Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), made effective as of the 22nd day
of December, 2010, by and between Akorn, Inc., a corporation incorporated under
the laws of Louisiana (the “Company”), and Timothy Dick (“Executive Officer”).

EMPLOYMENT

Subject to the terms and conditions of this Agreement, the Company will employ
Executive Officer as Chief Financial Officer reporting to the Chief Executive
Officer of the Company, and having the responsibilities, duties and authority
commensurate with the position of Chief Financial Officer. The principal
location at which Executive Officer will perform such services will be the
Company’s facility located at Lake Forest, IL.

1.   TERM OF AGREEMENT.

This Agreement shall commence as the date hereof (the “Effective Date”) and
shall continue in effect until the first anniversary of the Effective Date;
provided, that commencing on the first anniversary of the Effective Date and on
each subsequent anniversary thereof, the term of this Agreement shall
automatically be extended for one (1) year unless either the Company or
Executive Officer shall have given written notice to the other at least ninety
(90) days prior thereto that the term of this Agreement shall not be so
extended; and provided, further, that notwithstanding any such notice by the
Company not to extend, the term of this Agreement shall not expire prior to the
expiration of twelve (12) months after the occurrence of a Change in Control.

2. DEFINITIONS.

2.1. Accrued Compensation. “Accrued Compensation” shall mean an amount which
shall include all amounts earned or accrued through the Termination Date (as
hereinafter defined) but not paid as of the Termination Date, including, without
limitation, (i) base salary, (ii) reimbursement for reasonable and necessary
expenses incurred by Executive Officer on behalf of the Company during the
period ending on the Termination Date, and (iii) vacation pay.

2.2. Base Amount. “Base Amount” shall mean the amount of Executive Officer’s
annual base salary at the greater of the rate in effect immediately prior to the
Change in Control (if applicable) or the rate in effect on the Termination Date,
and shall include all amounts of Executive Officer’s base salary that are
deferred under the qualified and non-qualified employee benefit plans of the
Company or any other agreement or arrangement.

2.3. Bonus Amount. “Bonus Amount” shall mean an amount equal to the total
eligible bonus amount (including eligible stretch bonus amount) under the
Company’s annual bonus incentive plan most recently approved by the Company or
the Company’s Board of Directors or Committee thereof.  
 
 
 

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2.4. Cause. A termination of employment is for “Cause” if Executive Officer has
been convicted of or enters a plea of nolo contendere with regard to any felony
or crime involving fraud, dishonesty or moral turpitude or the termination is
evidenced by a resolution adopted in good faith by the Board to the effect that
Executive Officer (i) continually failed substantially to perform Executive
Officer’s reasonably assigned duties with the Company (other than a failure
resulting from Executive Officer’s incapacity due to physical or mental illness
or, following a Change in Control, from Executive Officer’s assignment of duties
that would constitute Good Reason (as hereinafter defined)), which failure
continued for a period of at least ten (10) days after a written notice of
demand for substantial performance has been delivered to Executive Officer
specifying the manner in which Executive Officer has failed substantially to
perform, or (ii) engaged in conduct which is demonstrably and materially
injurious to the Company.

2.5. Change in Control. “Change in Control” shall mean any of the following:

(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any Person (as the term
“person” is used for purposes of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended (the “1934 Act”)) immediately after which such Person has
Beneficial Ownership (as the term “beneficial ownership” is defined under Rule
13d-3 promulgated under the 1934 Act) of forty percent (40%) or more of the
combined voting power of the Company’s then outstanding Voting Securities;

(b) The individuals who, as of the date hereof, are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least a majority of
the Board; provided, that if the appointment, election or nomination for
election by the Company’s shareholders of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered a member of the Incumbent Board; and
provided, further, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (a “Proxy
Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest;

(c) The consummation of a merger, consolidation or reorganization involving the
Company, unless the shareholders of the Company immediately before such merger,
consolidation or reorganization own, directly or indirectly, immediately
following such merger, consolidation or reorganization, at least sixty percent
(60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or reorganization (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation or
reorganization; and

(d) The consummation of an agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).

 
 

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(e)  Notwithstanding the foregoing, no “Change in Control” shall be deemed to
have occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of the Voting
Securities of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

2.6. Company. The “Company” shall mean Akorn, Inc. and shall include its
“Successors and Assigns” (as hereinafter defined).

