanding as of the close of
business in New York City, three (3) Business Days prior to such Change in
Control Payment Date (the “Change in Control Payment Record Date”), and the
Trustee shall pay to each Holder of record of the CVRs as of the Change in
Control Payment Record Date an amount equal to the Change in Control Payment
due, if any, in respect of such CVRs held by such Holder; provided that, the
Company’s obligations to make any Change in Control Payment shall terminate in
its entirety on the Termination Date; and

(iii)  on the Bankruptcy Claim Date, if any, each Holder as of such date shall
receive a general unsecured claim in the Company’s bankruptcy in an amount equal
to the Bankruptcy Claim in respect of each CVR held by such Holder as of the
Bankruptcy Claim Date.

(d)  The Holders of the CVRs, by acceptance thereof, agree that no joint
venture, partnership or other fiduciary relationship is created hereby or by the
Securities.

(e)  Other than in the case of interest on amounts due and payable after the
occurrence of an Event of Default, no interest or dividends shall accrue on any
amounts payable in respect of the CVRs.

(f)  The CVRs and any interest thereon may be sold, assigned, pledged encumbered
or in any manner transferred or disposed of, in whole or in part, only in
compliance with applicable United States federal and state securities Laws and,
to the extent applicable, in accordance with Section 3.4.

(g)  The Holder of any CVR is not, and shall not be, by virtue thereof, entitled
to any rights of a holder of any Voting Securities or other equity security or
other ownership interest of the Company or in any of its Affiliates, either at
Law or in equity, and the rights of the Holders are limited to those contractual
rights expressed in this CVR Agreement.

(h)  Except as provided in this CVR Agreement, none of the Company or any of its
Affiliates shall have any right to set-off any amounts owed or claimed to be
owed by any Holder to any of them against such Holder’s Securities or any CVR
Payment or other amount payable to such Holder in respect of such Securities.

(i)  For the avoidance of doubt, (i) prior to the occurrence of the first
Payment Date, if any, no amounts shall be owing to Holders pursuant to the terms
of this CVR Agreement, (ii) from and after the

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Bankruptcy Claim Date, the Holders shall have only Bankruptcy Claims and shall
not have claims with respect to any CVR Payments, (iii) in no event shall the
Holders be entitled to receive both a Change in Control Payment and a Bankruptcy
Claim and (iv) in no event shall any further Annual Payments be required
following the consummation of a Change in Control (and where a Change in Control
Payment is due in accordance with the terms hereof, upon the payment of the
Change in Control Payment) or Bankruptcy Claim Date (upon the receipt of the
Bankruptcy Claim).

Section 3.2.  Registrable Form. The Securities shall be issuable only in
registered form. The CVRs shall be issued initially in the form of (a) one or
more permanent Global Securities, deposited with the Trustee, as the custodian
for The Depository Trust Company, its nominees and successors (the
“Depositary”), or (b) one or more Direct Registration Securities. Each Global
Security will represent such of the outstanding CVRs as will be specified
therein and each shall provide that it represents the aggregate number of
outstanding CVRs from time to time endorsed thereon and that the aggregate
number of outstanding CVRs represented thereby may from time to time be reduced
or increased, as appropriate, to reflect exchanges. 

Section 3.3.  Execution, Authentication, Delivery and Dating.

(a)  The Global Securities shall be executed on behalf of the Company by the
Company’s chief executive officer, any president or vice president or any other
individual duly authorized to act on behalf of the Company for such purpose, but
need not be attested. The signature of any of these individuals on the Global
Securities may be manual or facsimile.

(b)  Global Securities bearing the manual or facsimile signatures of individuals
who were, at the time of execution, the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Global Securities or did not hold such offices at the date of such Global
Securities.

(c)  At any time and from time to time after the execution and delivery of this
CVR Agreement, the Company may deliver a Company Order for the authentication,
as applicable, and delivery of Securities, and the Trustee, in accordance with
such Company Order, shall authenticate, as applicable, and deliver such
Securities as provided in this CVR Agreement and not otherwise. In the case of
Global Securities, such Company Order shall be accompanied by Global Securities
executed by the Company and delivered to the Trustee for authentication in
accordance with such Company Order.

(d)  Each Global Security shall be dated the date of its authentication.

(e)  No Global Security shall be entitled to any benefit under this CVR
Agreement or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee, by manual or facsimile signature of an
authorized officer, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Global Security has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this CVR Agreement.

(f)  Direct Registration Securities need not be authenticated, and shall be
valid and obligatory for all purposes and shall entitle each Holder thereof to
all benefits of this CVR Agreement.

Section 3.4.  Registration, Registration of Transfer and Exchange.

(a)  The Company shall cause to be kept at the office of the Trustee a register
(the register maintained in such office and in any other office or agency
designated pursuant to Section 7.2 being herein sometimes referred to as the
“Security Register”) in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The Trustee is hereby initially appointed “Security
Registrar” for the purpose of registering Securities and transfers of Securities
as herein provided.

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(b)  (i)  A Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Securities will be exchanged by the Company for Direct
Registration Securities if (A) the Company delivers to the Security Registrar
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within one hundred twenty (120) days after the date of such notice from
the Depositary, (B) the Company in its sole discretion determines that the
Global Securities should be exchanged for Direct Registration Securities and
delivers a written notice to such effect to the Security Registrar or (C) an
Event of Default has occurred and is continuing and the Security Registrar has
received a request from the Depositary to issue Direct Registration Securities.
Upon the occurrence of either of the preceding events in (A) or (B) above,
Direct Registration Securities shall be issued in such names as the Depositary
shall instruct the Trustee. Global Securities also may be exchanged or replaced,
in whole or in part, as provided in Section 3.5 hereof. Every Global Security
authenticated and delivered in exchange for, or in lieu of, a Global Security or
any portion thereof, pursuant to this Section 3.4 or Section 3.5 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global Security.
A Global Security may not be exchanged for another Global Security other than as
provided in this Section 3.4(b)(i); however, beneficial interests in a Global
Security may be transferred and exchanged as provided in Sections 3.4(b)(ii) or
(iii) hereof. 

(ii)  The transfer and exchange of beneficial interests in the Global Securities
will be effected through the Depositary, in accordance with the provisions of
this CVR Agreement and the Applicable Procedures. Beneficial interests in any
Global Security may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in Global Security. No written orders or
instructions shall be required to be delivered to the Security Registrar to
effect the transfers described in this Section 3.4(b)(ii).

(iii)  If any holder of a beneficial interest in a Global Security proposes to
exchange such beneficial interest for a Direct Registration Security or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Direct Registration Security, then the Security Registrar will cause
the aggregate number of CVRs represented by the applicable Global Security to be
reduced accordingly pursuant to Section 3.4(b)(vi) hereof, and the Security
Registrar will deliver to the Person designated in the instructions a Direct
Registration Security in the appropriate number of CVRs. Any Direct Registration
Security issued in exchange for a beneficial interest pursuant to this Section
3.4(b)(iii) will be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest requests
through instructions to the Security Registrar from or through the Depositary
and the Participant or Indirect Participant.

(iv)  A Holder of a Direct Registration Security may exchange such Direct
Registration Security for a beneficial interest in a Global Security or transfer
such Direct Registration Security to a Person who takes delivery thereof in the
form of a beneficial interest in a Global Security at any time. Upon receipt of
a request for such an exchange or transfer, the Security Registrar will cancel
the applicable Direct Registration Security and increase or cause to be
increased the aggregate number of CVRs represented by one of the Global
Securities.

