Document:

EX-10.4

Exhibit 10.4

EXECUTION COPY

THIS SECURITY AND THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (1)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS.

AKORN, INC.

COMMON STOCK PURCHASE WARRANT

To Purchase 2,099,935 Shares of Common Stock

     THIS COMMON STOCK PURCHASE WARRANT (this “Warrant”) certifies that, for value
received, THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989 (the “Holder”), is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after August 17, 2009 (the “Initial Exercise Date”) and on or prior to
the close of business on the fifth (5th) anniversary following the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Akorn, Inc., a
Louisiana corporation (the “Company”), up to Two Million Ninety-Nine Thousand Nine Hundred
Thirty-Five (2,099,935) shares, subject to adjustment as set forth herein (the “Warrant
Shares”) of Common Stock, no par value per share, of the Company (the “Common Stock”).
The purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant
shall be $1.16 per share, subject to adjustment hereunder. The Exercise Price and the number of
Warrant Shares for which the Warrant is exercisable shall be subject to adjustment as provided
herein. Capitalized terms used and not otherwise defined herein shall have the meanings set forth
in that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated
as of August 17, 2009, between the Company and Holder.

     Concurrently with the issuance of this Warrant, the Holder is entering into an Amended and
Restated Subordination Agreement dated as of August 17, 2009 (the “Amended Subordination
Agreement”), pursuant to which the Holder is providing certain financial accommodations to the
Company as described therein, and this Warrant is being issued to Holder as partial consideration
therefor.

     1. Title to Warrant. Prior to the Termination Date and subject to compliance with
applicable laws and Section 7 hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

     2. Authorization of Shares. The Company covenants that all Warrant Shares which may
be issued upon any Exercise of the purchase rights represented by this Warrant will, upon such
Exercise in accordance with the terms of this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue). The
Company shall at all times reserve and keep available for issue upon the Exercise of this Warrant
such number of shares of its authorized but unissued Common Stock as will be sufficient to permit
the Exercise in full of this Warrant.

     3. Exercise of Warrant.

          (a) Exercise of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination Date by the surrender
of this Warrant and the Notice of Exercise annexed hereto duly executed, at the office of the
Company (or such other office or agency of the Company as it may designate by notice in writing to
the registered Holder at the address of such
Holder appearing on the books of the Company) to the attention of the Chief Executive Officer
or the Chief Financial Officer (the “Exercise”, and the date of such Exercise, the
“Exercise Date”). After each Exercise and upon the occurrence of the Exercise
Effectiveness Date (as hereinafter defined), the Holder shall immediately thereafter

 

 

be entitled to receive a certificate for the number of Warrant Shares so purchased upon
payment of the Exercise Price of the shares thereby purchased. Payment of the Exercise Price may
be made at the option of the Holder by (i) by wire transfer or cashier’s check drawn on a United
States bank of United States dollars or (ii) the surrender and cancellation of Warrant Shares
issuable upon such Exercise of this Warrant (i.e. on a “cashless exercise” basis), in which event
the Company shall issue to the Holder a number of shares of Common Stock computed using the
following formula:

	 	 	 	 	 	 	 	 	 
	Where:
	 	 	X =	 	 	Y (A – B) 
	 	 
	 	 	 	 	A	 	 

     X = The net number of shares of Common Stock to be issued to the Holder pursuant to the
election to exercise;

     Y = The gross number of shares of Common Stock in respect of which the election to exercise is
made;

     A = The average of the market price of one share of the Common Stock for the ten (10) Trading
Days immediately prior to the Exercise Date; and

     B = The Exercise Price.

“Market Price” shall mean the closing sale price of the Company’s Common Stock as reported
on the Nasdaq Global Market, or if not then traded on the Nasdaq Global Market, such closing sale
or bid price as reported on any exchange over which the Company’s Common Stock may then be traded,
or if not then traded over any exchange, then the market price of the Company’s Common Stock shall
be the fair market value of the Company’s Common Stock as determined in good faith by the Board of
Directors of the Company. Certificates for shares purchased hereunder shall be delivered to the
Holder (at an address in the United States specified by the Holder) within five (5) Trading Days
after the later of the Exercise Effectiveness Date and payment of the Exercise Price of the shares
thereby purchased as aforesaid or the Company shall instruct its transfer agent to register the
shares purchased hereunder in book entry form within five (5) Trading Days after the later of the
Exercise Effectiveness Date and payment of the Exercise Price of the shares thereby purchased as
aforesaid. This Warrant shall be deemed to have been exercised and such certificate or
certificates (or book entry shares) shall be deemed to have been issued, and the Holder or any
other person so designated to be named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the last to occur of the Exercise Effectiveness Date, payment
of the Exercise Price, and delivery of the required documentation and all taxes required to be paid
by the Holder, if any, pursuant to Section 5 . For purposes of this Warrant, a
“Trading Day” shall mean any day on which the national securities exchange or the national
market system of FINRA are open for trading.

          (b) If this Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called
for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

          (c) The Holder understands that, until such time as the Registration Statement has been
declared effective or the Warrant Shares may be sold pursuant to Rule 144 under the Securities Act
without any restriction as to the number of securities as of a particular date that can then be
immediately sold, (i) the Company shall be entitled to give its transfer agent stop transfer
instructions respecting those Warrant Shares and (ii) the certificates representing any Warrants
Shares issued upon Exercise of this Warrant will bear a restrictive legend in substantially the
following form:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN

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OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

          (d) Reporting and Waiting Requirements.