2.7. Disability. “Disability” shall mean a physical or mental infirmity which
impairs Executive Officer’s ability to substantially perform Executive Officer’s
duties with the Company for a period of one hundred eighty (180) consecutive
days; provided, that Executive Officer has not returned to Executive Officer’s
full-time employment prior to the Termination Date as stated in the Notice of
Termination (as hereinafter defined).

2.8. Good Reason. “Good Reason” shall mean the occurrence of any of the events
or conditions described in subsections (a) through (e) below, and further
Executive Officer’s right to terminate Executive Officer’s employment pursuant
for Good Reason shall not be affected by Executive Officer’s incapacity due to
physical or mental illness. Executive Officer must determine whether to invoke
the right to terminate employment pursuant to any condition for Good Cause
within ninety (90) days of the initial existence of such condition and the
Company shall be given a period of thirty (30) days during which it may remedy
such condition.
     
(a) a change in Executive Officer’s status or responsibilities which represents
a material and adverse change from Executive Officer’s status or
responsibilities, or (B) the assignment to Executive Officer of any duties or
responsibilities which are materially inconsistent with Executive Officer’s
status or responsibilities (in either case without sole regard to any change in
title or the Company’s status as a public or private entity);

                (b) a reduction in Executive Officer’s base salary to a level
below that in effect at any time previously (except to the extent such reduction
is not due to a Change in Control and is part of a comprehensive reduction in
salary applicable to employees of the Company generally so long as the reduction
applicable to Executive Officer is comparable to the reduction applied to other
senior executives of the Company);
     
(c) the Company’s requiring Executive Officer to be based at any place outside a
50-mile radius from Executive Officer’s job location or residence without
Executive Officer’s written consent, except for travel that is reasonably
necessary in connection with the Company’s business;
     
(d) the insolvency or the filing (by any party, including the Company) of a
petition for bankruptcy of the Company, which petition is not dismissed within
sixty (60) days;
 
 
 

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(e) the failure of the Company to obtain an agreement, satisfactory to Executive
Officer, from any Successors and Assigns (as hereinafter defined) to assume and
agree to perform this Agreement, as contemplated in Section 13 hereof.

2.9. Notice of Termination. “Notice of Termination” shall mean a written notice
of termination of Executive Officer’s employment which indicates the specific
termination provision in this Agreement relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive Officer’s employment under the provision so indicated.

2.10. Pro-Rata Bonus. “Pro-Rata Bonus” shall mean an amount equal to the Bonus
Amount multiplied by a fraction the numerator of which is the number of days in
the fiscal year through the Termination Date and the denominator of which is
365.

2.11. Successors and Assigns. “Successors and Assigns” shall mean a corporation
or other entity acquiring all or substantially all the assets and business of
the Company (including this Agreement), whether by operation of law or
otherwise.

2.12. Termination Date. “Termination Date” shall mean (i) in the case of
Executive Officer’s death, Executive Officer’s date of death, (ii) in the case
of Good Reason, the last day of Executive Officer’s employment, and (iii) in all
other cases, the date specified in the Notice of Termination; provided, that if
Executive Officer’s employment is terminated by the Company for Cause or due to
Disability, the date specified in the Notice of Termination shall be at least
forty-five (45) days from the date the Notice of Termination is given to
Executive Officer; and provided, further, that in the case of Disability,
Executive Officer shall not have returned to the full-time performance of
Executive Officer’s duties during such period of at least thirty (30) days.

3. EXECUTIVE OFFICER OBLIGATIONS.

During the term of this Agreement, and excluding any periods of vacation and
leave due to sickness or Disability to which Executive Officer is entitled,
Executive Officer agrees to devote his full time and attention spent on business
matters to the business and affairs of the Company and, to the extent necessary
to discharge the responsibilities assigned to Executive Officer by the Company,
to use Executive Officer’s reasonable best efforts to perform faithfully and
efficiently such responsibilities; provided, that it shall not be a violation of
this Agreement for Executive Officer to, without limitation, (i) serve on
corporate, civic or charitable boards or committees, (ii) deliver lectures or
fulfill speaking engagements, (iii) manage personal investments and (iv) perform
such other activities as the Company’s Chief Executive Officer may approve, so
long as such activities do not interfere materially with the performance of
Executive Officer’s responsibilities as an employee of the Company. It is
expressly understood and agreed that to the extent that any such activities have
been conducted by Executive Officer prior to the date of a Change in Control,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to such date shall not thereafter be
deemed to interfere with the performance of Executive Officer’s responsibilities
to the Company.
 