(v)  Upon request by a Holder of Direct Registration Securities and such
Holder’s compliance with the provisions of this Section 3.4(b)(v), the Security
Registrar will register the transfer or exchange of Direct Registration
Securities. Prior to such registration of transfer or exchange, the requesting
Holder must present to the Security Registrar a written instruction of transfer
in form satisfactory to the Security Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. A Holder of Direct Registration
Securities may transfer such Direct Registration Securities to a Person who
takes delivery thereof in the form of Direct Registration Securities. Upon
receipt of a request to register such a transfer, the Security Registrar shall
register the Direct Registration Securities pursuant to the instructions from
the Holder thereof.

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(vi)  At such time as all beneficial interests in a particular Global Security
have been exchanged for Direct Registration Securities or a particular Global
Security has been repurchased or canceled in whole and not in part, each such
Global Security will be returned to or retained and canceled by the Security
Registrar in accordance with Section 3.8 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Security or for Direct Registration
Securities, the aggregate number of CVRs represented by such Global Security
will be reduced accordingly and an endorsement will be made on such Global
Security by the Security Registrar or by the Depositary at the direction of the
Security Registrar to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Security, such other Global
Security will be increased accordingly and an endorsement will be made on such
Global Security by the Security Registrar or by the Depositary at the direction
of the Security Registrar to reflect such increase. 

(vii)  (A)  To permit registrations of transfers and exchanges, the Company will
execute and the Trustee will authenticate Global Securities upon receipt of a
Company Order in accordance with Section 3.3 hereof or at the Security
Registrar’s request. 

(B)  No service charge will be made to a Holder of a beneficial interest in a
Global Security or to a Holder of a Direct Registration Security for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith. 

(C)  All Global Securities and Direct Registration Securities issued upon any
registration of transfer or exchange of Global Securities or Direct Registration
Securities will be the valid obligations of the Company, evidencing the same
rights, and entitled to the same benefits under this CVR Agreement, as the
Global Securities or Direct Registration Securities surrendered upon such
registration of transfer or exchange.

(D)   The Trustee will authenticate Global Securities in accordance with the
provisions of Section 3.3 hereof.

Section 3.5.  Mutilated, Destroyed, Lost and Stolen Securities.

(a)  If (i)  any mutilated Global Security is surrendered to the Trustee, or
(ii) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Global Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
hold each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Global Security has been acquired by a bona fide purchaser,
the Company shall execute and, upon delivery of a Company Order, the Trustee
shall authenticate, as applicable, and deliver, in exchange for any such
mutilated Global Security or in lieu of any such destroyed, lost or stolen
Global Security, a new CVR, in the form of either a Global Security or a Direct
Registration Security, of like tenor and amount of CVRs, bearing a number not
contemporaneously outstanding. 

(b)  In case any such mutilated, destroyed, lost or stolen Global Security has
become or is to become finally due and payable within fifteen (15) days, the
Company in its discretion may, instead of issuing a new CVR, pay to the Holder
of such Security on the applicable Payment Date all amounts due and payable with
respect thereto.

(c)  Every new Security issued pursuant to this Section 3.5 in lieu of any
destroyed, lost or stolen Global Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Global Security shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this CVR Agreement equally and
proportionately with any and all other Securities duly issued hereunder.

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(d)  The provisions of this Section 3.5 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Global Securities.

Section 3.6.  Payments with respect to CVRs. Payment of any CVR Payment pursuant
to the CVR Agreement shall be made in such coin or currency of the United States
of America as at the time is legal tender for the payment of public and private
debts. The Company may, at its option, pay such amounts by wire transfer or
check payable in such money. 

Section 3.7.  Persons Deemed Owners. Prior to the time of due presentment for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name any Security is registered as
the owner of such Security for the purpose of receiving payment on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

Section 3.8.  Cancellation. All Securities surrendered for payment, registration
of transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any Global
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Global Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this CVR Agreement. All
cancelled Global Securities held by the Trustee shall be destroyed and a
certificate of destruction shall be issued by the Trustee to the Company, unless
otherwise directed by a Company Order.

Section 3.9.  CUSIP Numbers. The Company in issuing the CVRs may use “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices to the Holders as a convenience to the Holders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the CVRs or as contained in any notices and
that reliance may be placed only on the other identification numbers printed on
the CVRs, and any such notice shall not be affected by any defect in or omission
of such numbers. The Company will promptly notify the Trustee of any change in
the “CUSIP” numbers.

ARTICLE 4
THE TRUSTEE

Section 4.1.  Certain Duties and Responsibilities.

(a)  With respect to the Holders, the Trustee, prior to the occurrence of an
Event of Default (as defined in Section 8.1) with respect to the Securities and
after the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this CVR Agreement and no implied covenants shall be read into this CVR
Agreement against the Trustee. In case an Event of Default with respect to the
Securities has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this CVR Agreement, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

(b)  In the absence of bad faith on its part, prior to the occurrence of an
Event of Default and after the curing or waiving of all such Events of Default
which may have occurred, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee which conform to the
requirements of this CVR Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this CVR Agreement.

(c)  No provision of this CVR Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) this

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Subsection (c) shall not be construed to limit the effect of Subsections (a) and
(b) of this Section 4.1; (ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and (iii)
the Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Holders
pursuant to Section 8.9 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this CVR Agreement. 

(d)  Whether or not therein expressly so provided, every provision of this CVR
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
4.1.

Section 4.2.  Certain Rights of Trustee. Subject to the provisions of Section
4.1, including the duty of care that the Trustee is required to exercise upon
the occurrence of an Event of Default:

(a)  the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties, and the
Trustee need not investigate any fact or matter stated in the document;

(b)  any request or direction or order of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution
and the Trustee shall not be liable for any action it takes or omits to take in
good faith reliance thereon;

(c)  whenever in the administration of this CVR Agreement the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer’s Certificate and the Trustee shall not be liable for any action it
takes or omits to take in good faith reliance thereon or an Opinion of Counsel; 

(d)  the Trustee may consult with counsel and the written advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;

(e)  the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this CVR Agreement at the request or direction of any of
the Holders pursuant to this CVR Agreement, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;

(f)  the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document, but the Trustee in its
discretion may make such further inquiry or investigation into such facts or
matters as it may see fit, and if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the pertinent
books and records of the Company, personally or by agent or attorney, as may be
reasonably necessary for such inquiry or investigation and in a manner so as to
not unreasonably interfere with the normal business operations of the Company or
any of its Affiliates; provided, however, that Company shall not be required to
provide any books or records to the extent that the provision thereof (i) would,
as reasonably determined based on the advice of outside counsel, jeopardize any
attorney-client privilege or (ii) would contravene any Law, charter, articles or
certificate or organization or incorporation and bylaws or other organization or
governing documents, or any contract or agreement to which the Company or any of
its Affiliates is subject or bound;

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(g)  the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;

(h)  the Trustee shall not be liable for any action taken, suffered or omitted
to be taken by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this CVR
Agreement; and

(i)  the Trustee shall not be deemed to have notice of any default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice thereof has been received by such Responsible Officer
at the Corporate Trust Office and such notice references the CVRs and this CVR
Agreement and the fact that such notice constitutes notification of default or
Event of Default.

Section 4.3.  Notice of Default. If a default occurs hereunder with respect to
the Securities, the Trustee shall give the Holders notice of any such default
actually known to it as and to the extent applicable and provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 8.1(b) with respect to the Securities, no notice
to Holders shall be given until at least thirty (30) days after the occurrence
thereof. For the purpose of this Section 4.3, the term “default” means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to the Securities.