               (i) To the extent necessary, each of and the Company and the Holder shall file, within fifteen
(15) days after each Exercise Date, before the expiration of any relevant legal deadline, with (i)
the FTC and the Antitrust Division of the DOJ, a Notification and Report Form required under the
HSR Act with respect to the transactions contemplated pursuant to such Exercise and any
supplemental information requested in connection therewith pursuant to the HSR Act, which forms
shall specifically request early termination of the waiting period prescribed by the HSR Act and
(ii) any other Governmental Authority, any other filings, reports, information and documentation
required for the transactions contemplated hereby pursuant to any other antitrust law of any other
jurisdiction. The parties shall furnish to each other’s counsel such necessary information and
reasonable assistance as the other may reasonably request in connection with its preparation of any
filing or submission that is necessary under the HSR Act and any antitrust law of any other
jurisdiction. The requirements under this Section 3(d)(i) shall be satisfied with respect
to any Exercise (without the need for further action by a party) upon the soonest to occur of: (a)
the HSR Clearance Date has occurred (provided, however, that rights obtained by the Holder pursuant
to the Warrant outside the United States shall become effective upon the HSR Clearance Date or, if
any ex-U.S. governmental or regulatory approvals are required prior to such rights becoming
effective, upon the later to occur of (1) the HSR Clearance Date and (2) the receipt of any such
required approvals), or (b) determination by the parties that such filings are unnecessary (with
respect to such Exercise, the “Exercise Effectiveness Date”). The determination of the
soonest to occur of the foregoing shall be made without taking into account the need for ex-U.S.
governmental or regulatory approvals required prior to such rights becoming effective and if,
giving effect to the foregoing, subsection (a) is the soonest to occur, then the Exercise
Effectiveness Date shall be the HSR Clearance Date.

               (ii) The parties shall use their reasonable best efforts to promptly obtain any clearance
required under the HSR Act and any other antitrust law for the consummation of the Exercise and the
transactions contemplated thereby and shall keep each other apprised of the status of any
communications with, and any inquiries or requests for additional information from, the FTC and the
DOJ and other Governmental Authorities concerning such clearances and shall use reasonable best
efforts to comply promptly with any such inquiry or request; provided, however, that (a) neither
party shall be required to consent to the divestiture or other disposition of any of its or its
affiliates’ assets or those of the other party, or to agree to any modification or amendment of
this Warrant that, in the reasonable opinion of such party’s legal and/or financial counsel, would
be adverse to such party, and (b) neither party shall have any obligation to contest,
administratively or in court, any ruling, order or other action of any Governmental Authority or
private party respecting the transactions contemplated by this Warrant or to comply with any other
structure or conduct remedy or restriction or limit on operation; provided, further, however, that
the parties shall both promptly respond to the DOJ or the FTC to a request for additional
information as defined under the HSR Act.

               (iii) The parties commit to instruct their respective counsel to cooperate with each other and
use reasonable best efforts to facilitate and expedite the identification and resolution of any
such issues and, consequently, the expiration of the applicable HSR Act waiting period and the
waiting periods under any other antitrust law of any other jurisdiction, or the obtaining of
clearances thereunder (as the case may be), at the earliest practicable dates. Such efforts and
cooperation include, but are not limited to, the parties’ respective counsel undertaking (i) to
keep each other appropriately informed of communications from and to personnel of the reviewing
antitrust authority, and (ii) to confer with each other regarding appropriate contacts with and
response to personnel of said antitrust authority.

               (iv) Each Party shall be responsible for its own costs and expenses associated with any filing
under the HSR Act or the Law of any other jurisdiction.

               (v) Certain Terms. As used in this Section 3(d), the below terms shall have the
meanings so specified.

                    (1) “DOJ” shall mean the United States Department of Justice.

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                    (2) “FTC” shall mean the United States Federal Trade Commission, or any successor
entity thereto.

                    (3) “Governmental Authority” shall mean any administrative agency, commission or other
governmental authority, body or instrumentality, federal, state, local, domestic or foreign
governmental or regulatory authority.

                    (4) “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (15 U.S.C. Section 18(a)), and the rules and regulations promulgated thereunder.

                    (5) “HSR Clearance Date” shall mean the earlier of (i) the date on which the FTC shall
notify the Company and the Holder of early termination of the applicable waiting period under the
HSR Act or (ii) the day after the date on which the applicable waiting period under the HSR Act
expires without any action by any government agency or challenged to the termination.

          (e) If within five (5) Trading Days after the later of the Exercise Effectiveness Date and
payment of the Exercise Price of the shares thereby purchased, the Company shall fail to issue and
deliver a certificate to the Holder (at an address in the United States specified by the Holder)
and register such Warrant Shares on the Company’s share register, or instruct its transfer agent to
register in book entry form the number of Warrant Shares to which the Holder is entitled or credit
the Holder’s balance account with the Depository Trust Company for the number of Warrant Shares to
which the Holder is entitled upon the Holder’s exercise hereunder, and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of Warrant Shares issuable upon such Exercise that
the Holder anticipated receiving from the Company, then the Company shall, within five (5) Trading
Days after the Holder’s request promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Warrant Shares and pay cash to the Holder in an
amount equal to the excess (if any) of the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased over the product of (A) such
number of shares of Common Stock, times (B) the closing sale price of the Common Stock on the
Trading Day immediately preceding the last possible date which the Company could have issued such
Warrant Shares to the Holder without violating this Section 3(e) .

     4. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the Exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such Exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the market price of one share of the Common Stock for the ten (10) Trading Days immediately
prior to the Exercise Date of this Warrant.

     5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names
(provided the Holder has complied with the restrictions on transfer set forth herein) as may be
directed by the Holder; provided , however , that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto.

     6. Closing of Books. The Company will not close its stockholder books or records in
any manner which prevents the timely Exercise of this Warrant, pursuant to the terms hereof.

     7. Transfer, Division and Combination.

          (a) Subject to compliance with any applicable securities laws and the conditions set forth in
Sections 1 and 7(e) hereof, this Warrant and all rights hereunder are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company,
together with a written assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to

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pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned,
may be Exercised by a new holder for the purchase of Warrant Shares without having a new Warrant
issued.

          (b) This Warrant may be divided or combined with other Warrants upon presentation hereof at
the aforesaid office of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 7(a) hereof, as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.

          (c) The Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7 .

          (d) The Company agrees to maintain, at its aforesaid office, books for the registration and
the registration of transfer of the Warrants.

          (e) Prior to, and as a condition of, any transfer of this Warrant, the Holder or transferee of
this Warrant, as the case may be must (i) execute and deliver to the Company an investment letter
in form and substance reasonably acceptable to the Company and (ii) qualify as an “accredited
investor” as defined in Rule 501(a) promulgated under the Securities Act.

     8. No Rights as Stockholder until Exercise. This Warrant does not entitle the Holder
to any voting rights or other rights as a stockholder of the Company prior to the Exercise hereof.
Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or payment.

