exv10w54



 





EXHIBIT 10.54


WAIVER AND CONSENT TO CREDIT AGREEMENT




     THIS WAIVER AND CONSENT TO CREDIT AGREEMENT (this “Consent”) is
executed and delivered as of this 8th day of October, 2004 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 (i) enter into that certain Limited Liability Company
Agreement for Akorn-Strides, LLC, a Delaware limited liability company
(“Akorn-Strides”), to be dated on or around the date hereof (the “LLC
Agreement”) along with Strides Arcolab Limited, a company organized under
the laws of India (a copy of which is attached hereto as Exhibit A)
pursuant to which Akorn may be required to contribute up to $2,500,000 in cash
for an equity interest therein and (ii) advance up to $2,500,000 in cash
pursuant to that certain Promissory Note issued on September 22, 2004 (the
“A-S Note”) by Akorn-Strides in favor of Akorn (the foregoing 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.   Waiver and Consent.  Subject to the terms and conditions herein,
the Required Lenders hereby (i) consent to Akorn’s execution of and performance
under the LLC Agreement and (ii) waive any Event of Default which, if not for
the execution of this Consent, arising solely from (A) Akorn’s failure to
comply with Section 11.1 of the Credit Agreement resulting from the Debt
incurred by Akorn under the LLC Agreement with respect to Akorn’s Contingent
Liability to contribute cash in Akorn-Strides and (B) Akorn’s failure to comply
with Sections 11.5 and 11.11 of the Credit Agreement resulting from
Akorn’s acquisition of a 50% equity interest in Akorn-Strides, Akorn’s capital
contribution in Akorn-Strides and the Investment made by Akorn pursuant to the
A-S Note; provided, that the foregoing clauses (i) and (ii) are
expressly conditioned upon the requirements that (a) Akorn’s Investment with
respect to Akorn-Strides shall be limited to cash contributed in accordance
with the LLC Agreement or cash advanced under the A-S Note in amount which
shall not (I) at any time prior to December 10, 2004, exceed $2,500,000 in the
aggregate with respect to both cash contributed under the LLC Agreement and
cash advance under the A-S Note and (II) at any time after the date hereof
exceed $5,000,000 in the aggregate with respect to both cash contributed under
the LLC Agreement and cash advance



 









 





under the A-S Note at any time (b) with respect to any cash advanced or
contributed pursuant to LLC Agreement or the A-S Note made after December 10,
2004, no advance or contribution shall be permitted if the total outstanding
Revolving Loans (after giving effect to any such advance or contribution) is
greater than or equal to $500,000 unless the Administrative Agent has given its
prior written consent to such advance or contribution and (c) Akorn shall make
no investment, payment or contribution in or to Akorn-Strides so long as any
Event of Default exists or would result therefrom.



     2.   Representations and Warranties.  To induce the Administrative
Agent and the Required Lenders to execute this Consent, each Company represents
and warrants to the Administrative Agent and the Lenders as follows: (a) each
Company has all requisite power and authority to execute, deliver and perform
this Consent; (b) this Consent constitutes the legal, valid and binding
obligation of each Company, enforceable against each Company in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors’ rights generally and to general principles of
equity; (c) the representations and warranties in the Loan Documents 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 shall
be true and correct as of such earlier date); and (d) after giving effect to
this Consent, no Unmatured Event of Default or Event of Default exists.



     3.   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 and (b) an executed copy of the LLC Agreement certified by the
secretary of Akorn as true, accurate and complete.



     4.   Affirmation.  Except as specifically provided in this Consent,
the execution, delivery and effectiveness of this Consent shall not operate as
a waiver or forbearance of any 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 the 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.



     5.   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.



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     6.   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.



     7.   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.



     8.   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.



     9.   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/ Jeffrey A. Whitnell
	

	 	 	 	
 
	

	 	Title:
	 	Chief Financial Officer
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	AKORN (NEW JERSEY), INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Jeffrey A. Whitnell
	

	 	 	 	
 
	

	 	Title:
	 	Chief Financial Officer
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent and Lender
	 
	 	 	 	 
	

	 	By:
	 	/s/ Patrick J. O’Toole
	

	 	 	 	
 
	

	 	Title:
	 	Vice President