Section 4.4.  Not Responsible for Recitals or Issuance of Securities. The
Trustee shall not be accountable for the Company’s issuance of or obligations
under the Securities. The recitals contained herein and in the Securities,
except the Trustee’s certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this CVR Agreement or of the Securities.

Section 4.5.  May Hold Securities. The Trustee, any Paying Agent, Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities, and, subject to
Sections 4.8 and 4.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.

Section 4.6.  Money Held in Trust. Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by Law.
The Trustee shall be under no liability for interest on any money received by it
hereunder.

Section 4.7.  Compensation and Reimbursement. The Company agrees:

(a)  to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder in such amount as the Company and the Trustee
shall agree from time to time (which compensation shall not be limited by any
provision of Law in regard to the compensation of a trustee of an express
trust);

(b)  except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable and documented out-of-pocket expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this CVR Agreement (including the reasonable compensation and
the reasonable expenses and disbursements of its agents and outside counsel),
except any such expense, disbursement or advance as may be attributable to the
Trustee’s negligence, bad faith or willful misconduct; and

(c)  to indemnify the Trustee and each of its agents, officers, directors and
employees (each an “indemnitee”) for, and to hold it harmless against, any loss,
liability or reasonable and documented out-of-pocket expense (including the
reasonable compensation and the reasonable expenses and disbursements of its
agents and outside counsel) incurred without negligence, bad faith or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this trust and the performance of its duties hereunder,
including the reasonable and documented out-of-pocket costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties

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hereunder. The Company’s payment obligations pursuant to this Section 4.7 shall
survive the termination of this CVR Agreement.

Section 4.8.  Disqualification; Conflicting Interests.

(a)  If applicable, to the extent that the Trustee or the Company determines
that the Trustee has a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall immediately notify the Company of such conflict
and, within ninety (90) days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign to the extent and
in the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this CVR Agreement. The Company shall take prompt steps to have a
successor appointed in the manner provided in this CVR Agreement.

(b)  If the Trustee fails to comply with Section 4.8(a), the Trustee shall,
within ten (10) days of the expiration of such ninety (90) day period, transmit
a notice of such failure to the Holders in the manner and to the extent provided
in the Trust Indenture Act and this CVR Agreement.

(c)  If the Trustee fails to comply with Section 4.8(a) after written request
therefor by the Company or any Holder, then any Holder of any Security who has
been a bona fide Holder for at least six (6) months may on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of such Trustee and the appointment of a successor Trustee.

Section 4.9.  Corporate Trustee Required; Eligibility. There shall at all times
be a Trustee hereunder which satisfies the applicable requirements of Sections
310(a)(1) and (5) of the Trust Indenture Act and has a combined capital and
surplus of at least one hundred million dollars ($100,000,000). If such
corporation publishes reports of condition at least annually, pursuant to Law or
to the requirements of a supervising or examining authority, then for the
purposes of this Section 4.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
4.9, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article 4.

Section 4.10.  Resignation and Removal; Appointment of Successor.

(a)  No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article 4 shall become effective until the acceptance
of appointment by the successor Trustee under Section 4.11.

(b)  The Trustee, or any trustee or trustees hereafter appointed, may resign at
any time by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within thirty (30) days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(c)  The Trustee may be removed at any time by an Act of the Majority Holders,
delivered to the Trustee and to the Company.

(d)  If at any time:

(i)  the Trustee shall fail to comply with Section 4.8 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six (6) months, or

(ii)  the Trustee shall cease to be eligible under Section 4.9 and shall fail to
resign after written request therefor by the Company or by any such Holder, or

(iii)  the Trustee shall become incapable of acting or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall

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take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,

then, in any case, (A) the Company, by a Board Resolution or an action of the
chief executive officer of the Company, may remove the Trustee, or (B) the
Holder of any Security who has been a bona fide Holder of a Security for at
least six (6) months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

(e)  If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, the Company, by
a Board Resolution or an action of the chief executive officer of the Company,
shall promptly appoint a successor Trustee. If, within one year after any
removal by the Majority Holders, a successor Trustee shall be appointed by an
Act of the Majority Holders delivered to the Company and the retiring Trustee,
then the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment in accordance with Section 4.11, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Majority Holders and
accepted appointment within sixty (60) days after the retiring Trustee tenders
its resignation or is removed, the retiring Trustee may, or, the Holder of any
Security who has been a bona fide Holder for at least six (6) months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(f)  The Company shall give notice of each resignation and each removal of the
Trustee and each appointment of a successor Trustee by mailing written notice of
such event by first-class mail, postage prepaid, or otherwise delivering such
written notice to the Holders as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
and the address of its Corporate Trust Office. If the Company fails to send such
notice within ten (10) days after acceptance of appointment by a successor
Trustee, it shall not be a default hereunder but the successor Trustee shall
cause the notice to be mailed or otherwise delivered at the expense of the
Company. 

Section 4.11.  Acceptance of Appointment of Successor.

(a)  Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, upon request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

(b)  No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article 4.

Section 4.12.  Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, by sale or otherwise, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article 4, without the execution or filing of any paper or any further act on
the part of any of the Parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion, sale or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities; and such certificate shall have the full force which it is anywhere
in the Securities or in this CVR Agreement provided that the certificate of the

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Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

Section 4.13.  Preferential Collection of Claims Against Company. If and when
the Trustee shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company (or any other obligor upon the Securities),
excluding any creditor relationship set forth in Section 311(b) of the Trust
Indenture Act, if applicable, the Trustee shall be subject to the applicable
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

ARTICLE 5
HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE AND COMPANY 

Section 5.1.  Company to Furnish Trustee Names and Addresses of Holders. The
Company will furnish or cause to be furnished to the Trustee (a) promptly after
the issuance of the Securities, and semi-annually thereafter, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders as of a recent date, and (b) at such times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than fifteen (15) days
prior to the time such list is furnished; provided, however, that if and for so
long as the Trustee shall be the Security Registrar, no such list need be
furnished.

Section 5.2.  Preservation of Information; Communications to Holders.

(a)  The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Trustee as provided in Section 5.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 5.1 upon receipt of a new list so furnished.

(b)  The rights of the Holders to communicate with other Holders with respect to
their rights under this CVR Agreement and the corresponding rights and
privileges of the Trustee shall be as provided by Section 312(b)(2) of the Trust
Indenture Act, if applicable.

(c)  Every Holder, by receiving and holding Securities, agrees with the Company
and the Trustee that neither the Company nor the Trustee shall be deemed to be
in violation of Law or held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders made pursuant to the
Trust Indenture Act (if applicable), regardless of the source from which such
information was derived.

Section 5.3.  Reports by Trustee.

(a)  Within sixty (60) days after December 31 of each year commencing with the
December 31 following the date of this CVR Agreement, the Trustee shall transmit
to all Holders such reports concerning the Trustee and its actions under this
CVR Agreement as may be required pursuant to the Trust Indenture Act to the
extent and in the manner provided pursuant thereto. The Trustee shall also
comply with Section 313(b)(2) of the Trust Indenture Act, if applicable. The
Trustee shall also transmit by mail or otherwise deliver all reports as required
by Section 313(c) of the Trust Indenture Act, if applicable.

(b)  A copy of each such report shall, at the time of such transmission to the
Holders, be filed by the Trustee with each stock exchange, if any, upon which
the Securities are listed, with the Commission and also with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.

