exv10w3






Exhibit 10.3




	 	 	 	 	 	 
	This instrument was prepared by
	 	 	 	 	 
	and after recording, return to:
	 	 	 	 	 
	Susan E. Foxworth, Esq.
	 	 	 	 	 
	King & Spalding LLP
	 	 	 	 	 
	1180 Peachtree Street
	 	 	 	 	 
	Atlanta, Georgia 30309
	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	 	 	 	This space reserved for Recorder’s use only.
	 
	 	 	 	 	 
	 	 	 





Macon County, Illinois




 





MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF

LEASES AND RENTS, FINANCING STATEMENT AND

FIXTURE FILING




BY




AKORN, INC.

Mortgagor,




TO




GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent and Mortgagee,




Relating to Premises in:




Macon County, Illinois




DATED: As of January 7, 2009




 





 









 





MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF

LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING




          THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND
FIXTURE FILING (“Mortgage”) is made as of January 7, 2009, by AKORN, INC., a Louisiana
corporation, with an office at 1925 West Field Court, Suite 300, Lake Forest, Illinois 60045
(“Mortgagor”), to GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, with an
office at 500 West Monroe, Chicago, Illinois 60661, as secured party, in its capacity as agent on
behalf of itself as a Lender and for the Lenders, as hereinafter defined (together with any
successors or assigns in such capacity, the “Agent” or “Mortgagee”).



I.

RECITALS




          WHEREAS, Mortgagor is the owner and holder of fee simple title in and to all of that certain
real property located in Illinois (the “State”), and more fully described in Exhibit
A attached hereto (the “Premises”), which Premises forms a portion of the Property
described below;



          WHEREAS, on the date hereof, Mortgagor entered into that certain Credit Agreement (as the same
may be further amended, restated, modified or otherwise supplemented and in effect from time to
time, hereinafter the “Credit Agreement”), by and among Mortgagor and Akorn (New Jersey),
Inc. (collectively, “Borrowers”), each of the other persons party thereto that are
designated as credit parties, General Electric Capital Corporation, for itself, as a Lender, as L/C
Issuer, Swingline Lender and as the agent for all the Lenders, and each of the other financial
institutions from time to time party thereto (collectively, the “Lenders”), under which the
Lenders agreed to make available to Borrowers certain loans and other financial accommodations;



          WHEREAS, Mortgagor wishes to provide further assurance and security to the Agent and the
Lenders and as a condition to the Agent and the Lenders executing the Credit Agreement, the Agent
and the Lenders are requiring that Mortgagor grant to the Agent, on behalf of the Lenders, a
security interest in and a first mortgage lien upon the Property (as hereinafter defined), subject
to the Permitted Liens (as such term is defined in the Credit Agreement), to secure all of
Mortgagor’s obligations under the Credit Agreement, this Mortgage and the Loan Documents (as such
term is defined in the Credit Agreement). All capitalized terms used herein but not defined herein
shall have the meanings ascribed to them in the Credit Agreement.


II.

THE GRANT



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          NOW, THEREFORE, in order to secure the payment of the obligations of Mortgagor under the
Credit Agreement, this Mortgage and the other Loan Documents that may now or hereafter become owing
from Mortgagor to Mortgagee and the Lenders (the “Secured Indebtedness”), and in
consideration of Ten and No/100 Dollars ($10.00) in hand paid by Mortgagee to Mortgagor, the
Recitals above stated, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Mortgagor hereby GRANTS, BARGAINS, SELLS, ASSIGNS, RELEASES,
ALIENS, TRANSFERS, WARRANTS, DEMISES, CONVEYS and MORTGAGES to Mortgagee and its successors and
assigns (for the benefit of the Lenders) forever (and grants to Mortgagee and its successors and
assigns (for the benefit of the Lenders) forever a continuing security interest in and to all of
Mortgagor’s estate, right, claim and interest in and to the Premises, together with all of
Mortgagor’s estate, right, claim and interest in and to the following described property, all of
which other property is pledged primarily on a parity with the Premises and not secondarily (the
Premises and the following described rights, interests, claims and property are collectively
referred to as the “Property”):




     (a) all buildings, structures and other improvements of every kind and description now
or hereafter erected, situated, or placed upon the Premises (the “Improvements”),
together with any and all personal property now or hereafter owned by Mortgagor and located
in or on, forming part of, attached to, used or intended to be used in connection with, or
incorporated in any such Improvements, including all extensions of, additions to,
betterments, renewals of, substitutions for and replacements for any of the foregoing;




     (b) all claims, demands, rights, title and interest of Mortgagor now owned or hereafter
acquired, including without limitation, any after-acquired title, franchise, license,
remainder or reversion, in and to any and all (i) land or vaults lying within the
right-of-way of any street, avenue, way, passage, highway, or alley, open or proposed,
vacated or otherwise, adjoining the Premises; (ii) alleys, sidewalks, streets, avenues,
strips and gores of land belonging, adjacent or pertaining to the Premises or the
Improvements; (iii) storm and sanitary sewer, water, gas, electric, railway and telephone
services relating to the Premises and the Improvements; (iv) development rights, air rights,
water, water rights, water stock, gas, oil, minerals, coal and other substances of any kind
or character underlying or relating to the Premises or any part thereof; and (v) tenements,
hereditaments, easements, appurtenances, other rights, liberties, reservations, allowances
and privileges relating to the Premises or the Improvements or in any way now or hereafter
appertaining thereto, including homestead and any other claims at law or in equity;




     (c) all right, title and interest of Mortgagor in any and all leases, subleases,
management agreements, arrangements, concessions or agreements, written or oral, relating to
the use and occupancy of the Premises or the Improvements or any portion thereof, now or
hereafter existing or entered into (collectively “Leases”);




     (d) all rents, issues, profits, royalties, revenue, advantages, income, avails, claims
against guarantors, all cash or security deposits, advance rentals, deposits or payments
given and other benefits now or hereafter derived directly or indirectly from the