 
 

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4. TERMINATION OF EMPLOYMENT NOT IN CONNECTION WITH A CHANGE IN CONTROL.

4.1. Termination Benefits. The Executive Officer shall be entitled to the
following compensation and benefits if, during the term of this Agreement,
Executive Officer’s employment with the Company shall be terminated more than
ninety (90) days prior to a Change in Control, or Executive Officer’s employment
with the Company shall be terminated at any time after the first anniversary of
the occurrence of a Change in Control:

(a) If Executive Officer’s employment with the Company shall be terminated
(i) by the Company for Cause, (ii) due to Executive Officer’s Disability or
death, (iii) due to Executive Officer’s retirement pursuant to the Company’s
policies applying to executive officers generally, or (iv) by Executive Officer
other than for Good Reason, the Company shall pay to Executive Officer the
Accrued Compensation;

(b) If Executive Officer’s employment with the Company shall be terminated by
the Company without Cause, or by the Executive Officer for Good Reason,
Executive Officer shall be entitled to the following:
     
(i) the Company shall pay Executive Officer all Accrued Compensation and a
Pro-Rata Bonus;

(ii) the Company shall pay Executive Officer as severance pay and in lieu of any
further compensation for periods subsequent to the Termination Date, an amount
in cash equal to one (1) times the sum of (A) the Base Amount and (B) the Bonus
Amount;
 
(iii) until the first (1st) anniversary of the Termination Date, Executive
Officer shall have such rights with respect to benefits provided by the Company,
including without limitation car allowance, life insurance, disability, medical,
dental and hospitalization benefits as were provided to Executive Officer as of
the Effective Date or, if greater, at any time within ninety (90) days preceding
the Termination Date.
 
(c) The amounts provided for in Sections 4.1(a) and 4.1(b)(i), and (ii) shall be
paid in a single lump sum cash payment within thirty (30) days, or as soon as
administratively practicable, after the Termination Date (but in no event later
than March 15 of the following calendar year), and shall be subject to all
applicable tax and other withholdings.

(d) The Executive Officer shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and, no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive Officer in any subsequent
employment.

4.2. Cooperation. Notwithstanding anything to the contrary contained in this
Agreement, payment of the amounts specified in Section 4.1(b)(ii) hereof is
conditional upon Executive Officer reasonably cooperating with the Company in
connection with all matters relating to Executive Officer’s employment with the
Company and assisting the Company as reasonably requested in transitioning
Executive Officer’s responsibilities to Executive Officer’s replacement;
provided that Executive Officer shall not be required to perform any duties or
take any action that would constitute Good Reason.
 
 
 

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5. TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.

5.1. Termination Benefits. If, during the term of this Agreement, Executive
Officer’s employment with the Company shall be terminated within ninety
(90) days prior to or twelve (12) months following a Change in Control,
Executive Officer shall be entitled to the following compensation and benefits:

(a) If Executive Officer’s employment with the Company shall be terminated
(i) by the Company for Cause, (ii) due to Executive Officer’s Disability or
death, (iii) due to Executive Officer’s retirement pursuant to the Company’s
policies applying to executive officers generally, or (iv) by Executive Officer
other than for Good Reason, the Company shall pay to Executive Officer the
Accrued Compensation;

(b) If Executive Officer’s employment with the Company shall be terminated by
the Company without Cause, or by the Executive Officer for Good Reason,
Executive Officer shall be entitled to the following:

                (i) the Company shall pay Executive Officer all Accrued
Compensation and a Pro-Rata Bonus;

                (ii) the Company shall pay Executive Officer as severance pay
and in lieu of any further compensation for periods subsequent to the
Termination Date, an amount in cash equal to two (2) times the sum of (A) the
Base Amount and (B) the Bonus Amount;
 
                (iii) until the second (2nd) anniversary of the Termination
Date, Executive Officer shall have such rights with respect to benefits provided
by the Company, including without limitation car allowance, life insurance,
disability, medical, dental and hospitalization benefits as were provided to
Executive Officer as of the Effective Date or, if greater, at any time within
ninety (90) days preceding the date of the Change in Control; and

                (iv) the restrictions on any outstanding incentive awards
(including restricted stock and granted performance shares or units) granted to
Executive Officer under the Company’s stock option and other stock incentive
plans or under any other incentive plan or arrangement shall lapse and such
incentive award shall become 100% vested, all stock options and stock
appreciation rights granted to Executive Officer shall become immediately
exercisable and shall become 100% vested and all performance units granted to
Executive Officer shall become 100% vested.