Section 5.4.  Reports by Company.  The Company shall comply with the provisions
of Section 314(a) of the Trust Indenture Act to the extent applicable.

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ARTICLE 6
AMENDMENTS

Section 6.1.  Amendments Without Consent of Holders. Without the consent of any
Holders, the Company and the Trustee, at any time and from time to time, may
enter into one or more amendments hereto or to the Securities, for any of the
following purposes:

(a)  to convey, transfer, assign, mortgage or pledge to the Trustee as security
for the Securities any property or assets;

(b)  to evidence the succession of another Person to the Company, and the
assumption by any such successor of any obligations pursuant to Article 9
hereof;

(c)  to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Company and the Trustee shall
consider to be for the protection of the Holders, and to make the occurrence, or
the occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this CVR Agreement
as herein set forth; provided that in respect of any such additional covenant,
restriction, condition or provision, such amendment may provide for a particular
period of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies available to
the Trustee upon such an Event of Default or may limit the right of the Majority
Holders to waive such an Event of Default;

(d)  to cure any ambiguity, or to correct or supplement any provision herein or
in the Securities which may be defective or inconsistent with any other
provision herein; provided, that such provisions shall not materially reduce the
benefits of this CVR Agreement or the Securities to the Holders;

(e)  to make any other provisions with respect to matters or questions arising
under this CVR Agreement; provided, that such provisions shall not adversely
affect in any material respect the interests of the Holders;

(f)  to make any amendments or changes necessary to comply or maintain
compliance with the Trust Indenture Act, if applicable; or

(g)  to make any other change that does not adversely affect in any material
respect the interests of the Holders.

Section 6.2.  Amendments with Consent of Holders. With the consent of the
Majority Holders (including any consent obtained in connection with a tender
offer or exchange for, or purchase of, the CVRs), by Act of said Holders
delivered to the Company and the Trustee, the Company (when authorized by a
Board Resolution or the chief executive officer of the Company) and the Trustee
may enter into one or more amendments hereto or to the Securities for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this CVR Agreement or to the Securities or of modifying in
any manner the rights of the Holders under this CVR Agreement or to the
Securities; provided, however, that no such amendment shall, without the consent
of the Holder of each Outstanding Security affected thereby:

(a)  (i) modify in a manner adverse in any material respect to the Holders the
time for payment or (ii) modify in a manner adverse to the Holders the amount of
any CVR Payment; 

(b)  reduce the number of CVRs, the consent of whose Holders is required for any
such amendment; or

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(c)  modify any of the provisions of this Section 6.2, except to increase the
percentage of Holders from whom consent or approval is required or to provide
that certain other provisions of this CVR Agreement cannot be modified or waived
without the consent of the each Holder affected thereby.

It shall not be necessary for any Act of Holders under this Section 6.2 to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

Section 6.3.  Execution of Amendments. In executing any amendment permitted by
this Article 6, the Trustee (subject to Section 4.1) shall be fully protected in
relying upon an Opinion of Counsel or Officer’s Certificate stating that the
execution of such amendment is authorized or permitted by this CVR Agreement.
The Trustee shall execute any amendment authorized pursuant to this Article 6 if
the amendment does not adversely affect the Trustee’s own rights, duties or
immunities under this CVR Agreement or otherwise. Otherwise, the Trustee may,
but need not, execute such amendment.

Section 6.4.  Effect of Amendments.  Upon the execution of any amendment under
this Article 6, this CVR Agreement and the Securities shall be modified in
accordance therewith, and such amendment shall form a part of this CVR Agreement
and the Securities for all purposes; and every Holder of Securities theretofore
or thereafter authenticated, as applicable, and delivered hereunder shall be
bound thereby. 

Section 6.5.  Conformity with Trust Indenture Act. Every amendment executed
pursuant to this Article 6 shall conform to the applicable requirements of the
Trust Indenture Act, if any.

Section 6.6.  Reference in Securities to Amendments. If an amendment changes the
terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. Global Securities authenticated and delivered after
the execution of any amendment pursuant to this Article 6 may, and shall if
required by the Trustee, bear a notation in the form approved by the Trustee as
to any matter provided for in such amendment. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee, on the
one hand, and the Board of Directors or the chief executive officer of the
Company, on the other hand, to any such amendment may be prepared and executed
by the Company, as applicable, and authenticated, as applicable, and delivered
by the Trustee in exchange for Outstanding Securities. Failure to make the
appropriate notation or to issue a new Security shall not affect the validity of
such amendment.

ARTICLE 7
COVENANTS

Section 7.1.  Payment of Amounts, if any, to Holders. The Company will duly and
punctually pay the amounts, if any, due on the Securities in accordance with the
terms of the Securities and this CVR Agreement. Such amounts shall be considered
paid on the applicable Payment Date if, on or prior to such Payment Date, the
Company makes, or causes to be made, the payment required pursuant to subclauses
(i) or (ii) of Section 3.1(c) of this CVR Agreement. Notwithstanding any other
provision of this CVR Agreement, the Company or any of its Affiliates, the
Trustee or the Paying Agent, shall be entitled to deduct and withhold, or cause
to be deducted and withheld, from any amounts payable or otherwise deliverable
pursuant to this CVR Agreement to any Person, such amounts as are required to be
deducted and withheld therefrom under the Code or any provision of state, local
or foreign Tax Law. To the extent that amounts are so deducted and withheld by
the Company or any of its Affiliates, the Trustee or the Paying Agent, such
deducted and withheld amounts shall be (a) paid over to the applicable
Governmental Entity in accordance with applicable Law and (b) treated for all
purposes of this CVR Agreement as having been paid to the Person in respect of
which such deduction and withholding was made by the Company or any of its
Affiliates, the Trustee or the Paying Agent, as the case may be. The consent of
the Holders shall not be required for any such withholding.

Section 7.2.  Maintenance of Office or Agency.

(a)  As long as any of the Securities remain Outstanding, the Company will
maintain an office or agency (i) where Securities may be presented or
surrendered for payment, (ii) where Securities may be surrendered for
registration of transfer or exchange and (iii) where notices and demands to or
upon the

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Company in respect of the Securities and this CVR Agreement may be served. The
office or agency of the Trustee at [] shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company or any of its Subsidiaries
may act as Paying Agent, registrar or transfer agent; provided that such Person
shall take appropriate actions to avoid the commingling of funds. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

(b)  The Company may from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes, and may from time to time rescind such designation; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain at least one office or agency for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such office or
agency.

Section 7.3.  Money for Security Payments to Be Held in Trust.

(a)  If the Company or any of its Subsidiaries shall at any time act as the
Paying Agent, it will, on or before a Payment Date, segregate and hold in trust
for the benefit of the Holders all sums held by such Paying Agent for payment on
the Securities until such sums shall be paid to the Holders as herein provided,
and will promptly notify the Trustee of any default by the Company in making
payment on the Securities.

(b)  Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before a Payment Date, deposit with the Paying
Agent(s) a sum in same day funds sufficient to pay the amount, if any, so
becoming due; such sum to be held in trust for the benefit of the Persons
entitled to such amount, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure so to
act.

(c)  The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 7.3, that (i) such
Paying Agent will hold all sums held by it for the payment of any amount payable
on Securities in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will notify the Trustee of the sums so held and (ii) that it will
give the Trustee notice of any failure by the Company (or by any other obligor
on the Securities) to make any payment on the Securities when the same shall be
due and payable.