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Premises and Improvements under the Leases or otherwise (collectively “Rents”),
subject to the right, power and authority granted to Mortgagee pursuant to Section 3.8
hereof;




     (e) all right, title and interest of Mortgagor in and to all options to purchase or
lease the Premises or the Improvements or any portion thereof or interest therein, or any
other rights, interests or greater estates in the rights and properties comprising the
Property now owned or hereafter acquired by Mortgagor;




     (f) any interests, estates or other claims of every name, kind or nature, both in law
and in equity, which Mortgagor now has or may acquire in the Premises and Improvements or
other rights, interests or properties comprising the Property now owned or hereafter
acquired;




     (g) all rights of Mortgagor to any and all plans and specifications, designs, drawings
and other matters prepared for any construction on the Premises or regarding the
Improvements;




     (h) all rights of Mortgagor under any contracts executed by Mortgagor with any provider
of goods or services for or in connection with any construction undertaken on or services
performed or to be performed in connection with the Premises or the Improvements;




     (i) all right, title and interest of Mortgagor in and to all tangible personal property
(“Personal Property”) now or hereafter owned by Mortgagor and located in, on or at
the Premises or the Improvements and used or useful in connection therewith, including,
without limitation:




     (i) all building materials and equipment located upon the Premises and intended
for construction, reconstruction, alteration, repair or incorporation in or to the
Improvements now or hereafter to be constructed thereon, whether or not yet
incorporated in such Improvements (all of which shall be deemed to be included in
the Property upon delivery thereto);




     (ii) all machines, machinery, fixtures, apparatus, equipment or articles used
in supplying heating, gas, electricity, air-conditioning, water, light, power,
plumbing, sprinkler, waste removal, refrigeration, ventilation, and all fire
sprinklers, alarm systems, protection, electronic monitoring equipment and devices;




     (iii) all window, structural, maintenance and cleaning equipment and rigs; and




     (iv) all Fixtures now or hereafter owned by Mortgagor and attached to or
contained in and used or useful in connection with the Premises or the Improvements;
and




     (j) all the estate, interest, right, title or other claim or demand which the Mortgagor
now has or may hereafter have or acquire with respect to (i) proceeds of



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insurance in effect with respect to the Property and (ii) any and all awards, claims
for damages, judgments, settlements and other compensation made for or consequent upon the
taking by condemnation, eminent domain or any like proceeding, or by any proceeding or
purchase in lieu thereof, of the whole or any part of the Property, including, without
limitation, any awards and compensation resulting from a change of grade of streets and
awards and compensation for severance damages (collectively “Awards”).



          TO HAVE AND TO HOLD the Property hereby mortgaged and conveyed or so intended, unto the
Mortgagee, its successors and assigns, forever, for the uses and purposes herein set forth,
subject, however, only to the Permitted Liens.



          The Mortgagor hereby covenants with the Mortgagee: (i) that at the execution and delivery
hereof, Mortgagor owns the Property and has good, indefeasible fee simple estate therein; (ii) that
the Property is free from all encumbrances and exceptions to title (and any claim of any other
person) other than Permitted Liens, (iii) that it has good and lawful right to sell, mortgage and
convey the Property; and (iv) that Mortgagor and its successors and assigns shall forever warrant
and defend the Property against all claims and demands whatsoever, other than those arising from
Permitted Liens.



III.

GENERAL AGREEMENTS




     3.1 Payment of Indebtedness.
Mortgagor shall pay promptly and when due all amounts owing by Mortgagor in respect of the
Secured Indebtedness at the times and in the manner provided in the Credit Agreement, the Notes,
this Mortgage, or any of the other Loan Documents.



     3.2 Impositions.
Except as otherwise permitted under Section 4.7 of the Credit Agreement, Mortgagor shall pay
prior to delinquency, all general taxes, special taxes, special assessments, water charges, sewer
charges, and any other charges, fees, taxes, claims, levies, expenses, liens and assessments,
ordinary or extraordinary, governmental or nongovernmental, statutory or otherwise (all of the
foregoing being herein collectively referred to as “Impositions”), that may be asserted
against the Property or any part thereof or Mortgagor’s interest therein.



     3.3 Payment of Impositions by Mortgagee.
Upon the occurrence and during the continuance of an Event of Default (as hereinafter
defined), Mortgagee is hereby authorized to make or advance, in the place and stead of Mortgagor,
any payment relating to Impositions. Mortgagee may do so according to any bill, statement, or
estimate procured from the appropriate public office without inquiry into the accuracy or the
validity of any Impositions, lien, sale, forfeiture, or related title or claim. Mortgagee is
further authorized to make or advance, in place of Mortgagor, unless such matter is being properly
contested by Mortgagor in accordance with Section 4.7 of the Credit Agreement, any payment relating
to any apparent or threatened adverse title, lien, statement of lien,
encumbrance, claim, charge, or payment otherwise relating to any other purpose herein and
hereby authorized, but not enumerated in this Section 3.3, whenever, in Mortgagee’s judgment and
discretion, such advance is necessary to protect the full security



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intended to be created by this
Mortgage. All such advances and indebtedness authorized by this Section 3.3 shall constitute
Secured Indebtedness and shall be repayable by Mortgagor upon demand with interest at the rate set
forth under Section 1.3(c) of the Credit Agreement.



     3.4 Condemnation and Eminent Domain.
Mortgagor shall give Mortgagee prompt notice of all proceedings, instituted or threatened,
seeking condemnation or a taking by eminent domain or like process (herein collectively called
“Taking”), of all or any part of the Property or any related easement or appurtenance, and
shall deliver to Mortgagee copies of any and all papers served upon Mortgagor in connection with
any such proceeding. Mortgagee (or, after entry of decree of foreclosure, the purchaser at the
foreclosure sale or decree creditor, as the case may be) is hereby authorized at its option to
participate in such proceeding and, upon the occurrence and during the continuance of an Event of
Default, control the same and to be represented therein by counsel of its own choice, and Mortgagor
will deliver, or cause to be delivered to Mortgagee such instruments as may be requested by it from
time to time to permit such participation or control. Mortgagor hereby assigns, transfers and sets
over unto Mortgagee the entire proceeds of any and all Awards resulting from any Taking. Mortgagee
is hereby authorized to collect and receive from the condemnation authorities all Awards and is
further authorized to give appropriate receipts and acquittances. Such Award or payment, less the
amount of any expenses incurred in litigating, arbitrating, compromising, or settling any claim
arising out of a Taking, shall be applied in the same manner as if they were proceeds from a
casualty loss covered by insurance in accordance with Section 4.6 of the Credit Agreement and in
accordance with Section 3.5 hereafter.



