Exhibit 10.3
EXECUTION COPY
CONSENT
     THIS CONSENT TO CREDIT AGREEMENT (this “Consent”) is executed and delivered
as of this 28th day of July, 2008, by and among LASALLE BANK NATIONAL
ASSOCIATION, as administrative agent (the “Administrative Agent”), the financial
institutions party hereto (the “Lenders”), AKORN, INC., a Louisiana corporation
(“Akorn”) and AKORN (NEW JERSEY), INC., an Illinois corporation (“Akorn New
Jersey”).
W I T N E S S E T H :
     A. The Administrative Agent, Akorn, Akorn New Jersey and the Lenders
entered into a Credit Agreement dated as of October 7, 2003 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”). Capitalized terms used but not defined herein shall have the
meanings attributed to them in the Credit Agreement.
     B. Akorn intends to enter into a transaction in which it will borrow
$5,000,000 from The John N. Kapoor Trust dated September 20, 1989 (“Subordinated
Creditor”) and issue to Subordinated Creditor a Subordinated Promissory Note,
dated as of July 28, 2008 (the “Subordinated Note”) evidencing such Debt. A copy
of the Subordinated Note is attached hereto as Exhibit A. The foregoing shall be
referred to herein in as the “Transaction”.
     C. The Companies have requested that the Administrative Agent and the
Required Lenders consent to the action to be taken by the Companies in
connection with the Transaction with respect to the Credit Agreement, subject to
the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto hereby agree as follows:
     1. Consent. Subject to the terms and conditions herein, the Required
Lenders hereby (a) consent to Akorn’s incurrence of $5,000,000 of Debt pursuant
to the Subordinated Note, and (b) consent to such Debt being treated as
Subordinated Debt in accordance with clause (d) of the definition thereof;
provided, that the foregoing clauses (a) and (b) are expressly conditioned upon
the satisfaction of the conditions to effectiveness set forth in Section 4
hereof.
     2. Representations and Warranties. To induce the Administrative Agent and
the Lenders to execute this Consent, each Company jointly and severally
represents and warrants to the Administrative Agent and the Lenders as follows:
     (a) Each Company is in good standing under the laws of its jurisdiction of
formation and in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect.
     (b) Each Company is duly authorized to execute and deliver this Consent and
is duly authorized to perform its obligations hereunder.

 

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     (c) The execution, delivery and performance by the Companies of this
Consent and the Companies’ entering into the Transaction do not and will not
(i) require any consent or approval of any governmental agency or authority
(other than any consent or approval which has been obtained and is in full force
and effect), (ii) conflict with (A) any provision of law, (B) the charter,
by-laws or other organizational documents of any Company or (C) any agreement,
indenture, instrument or other document, or any judgment, order or decree, which
is binding upon any Company or any of its properties or (iii) require, or result
in, the creation or imposition of any Lien on any asset of any Company.
     (d) This Consent is the legal, valid and binding obligation of each
Company, enforceable against such Company in accordance with its terms, subject
to bankruptcy, insolvency and similar laws affecting enforceability of
creditors’ rights generally and to general principals of equity.
     (e) The representations and warranties in the Loan Documents (including but
not limited to Section 9 of the Credit Agreement) are true and correct in all
material respects with the same effect as though made on and as of the date of
this Consent (except to the extent stated to relate to a specific earlier date,
in which case such representations and warranties were true and correct as of
such earlier date).
     (f) Akorn owns good and marketable title to the real property that was
subject to the Decatur Mortgage Documents free and clear of all Liens, charges
and claims.
     (g) No Event of Default or Unmatured Event of Default has occurred and is
continuing.
     3. Covenant. Each Company covenants that within 75 days following the date
of this Consent, it shall deliver to the Administrative Agent an executed
mortgage, in form and substance satisfactory to the Administrative Agent, with
respect to Akorn’s facility located in Decatur, Illinois, together with title
commitments, surveys, appraisals, opinions, environmental reports and any other
related documents requested by the Administrative Agent.
     4. Conditions to Effectiveness. The effectiveness of this Consent is
expressly conditioned upon delivering to the Administrative Agent all of the
following in form and substance acceptable to the Administrative Agent: (a) this
Consent executed by each Company, the Administrative Agent and the Required
Lenders; (b) an executed copy of the Subordinated Note certified by the
secretary of Akorn as true, accurate and complete; (c) an executed copy of the
Subordination and Intercreditor Agreement in form attached hereto as Exhibit B
by the Companies, the Administrative Agent and the Subordinated Creditor and
(d) a certificate of the Secretary or Assistant Secretary of each Company
evidencing that all corporate proceedings required to authorize the Transaction
and the execution and delivery of this Consent, the Subordination Agreement and
all other documents relating hereto and thereto on behalf of each Company have
been duly taken and setting forth the names, offices and specimen signatures of
the officers of each Company who are authorized to execute this Consent and such
other