 
 

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(v)  Notwithstanding the foregoing, in the event that any payment or benefit
received or to be received by Executive Officer in connection with Executive
Officer’s separation with the Company (collectively, the “Severance Parachute
Payments”) would (i) constitute a parachute payment within the meaning of
Section 280G of the Code or any similar or successor provision to 280G and
(ii) but for this Section 4, be subject to the excise tax imposed by
Section 4999 of the Code or any similar or successor provision to Section 4999
(the “Excise Tax”), then such Severance Parachute Payments shall be reduced to
the largest amount which would result in no portion of the Severance Parachute
Payments being subject to the Excise Tax. In the event any reduction of benefits
is required pursuant to this Agreement, Executive Officer shall be allowed to
choose which benefits hereunder are reduced (e.g., reduction first from the
Severance Payment, then from the vesting acceleration). Any determination as to
whether a reduction is required under this Agreement and as to the amount of
such reduction shall be made in writing by the independent public accountants
appointed for this purpose by the Company (the “Accountants”) prior to, or
immediately following, the Change of Control, whose determinations shall be
conclusive and binding upon Executive Officer and the Company for all purposes.
If the Internal Revenue Service (the “IRS”) determines that these Parachute
Payments are subject to the Excise Tax, then the Company or any related
corporation, as their exclusive remedy, shall seek to enforce the provisions of
this Section hereof. Such enforcement of this Section shall be the only remedy,
under any and all applicable state and federal laws or otherwise, for Executive
Officer’s failure to reduce the Severance Parachute Payments so that no portion
thereof is subject to the Excise Tax. The Company or related corporation shall
reduce the Severance Parachute Payments in accordance with this Section only
upon written notice by the Accountants indicating the amount of such reduction,
if any. The Company shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Agreement.

(c) The amounts provided for in Sections 5.1(a) and 5.1(b)(i), (ii) and
(iii) shall be paid in a single lump sum cash payment within thirty (30) days,
or as soon as administratively practicable, after the Termination Date (but in
no event later than March 15 of the following calendar year), and shall be
subject to all applicable tax and other withholdings.

(d) The Executive Officer shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and, no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive Officer in any subsequent
employment.

5.2. Cooperation. Notwithstanding anything to the contrary contained in this
Agreement, payment of the amounts specified in Section 5.1(b)(ii) hereof is
conditional upon Executive Officer reasonably cooperating with the Company in
connection with all matters relating to Executive Officer’s employment with the
Company and assisting the Company as reasonably requested in transitioning
Executive Officer’s responsibilities to Executive Officer’s replacement;
provided that Executive Officer shall not be required to perform any duties or
take any action that would constitute Good Reason.
 
 
 

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6. OTHER BENEFIT POLICIES.

The severance pay and benefits provided for in Sections 4 or 5 shall be in lieu
of any other severance or termination pay to which Executive Officer may be
entitled under any Company severance or termination plan, program, practice or
arrangement. Notwithstanding the foregoing, nothing in this Agreement shall
prevent or limit Executive Officer’s continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company
(except for any severance or termination policies, plans, programs or practices)
and for which Executive Officer may qualify, nor shall anything herein limit or
reduce such rights as Executive Officer may have under any other agreements with
the Company (except for any severance or termination agreement). Amounts which
are vested benefits or which Executive Officer is otherwise entitled to receive
under any plan or program of the Company shall be payable in accordance with
such plan or program, except as explicitly modified by this Agreement. The
Company may condition the payment to Executive Officer of severance benefits
upon Executive Officer’s delivery of a reasonable form of release in favor of
the Company containing customary terms and conditions for the release of
employment related claims and including mutual non-disparagement provisions.
Nothing in this Agreement shall alter Executive Officer’s status as an “at will”
employee of the Company.

7. NOTICE OF TERMINATION.

Any purported termination of Executive Officer’s employment by the Company shall
be communicated by Notice of Termination to Executive Officer. For purposes of
this Agreement, no such purported termination shall be effective without such
Notice of Termination.