     3.5 Restoration.
In the event there shall be casualty loss or a Taking, and Mortgagee elects to cause the
applicable insurance proceeds or Award to be applied to restore, repair or replace the Property
(“Restoration”), Mortgagee shall disburse such insurance proceeds or Award in accordance
with disbursement procedures reasonably acceptable to Mortgagee, including, without limitation,
such procedures as are customarily utilized by construction lenders to insure the lien free
completion of construction projects. No such insurance proceeds or Award shall be disbursed unless
the following conditions are satisfied promptly upon the occurrence of the casualty loss or Taking
(but in no event later than one hundred eighty (180) days following such occurrence):



          (a) Mortgagee shall have received and approved complete plans and specifications for the
Restoration;



          (b) Mortgagee shall have received and approved a construction contract for the work of
Restoration with a contractor reasonably acceptable to Mortgagee;



          (c) Mortgagee shall have received copies of all permits and approvals required in connection
with the Restoration to be issued prior to the commencement of the Restoration; and



          (d) Mortgagee shall be satisfied that the amount of the insurance proceeds or Award actually
received, together with such funds as may be available, if any, under the Credit Agreement and as
Mortgagor requests be reserved for such purpose, are sufficient to pay all costs



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of the Restoration
(as evidenced by a cost estimate prepared by an architect or engineer reasonably acceptable to
Mortgagee).



     3.6 Maintenance of Property. 
Mortgagor shall:



          (a) subject to Section 3.5 hereof, promptly repair, restore, replace or rebuild any material
portion of the Property which may become damaged, destroyed, altered, removed, severed, or
demolished, with replacements at least equal in quality and condition as previously existed, free
from any security interest in, encumbrances on or reservation of title thereto except the lien of
this Mortgage and Permitted Liens;



          (b) keep the Property in good condition and repair, without waste, and free from mechanics’,
materialmen’s or like liens or claims except for Permitted Liens and liens which have been properly
bonded with the appropriate judicial or other authority in accordance with the terms of the Credit
Agreement; and



          (c) not make any material alterations in the Property, except as required by law or municipal
ordinance or in the ordinary course of business or as otherwise may reasonably be necessary in
light of Mortgagee’s business activities conducted in accordance with the Credit Agreement.



     3.7 Prohibited Liens; Prohibited Transfers.



          (a) Except as otherwise permitted in Section 5.1 of the Credit Agreement, Mortgagor shall not
create, suffer, or permit to be created or filed against the Property any Lien superior or inferior
to the lien created by this Mortgage.



          (b) Except as otherwise provided in Section 5.2 of the Credit Agreement, Mortgagor may not
sell, lease or convey all or any part of the Property or any interest therein.



     3.8 Assignment of Leases and Rents.
(a) All right, title, and interest of Mortgagor in and to all Leases and Rents are hereby
transferred and assigned simultaneously herewith to Mortgagee. Although it is the intention of the
parties that the assignment contained in this paragraph shall be a present
assignment, it is expressly understood and agreed, anything to the contrary notwithstanding,
that Mortgagee shall not exercise any of the rights or powers conferred upon it by this paragraph
until an Event of Default shall exist and be continuing under this Mortgage.



          (b) Following the occurrence of an Event of Default and during the continuance thereof, (a)
Mortgagee shall have the rights and powers as are provided herein, (b) this Mortgage shall
constitute a direction to each lessee under the Leases and each guarantor thereof to pay all Rents
directly to Mortgagee without proof of the Event of Default, and (c) Mortgagee shall have the
authority, as Mortgagor’s attorney-in-fact (such authority being



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coupled with an interest and
irrevocable), to sign the name of Mortgagor and to bind Mortgagor on all papers and documents
relating to the operation, leasing and maintenance of the Property.



          (c) If Mortgagor, as lessor under any Lease, shall neglect or refuse to perform, observe and
keep all of the covenants, provisions and agreements contained in such Lease, then Mortgagee may
perform and comply with any such Lease covenants, agreements and provisions. All reasonable costs
and expenses incurred by Mortgagee in complying with such covenants, agreements, and provisions
shall constitute Secured Indebtedness and shall be payable upon demand with interest payable at the
rate set forth under Section 1.3(c) of the Credit Agreement.



          (d) Mortgagee shall not be obligated to perform or discharge any obligation, duty or liability
under any Lease, and Mortgagor shall and does hereby agree, except to the extent of Mortgagee’s
gross negligence or willful misconduct, to indemnify and hold the Mortgagee harmless of and from
any and all liability, loss or damage which it may or might incur under any Lease or under or by
reason of their assignments and of and from any and all claims and demands whatsoever which may be
asserted against it by reason of alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants or agreements contained in such Lease. Should Mortgagee
incur any such liability, loss or damage under any Lease or under or by reason of its assignment to
Mortgagee, or in the defense of any claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys’ fees, shall constitute Secured Indebtedness and shall be payable
upon demand with interest payable at the rate set forth under Section 1.3(c) of the Credit
Agreement.



     3.9 Uniform Commercial Code.
(a) This Mortgage constitutes a Security Agreement as that term is used in the Uniform
Commercial Code in the State (the “Code”) with respect to any part of the Property which
may or might now or hereafter be or be deemed to be personal property, fixtures or property other
than real estate (including all replacements thereof, additions thereto and substitutions therefor)
(collectively, the “Personal Property Collateral”). Mortgagor hereby grants to Mortgagee a
security interest in and to all Personal Property Collateral to secure the payment of the Secured
Indebtedness.