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documents on behalf of each Company. The date on which such events have occurred
is the “Effective Date”.
     5. Affirmation. The execution, delivery and effectiveness of this Consent
shall not operate as a waiver or forbearance of any Unmatured Event of Default
or Event of Default or any right, power or remedy of the Administrative Agent or
any Lender under the Credit Agreement or any of the other Loan Documents, or
constitute a consent, waiver or modification with respect to any provision of
the Credit Agreement or any of the other Loan Documents, and each Company hereby
fully ratifies and affirms each Loan Document to which it is a party. Reference
in any of this Consent, the Credit Agreement or any other Loan Document to the
Credit Agreement shall be a reference to the Credit Agreement as modified hereby
and as further amended, modified, restated, supplemented or extended from time
to time. This Consent shall constitute a Loan Document for purposes of the
Credit Agreement and the other Loan Documents.
     6. Counterparts. This Consent may be executed in two or more counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute one instrument. Delivery of an executed counterpart of this
Consent by facsimile shall be effective as delivery of an original counterpart.
     7. Headings. The headings and captions of this Consent are for the purposes
of reference only and shall not affect the construction of, or be taken into
consideration in interpreting, this Consent.
     8. Further Assurances. Each Company agrees to execute and deliver, or cause
to be executed and delivered, in form and substance satisfactory to the
Administrative Agent and the Lenders, such further documents, instruments,
amendments and financing statements and to take such further action, as may be
necessary from time to time to perfect and maintain the liens and security
interests created by the Loan Documents.
     9. APPLICABLE LAW. THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ILLINOIS
CHOICE OF LAW DOCTRINE.
     10. Acknowledgment. Each Company hereby waives, discharges and forever
releases the Administrative Agent and each of the Lenders, and each of said
Person’s employees, officers, directors, attorneys, stockholders and successors
and assigns, from and of any and all claims, causes of action, allegations or
assertions that either Company has or may have had at any time through (and
including) the date of this Consent, against any or all of the foregoing,
regardless of whether any such claims, causes of action, allegations or
assertions are known to either Company or whether any such claims, causes of
action, allegations or assertions arose as a result of the Administrative
Agent’s or any Lender’s actions or omissions in connection with the Credit
Agreement, including any amendments or modifications thereto, or otherwise.
[signature pages follow]

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     IN WITNESS WHEREOF, this Consent has been duly executed and delivered as of
the day and year first above written.

                  AKORN, INC.    
 
           
 
  By:   /s/ Arthur Przybyl    
 
           
 
  Title:   President and CEO    
 
                AKORN (NEW JERSEY), INC.    
 
           
 
  By:   /s/ Arthur Przybyl    
 
           
 
  Title:   President and CEO    
 
                LASALLE BANK NATIONAL ASSOCIATION,         as Administrative
Agent and Lender    
 
           
 
  By:   /s/ Patrick J. O’Toole    
 
           
 
  Title:   Senior Vice President    

 

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