     9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond or letter of credit), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will
make and deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or
a legal holiday, then such action may be taken or such right may be Exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

     11. Adjustments of Exercise Price and Number of Warrant Shares. The number and kind
of securities purchasable upon the Exercise of this Warrant and the Exercise Price shall be subject
to adjustment from time to time upon the happening of any of the following. In case the Company
shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock
to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares purchasable upon Exercise
of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to
receive the kind and number of Warrant Shares or other securities of the Company which it would
have owned or have been entitled to receive had such Warrant been exercised in advance thereof.
Upon each such adjustment of the kind and number of Warrant Shares or other securities of the
Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price
per Warrant Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to

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such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior
to such adjustment and dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph shall become
effective immediately after the effective date of such event retroactive to the record date, if
any, for such event.

     12. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.
In case of (i) any capital reorganization or reclassification, (ii) any consolidation or merger to
which the Company is a party other than a merger or consolidation in which the Company is the
continuing corporation, (iii) any sale or conveyance to another entity of the property of the
Company as an entirety or substantially as an entirety, or (iv) any statutory exchange of
securities with another corporation (including any exchange effected in connection with a merger of
a third corporation into the Company) (each, a “Fundamental Transaction”), the Holder of
this Warrant shall have the right thereafter to receive on the Exercise of this Warrant the kind
and amount of securities, cash or other property which the Holder would have owned or have been
entitled to receive immediately after such Fundamental Transaction had this Warrant been exercised
immediately prior to the effective date of such Fundamental Transaction and in any such case, if
necessary, appropriate adjustment shall be made in the application of the provisions set forth in
Section 11 hereof with respect to the rights and interests thereafter of the Holder of this
Warrant to the end that the provisions set forth in Section 11 hereof shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the Exercise of this Warrant. The
above provisions of this Section 12 shall similarly apply to successive Fundamental
Transactions. The Company shall require the issuer of any shares of stock or other securities or
property thereafter deliverable on the Exercise of this Warrant to be responsible for all of the
agreements and obligations of the Company hereunder. Notice of any such Fundamental Transaction
and of said provisions so proposed to be made, shall be mailed to the Holder of this Warrant not
less than thirty (30) days prior to such event. A sale of all or substantially all of the assets
of the Company for a consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes. Notwithstanding the foregoing, following a
Fundamental Transaction in which all or substantially all of the outstanding Common Stock of the
Company is exchanged for, converted into, acquired for or constitutes the right to receive solely
cash (a “Triggering Event”), at the written request of the Holder delivered before the
twentieth (20 th ) day after such Triggering Event, the Company (or the successor
entity) shall purchase this Warrant from the Holder by paying to the Holder, within five days after
such request, cash in an amount equal to the Black-Scholes Value (as defined below) of the
remaining unexercised portion of this Warrant. “Black-Scholes Value” means the value of
the unexercised portion of this Warrant calculated using the Black-Scholes Option Pricing Model
determined as of the day immediately following the public announcement of the applicable Triggering
Event and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a
period equal to the remaining term of this Warrant as of the date of such request and (ii) an
expected volatility equal to the one-hundred (100) day volatility obtained from the HVT function on
Bloomberg.

     13. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of
securities or other property purchasable upon the Exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice
shall state the number of Warrant Shares (and other securities or property) purchasable upon the
Exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or
property) after such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

     14. Notice of Distribution. If the Board of Directors of the Company shall declare
any dividend or other distribution with respect to its Common Stock other than a cash distribution
out of earned surplus, the Company shall mail notice thereof to the Holder of this Warrant not less
than twenty (20) days prior to the record date fixed for determining stockholders entitled to
participate in such dividend or other distribution. Each such written notice shall be sufficiently
given if addressed to the Holder at the last address of the Holder appearing on the books of the
Company and delivered in accordance with Section 16(d) hereof.

     15. Registration Rights. The Common Stock issuable upon Exercise of this Warrant
shall constitute Registrable Securities (as such term is defined in the Registration Rights
Agreement). The original Holder of this Warrant, and any valid transferees thereof pursuant to the
Registration Rights Agreement, shall be entitled to all of the benefits afforded to a holder of any
Registrable Securities under the Registration Rights Agreement and such

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holder, by its acceptance of this Warrant, agrees to be bound by and to comply with the terms
and conditions of the Registration Rights Agreement applicable to the holder as a holder of
Registrable Securities.

     16. Miscellaneous.

          (a) Jurisdiction. This Warrant shall constitute a contract under the laws of the
State of Louisiana.

          (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
Exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

          (c) Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice
the Holder’s rights, powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date.

          (d) Notices. Any notice, request or other document required or permitted to be given
or delivered under this Warrant will be in writing and will be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by confirmed facsimile,
electronic or digital transmission method; the day after it is sent, if sent for next day delivery
to a domestic address by recognized overnight delivery service (e.g., Federal Express); and upon
receipt, if sent by certified or registered mail, return receipt requested; provided, that
upon any permitted assignment of this Warrant, the assignee shall promptly provide the Company with
its contact information. In each case notice will be sent to: (i) if to the Company, addressed to:
Akorn, Inc., 1925 West Field Court, Suite 300, Lake Forest, Illinois 60045, Attention: Jerry
Ellis; or (ii) if to Holder, addressed to: John N. Kapoor Trust Dated September 20, 1989, c/o Dr.
John N. Kapoor, 225 E. Deerpath Road, Suite 250,Lake Forest, Illinois 60045, Attention: Dr. John
N. Kapoor.

          (e) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by the Holder to Exercise this Warrant or purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

          (f) Remedies. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant
and hereby agrees to waive the defense in any action for specific performance that a remedy at law
would be adequate.

          (g) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of the Holder.

          (h) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

          (i) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.

          (j) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

**** [Signature Page Follows] ****

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

Dated: August 17, 2009

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Common Stock Purchase Warrant]

 

 

NOTICE OF EXERCISE

To: Akorn, Inc.

     1. The undersigned hereby elects to purchase                                          Warrant
Shares of Akorn, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment
of the exercise price for such Warrant Shares in full, together with all applicable transfer taxes,
if any. Payment shall take the form of lawful money of the United States.