          (b) At any time after an Event of Default has occurred and shall be continuing, Mortgagee
shall have the remedies of a secured party under the Code, including without limitation the right
to take immediate and exclusive possession of the Personal Property Collateral or any part thereof.
The remedies of Mortgagee hereunder are cumulative and the exercise of any one or more of the
remedies provided for herein or under the Code shall not be
construed as a waiver of any of the other remedies of the Mortgagee, including having the
Personal Property Collateral deemed part of the realty upon any foreclosure so long as any part of
the Secured Indebtedness remains unsatisfied.



          (c) This Mortgage is intended to be a “fixture filing” for purposes of the Code with respect
to the items of Property which are or may become fixtures relating to the Premises upon recording
of this Mortgage in the real estate records of the proper office. The addresses of Mortgagor
(Debtor) and Mortgagee (Secured Party) are set forth on the first page hereof.



          (d) The Mortgagor hereby directs that the Mortgagee shall cause to be recorded in the County
in which the Premises are located, as well as with the applicable offices



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of the State, such
financing statements and fixture filings as shall be necessary in order to perfect and preserve the
priority of Mortgagee’s lien upon the Personal Property Collateral.



     3.10 Releases.



          Without notice and without regard to the consideration therefor, and to the existence at that
time of any inferior liens, Mortgagee may release from the lien created hereby all or any part of
the Property, or release from liability any person obligated to repay any of the Obligations,
without affecting the liability of any party to any of the Notes, this Mortgage, or any of the
other Loan Documents (including without limitation any guaranty given as additional security) and
without in any way affecting the priority of the lien created hereby. Mortgagee may agree with any
liable party to extend the time for payment of any part or all of the Obligations. Such agreement
shall not in any way release or impair the lien created by this Mortgage or reduce or modify the
liability of any person or entity obligated personally to repay the Obligations, but shall extend
the lien created by this Mortgage as against the title of all parties having any interest in the
Property.



     3.11 Further Assurances.



          Mortgagor agrees that, upon the request of Mortgagee from time to time, it will, at
Mortgagor’s sole cost and expense, execute, acknowledge and deliver all such additional instruments
and further assurances of title and will do or cause to be done all such further acts and things as
may reasonably be necessary to fully effectuate the intent of this Mortgage. In the event that
Mortgagor shall fail to do any of the foregoing, Mortgagee may, in its sole discretion, do so in
the name of Mortgagor, and Mortgagor hereby appoints Mortgagee as its attorney-in-fact to do any of
the foregoing.



IV.

EVENT OF DEFAULT AND REMEDIES




     4.1 Event of Default.



          The occurrence of an “Event of Default,” as such term is defined in the Credit Agreement,
shall constitute an “Event of Default” under this Mortgage. The Secured Indebtedness shall be
subject to acceleration upon an Event of Default.



     4.2 Foreclosure and Remedies.



          Upon the occurrence and during the continuation of an Event of Default, Mortgagee shall have
the right to foreclose the lien hereof for the Secured Indebtedness or any part thereof and/or
exercise any right, power or remedy provided in this Mortgage or any of the other Loan Documents.
In the event of any foreclosure sale, the Property may be sold in one or more parcels. Mortgagee
may bid for and acquire the Property or any part thereof at any sale made under or by virtue of
this Mortgage and, in lieu of paying cash therefor, may make settlement for the purchase price by
crediting against the purchase price the unpaid amounts due and owing in respect of any Loans,
Secured Indebtedness or any other liabilities after deducting from the sales price the expenses of
the sale and the costs of the action or proceedings and any other sums that Mortgagee is authorized
to deduct under this Mortgage or applicable law.



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     4.3 Sale of Personal Property Collateral.



          Upon the occurrence and during the continuation of an Event of Default, at the request of the
Mortgagee, and to the extent permitted under applicable law, the Personal Property Collateral shall
be sold concurrently with and in conjunction with a sale of the Premises, in which case the
provisions of Section 4.2 hereof shall apply to the Personal Property Collateral as well as to the
Premises. The Mortgagor stipulates and agrees that a sale of the Personal Property Collateral in
conjunction with the Premises is a commercially reasonable manner of disposing of the Personal
Property Collateral. Alternatively, upon the occurrence and during the continuation of an Event of
Default, the Mortgagee may sell or otherwise dispose of the Personal Property Collateral separately
and apart from the Premises in the time and manner provided by the Code. To the extent that the
Code shall require prior notice of sale or other disposition of the Personal Property Collateral,
twenty (20) days written notice shall be deemed to be reasonable notice. Upon the occurrence and
during the continuation of an Event of Default, the Mortgagee also may (a) require the Mortgagor
to, and the Mortgagor hereby agrees that the Mortgagor will at the Mortgagor’s expense and upon
request of the Mortgagee forthwith, assemble all or part of the Personal Property Collateral as
directed by the Mortgagee and make it available to the Mortgagee at a place to be designated by the
Mortgagee which is reasonably convenient to the parties; and (b) sell the Personal Property
Collateral or any part thereof in one or more parcels at public or private sale for cash or credit
or for future delivery, and at such price or prices and upon such other terms as are commercially
reasonable. The Mortgagee shall not be obligated to make any sale of the Personal Property
Collateral regardless of a notice of sale having been given. The Mortgagee may adjourn any public
or private sale from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was so adjourned.