(d)  Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment on any Security and remaining unclaimed
for one year after the applicable Payment Date shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as a general unsecured
creditor (subject to Article 10), look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease.

Section 7.4.  Listing of CVRs. The Company hereby covenants and agrees to work
in good faith to cause the Securities to be approved for listing (subject to
notice of issuance) for trading on the NASDAQ Global Market or other national
securities exchange.

Section 7.5.  Non-Use of Name. Neither the Trustee nor the Holders shall use the
name, trademark, trade name, or logo of the Company, its Affiliates or their
respective employees, agents or representatives in any publicity or news release
relating to this CVR Agreement or its subject matter, without the prior express
written permission of the Company.

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ARTICLE 8
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT

Section 8.1.  Event of Default Defined; Waiver of Default. “Event of Default”,
with respect to the Securities, means each one of the following events, which
shall have occurred and be continuing:

(a)  default in the payment by the Company pursuant to the terms of this CVR
Agreement of all or any part of any CVR Payment after a period of ten (10)
Business Days after such CVR Payment shall become due and payable on the
applicable Payment Date; or

(b)  material default in the performance, or breach in any material respect, of
any covenant in respect of the Securities (other than a covenant in respect of
the Securities, a default in the performance or breach of which is elsewhere in
this Section 8.1 specifically dealt with), and continuance of such default or
breach for a period of ninety (90) days after there has been given by registered
or certified mail to the Company by the Trustee or to the Company and the
Trustee by the Majority Holders, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a “Notice
of Default” hereunder.

If an Event of Default described above occurs and is continuing, then, and in
each and every such case, either the Trustee by notice in writing to the Company
or the Trustee upon the written request of the Majority Holders by notice in
writing to the Company (and to the Trustee if given by the Majority Holders),
may bring suit to protect the rights of the Holders, including to obtain payment
for any amounts then due and payable.

The foregoing provisions of this Section 8.1, however, are subject to the
condition that if, at any time after the Trustee shall have begun such suit, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all amounts which shall have
become due and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents, attorneys and counsel, and all other
expenses and liabilities incurred and all advances made by the Trustee, and if
any and all Events of Default under this CVR Agreement shall have been cured,
waived or otherwise remedied as provided herein, then and in every such case the
Majority Holders, by written notice to the Company and to the Trustee, may waive
all defaults with respect to the Securities, but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereof.

Section 8.2.  Collection by the Trustee; the Trustee May Prove Payment
Obligations. The Company covenants that in case default shall be made in the
payment of all or any part of the Securities when the same shall have become due
and payable, whether at a Payment Date or otherwise, then upon demand of the
Trustee, the Company will pay to the Trustee for the benefit of the Holders the
whole amount that then shall have become due and payable on all Securities; and
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee, except as a result of its negligence,
bad faith or willful misconduct.

The Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this CVR
Agreement or in aid of the exercise of any power granted herein, or to enforce
any other remedy.

In case the Company shall fail forthwith to pay such amounts upon such demand,
the Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at Law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by Law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.

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In any judicial proceedings relative to the Company or other obligor upon the
Securities, irrespective of whether any amount is then due and payable with
respect to the Securities, the Trustee is authorized:

(a)  to file and prove a claim or claims for the whole amount owing and unpaid
in respect of the Securities, and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence,
bad faith or willful misconduct) and of the Holders allowed in any judicial
proceedings relative to the Company or other obligor upon the Securities, or to
their respective property;

(b)  unless prohibited by and only to the extent required by applicable Law, to
vote on behalf of the Holders in any election of a trustee or a standby trustee
in arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings;
and 

(c)  to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute all amounts received with respect to the
claims of the Holders and of the Trustee on their behalf; and any trustee,
receiver, or liquidator, custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee,
except as a result of its negligence, bad faith or willful misconduct, and all
other amounts due to the Trustee or any predecessor Trustee pursuant to Section
4.7. To the extent that such payment of reasonable compensation, expenses,
disbursements, advances and other amounts out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
moneys, securities and other property which the Holders may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.

Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities,
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar person.

All rights of action and of asserting claims under this CVR Agreement, or under
any of the Securities, may be enforced by the Trustee without the possession of
any of the Securities or the production thereof and any trial or other
proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders.

In any proceedings brought by the Trustee (and also any proceedings involving
the interpretation of any provision of this CVR Agreement to which the Trustee
shall be a party) the Trustee shall be held to represent all the Holders, and it
shall not be necessary to make any Holders of such Securities parties to any
such proceedings.

Section 8.3.  Application of Proceeds. Any monies collected by the Trustee
pursuant to this Article 8 in respect of any Securities shall be applied in the
following order at the date or dates fixed by the Trustee upon presentation of
the several Securities in respect of which monies have been collected and
stamping (or otherwise noting) thereon the payment in exchange for the presented
Securities if only partially paid or upon surrender thereof if fully paid:

FIRST: To the payment of costs and expenses in respect of which monies have been
collected, including reasonable compensation to the Trustee and each predecessor
Trustee and their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the Trustee and each

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predecessor Trustee, except as a result of its negligence, bad faith or willful
misconduct, and all other amounts due to the Trustee or any predecessor Trustee
pursuant to
Section 4.7;

SECOND: To the payment of the whole amount then owing and unpaid upon all the
Securities, and in case such monies shall be insufficient to pay in full the
whole amount so due and unpaid upon the Securities, then to the payment of such
amounts without preference or priority of any security over any other Security,
ratably to the aggregate of such amounts due and payable; and

THIRD: To the payment of the remainder, if any, to the Company or any other
person lawfully entitled thereto.

Section 8.4.  Suits for Enforcement. In case an Event of Default has occurred,
has not been waived and is continuing, the Trustee may in its discretion proceed
to protect and enforce the rights vested in it by this CVR Agreement by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at Law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this CVR Agreement or in aid of the exercise of any power
granted in this CVR Agreement or to enforce any other legal or equitable right
vested in the Trustee by this CVR Agreement or by Law.

Section 8.5.  Restoration of Rights on Abandonment of Proceedings. In case the
Trustee or any Holder shall have proceeded to enforce any right under this CVR
Agreement and such proceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee or to such
Holder, then and in every such case the Company and the Trustee and the Holders
shall be restored respectively to their former positions and rights hereunder,
and all rights, remedies and powers of the Company, the Trustee and the Holders
shall continue as though no such proceedings had been taken.

Section 8.6.  Limitations on Suits by Holders. Subject to the rights of the
Holders under Section 8.7, no Holder of any Security shall have any right, by
virtue or by availing of any provision of this CVR Agreement, to institute any
action or proceeding at Law or in equity or in bankruptcy or otherwise upon or
under or with respect to this CVR Agreement, or for the appointment of a
trustee, receiver, liquidator, custodian or other similar official or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless the Majority Holders also shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for thirty (30)
days after receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 8.9; it being understood and intended, and being expressly covenanted by
the Holder of every Security with every other Holder and the Trustee, that no
one or more Holders of the Securities shall have any right in any manner
whatsoever by virtue or by availing of any provision of this CVR Agreement to
effect, disturb or prejudice the rights of any other such Holder of Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this CVR Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders of
the Securities. For the protection and enforcement of the provisions of this
Section 8.6, each and every Holder and the Trustee shall be entitled to such
relief as can be given either at Law or in equity.