     2. The undersigned hereby elects to exercise the attached Warrant into Warrant Shares of
Akorn, Inc. through “cashless exercise” in the manner specified in the Warrant. This exercise is
made with respect to                      of the Warrant Shares covered by the
Warrant.

     3. Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the following:

     4. Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

	 	 	 	 	 
	 	[PURCHASER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: 

Dated: 	

 	 

 

 

	 	 	 	 	 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute

this form and supply required information.

Do not use this form to exercise the Warrant.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to
                                                

	 
	 	whose address is

 

	 
	.

Dated:                                         ,                     

Holder’s Signature:

Holder’s Address:

Signature Guaranteed:

NOTE: The signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change whatsoever, and
must be guaranteed by a bank or trust company. Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.EX-10.5

Exhibit 10.5

EXECUTION COPY 

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
August 17, 2009, by and among AKORN, INC., a Louisiana corporation (the “Company”), THE
JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989 (the “Kapoor Trust”) and EJ Funds LP, a
Delaware limited partnership (“EJ Funds” and together with the Kapoor Trust and their respective
Affiliates, the “Investors”). Capitalized terms that are used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Restated Credit Agreement (herein
defined).

WITNESSETH:

     WHEREAS, on January 7, 2009, the Company, Akorn (New Jersey), Inc., an Illinois corporation
(“Akorn NJ”), and General Electric Capital Corporation, a Delaware corporation (“GE Capital”), as
agent and a lender, entered into a Credit Agreement (the “Credit Agreement”);

     WHEREAS, on March 31, 2009, GE Capital assigned the Credit Agreement to EJ Funds pursuant to
an Assignment Agreement, and EJ Funds became the sole agent and lender under the Credit Agreement;

     WHEREAS, on April 13, 2009, the Company, Akorn NJ and EJ Funds entered into a Modification,
Warrant and Investor Rights Agreement (the “Modification Agreement”) that, among other
things, modified certain provisions of the Credit Agreement, reduced the aggregate revolving loan
commitment from $25,000,000 to $5,650,000 and provided EJ Funds and its Affiliates with certain
registration rights as set forth in the Modification Agreement;

     WHEREAS, concurrently with the execution of this Agreement, the Company, Akorn NJ and EJ
Funds, as sole agent and lender under the Credit Agreement, as amended by the Modification
Agreement, agreed to enter into an Amended and Restated Credit Agreement to, among other things,
increase the aggregate revolving loan commitment from $5,650,000 to $10,000,000, eliminate the
letter of credit subfacility and to temporarily suspend the financial covenants to the extent
reflected (as may be amended, restated, modified or otherwise supplemented from time to time, the
“Restated Credit Agreement”);

     WHEREAS, concurrently with the execution of this Agreement, the Kapoor Trust, as subordinated
lender, permitted the Company to extend the maturity of the Company’s subordinated note for five
years on substantially similar terms as in effect prior to the maturity of the original
subordinated note, which indebtedness is evidenced by an Amended and Restated Subordinated
Promissory Note of even date herewith (the “Restated Subordinated Note”); and

     WHEREAS, in order to induce EJ Funds to enter into the Restated Credit Agreement and to induce
the Kapoor Trust to enter into the Restated Subordinated Note, the Company desires to (i) issue the
First Warrant (defined herein) to EJ Funds, (ii) issue the Second Warrant (defined herein) to the
Kapoor Trust and (iii) enter into this Agreement to provide to the Investors and their respective
Affiliates certain registration rights on terms substantially similar to those previously granted
under the Modification Agreement (which agreement shall cease to be in effect upon execution of the
Restated Credit Agreement) and to clarify that such registration rights extend to the shares of
Common Stock (defined herein) issuable upon exercise of the First Warrant and the Second Warrant.

     NOW, THEREFORE, in consideration of the foregoing premises and the agreements and undertakings
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

     1. Warrants. In order to induce EJ Funds to enter into the Restated Credit Agreement,
the Company hereby issues to EJ Funds a warrant for the purchase of up to One Million Six Hundred
Fifty Thousand Eight Hundred Six (1,650,806) shares of common stock, no par value per share, of the
Company (“Common Stock”), in the form attached hereto as Exhibit “A” (the
“First Warrant”) and in order to induce the Kapoor Trust to enter into the Restated
Subordinated Note, the Company hereby issues to the Kapoor Trust a warrant for the purchase of up
to Two Million Ninety-Nine Thousand Nine Hundred Thirty-Five (2,099,935) shares of Common Stock in
the form attached hereto as Exhibit “B” (the “Second Warrant”).

 

 

     2. Registration Rights. In order to induce EJ Funds to enter into the Restated Credit
Agreement and to induce the Kapoor Trust to enter into the Subordinated Promissory Note, the
Company hereby further agree as follows:

          (a) Resale Registration Statement. The Company shall (subject to Section
2(b)) use commercially reasonable efforts to:

               (i) cause to be filed with the U.S. Securities and Exchange Commission (the “SEC”) as
soon as reasonably practicable, but in no event later than forty-five days (45) days after the date
hereof (the “Resale Filing Deadline”), a registration statement pursuant to Rule 415 under
the Securities Act (defined in Section 2(g)) (the “Resale Registration
Statement”), which Resale Registration Statement shall provide for resales and Transfers
(defined in Section 2(g)) of all Registrable Securities (defined in Section 2(g))
by the Holders (defined in Section 2(g)) as permitted by such Rule 415;

               (ii) cause the Resale Registration Statement to be declared effective by the SEC at the
earliest practicable time, but in no event later than the earlier to occur of (i) if the SEC
notifies the Company that it does not intend to review the Resale Registration Statement, ten (10)
days after the Company receives such notice from the SEC; or (ii) if the SEC notifies the Company
that it intends to review the Resale Registration Statement, one-hundred fifty (150) days after
Resale Filing Deadline (or if such day is not a Business Day, the next succeeding Business Day, the
“Resale Effective Deadline”);

               (iii) in connection with the foregoing, file all pre-effective amendments to the Resale
Registration Statement as may be necessary in order to cause such Resale Registration Statement to
become effective and, if applicable, a post-effective amendment to the Resale Registration
Statement pursuant to Rule 430A under the Securities Act; and

               (iv) cause the Resale Registration Statement to remain Continuously Effective (defined in
Section 2(g)), supplemented and amended as required by the provisions of Section
2(c) to the extent necessary to ensure that it is available for resales and Transfers of
Registrable Securities by the Holders, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from
time to time, for a period beginning on the Resale Effective Deadline and continuing through the
earliest to occur of (A) the date no shares of Common Stock qualify as Registrable Securities, (B)
the date on which all of the Registrable Securities may be sold in a single transaction by the
Holder to the public pursuant to Rule 144 or any similar rule promulgated by the SEC pursuant to
the Securities Act permitting the resale of restricted securities without the necessity of a
registration statement under the Securities Act or (C) the date upon which the Investors have
Transferred all of the Registrable Securities.