     4.4 Remedies Cumulative and Non-Waiver.
(a) No remedy or right of Mortgagee hereunder or under the Notes, or any of the Loan Documents
or otherwise, or available under applicable law, shall be exclusive of any other right or remedy.
Each such remedy or right shall be in addition to every other remedy or right now or hereafter
existing under any such document or under applicable law. No delay in the exercise of, or omission
to exercise, any remedy or right accruing on the occurrence of any Event of Default shall impair
any such remedy or right or be construed to be a waiver of any such Event of Default or an
acquiescence therein, nor shall it affect any subsequent Event of Default of the same or a
different nature, nor shall it extend or affect any grace period. Every
remedy or right may be exercised concurrently or independently, when and as often as may be
deemed expedient by the Mortgagee. All obligations of the Mortgagor, and all rights, powers and
remedies of the Mortgagee shall be in addition to, and not in limitation of, those provided by law
or in the Notes or contained in any of the Loan Documents or any other written agreement or
instrument relating to any of the Secured Indebtedness or any security therefor.



          (b) Mortgagee may elect to subordinate this Mortgage to all or only selected Leases, as
determined or selected by Mortgagee in its sole and absolute discretion, and to foreclose this
Mortgage subject to all Leases or such selected Leases. However, Mortgagee’s election not to
foreclose this Mortgage subject to all Leases or selected Leases will not be, or be asserted by
Mortgagor to be, a defense to any proceedings instituted by Mortgagee to collect the indebtedness
hereby secured or to collect any deficiency remaining unpaid after the foreclosure



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sale of the
Property or any portion thereof. Otherwise, any foreclosure sale of the Property or any portion
thereof pursuant to this Mortgage, without further notice, shall create the relation of landlord
and tenant at sufferance between the purchaser and Mortgagor or any person holding possession of
the Property through Mortgagor. Upon the failure of Mortgagor or any such person to surrender such
possession immediately upon the purchaser’s written request, Mortgagor or such person may be
removed by a writ of possession obtained by the purchaser in any court then having jurisdiction and
venue



     4.5 Expenses.



          In any proceeding to foreclose or partially foreclose the lien of this Mortgage, there shall
be allowed and included, as additional indebtedness in the judgment or decree resulting therefrom,
all expenses paid or incurred by or on behalf of Mortgagee in the protection of the Property and
the exercise of Mortgagee’s rights and remedies hereunder, which expenses may be estimated as to
items to be expended after entry of any judgment or decree of foreclosure. Such expenses shall
include: reasonable attorney’s fees, appraiser’s fees, outlays for documentary and expert
evidence, stenographer’s charges, publication costs, survey costs, and costs of procuring all
abstracts of title, title searches and examinations, title insurance policies, and any similar data
and assurances with respect to title to the Property as Mortgagee may deem reasonably necessary
either to prosecute any such proceeding or to evidence to bidders at any sale pursuant to such
decree the true condition of the title to or value of the Premises or the Property. All such
expenses shall be due and payable by Mortgagor upon demand with interest thereon at the rate set
forth under Section 1.3(c) of the Credit Agreement.



     4.6 Mortgagee’s Performance of Mortgagor’s Obligations.



          Following the occurrence of an Event of Default and during the continuance thereof, Mortgagee,
either before or after acceleration of the Secured Indebtedness or the foreclosure of the lien
hereof and during the period of redemption, if any, may, but shall not be required to (a) make any
payment or perform any act herein, in the Notes or any other Loan Document which is required of
Mortgagor (whether or not Mortgagor is personally liable therefor) in any form and manner deemed
expedient to Mortgagee; (b) make full or partial payments of principal or interest on any permitted
prior mortgage or encumbrance and purchase, discharge, compromise or settle any tax lien or other
prior lien on title or claim thereof, or redeem from any tax sale or forfeiture affecting the
Premises, or contest any Impositions; and (c)
complete construction, furnishing and equipping of the Improvements upon the Premises and
rent, operate and manage the Premises and such Improvements and pay operating costs and expenses,
including management fees, of every kind and nature in connection therewith, so that the Premises
and Improvements shall be operational and usable for their intended purposes. All monies paid for
any of the purposes herein authorized, and all expenses paid or incurred in connection therewith,
including reasonable attorneys’ fees, shall constitute Secured Indebtedness, and shall become due
and payable upon demand and with interest thereon at the rate set forth under Section 1.3(c) of the
Credit Agreement. Mortgagee, in making any payment hereby authorized: (x) for the payment of
Impositions, may do so according to any bill or statement, without inquiry into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or claim thereof; (y) for the purchase,
discharge, compromise or settlement of any other prior lien, may do so without inquiry as to the
validity or amount of any claim or lien which may be



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asserted; or (z) for the completion of
construction, furnishing or equipping of the Improvements or the Premises or the rental, operation
or management of the Premises or the payment of operating cost and expenses thereof, may do so in
such amounts and to such persons as Mortgagee may deem appropriate and may enter into such
contracts therefor as Mortgagee may deem appropriate or may perform the same itself.



     4.7 Right of Possession.



          Following the occurrence of an Event of Default and during the continuance thereof, Mortgagor
shall, immediately upon Mortgagee’s demand, surrender to Mortgagee, and Mortgagee shall be entitled
to take actual possession of the Property or any part thereof, personally or by its agent or
attorneys. Mortgagee may enter upon and take and maintain possession or may apply to the court in
which a foreclosure is pending to be placed in possession of all or any part of the Property,
together with all documents, books, records, papers, and accounts of Mortgagor or the then owner of
the Property relating thereto. Mortgagee may exclude Mortgagor, such owner, and any agents and
servants from the Property. As attorney-in-fact or agent of Mortgagor or such owner, or in its own
name Mortgagee may hold, operate, manage, and control all or any part of the Property, either
personally or by its agents. Mortgagee shall have full power to use such measures, legal or
equitable, as it may deem proper or necessary to enforce the payment or security of the rents,
issues, deposits, profits, and avails of the Property, including actions for recovery of rent,
actions in forcible detainer, and actions in distress for rent, all without notice to Mortgagor.