Section 8.7.  Unconditional Right of Holders to Institute Certain Suits.
Notwithstanding any other provision in this CVR Agreement and any provision of
any Security, but subject to Article 10, the right of any Holder of any Security
to receive payment of the amounts payable in respect of such Security on or
after the respective due dates expressed in such Security, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.

Section 8.8.  Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default.

(a)  Except as provided in Section 8.6, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by Law, be cumulative and in addition to every other right and remedy given

27

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hereunder or now or hereafter existing at Law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

(b)  No delay or omission of the Trustee or of any Holder to exercise any right
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 8.6, every power and remedy given by this CVR Agreement or by Law to the
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.

Section 8.9.  Control by Holders.

(a)  The Majority Holders shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any power conferred on the Trustee with respect to the Securities by
this CVR Agreement; provided that such direction shall not be otherwise than in
accordance with Law and the provisions of this CVR Agreement; and
provided further that (subject to the provisions of Section 4.1) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee, or a committee of directors or
Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forbearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities not joining in the giving of said
direction.

(b)  Nothing in this CVR Agreement shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Holders.

Section 8.10.  Waiver of Past Defaults.

(a)  In the case of a default or an Event of Default specified in clause (b) of
Section 8.1, the Majority Holders may waive any such default or Event of
Default, and its consequences except a default in respect of a covenant or
provisions hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Company,
the Trustee and the Holders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

(b)  Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this CVR Agreement; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.

Section 8.11.  The Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall mail or otherwise deliver to the
Holders, as the names and addresses of such Holders appear on the Security
Register (as provided under Section 313(c) of the Trust Indenture Act, if
applicable), written notice of all defaults which have occurred and are known to
the Trustee, such notice to be transmitted within ninety (90) days after the
occurrence thereof, unless such defaults shall have been cured before the giving
of such notice (the term “default” for the purpose of this Section 8.11 being
hereby defined to mean any event or condition which is, or with notice or lapse
of time or both would become, an Event of Default); provided that, except in the
case of default in the payment of the amounts payable in respect of any of the
Securities, the Trustee shall be protected in withholding such notice if and for
so long as the board of directors, the executive committee, or a trust committee
of directors or trustees and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders; provided further, that in the case of any breach of the character
specified in Section 8.1(b) with respect to the Securities, no notice to Holders
shall be given until at least thirty (30) days after the occurrence thereof.

28

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Section 8.12.  Right of Court to Require Filing of Undertaking to Pay Costs. All
Parties to this CVR Agreement agree, and each Holder of any Security by his or
her acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this CVR Agreement or in any suit against the Trustee for any action taken,
suffered or omitted by it as the Trustee, the filing by any party litigant in
such suit of an undertaking to pay the reasonable and documented out-of-pocket
costs of such suit, and that such court may in its discretion assess reasonable
and documented out-of-pocket costs, including reasonable and documented
out-of-pocket attorneys’ fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided, however, that the provisions of this Section 8.12
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Holder or group of Holders holding in the aggregate more than ten percent
(10%) of the Securities Outstanding or to any suit instituted by any Holder for
the enforcement of the payment of any Security on or after the due date
expressed in such Security.

ARTICLE 9
CONSOLIDATION OR MERGER

Section 9.1.  Company May Consolidate or Merge on Certain Terms. Subject to the
provisions of Section 1.16, the Company covenants that it will not consolidate
or merge with or into any other Person unless (a) the Company shall be the
continuing Person or (b) the successor Person shall expressly assume, by an
instrument supplemental hereto, executed and delivered to the Trustee in form
reasonably satisfactory to the Trustee, the due and punctual performance and
observance of all covenants and conditions of this CVR Agreement to be performed
by the Company.

Section 9.2.  Successor Person Substituted.

(a)  In case of any consolidation or merger and, following such, assumption by
the successor Person pursuant to Section 9.1, such successor Person shall
succeed to and be substituted for the Company with the same effect as if it had
been named herein. Such successor Person may cause to be signed, and may issue
either in its own name (or, if it is the successor to the Company, in the name
of the Company prior to such succession) any or all of the Securities issuable
hereunder, in the case of Global Securities, which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor Person instead of the Company and subject to all the terms,
conditions and limitations in this CVR Agreement prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered to the Trustee for authentication, and any Securities which
such successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this CVR Agreement as the Securities
theretofore or thereafter issued in accordance with the terms of this CVR
Agreement as though all of such Securities had been issued at the date of the
execution hereof. 

(b)  In case of any such consolidation or merger and, following such, assumption
by the successor Person pursuant to Section 9.1, such changes in phraseology and
form (but not in substance) may be made in the Securities thereafter to be
issued as may be appropriate.

(c)  In the event of any such consolidation or merger and following such,
assumption by the successor Person pursuant to Section 9.1, the Company or any
Person which shall theretofore have become such in the manner described in this
Article 9 shall be discharged from all obligations and covenants under this CVR
Agreement and the Securities and may be liquidated and dissolved.

Section 9.3.  Officer’s Certificate to the Trustee. The Trustee, subject to the
provisions of Sections 4.1 and 4.2, shall receive an Officer’s Certificate,
prepared in accordance with Section 1.2 and Section 1.3, as conclusive evidence
that any such consolidation or merger, and any such assumption, complies with
the applicable provisions of this CVR Agreement, and if a supplemental agreement
is required in connection with such transaction, such supplemental agreement
complies with this Article 9 and that there has been compliance with all
conditions precedent herein provided for or relating to such transaction. 

Section 9.4.  Successors and Assigns. All covenants, provisions and agreements
in this CVR Agreement by or for the benefit of the Company, the Trustee or the
Holders shall bind and inure to the benefit of their respective successors,
assigns, heirs and personal representatives, whether so expressed or not.

29

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ARTICLE 10
SUBORDINATION

Section 10.1.  Agreement to Subordinate. The Company agrees, and each Holder by
accepting a Security hereunder agrees, that the CVR Payments, the Bankruptcy
Claims and all other obligations under this CVR Agreement and the Securities and
any rights or claims relating thereto (collectively, the “Junior Obligations”)
are subordinated in right of payment, to the extent and in the manner provided
in this Article 10, to the prior payment in full in cash of all Senior
Obligations of the Company (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of such Senior Obligations.

Section 10.2.  Liquidation; Dissolution; Bankruptcy. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of
creditors or any marshaling of the Company’s assets and liabilities:

(a)  holders of Senior Obligations will be entitled to receive payment in full
in cash of all Senior Obligations of the Company before the Holders will be
entitled to receive any payment of any kind with respect to the Junior
Obligations; and

(b)  until all Senior Obligations of the Company (as provided in clause (a)
above) are paid in full in cash, any distribution to which Holders would be
entitled but for this Article 10 will be made to holders of Senior Obligations
of the Company, as their interests may appear.

Section 10.3.  Default on Senior Obligations.  The Company shall not be required
to (and may not) make any payment or distribution to any Holder in respect of
Junior Obligations or acquire from any Holder for cash or property any Junior
Obligations:

(a)  if any default on any Senior Obligations exceeding one million dollars
($1,000,000) in aggregate principal amount would occur as a result of such
payment, distribution or acquisition;

(b)  during the continuance of any payment default in respect of any Senior
Obligations exceeding one million dollars ($1,000,000) in aggregate principal
amount (after expiration of any applicable grace period);

(c)  if the maturity of any Senior Obligations representing more than one
million dollars ($1,000,000) in aggregate principal amount is accelerated in
accordance with its terms and such acceleration has not been rescinded; or

(d)  following the occurrence of any default (other than a payment default, and
after the expiration of any applicable grace period) with respect to any Senior
Obligations with an aggregate principal amount of more than one million dollars
($1,000,000), the effect of which is to permit the holders of such Senior
Obligations (or a trustee or agent acting on their behalf) to cause, with the
giving of notice if required, the maturity of such Senior Obligations to be
accelerated, for a period commencing upon the receipt by the Trustee (with a
copy to the Company) of a written notice of such default from the representative
of the holders of such Senior Obligations and ending when such Senior
Obligations are paid in full in cash or, if earlier, when such default is cured
or waived.