8. CONFIDENTIAL INFORMATION.

8.1. Confidence. Executive Officer shall hold in confidence for the benefit of
the Company all secret or confidential information, knowledge or data relating
to the Company and its businesses, which shall have been obtained by Executive
Officer in the course of Executive Officer’s employment by the Company and which
shall not be public knowledge (other than by acts by Executive Officer in
violation of this Agreement) (“Confidential Information”). Whether before or
after termination of the Executive Officer’s employment with the Company,
Executive Officer shall not, without the prior written consent of the Company,
communicate, use or divulge any Confidential Information, other than to the
Company and to those persons or entities designated by the Company or as
otherwise is reasonably necessary for Executive Officer to carry out his or her
responsibilities as an executive of the Company. Confidential Information shall
not include information which is required to be disclosed pursuant to law,
provided Executive Officer uses reasonable efforts to give the Company
reasonable notice of such required disclosure.

8.2. Remedies. Executive Officer agrees that any breach or threatened breach by
Executive Officer of this Section 8 will entitle the Company to defer or
withhold any amounts otherwise payable to Executive Officer under this
Agreement.

9. COVENANT NOT TO COMPETE.

9.1. Non-Competition. Executive Officer agrees that from the Effective Date
hereof until the sooner to occur of (i) the end of the twelfth month following
the Termination Date or (ii) the end of the twelfth month following the Change
in Control (if applicable), Executive Officer will not, directly or indirectly,
engage in any business activity that is or may reasonably be found to be in
competition with the business of the Company and its subsidiaries as such
business may exist at any time from the Effective Date through the Termination
Date, unless Executive Officer can demonstrate that any action that otherwise
would contravene this Section 9.1 was done without use in any way of
Confidential Information; provided, that nothing in this Agreement shall be
deemed to prohibit Executive Officer from owning not more than five percent (5%)
of any class of publicly traded securities of a competitor.
 
 
 

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9.2. Non-Solicitation. Executive Officer agrees that from the Effective Date
hereof to the sooner to occur of (i) the end of the twelfth month following the
Termination Date or (ii) the end of the twelfth month following the Change in
Control (if applicable), Executive Officer will not:

(a) Solicit, raid, entice or induce any employee of the Company to be employed
by any competitor of the Company (except to the extent that such employee has
first responded to a general advertisement or general employment search by
Executive Officer’s place of employment at the time);

(b) Solicit business for any competitor from, or transact such business for any
competitor with, any person, firm or corporation which was, at any time during
Executive Officer’s employment hereunder, a customer of the Company; or

(c) Assist a competitor in taking such action.

9.3 Property of the Company. All ideas, discoveries, creations, manuscripts and
properties, innovations, improvements, know-how, inventions, designs,
developments, apparatus, techniques, methods, and formulae (collectively the
“Inventions”) which may be used in the business of the Company, whether
patentable, copyrightable or not, which Executive Officer may conceive, reduce
to practice or develop while Executive Officer is employed hereunder, alone or
in conjunction with another or others, and whether at the request or upon the
suggestion of the Company or otherwise, will be the sole and exclusive property
of the Company, and that Executive Officer will not publish any of the
Inventions without the prior written consent of the Company. Executive Officer
hereby assign to the Company all of his right, title and interest in and to all
of the foregoing.

9.4. Remedies. Executive Officer agrees that any breach or threatened breach by
Executive Officer of any provision of this Section 9 will entitle the Company,
in addition to any other legal remedies available to it, to apply to any court
of competent jurisdiction to enjoin the breach or threatened breach, it being
acknowledged and agreed that any such material breach will cause irreparable
injury to the Company and that any damages will not provide adequate remedies to
the Company.

10. EXCLUSIVE REMEDY.

10.1. Executive Officer’s right to salary continuation and other severance
benefits pursuant to Sections 4 and 5 shall be Executive Officer’s sole and
exclusive remedy for any termination of Executive Officer’s employment by the
Company other than for Death, Disability or Cause or by Executive Officer for
Good Reason.

 
 

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11. INDEMNIFICATION.

The Company will indemnify Executive Officer to the extent permitted by its
charter and by-laws and by applicable law against all costs, charges and
expenses, including, without limitation, attorneys’ fees, incurred or sustained
by Executive Officer in connection with any action, suit or proceeding to which
he may be made a party by reason of being an officer, director or employee of
the Company. In connection with the foregoing, Executive Officer will be covered
under any directors and officers, any employment practices, any errors and
omissions and any other liability insurance policy that protects other officers
of the Company.