     4.8 Application of Income Received by Mortgagee.



          Mortgagee, in the exercise of the rights and powers hereinabove conferred upon it, shall have
full power to use and apply the avails, rents, issues and profits of the Property to the payment of
or on account of the following, in such order as Mortgagee may determine: (i) to the payment of
the operating expenses of the Property including cost of management thereof, established claims for
damages, if any, and premiums on insurance hereinabove authorized; (ii) to the payment of taxes and
special assessments now due or which may hereafter become due on the Premises; (iii) to all other
items which may under the terms hereof constitute Secured Indebtedness additional to that evidenced
by the Notes, with interest thereon as provided herein or in the other Loan Documents; and (iv) to
all principal and interest remaining unpaid on the Notes.



     4.9 Appointment of Receiver.
If an Event of Default has occurred and is continuing, to the full extent permitted by law,
Mortgagee, without regard to the value, adequacy or occupancy of the Property as security for the
Secured Indebtedness, shall be entitled as a matter of right if it so elects to the appointment of
a receiver (“Receiver”), either ex parte, to the extent permitted by applicable law, or
upon prior notice to Mortgagor, to enter upon and take possession of the Property, and to collect
and apply the Rents in the manner it deems appropriate or as the court otherwise may direct. Any
such Receiver shall have all the usual powers and duties of receivers in similar cases. This
Mortgage shall secure the expenses, including without limitation Receiver’s fees, attorney’s fees,
costs and agent’s compensation, which are incurred pursuant to the powers herein contained. The
right to enter, take possession of, manage and operate the Property, and collect the Rents, whether
by Receiver or otherwise, shall be



12









 







cumulative to any other right or remedy and may be exercised
concurrently therewith or independently thereof. Mortgagee or Receiver, as the case may be, shall
be liable to account only for such rents, income and other benefits actually received by Mortgagee
or Receiver. Notwithstanding the appointment of Receiver or any other custodian, Mortgagee shall
be entitled as pledgee to the possession and control of any cash, deposits or instruments at the
time held by, or payable or deliverable under the terms of this Mortgage to, Mortgagee and/or the
Lenders.



     4.10 Rescission of Notice of Default.
Mortgagee (on behalf of the Lenders) may from time to time rescind any notice of default or
notice of sale before any foreclosure sale as provided above, by executing and delivering to
Mortgagor a written notice of such rescission, which such notice, when recorded, shall also
constitute a cancellation of any prior declaration of default and demand for sale. The exercise by
Mortgagee of such right of rescission shall not constitute a waiver of any breach or default then
existing or subsequently occurring, or impair the right of Mortgagee to execute and deliver to
Mortgagor, as above provided, other declarations or notices of default to satisfy the obligations
of this Mortgage or the obligations secured hereby, nor otherwise affect any provision, covenant or
condition of any Loan Document or any of the rights, obligations or remedies of Mortgagee or the
Lenders hereunder or thereunder.



     4.11 Application of Proceeds of Foreclosure Sale.
The proceeds of any foreclosure sale of the Property shall be distributed and applied in the
following order of priority: first, to all costs and expenses incident to the foreclosure
proceedings, including all such items as are mentioned in Section 4.5 above; second, to all other
items which may under the terms hereof constitute Secured Indebtedness additional to that evidenced
by the Notes, with interest thereon as provided herein or in the other Loan Documents; third, to
all principal and interest remaining unpaid on the Notes; and fourth, any surplus to Mortgagor, its
successors or assigns, as their rights may appear or to any other party legally entitled thereto.



     4.12 Insurance Upon Foreclosure.
In case of an insured loss after foreclosure proceedings have been instituted, the proceeds of
any insurance policy or policies, if not applied in repairing, restoring, replacing or rebuilding
any portion of the Property, shall be used to pay the amount due in accordance with any decree of
foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as
the court may direct. In case of the foreclosure of this Mortgage, the court in its judgment may
provide that the judgment creditor may cause a new or additional loss clause to be attached to each
of said policies making the loss thereunder payable to said judgment creditor; and any such
foreclosure judgment may further provide, unless the right of redemption has been waived, that in
case of redemption under said judgment, then, and in every such case, the redemptory may cause the
preceding loss clause attached to each insurance policy to be canceled and a new loss clause to be
attached thereto, making the loss thereunder payable to such redemptory.



     4.13 Waiver of Statutory Rights. Mortgagor shall not apply for or avail itself of any appraisement, valuation, redemption,
stay, extension, or exemption laws, or any so-called “moratorium laws,” now existing or hereafter
enacted, in order to prevent or hinder the enforcement or foreclosure of this Mortgage, and
Mortgagor hereby waives the benefit of such laws. Mortgagor, for itself and all who may claim
through or under it, waives any and all rights to have the Property and estates comprising the
Property marshaled upon any foreclosure of the



13









 







lien of this Mortgage, and agrees that any court
having jurisdiction to foreclose such lien may order the Property sold in its entirety. Mortgagor
further waives any and all rights of homestead, dower, elective or distributive share and
redemption from foreclosure and from sale under any order or decree of foreclosure of the lien
created by this Mortgage, for itself and on behalf of: (i) any trust estate of which the Premises
are a part; (ii) all beneficially interested persons; (iii) each and every person acquiring any
interest in the Property or title to the Premises subsequent to the date of this Mortgage; and (iv)
all other persons to the extent permitted by the provisions of laws of the State in which the
Premises are located.



     4.14 Effect of Judgment.
The obtaining of any judgment by Mortgagee and any levy of any execution under any judgment
upon the Property shall not affect in any manner or to any extent the Lien of this Mortgage upon
the Property or any part thereof, or any Liens, powers, rights and remedies of Mortgagee hereunder,
but such Liens, powers, rights and remedies shall continue unimpaired as before until the judgment
or levy is satisfied.



     4.15 Jury Trial Waiver.



          TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, MORTGAGOR AND MORTGAGEE EACH HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS MORTGAGE.



     4.16 Request for Notice.
Mortgagor hereby requests a copy of any notice of default and requests that any notice of sale
hereunder be mailed to Mortgagor at the address referenced in Section 5.1 hereof. Otherwise,
Mortgagee is not under any obligation to notify any person or entity of any action or proceeding of
any kind in which Mortgagor, and/or Mortgagee shall be a party, unless brought by Mortgagee, or of
any pending sale under any other mortgage or Mortgage.