Section 10.4.  When Distribution Must Be Paid Over.

(a)  In the event that the Trustee or any Holder receives any payment of any
Junior Obligations at a time when such payment is prohibited by this Article 10,
such payment will be held by the Trustee or such Holder in trust for the benefit
of, and will be paid forthwith over and delivered, upon written request, to the
holders of Senior Obligations of the Company as their interests may appear or
their representative under the agreement, indenture or other document (if any)
pursuant to which such Senior Obligations may have been issued, as their
respective interests may appear, for application to the payment of all such
Senior Obligations

30

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remaining unpaid to the extent necessary to pay such Senior Obligations in full
in accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Obligations.

(b)  Any amount received by any Holder as a result of direct or indirect credit
support for the Junior Obligations from any Affiliate of the Company shall be
treated as payments received by such Holder from the Company that are subject to
the provisions of this Article 10.

(c)  With respect to the holders of Senior Obligations, the Trustee undertakes
to perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Obligations will be read into this CVR
Agreement against the Trustee. The Trustee will not be deemed to owe any
fiduciary duty to the holders of Senior Obligations, and will not be liable to
any such holders if the Trustee pays over or distributes to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Obligations are then entitled by virtue of this Article 10, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.

Section 10.5.  Notice by Company. The Company will promptly notify the Trustee
of any facts known to the Company that would cause a payment of any Junior
Obligations to violate this Article 10, but failure to give such notice will not
affect the subordination of the Junior Obligations to the Senior Obligations as
provided in this Article 10.

Section 10.6.  Subordination Effective Notwithstanding Deficiencies with Respect
to Senior Obligations; Waiver of Right to Contest Senior Obligation;
Reinstatement of Subordination Provisions.

(a)  The Holders hereby agree that subordination provisions contained in this
Article 10 are unconditional, irrespective of the validity, regularity or
enforceability of the Senior Obligations, the absence of any action to enforce
the same, any waiver or consent by any holder of Senior Obligations with respect
to any provisions thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense. Without limiting the
foregoing, and notwithstanding anything to the contrary contained elsewhere in
this CVR Agreement, in the event that the amount of Senior Obligations are
reduced or diminished for any reason (other than as a result of the payment in
cash thereof), whether because of the applicability of fraudulent conveyance or
other applicable Laws, or any other invalidity or limitation on the amount of
Senior Obligations, the subordination provisions thereof shall apply to the full
amount of Senior Obligations (without giving effect to any reduction, invalidity
or diminution thereof), and the turnover provisions hereunder shall be fully
enforceable with respect to the full amount of Senior Obligations (without
giving effect to any such reduction, invalidity or diminution thereof), even if
the effect thereof is that there will be no (or a limited amount of) Senior
Obligations to which the Junior Obligations are subrogated after the payment in
full in cash of any of the remaining Senior Obligations (without giving effect
to any reductions, invalidity or diminution thereof, except for reductions as a
result of payments thereof in cash).

(b)  The Trustee and the Holders agree that they shall not (and hereby waive any
right to) take any action to contest or challenge (or assist or support any
other Person in contesting or challenging), directly or indirectly, whether or
not in any proceeding (including in any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code, as now and hereinafter in
effect, or any successor statute or under any other state or federal bankruptcy
or insolvency Law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief), the validity or
enforceability of the Senior Obligations. 

(c)  If any payment made or in respect of the Senior Obligations must be
disgorged or returned for any reason, the Senior Obligations shall be reinstated
hereunder and for all purposes of this Article 10 (including the turnover
provisions hereof) such payment shall be deemed to have never been made with
respect to the Senior Obligations.

Section 10.7.  Relative Rights. This Article 10 defines the relative rights of
Holders and holders of Senior Obligations. Nothing in this CVR Agreement will
(a) impair, as between the Company and Holders, the obligations

31

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of the Company under this CVR Agreement and the Securities or (b) affect the
relative rights of Holders and creditors of the Company other than their rights
in relation to holders of Senior Obligations.  If the Company fails because of
this Article 10 to pay any amounts due in respect of the Securities on a Payment
Date in violation of Section 8.1, such failure is still an Event of Default.

Section 10.8.  Subordination May Not Be Impaired by Company. No right of any
holder of Senior Obligations to enforce the subordination of the Junior
Obligations may be impaired by any act or failure to act by the Company or any
Holder or by the failure of the Company or any Holder to comply with this CVR
Agreement.

Section 10.9.  Distribution or Notice to Representative. Whenever a distribution
is to be made or a notice given to holders of Senior Obligations, the
distribution may be made and the notice given to such holders’ representatives
in accordance with the terms of the instrument or other agreement governing such
Senior Obligations. Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders will be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Obligations and other obligations of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

Section 10.10.  Rights of the Trustee. Notwithstanding the provisions of this
Article 10 or any other provision of this CVR Agreement, the Trustee will not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment or distribution by the Trustee, and the Trustee may
continue to make payments on the Securities, unless the Trustee has received at
its Corporate Trust Office at least one (1) Business Day prior to the date of
such payment written notice of facts that would cause the payment of any Junior
Obligations to violate this Article 10. Only the Company or a representative of
Senior Obligations may give the notice. Nothing in this Article 10 will impair
the claims of, or payments to, the Trustee under or pursuant to Section 4.7. The
Trustee in its individual or any other capacity may hold Senior Obligations with
the same rights it would have if it were not the Trustee.

Section 10.11.  Authorization to Effect Subordination. Each Holder, by the
Holder’s acceptance of the Securities, authorizes and directs the Trustee on
such Holder’s behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Trustee to act as such Holder’s attorney-in-fact for any and all such purposes.
If the Trustee (or any other Person acting on behalf of and at the direction of
the Majority Holders) does not file a proper proof of claim or proof of debt in
the form required in any proceeding referred to in Section 8.2 hereof at least
thirty (30) days before the expiration of the time to file such claim, the
representatives of the Senior Obligations are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this CVR Agreement to be duly
executed, all as of the day and year first above written.

 
AKORN, INC.
       