12. RECORDS.

Upon termination of Executive Officer’s employment hereunder for any reason or
for no reason, Executive Officer will deliver to the Company any property of the
Company which may be in his possession, including products, materials,
memoranda, notes, records, reports or other documents or photocopies of the
same.

13. SUCCESSORS; BINDING AGREEMENT.

13.1. This Agreement shall be binding upon and shall inure to the benefit of the
Company and its Successors and Assigns, and the Company shall require any
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.

13.2. Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by Executive Officer or Executive Officer’s
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by Executive Officer’s legal personal representative.

14. FEES AND EXPENSES.

Except as provided in Section 18, the Company and Executive Officer shall pay
its own costs and expenses related to the negation and execution of this
Agreement.

15. NOTICE.

Notices and all other communications provided for in this Agreement (including
the Notice of Termination) shall be in writing and shall be deemed to have been
duly given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last given by
each party to the other; provided, that all notices to the Company shall be
directed to the attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof or on the third business day after the mailing
thereof, except that notice of change of address shall be effective only upon
receipt.

 
 

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16. SETTLEMENT OF CLAIMS.

The Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against Executive
Officer or others.

17. MISCELLANEOUS.

No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by
Executive Officer and the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreement or representation, oral or otherwise,
express or implied, with respect to the subject matter hereof has been made by
either party which is not expressly set forth in this Agreement.

18. GOVERNING LAW; MEDIATION and ARBITRATION.

18.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Illinois without giving effect to the
conflict of laws principles thereof. In the event of any controversy or claim
arising out of, relating to or in connection with this Agreement, or the breach
thereof, the parties shall follow the procedures set forth below.

18.2         Mediation.     A party shall submit a dispute to mediation by
written notice to the other party.  The mediator shall be selected by the
parties.  If the parties cannot agree on a mediator, the American Arbitration
Association (“AAA”) shall designate a mediator at the request of a party.  Any
mediator must be acceptable to the parties.  The mediator shall conduct the
mediation as he/she determines, with the agreement of the parties.  The parties
shall discuss their differences in good faith and attempt, with the mediator's
assistance, to reach an amicable resolution of the dispute.  The mediation shall
be treated as a settlement discussion and shall therefore be confidential.  The
mediator may not testify for either party in any later proceeding relating to
the dispute.  The mediation proceedings shall not be recorded or transcribed.
 
(a)           Each party shall bear its own costs in the mediation.  The parties
shall share equally the fees and expenses of the mediator.
 
 
(b)           If the parties have not resolved a dispute within 90 days after
written notice beginning mediation (or a longer period, if the parties agree to
extend the mediation), the mediation shall terminate and the dispute shall be
settled by arbitration.  In addition, if a party initiates litigation,
arbitration, or other binding dispute resolution process without initiating
mediation or before the mediation process has terminated, an opposing party may
deem the mediation requirement to have been waived and may proceed with
arbitration following the procedures set forth below.
 
 
 

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18.3   Arbitration.  It is the express agreement of the parties that the
provisions of this Section, including the rules of the AAA, as modified by the
terms of this Section 18, shall govern the arbitration of any disputes arising
pursuant to this Agreement, that have not been resolved through mediation
pursuant to Subsection 18.2 above. In the event of any conflict between the law
of the State of Illinois, the law of the arbitral location, and the U.S.
Arbitration Act (Title 9, U.S. Code), with respect to any arbitration conducted
pursuant to this Agreement, to the extent permissible, it is the express intent
of the parties that the law of Illinois, as modified herein, shall prevail. To
the extent this Section 18 is deemed a separate agreement, independent from this
Agreement, Sections 14, 15, 17, 19 and 20 are incorporated herein by reference.
Either party (the “Initiating Party”) may commence arbitration by submitting a
Demand for Arbitration under the AAA Rules and by notice to the other Party (the
“Respondent”) in accordance with Section 15. Such notice shall set forth in
reasonable detail the basic operative facts upon which the Initiating Party
seeks relief and specific reference to the clauses of this Agreement, the amount
claimed, if any, and any non-monetary relief sought against the Respondent.
After the initial list of issues to be resolved has been submitted, the
arbitrators shall permit either party to propose additional issues for
resolution in the pending proceedings.

(a) The place of arbitration shall be Chicago, Illinois, or any other place
selected by mutual agreement.