          (b) Postponement of Registration Statement. The Company shall be entitled to (i)
postpone the effectiveness of the Resale Registration Statement filed pursuant to this Agreement
and (ii) suspend the use of any Prospectus (defined in Section 2(g) ) included in the
Resale Registration Statement, in the event (a) of the issuance by the SEC of any stop order
suspending the effectiveness of the Resale Registration Statement or the initiation of any
proceedings for that purpose; (b) upon the occurrence of an event set forth in Section
2(c)(ii) or Sections 2(c)(v)(2)-(4); or (c) the Company’s chief executive officer
delivers to the Holders an executed certificate stating that in the good faith judgment of the
Board it would be materially detrimental to the Company and its stockholders either for such Resale
Registration Statement to become effective or for Transfers to be made thereunder (including,
without limitation, due to the inadvisability of filing a required prospectus supplement or
post-effective amendment), because such action would materially interfere with, or require
premature disclosure of, any bona fide plan or proposal by the Company to engage in any material
financing, acquisition, disposition, reorganization, merger or tender offer or other significant
transaction. Notwithstanding anything to the contrary, the Company shall not exercise its rights
under this Section 2(b) more than twice in any twelve (12) month period, nor for a period
of more than sixty (60) days.

          (c) Registration Procedures. In connection with the Company’s obligations arising
under this Agreement regarding the Resale Registration Statement (and any other Prospectus required
by this Agreement to permit the resale and Transfer of Registrable Securities), the Company will
(subject to Section 2(b) and, where

2

 

applicable, subject to the Resale Registration Statement having been declared effective) use
commercially reasonable efforts to:

               (i) effect such registration to permit the sale of the Registrable Securities being sold in
accordance with the intended method or methods of distribution selected by the Holders of the
Registrable Securities and permitted by Rule 415, and keep the Resale Registration Statement
Continuously Effective for all periods required by this Agreement;

               (ii) upon the occurrence of any event that would cause the Resale Registration Statement or
any Prospectus filed in connection therewith (i) to contain a material misstatement or omission or
(ii) not to be effective and usable for resale and Transfer of Registrable Securities during any
period required by this Agreement, the Company shall file promptly an appropriate amendment to the
Resale Registration Statement or a prospectus supplement, in the case of clause (i), correcting any
such misstatement or omission, and, in the case of either clause (i) or (ii), if a post-effective
amendment is utilized, cause such amendment to be declared effective and the Resale Registration
Statement and the related Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;

               (iii) prepare and file with the SEC such amendments and post-effective amendments to the
Resale Registration Statement as may be necessary to keep the Resale Registration Statement
effective for the applicable period set forth in Section 2(a);

               (iv) cause the Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and
comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Resale Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in the Resale
Registration Statement or supplement to the Prospectus;

               (v) advise the Holders promptly and, if requested by such Persons, to confirm such advice in
writing, (1) when the Prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to the Resale Registration Statement or any post-effective amendment
thereto, when the same has become effective; (2) of any request by the SEC for amendments to the
Resale Registration Statement or amendments or supplements to the Prospectus or for additional
information relating thereto; (3) of the issuance by the SEC of any stop order suspending the
effectiveness of the Resale Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Registrable Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes;
(4) of the existence of any fact or the happening of any event that makes any statement of a
material fact made in the Resale Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Resale Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the SEC shall issue any stop
order suspending the effectiveness of the Resale Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Registrable Securities under state securities or blue sky laws,
the Company shall obtain the withdrawal or lifting of such order as soon as practicable. The
Investors acknowledges that trading the Company’s securities while in possession of material
non-public information is not permitted under federal and state securities laws;

               (vi) furnish without charge to each of the Holders, and each of the underwriter(s) if any,
before filing with the SEC, copies of the Resale Registration Statement or any Prospectus included
therein or any amendments or supplements to the Resale Registration Statement or Prospectus
(including all documents incorporated by reference after the initial filing of the Resale
Registration Statement but excluding documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act and any exhibits to such filings), which documents will be subject to the
review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a
period of at least three (3) Business Days, and the Company will not file the Resale Registration
Statement or Prospectus or any amendment or supplement to the Resale Registration Statement or
Prospectus (including all such documents incorporated by reference but excluding documents filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and any exhibits to such
filings) to which a Holder covered by such

3

 

registration statement or the underwriter(s), if any, shall reasonably object in writing
within three (3) Business Days after the receipt thereof (such objection to be deemed timely made
upon confirmation of telecopy or e-mail transmission within such period), unless the Company
receives advice from legal counsel that the delay required by such review period would be
detrimental to the Company. For purposes of this Section 2(c)(vi), the objection of a
Holder or underwriter, if any, shall be deemed to be reasonable if the Resale Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission;

               (vii) make available any document that is incorporated by reference into the Resale
Registration Statement or Prospectus, provide copies of such document to the Holders, and to the
underwriter(s), if any, and make the Company’s representatives available for discussion of such
document and other customary due diligence matters;

               (viii) make available at reasonable times for inspection by the Holders or underwriter(s), if
any, participating in any disposition pursuant to the Resale Registration Statement and any
attorney or accountant retained by the Holders or underwriter(s), if any, all financial and other
records, pertinent corporate documents and properties of the Company and cause the Company’s
officers, directors and employees to supply all information reasonably requested by the Holders,
underwriter(s), if any, or their attorneys or accountants in connection with the Resale
Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness and to participate in meetings with investors to the extent requested by
the underwriter(s), if any, and make members of the Company’s senior management available at
reasonable times and places to participate in “road-shows” and investor calls as the
underwriter(s), if any, may request;