V.




MISCELLANEOUS




     5.1 Notices.
Any notice or other communication required or permitted to be given under this Mortgage shall
be given or sent, deemed received and otherwise governed in accordance with Section 9.2 of the
Credit Agreement.



     5.2 Time of Essence.
Time is of the essence of this Mortgage.



     5.3 Covenants Run with Land. All of the covenants of this Mortgage shall run with the land constituting the Premises.



     5.4 GOVERNING LAW.
THIS MORTGAGE SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO



14









 







CONFLICTS OF LAW PRINCIPLES, EXCEPT TO
THE EXTENT ILLINOIS LAW NECESSARILY APPLIES BECAUSE THE PROPERTY IS LOCATED IN ILLINOIS.



     5.5 Severability. If any provision of this Mortgage, or any paragraph, sentence, clause, phrase, or word, or
their application, in any circumstance, is held invalid, the validity of the remainder of this
Mortgage shall be construed as if such invalid part were never included.



     5.6 Non-Waiver. Unless expressly provided in this Mortgage to the contrary, no consent or waiver, express
or implied, by any party, to or of any breach or default by any other party shall be deemed a
consent to or waiver of the performance by such defaulting party of any other obligations or the
performance by any other party of the same, or of any other, obligations.



     5.7 Attorney-in-Fact. Mortgagor hereby irrevocably appoints Mortgagee (on behalf of the Lenders) and its
successors and assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to
execute and/or record any notices of completion, cessation of labor or any other notices that
Mortgagee deems appropriate to protect Mortgagee’s interest, if Mortgagor shall fail to do so
within twenty (20) days after written request by Mortgagee, (b) upon the issuance of a deed
pursuant to the foreclosure of this Mortgage or the delivery of a deed in lieu of foreclosure, to
execute all instruments of assignment, conveyance or further assurance with respect to the Leases,
Rents, Fixtures, personalty, plans and property agreements in favor of the Mortgagee of any such
deed and as may be necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for registration and like papers
necessary to create, perfect or preserve Mortgagee’s security interests and rights in or to any of
the collateral, and (d) while any Event of Default exists, to perform any obligation of Mortgagor
hereunder; however: (i) Mortgagee shall not under any circumstances be obligated to perform any
obligation of Mortgagor; (ii) any sums advanced by Mortgagee in such performance shall be added to
and included in the Secured Indebtedness and shall bear interest at the rate set forth under
Section 1.3(c) of the Credit Agreement; (iii) Mortgagee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Mortgagee; and (iv) Mortgagee shall not be
liable to Mortgagor or any other person or entity for any failure to take any action which it is
empowered to take under this Section. This appointment shall not terminate on the disability of
the Mortgagor.



     5.8 Headings. The headings of sections and paragraphs in this Mortgage are for convenience or reference
only and shall not be construed in any way to limit or define the content, scope, or intent of the
provisions.



     5.9 Grammar. As used in this Mortgage, the singular shall include the plural, and masculine, feminine,
and neuter pronouns shall be fully interchangeable, where the context so requires.



     5.10 Successors and Assigns. This Mortgage shall be binding upon Mortgagor, its successors, assigns, legal
representatives, and all other persons or entities claiming under or through Mortgagor. The word
“Mortgagee,” when used herein, shall include the Agent in its capacity as a Lender and as Agent for
the Lenders, together with its successors, assigns and legal representatives.



15









 





     5.11 Counterparts. This Mortgage may be executed in any number of separate counterparts, each of which shall
collectively and separately constitute one Mortgage.



     5.12 Mortgagee in Possession. Nothing contained in this Mortgage shall be construed as constituting Mortgagee a mortgagee
in possession in the absence of the actual taking of possession of the Property.



     5.13 Incorporation of Credit Agreement; No Conflicts. The terms of the Credit Agreement are incorporated by reference herein as though set forth
in full detail. In the event of any conflict between the terms and provisions of Section 3.9 of
this Mortgage and the Security Agreement, the terms and provisions of the Security Agreement shall
control; in the event of a conflict between any other term or provision of this Mortgage and the
Credit Agreement, the terms and provisions of the Credit Agreement shall control.



     5.14 Additional Provisions.



          Notwithstanding anything contained herein to the contrary:



          (a) Where any provision of this Mortgage is inconsistent with any provision of Illinois law
regulating the creation or enforcement of a lien or security interest in real or personal property
including, but not by way of limitation, the Illinois Mortgage Foreclosure Law (765 ILCS 5/15-1101
et seq.), as amended, modified and/or replaced from time to time, the provisions of Illinois law
shall take precedence over the provisions of this Mortgage, but shall not invalidate or render
unenforceable any other provisions of this Mortgage that can be construed in a manner consistent
with Illinois law.



          (b) The term “Secured Indebtedness” as defined in this Mortgage shall include, without
limitation, any judgment(s) or final decree(s) rendered to collect any money obligations of
Mortgagor to Mortgagee and/or the Lenders and/or to enforce the performance or collection of all
rights, remedies, obligations, covenants, agreements, conditions, indemnities, representations,
warranties, and other liabilities of the Mortgagor under this Mortgage or any or all of the other
Loan Documents. The obtaining of any judgment by Mortgagee and/or the Lenders (other than a
judgment foreclosing this Mortgage) and any levy of any execution under any such judgment upon the
Property shall not affect in any manner or to any extent the lien of this Mortgage upon the
Property or any part thereof, or any liens, powers, rights and remedies of Mortgagee and/or the
Lenders hereunder, but such liens, powers, rights and remedies shall continue unimpaired as before
until the judgment or levy is satisfied. Furthermore, Mortgagor acknowledges and agrees that the
Secured Indebtedness is secured by the Property and various other collateral at the time of
execution of this Mortgage. Mortgagor specifically acknowledges and agrees that the Property, in
and of itself, if foreclosed or realized upon would not be sufficient to satisfy the outstanding
amount of the Secured Indebtedness. Accordingly, Mortgagor acknowledges that it is in Mortgagor’s
contemplation that the other collateral pledged to secure the Secured Indebtedness may be pursued
by Mortgagee in separate proceedings in the various states and counties where such collateral may
be located and additionally that Mortgagor will remain liable for any deficiency judgments in
addition to any amounts Mortgagee and/or the Lenders may realize on sales of other property or any
other collateral given as security for the Secured Indebtedness. Specifically, and without
limitation of the foregoing, it is agreed that it is



16









 







the intent of  the parties hereto that in the
event of a foreclosure of this Mortgage, that the
Secured Indebtedness shall not be deemed merged into any judgment of foreclosure, but shall
rather remain outstanding to the fullest extent permitted by applicable law.