(b)  The parties shall attempt, by agreement, to nominate a sole arbitrator for
confirmation by the AAA. If the parties fail so to nominate a sole arbitrator
within 30 days from the date when the Initiating Party’s Demand for Arbitration
has been communicated to the other party, a board of three arbitrators shall be
appointed by the parties jointly or, if the parties cannot agree as to three
arbitrators within 30 days after the commencement of the arbitration proceeding,
then one arbitrator shall be appointed by each of Executive Officer and the
Company within 60 days after the commencement of the arbitration proceeding and
the third arbitrator shall be appointed by mutual agreement of such two
arbitrators. If such two arbitrators shall fail to agree within 75 days after
commencement of the arbitration proceeding upon the appointment of the third
arbitrator, the third arbitrator shall be appointed by the AAA in accordance
with its then existing rules. Notwithstanding the foregoing, if any party shall
fail to appoint an arbitrator within the specified time period, such arbitrator
and the third arbitrator shall be appointed by the AAA in accordance with its
then existing rules. For purposes of this Section 18, the “commencement of the
arbitration proceeding” shall be deemed to be the date upon which the Demand for
Arbitration has been received by the AAA. Any award shall be rendered by a
majority of the members of the board of arbitration.

(c) An award rendered in connection with an arbitration pursuant to this
Section 16 shall be final and binding upon the parties, and any judgment upon
such an award may be entered and enforced in any court of competent
jurisdiction.

(d)  The parties agree that the award of the arbitral tribunal will be the sole
and exclusive remedy between them regarding any and all claims between them with
respect to the subject matter of the arbitrated dispute. The parties hereby
waive all jurisdictional defenses in connection with any arbitration hereunder
or the enforcement of any order or award rendered pursuant thereto (assuming
that the terms and conditions of this arbitration clause have been complied
with).

 
 

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(e)  With respect to any award issued by the arbitrators pursuant to this
Agreement, the parties expressly agree (i) that such order shall be conclusive
proof of the validity of the determination(s) of the arbitrators underlying such
order; and (ii) any federal court sitting in Chicago, Illinois, or any other
court having jurisdiction, may enter judgment upon and enforce such order,
whether pursuant to the U.S. Arbitration Act, or otherwise.

(f)  The arbitrators shall issue a written explanation of the reasons for the
award and a full statement of the facts as found and the rules of law applied in
reaching their decision to both parties. The arbitrators shall apportion to each
party all costs (other than attorneys’ fees) incurred in conducting the
arbitration in accordance with what the arbitrators deem just and equitable
under the circumstances. The prevailing party, as that is determined by the
arbitrator, shall be entitled to recover its reasonable attorneys’ fees, costs
and expenses from the other party. Any provisional remedy which would be
available to a court of law shall be available from the arbitrators pending
arbitration of the dispute. Either party may make an application to the
arbitrators seeking injunctive or other interim relief, and the arbitrators may
take whatever interim measures they deem necessary in respect of the subject
matter of the dispute, including measures to maintain the status quo until such
time as the arbitration award is rendered or the controversy is otherwise
resolved. The arbitrator shall have the authority to award any remedy or relief
that a court of the State of Illinois could order or grant, including, without
limitation, specific performance of any obligation created under this Agreement,
the issuance of an injunction, or the imposition of sanctions for abuse or
frustration of the arbitration process, but specifically excluding punitive
damages (the parties specifically agree that punitive damages shall not be
available in the event of any dispute).

(g)  The parties may file an application in any proper court for a provisional
remedy in connection with an arbitrable controversy, but only upon the ground
that the award to which the application may be entitled may be rendered
ineffectual without provisional relief.

19. SEVERABILITY.

The provisions of this Agreement shall be deemed severable, and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

20. ENTIRE AGREEMENT.

This Agreement constitutes the entire agreement between the parties hereto and
supersedes all prior agreements, if any, understandings and arrangements, oral
or otherwise, between the parties hereto with respect to the subject matter
hereof.

 
 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and Executive Officer has executed this Agreement as of
the day and year first above written.
 
 

 
Akorn, Inc.
 
a Louisiana corporation
   
ATTEST:
   
By:
 
                                                                               
   
Name:
 
Title:
 
1925 West Field Court, Suite 300
Lake Forest, IL 60045
     
Executive Officer
                                                                               
   
Signature
 
 
                                                                               
   
Print Name