               (ix) if requested by a Holder or the underwriter(s), if any, to promptly incorporate in the
Resale Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment
if necessary, such information as the Holders and underwriter(s), if any, may reasonably request to
have included therein, including, without limitation, information relating to the “Plan of
Distribution” of the Registrable Securities, information with respect to the Registrable Securities
being sold, the purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such prospectus supplement or post-effective
amendment;

               (x) furnish to each Holder and each of the underwriter(s), if any, upon request, without
charge, at least one copy of the Resale Registration Statement, as first filed with the SEC, and of
each amendment thereto, including financial statements and schedules, all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein by reference);

               (xi) deliver to each Holder and each of the underwriter(s), if any, upon request, without
charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Holder reasonably may request;

               (xii) enter into such customary agreements (including a customary underwriting agreement), and
make such customary representations and warranties, and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Registrable Securities pursuant
to the Resale Registration Statement contemplated by this Agreement, all to such extent as may be
reasonably requested by any Holder or underwriter(s), if any, in connection with any resale or
Transfer pursuant to the Resale Registration Statement; and if and only if the registration is an
Underwritten Registration (defined in Section 2(g)), the Company shall:

                    (1) furnish to each Holder, and each underwriter, in such substance and scope as they may
reasonably request and as are customarily made by issuers to underwriters in primary underwritten
offerings, upon the initial effective date of the Resale Registration Statement:

                         (A) a certificate, dated the date of the date of effectiveness of the Resale Registration
Statement signed by (i) the Chief Executive Officer or President and (ii) the principal financial
or accounting officer of the Company confirming, as of the date thereof, such matters (including,
without limitation representations and warranties) as the Holders and underwriters may reasonably
request;

4

 

                         (B) an opinion, dated the date of effectiveness of the Resale Registration Statement, of
outside counsel for the Company, covering such matters as the Holders and the underwriter(s) may
reasonably request, and in any event including a statement to the effect that such counsel have
participated in conferences with officers and other representatives of the Company, representatives
of the independent public or certified public accountants for the Company and with representatives
of the underwriter(s), and counsel to the underwriter(s) at which the contents of the Resale
Registration Statement and the related Prospectus and related matters were discussed and, on the
basis of the foregoing, no facts have come to such counsel’s attention that would lead such counsel
to believe that (i) the Resale Registration Statement, at the time of the Resale Registration
Statement or any post effective amendment thereto became effective, or (ii) that the Prospectus
contained in the Resale Registration Statement as of its date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; and

                         (C) a customary comfort letter, dated the date of effectiveness of the Resale Registration
Statement, from the Company’s independent accountants, in the customary form and covering matters
of the type customarily requested to be covered in comfort letters by underwriters in connection
with primary underwritten offerings, and covering or affirming the matters set forth in any comfort
letters delivered pursuant to the Resale Registration Statement;

                    (2) set forth in full the indemnification provisions and procedures of Section 2(f)
with respect to all parties to be indemnified pursuant to said Section; and

                    (3) deliver such other documents and certificates as may be reasonably requested by such
parties to evidence compliance with Section 2(c)(xii)(1)(A) and with any customary
conditions contained in the underwriting agreement entered into by the Company pursuant to this
Section 2(c)(xii) .

If at any time the representations and warranties of the Company contemplated in Section
2(c)(xii)(1)(A) cease to be true and correct, the Company shall so advise the Holders and the
underwriter(s), promptly and, if requested by such Persons, shall confirm such advice in writing;

               (xiii) prior to any public offering of Registrable Securities, cooperate with the Holders, the
underwriter(s), if any, and their respective counsel in connection with the registration and
qualification of the Registrable Securities under the state securities or blue sky laws of such
jurisdictions as the Holders or underwriter(s), if any, may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Resale Registration Statement; provided,
however, that the Company shall not be required to register or qualify as a foreign
corporation where it is not then so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and transactions relating to
the Resale Registration Statement, in any jurisdiction where it is not then so subject and
provided, further, that if the Common Stock is not then a “covered security” as defined in Section
18 of the Securities Act, then the Company shall not be required to register and qualify the
Registrable Securities under the state securities or blue sky laws in more than ten (10) states;

               (xiv) cooperate with the Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities to be sold and not
bearing any restrictive legends (subject to the limitations set forth in Section 2(d)); and
enable such Registrable Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least three (3) Business Days prior to any
sale of Registrable Securities made by such Holders or underwriter(s), if any; provided, the
Holders provide the Company with the necessary information to prepare such certificates at least
four (4) Business Days prior to the applicable sale of Registrable Securities;

               (xv) if any fact or event contemplated by Section 2(c)(v)(4) shall exist or have
occurred, prepare a supplement or post-effective amendment to the Resale Registration Statement or
related Prospectus or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Registrable Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading;

5

 

               (xvi) cooperate and assist in any filings required to be made with FINRA (defined in
Section 2(g)) and in the performance of any due diligence investigation by any underwriter
(including any “qualified independent underwriter”) that is required to be retained in accordance
with the rules and regulations of FINRA;

               (xvii) otherwise comply with all applicable rules and regulations of the SEC, and make
generally available to its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month
period (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts Underwritten Offering or (ii) if not sold to
underwriters in such an offering, beginning with the first month of the Company’s first fiscal
quarter commencing after the effective date of the Resale Registration Statement;

               (xviii) cause all securities covered by the Resale Registration Statement to be listed on each
securities exchange or automated quotation system on which the Common Stock issued by the Company
is then listed if requested by any Holder or the underwriter(s), if any; and

               (xix) provide promptly to each Holder upon request each document filed with the SEC pursuant
to the requirements of Section 13 and Section 15 of the Exchange Act.

