Exhibit 10.1
EXECUTION COPY
SUBORDINATED PROMISSORY NOTE
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF JULY 28,
2008, AMONG THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989, AKORN, INC.
("AKORN"), AKORN (NEW JERSEY), INC., ("AKORN NEW JERSEY" AND TOGETHER WITH
AKORN, THE "COMPANIES", AND EACH A "COMPANY") AND LASALLE BANK NATIONAL
ASSOCIATION ("ADMINISTRATIVE AGENT"), TO THE INDEBTEDNESS (INCLUDING INTEREST)
OWED BY THE COMPANIES PURSUANT TO THAT CERTAIN CREDIT AGREEMENT DATED AS OF
OCTOBER 7, 2003 AMONG THE COMPANIES, ADMINISTRATIVE AGENT AND THE LENDERS FROM
TIME TO TIME PARTY THERETO, AS SUCH CREDIT AGREEMENT HAS BEEN AND HEREAFTER MAY
BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO
INDEBTEDNESS REFINANCING THE INDEBTEDNESS UNDER THAT AGREEMENT AS CONTEMPLATED
BY THE SUBORDINATION AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS
ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENT.
THIS SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND SUCH STATE SECURITIES LAWS, OR AN EXEMPTION FROM REGISTRATION
THEREUNDER.
US $5,000,000.00
July 28, 2008
FOR VALUE RECEIVED, AKORN, INC., a Louisiana corporation ("Akorn") and
AKORN (NEW JERSEY), INC., an Illinois corporation ("Akorn New Jersey") and
collectively with Akorn, the "Makers" and each a "Maker"), hereby promise
jointly and severally to pay to the order of THE JOHN N. KAPOOR TRUST DATED
SEPTEMBER 20, 1989, or its permitted successors or assigns ("Payee"), the
aggregate principal sum of FIVE MILLION DOLLARS ($5,000,000) on the terms and
conditions set forth below, and to pay to Payee interest on the unpaid principal
balance hereof at the rate and on the terms and conditions set forth herein.
1. Payment of Principal. The principal amount of this Subordinated
Promissory Note (the "Note"), together with all unpaid interest accrued hereon,
shall be due and payable on the one year anniversary of the date hereof (the
"Maturity Date").
2. Payment of Interest. The unpaid principal balance due hereunder shall
bear interest at a fixed annual rate (based on a 360-day year) of fifteen
percent (15%) (the "Interest Rate") and such interest shall accrue quarterly in
arrears (each, whether at the Interest Rate or Default Interest Rate (as defined
below), an "Interest Payment") on the 28th day of each January,
CHI : 2118073.6
April, July and October (each, an "Interest Payment Date") commencing on
October 28, 2008; provided that upon the occurrence of a Default, the
outstanding principal balance hereunder shall accrue at a fixed annual rate
(based on a 360-day year) of twenty percent (20%) (the "Default Interest Rate").
All accrued interest (including default interest) under this Note shall be paid
in kind, and the amount