By:
     
Name:
   
Title:
       
[          ], as the Trustee
       
By:
     
Name:
   
Title:

 

--------------------------------------------------------------------------------

ANNEX A

EXAMPLE CALCULATIONS OF EBITDA, EXCESS EBITDA AND ANNUAL PAYMENT (1)
(dollars in millions)

 
 
For the Twelve Months Ended December 31,
 
 
 
2018
   
20XX
   
20XX
 
Calculation of EBITDA:
                 
Net income (loss)
 
$ 
(402
)
 
$
158
   
$
208
 
plus:      Interest expense, net
   
46
     
46
     
46
 
minus:   Income tax benefit
   
(36
)
   
(36
)
   
(36
)
plus:      Depreciation expense
   
29
     
29
     
29
 
plus:      Amortization expense
   
53
     
53
     
53
 
EBITDA
 
$ 
(309
)
 
$
250
   
$
300
 
 
                       
Calculation of Excess EBITDA:
                       
Total short-term and long-term debt
 
$
820
   
$
820
   
$
820
 
plus:      Deferred financing costs
   
12
     
12
     
12
 
minus:   Unrestricted cash and cash equivalents
   
(225
)
   
(225
)
   
(225
)
plus:      Minimum cash
   
100
     
100
     
100
 
Net Debt
 
$
707
   
$
707
   
$
707
 
 
                       
Excess EBITDA denominator
   
3.0
     
3.0
     
3.0
 
 
                       
Excess EBITDA threshold
 
$
236
   
$
236
   
$
236
 
 
                       
EBITDA
 
$ 
(309
)
 
$
250
   
$
300
 
minus:   Excess EBITDA threshold
   
(236
)
   
(236
)
   
(236
)
Excess EBITDA
 
$
0
   
$
15
   
$
65
 
 
                       
Calculation of Annual Payment:
                       
Excess EBITDA
 
$
0
   
$
15
   
$
65
 
multiplied by:  Payment percentage
   
33.3
%
   
33.3
%
   
33.3
%
Annual Payment before adjustment for Annual Payment Cap
 
$
0
   
$
5
   
$
22
 
 
                       
Annual Payment Cap
 
$
12
   
$
12
   
$
12
 
 
                       
Aggregate Annual Payment (2)
 
$
0
   
$
5
   
$
12
 

(1)
Calculations for the twelve (12) months ended December 31, 2018 are based on
financial information reported in the Company’s annual report on Form 10-K for
such fiscal year.  The other calculations are illustrative figures selected
solely for the purpose of illustrating Annual Payment calculations that are
above and below the Annual Payment Cap.

(2)
Pursuant to the definition of “Annual Payment” in Section 1.1, this amount will
be divided by the Initial CVR Settlement Amount to determine the payments in
respect of each Outstanding CVR.

A-1

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ANNEX B
 
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE CONTINGENT VALUE
RIGHTS AGREEMENT (THE “CVR AGREEMENT”) HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR
DEPOSITARY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
CVR AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE CVR AGREEMENT.
 
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DIRECT
REGISTRATION FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
 
AKORN, INC.
 
No.
Certificate for
Contingent Value Rights
CUSIP
[________]
 

 
This certifies that __________, or registered assigns (the “Holder”), is the
registered holder of the number of Contingent Value Rights (“CVRs” or
“Securities”) set forth above. Each CVR entitles the Holder, subject to the
provisions contained herein and in the CVR Agreement referred to on the reverse
hereof, to payments from Akorn, Inc., a Louisiana corporation (the “Company”),
in an amount and in the form determined pursuant to the provisions set forth on
the reverse hereof and as more fully described in the CVR Agreement referred to
on the reverse hereof. Such payments shall be made by the Company on the
applicable Payment Date, as defined in the CVR Agreement referred to on the
reverse hereof, in accordance with the terms of the CVR Agreement.

Payment of any amounts pursuant to this CVR certificate shall be made only to
the registered Holder (as defined in the CVR Agreement) of this CVR certificate.
Such payment shall be made at the office or agency maintained by the Company for
such purpose, in such coin or currency of the United States of America as at the
time is legal tender for the payment of public and private debts; provided,
however, that the Company may pay such amounts by wire transfer or check payable
in such money. [     ] has been initially appointed as Paying Agent at its
office or agency in [     ]. 

Reference is hereby made to the further provisions of this CVR certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
 
Unless the certificate of authentication hereon has been duly executed by the
Trustee referred to on the reverse hereof by manual signature, this CVR
certificate shall not be entitled to any benefit under the CVR Agreement, or be
valid or obligatory for any purpose.
 
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
 
Dated: [•]
 

 
By:
     
Name:
   
Title:

 
[Form of Reverse of CVR certificate]
 
1.  This CVR certificate is issued under and in accordance with the Contingent
Value Rights Agreement, dated as of [______], 2019 (the “CVR Agreement”),
between the Company and [          ], as trustee (the “Trustee,” which term
includes any successor Trustee under the CVR Agreement), and is subject to the
terms and provisions contained in the CVR Agreement, to all of which terms and
provisions the Holder of this CVR certificate consents by acceptance hereof. The
CVR Agreement is hereby incorporated herein by reference and made a part hereof.
Reference is hereby made to the CVR Agreement for a full statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the CVRs. All
capitalized terms used in this CVR certificate without definition shall have the
respective meanings ascribed to them in the CVR Agreement. Copies of the CVR
Agreement can be obtained by contacting the Trustee.

2.  On each Payment Date, if any, the Company shall make the payments required
by Section 3.1(c)(i) or (ii), as applicable, of the CVR Agreement.

3.  In the event of any conflict between this CVR certificate and the CVR
Agreement, the CVR Agreement shall govern and prevail.

4.  Each CVR Payment, if any, and interest thereon, if any, shall be payable by
the Company in such coin or currency of the United States of America as at the
time is legal tender for the payment of public and private debts; provided,
however, that such amounts may be paid by check or wire transfer payable in such
money. [] has been initially appointed as Paying Agent at its office or agency
in [].

5.  If an Event of Default occurs and is continuing, either the Trustee may or
the Majority Holders, by notice to the Company and to the Trustee, may bring
suit in accordance with the terms and conditions of the CVR Agreement to protect
the rights of the Holders, including to obtain payment of all amounts then due
and payable.

6.  The CVR Agreement permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of CVRs under the CVR Agreement at any
time by the Company and the Trustee with the consent of the Majority Holders of
the CVRs at the time outstanding.

7.  No reference herein to the CVR Agreement and no provision of this CVR
certificate or of the CVR Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay any amounts determined
pursuant to the terms hereof and of the CVR Agreement at the times, place and
amount, and in the manner, herein prescribed.

8. Each CVR Payment or any other right, claim or payment of any kind under this
CVR certificate, if any, shall be subordinated in right of payment, as set forth
in Article 10 of the CVR Agreement, to the prior payment in full in cash of all
Senior Obligations whether outstanding on the date of the CVR Agreement or
thereafter incurred.

9. As provided in the CVR Agreement and subject to certain limitations therein
set forth, the transfer of the CVRs represented by this CVR certificate is
registrable on the Security Register, upon surrender of this CVR certificate for
registration of transfer at the office or agency of the Company maintained for
such purpose duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by the Holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new CVR certificates or Direct Registration
Securities, for the same amount of CVRs, will be issued to the

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designated transferee or transferees. The Company hereby initially designates
the office of [     ] at [     ] as the office for registration of transfer of
this CVR certificate.

10.  As provided in the CVR Agreement and subject to certain limitations therein
set forth, this CVR certificate is exchangeable for one or more CVR certificates
or Direct Registration Securities representing the same number of CVRs as
represented by this CVR certificate as requested by the Holder surrendering the
same.

11.  No service charge will be made for any registration of transfer or exchange
of CVRs, but the Company may require payment of a sum sufficient to cover all
documentary, stamp or similar issue or transfer taxes or other governmental
charges payable in connection with any registration of transfer or exchange.

12.  Prior to the time of due presentment of this CVR certificate for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this CVR certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.

13. Neither the Company nor the Trustee has any duty or obligation to the holder
of this CVR certificate, except as expressly set forth herein or in the CVR
Agreement.

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 
This is one of the Global Securities referred to in the within-mentioned CVR
Agreement.
 

 
[          ], as the Trustee

 
Dated: [         ]

 
By:
     
Authorized Signatory

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