          (d) Holder Obligations. Each Holder agrees to, and in addition it shall be a
condition precedent to the obligation of the Company to take any action pursuant to this
Section 2 with respect to the Registrable Securities of the Holders, that each Holder
shall:

               (i) Promptly furnish to the Company such information regarding the Holder, the number of the
Registrable Securities owned by it, the number of Registrable Securities to be registered and the
intended method of disposition of such securities as shall be required to effect the registration
of the Registrable Securities of the Holders, and cooperate fully with the Company in preparing the
Resale Registration Statement and any related Prospectus;

               (ii) If the Company has delivered a Prospectus to the Holder and after having done so the
Prospectus is amended or supplemented to comply with the requirements of the Securities Act, at the
written request of the Company, the Holder shall immediately cease making offers or Registrable
Securities and, upon receipt of the amended or supplemented Prospectus from the Company, the Holder
shall use only such amended or supplemented Prospectus in making offers of the Registrable
Securities;

               (iii) During such time as the Holder may be engaged in a distribution of Registrable
Securities, the Holder shall comply with Regulation M promulgated under the Exchange Act and
pursuant thereto it shall, among other things, (i) not engage in any stabilization activity in
connection with the securities of the Company in contravention of such regulation or (ii)
distribute Registrable Securities under the Resale Registration Statement other than in the manner
described in the Resale Registration Statement;

               (iv) If the Company has delivered to the Holder written notice in accordance with Section
2(b), then the Holder shall immediately cease making offers or Transfers of Registrable
Securities until the Company shall have given the Holder written notice that the Holder may once
again commence making offers or Transfers of Registrable Securities under the current (or amended
or supplemented) Prospectus; and

               (v) Dispose of the Registrable Securities only (a) pursuant to an effective registration
statement under, and in compliance with the requirements of, the Securities Act or (b) pursuant to
an available exemption from the registration requirements of the Securities Act, and in compliance
with any applicable state securities laws, including providing the Company an opinion of counsel
selected by the Holder, the form and substance of which opinion shall be reasonably satisfactory to
the Company, to the effect that such transfer does not require registration under the Securities
Act.

          (e) Registration Expenses:

6

 

               (i) Company Expenses. Subject to Section 2(e)(ii), all expenses incident to
the Company’s performance of or compliance with this Section 2, including all registration
and filing fees, fees of any transfer agent and registrar, fees and expenses of compliance with
securities or blue sky laws, printing expenses, fees and disbursements of counsel for the Company
and its independent certified public accountants, the Company’s internal expenses and the expenses
and fees for listing the securities to be registered on each securities exchange or quotation
system on which similar securities issued by the Company are then listed or quoted (all such
expenses being herein called “Registration Expenses”) shall be borne by the Company.

               (ii) Holder Expenses. In connection with the registration contemplated hereunder, the
Company shall reimburse the Holders included in a registration for the reasonable fees and
disbursements of one counsel. The Holders, and not the Company, shall be responsible for all fees
and expenses of underwriters (including discounts and commissions attributable to the Registrable
Securities included in such registration).

          (f) Indemnification; Contribution. If any Registrable Securities are included in a
registration statement under this Agreement:

               (i) To the extent permitted by applicable law, the Company shall indemnify and hold harmless
each Holder, and the partners, members, officers, directors, employees, and stockholders of each
such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the
Securities Act) for each such Holder; and each Person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act, against any and all
losses, claims, damages, liabilities and expenses (joint or several), including reasonable
attorney’s fees and disbursements and reasonable expenses of investigation (collectively,
“Losses”), incurred by such Person pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may otherwise become subject
under the Securities Act, the Exchange Act or other federal or state laws, but only insofar as such
Losses arise out of or are based upon any of the following statements or omissions (collectively, a
“Violation”):

                    (1) any untrue statement or alleged untrue statement of a material fact contained in the
registration statement, including any preliminary Prospectus or final Prospectus contained therein,
or any amendments or supplements thereto; or

                    (2) the omission or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the indemnification
required by this Section 2(f)(i) shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any such Loss to the
extent that it arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf of a Holder or any
underwriter expressly for use in connection with such registration; and provided,
further, that any indemnification required by this Section 2(f)(i) shall not apply
to the extent that any such Loss is based on or arises out of an untrue statement or alleged untrue
statement of a material fact, or an omission or alleged omission to state a material fact, included
in or omitted from any preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission, and a copy of the
final prospectus has not been sent or given by the Holder or any underwriter to the Person alleging
damage at or prior to the confirmation of sale to such Person; and provided,
further, that this indemnity shall not apply to the extent that any such Loss is based on
an offer or Transfer of Registrable Securities during any period which the Company has notified the
Holder that such offers and Transfers must cease under the Agreement, including under Section
2(b), Section 2(c)(ii) or Section 2(c)(v) .

               (ii) To the extent permitted by applicable law, the Holders (severally and not jointly) shall
indemnify and hold harmless the Company, each of the directors of the Company, each of the officers
of the Company who shall have signed the Resale Registration Statement, each Person, if any, who
controls the Company within the meaning of the Securities Act, and each officer, director, partner,
and employee of such controlling Person, against any and all Losses incurred by such Person
pursuant to any actual or threatened action, suit, proceeding or investigation, or to which any of
the foregoing Persons may otherwise become subject under the Securities Act, the Exchange Act or
other federal or state laws, but only insofar as such Losses arise out of or are based upon any
Violation, in each case to the extent that such Violation arises out of or is based upon
information

7

 

furnished in writing by or on behalf of a Holder expressly for use in connection with such
registration, or upon the Holder’s failure to properly and timely deliver an “official” Prospectus,
or upon the Holder’s use of a written or oral prospectus other than the “official” Prospectus;
provided, however, that any indemnification required by this Section
2(f)(ii) shall not apply to amounts paid in settlement of any such Loss if such settlement is
effected without the consent of the Holders (which consent shall not be unreasonably withheld) and
in no event shall the amount of any indemnity obligation under this Section 2(f)(ii) exceed
the gross proceeds from the applicable offering received by the Holders.

               (iii) Promptly after receipt by an indemnified party under this Section 2(f) of notice
of the commencement of any action, suit, proceeding, investigation or threat thereof made in
writing for which such indemnified party may make a claim under this Section 2(f), such
indemnified party shall deliver to the indemnifying party a written notice thereof and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified party; provided,
however, that an indemnified party shall have the right to retain its own counsel, with the
fees and disbursements and expenses (in each case, to the extent reasonable) to be paid by the
indemnifying party, if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a reasonable time following the
commencement of any such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this Section 2(f)
to the extent, but only to the extent, of such prejudice but shall not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise than pursuant to this
Section 2(f). Any such indemnified party shall have the right to employ separate counsel
in any such action, claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii) the indemnifying party shall
have failed to promptly assume the defense of such action, claim or proceeding or (iii) the named
parties to any such action, claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it that are different from or in
addition to those available to the indemnifying party and that the assertion of such defenses would
create a conflict of interest such that counsel employed by the indemnifying party could not
faithfully represent the indemnified party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being understood, however, that
the indemnifying party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all such indemnified parties, unless in the reasonable judgment of
such indemnified party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such action, claim or proceeding, in which event
the indemnifying party shall be obligated to pay the reasonable fees and expenses of such
additional counsel or counsels).