          (c) To the extent the laws of the State of Illinois limit (i) the availability of the exercise
of any of the remedies set forth in this Mortgage, including without limitation the right of
Mortgagee and the Lenders to exercise self-help in connection with the enforcement of the terms of
this Mortgage, or (ii) the enforcement of waivers and indemnities made by Mortgagor, such remedies,
waivers, or indemnities shall be exercisable or enforceable, any provisions in this Mortgage to the
contrary notwithstanding, if, and to the extent, permitted by the laws in force at the time of the
exercise of such remedies or the enforcement of such waivers or indemnities without regard to the
enforceability of such remedies, waivers or indemnities at the time of the execution and delivery
of this Mortgage.



          (d) This Mortgage secures the payment of future advances of revolving loans which may be made
after the date hereof to the same extent as if such future advances were made on the date of the
execution of this Mortgage, although there may be no advance made on the date of the execution of
this Mortgage, and although there may be no indebtedness outstanding at the time any advance is
made. The total principal amount of Secured Indebtedness secured by this Mortgage may decrease or
increase from time to time but the total unpaid principal balance so secured at any one time shall
not exceed One Hundred Fifty Million Dollars ($150,000,000.00), plus interest thereon, and any and
all disbursements made by Mortgagee for the payment of taxes, special assessments or insurance on
the Property, with interest on such disbursements. The parties hereby acknowledge and intend that
all advances of the revolving loans, including future advances whenever hereafter made, shall be a
lien from the time this Mortgage is recorded.



          (e) This Mortgage secures, among other obligations, a revolving line of credit pursuant to the
terms and conditions of the Credit Agreement, under the terms of which funds may be advanced, paid
back, and readvanced, PROVIDED, HOWEVER, the maximum aggregate amount secured by this Mortgage at
any one time shall not exceed One Hundred Fifty Million Dollars ($150,000,000).



          (f) Even though the lien of this Mortgage shall be released from the Property subject to
Article I, any of the terms and provisions of this Mortgage that are intended to survive shall
nevertheless survive the release or satisfaction of this Mortgage whether voluntarily granted by
Mortgagee or the Lenders, as a result of a judgment upon judicial foreclosure of this Mortgage or
in the event a deed in lieu of foreclosure is granted by Mortgagor to Mortgagee and/or the Lenders.



     5.15 No Strict Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Mortgage.
In the event an ambiguity or question of intent or interpretation arises, this Mortgage shall be
construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of this Mortgage.


     5.16 Satisfaction of Mortgage Lien.



17









 







          If and when Mortgagor has paid all of the Secured Indebtedness and has strictly performed and
observed all of the agreements, terms, conditions, provisions and warranties contained herein and
in the Guaranty and in all of the Loan Documents and there exist no commitments of the Lenders
under the Loan Documents which could give rise to Secured Indebtedness, Mortgagee will release the
Property from the lien of this Mortgage, whether in whole or in part, in accordance with all
applicable Illinois laws. When the Property has been fully released, such release will operate as a
reassignment of all future Rents of the Property to the person legally entitled.




     5.17 Compliance with Applicable Law.
If any provision of this Mortgage shall grant to Mortgagee (including Mortgagee acting as a
mortgagee-in-possession) or a receiver appointed pursuant to the provisions of this Mortgage, any
rights or remedies prior to, upon or following the occurrence of an Event of Default which are more
limited than the rights that would otherwise be vested in Mortgagee or such receiver under the
Illinois Foreclosure Law in the absence of said provision, Mortgagee and such receiver shall be
vested with the rights granted under the Illinois Foreclosure Law to the full extent permitted by
law.



     5.18 Variable Interest Rate.



          The Notes and Credit Agreement which this Mortgage secures contains a variable rate feature.




(SIGNATURE PAGE FOLLOWS)




18









 





          IN WITNESS WHEREOF, Mortgagor has duly signed and delivered this Mortgage as of the date first
above written.




	 	 	 	 	 
	 	AKORN, INC., a Louisiana corporation

 	 
	 	By:  	/s/ Jeffrey A. Whitnell	 
	 	Name:  	 Jeffrey A. Whitnell	 
	 	Title:  	CFO	 



 









 




	 	 	 	 	 




	 	 	 	 	 	 	 	 	 
	
STATE OF Illinois
	 	 	)	 	 	 
	 
	 	 	 	 	)	 	 	SS
	
COUNTY OF Lake
	 	 	)	 	 	 





          On
Jan. 6th 2008, before me, the undersigned, a Notary Public in and for said State
personally appeared Jeffrey A. Whitnell known to me to be the CFO of AKORN, INC.,
a Louisiana corporation, and acknowledged to me that such individual executed the within instrument
on behalf of said corporation.


          WITNESS my hand and official seal.



	 	 	 	 	 
	 
	 
	 	/s/ J. A. Richardson	 	 
	 
	 	Notary Public in and for	 	 
	 

	 	said County and State	 	 





[SEAL]


[SIGNATURE PAGE TO IL MORTGAGE]


 








 





EXHIBIT A




LEGAL DESCRIPTION



Lot 2 of Taylor Subdivision, as per Plat recorded in Book 1832 page 676 of the Records in the Recorder’s
Office of Macon County, Illinois. Situated in Macon County, Illinois