               (iv) If the indemnification required by this Section 2(f) from the indemnifying party
is unavailable to an indemnified party hereunder in respect of any Losses referred to in this
Section 2(f) :

                    (1) the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things, whether any Violation
has been committed by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such Violation. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include, subject to the limitations set
forth in Section 2(f)(i), 2(f)(ii) and 2(f)(iii), any legal or other fees
or expenses reasonably incurred by such party in connection with any investigation or proceeding;

8

 

                    (2) the parties hereto agree that it would not be just and equitable if contribution pursuant
to this Section 2(f)(iv) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations referred to in Section
2(f)(iv)(1). No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(e) of the Securities Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

               (v) The obligations of the Company and the Holders under this Section 2(f) shall
survive the completion of any offering of Registrable Securities pursuant to the registration
statement under this Agreement, and otherwise.

          (g) Definitions. The following terms used in this Section 2 shall have the
following meanings:

     “Continuously Effective” with respect to the Resale Registration Statement means that
such registration statement shall not cease to be effective and available for Transfers of
Registrable Securities.

     “FINRA” means the Financial Industry Regulatory Authority (f/k/a the National
Association of Securities Dealers) and any successor entity.

     “Holder” means with respect to any Registrable Securities, EJ Funds or the Kapoor
Trust, as applicable, unless and until EJ Funds or the Kapoor Trust, as applicable, Transfers such
Registrable Securities to new Holders in accordance with Section 3(e).

     “Prospectus” means any prospectus included in the Resale Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such Prospectus.

     “Registrable Securities” means (a) any Common Stock now held by any Investor or any of
their respective affiliates or issuable or issued upon any conversion or exercise of any other
securities (including the First Warrant, the Second Warrant and any other warrants) held by any
Investors or its affiliates and (b) any Common Stock issued or issuable with respect to any of the
securities referred to in clause (a) by way of an event triggering any adjustment in the number of
shares of Common Stock into which such securities convert or are exercisable. Except for purposes
of Section 2(a)(iv)(C), Registrable Securities shall be deemed to be outstanding and in
existence, whenever such Person has the right to acquire such Registrable Securities upon exercise
or conversion of such securities, whether or not such exercise or conversion has actually been
effected, and such Person shall be entitled to exercise the rights of a Holder of such Registrable
Securities hereunder. As to any particular Registrable Securities, such securities shall cease to
be Registrable Securities when they (x) have been registered and Transferred pursuant to the
Securities Act or (y) have been Transferred pursuant to Rule 144 or any similar rule promulgated by
the SEC pursuant to the Securities Act permitting the resale of restricted securities without the
necessity of a registration statement under the Securities Act.

     Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at that time.

     “Transfer” means and includes the act of selling, giving, transferring, creating a
trust (voting or otherwise), assigning or otherwise disposing of (other than pledging,
hypothecating or otherwise transferring as security) (and correlative words shall have correlative
meanings); provided, however, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an event of default under or
with respect to a pledge, hypothecation or other transfer as security shall constitute a
“Transfer”; provided, further, however, no “Transfer” shall be deemed to have
occurred if EJ Funds or the Kapoor Trust, as the case may be, continues to be an affiliate of the
Holder of the Registrable Securities after giving effect to such transfer or other distribution.

     “Underwritten Registration” means a registration in which securities of the Company
are sold to an underwriter for reoffering to the public.

     3. Miscellaneous.

9

 

          (a) Entire Agreement. This Agreement reflects the entire understanding of the parties
with respect to the subject matter of registration rights herein contained and supersedes any prior
agreements, whether written or oral, in regard thereto.

          (b) Governing Law. This Agreement shall be governed by, and shall be construed in
accordance with, the laws of the State of New York and all applicable laws of the United States of
America.

          (c) WAIVER OF RIGHT TO JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES TRIAL BY JURY
AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE A JUDGE OF A
COURT OF COMPETENT JURISDICTION.

          (d) Counterparts; Facsimile. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which, taken together, shall constitute but one and
the same agreement among the parties. This Agreement may be executed and transmitted by facsimile
and with confirmation of transmission shall have the same binding effect as though such executed
Agreement was delivered as an original.

          (e) Assignment; Binding Nature. The Investors may assign their rights under this
Agreement, including, without limitation, the rights of any Holder to cause the Company to register
Registrable Securities pursuant to this Agreement, without the Company’ consent. The Company may
not assign its rights under this Agreement without the prior written consent of the Investors,
which shall not be unreasonably withheld, conditioned or delayed. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns.

          (f) Captions. The captions to the Sections and paragraphs of the Agreement are for
the convenience of the parties only, and are not a part of this Agreement.

          (g) Time of the Essence. Time is of the essence under this Agreement.

          (h) Remedies. Any party having rights under any provision of this Agreement shall be
entitled to enforce such rights specifically, to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages are not an adequate remedy for any breach of the
provisions of this Agreement and that any party may apply for specific performance and for other
injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

10

 

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals effective as of the date
first above written.

	 	 	 	 	 
	 	AKORN, INC,

a Louisiana corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989

 	 
	 	By:  	 	 
	 	 	Name:  	John N. Kapoor 	 
	 	 	Title:  	Trustee 	 
	 
	 	EJ FUNDS LP
 	 
	 	By:  	EJ Financial Enterprises, Inc.
 	 
	 	Its:	  General Partner 	 
	 	 	 	 
	 	By:  	
 	 
	 	 	John N. Kapoor 	 
	 	 	President 	 
	 

[Signature Page to Registration Rights Agreement]

 

 

EXHIBIT A

FORM OF FIRST WARRANT

See Attached.

12

 

EXHIBIT A

FORM OF SECOND WARRANT

See Attached.

13

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